The Nagpur Bench of the Bombay High Court has granted interim relief to a GST taxpayer by staying recovery proceedings initiated pursuant to a series of show cause notices issued by a State Tax Officer, after finding that the challenge to the officer’s authority under a CBIC jurisdictional circular warranted consideration.
The bench of Justice Urmila Joshi-Phalke and Justice Nivedita P. Mehta has observed that the petitioner’s contention regarding the competence of the issuing authority raises an arguable issue and directed that no recovery action be taken until the State files its reply.
The petitions arose from four show cause notices dated 30 March 2026 issued to the petitioner by the State Tax Officer. The petitioner challenged the notices on the ground that they had been issued by an officer who was not authorized under the CBIC Circular dated 27 October 2025, which assigns functions to specific Central Tax officers for issuing show cause notices under particular provisions of the CGST Act.
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Appearing for the petitioner, counsel argued that the CBIC’s circular, issued in exercise of powers under Section 2(91) read with Section 5 of the Central Goods and Services Tax Act, 2017 and Section 20 of the Integrated Goods and Services Tax Act, clearly specifies which officers are empowered to perform various statutory functions.
The petitioner relied particularly on Table I of the circular, which assigns functions under Section 74A, Section 122, and Rule 142(1A) of the CGST Rules, 2017 to officers such as the Superintendent, Deputy/Assistant Commissioner, and Additional/Joint Commissioner of Central Tax.
The Court also examined Table III of the CBIC circular, which prescribes monetary limits for issuance of show cause notices involving penalties under Section 122 of the CGST Act.
According to the circular a Superintendent of Central Tax may issue notices where the penalty amount does not exceed ₹10 lakh. A Deputy or Assistant Commissioner of Central Tax is authorized where the amount exceeds ₹10 lakh but does not exceed ₹1 crore. An Additional or Joint Commissioner of Central Tax is empowered to issue notices where the amount exceeds ₹1 crore.
The petitioner contended that despite these clear assignments of jurisdiction, the impugned notices had instead been issued by a State Tax Officer, rendering them without legal authority.
The bench observed that the petitioner’s challenge to the competence of the issuing authority deserved consideration.
The Court specifically noted that, in view of the monetary limits prescribed in the CBIC circular, the issuance of notices by a State Tax Officer formed the core issue requiring adjudication.
Taking note of the jurisdictional challenge, the High Court granted interim protection to the petitioner. It ordered that, in terms of the relief sought in the petitions, further GST recovery proceedings pursuant to the impugned show cause notices shall remain stayed until the State files its reply. The matters have been listed for further hearing on 3 July 2026.
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