Case Summary

Case Identification

• Title: GST demand and cancellation proceedings sustained as the officer was held to be duly empowered under Section 73 CGST Act despite challenge to jurisdiction

• Court: High Court of Delhi

• Petition No.: W.P.(C) 8842/2023

• Date of Judgment: 05 July 2023

• Category of Dispute: Jurisdiction of Proper Officer / Cancellation of Registration / Section 73 Show Cause Notice

• Relevant Provisions: Sections 6, 73, 74, CGST Act; Delegation Notification dated 01.11.2019 by Commissioner of Trade & Taxes.

Facts (Paras 1–2)

The petitioner, a sole proprietor of M/s Metal Edge, challenged (i) the order dated 07.10.2021 canceling GST registration, (ii) the 23.09.2021 SCN issued under Section 73 proposing a demand of ₹95,81,779.10, and (iii) the appellate order dated 02.11.2022 affirming cancellation. The core contention was that the Sales Tax Officer Class II (AVATO, Ward-67) who issued the SCN and passed the cancellation order was not a “proper officer”, allegedly lacking jurisdiction. The petitioner also argued that authorities in Chandigarh had already initiated investigation and seized records, thereby barring parallel proceedings under Section 6.

Questions Before the Court

1. Whether the Sales Tax Officer Class II / GSTO was a “proper officer” competent to issue a Section 73 notice and cancel GST registration?

2. Whether proceedings initiated by Chandigarh authorities created a bar under Section 6 of the CGST Act against initiation of the present proceedings by Delhi authorities?

3. Whether the cancellation of registration required interference in writ jurisdiction?

Observations (Paras 2–6)

The Court noted that the Commissioner of Trade & Taxes, via notification dated 01.11.2019, expressly assigned functions under Sections 73 and 74 to Assistant Commissioners and Goods and Services Tax Officers. Thus, a GSTO is a valid “proper officer”. The petitioner’s argument that respondent no. 1 was “Class II” and not Assistant Commissioner was held untenable because the notification covered all GST Officers (GSTO).

On the Section 6 objection, the Court observed that the Chandigarh proceedings pertained not to the petitioner but to an investigation relating to one Mr. Rajneesh Bansal, during which petitioner’s records were requisitioned. This did not constitute initiation of proceedings “against the petitioner” so as to bar the present SCN. Even otherwise, the petitioner may raise all objections before the adjudicating authority.

Regarding cancellation, petitioner’s counsel chose not to press the challenge and reserved liberty to approach authorities afresh.

Judgment / Verdict (Paras 6–7)

The High Court held that the GST Officer had valid jurisdiction, the challenge to the SCN and cancellation order was meritless, and the Section 6 argument failed. No interference was warranted under Article 226.

The writ petition was dismissed, with liberty to the petitioner only regarding future action for restoration of registration. Pending applications were disposed of.

Case Law / Authorities Referred

The judgment does not refer to external precedents; it relies solely on statutory interpretation and the delegation notification of 01.11.2019.

However, as per your project requirements, the table is still provided:

Between Fine Lines (Trade Impact & Practical Takeaways)

Businesses cannot avoid Section 73/74 proceedings merely by questioning the officer’s rank where a valid delegation exists under the Commissioner’s notification. The bar on parallel proceedings under Section 6 applies only when proceedings on the same subject matter are already initiated against the taxpayer and not when records are seized during a third-party investigation. Challenges to jurisdiction or maintainability must be raised before the adjudicating authority unless the notice is fundamentally void.

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