Quick answer: In RPP Infra Projects Ltd v. Union of India & Ors., a common order dated 16 September 2026, a Division Bench of the Delhi High Court (Anil Kshetarpal and Shail Jain, JJ.) dismissed three connected writ petitions filed by a construction company against a common adjudication order confirming input tax credit demands of ₹2,62,74,687, ₹10,57,452 and ₹2,94,30,991 for the tax period September–October 2017 against its Karnataka, Tamil Nadu and Telangana GST registrations respectively. The Court held that a taxpayer’s administrative assignment to State tax authorities does not oust the Directorate General of GST Intelligence’s power to investigate and issue a show cause notice under Section 74(1) of the Central Goods and Services Tax Act, 2017, applying the Supreme Court’s recent ruling in Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East Commissionerate. It also held that the Delhi North Commissionerate remained the properly designated Common Adjudicating Authority under the “highest demand” circular even after a later reallocation circular. The petitioners’ remaining grounds — that their reply was not considered and that Circular No. 171/03/2022-GST barred recovery under Section 74 — were left to the statutory appeal, with four weeks’ interim protection to file it.
Key Takeaways
- Administrative allocation between Central and State GST officers does not limit DGGI’s power to investigate. Applying Armour Security, the Court held that a taxpayer’s registration being administratively assigned to a State tax authority does not exclude intelligence-based enforcement by the Directorate General of GST Intelligence, whose officers derive pan-India jurisdiction from a separate notification.
- The “highest demand” allocation survives a later reallocation circular if the underlying facts still point to the same Commissionerate. The Court traced the noticee bearing the highest demand in the common show cause notice to a specific PIN code and Commissionerate under both the original and the revised allocation circulars, and found Delhi North remained correctly seized under each.
- Non-reproduction of a taxpayer’s reply in the adjudication order is not, by itself, a denial of natural justice. What matters is whether the order discloses the substance of the defence and the basis for rejecting it — a fact-sensitive inquiry the Court treated as more appropriately undertaken in statutory appeal than in writ jurisdiction.
- A circular excluding recovery for wholly fictitious transactions does not oust adjudicatory jurisdiction merely because it is invoked. Whether Circular No. 171/03/2022-GST’s bar on Section 74 recovery for entirely non-genuine inward-and-outward invoicing applies to a given taxpayer’s facts is a question for the Appellate Authority, not a jurisdictional objection that can defeat the show cause notice itself.
- The Appellate Authority’s inability to remand does not disable it from deciding the appeal on the merits. The Court held that the power to decide an appeal on a fresh appreciation of the record is distinct from, and not dependent upon, a power to remand — closing off inability-to-remand as a routine ground for bypassing Section 107.
1. Introduction
Fraudulent input tax credit chains under the Goods and Services Tax regime typically span several States, since the fictitious suppliers, the intermediate conduits and the ultimate recipients of the credit are rarely registered in the same jurisdiction. When the Directorate General of GST Intelligence (DGGI) investigates such a chain, it commonly issues one composite show cause notice to every noticee, regardless of which State authority administers each noticee’s registration day to day. That practice regularly produces two structural objections from noticees: that the investigating and adjudicating Central authority lacked jurisdiction over a taxpayer administratively assigned to a State tax officer, and that the specific Central Commissionerate chosen to adjudicate a multi-State notice was not the one properly designated under the Central Board of Indirect Taxes and Customs’ allocation circulars.
RPP Infra Projects Ltd v. Union of India, decided by the Delhi High Court on 16 September 2026, addresses both objections in the context of a construction company that received a combined demand exceeding ₹5.67 crore across three State registrations, arising from an alleged fake-invoicing chain traced through its sub-subcontractor. The Court applied the Supreme Court’s recent decision in Armour Security to reject the taxpayer’s jurisdictional challenge, traced the “highest demand” allocation mechanism through a subsequent reallocation circular to confirm the adjudicating Commissionerate, and declined to treat a separate circular restricting recovery for wholly fictitious invoicing as a jurisdictional bar rather than a merits question for appeal. This article sets out the transaction chain and demand, the Court’s reasoning on cross-empowerment and allocation, and what the decision means for taxpayers and counsel handling multi-State DGGI proceedings.
2. Case summary and background
RPP Infra Projects Ltd held three separate GST registrations — in Karnataka, Tamil Nadu and Telangana. An investigation by the Kanpur Regional Unit of the DGGI into an alleged chain of invoices issued without corresponding supplies traced input tax credit passing through three firms — M/s Club Axe Clothing, M/s Footprints and M/s Disha Traders — to M/s Univista Contractors Ltd, which in turn passed the credit on to several recipients, including the three RPP registrations. The Department’s case was that the entire chain was one of paper transactions unsupported by any actual movement of goods or services.
