Can Customs Issue SCN For IGST Recovery? Delhi High Court Issues Notice To Customs & GST Dept; Seeks Joint Affidavit

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain has listed the matter for February 24, 2026 while observing that

“However, insofar as the question as the inter-play between the provisions of the Customs Act, 1962, the IGST Act and CGST Act is concerned, the matter requires consideration.”

The twin issues involved in this writ petition were

• classification of automobile components used for sealing and
• power of the Commissioner of Customs to issue the Show Cause Notice (SCN)

Petitioner an exporter of sealing material such as rubberised cork gaskets, rubber gaskets and also components of machinery and motor vehicles obtained refund of IGST for some of its exports. The Show Cause Notice (SCN) culminated into an Order passed by the Customs Department. The Order sought to reclassify cork gasket, rubberized cork under HSN 45041010 as opposed to exporter's favoured classification under HSN 84841010 and HSN 40169340. Also, redemption fine of Rs 2,50,000/

and Rs 30,000 was imposed on the exporter together with rejection of IGST claim of Rs. 5,12,006, drawback amount of Rs. 20,206, benefit of export incentive scheme amounting to Rs 28,443.

As for classification, the High Court relegated Petitioner to alternative remedy of appeal with a direction regarding non-dismissal of appeal on the ground of limitation.

Petitioner called into question the aforesaid recovery considering Sections 2 (12), 5, 7(5) and 20 of the IGST Act, 2017. It was submitted that demands and recovery under the IGST Act would be governed by the provisions of the CGST Act, 2017. Thus, it was pointed out that under Section 73 of the CGST Act, only a proper officer notified under Section 73 of the CGST Act can raise any demand or seek to recover.

Contrarily, Customs Department contended that in terms of Section 2(2) of the Customs Act, 1962, the Customs Officers would also be 'proper officers' in order to raise demands of any tax in respect of exports.

The High Court directed the Customs and GST Department to file a joint affidavit explaining as to who the 'proper officer' in such a case would be. The High Court has granted four weeks to the Departments and another four weeks to the Petitioner for counter affidavit.

Appearance: Advocates Rajat Mittal, Ms. Krati Agrawal, Suprateek Neogi, Priyanshu appeared on behalf of the assesee, whereas Customs were represented by SSC Anushree Narain with Advocate Naman Choula.

Case Detail: A AND T Security Services Pvt. Ltd. vs. Additional Commissioner of CGST Delhi, West

Case No.: W.P.(C) 17723/2025