The Calcutta High Court, Circuit Bench at Jalpaiguri, in Sagar Ghosh v. Deputy Commissioner, State GST & Ors., considered an important jurisdictional challenge concerning proceedings initiated and adjudicated under Section 74 of the WBGST/CGST Act, 2017 by an officer posted in the Bureau of Investigation. The Court also examined whether the existence of an appellate remedy before the GST Appellate Tribunal would prevent the High Court from exercising its writ jurisdiction where the very competence of the adjudicating authority was questioned.
The petitioner, a registered person, challenged the adjudication order dated 13 March 2024, the appellate order dated 20 March 2025 and a consequential recovery letter dated 27 May 2026. The dispute originated from an enforcement case initiated in January 2021 regarding the genuineness and eligibility of Input Tax Credit claimed on inward supplies. Following investigation, proceedings under Section 74 were initiated and the adjudicating authority ultimately held ITC relating to supplies from five suppliers to be ineligible, directing reversal along with interest and penalty.
The petitioner thereafter preferred an appeal under Section 107 of the GST enactments. The appellate authority declined to entertain the appeal on the ground that it had been filed electronically beyond the prescribed period. The petitioner consequently approached the High Court questioning, among other issues, the jurisdiction of the State GST authority to issue the show cause notice and undertake adjudication.
Jurisdiction of Bureau of Investigation Officer
A principal contention raised before the Court was that the officer of the Bureau of Investigation was empowered to conduct enforcement and investigation activities, including ITC investigation, but lacked authority to undertake adjudication under Section 74 of the WBGST/CGST Act.
The Court examined the order dated 20 November 2019 issued by the Commissioner, State Tax, West Bengal, governing the jurisdiction of officers posted in the Bureau of Investigation. The Court observed that the relevant order conferred powers relating to enforcement activities and investigation, including ITC investigation, across specified territorial limits.
On a prima facie consideration, the Court noted that the concerned officer was vested with enforcement and investigation functions. However, whether such an officer also possessed the power to adjudicate proceedings under Section 74 required proper determination. The Court therefore held that the respondents should be given an opportunity to substantiate the legal basis on which such adjudicatory power was claimed.
Alternative Remedy Does Not Bar Pure Jurisdictional Challenge
The State argued that an appeal under Section 112 was available before the GST Appellate Tribunal and that the writ petition should therefore not be entertained.
The High Court reiterated that the existence of an alternative statutory remedy ordinarily discourages exercise of jurisdiction under Article 226. However, referring to established Supreme Court principles, the Court held that a writ petition may nevertheless be entertained where a jurisdictional issue questioning the very competence of an authority is raised and such issue constitutes a pure question of law without requiring determination of disputed facts.
The Court referred to the principles laid down in decisions including Whirlpool Corporation, Gujarat Ambuja Ltd., Calcutta Discount Company Ltd. and Godrej Sara Lee Ltd. and concluded that a writ petition need not be rejected at the threshold merely because an alternative appellate remedy exists when the challenge goes to the root of the authority’s jurisdiction.
Cross-Empowerment Under Section 6
The petitioner also argued that he was administratively assigned to Central Tax authorities and that State Tax authorities could not undertake adjudication in the absence of a notification providing for cross-empowerment under Section 6 of the respective GST enactments.
The High Court noted that different High Courts have expressed divergent opinions on this question.
The Madras High Court in Tvl. Vardhan Infrastructure had held that where an assessee was administratively assigned to the Central authority, State authorities could not interfere with assessment proceedings in the absence of a corresponding notification under Section 6.
On the other hand, the Kerala High Court in Pinnacle Vehicles and Services Pvt. Ltd. and the High Court of Jammu & Kashmir and Ladakh in R.K. Ispat Ltd. had taken the view that cross-empowerment under Section 6(1) operates automatically by legislative mandate and that a separate notification is necessary only where conditions or restrictions are sought to be imposed.
In view of the jurisdictional questions raised, the Calcutta High Court considered it appropriate to entertain the writ petition rather than dismiss it solely on the ground of availability of an appellate remedy.
High Court Sets Aside Adjudication and Appellate Orders
The Court observed that the jurisdictional objections did not appear to have been raised before the original adjudicating authority. It therefore considered remand to be the appropriate course, while recognising that an adjudicating authority is competent to rule upon its own jurisdiction.
Accordingly, the High Court set aside and quashed the adjudication order dated 13 March 2024, the appellate order dated 20 March 2025 and all consequential steps taken pursuant thereto.
The petitioner was granted liberty to submit a comprehensive reply to the show cause notice within 14 working days from receipt of the server copy of the High Court’s order, raising all available grounds including the question of jurisdiction.
The adjudicating authority was directed to provide an opportunity of hearing and to decide the issue of jurisdiction, if raised, as the first issue. Only thereafter was the authority directed to consider the remaining issues afresh in accordance with law and pass a reasoned order.
The Court clarified that its observations were made only for arriving at the ultimate conclusion and that the adjudicating authority would remain free to decide the matter independently and without being influenced by the observations in the High Court judgment or the earlier adjudication and appellate orders.
Key Legal Principle
The judgment reinforces the principle that the availability of an alternative statutory remedy does not automatically bar a writ petition where the petitioner raises a pure question of law concerning the inherent jurisdiction or competence of the authority passing the impugned order.
It also brings into focus an important unresolved aspect of GST administration—whether officers posted in investigation or enforcement wings possess adjudicatory authority under Section 74 merely by virtue of their investigative jurisdiction. The High Court did not finally decide that question but directed the adjudicating authority to determine its jurisdiction as a preliminary issue before proceeding on the merits.
For GST practitioners, the decision is particularly relevant in cases involving jurisdiction of investigation wings, cross-empowerment of Central and State GST officers, proceedings under Section 74, maintainability of writ petitions despite statutory remedies and challenges to the competence of the proper officer.