RPP disputed that characterisation. Its account was that M/s Sunil Hitech Engineers Ltd had awarded it construction work, which it subcontracted to Univista on a back-to-back basis while retaining a 5% margin, and that Univista had genuinely executed the subcontracted work — a position it supported with work orders, invoices, ledgers, bank records and other documents relied upon in its defence.
A common show cause notice was issued to 95 noticees on 29 April 2022. RPP filed a common reply on 17 April 2024, and a further reply on 13 January 2025 that additionally questioned the allocation of adjudication to the Delhi North Commissionerate and sought transfer to Chennai or Rangareddy. A personal hearing was held on 14 January 2025, at which counsel for RPP reiterated its written submissions. On 4 February 2025, the Additional Commissioner, Adjudication, DGGI, Central GST, Delhi North, passed a common order confirming ITC demands of ₹2,62,74,687 against the Karnataka registration (for September and October 2017), ₹10,57,452 against the Tamil Nadu registration (for September 2017), and ₹2,94,30,991 against the Telangana registration (for September and October 2017). Each demand carried interest under Section 50 of the CGST Act, a penalty equal to the demand under the provisions specified in the order, and a further penalty of ₹50,000 under Section 122(3)(a) of the CGST Act read with Section 20 of the Integrated Goods and Services Tax Act, 2017.
RPP moved the Delhi High Court by three connected writ petitions rather than filing a statutory appeal under Section 107. An interim order dated 5 August 2025 had earlier recorded a prima facie observation about possibly parallel DGGI proceedings in Mumbai concerning RPP’s dealings with Sunil Hitech, and protected the petitioners against coercive action pending further hearing; at the final hearing, however, that point was not pressed, in view of the Delhi High Court’s own decision of 5 August 2026 in Shub Conductors LLP v. Joint Commissioner, Central Tax GST, Delhi East, and the Court accordingly did not examine it. The petitions proceeded on three grounds: that the reply and supporting documents had not been considered, contrary to Sections 74(9) and 75(6) of the CGST Act; that DGGI lacked jurisdiction over State-registered taxpayers and that, in any event, the notice ought to have been adjudicated at Chennai or Rangareddy rather than Delhi; and that Circular No. 171/03/2022-GST excluded recovery under Section 74 even on the Department’s own version of the facts.
3. Legal analysis
3.1 The alternative-remedy framework
Since the Impugned Order was appealable under Section 107 of the CGST Act, the Court examined each objection only to decide whether it justified bypassing that remedy under Article 226. It reaffirmed that mere availability of an alternative remedy does not oust writ jurisdiction where there is a breach of natural justice or a want of jurisdiction, but that this exception must be invoked sparingly and not where the grievance is essentially factual and curable by the Appellate Authority. That framework governed the disposal of all three grounds.
3.2 The reply-not-considered ground
The Court held that mere non-reproduction of a reply in an adjudication order does not, by itself, establish that the reply was ignored; what matters is whether the order discloses the substance of the defence and the basis on which it was rejected, just as a bare recital that replies were “considered” cannot cure an order that discloses no reasons at all. On the facts, the filing of the reply and RPP’s appearance at the personal hearing were undisputed, and while the order’s reference to “written submissions dated 10.10.2025” was an evident error — that date fell after both the hearing and the order itself — the error did not negate the fact that a hearing had taken place. The order’s operative paragraphs held, in substance, that the invoices were unsupported by actual supplies, that the conditions for availing input tax credit were unmet, and that the noticees had failed to discharge the burden cast on them under Section 155 of the CGST Act. Although that reasoning was common to all 95 noticees and did not separately analyse RPP’s specific work orders and ledgers, the Court found it disclosed a basis for rejection. Testing whether RPP’s documents in fact established the genuineness of the Univista subcontract — matching work orders, invoices, payments and evidence of execution across three States — was, in the Court’s view, an exercise in the appreciation of a voluminous factual record that the statutory Appellate Authority was better placed to undertake than a writ court.
3.3 Cross-empowerment: DGGI’s jurisdiction over State-registered taxpayers
The first limb of the jurisdictional objection was that RPP’s registrations, being administratively assigned to State tax authorities in Karnataka, Tamil Nadu and Telangana, could not be investigated or proceeded against by DGGI, a Central agency. The Court rejected this. Notification No. 14/2017-Central Tax dated 1 July 2017 appoints specified DGGI officers as Central tax officers, conferring on them the powers exercisable by officers of corresponding rank throughout India. The Court then applied the Supreme Court’s decision in Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East Commissionerate, 2025 SCC OnLine SC 1700, which had explained that the administrative allocation of a taxpayer to Central or State tax administration for routine purposes does not exclude intelligence-based enforcement action by the other administration. Since the investigation here arose from intelligence concerning a chain of transactions extending across several States — precisely the kind of enforcement action Armour Security contemplated — RPP’s State registration did not exclude DGGI’s jurisdiction to investigate and issue the show cause notice.
