Court Dismisses Jurisdictional Objection, Directs Petitioner to Pursue Appellate Remedy
In a significant ruling, the Allahabad High Court has upheld the competence of a Deputy Commissioner to issue a show-cause notice under Section 122 of the Uttar Pradesh Goods and Services Tax (UPGST) Act, 2017, where the pecuniary jurisdiction exceeds Rs. 2.5 crores. This decision came in response to a writ petition filed by M/s Nageen Traders and Molding India Pvt. Ltd., which challenged the jurisdiction of the Deputy Commissioner in issuing the notice and the subsequent penalty order.
The Division Bench comprising Justices Shekhar B. Saraf and Abdhesh Kumar Chaudhary, delivered the judgment on August 10, 2026, in the case titled "M/s Nageen Traders and Molding India Pvt. Ltd. v. State of U.P. and 2 others."
The petitioner had argued that the show-cause notice dated November 19, 2025, was issued by an officer lacking the proper jurisdiction, as defined under the UPGST Act, 2017. They contended that the term "proper officer" was not explicitly defined, leading to a jurisdictional error. The petitioner also cited a Central Government circular that identified the appropriate officers authorized to issue such notices, arguing that similar guidelines were required from the State Government to prevent jurisdictional overreach.
However, the State's counsel, Shri Sanjay Sarin, countered this argument by referencing two circulars issued under the UPGST Act in 2018 and 2022. These circulars clarified that the Deputy Commissioner was indeed authorized to issue show-cause notices in cases involving amounts over Rs. 2.5 crores. The court concurred with this interpretation, affirming the Deputy Commissioner's jurisdiction.
The court also noted that the petitioner had participated in the proceedings without initially objecting to the jurisdiction, invoking the doctrine of election. Consequently, the court exercised its discretion under Article 226 of the Constitution of India to refuse the writ petition, directing the petitioner to pursue the statutory appellate remedy available under the GST Act. Additionally, the court granted the benefit of Section 14 of the Limitation Act, 1963, allowing the exclusion of the time period during which the writ petition was pending.
This judgment reinforces the authority of the Deputy Commissioner under the UPGST framework and underscores the importance of procedural compliance in GST-related disputes.
Bottom Line :
GST Law - Proper officer under UPGST Act, 2017 - Deputy Commissioner held competent to issue show-cause notice under Section 122 of the UPGST Act where pecuniary jurisdiction exceeds Rs. 2.5 crores - Writ petition disposed of, petitioner directed to avail statutory appellate remedy.
Statutory provision(s): UPGST Act, 2017 Sections 122 and 127, Constitution of India Article 226, Limitation Act, 1963 Section 14
