M/s JAI GANESH ENTERPRISE vs UNION OF INDIA
- Court
- Gujarat High Court
C/SCA/9269/2026 JUDGMENT DATED: 13/07/2026
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 9269 of 2026
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
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Approved for Reporting Yes No
✔
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M/s JAI GANESH ENTERPRISE
Versus
UNION OF INDIA & ORS.
=============================================
Appearance:
MR SAMIR GUPTA for MR NACHIKET D MEHTA(6529) for the
Petitioner(s) No. 1
MS TANUSHREE SHRIMAL, AGP for the Respondent(s) No. 3,4
MR ANKIT SHAH for the Respondent(s) No. 1,2
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CORAM: HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
Date : 13/07/2026
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)
1. In the present writ petition, the petitioner has assailed
the confiscation order Form GST MOV-11 dated 27.03.2026
and the summary order Form GST DRC-07 dated 24.04.2026.
2. This writ petition has been filed under Article 226 of the
Constitution of India, seeking quashing of the Confiscation
Order dated 27.03.2026 passed in Form GST MOV-11 under
section 130 of the Central Goods and Services Tax Act, 2017
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(for short ‘the CGST Act’) read with section 20 of the
Integrated Goods and Services Tax Act, 2017 (for short ‘the
IGST Act’) vide which, demand of Rs.88,68,728/- has been
confirmed in lieu of confiscation of goods and conveyance.
2.1 The petitioner is also challenging the summary order in
Form GST DRC-07 dated 24.04.2026 passed by the respondent
No.4 under Rule 142(5) of the Central Goods and Services Tax
Rules, 2017 (for short 'the CGST Rules'). The petitioner is also
challenging the cross-empowerment of the Gujarat Goods and
Services Tax officers to perform the functions of proper officers
under the IGST Act.
2.2 That for the sake of brevity, the Gujarat Goods and
Services Tax Act, 2017 shall be referred as 'GGST Act’.
Brief facts
3. The petitioner is the buyer of the goods (Pan Masala and
Tobacco) and a registered dealer under GST. The goods are
being sold by M/s Ram Trading Company. It is undisputed that
the petitioner and the seller are duly registered under GST.
That, while the goods were in transit, the consignment was
intercepted by the respondent No.4 on 25.02.2026 and
statement of the driver was recorded in Form GST MOV-01. It is
the case of the petitioner that at the time of interception, the
driver duly furnished E-invoices and E-way bills pertaining to
accompanied goods, and, after recording the statement of
driver, the respondent No.4 passed the order for physical
verification Form GST MOV-02 and document verification.
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3.1 It is the case of the petitioner that on 27.02.2026, the
respondent No.4 conducted the physical verification and
prepared the report in Form GST MOV-04 wherein no
discrepancy was found between the quantity of goods as per
invoice and quantity of goods as per physical verification.
3.2 On 28.02.2026, the Respondent No.4 passed the
Detention Order Form GST MOV-06 under Section 129(1) of the
CGST Act read with section 20 of the IGST Act on the ground
that the documents accompanied with the goods in question
had already been used on an earlier occasion i.e. between
22.02.2026 to 23.02.2026.
3.3 On 07.03.2026, the respondent No.4 issued the show
cause notice for Confiscation Form GST MOV-10 under Section
130 of the CGST Act read with Section 20 of the IGST Act
wherein, the Respondent No.4 directed to show cause as to
why penalty amounting to Rs.19,70,828.58/- in lieu of goods,
fine amounting to Rs.49,27,071.43/- in lieu of goods and fine
amounting to Rs.19,70,828.58/- shall not be recovered. After
the petitioner filed reply on 27.03.2026, the respondent No.4
passed the confiscation order Form GST MOV-11 and confirm
the demand of penalty and fine.
