Excelsior Correspondent
JAMMU, Oct 1: In a landmark ruling reinforcing the powers of tax authorities, the High Court of Jammu & Kashmir and Ladakh has held that cross-empowerment of GST officers is “automatic and inherent” under the CGST Act, 2017, and does not require any separate notification from the Government of India.
The judgment, delivered by a Division Bench of Justice Sanjeev Kumar and Justice Sanjay Parihar, came while dismissing 10 writ petitions filed by Kathua-based industrial units accused of fraudulently availing Input Tax Credit (ITC) through paper transactions. The petitioners had challenged show-cause notices issued by the Joint Commissioner, CGST Commissionerate, Jammu, contending that the central tax authorities had no jurisdiction since their firms were assigned to the State GST administration.
The petitioners included R K Ispat Ltd, Silklon Processors Pvt Ltd, Chenab Industries Pvt. Ltd, Jyotsana Industries Pvt Ltd, J&K Textorium Pvt Ltd, J&K Synthetic Pvt Ltd, Natural Industries, Toplon Industries Pvt Ltd, Orbit Spinning Pvt Ltd and Green Textorium Pvt. Ltd. They were represented by Advocate Jatin Mahajan, while the Union of India was defended by CGSC Jagpaul Singh.
Investigations by CGST Jammu, based on intelligence inputs, had revealed that out of 12 units operating from the Integrated Textile Park, Kathua, only two were functional, while the rest were engaged in circular trading and bogus transactions to fraudulently inflate turnover and avail ITC. Searches revealed major discrepancies, with some firms showing 85-90% turnover from trading rather than manufacturing.
The High Court rejected the contention that only State authorities had jurisdiction, holding that under Section 6 of the CGST Act, officers of both Centre and States are deemed proper officers by law itself. “Cross-empowerment is inherent and automatic. A separate notification is required only if conditions are to be imposed,” the Bench observed, citing Supreme Court precedent in M/s Armour Security India Ltd. Vs. Commissioner CGST Delhi East (2025).
On the petitioners’ argument that the Joint Commissioner could not issue notices where the tax demand was below Rs 1 crore, the High Court clarified that monetary thresholds were merely administrative guidelines and did not restrict the jurisdiction of senior officers. The Bench also found no statutory bar on clubbing multiple financial years in one show-cause notice, though it allowed the petitioners to raise this issue before the adjudicating authority.
Dismissing the petitions as “devoid of merit,” the High Court upheld the enforcement action, stressing that intelligence-based GST fraud investigations can be initiated by either Central or State authorities, regardless of administrative allocation.
The post Empowerment of GST officers automatic, no notification needed: DB appeared first on Daily Excelsior.