# Ajay Verma v. Union of India & Ors

- **Citation:** (2022) 4 ILRA 981
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-02-09
- **Case number:** Writ Tax No. 1169 of 2021
- **Bench:** Surya Prakash Kesarwani, Jayant Banerji
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/ajay-verma-v-union-of-india-ors-48386
- **Pages:** 14

## Headnote

A. Tax Law - Jurisdiction - CGST
Act/UPGST
Act,2017
-
Sections
73,
2(21), 2(91), 6 & 9 - CGST Act,2017 -
Sections 6(1) & 6(2)(a) - The question
involved in the present case is not as to
the inherent lack of jurisdiction instead
but is as to whether the impugned show
cause notice and the assessment order
issued by the respondent No. 4 are
without jurisdiction due to assignment
of the assessee to the Central Officer? A
further question would be as to whether the
impugned
show
cause
notice
or
the
assessment order would become void ab initio
on account of non assignment of the case to
the respondent No. 4 even when the
petitioner submitted to the jurisdiction of the
respondent No. 4 and participated in the
proceeding without raising any objection as to
the jurisdiction? (Para 17)

Sub-section (91) of Sections 2 & 6 of the
CGST Act/UPGST Act,2017 - read with the
minutes of the meeting of the GST Council
dated 16.1.2017 agenda Item No. 28 and the
order No. 04/2018 dated 12.9.2018 jointly
issued by the State and Central authorities,
leads to an irresistible conclusion that proper
officer under the UPGST Act and proper officer
under the CGST Act both have jurisdiction over
assessees
falling
within
their
territorial
jurisdiction but for administrative convenience,
assignment of taxpayers have been made by the
designated committee at the State level. (Para
15, 18)

In terms of the order No. 04/2018 dated
12.9.2021 issued by the Commissioner,
Commercial Tax, Uttar Pradesh and the
Chief Commissioner of Central Tax,
Meerut Zone, Lucknow, the assessment of
petitioner under the Act was assigned to the
Central Officer and not to the respondent No.

## Text

_Characters 0–39,908 of 45,751. This is a partial read: ask again with offset=39908 for what follows._

4 All. Ajay Verma Vs. Union of India & Ors.
981
In the opinion of this Court, the Tribunal
should have allowed the dealer's appeal.

23. In view of the aforesaid facts &
circumstances of the case as well as the law
laid down by this Court, the impugned
order passed by the Tribunal is set aside.

24. The revision is allowed with cost
of Rs. 5,000/-, which shall be deposited
within a month from today. An affidavit of
compliance of deposit shall be filed within
two months from today in the Registry of
this Court, failing which the matter be
listed in Chamber.

25. The questions of law are answered
accordingly.
----------
(2022)04ILR A981
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 09.02.2022

BEFORE

THE HON'BLE SURYA PRAKASH
KESARWANI, J.
THE HON'BLE JAYANT BANERJI, J.

Writ Tax No. 1169 of 2021

Ajay Verma ...Petitioner
Versus
Union of India & Ors. ...Respondents

Counsel for the Petitioner:
Ms. Mahima Jaiswal, Sri Saurabh Sharma, Sri
Shambhu Chopra (Senior Adv.)

Counsel for the Respondents:
A.S.G.I., C.S.C., Sri Krishna Ji Shukla

A. Tax Law - Jurisdiction - CGST
Act/UPGST
Act,2017
-
Sections
73,
2(21), 2(91), 6 & 9 - CGST Act,2017 -
Sections 6(1) & 6(2)(a) - The question
involved in the present case is not as to
the inherent lack of jurisdiction instead
but is as to whether the impugned show
cause notice and the assessment order
issued by the respondent No. 4 are
without jurisdiction due to assignment
of the assessee to the Central Officer? A
further question would be as to whether the
impugned
show
cause
notice
or
the
assessment order would become void ab initio
on account of non assignment of the case to
the respondent No. 4 even when the
petitioner submitted to the jurisdiction of the
respondent No. 4 and participated in the
proceeding without raising any objection as to
the jurisdiction? (Para 17)

Sub-section (91) of Sections 2 & 6 of the
CGST Act/UPGST Act,2017 - read with the
minutes of the meeting of the GST Council
dated 16.1.2017 agenda Item No. 28 and the
order No. 04/2018 dated 12.9.2018 jointly
issued by the State and Central authorities,
leads to an irresistible conclusion that proper
officer under the UPGST Act and proper officer
under the CGST Act both have jurisdiction over
assessees
falling
within
their
territorial
jurisdiction but for administrative convenience,
assignment of taxpayers have been made by the
designated committee at the State level. (Para
15, 18)

