In a recent ruling, the Rajasthan High Court confirmed that Central Tax Officers and the Directorate General of Goods and Services Tax Intelligence ( DGGI ) have nationwide authority to issue Show Cause Notices ( SCNs ) under the Goods and Services Tax ( GST ).
Baba Minerals, the petitioner is a registered Goods and Service Tax ( GST ) dealer who filed a writ petition seeking to quash a show cause notice dated July 31, 2024, issued by the Deputy Director of DGGSTI, Jaipur Zonal Unit.
The petitioner argued that jurisdiction for adjudicating the matter lies with State authorities under Section 6(1) of the Goods and Service Tax ( GST ) Act, 2017.
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The petitioner’s counsel argued that the Deputy Director of the Directorate General of Goods and Services Tax Intelligence ( DGGSTI ) could not act as the adjudicating authority and challenged the validity of the notice on jurisdictional grounds.
The Goods and Service Tax Department ( GST )’s counsel alleged that investigations revealed the petitioner was involved in generating fake Input Tax Credits ( ITC ) through cash transactions and fake invoices.
The respondents referenced a circular dated February 9, 2018, which empowers Central Tax Officers of Audit Commissionerates and the Directorate General of Goods and Services Tax Intelligence (DGGSTI) to issue show-cause notices.
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The petitioner approached the court without responding to the show cause notice or challenging the allegations before the Goods and Service Tax Department.
The bench comprising Justice Avneesh Jhingan and Justice Ashutosh Kumar observed that the allegations in the notice involved factual issues requiring determination through appropriate proceedings.
The court held that the writ petition was premature and should have been filed after responding to the show cause notice. The writ petition was dismissed.
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