State GST officer can assess taxpayer assigned to Central officer due to territorial jurisdiction and estoppel principles

Allahabad HC dismissed a writ petition challenging a show cause notice and assessment order issued by a State GST officer when the taxpayer was assigned to a Central GST officer. The court held that while the case was assigned to Central officer for administrative convenience, the State officer had inherent territorial jurisdiction. Since the taxpayer participated in proceedings without raising jurisdictional objections and submitted to the State officer's jurisdiction, they were estopped from challenging it later. The court distinguished between inherent lack of jurisdiction and error of jurisdiction, finding this was the latter with contributory negligence by the taxpayer.

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Issues Involved:
1. Jurisdiction of the State Officer to issue a show cause notice and pass an assessment order.
2. The validity of the show cause notice and assessment order due to the assignment of the case to a Central Officer.
3. The implications of the petitioner submitting to the jurisdiction of the State Officer without objection.
4. The distinction between inherent lack of jurisdiction and error of jurisdiction.

Issue-Wise Detailed Analysis:

1. Jurisdiction of the State Officer to issue a show cause notice and pass an assessment order:
The petitioner argued that the show cause notice and assessment order issued by the State Officer were without jurisdiction because the GST Council had assigned the case to a Central Officer. The relevant provisions of the CGST Act and UPGST Act, including Sections 2(21), 2(91), 6, and 9, were examined to determine the proper officer's jurisdiction. The court found that both the proper officers under the CGST Act and UPGST Act have jurisdiction within their territorial limits but must adhere to the assignment of cases for administrative convenience.

2. The validity of the show cause notice and assessment order due to the assignment of the case to a Central Officer:
The GST Council's decision and subsequent circulars mandated a division of taxpayers between Central and State tax administrations. The petitioner's case was assigned to a Central Officer, but the State Officer issued the show cause notice and passed the assessment order. The court noted that the petitioner did not raise any jurisdictional objections during the proceedings and participated fully, leading to a "contributory error of jurisdiction."

3. The implications of the petitioner submitting to the jurisdiction of the State Officer without objection:
The court emphasized that the petitioner, by not objecting to the jurisdiction and participating in the proceedings, effectively submitted to the jurisdiction of the State Officer. Citing precedents from the Supreme Court, the court held that a party cannot challenge the jurisdiction in further appellate proceedings if they have submitted to it initially. The court referenced cases such as "Municipal Commissioner, Kolkata vs. Salil Kumar Banerji" and "Kedar Shashikant Deshpandey vs. Bhor Municipal Council" to support this principle.

4. The distinction between inherent lack of jurisdiction and error of jurisdiction:
The court differentiated between inherent lack of jurisdiction and an error of jurisdiction. It concluded that the State Officer did not lack inherent jurisdiction but committed an error by exercising jurisdiction over a case assigned to a Central Officer. The court cited "H.V. Nirmala vs. Karnataka State Financial Corporation" and "Nusli Neville Wadia vs. Ivory Properties" to explain that jurisdictional errors can be corrected if timely objections are raised. Since the petitioner did not object, the error did not render the proceedings void ab initio.

Conclusion:
The court dismissed the writ petition, holding that the show cause notice and assessment order did not suffer from inherent lack of jurisdiction but were the result of a contributory error due to the petitioner's failure to object. The petitioner was advised to challenge the assessment order through an appeal under Section 107 of the CGST/UPGST Act.

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