Allahabad High Court: State GST Officers Empowered as Proper Officers for IGST & CGST Proceedings

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The Allahabad High Court in Shree Maa Trading Company & Ors. v. State of U.P. & Ors. (2025) addressed an important issue under the GST framework concerning the powers of State GST officers. The petitioners had challenged a penalty imposed under Section 129(1)(b) of the CGST Act, 2017 following the interception of goods in transit, contending that officers appointed under the U.P. State GST Act lacked jurisdiction to act as “proper officers” under the CGST Act or the IGST Act in the absence of a specific central notification.

Case Details

Shree Maa Trading Company & Ors. v. State of U.P. & Ors.

  • Court: Allahabad High Court (Court No. 7)
  • Coram: Justice Piyush Agrawal
  • Neutral Citation: 2025:AHC:143407
  • Case Nos.: WRIT TAX No. 3171 of 2025 (with WRIT TAX No. 3172 of 2025)
  • Reserved/Delivered: 30.07.2025 / 21.08.2025
  • Counsel: For petitioners – Naveen Chandra Gupta, Arjit Gupta; For State – Anoop Trivedi (AAG), Ravi Shankar Pandey (ACSC).

Facts

  • Goods traveling Delhi → Raipur were intercepted at Jhansi (U.P.) on 26.05.2025. MOV-01 (27.05.2025), MOV-04 (01.06.2025), MOV-06 (01.06.2025), and GST DRC-01 (03.06.2025) followed, culminating in penalty under Section 129(1)(b).
  • Petitioners argued (i) documents existed but the driver couldn’t produce them at interception, and (ii) State GST officers lacked authority to act for IGST/CGST without a specific notification under Section 4, IGST Act.

Issues

  1. Whether a State GST officer is a “proper officer” for proceedings under IGST/CGST (e.g., Section 129 detention/penalty) absent a separate central notification.
  2. Whether, on facts, the seizure/penalty orders were vitiated by delay or non-consideration of documents/ownership.

Holding

  • Yes, SGST officers are proper officers for IGST & CGST.
    The Court read Section 4, IGST Act with Rule 20, CGST Rules, holding the text is clear: officers appointed under SGST/UTGST are authorised as proper officers for IGST/CGST; a notification is needed only to carve out exceptions/conditions on Council recommendation—not for general authorisation.
  • The Court also noted U.P. State circulars dated 01.07.2017 and 04.08.2020 assigning duties under Section 129 to mobile-squad State Tax officers.
  • It relied on Advantage India Logistics (MP HC, 23.08.2018) and Bright Road Logistics (P&H HC, 2023) taking the same view on cross-empowerment.

Result on Facts

  • Since no specified documents were produced at the time of detention/seizure, initiation under Section 129(1)(b) was proper; ownership claim arose only in appeal and portal verifications suggested bogus transactions.
  • Writ petitions dismissed; penalty order sustained.

Takeaways

  • Cross-empowerment affirmed: SGST officers can validly act as proper officers under IGST/CGST without a separate central notification, unless the Government (on GST Council’s recommendation) specifies exceptions/conditions.

  • For transporters/taxpayers: ensure e-way bill/invoice are produced at interception; failure may shift proceedings to 129(1)(b) (owner not established), increasing exposure.

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