Jurisdictional Jumble: Rajasthan High Court Stalls GST Enforcement Overreach

M/S Agrawal Namkeen Versus GST Council and Others (2024) | Case No.: D. B. Civil Writ Petition No. 6442/2024

Issues

1. Jurisdiction and Power: Whether the Joint Commissioner (Investigation) Enforcement Wing, Rajasthan–I, Jaipur has the authority to exercise adjudicating powers under Section 73 of the Rajasthan GST Act, 2017 beyond their designated jurisdiction, specifically in the Udaipur area.

2. Validity of Notifications: Whether the notification dated 25.02.2020 confers blanket powers on Joint Commissioners, Deputy Commissioners, and Assistant Commissioners to exercise powers under Section 73 of the Act across the entire state.

Key Legal Provisions

- Section 73 of the Rajasthan GST Act, 2017: Relates to the adjudication of tax not paid or short paid.

- Section 2 (4), 2 (24), 2 (91), Section 5 of the Act: Define the scope and jurisdiction of officers under the Act.

Court's Findings

1. Jurisdiction of Proper Officer: For exercising powers under Section 73, the officer must be properly assigned as the adjudicating authority within their jurisdiction.

2. Interpretation of Notifications:

- The notification dated 25.02.2020 states that officers of the rank of Joint Commissioner, Deputy Commissioner, and Assistant Commissioner are competent to exercise powers under Section 73 but within their respective jurisdictions.

- Other notifications cited by respondents do not extend the jurisdiction of the Joint Commissioner (Investigation) Enforcement Wing, Rajasthan–I, Jaipur to areas outside their designated jurisdiction, such as Udaipur.

3. Prima Facie View: The court found the petitioner’s argument plausible that the respondents did not have jurisdiction to issue the notice and pass the impugned order against the petitioner.

Court’s Orders

1. Stay on Coercive Actions: The respondents are restrained from taking any coercive action against the petitioner under the impugned order dated 04.01.2024.

Our 2 Cents

1. In accordance with Sections 2 (4), 2 (24), 2 (91), Section 5, and Section 73 of the 2017 Act, any order issued by an officer lacking proper authority is legally untenable.
2. This issue extends beyond Rajasthan; numerous states have established autonomous enforcement wings. Notices or orders issued without proper authority should be retracted.
3. Often, such notices are issued on the last possible dates to exploit limitation constraints.
4. We have managed several cases where jurisdictional issues, in addition to the merits of the case, have been a primary concern.
5. The next challenge arises from addressing the actions of State Audit Authorities, who are also issuing similar notices or orders.

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