Quick answer: In M/s. Charanji Distributors v. The Principal Commissioner of Central Tax and others, Writ Petition No. 14136 of 2026, decided on 13 October 2026 (reserved on 30 April 2026), a Division Bench of the Telangana High Court, comprising P. Sam Koshy, Acting Chief Justice, and Narsing Rao Nandikonda, J. (who authored the order), dismissed a writ petition against a show cause notice and an Order-in-Original dated 15 October 2025. The notice invoked Section 122(1)(ii) of the Central Goods and Services Tax Act, 2017 (the CGST Act) against a trader accused of issuing invoices without supply, and proposed a penalty equal to the input tax credit allegedly passed on, Rs. 17,27,04,518. The petitioner argued that no “proper officer” had been assigned the functions under Section 122 before CBIC Circular No. 254/11/2025-GST dated 27 October 2025. The Court held that the Joint Commissioner who passed the order was the competent officer for a matter above Rs. 2 crores, and that Section 160 of the CGST Act prevented the order being “assailed merely on this ground” (¶33). All other grounds were left to the statutory appeal, with an observation on limitation.
Key Takeaways
- The jurisdiction plea failed on identity of officer. The Court compared the officer who adjudicated with the officer the 2025 circular names for cases above Rs. 2 crores, found them to be the same (the Joint Commissioner), and applied Section 160 (¶¶31–34).
- A later circular was treated as confirming, not creating, competence. The judgment does not hold that an earlier assignment existed. It relies on the circular and Section 160 together (¶¶30–33).
- Only jurisdiction was decided. Penalty-only proceedings without a prior determination of tax, ITC already reversed by recipients, coerced statements, double penalty under Article 20(2) and defective service were left for the appellate authority (¶¶35–37).
- The Court offered a limitation safeguard, but a qualified one. The time spent on the writ is to be excluded “in accordance with law”, “subject to the applicability of Section 14 of the Limitation Act, 1963” (¶37).
- Weight. This is a Division Bench order of a High Court in a writ petition, and it expressly declines to express “any opinion on the merits of the case” (¶37).
1. Introduction
Penalty under Section 122 of the CGST Act is one of the sharpest instruments in the statute. Where a taxable person issues an invoice without any supply of goods or services, the penalty is the higher of Rs. 10,000 and an amount equal to the tax evaded or the input tax credit (ITC, the credit a registered person takes for tax paid on inputs, set off against output tax) availed of or passed on irregularly. In fake-invoice investigations that figure can run to crores, and it is often imposed in a proceeding that is entirely about penalty. Taxpayers therefore examine closely who was entitled to start and decide such a case.
The petitioner did exactly that. It argued that the CGST Act speaks of a “proper officer” for each function, that nobody had been assigned the Section 122 function when the notice was issued in February 2025 or when the order was passed in October 2025, and that the first assignment was a Board circular of 27 October 2025. If that were right, both the notice and the order would be void.
The Telangana High Court disagreed. Its reasoning is short and turns on the definition of proper officer in Section 2(91), the empowerment provision in Section 5(1), and the saving provision in Section 160. It also decided that the remaining grounds, several of them substantial, belong before the appellate authority.
The decision matters because “no proper officer for Section 122” has become a standard writ ground and this is a reasoned Division Bench response; because it shows Section 160 used against a jurisdictional objection; and because it illustrates the current practice of splitting a writ, deciding the pure question of power and referring the rest to appeal.
Section 2 sets out the facts and holding, Section 3 analyses the reasoning and what it leaves undecided, Section 4 turns to practice, and Section 5 concludes.
2. Case Summary and Background
The investigation. The petitioner is a proprietary concern registered under the CGST Act, trading in two-wheeler and three-wheeler automobile spare parts and describing itself as an authorised dealer of established brands (¶3). The Directorate General of GST Intelligence (DGGI), Hyderabad Zonal Unit, investigated on the allegation that it had issued invoices facilitating fraudulent ITC without actual supply (¶4). Its premises were visited on 24 May 2022, and statements of Sri Parth Goyal, the proprietor’s son who looks after the business, were recorded under Section 70 of the CGST Act on 24 May 2022 and 23 January 2023 (¶¶4, 18).
The Department’s case. As recorded, goods shown as supplied to a group of recipient firms did not match the nature of those recipients’ businesses. Recipients were summoned, and statements were taken from owners of vehicles whose numbers appeared in e-way bills raised for one recipient (¶¶19–20). The Department concluded that the petitioner had contravened Section 31 of the CGST Act read with Rule 46 of the Central Goods and Services Tax Rules, 2017, and Section 20 of the Integrated Goods and Services Tax Act, 2017, by issuing invoices without supply, and had misreported outward supplies under Section 37 and failed to disclose its liability under Section 39 (¶¶20–21).