SUBMISSIONS ON BEHALF OF THE PETITIONER
4. Learned advocate, Mr.Samir Gupta appearing for the
petitioner has questioned the action and powers of the
respondent officers in passing the impugned orders. While
referring to the provision of section 4 of the IGST Act, it is
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contended that under the said provision, the officers appointed
under the State Goods and Services Tax Act or the Union
Territory Goods and Services Tax Act are authorized to be the
proper officers, subject to the exceptions and conditions as the
Government on recommendations of the Council, shall by
notification specify. He has also referred that a similar
provision has been engrafted in the CGST Act under section
6(1) which empower the officers appointed under the said Act
as authorized to be the proper officers. Thus, it is submitted
that since there is cross-empowerment of the officers amid
State GST and Central GST to perform the functions of proper
officers, the same has to be clarified by issuance of
notification, which is not done in the present case. It is
submitted that though the Commissioner of State Tax had
issued an order dated 23.06.2017 specifying the proper officer
under the GGST Act, the same will not empower such officers
as mentioned therein to pass the orders unless, there is a
notification issued under section 4 of the IGST Act empowering
such officers to exercise their powers.
4.1 Learned advocate, Mr.Samir Gupta has also referred that
nd
the GST Council in its 22 meeting held on 06.10.2017,
included a proposal for issuing notification on cross
empowerment for ensuring single interface under GST.
However, the same is not issued and hence, the functioning of
the proper officer through the circular/order dated 23.06.2017
by the State officers, who are delegated the power by the
Commissioner, is dehors the statutory scheme of the IGST Act
and the State GST Act and thus, the impugned orders are
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required to be quashed and set aside. It is submitted that
pursuant to the recommendation of the GST Council, the
respondent No.1 issued notification dated 13.10.2017, to cross
empower the State officers for processing and grant of refund
which specifies that the officers of the State tax are authorized
to be proper officers for the purposes of Section 54 or Section
55 of the said Acts and hence, until such notification has been
issued under section 4 of the IGST Act by the Central
Government, the State officers are not authorized or
empowered to pass the impugned orders, which are passed in
the present case against the petitioner. It is submitted that
such officers are allowed to exercise the powers when it comes
to cross empowerment, there would not be any restriction or
guidance or any check on their functions which would lead to
an anomalous situation of imposing penalty and confiscation of
the goods on the tax payers. In support of his submission, he
has placed reliance on the decision of the High Court of Andhra
Pradesh in the case of Sri Balaji Rice Company vs. Commercial
Tax Officer, No.I, Nellore & Ors. , 1983 SCC Online AP 309 .
4.2 Learned advocate, Mr.Samir Gupta has further
highlighted the predicament of the present petitioner filing an
appeal under section 107(1) of the CGST Act, 2017 read with
section 107 of the GGST Act. It is submitted that the provision
of section 107(1) of the CGST Act provides of filing an appeal
before the prescribed authority against any decision or order
passed under the Acts by an adjudicating authority. However,
the said provision does not stipulate of filing an appeal against
the decision or order passed under the IGST Act. He has
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referred to the provision of section 107(1) of the GGST Act and
has submitted that as per the aforesaid provision of section 6
of GGST Act more particularly, sub-section (3) of section 6 of
the GGST Act, any order passed by the State authority officers
(proper officer) under the said Act, shall not lie before an
officer appointed under the CGST Act. Thus, it is urged that the
petitioner is remediless as he cannot file an appeal unless the
Acts prescribed of filing an appeal against an order passed
under the IGST Act. No further submissions are made.
SUBMISSIONS ON BEHALF OF THE RESPONDENTS
5. Responding to the foregoing submissions and opposing
the present writ petition, learned Assistant Government
Pleader, Ms.Tanushree Shrimal appearing for the respondent
Nos.3 and 4 has submitted that the issue raised in the present
writ petition by the writ petitioner is already laid quietus by the
various judgments of the High Courts. In this context, she has
referred to the judgment of the High Court of Punjab &
Haryana in the case of Bright Road Logistics vs. State of
Haryana, (2023) 153 taxmann.com 353 (Punjab & Haryana),
the High Court of Madhya Pradesh in the case of Advantage
India Logistics (P) Ltd. vs. Union of India, (2018) 98
taxmann.com 120 (Madhya Pradesh) and the High Court of
Calcutta in the case of Jageswar Saw vs. Deputy Commissioner
of Revenue, State Tax, Bureau of Investigation, (2026) 185
taxmann.com 853 (Calcutta) . She has also referred to the
provision of section 4 and section 107 of the GST Acts and has
submitted that the petitioner can file an appeal against the
impugned orders before the appellate authorities under the
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GGST Act. Thus, she has urged that the writ petition is not
maintainable.
