The Madras High Court has granted interim relief to a taxpayer by staying GST assessment and penalty orders after finding a prima facie case that the adjudication may have been carried out by an authority lacking jurisdiction under Notification No. 2/2022-Central Tax dated March 11, 2022. 

The bench of Justice Senthilkumar Ramamoorthy observed that where a show cause notice is issued by the Directorate General of GST Intelligence (DGGI), the adjudication must be undertaken only by officers specifically empowered under the notification. 

G Natarajan, counsel appearing for the petitioners argued that Notification No. 2/2022-Central Tax amended the GST framework by conferring adjudicatory powers on specific officers listed in Table 5 for matters arising out of notices issued by the DGGI. Since the impugned assessment and penalty orders had not been passed by any of the officers designated under the notification, it was contended that the entire adjudication exercise was legally unsustainable for want of jurisdiction. 

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The petitioners therefore sought to have both the assessment and penalty orders quashed on the ground that they had been issued by an authority not competent under the statutory notification. 

The High Court noted that the show cause notice in the matter had admittedly been issued by the DGGI. The Court observed that this circumstance prima facie supported the petitioners’ contention that the subsequent assessment and penalty orders had been passed in contravention of Notification No. 2/2022 if they were not adjudicated by the officers specified therein. 

The Court held that a prima facie case had therefore been made out warranting interim protection pending adjudication of the writ petitions. 

Taking note of the apparent jurisdictional issue, the High Court ordered an interim stay of both the assessment order and the penalty order until the next date of hearing. The respondents sought time to file their counter affidavits, which the Court granted. 

The matter has been directed to be listed for further hearing on September 2, 2026. 

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