In terms of the order No. 04/2018 dated
12.9.2021 issued by the Commissioner,
Commercial Tax, Uttar Pradesh and the
Chief Commissioner of Central Tax,
Meerut Zone, Lucknow, the assessment of
petitioner under the Act was assigned to the
Central Officer and not to the respondent No.
4. However, the respondent No. 4 took up the
matter and issued the impugned show cause
notice dated 25.6.2021 which was replied by
the petitioner without raising any objection as
to jurisdiction on account of assignment of
case to the Central Officer. It was also not
brought to the notice of the respondent No. 4
by the petitioner that his case is assigned to a
Central
Officer.
Instead,
the
petitioner
participated in the assessment proceeding
and the assessing officer i.e. the proper
officer (respondent No. 4) has passed the
impugned
assessment
order
dated
09.08.2021, which can be said to be
contributory error of jurisdiction. (Para 16,
19)
982 INDIAN LAW REPORTS ALLAHABAD SERIES
After the assessment order dated 09.08.2021
was passed by the respondent No. 4, it came to
notice that the case was assigned to a Central
Officer. Hence, the respondent No. 4 wrote
letters to the Central Officer who informed vide
letters dated 22.11.2021 and 03.12.2021 that as
per Act the proceedings shall be completed by
the officer who initiated it, i.e. by the
respondent No. 4. (Para 16)

B. Consequences of 'Submitting to the
Jurisdiction' - Present case is not a case of
inherent lack of jurisdiction rather it is a case of
error of jurisdiction on account of non allotment
of case of the petitioner assessee to the
respondent No. 4/State officer. (Para 20)

It is well settled that if a person has
submitted to the jurisdiction of the
authority,
he
cannot
challenge
the
proceedings on the ground of lack of
jurisdiction of the said authority in further
appellate proceedings. (Para 22)

C. Difference between inherent lack of
jurisdiction and error of jurisdiction -
There is a difference between the existence of
jurisdiction and the exercise of jurisdiction. In
case jurisdiction is exercised with material
irregularity or with illegality, it would also
constitute jurisdictional error. However, if
a court has jurisdiction to entertain a suit
but in exercise of jurisdiction, a mistake
has been committed, though it would be a
jurisdictional error but not lack of it. It may
be a jurisdictional error open for interference in
appellate or revisional jurisdiction. (Para 27)

D. Words and Phrases - "Jurisdiction" -
The word 'jurisdiction' is a verbal coat of many
colours. It is used in a wide and broad sense
while dealing with administrative or quasijudicial tribunals and subordinate courts over
which the superior courts exercise a power of
judicial review and superintendence. Then it is
only a question of "how much latitude the court
is prepared to allow" and "there is no yardstick
to determine the magnitude of the error other
than the opinion of the court." (Para 23)

The impugned show cause notice and the
impugned assessment order do not suffer from
any inherent lack of jurisdiction and instead it is
the result of contributory error of jurisdiction by
the respondent No. 4. Had the petitioner
objected to it at the initial stage or during the
course of assessment proceedings, the position
could have been rectified by the respondent No.
4 by informing the central officer to complete
the assessment proceedings. (Para 31)

Writ petitions dismissed. (E-4)

Precedent followed:

1. Municipal Commissioner, Kolkata & ors. Vs
Salil Kumar Banerji, (2000) 4 SCC 108 (Para 21)

2. Kedar Shashikant Deshpandey & ors. Vs Bhor
Municipal Council & ors., (2011) 2 SCC 654
(Para 22)

3. A.R. Antulay Vs R.S. Nayak & anr., (1988) 2
SCC 602 (Para 23)

4. H.V. Nirmala Vs Karnataka State Financial
Corporation & ors., (2008) 7 SCC 639 (Para 24)

5. Central Bank of India Vs C. Bernard, (1991)1
SCC 319 (Para 25)

6. Nusli Neville Wadia Vs Ivory Properties & ors.,
(2020) 6 SCC 557 (Para 26)

7. Hridya Narain Roy Vs Ram Chandra Barna
Sarma, AIR 1921 Cal 34 (FB) (Para 28)

8. Official Trustee Vs Sachindra Nath Chatterjee,
AIR 1969 SC 823 (Para 28)

Present petition challenges assessment
order dated 09.08.2021 passed by State
Officer and show cause notice (DRC-01)
dated 25.06.2021 issued by the State
Officer
i.e.
Deputy
Commissioner,
Commercial Tax Saharanpur, Sector- 10,
Saharanpur(B), U.P.

(Delivered by Hon'ble Surya Prakash
Kesarwani, J. & Hon'ble Jayant Banerji, J.)

1. Heard Sri Shambhu Chopra,
learned Senior Advocate, assisted by
Mahima Jaiswal and Sri Saurabh Sharma,
4 All. Ajay Verma Vs. Union of India & Ors.
983
learned counsel for the petitioner, Sri B.P.
Singh
Kachhawah,
learned
Standing
Counsel for the respondent nos. 3,4 and 6
and Sri Krishna Ji Shukla, learned counsel
for the respondent nos. 1 and 5.

