CBIC Clarification Circular on DGGI Adjudication Sparks Confusion, Triggers New Legal and Operational Questions

The circular outlines how decisions made by Common Adjudicating Authorities (CAAs), usually Additional or Joint Commissioners assigned to handle DGGI-origin show cause notices, should be reviewed, revised, and appealed. It designates the Commissioner under whom the CAA is posted as the key authority for all such follow-up procedures.

This may appear straightforward on paper, but those on the ground see a different picture. Legal experts point out that the circular appears to go beyond mere clarification and is instead attempting to define appellate and revisionary jurisdiction, a power that arguably rests with the Parliament or through formal rule-making, not administrative circulars. This raises immediate questions about its enforceability, especially in courts.

Read More: CBIC Clarifies Review, Revision, and Appeal Procedures forOrders Passed by Common Adjudicating Authorities in DGGI Cases [Read Circular]

Unclear Legal Authority

One of the central concerns is whether the CBIC can, through a circular alone, assign or realign legal responsibilities that involve taxpayer rights and jurisdiction. The CGST Act lays down procedures for appeals, revisions, and reviews in Sections 107 and 108, but these provisions were meant to operate within a clear territorial structure. By assigning roles based on where the CAA is posted, the circular may be reshaping legal jurisdiction without legislative backing. Many legal professionals suggest that a circular cannot override or supplement the Act, especially on such core procedural matters.

Appeal Jurisdiction Unsettled

The confusion deepens when it comes to determining where a taxpayer must file an appeal. The circular vaguely suggests that it lies with the Commissioner (Appeals) in the same area as the CAA’s administrative Commissioner, but what happens if the taxpayer is located in a different State altogether? This scenario is increasingly common with businesses operating across multiple States. The risk is that appeals could be filed in the wrong jurisdiction and dismissed on technical grounds, denying taxpayers an effective remedy.

Read More: GST Notice u/s 61 stating Price Comparison Instead of PointingOut Discrepancies beyond Jurisdiction: Jharkhand HC [Read Order]

Clash with Natural Justice

Legal scholars also argue that such jurisdictional changes, implemented without public consultation or a legislative process, may clash with the principle of natural justice. A taxpayer should be able to challenge an order before an appellate authority in their home State, not one located far away where they have no administrative link or local counsel access. This could turn the appellate process into a logistical burden, particularly for small and medium enterprises.

Pending Appeals Left in Limbo

There is also no direction on how pending appeals, filed before this circular was issued, will be handled. These may be caught in a procedural vacuum, with no clarity on whether they should be transferred, refiled, or adjudicated as is. Both taxpayers and tax officers are now left guessing the fate of in-progress cases, especially those tied to older notices from the financial year 2017–18 onward.

Uncertainty Over Pre-Deposit and Refund Mechanisms

A particularly thorny issue involves pre-deposit payments, the amount taxpayers must pay when filing appeals. In cases where the CAA is located in one State and the taxpayer in another, which State gets credit for the deposit? More importantly, who processes the refund if the appeal is decided in the taxpayer’s favor? This has direct implications for revenue sharing between the Centre and States, and no mechanism currently exists to reconcile such cross-jurisdictional financial flows.

Read More: Dual GST Demands for Same Assessment Year Cannot be Sustained inLaw: Madras HC [Read Order]

Rectification of Errors – Who Is Responsible?

Errors in adjudication orders, be it typographical, factual, or otherwise, are typically corrected under Section 161 of the CGST Act. But when the adjudicating officer is located outside the taxpayer’s jurisdiction, who accepts and processes rectification requests? Officers on the ground report cases being bounced between jurisdictions due to a lack of clarity, delaying corrections and putting appeal timelines at risk.

GSTN System Misalignment

The GSTN IT system, which supports filing, payments, appeals, and other compliance tasks, is also reportedly not aligned with the circular’s framework. Officers and taxpayers have faced issues generating pre-deposit challans or uploading appeals when the parties are based in different States. The system’s design still follows the traditional taxpayer jurisdiction model, and any shift to a centralized adjudication process needs parallel tech upgrades, which are yet to be rolled out.

Legal Representation and Litigation Burden

With jurisdictional questions now stretching across State lines, litigation is expected to rise. Writ petitions are already being filed in High Courts where taxpayers are based, while the adjudication has happened elsewhere. This raises practical challenges for the department: Who will represent the government in such cases? Who briefs counsel? Who bears the cost? A lack of coordination mechanisms may lead to inconsistent legal strategy and repeated adjournments, weakening the department’s case.

Risk of Inconsistent Precedents

Perhaps one of the most concerning outcomes of this confusion is the possibility of divergent High Court rulings on the same issue. One court may accept the jurisdiction created by the circular; another may reject it as ultra vires the Act. This could create chaos in the legal system, with similar cases being treated differently depending on geography.

The CBIC issued Circular 250/2025, hoping to bring order and clarity to how cases involving DGGI should be reviewed and appealed. But instead, it has triggered confusion, not just among taxpayers but also within the GST department. Many say that without proper legal backing and full coordination with GST systems, the circular may end up increasing disputes and legal challenges.

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