6. Adopting the aforesaid submissions, learned Senior
Standing Counsel, Mr.Ankit Shah appearing for the respondent
Nos.1 and 2 has submitted that the provisions of section 4 of
the IGST Act are self-explanatory and they do not require
further issuance of any notification promulgating the division of
powers of proper officers. It is submitted that the
Commissioner of State Tax, Gujarat State, Ahmedabad, vide
order dated 23.06.2017 has already prescribed the schedule of
the proper officers with the corresponding entries and the
sanctions and hence, the further notification is not required.
ANALYSIS AND OPINION
7. We have heard the learned advocates appearing for the
respective parties at length. The entire case of the petitioner
hinges on the interpretation of two statutory provisions; (i)
section 4 of the IGST Act and; (ii) section 107 of the CGST Act
which provides for filing an appeal against the impugned
orders. Thus, it is not in dispute that the petitioner has an
alternative remedy of filing an appeal against the impugned
orders. However, it is the case of the petitioner that since there
is no provision governing either in the CGST Act or under GGST
Act of filing an appeal against any order passed by any proper
officer under the IGST Act, he is unable to do so.
8. We may deal with the first part of the submission
advanced on behalf of the petitioner relating to the issue of
absence of any notification or any clarification issued by the
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Central Government governing the provision of section 4 of the
IGST Act and correspondingly, non issuance of any clarification
regarding the exercise of the powers by the proper officers in
relation to the respective sections/statutory provisions of the
respective Acts. Section 4 of the IGST Act reads as under:
“Section 4 - Authorisation of officers of State tax or Union
territory tax as proper officer in certain circumstances
Without prejudice to the provisions of this Act, the officers appointed under
the State Goods 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 exceptions and conditions as the Government
shall, on the recommendations of the Council, by notification, specify.”
8.1 A careful reading of the provision of section 4 of the IGST
Act, manifests that the officers appointed under the State
Goods and Services Tax Act or the Union Territory Goods and
Services Tax Act “are authorized to be the proper officers” for
the purpose of this Act i.e. the IGST Act, subject to such
exceptions and conditions as the Government shall, on the
recommendations of the Council, by notification, specify. Thus,
if the Central Government is of the opinion that there has to be
some exceptions or conditions which are necessary to be
incorporated and read into the provisions of section 4, in those
cases, the Central Government on the recommendations of the
Council, has to issue the notification. The powers which are to
be exercised by the proper officers appointed under the State
Goods and Services Tax Act or the Union Territory Goods and
Services Tax Act, are conferred and authorized on the proper
officers for the purpose of the operation of the provisions of
IGST Act. Thus, there is no ambiguity in the language of the
provisions of section 4 of the IGST Act, which categorically and
specifically authorizes the officers appointed under the State
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Goods and Services Tax Act, who are authorized to be proper
officers for the purpose of operation of the statutory provisions
of the IGST Act and the said authorization of the proper officers
of the State Goods and Services Tax Act or the Union Territory
Goods and Services Tax are subject to the exceptions and
conditions which can be promulgated by the Government on
the recommendations of the Council by a notification. It
appears that one of such exception was in cases of governing
or sanctioning the refund and accordingly, the Central
Government issued a Notification No.39 of 2017, dated
13.10.2017, authorizing the proper officers for the purpose of
section 54 and section 55 of the said Acts i.e. the State Goods
and Services Tax Act and the Union Territory Goods and
Services Tax Act. These are the circumstances which could be
considered by the Central Government for issuance of the
notifications as mentioned under section 4 of the IGST Act.
8.2 Thus, the language of provision of section 4 of the IGST
Act indubitably prescribes that the officers who are appointed
under the State Goods and Services Tax Act are authorized
and empowered to carry out their powers or functions for the
purpose of IGST Act. The section does not in any manner
further mandates of issuance of notification by the Central
Government suggesting or stipulating any division of powers
by such proper officers but, it is left on the discretion of the
proper officer, who is appointed by the State Government to
further delegate the powers to other officers, which is already
done vide order dated 23.06.2017 issued by the Commissioner
of State Tax, Gujarat State, Ahmedabad, providing the
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schedule empowering the proper officers specified in the
corresponding entries Section wise of the GGST Act. The order
specifically mentions the specification of proper officers under
the GGST Act right from section 10(5) of the GGST Act, which is
found at item No.1 of such order, till Section 163 of the GGST
Act i.e. the entry 116. The designation of proper officers are
prescribed by the Commissioner of State Tax. The Schedule – A
of the said order thus, prescribes the various officers, who are
designated as proper officers, for the functioning of the
statutory provisions under the GGST Act.