FACTS

2. Briefly stated facts of the present
case are that the petitioner claims to be
engaged in the business of lubricants after
obtaining registration under the Central
Goods and Services Tax Act, 2017
(hereinafter referred to as 'CGST Act') and
the U.P. Goods and Services Tax Act, 2017
(hereinafter referred to as 'UPGST Act').
According to the petitioner as per division
of work his case for the tax period 2017-18
(July, 2017 to March, 2018) was assigned
to the Officer of Central Tax (hereinafter
referred to as 'the Central Officer') but the
show cause notice dated 25.6.2021 for
assessment under section 73 of CGST
Act/UPGST Act was issued by the Officer
of the State Tax (hereinafter referred to as
'the State Officer') i.e. Dy. Commissioner,
Commercial Tax Saharanpur, Sector 10,
Saharanpur
(B),
Uttar
Pradesh.
The
petitioner submitted reply to the show
cause notice but did not raise any
objection as to the jurisdiction on the
ground of assignment of the case to Central
Officer. The proper officer under the Act
completed the assessment proceedings and
passed the assessment order under section
73 of the UPGST Act/CGST Act dated
9.8.2021 for the tax period July, 2017 to
March, 2018. Aggrieved the aforesaid
assessment order dated 9.8.2021 the
petitioner has filed the present writ petition
praying to quash the show cause notice
(DRC-01) dated 25.6.2021 issued by the
State Officer i.e. the respondent no. 4 and
the assessment order dated 9.8.2021 passed
by the respondent no. 4.

SUBMISSIONS ON BEHALF OF
THE PETITIONER

3.
(i)
Learned
counsel
for
the
petitioner submits that the impugned show
cause notice and the impugned assessment
order are without jurisdiction inasmuch as
pursuant to the decision of the GST
Council vide Agenda item no. 28 of the
Minutes of the IX GST Council Meeting
dated 16.1.2017, the designated committee
passed the order no. 04/2018 dated
12.9.2018 issued by the Commissioner of
Commercial Tax, Uttar Pradesh providing
for single interface under the Act and
whereby the petitioner i.e. taxpayer was
assigned
to
the
Central
Government
Officer. Therefore, the show cause notices
issued by the State Officer i.e. the
respondent no. 4 and the impugned
assessment order passed by him both are
without jurisdiction and, therefore, deserve
to be quashed.

(ii) Even though the petitioner has not
raised any objection as to the jurisdiction
before the proper officer who issued the
impugned show cause notice and passed
the
impugned
assessment
order,
yet
objection as to the jurisdiction can be well
entertained in writ petition inasmuch as the
question of jurisdiction goes to very root of
the matter and renders the impugned show
cause notice and the impugned assessment
order to be null and void being without
jurisdiction.

SUBMISSIONS ON BEHALF OF
THE RESPONDENTS

4.

Learned
counsel
for
the
respondents have supported the impugned
show cause notice and the impugned
orders.

DISCUSSION AND FINDINGS
984 INDIAN LAW REPORTS ALLAHABAD SERIES

5. Relevant provisions for the
purposes of the controversy involved in the
present writ petition are the provisions of
Section 2(21), Section 2(91), Section 6 and
Section 9 of the CGST Act/UPGST Act,
which reproduced below:

Central Goods and
Services Tax Act,
2017

2(21)
"central
tax"
means
the
central goods and
services tax levied
under section 9;

2(91)
"proper
officer" in relation
to any function to
be performed under
this Act, means the
Commissioner
or
the officer of the
central tax who is
assigned
that
function
by
the
Commissioner
in
the Board;

6.
Authorisation
of officers of State
tax
or
Union
territory tax as
proper officer in
certain
circumstances

(1)
Without
prejudice
to
the
provisions of this
Act, the officers
appointed
under
the State Goods
Uttar Pradesh Goods
and
Services
Tax
Act, 2017

2(21). "central tax"
means
the
central
goods and services
tax
levied
under
section
9
of
the
Central Goods and
Services
Tax
Act
(Act
No.
12
of
2017);

2
(91).
"proper
officer" in relation to
any function to be
performed under this
Act,
means
the
Commissioner or the
officer of the State
tax who is assigned
that function by the
Commissioner;

6. Authorisation of
officers of State tax
or Union territory
tax
as
proper
officer in certain
circumstances

(1) Without prejudice
to the provisions of
this Act, 2017 the
officers
appointed
under
the
Central
Goods and Services
and Services Tax
Act or the Union
Territory
Goods
and Services Tax
Act are authorised
to be the proper
officers
for
the
purposes of this
Act,
subject
to
such conditions as
the
Government
shall,
on
the
recommendations
of the Council, by
notification,
specify.

(2) Subject to the
conditions
specified
in
the
notification issued
under
sub-section
(1),--

(a)
where
any
proper
officer
issues
an
order
under this Act, he
shall also issue an
order
under
the
State Goods and
Services Tax Act
or
the
Union
Territory
Goods
and Services Tax
Act, as authorised
by the State Goods
and Services Tax
Act or the Union
Territory
Goods
and Services Tax
Act, as the case
may
be,
under
intimation to the
jurisdictional
Tax
Act,
are
authorised to be the
proper officers for
the purposes of this
Act, subject to such
conditions
as
the
Government shall, on
the recommendations
of the Council, by
notification, specify.

