2026-VIL-1016-DEL
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SGST High Court Cases

GST - Competence of Proper Officer to issue Show Cause Notice under Section 122 of CGST Act, 2017 - Assignment of functions - Investigations into alleged issuance of invoices without actual supply of goods and wrongful availment of Input Tax Credit. Show Cause Notices under Section 122 were issued by DGGI on 30.06.2025. Petitioners contended that the issuing officer had not been assigned relevant functions under Section 122 at time of issuance and that subsequent assignment through Circular dated 27.10.2025 could not retrospectively validate notices which were void at inception - Respondents relied upon Notification No. 14/2017 which places DGGI officers at par with corresponding rank central tax officers invested with all powers under CGST and IGST Acts, and contended that subsequent Circular merely clarified existing authority - Whether officer of Central Tax who is not specifically assigned function under Section 2(91) can initiate proceedings under Section 122 when empowered under Sections 3 and 5 of CGST Act and invested with powers of corresponding rank by Notification No. 14/2017-CT and subsequent Circular dated 27.10.2025 can retrospectively validate void SCNs - HELD – The statutory scheme distinguishes between designation or rank of officer and assignment of particular statutory function and expression proper officer is function-specific. However, on conjoint reading of Sections 2(91), 3 and 5 of CGST Act and Notification Nos. 02 and 14, Court is unable to hold that in absence of specific assignment officer otherwise empowered by Sections 3 and 5 is denuded of authority to initiate proceedings - Notification No. 14/2017-CT specifically invests DGGI officers with powers exercisable by Central Tax officers of corresponding rank and Notification No. 02/2017-CT assigns various functions to specified classes of officers. Question whether provisions read together constitute sufficient conferment of authority cannot be answered merely on basis of subsequent Circular dated 27.10.2025 which is issued in view of amendments in Finance Act and is clarificatory of manner in which functions are to be exercised and officers who perform such functions but cannot render nugatory or override statutory notifications already issued - Objection as to competence cannot be characterized as patent or self-evident absence of jurisdiction warranting interference under Article 226. Question involves construction of statutory scheme, effect of Notification Nos. 02 and 14, subsequent Circular and interrelationship between proceedings under Sections 73 or 74 and consequential penalties under Section 122, which are matters capable of examination by Appellate Authority which is competent to consider both questions of fact and law - Objection concerning competence of officer does not disclose patent absence of jurisdiction warranting interference in writ jurisdiction. Petitioners remain at liberty to raise said objection in statutory appeals - The writ petitions are disposed of - Applicability of Amended Pre-Deposit Requirement under Section 107(6) to Proceedings Initiated Before Amendment - Whether amended requirement of pre-deposit can be applied retrospectively to proceedings initiated before 01.10.2025 - HELD - Substituted proviso to Section 107(6) which came into force on 01.10.2025 does not govern appeals arising from adjudicatory proceedings initiated by Show Cause Notices issued prior to that date. Appellate remedy including conditions governing its exercise is governed by law applicable on date on which adjudicatory proceedings commenced - Amended pre-deposit requirement shall not apply to appeals arising from Show Cause Notices issued prior to 01.10.2025. Appeals shall be governed by Section 107(6) as it stood on respective dates of issuance of Show Cause Notices and shall not be rejected merely because Orders-in-Original were passed after 01.10.2025.
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