1. Introduction
The implementation of the Goods and Services Tax (GST) regime in India from 1 July 2017 brought a fundamental shift in the country’s indirect taxation framework. One of the important consequences of this shift is the realignment of jurisdictional powers among various tax authorities. An issue that has arisen periodically is whether Customs Authorities, while exercising powers under the Customs Act, 1962, can issue notices relating to GST demands—particularly in cases involving imports, exports, classification disputes, valuation, or alleged wrongful availment of Input Tax Credit (ITC).
A correct understanding of statutory interpretation, constitutional framework, and judicial precedents makes it clear that Customs authorities do not possess jurisdiction to issue notices under GST laws, unless such power is specifically delegated or authorised by the GST statutes themselves.
2. Distinct Legislative Frameworks: Customs Act vs. GST Laws
2.1. Customs Act, 1962
The Customs Act governs:
- Levy and collection of Customs Duty
- Import/export procedures
- Confiscation, penalties, and adjudication relating to customs violations
- Enforcement through officers designated under the Act (Customs Officers)
2.2. GST Laws
GST is governed by:
- Central Goods and Services Tax Act, 2017 (CGST Act)
- Integrated Goods and Services Tax Act, 2017 (IGST Act)
- Corresponding State GST Acts
Under these laws:
- GST officers are appointed under Section 3 and 4 of the CGST Act
- Powers of inspection, search, seizure, and issuance of notices are governed by Sections 67, 73, 74, etc.
- Jurisdictional limits are specified by rules and notifications.
Thus, Customs law and GST law function within independent statutory boundaries, except for areas where they explicitly intersect.
3. The Core Jurisdictional Issue
The central question is whether a Customs Officer, while acting under the Customs Act, can issue:
- Show cause notices for GST liabilities,
- Notices for reversal of ITC,
- Notices relating to classification under GST tariff,
- Notices for alleged GST evasion during import/export transactions.
The answer is clearly negative, based on the following legal principles:
4. Statutory Interpretation: No Power Without Statutory Authority
4.1. GST Officers Must Be Appointed Under GST Acts
Section 3 of the CGST Act lists officers empowered under GST.
Section 4 enables the Government to appoint officers and assign powers.
Unless a Customs Officer is:
- notified,.
- appointed, and
- vested with GST powers,
they cannot act as a GST officer.
4.2. Doctrine of Expressio Unius Est Exclusio Alterius
When a statute specifically lists the officers empowered, others are implied to be excluded. Since, the Customs Act does not confer GST powers, and GST Acts do not list Customs officers unless expressly notified, their jurisdiction is excluded by design.
4.3. Only the Proper Officer Can Issue Notices
Under Sections 73 and 74 of the CGST Act, notices can only be issued by the “proper officer”—a term defined strictly within GST law.
A Customs Officer is not a “proper officer” under GST unless specially empowered.
5. Case Law Principles Supporting Lack of Jurisdiction
While different High Courts have addressed similar jurisdictional questions across taxation statutes, certain consistent principles emerge:
5.1. Proper Officer Doctrine
In Canon India Pvt. Ltd. v. Commissioner of Customs (2021), the Supreme Court held that:
- Only proper officers duly empowered under the statute can initiate proceedings.
- Officers from external departments cannot assume jurisdiction unless lawfully assigned.
Though this case involved Customs, the principle is squarely applicable to GST:
Jurisdiction cannot be assumed by implication or administrative practice; it must flow from statute.
5.2. Delegation of Powers Must Be Express
Courts have repeatedly held that:
- Delegation of adjudicatory or assessment powers must be explicit and traceable.
- Implicit or assumed jurisdiction is invalid.
5.3. Cross-empowerment Requires Notification
Wherever GST authorities and Customs authorities are intended to be cross-empowered (e.g., IGST on imports), the Government has issued explicit notifications.
Absent such notification for issuance of notices under Sections 73/74 of the CGST Act, Customs authorities cannot do so.
6. Practical Scenarios Where Customs Officers Cannot Issue GST Notices
6.1. Valuation differences under GST
Even if Customs authorities dispute the declared import value, they cannot issue GST demand notices for undervaluation under Section 74 of CGST.
6.2. IGST payable on imports
While Customs collects IGST at the time of import, this does not make a Customs Officer a GST adjudicating authority.
6.3. Input Tax Credit investigation
Allegations that ITC has been wrongfully availed cannot be adjudicated by Customs officers.
6.4. Classification disputes
Customs tariff and GST tariff share similarities but are administered by separate authorities.
A customs authority cannot issue notices demanding additional GST based on classification differences.
7. Why This Distinction Matters: Constitutional and Administrative Implications
7.1. Federal Structure of GST
GST is jointly administered by Centre and States.
Conferring GST powers on Customs without clear statutory mandate would disrupt the federal balance.
7.2. Safeguards Against Excessive Delegation
Tax administration must comply with constitutional safeguards under Articles 14 and 265:
- No tax can be levied or collected except by authority of law.
- Officers must act within clearly defined powers.
7.3. Avoiding Overreach and Parallel Proceedings
Allowing Customs to issue GST notices would result in:
- Duplicity of proceedings
- Departmental conflicts
- Violation of principles of natural justice
8. Exceptions: When Customs Can Interact with GST Matters
Customs authorities can deal with:
- IGST collection at the time of import (as per Customs Tariff Act + IGST Act)
- Investigations under the Customs Act relating to smuggling, misdeclaration, etc.
- Providing intelligence inputs to GST authorities
However, these do not empower them to issue SCNs under GST laws.
Only if the Government explicitly notifies Customs officers as “proper officers” under GST can they issue notices—and only within the limited scope of such notifications.
9. Author’s Comments:
The legal position is well-settled that Customs Authorities lack jurisdiction to issue notices under GST laws unless explicitly empowered under GST statutes. Jurisdiction under taxation laws is strictly statutory, and any action taken by an officer without proper legal authority is void ab initio.
Taxpayers confronted with GST notices from Customs Officers have strong legal grounds to challenge such notices on the basis of:
- Lack of jurisdiction
- Violation of statutory mandates
- Breach of constitutional principles
- Non-conformity with the concept of the “proper officer”
The separation of administrative powers under GST law is intentional and essential for maintaining consistency, fairness, and legality in tax administration.
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Ashish Parashar, Advocate | Delhi High Court | advashishparashar@gmail.com
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