The Court mandates adherence to Section 6 of the CGST Act, directing Central GST Authority to complete adjudication within four months.
In a landmark ruling, the Delhi High Court, comprising Justices Nitin Wasudeo Sambre and Ajay Digpaul, has quashed an order passed by the State GST Authority in a case involving overlapping jurisdiction with the Central GST Authority. The Court emphasized the importance of adhering to the statutory mandate under Section 6 of the Central Goods and Services Tax Act, 2017, which requires that the authority initiating proceedings first retains jurisdiction.
The case, M/s Maa Jagdambe Engineering Works v. Commissioner of Trade and Taxes, revolved around a jurisdictional conflict between the State GST Authority and the Central GST Authority concerning the assessment of tax liabilities for the petitioner, M/s Maa Jagdambe Engineering Works. The CGST Authority had issued a Show Cause Notice on June 28, 2025, which preceded a similar notice by the State GST Authority on July 2, 2025.
The petitioner objected to the continuation of proceedings by the State GST Authority, citing the earlier notice by the CGST Authority and the statutory provisions under Section 6 of the CGST Act. Despite these objections, the State Authority proceeded with its order on December 18, 2025, prompting the petitioner to challenge the decision in court.
The Court found the petitioner's arguments compelling, noting that the State Authority failed to consider the prior Show Cause Notice by the CGST Authority. The Court observed that the details of the CGST Authority's notice were accessible on the GST portal, and the State Authority was duty-bound to examine such records to avoid jurisdictional overlaps.
The ruling directs the CGST Authority to complete the adjudication process within four months and communicate the outcome to both the State Authority and the petitioner. Meanwhile, the Court has kept the State Authority's Show Cause Notice in abeyance, pending the completion of the CGST Authority's adjudication.
This decision underscores the importance of clear jurisdictional boundaries between State and Central GST Authorities to prevent conflicting proceedings and ensure compliance with statutory provisions. Legal experts view this judgment as a critical affirmation of procedural adherence under the GST framework.
Bottom Line:
Proceedings under the CGST Act must respect the statutory mandate of Section 6, ensuring that overlapping jurisdiction between State and Central GST Authorities is avoided, and the authority that initiates proceedings first retains jurisdiction.
Statutory provision(s): Central Goods and Services Tax Act, 2017, Section 6, Section 73
