GST | Party Contesting Notice On Merits, Challenging Jurisdiction After Adverse Order Hit By Doctrine Of Election: Allahabad HC

The bench of Justice Shekhar B. Saraf and Justice Abdhesh Kumar Chaudhary held

“We are conscious of the settled legal position that a question of jurisdiction can be raised before a Constitutional Court at any stage. However, the writ jurisdiction exercised under Article 226 of the Constitution of India is discretionary in nature and is required to be exercised by this Court in a judicious manner.”

Petitioner challenged a show cause notice dated 19.11.2025 issued under Section 122(1)(ii) for the financial year 2024-2025, and the consequential penalty order dated 24.06.2026 passed under Sections 122(1)(ii) and 122(1)(vii), both on the ground of patent lack of jurisdiction.

It was argued that the expression “proper officer” is not defined under the UPGST Act, 2017, and the officer who issued the notice therefore lacked jurisdiction. Reliance was placed on Circular No. 254/11/2025-GST dated 27.10.2025, by which the Central Government identified the officers competent to issue notices under various provisions of the CGST Act, 2017 and the IGST Act, 2017, including under Section 122, and prescribed monetary limits.

Similar circulars, it was submitted, had to be issued by the State Governments, failing which Section 122 notices would be without jurisdiction in law. As the penalty proposed exceeded Rs. 1 crore, the notice ought to have come from the Additional Commissioner or Joint Commissioner of Central Tax, whereas it was issued by the Deputy Commissioner of State Tax.

Standing Counsel for the State placed on record two circulars issued under the UPGST Act, dated 11.12.2018 and 10.05.2022. The first provides that the proper officer for a notice under Section 122 is the proper officer contemplated under Section 127, which allows penalty to be levied by order, after a reasonable opportunity of hearing, in cases not covered by other specified proceedings, and clarifies that Section 122 need not itself use the expression “proper officer." The circulars were also relied on to show that where turnover exceeds Rs. 2.5 crores, jurisdiction lies with the Deputy Commissioner.

On a perusal of the circulars, the Court held

“with regard to the UPGST Act, the Deputy Commissioner has been vested with the power to issue a show-cause notice under Section 122, and that the pecuniary jurisdiction in cases involving an amount exceeding Rs. 2.5 crores would lie with the Deputy Commissioner.”

The Court noted that the notice had been issued in November 2025 and that no objection to jurisdiction was taken then. The petitioner had appeared before the officer concerned and argued the matter on merits.

“Having suffered the impugned order dated 24.06.2026, the petitioner has now taken a volte-face and challenged the impugned order on the ground of lack of jurisdiction.”

The Court held

“firstly, we are prima facie of the view that the authority which issued the show-cause notice was not lacking in jurisdiction. Secondly, we are of the view that the petitioner is hit by the doctrine of election and ought to be relegated to the statutory appellate remedy available under the Act.”

Accordingly, the Court disposed of the writ petition with liberty to the petitioner to avail the statutory appellate remedy in accordance with law. It held that the benefit of Section 14 of the Limitation Act, 1963 would be available for the period the petition remained pending before it, subject to the petitioner satisfying that provision.

For Petitioner: Advocate Alok Kumar Gupta

For Respondents/State: Sanjay Sarin, Standing Counsel