Nageen Traders and Molding India Pvt. Ltd Vs State of U.P. (Allahabad High Court)
Summary: The Allahabad High Court disposed of a writ petition filed by Nageen Traders and Molding India Pvt. Ltd. under Article 226 of the Constitution of India challenging a show-cause notice dated 19.11.2025 under Section 122(1)(ii), DRC-01 dated 19.11.2025, and consequential penalty order dated 24.06.2026 under Sections 122(1)(ii) and 122(1)(vii), along with DRC-07. The petitioner contended that the show-cause notice for financial year 2024-2025 was issued without jurisdiction by a Deputy Commissioner of State Tax and relied upon Circular No. 254/11/2025-GST dated 27.10.2025, which assigns proper officers and monetary limits under the CGST Act. The State relied upon Circulars dated 11.12.2018 and 10.05.2022 issued under the UPGST Act and submitted that proceedings under Section 122 were governed by Section 127 and that the Deputy Commissioner possessed jurisdiction where the turnover exceeded Rs. 2.5 crores. The Court held that, under the UPGST framework and the relevant State circulars, the Deputy Commissioner was vested with power to issue a Section 122 show-cause notice and that pecuniary jurisdiction for cases involving an amount exceeding Rs. 2.5 crores lay with the Deputy Commissioner. The Court further noted that the petitioner had participated in the proceedings on merits without raising the jurisdiction objection before subsequently challenging the order after it was passed. While recognising that jurisdiction may be questioned before a Constitutional Court at any stage, the Court held that Article 226 jurisdiction is discretionary and that the petitioner was hit by the doctrine of election. The writ petition was therefore disposed of with liberty to avail the statutory appellate remedy in accordance with law. The Court also stated that the benefit of Section 14 of the Limitation Act, 1963 would be available for the period during which the writ petition remained pending, subject to satisfaction of the statutory requirements.
