Notification Defining Jurisdiction Does Not Automatically Empower All Officers To Invoke S. 122 CGST Act: AP High Court

Section 122 of the Central Goods and Services Tax (CGST) Act, 2017 is the primary provision defining various GST-related offences and the specific monetary penalties applicable to them.

Justices R. Raghunandan Rao and T.C.D. Sekhar examined whether Notification No.2/2017-Central Tax dated 19.06.2017 conferred power on any authority or officer to initiate or conduct proceedings under Section 122 of the CGST Act.

In the case at hand, a show-cause notice was issued to the assessee/petitioner under Section 122 of the CGST Act.

The show-cause notice was issued on the ground that there were various instances of circular trading, etc., which would attract penalties under Section 122 of the CGST (Central Goods and Services Tax) Act.

The counsel for the assessee argued that Section 122 of the CGST Act does not confer power on any authority or officer to initiate or conduct proceedings under the Section.

Apart from this, it was contended that no proceedings can be initiated under the provisions as there is no provision for a hearing to be given to the registered person against whom such proceedings are sought to be initiated and that there is no period of limitation set out in the said provision.

The department contended that Notification No.2/2017-Central Tax dated 19.06.2017, issued in exercise of powers under Section 3 read with Section 5 of the GST Act and Section 3 of the IGST Act, had empowered various officers, enumerated in the notification, with all the powers under the Act and the rules made thereunder and set out the territorial jurisdiction of each of the said officers.

It was further argued that the subsequent Circular No.254/11/2025-GST dated 27.10.2025 clearly empowers the concerned Deputy Commissioner or Assistant Commissioner to exercise functions under Section 122 of the CGST Act. Section 5 further states that a superior officer is empowered to exercise any jurisdiction which is vested in a subordinate officer.

The bench referred to the Circular dated 27.10.2025 and noted that the Circular clearly empowers the Assistant Commissioner of Central tax to exercise powers under Section 122 of the CGST Act.

The Court further referred to Notification No.2 of 2017 and noted that this conferment of power can be taken to mean that the notification was not conferring any further power, but was only fixing the territorial jurisdiction of the officers in respect of the powers which are conferred on them by virtue of the act itself. In such circumstances, it may not be permissible to hold that authority had been granted, to all the officers enumerated in the list, in the said notification, with all the powers under the entire act including Section 122 of the CGST Act.

Regarding the question of whether Section 122 of the CGST Act can be enforced and whether necessary safeguards are available, the bench opined that the same falls outside the scope of the Writ Petition inasmuch as the question was only on the jurisdiction of the Additional Commissioner, Central Tax, in issuing the notice under Section 122 of the CGST Act.

In view of the above, the bench disposed of the petition and set aside the show-cause notice. The bench granted liberty to the Additional Commissioner, Central Tax, to issue a fresh show cause notice under Section 122 of the CGST Act.

Case Title: Ganpati Ispat v. Union of India

Case Number: WRIT PETITION NO: 31263/2025

Counsel for Petitioner/Assessee: Vadlapatla Sai Mallik

Counsel for Respondent/Department: D. Nagaraja Kumari

2026 LLBiz HC (APH) 1

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