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2025-VIL-79-GUJ
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SGST High Court Cases

GST - Section 122(1A) of the CGST Act, 2017 – Territorial Jurisdiction to adjudicate Show Cause Notice, Penalty – Issue of Show cause notices by the Additional Director, DGGI, proposing to impose penalty under Section 122 of the CGST Act, 2017 - Petitioners challenged the jurisdiction of the Additional/Joint Commissioner, Kanpur Commissionerate to adjudicate the show cause notices - Whether the Additional/Joint Commissioner, Kanpur Commissionerate has the jurisdiction to adjudicate the show cause notices issued against the petitioners by the Additional Director, DGGI, Zonal Unit, Ahmedabad - HELD – As per the SCNs, there is allegation of scam of clandestine supplies of unaccounted Pan Masala and scented Tobacco/Jarda. The petitioners are part of such modus operandi as alleged in the show cause notices - The contention of the petitioners regarding the jurisdiction of the Kanpur Commissionerate is not tenable - as per Notification No. 31/2018, the SCN issued by the DGGI is required to be adjudicated by the competent Central Tax Officer of the Executive Commissionerate in whose jurisdiction the main noticees are registered. The main noticees in the present case are situated in Kannauj, which falls under the jurisdiction of the Kanpur Commissionerate as per Notification No. 2/2017. Therefore, the Additional/Joint Commissioner, Kanpur Commissionerate has the jurisdiction to adjudicate the show cause notices issued against the petitioners – The proper officer under sections 73 and 74 under the CGST Act would be Additional or Joint Commissioner of Central Tax who is required to determine the liability of tax and interest in the hands of the main noticees - the allegations made against the petitioners in the SCNs are required to be examined in the adjudication proceedings and the petitioners can raise all their contentions, including the issue of jurisdiction, before the adjudicating authority. It would not be proper to entertain the writ petitions at this stage and the petitioners are directed to raise all their contentions before the adjudicating authority – The petitions challenging the jurisdiction of the Additional/Joint Commissioner, Kanpur Commissionerate are dismissed – Ordered accordingly - Penalty under Section 122(1A) of the CGST Act - The petitioners were also issued show cause notices proposing to impose penalty on them under Section 122(1A) of the CGST Act, 2017, which provides for penalty on any person who retains the benefit of a fraudulent transaction - Whether the provisions of Section 122(1A) of the GST Act can be invoked against the petitioners - HELD - The contention of the petitioners that the provisions of Section 122(1A) can be invoked only against a "taxable person" and not against the petitioners, is rejected - The legislature has specifically used the term "Any Person" in Section 122(1A) instead of "taxable person", and any other interpretation would defeat the purpose of the provision - The Memorandum explaining the Finance Bill, 2020, which inserted Section 122(1A), makes the beneficiary of fraudulent transactions liable for penalty similar to the person who committed the offence. Accordingly, the petitioners can be subjected to penalty under Section 122(1A) of the CGST Act - the provisions of Section 122(1A) of the CGST Act can be invoked against the petitioners.
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