The notice and the order. The DGGI issued Form GST DRC-01A (¶5), followed by Show Cause Notice No. 91/2024-25-GST. The Court gives its date as 17 February 2025 in several places (¶¶2, 5, 15) but as 7 February 2025 in one paragraph (¶30). The notice was issued by the Additional Director, DGGI (¶30), and proposed a penalty under Section 122(1)(ii) equal to the ITC allegedly passed, Rs. 17,27,04,518, besides penalties for other alleged contraventions (¶5). Order-in-Original No. 74/GST/2025-26-Adjn.(JC)-HYD-GST dated 15 October 2025 was passed by the Joint Commissioner, Hyderabad GST Commissionerate (¶¶22, 30). According to the prayer it imposed penalties under Sections 122(1)(ii) and 125 (¶2), and the petitioner says Sri Parth Goyal was separately penalised under Section 122(1A) (¶12).
The grounds. The writ petition under Article 226 of the Constitution of India alleged that: no proper officer had been assigned the Section 122 function, so the notice and order were void (¶¶7–9, 24–25); a penalty under Section 122(1)(ii) cannot be imposed in a penalty-only proceeding without a determination of tax under Section 74 (¶9); no penalty can follow where recipients had already reversed the ITC (¶10); the statements were obtained under duress (¶¶11, 23); penalising both the petitioner and Sri Parth Goyal was double penalisation contrary to Article 20(2) (¶¶12–13, 16); and notices returned “addressee left” meant no effective service or hearing (¶¶6, 14).
The respondents’ reliance. The Standing Counsel relied on the circular of 27 October 2025, on circulars of 19 June 2017 and 6 July 2022, and on a coordinate Bench decision, Alokadci Holdings Pvt. Ltd. v. Commissioner of Central Tax, Writ Petition No. 4426 of 2026 dated 17 February 2026, whose paragraph 10 recites Section 160 (¶¶28–29). The petitioner relied on V. Senthur v. M. Vijayakumar, (2022) 17 SCC 568 (¶29).
Holding. The Court framed the question as whether a valid assignment of the officer as proper officer existed on the dates of notice and order (¶27). The circular post-dated both (¶30), but it designates the Joint Commissioner as proper officer, for cases involving a monetary limit of more than Rs. 2 crores, to issue notices and adjudicate (¶31). The amount here exceeded Rs. 2 crores and the Joint Commissioner passed the order (¶32). As the officers were “one and the same”, Section 160 meant that “the order cannot be assailed merely on this ground” (¶33). The jurisdiction contention was rejected (¶34), the other issues were left to the appellate authority because the petitioner has “an efficient alternative remedy” (¶35), and the petition was dismissed without costs (¶38).
3. Legal Analysis
3.1 The statutory scheme engaged
As the petitioner put it, Section 2(91) defines “proper officer” as the Commissioner or the officer of central tax assigned by the Commissioner in the Board to perform the functions under the relevant provision (¶8), and Section 5(1) provides for the exercise of powers by officers empowered by the Board (¶8). The structure is function-specific: an officer is proper for a section only if assigned that section’s function.
As extracted, Section 122(1)(ii) reaches a taxable person who “issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act or the rules made thereunder”, the penalty being the higher of ten thousand rupees and the tax evaded or ITC availed of or passed on irregularly (¶17). Section 122(1A) penalises a person who retains the benefit of such a transaction and at whose instance it was conducted, and Section 125 is the general penalty of up to Rs. 25,000 (¶17).
Section 160(1), quoted from Alokadci Holdings, saves a proceeding from invalidity “merely by reason of any mistake, defect or omission therein” if it is “in substance and effect in conformity with or according to the intents, purposes and requirements of this Act”. Section 160(2) protects service of a notice that has been acted upon or whose service was not questioned earlier (¶28).
3.2 Issue one: was there a proper officer?
The reasoning has four steps. The Court frames the issue as the existence of a valid assignment on the relevant dates (¶27); accepts that the circular post-dates the notice and order (¶30); reads the circular as designating the Joint Commissioner above Rs. 2 crores (¶31); and holds that the Joint Commissioner was competent and Section 160 closes the point (¶¶32–33). The outcome is understandable, but the route has gaps.
