Manikjeet Singh Kals v. Union of India & Ors.

1. This hearing has been done through hybrid mode.

2. The present petition has been filed under Articles 226 and 227 of the Constitution of India challenging the impugned order dated 14th February, 2025 passed by the Respondent No. 2 - Joint Commissioner, Delhi (South), Central, Central Goods & Service Tax (hereinafter, ‘the impugned order’), vide which various demands have been raised against the Petitioner on the ground of availment of fraudulent Input Tax Credit (hereinafter “ITC”).

3. The records present a complex factual situation wherein multiple individuals and entities based in various cities have been found to be involved in the alleged fraudulent availment of ITC. One Sh. Gagan Kumar was found to be the person who was running a racket of fake firms for issuance of fake invoices to various firms/companies without actual supply of goods and services.

4. The Petitioner is stated to be the proprietor of M/s. Bharat Facilities and the said firm is alleged to be one such firm which was part of the chain which had claimed to have availed of manpower from one of the fake firms of Sh. Gagan Kumar.

5. Submission of the ld. Counsel for the Petitioner is two-fold. First, that considering the amount involved, the show cause notice dated 4th August, 2024 could not have been issued by the Superintendent, Directorate General of GST Intelligence (hereinafter “DGGI”), and it had to be only at the level of the Joint Director, DGGI. Second submission is that although the proceedings took place in Faridabad, however, the final order qua the Petitioner has been passed from both places, i.e., Delhi and Faridabad, by the same Officer and there is no clarity as to where the Appeal would lie.

6. Insofar as the first submission is concerned, ld. Counsel for the Respondents submits that though the show cause notice dated 4th August, 2024 is shown on the portal under the name of the Superintendent, DGGI, the show cause notice was actually signed by the Joint Director himself.

7. Insofar as the second submission is concerned, the ld. Counsel for the Respondents was directed to seek instructions vide the order dated 15th April, 2025, in the following terms: “In respect of the second submission, the ld. Counsel for the Respondents wishes to seek instructions as to where the appeal against the impugned order would lie for the Petitioner. Further, the ld. Counsel also seeks time to take instructions as to whether considering the fact that there are entities and individuals in different jurisdictions would there be multiplicity of proceedings before different Appellate Authorities or whether a common Appellate Authority would have the jurisdiction to entertain all the appeals.”

8. Today, Ms. Monika Benjamin, ld. Counsel has handed over to the Court two documents, one being the circular no. 250/07/2025-GST dated 24th June, 2025 wherein it has been clearly set out as under:

4. Therefore, to ensure uniformity in procedure for review, revision, and appeal against the Orders-in-Original (O-I- Os) adjudicated by Common Adjudicating Authorities, it is hereby clarified that: a) Review under Section 107 of the CGST Act, 2017: The Principal Commissioner or Commissioner of Central Tax under whom the Common Adjudicating Authority (Additional/ Joint Commissioner) is posted shall be the reviewing authority in respect of such O-I-Os. b) Revisional Power under Section 108 of the CGST Act, 2017: The Principal Commissioner or Commissioner of Central Tax under whom the Common Adjudicating Authority (Additional/ Joint Commissioner) is posted shall be the revisional authority in respect of such O-I-Os. c) Appeal Procedure under Section 107 of the CGST Act, 2017: Appeals against the order of Common Adjudicating Authority (Additional/Joint Commissioner) shall lie before the Commissioner (Appeals) corresponding to the territorial jurisdiction of the Principal Commissioner or the Commissioner of Central Tax, under whom the said Common Adjudicating Authority (Additional Joint Commissioner) is posted, as specified in Table III of notification No. 02/2017-Central tax dated 19th June, 2017. d) Department's Representation in Appeals: The Principal Commissioner or Commissioner of Central Tax of such Commissionerate under whom the Common Adjudicating Authority (Additional/Joint Commissioner) is posted shall represent the department in appeal proceedings against the O-I-Os passed by such Common Adjudicating Authority (Additional/ Joint Commissioner) and accordingly may appoint any officer subordinate to him to be the designated officer for filing departmental appeals. e) The reviewing or revisional authority for such orders may seek comments on the 0-1-0 from the concerned DGGI formation before proceeding to decide on the order passed by the CAA.

9. The relevant clause from the above circular no. 250/07/2025-GST would be Clause 4(c), which refers to Notification No. 02/2017-Central tax dated 19th June, 2017. A perusal of the said Notification No. 02/2017- Central tax,which has also been handed over, would show that in terms of Table III of the notification, the Commissioner of Central Tax (Appeals), Gurugram, exercises appellate jurisdiction over orders passed by Principal Commissioner of Commissioner of Central Tax, Gurugram and Faridabad. The relevant part of Table III of Notification No. 02/2017-Central tax dated 19th June, 2017 is extracted below: Table III Jurisdiction of Commissioner of Central Tax (Appeals) and Additional Commissioner of Central Tax (Appeals)

┌──────────────────────────────────────────────────────────────────────────────────────────────────────────────────────┐
│

┌───────────────────────────────────────────────────────────────────────────────────────────────────────────────────────┐
│                           Sl.      Officer     of Monetary limit of the    Monetary limit of   Monetary limit of      │
│                           No.      Central tax    amount of central tax    the amount of       the amount of          │
│                                                   (including cess) not     integrated    tax   central tax and        │
│                                                   paid or short paid or    (including  cess)   integrated    tax      │
│                                                   erroneously refunded     not paid or short   (including cess)       │
│                                                   or input tax credit of   paid           or   not paid or short      │
│                                                   central tax wrongly      erroneously         paid           or      │
│ Signature Not Verified                                                                                                │
│ Signed By:TANISHKA              W.P.(C) 4682/2025                                                       Page 6 of 9   │
└───────────────────────────────────────────────────────────────────────────────────────────────────────────────────────┘

Counsel for the Petitioner refutes this position and submits that in

│
│                           this case, the impugned order has been passed by the Joint Commissioner,                   │
│                           Delhi South. This may not be correct. A perusal of the DRC-07 would show                   │
│                           that it has been issued by Joint Commissioner, South Delhi but the main                    │
│                           impugned order itself has been passed by the Adjudicating Authority at                     │
│                           Faridabad. The impugned order itself states as under:                                      │
│                                        “4.The form of appeal in Form No. GST APL-01shall be                          │
│                                        filed in duplicate and shall be accompanied by a copy of                      │
│                                        the decision or order appealed against.                                       │
│                                        5.An appeal against this order lies with the                                  │
│                                        Commissioner (Appeals), Plot No. 24, Mudit Square,                            │
│                                        Sector-32, Gurugram within ninety days as provided                            │
│                                        under section 107 of Central Goods and Services                               │
│                                        Act,2017. From the date of Communication of this order                        │
│                                        and appeal should bear a court fee stamp of Rupee Five                        │
│                                        only accompanied by this order.                                               │
│                                        6.An appeal against this order shall lie before any                           │
│                                        officer not below the rank of The Joint Commissioner                          │
│                                        (Appeal) on payment amount of tax, interest, fine, fee                        │
│                                        & penalty, as is admitted, in full; and pre-deposit of                        │
│                                        rupees).”                                                                     │
└──────────────────────────────────────────────────────────────────────────────────────────────────────────────────────�

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14. From the above, it is clear that when there are multiple parties involved and Show Cause Notices have to be adjudicated, the adjudicating authority is fixed on the basis of the jurisdiction which has the highest tax demand.

15. Once the adjudication takes place, obviously, the DRC-07 would have to be uploaded by the concerned Commissionerate and depending upon the monetary limit, it would be uploaded either by the Superintendent or by the concerned other higher officials.