(2) Subject to the
conditions specified
in the notification
issued under sub -
section (1),-

(a) where any proper
officer
issues
an
order under this Act,
he shall also issue an
order
under
the
Central Goods and
Services
Tax
Act
2017, as authorised
by the said Act under
intimation
to
the
jurisdictional officer
of central tax;

(b) where a proper
officer
under
the
Central Goods and
Services Tax Act,
2017 has initiated
any proceedings on a
subject matter, no
proceedings shall be
initiated
by
the
proper officer under
this Act on the same
subject matter.
4 All. Ajay Verma Vs. Union of India & Ors.
985
officer of State tax
or Union territory
tax;

(b) where a proper
officer under the
State Goods and
Services Tax Act
or
the
Union
Territory
Goods
and Services Tax
Act has initiated
any proceedings on
a subject matter, no
proceedings
shall
be initiated by the
proper
officer
under this Act on
the same subject
matter.

(3)
Any
proceedings
for
rectification,
appeal
and
revision, wherever
applicable, of any
order passed by an
officer
appointed
under this Act shall
not lie before an
officer
appointed
under
the
State
Goods
and
Services Tax Act
or
the
Union
Territory
Goods
and Services Tax
Act.

9.
Levy
and
collection.

(1) Subject to the
provisions of sub-
(3) Any proceedings
for
rectification,
appeal and revision,
wherever applicable,
of any order passed
by
an
officer
appointed under this
Act, shall not lie
before
an
officer
appointed under the
Central Goods and
Services Tax Act,
2017.

9.Levy
and
collection.

(1) Subject to the
provisions of subsection
(2),
there
shall be levied a tax
called
the
Uttar
Pradesh goods and
services tax on all
intra-State
supplies
of goods or services
or both, except on
the
supply
of
alcoholic liquor for
human consumption,
on
the
value
determined
under
section 15 and at
such
rates,
not
exceeding twenty per
cent., as may be
notified
by
the
Government on the
recommendations of
the
Council
and
collected
in
such
manner as may be
prescribed and shall
be
paid
by
the
section (2), there
shall be levied a
tax
called
the
central goods and
services tax on all
intra-State supplies
of
goods
or
services or both,
except
on
the
supply of alcoholic
liquor for human
consumption,
on
the
value
determined
under
section 15 and at
such
rates,
not
exceeding
twenty
per cent., as may
be notified by the
Government on the
recommendations
of the Council and
collected in such
manner as may be
prescribed
and
shall be paid by the
taxable person.

(2) The central tax
on the supply of
petroleum
crude,
high speed diesel,
motor
spirit
(commonly known
as petrol), natural
gas and aviation
turbine fuel shall
be
levied
with
effect from such
date as may be
notified
by
the
Government on the
recommendations
of the Council.

taxable person.

(2) The State tax on
the
supply
of
petroleum
crude,
high speed diesel,
motor
spirit
(commonly known as
petrol), natural gas
and aviation turbine
fuel, shall be levied
with effect from such
date
as
may
be
notified
by
the
Government on the
recommendations of
the Council.

(3) The Government
may,
on
the
recommendations of
the
Council,
by
notification, specify
categories of supply
of goods or services
or both, the tax on
which shall be paid
on
reverse
charge
basis by the recipient
of such goods or
services or both and
all the provisions of
this Act shall apply
to such recipient as if
he
is
the
person
liable for paying the
tax in relation to the
supply of such goods
or services or both.

(4) The Government
may,
on
the
recommendations of
the
Council,
by
notification, specify
986 INDIAN LAW REPORTS ALLAHABAD SERIES
(3)
The
Government may,
on
the
recommendations
of the Council, by
notification,
specify categories
of supply of goods
or services or both,
the tax on which
shall be paid on
reverse
charge
basis
by
the
recipient of such
goods or services
or both and all the
provisions of this
Act shall apply to
such recipient as if
he is the person
liable for paying
the tax in relation
to the supply of
such
goods
or
services or both.

(4)
The
Government may,
on
the
recommendations
of the Council, by
notification,
specify a class of
registered persons
who
shall,
in
respect of supply
of
specified
categories of goods
or services or both
received from an
unregistered
supplier, pay the
tax
on
reverse
charge basis as the
recipient of such
a class of registered
persons who shall, in
respect of supply of
specified categories
of goods or services
or
both
received
from an unregistered
supplier, pay the tax
on
reverse
charge
basis as the recipient
of such supply of
goods or services or
both, and all the
provisions of this Act
shall apply to such
recipient as if he is
the person liable for
paying the tax in
relation
to
such
supply of goods or
services or both.

(5) The Government
may,
on
the
recommendations of
the
Council,
by
notification, specify
categories of services
the tax on intra-State
supplies
of
which
shall be paid by the
electronic commerce
operator
if
such
services are supplied
through it, and all the
provisions of this Act
shall apply to such
electronic commerce
operator as if he is
the supplier liable for
paying the tax in
relation to the supply
of such services:

Provided further that
supply of goods or
services or both,
and
all
the
provisions of this
Act shall apply to
such recipient as if
he is the person
liable for paying
the tax in relation
to such supply of
goods or services
or both.