First, the order does not find that a valid assignment existed on 17 February 2025 or 15 October 2025, which is the question the Court framed. It records the Department’s reliance on circulars of 19 June 2017 and 6 July 2022 but does not say what they provide. The later circular is treated as evidence of the “applicable allocation of functions”. That is a fair inference if the circular merely restated an existing allocation, and an inadequate one if it created the allocation, which is what the petitioner argued. The judgment does not choose between the two.
Second, Section 160 does substantial work and its limits are not examined. On its wording it saves proceedings from a “mistake, defect or omission”. The petitioner’s case was that nobody had been given the power. Whether a missing assignment is an “omission” curable under Section 160 or a want of authority beyond any saving provision is a recurring question. The Court answers it only on the coincidence of officer and later designation. It does not discuss V. Senthur and does not say whether Section 160 would save an order by an officer with no allocation at all. The decision should not be read as holding that Section 160 cures every jurisdictional defect.
Third, the notice and the order came from different officers. The notice was issued by the Additional Director, DGGI (¶30), yet ¶¶31–33 analyse only the Joint Commissioner, while ¶34 rejects the contention that “the show-cause notice and the order-in-original were issued by an officer lacking jurisdiction”. The competence of the Additional Director is not separately examined, and a litigant whose notice came from an investigating officer should not treat the point as settled.
Fourth, the Rs. 2 crore test is applied to “the monetary amount involved” (¶32). The judgment does not say how that is measured where penalty rather than tax is proposed, though Rs. 17,27,04,518 exceeds the threshold on any measure.
3.3 Issue two: alternative remedy and the grounds left open
The Court held that the order is appealable, that the petitioner has “an efficient alternative remedy”, and that the issues other than jurisdiction “can appropriately be raised before the appellate authority” (¶35). It added that it had “not expressed any opinion on the merits of the case” (¶37). No authority is cited. The Court simply applies the settled practice that a High Court ordinarily does not interfere under Article 226 where an effective statutory appeal exists. The sequence is sensible: it first answers the objection that, if sound, would have made the appeal irrelevant, and then relegates the rest.
The remaining grounds are not trivial. Whether Section 122(1)(ii) can apply without a Section 74 determination is undecided. Whether a penalty measured by ITC “passed on” survives reversal by recipients is undecided; the text as extracted measures the penalty by the credit and not by revenue loss. On service, the Court neither applied Section 160(2) nor found that service was effected, so no inference of valid service should be drawn. On Article 20(2), which bars prosecution and punishment more than once for the same offence, the Court did not consider whether penalties on an issuer under clause (ii) and on a beneficiary under sub-section (1A) are the “same offence”.
3.4 Limitation
The Court directed that, if an appeal is preferred, “the period spent in pursuing the present writ petition shall be liable to be excluded, in accordance with law, while computing the period of limitation, subject to the applicability of Section 14 of the Limitation Act, 1963” (¶37). The order is dated 15 October 2025, so the direction matters, but it is hedged. It does not extend time or condone delay, and it does not decide whether Section 14 applies to an appeal under the CGST Act, whose appeal provision carries its own limit. The petitioner has an invitation to appeal, not a guaranteed hearing.
3.5 Survival after amendment, regime and critique
The ratio is tied to the CGST Act, specifically Sections 2(91), 5(1), 122, 125 and 160, and to an order of 15 October 2025. The judgment records no amendment to those provisions. It does rest on an administrative instrument, Circular No. 254/11/2025-GST, which the Board can supersede; if a later instrument allocates Section 122 functions differently, the identity-of-officer reasoning must be re-run. The decision concerns GST alone and draws no analogy from central excise or service tax.
The conclusion that a jurisdiction objection should not defeat a Rs. 17 crore penalty order, where an officer of the rank later designated adjudicated it, is defensible. The weaker parts are the inference from a later circular to earlier competence, the omission of the earlier circulars, and the silence on the notice-issuing officer. Keeping the merits for the appellate authority is orthodox and probably wise given the fact-heavy grounds. What remains open is whether a Section 122 notice issued before any express assignment is valid when the officer is not a Joint Commissioner.
4. Practical Significance
Section 122 notices. A “no proper officer” objection is stronger when specific. Identify the assignment instruments in force on the dates of notice and order, show which officer they empower for which function and value band, and show that the officer who acted falls outside them. A general assertion that Section 122 was unassigned until the 2025 circular did not succeed here, partly because the adjudicating officer was the one the circular designates. Expect the Department to answer with Section 160 and the monetary-limit allocation.
Different officers. Where the notice and order come from different officers, test and plead each officer’s authority separately. The order’s treatment of the adjudicating officer should not be assumed to cover the officer who issued the notice.
