Customs tariff classification and IGST/CGST overlap: who is the "proper officer" to issue an SCN, joint affidavit ordered

The dominant issue was whether the Commissioner of Customs had jurisdiction to issue an SCN where the dispute involved the inter-play of the Customs Act, 1962 with the IGST Act and CGST Act, including identification of the "proper officer." The HC held that while the impugned tariff classification dispute could be pursued through statutory appellate remedies, the jurisdictional question concerning the competent authority under the overlapping tax and customs regimes required judicial consideration; consequently, notice was issued and the Customs and CGST Departments were directed to file a joint affidavit clarifying who would be the proper officer in such cases.

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1. ISSUES PRESENTED AND CONSIDERED

(a) Whether the challenge to classification and consequential denial/recovery of export-related benefits should be entertained in writ jurisdiction, or the petitioner should be relegated to the statutory appellate remedy.

(b) Whether, for recovery/demand relating to IGST on exports and allied consequences, the "proper officer" competent to issue the show cause notice and adjudicate could be from the Customs Department, or whether such action lies only with the GST authorities-an issue requiring examination of the inter-play between the Customs Act, the IGST Act and the CGST Act.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (a): Entertaining the classification dispute under Article 226 vs. relegation to appellate remedy

Legal framework (as discussed by the Court): The Court treated the impugned adjudication as an "appealable order" and noted availability of "appellate remedies" for the classification issue.

Interpretation and reasoning: The Court separated the controversy into two parts-(i) classification of exported goods (and related consequences), and (ii) competence of the authority to issue the show cause notice in relation to IGST-related recovery. It held that, insofar as classification is concerned, the petitioner should pursue the statutory appeal rather than seek adjudication in writ proceedings at this stage.

Conclusions: The Court directed that the petitioner may file an appeal on classification within 30 days, and if filed within that period, the appeal shall not be dismissed on limitation and must be adjudicated on merits.

Issue (b): Competence of Customs authorities as "proper officer" for IGST-related demand/recovery in export matters

Legal framework (as discussed by the Court): The Court recorded competing positions: the petitioner invoked provisions of the IGST Act (and the asserted application of CGST Act recovery mechanism) to contend that only a "proper officer" under the CGST Act could issue the demand; the respondent asserted Customs officers are "proper officers" for raising demands of tax in respect of exports, relying on the Customs Act.

Interpretation and reasoning: The Court found that the question concerning the inter-play between the Customs Act, the IGST Act and the CGST Act, and identification of the competent "proper officer" in such circumstances, "requires consideration." It therefore did not render a final determination on merits at this stage.

Conclusions: The Court issued notice and directed the Customs Department and the CGST Department to file a joint affidavit addressing who would be the "proper officer" in such a case; timelines for counter-affidavit and rejoinder were fixed.

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