(5)
The
Government may,
on
the
recommendations
of the Council, by
notification,
specify categories
of services the tax
on
intra-State
supplies of which
shall be paid by the
electronic
commerce operator
if such services are
supplied through it,
and
all
the
provisions of this
Act shall apply to
such
electronic
commerce operator
as if he is the
supplier liable for
paying the tax in
relation
to
the
supply
of
such
services:

PROVIDED
that
where an electronic
commerce operator
does not have a
physical
presence
where an electronic
commerce
operator
does
not
have
a
physical presence in
the taxable territory
and also he does not
have a representative
in the said territory,
such
electronic
commerce
operator
shall
appoint
a
person in the taxable
territory
for
the
purpose of paying
tax and such person
shall be liable to pay
tax.
4 All. Ajay Verma Vs. Union of India & Ors.
987
in
the
taxable
territory,
any
person representing
such
electronic
commerce operator
for any purpose in
the taxable territory
shall be liable to
pay tax:

6. The "Goods and Service Tax
Council" (for short GST Council) took a
decision vide minutes of the IX GST
Council meeting held on 16.1.2017
(Agenda item no. 28) in respect of cross
empowerment to ensure single interface
under the GST Act, as under:

"28. After further discussion, the
Council agreed to the decisions as
recorded below in respect of crossempowerment to ensure single interface
under GST.

i. There shall be a division of
taxpayers between the Central and the
State
tax
administrations
for
all
administrative purposes;

ii. Of the total number of taxpayers
below
Rs.
1.5
crore
turnover,
all
administrative control over 90% of the
taxpayers shall vest with the State tax
administration and 10% with the Central
tax administration;

iii. In respect of the total number of
taxpayers above Rs.1.5 crore turnover, all
administrative control shall be divided
equally in the ratio of 50% each for the
Central and the State tax administration;

iv. The division of taxpayers in each
State shall be done by computer at the
State level based on stratified random
sampling and could also take into account
the geographical location and type of the
taxpayers, as may be mutually agreed;

v. The new registrants shall be
initially divided one each between the
Central and the State tax administration
and at the end of the year, once the
turnover of such new registrants was
ascertained, those units with turnover
below Rs.1.5 crore shall be divided in the
ratio
of
90%
for
the
State
tax
administration and 10% for the Central tax
administration and those units above the
turnover of Rs.1.5 crore shall be divided in
the ratio of 50% each for the State and the
Central tax administration;

vi. The division of the taxpayers may
be switched between the Centre and the
States at such interval as may be decided
by the Council;

vii. The above arrangement shall be
reviewed by the Council from time to time;

viii. Both the Central and the State tax
administration shall have the power to take
intelligence-based enforcement action in
respect of the entire value chain;

ix. Powers under the IGST Act shall be
cross-empowered
to
the
State
tax
administration
on the same basis as under the CGST and
the SGST Acts either under law or under
Article 258 of the Constitution but with the
exception
that
he
Central
tax
administration shall alone have the power
to adjudicate a case where the disputed
issue relates to place of supply, or when an
affected State requests that the case be
adjudicated by the CGST authority and for
such issues of export and import as may be
discussed in the Law Committee of officers
and brought back to the Council for
decision;

x. The territorial water within the
twelve nautical miles shall be treated as the
territory of the Union of India unless the
Hon'ble Supreme Court decides otherwise
in the ongoing litigation on the issue but
the power to collect the State tax in the
988 INDIAN LAW REPORTS ALLAHABAD SERIES
territorial waters shall be delegated by the
Central Government to the States."

7. Pursuant to the aforesaid decision
of the GST Council, a circular no. 01/2017
dated
20.9.2017
(F
no.
166/cross
empowerment/GST/2017) was issued by
the GST Council, New Delhi providing that
the State Level Committee comprising
Chief
Commissioner/Commissioner
Commercial Taxes of respective States and
jurisdictional
Central
Tax
Chief
Commissioners/Commissioners are already
in place for effective coordination between
the Centre and State and the said
Committee may take necessary steps for
division of taxpayers in each State.

8. Pursuant to the aforesaid circular
the Committee constituted for the State of
Uttar Pradesh passed order No. 04/2018
dated 12.9.2018 assigning the taxpayers
registered in the State of U.P. in terms of
the aforequoted decision of the GST
Council.

9. It is admitted fact that the taxpayer
i.e. the petitioner has been assigned to the
Central Officer whereas the impugned
show cause notice was issued by the State
Officer i.e. the respondent no. 4 ( Dy.
Commissioner,
Commercial
Tax
Saharanpur, Sector 10, Saharanpur (B),
Uttar Pradesh) before whom, despite show
cause notice, the petitioner did not raise
any objection as to the jurisdiction and
instead participated in the proceedings and
submitted to his jurisdiction. Thereafter the
respondent no. 4 passed the impugned
assessment order creating certain demand
against the petitioner. It is thereafter that
the petitioner filed the present writ
petition and challenged the show cause
notice and the assessment order solely on
the ground that it is without jurisdiction.