9. At this stage, we may refer to the decision of the Punjab
& Haryana High Court in the case of Bright Road Logistics
(supra). While dealing with an analogous situation, the Punjab
& Haryana High Court after careful examination of the
provisions of section 20 of the IGST Act and section 4 of the
IGST Act read with the orders passed by the Excise and
Taxation Commissioner of Haryana under the provisions of
section 4 and section 20 of the IGST Act, has held thus:
“18. Since the vehicle was transporting the goods inter-State, therefore,
the provisions of IGST Act, 2017 as well the provisions of GST Act, 2017 in
so far applicable in view of the provisions of Section 20 of the IGST Act, are
applicable to the facts of the present case. In view of the said enabling
provisions under Section 20 of the IGST Act, 2017, the provisions of
Chapter XIV of GST Act, 2017 which deals with inspection, search, seizure
and arrest and power of inspection, search and seizure (Section 67 and 68
of CGST Act, 2017) are applicable to the inter-State supply of goods.
19. As per the provisions of Section 4 of IGST Act, 2017, the officers
who are appointed under the State Goods and Services Tax Act or Union
Territory Goods & Services Act are authorized to be the Proper Officers in
the process of IGST Act, 2017. The said Section is reproduced as under:-
4. Authorization of officers of State tax or Union territory tax as Proper
Officer in certain circumstances- Without prejudice to the provisions of
this Act, the officers appointed under the State Goods and Services
Tax Act or the Union Territory Goods and Services Tax Act are
authorized to be the Proper Officers for the purposes of this Act,
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subject to such exceptions and conditions as the Government shall, on
the recommendations of the Council, by notification, specify.'
20. Apart from the enabling provisions under the IGST Act, 2017, the
Commissioner of State Tax, Haryana had issued the order dated
07.12.2017 (Annexure P-46) exercising the powers conferred under sub-
section 1 of Section 5 read with clause 91 of section 2 of Haryana Goods
and Services Tax Act, 2017 assigning the functions to be performed under
the said Act by a Proper Officer. As per entry of Sr. No.51, 52 and 53 of the
said order, the Asstt. Excise and Taxation Officer of State Tax has been
assigned the functions to be performed under Section 129 (1) and (3); 129
(6); and Section 130 of the Haryana Goods and Services Tax Act, 2017.
Section 129 and 130 of the said Act is having the similar provisions as
under the said sections of IGST Act, 2017.
21. As such, in view of the enabling provisions of Sections 20 and
Section 4 of the IGST Act; as well as the order dated 07.12.2017 (Annexure
P-46) passed by the Excise & Taxation Commissioner, Haryana, assigning
the functions to the Proper Officer under the Haryana Goods & Services
Tax Act, 2017, we are of the considered opinion that the Asstt. Excise and
Taxation Officer of State Tax is competent and authorized to exercise the
powers under Section 129 and 130 of the IGST Act, 2017.
22. As such the first point for determination is accordingly, answered
that the Asstt. Excise & Taxation Officer of State Tax was authorized to Act
as a Proper Officer and was having the authority to act under Section 129
and 130 of the IGST Act. The decision of the appellate authority in this
regard requires no interference.”
9.1 The Punjab & Haryana High Court has held that the
Excise and Taxation Officer of State Tax is competent and
authorized to exercise the powers under section 129 and 130
of the IGST Act in light of the provision of section 20 and
section 4 of the IGST Act as well as the order dated 07.12.2017
passed by the Excise and Taxation Commissioner, Haryana. In
the present case, it is the order dated 23.06.2017.
10. The High Court of Calcutta in the case of Jageswar Saw
(supra), has also taken a similar view after examination of
section 4 of the IGST Act. The same is as under:
“27. The two sections are almost a mirror reflection of each other.
Section 6 deals with authorisation of officers of the State tax or Union
Territory tax as a proper officer, while Section 4 deals with authorisation of
officers appointed under the State Tax Act or Union Territory Tax Act as
proper officer in certain circumstances.
