M/s Kay Arr Engineering Services VS The Assistant Commissioner of GST & Central Excise

GST update /2026-27/0043

GST UPDATE

Hon’ble Court: MADRAS HIGH COURT

Case Title: M/s. Kay Arr Engineering Services VS The Assistant Commissioner of GST & Central Excise

Petition No. & Citation: W.P.No.5854 of 2025

Hon’ble Judge(s) MR.JUSTICE C.SARAVANAN

Date of Order 03.06.2026

Outcome In favour of the Petitioner

Brief Facts of the Case

The petitioner, M/s. Kay Arr Engineering Services, was issued a Show Cause Notice by the Directorate General of Goods and Services Tax Intelligence (DGGI) alleging short payment of GST due to incorrect classification under S.No. 234 of the First Schedule to Notification No. 1/2017-Central Tax (Rate) (taxed at 5%, later revised to 12%) regarding maintenance charges for wind-operated electricity generators by invoking the extended period under Section 74 of the CGST Act for the period FY 2017-18 to FY 2022-23. The adjudication was concluded in Order-in-Original passed by the Assistant Commissioner of GST & Central Excise, confirming the proposals contained in the Show Cause Notice. The petitioner challenged the adjudication order before the Madras High Court primarily on the ground of lack of jurisdiction of the adjudicating authority.

Relevant Notification

Notification No. 02/2017-Central Tax as amended by Notification No. 02/2022 dated 11.03.2022 and further amended by Notification No. 27/2024 dated 25.11.2024.

Question before Hon’ble Court

• Whether an Assistant Commissioner was competent to adjudicate a Show Cause Notice issued by DGGI under Sections 73/74 based on Notification No. 02/2022-Central Tax ?

Brief Arguments by Petitioner

• Bona fide Classification Dispute

The petitioner contended that the classification adopted by the petitioner was based on a bona fide interpretation of the applicable GST rate notifications and therefore invocation of the extended limitation period under Section 74 was unjustified.

* Order passed without Jurisdiction

The principal challenge was that. Notification No. 02/2017-Central Tax as amended by Notification No. 02/2022 dated 11.03.2022 and further amended by Notification No. 27/2024 dated 25.11.2024., specifically designated Additional Commissioners or Joint Commissioners to adjudicate notices issued by DGGI officers. Since the impugned order was passed by an Assistant Commissioner, the adjudication was without jurisdiction and liable to be quashed.

• Composite Adjudication of Multiple Years

Reliance was also placed on the decision in Titan Company Ltd. v. Joint Commissioner of GST, wherein it was held that authorities cannot bunch several assessment years together and pass composite orders.

Brief Arguments by Respondent

• Write Petition not maintainable

The Department argued that the classification dispute involved factual examination and ought to be adjudicated by the appellate authority under Section 107 of the CGST Act and therefore invocation of Article 226 to file writ where alternate remedy is available is not sustainable.

• Assistant Commissioner acted within Jurisdiction

It was contended that subsequent amendments merely expanded powers of higher officers without divesting Assistant Commissioners of their adjudicatory authority and therefore Order was rightly passed within Jurisdiction.

Cases Relied Upon

Case Law Citation

Titan Company Ltd vs. Joint Commissioner of GST (W.P. No. 33164 of 2023)

Findings and Judgement

The Court carefully examined Notification No. 02/2017-Central Tax as amended by Notification No. 02/2022 dated 11.03.2022 and further amended by Notification No. 27/2024 dated 25.11.2024 and noted that Table V expressly vested powers for adjudication of notices issued by DGGI officers upon Additional Commissioners or Joint Commissioners of Central Tax. Consequently, where a Show Cause Notice had been issued by DGGI, the adjudication could be undertaken only by the officers designated under the amended notification.

The Court held that the impugned Order-in-Original had been passed by an Assistant Commissioner despite the statutory notification conferring adjudicatory powers upon Additional Commissioners/Joint Commissioners. Therefore, the order suffered from a jurisdictional defect and procedural illegality.

Accordingly, the Court quashed the Order-in-Original and remanded the matter for fresh adjudication by the competent authority in terms of Notification No. 02/2017-Central Tax as amended.

Author’s Comment

This judgment is significant for businesses facing GST investigations, as it emphasizes that GST notifications are mandatory and not merely procedural, and authorities cannot bypass the procedure prescribed under law. The High Court has clarified that when a notice is issued by DGGI, the matter must be decided only by the officer specifically authorized under the Notification No Notification No. 02/2017-Central Tax as amended by Notification No. 02/2022 dated 11.03.2022 and further amended by Notification No. 27/2024 dated 25.11.2024. This provides an important safeguard to taxpayers against orders passed by authorities lacking proper jurisdiction and reinforcing that the Orders passed by officers not legally empowered to decide the cases would not sustain.

CA Pradeep Jain

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