10. The word "Central Tax" has been
defined under section 2(21) of the CGST
Act/UPGST Act to mean that the Central
Goods and Service Tax levied under
section 9. The word "proper officer" has
been defined under section 2(91) of the
CGST Act/UPGST Act. Section 6 (1) of
the CGST Act starts with a non obstante
clause and provides that the officer
appointed under the State Goods and
Service Tax Act (for short SGST Act) or
the Union Territory Goods and Service Act
(for short UTGST Act) are authorized to be
the proper officer for the purposes of this
Act, subject to such condition as the
Government shall, on the recommendations
of the Council, by notification, specify.
Section
6(2)(a)
of
the
CGST Act
mandates that where any proper officer
under the CGST Act issues an order, he
shall also issue an order under the SGST
Act or the UTGST Act as authorized under
those Acts, as the case may be, under
intimation to the jurisdictional officer of
the State tax or the Union territory Tax.
Clause (2) of sub section (2) of Section 6
of the CGST Act/UPGST Act mandates
that where a proper officer under the
SGST Act or the UTGST Act has
initiated any proceedings on a subjectmatter, no proceedings shall be initiated
by the proper officer under the CGST
Act on the same subject-matter.

11. Section 6(1) of the UPGST Act
also starts with non obstante clause and
provides that officers appointed under the
CGST Act are authorized to be the proper
officers for the purposes of this Act, subject
to such conditions as the Government shall,
on the recommendations of the Council, by
notification specify. Clause (a) of subSection (2) of Section 6 of the UPGST Act
provides that where any proper officer
issues an order under this Act, he shall also
4 All. Ajay Verma Vs. Union of India & Ors.
989
issue an order under the Central Goods and
Services Tax Act, 2017 as authorized by
the said Act under intimation to the
jurisdictional officer of central tax. Clause
(b) of sub-Section (2) of Section 6 of the
UPGST Act provides that where a
proper officer under the CGST Act has
initiated any proceeding on a subject
matter, no proceeding shall be initiated
by the proper officer under the UPGST
Act on the same subject matter.

12. From bare perusal of Section 6
of the CGST Act and the UPGST Act it
is clear that a proper officer under the
UPGST Act is also a proper officer
under
the
CGST
Act
within
his
territorial
jurisdiction.
Likewise
a
proper officer appointed under the
CGST Act is also the proper officer
under the UPGST Act within his
territorial jurisdiction. So as to avoid
possibility of conflicting orders, an in
built provision in both the CGST Act
and UPGST Act has been made in
Section 6 that when a proper officer
under the CGST Act passes an order, he
shall intimate it to the jurisdictional
officer under the State Act or the Union
territory Act and likewise when a proper
officer under the UPGST Act passes an
order, he shall intimate it to the
jurisdictional officer of Central Tax.
Thus
a
cross
empowerment
with
sufficient
provision
to
remove
the
possibility of conflicting orders has been
provided under the CGST Act and
UPGST Act.

13. From the scheme of the Act, as
briefly discussed above, it is clear that
the proper officer as defined under the
CGST Act and UPGST Act, both are
proper officers within their territorial
jurisdiction and have been conferred
with jurisdiction and powers under both
the Acts to exercise their jurisdiction as
proper officers subject to a rider that if
an order is issued by a proper officer
under the State Act or the Union
territory Act on a subject matter then on
the same subject matter, order shall not
be passed by a proper officer under the
CGST Act and vice versa and the orders
so passed shall be intimated to the other
jurisdictional officer under the other
Act.

14. Since proper officers under both
the Acts have been empowered to exercise
powers within their territorial jurisdiction
and since both the set of officers i.e. under
the CGST Act and UPGST Act are
authorized to pass assessment orders,
therefore, there arose necessity for division
of work between two sets of officers, i.e.
under CGST Act and UPGST Act having
same
territorial
jurisdiction.
Consequently,the GST Council evolved the
formula in its IXth Meeting held on
16.01.2017 for division of work between
two sets of proper officers which has been
reproduced above, and consequent thereto
the Committee constituted at the State level
has distributed and assigned taxpayers for
the purposes of assessment to both sets of
proper officers.

15. Thus the proper officer under
the CGST Act and the proper officer
under
the
UPGST
Act,
both
are
jurisdictional proper officers and have
jurisdiction to pass assessment order
with respect to an assessee within their
territorial
jurisdiction
but
for
administrative purposes the order no.
04/2018 dated 12.9.2018 was issued by
the Commissioner of Commercial Tax,
U.P. in terms of the Agenda item no. 28
of the Minutes of the IX GST Council
990 INDIAN LAW REPORTS ALLAHABAD SERIES
meeting dated 16.1.2017 and circular no.
01/2017 of the GST Council dated
29.1.2017.

