Vires of Notification No.11/2017 and whether paragraph 2s invalidity negates jurisdiction to issue the impugned SCN

Challenge to the vires of Notification No. 11/2017-Central Tax (Rate) focuses on whether paragraph 2 being held ultra vires removes jurisdiction to issue a show cause notice under the CGST/IGST framework; the analysis applies the pan-India applicability principle from Kusum Ingots and related high court decisions to determine territorial scope and competence to initiate proceedings. The respondents are directed to address, by affidavit, the preliminary jurisdictional question whether the issuing authority had legal competence to issue the impugned show cause notice, with a timetable set for filing and listing for further hearing.

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Issues: (i) Whether respondent no.1 had jurisdiction to issue the impugned show cause notice dated 29 September 2025 in view of the legal position relating to Notification No. 11/2017 dated 28 June 2017.

Issue (i): Whether respondent no.1 had jurisdiction to issue the impugned show cause notice dated 29 September 2025 in view of the decisions holding paragraph 2 of Notification No. 11/2017 ultra vires and related Supreme Court precedents on pan-India applicability.

Analysis: The Court noted precedents including judgments of the Gujarat and Delhi High Courts holding paragraph 2 of Notification No. 11/2017 vulnerable to challenge and recorded related interim orders of the Supreme Court. The Court framed the preliminary jurisdictional question for determination and directed the respondents to file a reply affidavit addressing whether respondent no.1 possessed jurisdiction to issue the impugned show cause notice. The respondent's reply is to be filed within two weeks and furnished to the petitioner in advance of the next listing. Pending further hearing, the Court restrained any further action under the impugned show cause notice.

Conclusion: The Court did not finally decide the jurisdictional issue. The respondents are directed to file a reply on the preliminary jurisdictional issue within two weeks, and in the meantime no further action shall be taken under the impugned show cause notice.

Final Conclusion: The order grants interlocutory protection by staying further action under the impugned show cause notice and frames a preliminary question on jurisdiction for adjudication after the respondent's reply; no final fiscal determination is made.

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