The Allahabad High Court has clarified that taxpayers cannot later oppose GST show-cause notices on jurisdictional grounds after an adverse penalty decision, emphasising the importance of pursuing statutory appeals and the doctrine of election.
The Allahabad High Court at Lucknow has said a taxpayer who challenged a show-cause notice on its merits before the tax officer could not later switch course and attack the proceedings as lacking jurisdiction only after an adverse penalty order. The bench of Justice Shekhar B. Saraf and Justice Abdhesh Kumar Chaudhary said the writ petition was hit by the doctrine of election and that the taxpayer should instead pursue the ordinary statutory appeal process.
The dispute arose from a show-cause notice dated 19 November 2025 issued under Section 122(1)(ii) of the UPGST Act for the financial year 2024-25, followed by a penalty order dated 24 June 2026 under Sections 122(1)(ii) and 122(1)(vii). The taxpayer argued that the notice was void because the officer lacked jurisdiction, relying on a central government circular of 27 October 2025 that set out which officers could issue notices under parallel GST provisions and attached monetary thresholds. On that basis, it was said that a matter involving more than Rs 1 crore should have been handled by an Additional Commissioner or Joint Commissioner of Central Tax, not a Deputy Commissioner of State Tax.
The State, however, pointed to two circulars issued under the UPGST Act on 11 December 2018 and 10 May 2022. According to the court’s reading of those circulars, the Deputy Commissioner was empowered to issue a notice under Section 122, and the pecuniary jurisdiction for cases above Rs 2.5 crore lay with that rank of officer. The court also noted that no jurisdictional objection had been raised when the notice was served in November 2025, and described the later challenge as a change of position after the order went against the taxpayer.
While the bench acknowledged that questions of jurisdiction can, in principle, be raised before a constitutional court at any stage, it stressed that writ power under Article 226 is discretionary and must be used judiciously. It said, at least prima facie, the issuing authority was not without jurisdiction and that the petitioner should be sent to the appellate remedy provided under the statute. The petition was accordingly disposed of, with the court allowing the taxpayer to rely on Section 14 of the Limitation Act, 1963, for the time spent in the writ proceedings, subject to compliance with that provision.
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