GST Intelligence officers have valid jurisdiction to issue show cause notices under Sections 2(24), 2(25), and 5

The Jharkhand HC dismissed writ petitions challenging show cause notices issued by GST Intelligence officers. Petitioners argued these officers lacked jurisdiction to issue SCNs. The court examined Sections 2(24), 2(25), and 5 of the GST Act 2017, finding that through Board notification dated July 1, 2017, Additional Director Generals and Deputy/Assistant Directors of GST Intelligence were validly empowered to exercise Commissioner and Deputy Commissioner powers respectively. The court distinguished GST provisions from Customs Act provisions, noting material differences in "Proper Officer" definitions. The court held these officers possess valid jurisdiction to issue SCNs and directed petitioners to respond to the notices.

---

---

Issues Involved:
1. Jurisdiction of officers issuing show cause notices under Section 74 of the CGST Act, 2017.
2. Maintainability of writ petitions challenging show cause notices.
3. Authority of the Additional Director and Deputy Director of GST Intelligence to issue notices.

Issue-wise Detailed Analysis:

1. Jurisdiction of Officers Issuing Show Cause Notices:
The primary issue in the judgment was whether the Additional Director and Deputy Director of the Directorate General of Goods and Services Tax Intelligence (DGGI) had the jurisdiction to issue show cause notices under Section 74 of the Central Goods and Services Tax Act, 2017. The court examined the definition of "Proper Officer" under Section 2(91) of the Act, which refers to the Commissioner or an officer of central tax assigned that function by the Commissioner in the Board. The court concluded that the notification dated 1st July 2017, as amended by the corrigendum on 29th July 2019, authorized these officers to act as "Proper Officers." This was supported by the statutory provisions under Sections 3, 4, and 5 of the CGST Act, which empower the Government and the Board to appoint and authorize officers to perform specific functions under the Act. Thus, the court held that the Additional Director and Deputy Director were competent to issue the show cause notices.

2. Maintainability of Writ Petitions Challenging Show Cause Notices:
The court addressed the maintainability of the writ petitions filed under Article 226 of the Constitution of India. The petitioners argued that the notices were issued without jurisdiction, constituting an abuse of process of law. The court referred to its previous order dated 18.06.2024, where it was held that the writ petitions were maintainable. However, it emphasized that the writ court should generally not interfere at the stage of issuance of show cause notices unless they are issued without jurisdiction or in abuse of process. The court cited precedents from the Supreme Court, including Union of India v. VICCO Laboratories and State of U.P. v. Arezzo Developers (P) Ltd., which support interference only in exceptional cases where jurisdictional errors are evident.

3. Authority of Additional Director and Deputy Director of GST Intelligence:
The court examined the statutory framework and notifications that conferred powers on the Additional Director and Deputy Director of GST Intelligence. It referred to the notification issued on 1st July 2017, which appointed officers in the Directorate General of Goods and Services Tax Intelligence as central tax officers with powers equivalent to their counterparts in the central tax hierarchy. The court also considered the corrigendum dated 29th July 2019, which clarified that the notification was issued by the Government. Additionally, the court analyzed Sections 3, 4, and 5 of the CGST Act, which outline the appointment and powers of officers under the Act. The court concluded that the officers in question were duly authorized to issue the notices, aligning with the statutory provisions and notifications.

Conclusion:
The court dismissed the writ petitions, holding that the Additional Director and Deputy Director of GST Intelligence had the jurisdiction to issue the show cause notices under the CGST Act. The court affirmed the maintainability of the writ petitions but emphasized that the petitioners should respond to the notices before the appropriate authorities, as the writ court's interference at the notice stage should be rare and only in cases of manifest jurisdictional errors.

---