Facts of the Case: The petitioners, consisting of various firms and companies registered under the Companies Act, 2013, are engaged in the business of manufacturing and trading of goods under the CGST Act, 2017 and J&K SGST Act, 2017.
In this case, the petitioner raised the following principal contentions, the proper officers under the CGST Act had no jurisdiction since the petitioners were assigned to the State GST Authorities under the administrative division framework. The Joint Commissioner lacked authority to issue SCNs where the tax amount involved was less than ₹1 crore, per the CBIC circular dated 09.02.2018. A consolidated SCN covering five financial years (2017–18 to 2021–22) was impermissible under Section 74 of the CGST Act.
Issue:
Whether issuance of a specific notification for cross-empowerment under Section 6 of the CGST Act and SGST Act is mandatory, and in its absence, can a CGST officer exercise jurisdiction over an assessee assigned to the State authorities and vice versa. Whether bunching of SCNs under Section 74 for multiple financial years is permissible in law. Whether the Joint Commissioner is competent to issue an SCN where the amount involved is less than ₹1 crore.
Held that:
The Court observed and held as under:
A. On Cross-Empowerment under Section 6
The Court held that cross-empowerment is inherent and automatic under Section 6(1) of the CGST Act. The words “subject to such conditions as the Government may, on the recommendations of the Council, by notification, specify” indicate that a notification is required only to impose conditions, not to create empowerment. Therefore, no separate notification is needed for cross-empowerment to take effect.
Reference was made to CBIC Clarification No. CBEC-20/10/07/2019-GST dated 22.06.2020, and Circular No. 01/2017 dated 20.09.2017, which confirm concurrent powers of both Central and State officers in intelligence-based enforcement actions.
Reliance was placed on M/s Armour Security India Pvt. Ltd. v. Commissioner CGST Delhi East (2025 INSC 982), wherein the Supreme Court affirmed that intelligence-based enforcement actions can be initiated by either Central or State tax authorities, irrespective of taxpayer allocation.
B. On Bunching of Multiple Years under Section 74
The Court observed that Section 74 does not expressly prohibit issuance of an SCN covering multiple years. However, it left the issue open for determination in appropriate adjudicatory proceedings, allowing the petitioners to raise it before the proper authority. No prima facie illegality is found in bunching SCNs for multiple years; the question is left open for the adjudicating authority.
C. On Competence of Joint Commissioner (Monetary Limit)
The Court held that under Section 5(2) of the CGST Act, a senior officer may exercise powers of a subordinate officer. The circular of 09.02.2018 prescribing monetary limits is administrative in nature, meant only for workload distribution and not to curtail statutory jurisdiction. Hence, a Joint Commissioner can issue SCNs even where the amount is below ₹1 crore. The Joint Commissioner, being higher in rank, is competent to issue the impugned SCN regardless of the monetary threshold.
Case Name: R.K. Ispat Ltd. through Ram Avtar Aggarwal Silklon Processors Pvt. Ltd. through Vikrant Sharma Chenab Industries Pvt. Ltd. through Kush Aggarwal Jyotsana Industries Pvt. Ltd through Sajan Marriya J&K Textorium Pvt. Ltd. through Rajesh Kumar J&K Synthetic Pvt. Ltd. through Rajesh Kumar M/s Natural Industries through Ram Avtar Aggarwal Toplon Industries Pvt. Ltd. through Kush Aggarwal Orbit Spinning Pvt. Ltd. through Sajan Marriya Green Textorium Pvt. Ltd. through Rajesh Kumar Versus Union of India and others. dated 06.10.2025.
