Ganapati Ispat Vs Union of India (Andhra Pradesh High Court)
The writ petition before the Andhra Pradesh High Court challenged a show cause notice dated 01.09.2025 issued to the petitioner under Section 122 of the CGST Act/GSGST Act by the third respondent. The notice proposed levy of penalties under Section 122 on the basis of information allegedly gathered by the Central Intelligence Unit, CCO, Visakhapatnam, which indicated instances such as circular trading that could attract penal provisions under the GST law.
Aggrieved by the issuance of the show cause notice, the petitioner approached the High Court contending that Section 122 of the CGST Act does not itself confer power on any authority or officer to initiate or conduct proceedings. It was further argued that proceedings under Section 122 could not be initiated as the provision does not prescribe any mechanism for granting a hearing to the registered person nor does it specify any period of limitation.
On behalf of the respondents, it was contended that the Notification dated 19.06.2017, bearing Notification No. 2/2017–Central Tax, and a subsequent Circular dated 27.10.2025 (Circular No. 254/11/2025-GST) adequately addressed the objections raised by the petitioner. The respondents argued that Notification No. 2/2017, issued under Section 3 read with Section 5 of the CGST Act and Section 3 of the IGST Act, empowered the officers enumerated therein with all powers under the Act and Rules and also defined their territorial jurisdiction. Reliance was also placed on the subsequent circular dated 27.10.2025, which, according to the respondents, expressly empowered the Deputy Commissioner or Assistant Commissioner to exercise powers under Section 122 of the CGST Act. It was further argued that Section 5 of the CGST Act permits superior officers to exercise powers vested in subordinate officers.