16. In terms of the aforesaid order no.
04/2018 dated 12.9.2021 issued by the
Commissioner, Commercial Tax, Uttar
Pradesh and the Chief Commissioner of
Central Tax, Meerut Zone, Lucknow, the
assessment of petitioner under the Act was
assigned to the Central Officer and not to
the respondent no. 4. However, the
respondent no. 4 took up the matter and
issued the impugned show cause notice
dated 25.6.2021 which was replied by the
petitioner without raising any objection
as
to
jurisdiction
on
account
of
assignment of case to the Central
Officer. It was also not brought to the
notice of the respondent no. 4 by the
petitioner that his case is assigned to a
Central Officer. Instead, the petitioner
participated
in
the
assessment
proceeding and the assessing officer i.e.
the proper officer (respondent No.4) has
passed the impugned assessment order
dated 9.8.2021, which can be said to be
contributory error of jurisdiction. The
GST
Act
came
into
force
from
01.07.2017. Prior to it the petitioner was
registered under the U.P. VAT Act and
was carrying on business in partnership.
But he migrated as proprietary concern
under the GST Act and carried the
entire stock of the partnership firm as on
30.06.2017 to the proprietary concern.
Neither on issuance of notice nor during
the course of assessment proceedings,
did the petitioner inform the respondent
No.4 that his case was assigned to a
Central Officer. After the assessment
order dated 09.08.2021 was passed by
the respondent No.4, it came to notice
that the case was assigned to a Central
Officer. Hence, the respondent No.4
wrote letters to the Central Officer who
informed vide letters dated 22.11.2021
and 03.12.2021 that as per Act the
proceedings shall be completed by the
officer who initiated it, i.e. by the
respondent No.4.

17. Thus, the question involved in the
present case is not as to the inherent lack of
jurisdiction instead but the question is as to
whether the impugned show cause notice
and the assessment order issued by the
respondent No.4 are without jurisdiction
due to assignment of the assessee to the
Central Officer? A further question would
be as to whether the impugned show
cause notice or the assessment order
would become void ab initio on account
of non assignment of the case to the
respondent
no.
4
even
when
the
petitioner submitted to the jurisdiction
of the respondent no. 4 and participated
in the proceeding without raising any
objection as to the jurisdiction?

18. Sub section (91) of Section 2 and
Section 6 of the CGST Act/UPGST Act
read with the minutes of the meeting of the
GST Council dated 16.1.2017 agenda Item
no. 28 and the order no. 04/2018 dated
12.9.2018 jointly issued by the State and
Central authorities, leads to an irresistible
conclusion that proper officer under the
UPGST Act and proper officer under the
CGST Act both have jurisdiction over
assessees falling within their territorial
jurisdiction
but
for
administrative
convenience, assignment of taxpayers have
been made by the designated committee at
the State level.

19. Thus, a proper officer under the
UPGST Act/CGST Act has inherent
jurisdiction over assessees falling within
his territorial jurisdiction but that
4 All. Ajay Verma Vs. Union of India & Ors.
991
jurisdiction has to be exercised as per
cases
assigned
by
the
designated
committee
comprising
Chief
Commissioner/Commissioner, Commercial
Taxes
of
respective
States
and
jurisdictional
Central
Tax
Chief
Commissioners/Commissioners.
In
the
present
set
of
facts,
the
Chief
Commissioner of Central Taxes, Lucknow
and Meerut Zone, Lucknow and the
Commissioner of Commercial Taxes, U.P.
issued the aforesaid order no. 04/2018
assigning the taxpayers to proper officers
and the case of the petitioner has been
assigned to the proper officer under the
CGST Act i.e. Central Officer and not to
the respondent no. 4.

CONSEQUENCES
OF
"SUBMITTING
TO
THE
JURISDICTION"

20. Present case is not a case of
inherent lack of jurisdiction rather it is a
case of error of jurisdiction on account of
non allotment of case of the petitioner
assessee to the respondent no. 4/State
officer.

21. In the case of Municipal
Commissioner, Kolkata and others Vs.
Salil Kumar Banerji (2000) 4 SCC 108
(para
4),
Hon'ble
Supreme
Court
considered the validity of an order passed
by a Tribunal not properly constituted.
Hon'ble Supreme Court held that "...Even
assuming that it ought to have consisted of
three or more Members, had that objection
been taken at the initial stage of the
hearing of the appeal before the Tribunal,
that position could have been rectified.
Certainly, in circumstances such as these,
the High Court ought not to have exercised
its discretion in favour of the first
respondent."

22. In the case of Kedar Shashikant
Deshpandey
and
others
Vs.
Bhor
Municipal Council and others (2011) 2
SCC 654 (para 29) Hon'ble Supreme Court
considered the principle "submitting to the
jurisdiction of the authority" and held that
"it is well settled that if a person has
submitted to the jurisdiction of the
authority,
he
cannot
challenge
the
proceedings on the ground of lack of
jurisdiction of the said authority in further
appellate proceedings...."

