Facts of the Case:

In this case, the petitioner imported various inputs during the assessment years 2017–18 to 2022–23 and claimed exemption from IGST on such imports. The petitioner was administratively assigned to the Central GST jurisdiction. However, the State Tax authorities conducted an inspection and issued an intimation under Section 73(5) of the CGST Act, disputing exemption claims and classification of imported goods. Subsequently, a second intimation in the nature of a show cause notice was issued raising additional issues not covered in the earlier intimation.

Aggrieved, the petitioner filed a writ petition challenging (i) the jurisdiction of State GST authorities to initiate proceedings relating to IGST on imports, and (ii) the validity of Circular No. 80/54/2018-GST, which allegedly restricted exemption benefits. The petitioner also relied on the fact that Customs authorities had already initiated proceedings and passed an order recognizing eligibility for exemption on certain imported goods.

Issue:

Whether State GST authorities have jurisdiction to assess and recover IGST on imported goods. Whether cross-empowerment under GST laws permits State officers to initiate proceedings under the IGST Act, particularly when the taxpayer is assigned to Central jurisdiction.

Held that:

The Court firstly, relying on the proviso to Section 5(1) of the IGST Act, the Court observed that IGST on imported goods is levied and collected in accordance with Section 3 of the Customs Tariff Act at the point of import. This clearly establishes that the entire mechanism of assessment, classification, valuation, and exemption relating to imported goods—including IGST is governed by the Customs Act and Customs Tariff Act. The definition of “assessment” under Section 2(2) of the Customs Act further reinforces that Customs authorities are empowered to determine not only customs duty but also any tax (including IGST) payable on imported goods.

Further, the Court held that Section 28 of the Customs Act provides a complete code for recovery of duties and taxes not levied or short paid, which includes IGST on imports. Therefore, the jurisdiction to assess and recover IGST on imports lies exclusively with Customs authorities, and GST officers cannot usurp such powers.

Also, on the issue of cross-empowerment, the Court clarified that provisions such as Section 6 of the CGST/APGST Acts and Section 4 of the IGST Act permit cross-empowerment only in limited circumstances and subject to administrative allocation of taxpayers. Since the petitioner was assigned to Central jurisdiction, the State GST officer could not assume jurisdiction. Thus, the plea of cross-empowerment raised by the department was rejected.

The Court held that where a show cause notice is issued without jurisdiction, the writ petition is maintainable even at the notice stage, as per settled principles. The Court also noted that the impugned circular had already been struck down by another High Court and therefore could not be relied upon by the authorities.

Case Name: Avanti Feeds Limited, Mr. A. Indra Kumar Versus Deputy Commissioner of State Tax, Principal Commissioner of State Tax, Guntur, Union of India, The State of Andhra Pradesh. dated 01.04.2026

To read the complete judgement 2026 Taxo.online 807