The Allahabad High Court at Lucknow said that a taxpayer appeared before the tax officer and challenged an SCN on merits and raised the objection of want of jurisdiction merely after the penalty order went against him, which is impacted by the doctrine of election and must be downgraded to the statutory appellate remedy.
The bench of Justice Shekhar B. Saraf and Justice Abdhesh Kumar Chaudhary said that
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“We are conscious of the settled legal position that a question of jurisdiction can be raised before a Constitutional Court at any stage. However, the writ jurisdiction exercised under Article 226 of the Constitution of India is discretionary in nature and is required to be exercised by this Court in a judicious manner.”
Applicant contested an SCN dated 19.11.2025 issued u/s 122(1)(ii) for the FY 2024-2025, and the consequential penalty order dated 24.06.2026 passed under Sections 122(1)(ii) and 122(1)(vii), both based on patent lack of jurisdiction.
Under the UPGST Act, 2017, the expression “proper officer” is not described, and the officer who issued the notice does not have jurisdiction. Reliance was placed on Circular No. 254/11/2025-GST dated 27.10.2025, by which the Central Government determined the officers competent to issue notices under various provisions of the CGST Act, 2017 and the IGST Act, 2017, including u/s 122, and specified monetary limits.
Similar circulars must be issued by the State governments, failing which section 122 notices shall be without jurisdiction in law.
Since the proposed penalty surpasses Rs 1 crore, the notice needs to be issued by the Additional Commissioner or Joint Commissioner of Central Tax, whereas it was issued by the Deputy Commissioner of State Tax.
The representative of the State placed on record two circulars issued under the UPGST Act, dated 11.12.2018 and 10.05.2022.
The first furnishes that the proper officer for a notice u/s 122 is the proper officer considered under Section 127, which authorises a penalty to be charged by order, after a reasonable chance of hearing, in cases not included by other mentioned proceedings, and stipulates that Section 122 itself need not utilise the expression, proper officer.
The circulars were referred to show that where the turnover surpasses Rs 2.5 crores, jurisdiction lies with the Deputy Commissioner.
On a perusal of the circulars, the Court mentioned that
“About the UPGST Act, the Deputy Commissioner has been vested with the power to issue a show-cause notice under Section 122, and that the pecuniary jurisdiction in cases involving an amount exceeding Rs. 2.5 crores would lie with the Deputy Commissioner.”
The Court observed that the notice had been issued in November 2025 and at that time no objection to jurisdiction was taken.
“Having suffered the impugned order dated 24.06.2026, the petitioner has now taken a volte-face and challenged the impugned order on the ground of lack of jurisdiction.”
The Court said that
“Firstly, we are prima facie of the view that the authority which issued the show-cause notice was not lacking in jurisdiction. Secondly, we are of the view that the petitioner is hit by the doctrine of election and ought to be relegated to the statutory appellate remedy available under the Act.”
Consequently, the Court disposed of the writ petition with a chance to the applicant to take the statutory appellate remedy in accordance with law.
It was determined that the benefits of Section 14 of the Limitation Act, 1963, would apply for the duration that the petition was pending, provided the petitioner complied with that provision.
| Case Title | Nageen Traders and Moulding India Pvt. Ltd. vs. State of U.P. |
| Case No. | WRIT TAX No. – 989 of 2026 |
| Counsel for Petitioner | Alok Kumar Gupta |
| Counsel for Respondent | C.S.C |
| Allahabad High Court | Read Order |