23. In the case of A.R. Antulay Vs.
R.S. Nayak and another (1988) 2 SCC 602
(para 234), a constitution Bench of Hon'ble
Supreme Court held as under:

"234. In dealing with this contention,
one important aspect of the concept of
jurisdiction has to be borne in mind. As
pointed out by Mathew J. in Sethi vs.
Kapur, (1972) 2 SCC 427, "the word
''jurisdiction' is a verbal coat of many
colours.". It is used in a wide and broad
sense while dealing with administrative or
quasi-judicial tribunals and subordinate
courts over which the superior courts
exercise a power of judicial review and
superintendence. Then it is only a
question of "how much latitude the court
is prepared to allow" and "there is no
yardstick to determine the magnitude of
the error other than the opinion of the
court." But the position is different with
superior courts with unlimited jurisdiction.
These are always presumed to act with
jurisdiction and unless it is clearly shown
that any particular order is patently one
which could not, on any conceivable view
of its jurisdiction, have been passed by
such court, such an order can neither be
ignored nor even recalled, annulled,
revoked or set aside in subsequent
proceedings by the same court. This
992 INDIAN LAW REPORTS ALLAHABAD SERIES
distinction is well brought out in the
speeches of Lord Diplock, Lord Edmund-
Davies and Lord Scarman in Re Racal
Communications Ltd., [1980] 2 All E R
634. In the interests of brevity, I resist the
temptation to quote extracts from the
speeches here."

DIFFERENCE
BETWEEN
INHRENT LACK OF JURISDICTION
AND ERROR OF JURISDICTION

24. In the case of H.V. Nirmala Vs.
Karnataka State Financial Corporation
and others (2008) 7 SCC 639 (paras 13 and
14), Hon'ble Supreme Court has held as
under:

"13. .........An authority may lack
inherent jurisdiction in which case the
order passed would be a nullity but it may
commit
a
jurisdictional
error
while
exercising jurisdiction. .........

14.
...........A
jurisdictional
issue
should be raised at the earliest possible
opportunity. A disciplinary proceedings is
not a judicial proceeding. It is a domestic
tribunal. There exists a distinction between
a domestic tribunal and a court. The
appellant does not contend that any
procedure in holding the enquiry has been
violated or that there was no compliance
with principles of natural justice."

25. In the case of Central Bank of
India Vs. C. Bernard (1991)1 SCC 319
(para
9),
Hon'ble
Supreme
Court
considered the submission that in the event
the respondent succeeded in getting the
order of punishment quashed on a mere
technicality and that too on the contention
belatedly raised before the High Court for
the first time and, therefore, the High Court
was in error in directing payment of all
consequential benefits.; and held as under:

"We think there is merit in this
contention. If the objection was raised at
the earliest possible opportunity before the
Enquiry Officer the appellant could have
taken steps to remedy the situation by
appointing a competent officer to enquire
into the charges before the respondent's
retirement from service......."

26. In the case of Nusli Neville Wadia
Vs. Ivory Properties and others (2020) 6
SCC 557 (paras 20, 21 and 22) Hon'ble
Supreme Court has explained the meaning
of the word "jurisdiction" and distinction
between jurisdiction to entertain and
error of exercise of jurisdiction or excess
jurisdiction and held as under :

"20. Jurisdiction is the power to
decide and not merely the power to decide
correctly. Jurisdiction is the authority of
law to act officially. It is an authority of
law to act officially in a particular matter
in hand. It is the power to take cognizance
and decide the cases. It is the power to
decide rightly or wrongly. It is the power to
hear and determine. Same is the foundation
of judicial proceedings. It does not depend
upon the correctness of the decision made.
It is the power to decide justiciable
controversy and includes questions of law
as well as facts on merits. Jurisdiction is
the right to hear and determine. It does not
depend upon whether a decision is right or
wrong.
Jurisdiction
means
power
to
entertain a suit, consider merits, and
render binding decisions, and "merits"
means the various elements which enter
into or qualify plaintiff's right to the relief
sought. If the law confers a power to render
a judgment or decree, then the court has
jurisdiction. The court must have control
over the subject matter, which comes within
classification limits of law under which
Court is established and functions.
4 All. Ajay Verma Vs. Union of India & Ors.
993

21. The word "jurisdiction" is derived
from Latin words "Juris" and "dico," meaning
"I speak by the law" and does not relate to
rights of parties as between each other but to
the power of the court. Jurisdiction relates to a
class of cases to which a particular case
belongs. Jurisdiction is the authority by which a
judicial officer takes cognizance and decides
the cases. It only presupposes the existence of a
duly constituted court having control over
subject-matter
which
comes
within
classification limits of the law under which
court has been established. It should have
control over the parties litigant, control over the
parties' territory, it may also relate to pecuniary
as well as the nature of the class of cases.
Jurisdiction is generally understood as the
authority to decide, render a judgment, inquire
into the facts, to apply the law, and to
pronounce a judgment. When there is the want
of general power to act, the court has no
jurisdiction.