GST transition saves legacy service tax proceedings and supports continued jurisdiction under the repeal-and-savings framework.

Under the GST transition, the omission of Chapter V of the Finance Act, 1994 did not by itself end proceedings relating to past service tax liabilities because Section 174(2) of the CGST Act preserves prior operation, accrued liabilities, investigations, adjudications and other legal proceedings. The earlier notifications governing assignment of show cause notices and adjudication under the service tax regime were treated as continuing within that saved framework, since they were not inconsistent with the later enactment. On that basis, the Madras HC rejected the jurisdictional objection to DGGI-issued notices and upheld the continuity of the pre-GST machinery for legacy matters.

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Issues: Whether the notifications issued under the pre-GST service tax regime survived the transition to GST so as to validly empower DGGI officials to issue show cause notices and secure adjudication under the Finance Act, 1994 read with Section 174(2) of the Central Goods and Services Tax Act, 2017.

Analysis: The challenge was confined, in substance, to the assumption of jurisdiction by DGGI. The omission of Chapter V of the Finance Act, 1994 by Section 173 of the Central Goods and Services Tax Act, 2017 did not, by itself, extinguish pending or future proceedings in respect of past liabilities because Section 174(2) expressly saves previous operation, accrued liabilities, investigations, adjudications and other legal proceedings. The earlier notifications governing assignment of show cause notices and adjudication under the service tax regime were treated as continuing within the saved framework, particularly in light of the statutory continuity intended by the repeal-and-savings provisions and the established practice of duality between notice-issuing and adjudicating authorities. The objection based on omission versus repeal was rejected, and the Court held that the petitioners could not succeed on the jurisdictional attack.

Conclusion: The assumption of jurisdiction by the DGGI officials was held to be valid and the challenge on that ground failed.

Final Conclusion: The writ petitions were dismissed on the jurisdictional issue, while the merits-based challenges were left to be agitated in statutory appeal or before the competent authority, as directed in the order.

Ratio Decidendi: Proceedings and liabilities arising under a repealed or omitted fiscal regime continue where the later enactment contains an express savings clause preserving prior operations, accrued liabilities, investigations and adjudications, and subordinate notifications issued under the earlier regime continue so far as they are not inconsistent with the new enactment.

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