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28. Section 4 of the IGST Act unequivocally mandates that the officer
appointed under the said Act or the Union Territory Act are authorised as
the proper officer for the purpose of IGST. This authorisation is subject to
exceptions and conditions as the government may, on the
recommendation of the Council, specify by issuing a notification.
29. No notification has been produced or relied upon before us by any
of the parties to assail the issue that persons other than those specified
under Section 4 of the IGST Act are to be construed as proper officer.
30. Section 4 of the IGST Act is thus unequivocal. This all-
encompassing nature of Section 4 can only be curtailed by a specific
notification issued by the Government of India on consultation or on the
recommendation of the Council. As no such notification or
recommendation was produced or relied upon before us, there is no
occasion for us to construe otherwise that an officer specified under
Section 4 of the IGST Act is not a proper officer. Officers appointed under
the CGST Act and the State Act (herein the West Bengal GST Act) are
construed, by way of this deeming provision of Section 4 of the IGST Act,
to be proper officers. This is a provision of cross empowerment which has
been fostered by the authority upon much consultation and deliberation to
mitigate the chances of double jeopardy and to ensure smooth and
efficient functioning of the tax regime.
31. The GST law, through this principle of cross empowerment, affords
a far more efficient machinery to the authorities to ensure due
enforcement of the provisions of the relevant statutes. The authorities,
both Union and state, while making their submission, in no uncertain terms
submitted that the proper officer of the West Bengal GST was empowered
and thereby had jurisdiction to detain the vehicle and inspect the
documents as presented to them.”
10.1 The Calcutta High Court has held that the provisions
of section 4 of the IGST Act can only be curtailed by a specific
notification issued by the Government of India on consultation
or on the recommendation of the Council.
11. In the case of Advantage India Logistics (P) Ltd.
(supra), the High Court of Madhya Pradesh has held thus:
“13. On due consideration of the arguments of the learned counsel for
the parties so also the provisions of Section 4 of the IGST Act, we are of the
view that officers appointed under the MPGST Act are authorized to be
proper officers for the purpose of IGST and, therefore, the contention of
the petitioner that no notification was issued and in absence of any
notification under Section 4 of the IGST Act has no force, we cannot accept
the contention of the petitioner that the action of the respondent No.4 is
wholly without jurisdiction.”
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12. Thus, on overall appreciation of the provisions of the Acts
as well as the legal precedent as set out by the other three
High Courts, we do not find any merits in the submissions
advanced by learned advocate, Mr.Samir Gupta. No further
notification is required to be issued by the Central government
clarifying the exercise of powers by proper officers under IGST,
since the Section 4 of the IGST Act already takes care of the
state of affairs.
13. So far as the predicament canvased by the petitioner in
filing the appeal under Section 107 of the CGST Act, the same
also has its roots in the aforesaid provisions of section 4 and
section 20 of the IGST Act. Section 107 of the CGST Act
provides for filing an appeal against an order passed under this
Act or the State Goods and Services Tax Act or the Union
Territory Goods and Services Tax Act. Section 4 of the IGST Act
as deliberated upon by us, would inevitably create a deeming
fiction of passing an order by the proper officers under the
State Goods and Services Tax Act and Union Territory Goods
and Services Tax Act and hence, an appeal would lie before
the appellate authority under section 107 of the CGST Act if
the order is passed by the proper officer exercising the powers
under CGST Act. However, since in the present case, the orders
have been passed by the proper officers of the State
Government, the provision of section 107 of the GGST Act gets
attracted. Section 6(3) of the GGST Act under which the
petitioner has sought shelter, mentions that “Any proceedings
for rectification, appeal and revision, wherever applicable, of
any order passed by an officer appointed under this Act, shall
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not lie before an officer appointed under the Central Goods and
Services Tax Act.” Precisely so stated, since the provisions is
framed under GGST Act. This provision cannot be made an
excuse of non-filing of an appeal since the appeal would only
lie to the appellate authority of the State under the provision of
section 107 of the GGST Act. Thus, on this count also, the writ
petition cannot be entertained as the petitioner has the
remedy of filing an appeal. Hence, the writ petition stands
dismissed.
(A. S. SUPEHIA, J)
(VAIBHAVI D. NANAVATI,J)
NEHA /2
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