Choice of remedy. A writ may test a pure question of power, but fact-dependent grounds will go to appeal, with the statutory time limit and any pre-deposit, which the judgment does not discuss. Where the jurisdiction ground depends on contested instruments, a timely appeal may be the safer primary route, with the writ reserved for a clean, document-based defect.
Limitation. The exclusion of time is “in accordance with law” and “subject to the applicability of Section 14”. A taxpayer who loses a writ should appeal at once, with an application for condonation if needed, and set out the order date and the time spent on the writ precisely.
Grounds left open. Preserve the evidence for each: postal covers and endorsements for service; contemporaneous retractions for coerced statements; proof and dates of reversal by recipients; and the orders against other persons penalised, for the double-penalty plea. Section 160(2) should be met squarely on service.
The Department. Keep the allocation of functions documented as of each date. Competence here was reached through a circular issued after the event, and an instrument in force at the time would have given firmer ground without reliance on Section 160.
Supply chains under scrutiny. The markers alleged, recipients whose businesses do not match the goods and vehicle numbers in e-way bills that do not match the movement, draw summons and statements under Section 70, and those statements often form the basis of the case. The judgment decides nothing on whether the allegations were made out. Keep transport, payment and stock records ready to answer them at the first stage.
Precedential weight. This is a Division Bench order in a writ petition and the text bears no reportable designation. It carries weight in Telangana and persuasive value elsewhere, but its narrow framing, and its partial reliance on a coordinate Bench decision, limit how far it can be cited.
5. Conclusion
Charanji Distributors answers who may start and decide a Section 122 case, and its answer is conservative. The Court asked whether the officer who passed the order of 15 October 2025 was the proper officer, found that the Joint Commissioner is the officer designated for cases above Rs. 2 crores, and applied Section 160 to hold that the order could not be challenged “merely on this ground”. It dismissed the petition and left every other ground, penalty-only proceedings, reversed credit, coerced statements, double penalty and service, to the appellate authority.
The result is supportable, but the order should be read for what it does not decide. It does not find that an assignment existed on the relevant dates, does not analyse the earlier circulars, does not separately examine the officer who issued the notice, and does not decide whether Section 160 can save a proceeding by an officer never allocated the function. Its direction on limitation is real but conditional.
For assessees, the lesson is to run a jurisdiction objection from the actual instruments and against each officer involved, to appeal promptly if the writ fails, and to build the record for the grounds the Court deferred. For the Department, it is to document the allocation of functions as of each date. The open question for both is how far Section 160 will extend where the issuing officer falls outside any allocation.
Authorities and Legislation
Applied or relied on by the Court:
- Circular No. 254/11/2025-GST dated 27 October 2025, as described in the judgment, designating the Joint Commissioner as the proper officer, for cases involving a monetary limit of more than Rs. 2 crores, to issue the show cause notice and adjudicate (¶¶30–33).
- Section 160, Central Goods and Services Tax Act, 2017 — applied to hold that the order could not be assailed merely on the ground of competence (¶33).
Cited by counsel only (recorded in the submissions and not separately analysed by the Court):
- By the respondents: Alokadci Holdings Pvt. Ltd. v. Commissioner of Central Tax, Writ Petition No. 4426 of 2026, Telangana High Court, dated 17 February 2026 — paragraph 10 extracted by the Court on Section 160 (¶28).
- By the respondents: circulars dated 19 June 2017 and 6 July 2022, whose contents the judgment does not describe (¶29).
- By the petitioner: V. Senthur v. M. Vijayakumar, (2022) 17 SCC 568 (¶29).
Legislation considered:
- Sections 2(91), 5(1), 20 (IGST), 31, 37, 39, 70, 74, 122, 125 and 160, Central Goods and Services Tax Act, 2017 and Integrated Goods and Services Tax Act, 2017 — https://www.indiacode.nic.in/
- Rule 46, Central Goods and Services Tax Rules, 2017 — https://www.indiacode.nic.in/
- Article 20(2), Article 226, Constitution of India — https://www.indiacode.nic.in/
- Section 14, Limitation Act, 1963 — https://www.indiacode.nic.in/
Case record:
- M/s. Charanji Distributors v. The Principal Commissioner of Central Tax and others, Writ Petition No. 14136 of 2026 (CNR No. HBHC010113172026), High Court for the State of Telangana at Hyderabad, reserved on 30 April 2026 and pronounced on 13 October 2026 — https://indiankanoon.org/doc/74661304/
This article is not legal advice and does not create an attorney–client relationship. Readers should verify the certified copy of the judgment and any subsequent clarificatory orders before relying on it, and consult a qualified advocate on the facts of their matter.