Tax proceedings initiated beyond specific statutory authorizations are non est and lack jurisdiction.
Issue
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Whether tax authorities can legally initiate adjudication proceedings for a specific financial year if their underlying administrative authorization restricts their jurisdiction to different financial years and imposes an expired temporal limit.
Facts
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The petitioner challenged a pre-intimation notice in Form GST DRC-01A, a Show Cause Notice (SCN), and a subsequent Order-in-Original (OIO) issued for the tax periods 2017-18, 2018-19, and 2021-22.
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By an administrative order dated January 30, 2023, the Commissioner of Commercial Taxes empowered the Joint Commissioner to assign and oversee tax proceedings strictly for the Financial Years 2017-18 and 2018-19.
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This specific authorization order carried a strict temporal deadline, remaining valid only up to December 31, 2023.
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Relying on this specific authorization order, the Joint Commissioner exceeded the mandate and initiated tax assignment proceedings for the completely distinct tax period of 2021-22.
Decision
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Limits of Jurisdiction Violated: The High Court held that the Commissioner’s authorization explicitly confined the Joint Commissioner’s assignment powers to FYs 2017-18 and 2018-19, while structurally terminating those powers on December 31, 2023.
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Initiation Held Untenable: Because the Joint Commissioner derived jurisdiction entirely from that single administrative order, extending it to cover the year 2021-22 violated both subject-matter boundaries and temporal restrictions.
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Notices and Orders Quashed: The High Court issued a writ of certiorari, ruling that the consequential DRC-01A, SCN, and final OIO were completely non est (legally non-existent) and lacked jurisdiction. The entire set of impugned notices and the final order were quashed.
Key Takeaways
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Strict Construction of Authority: Administrative powers delegated to tax officers are not open-ended. If a superior authority caps a delegation of power by time or specific financial years, any action bleeding past those boundaries is void.
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Jurisdiction is Mandatory: A tax officer cannot assume jurisdiction by implication or convenience. Every step of an assessment, from a pre-intimation DRC-01A to a final order, must be backed by an active, valid statutory instrument of authorization.
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Fatal to Consequential Actions: When the root authorization of an adjudicating officer is found to be dead or inapplicable, the entire legal chain—including intermediate show-cause notices and final tax demands—collapses automatically.
| “(a) | Issue Writ of Certiorari thereby quashing and setting aside the Audit Report issued in Form ADT-02 dated 31/07/2025, issued by Respondent No.1, Which is at ANNEXURE-G. |
| (b) | Issue Writ of Certiorari thereby quashing and setting aside the Pre-Intimation Notice along with summary in Form GST DRC-01A dated 22-08-2025, issued by Respondent No.1, as annexed at ANNEXURE-H. |
| (c) | Issue Writ of Certiorari thereby quashing and setting aside the Show Cause Notice under Section 73(1) along with summary, dated 02-09-2025, issued by Respondent No.1, as annexed at ANNEXURE-J. |
| (d) | Declare that an audit conducted under Section 65 of the CGST/KGST Act Nul and void as cannot be conducted ex parte, must be based on proper verification of records and facts, and that no adverse conclusion or demand can be raised merely on assumptions without affording the Petitioner a reasonable opportunity to present its case. |
| (e) | To grant such other relief as the Hon’ble court may deem fit in the interest of justice and equity. |
| (f) | Issue writ of certiorari thereby quashing and setting aside the order in original dated:28.10.2025 along with summary of demand in Form GST DRC-07 issued by respondent No.1 vide ANNEXURE-K.” |