3.4 Allocation to Delhi North under the “highest demand” circulars
The second limb concerned which Central Commissionerate was entitled to adjudicate the composite notice. Notification No. 2/2022-Central Tax dated 11 March 2022 empowers Additional and Joint Commissioners in specified Commissionerates, including Delhi North, to adjudicate DGGI notices nationwide, while Circular No. 169/01/2022-GST dated 12 March 2022 directs that a common show cause notice naming noticees in more than one Commissionerate be adjudicated by reference to the noticee bearing the highest tax demand — with adjudication falling to Delhi North if that noticee sits within the Delhi Zone. Both instruments were in force when the notice issued on 29 April 2022. RPP’s additional reply had compared only its own three registrations and identified the Telangana demand as the highest; but Table III of the notice, as reproduced in the Impugned Order, showed the highest demand in the entire 95-noticee proceeding — ₹20,65,43,038 — was raised against Disha Traders, a Delhi-based noticee, correctly making the notice answerable to Delhi North for every noticee including RPP.
RPP separately argued that a later instrument — Notification No. 27/2024-Central Tax dated 25 November 2024 and Circular No. 239/33/2024-GST dated 4 December 2024, which revised the allocation table — required transfer to Chennai or Rangareddy. The Court found this did not assist RPP: the revised table mapped matters falling within the Delhi North and Delhi East Commissionerates to a common adjudicating authority at Delhi North, and Disha Traders’ registered address, bearing PIN code 110053, fell within Delhi East. Even under the revised allocation, Delhi North remained the designated Commissionerate, so there was no occasion for a corrigendum redirecting the notice elsewhere.
3.5 Circular No. 171/03/2022-GST: a merits question, not a jurisdictional bar
RPP’s third ground invoked Circular No. 171/03/2022-GST dated 6 July 2022, which distinguishes two situations: where credit is availed on an invoice unsupported by an inward supply but is used to discharge tax on a genuine outward supply, recovery proceeds under Section 74 (serial no. 2 of the Circular); but where both the inward and outward invoices are unsupported by any underlying transaction, the Circular states that recovery under Sections 73 or 74 is not required, although penal action under Section 122 may still follow (serial no. 3). The Circular itself recognises that an actual case may present a mixture of the two situations.
RPP’s primary case was that both its inward supply from Univista and its outward supply to Sunil Hitech were genuine; its reliance on serial no. 3 was pleaded expressly in the alternative and, the Court held, could not be treated as an admission that the transactions were in fact fictitious. The Impugned Order had declined to apply the Circular on the ground that it postdated the show cause notice. The Court did not resolve whether that reasoning was correct, holding instead that which of the Circular’s situations applied, and what consequence followed for the demand and penalties, depended on the character of RPP’s inward and outward transactions — a factual question falling squarely within the scope of the statutory appeal. The mere invocation of a circular that might, on the facts, exclude recovery does not render the notice or the adjudication void for want of jurisdiction.
3.6 The Appellate Authority’s power despite its inability to remand
The Court rejected a final submission that appeal would be futile because the Appellate Authority under Section 107 lacks power to remand a matter for fresh adjudication. Section 107(11) empowers the Appellate Authority, after such further inquiry as necessary, to confirm, modify or annul the order under appeal; the Court held that the power to decide an appeal on a fresh and independent appreciation of the record is distinct from, and does not depend upon, a power to remand. The receipt of services from Univista, the discharge of the burden under Section 155, the applicability of Section 74, the operation of Circular No. 171/03/2022-GST, and the legality of the penalties were all matters the Appellate Authority could examine and decide for itself.
3.7 What the order decides, and what it leaves open
The order finally decides the two jurisdictional limbs — DGGI’s cross-empowerment and the correctness of the Delhi North allocation — in the Department’s favour, so those questions are not open to be reagitated in the Section 107 appeal. It expressly leaves open, for the Appellate Authority alone, the adequacy of the reasons in the Impugned Order, the genuineness of RPP’s transactions with Univista and Sunil Hitech, the applicability of Circular No. 171/03/2022-GST, and the legality of the demands, interest and penalties. It does not examine the Section 6(2)(b) cross-empowerment-for-enforcement contention at all, since that point was not pressed in view of the separate Shub Conductors decision. The Court was explicit that nothing in the order should be construed as affirming the Department’s disputed findings on the merits.
4. Practical significance
For taxpayers registered with State GST authorities who face DGGI action, this decision confirms that administrative assignment to a State officer is not, without more, a jurisdictional shield against Central intelligence-based enforcement once Armour Security is applied; a challenge confined to that ground alone is unlikely to succeed. Counsel should instead focus jurisdictional objections on whether the specific notification and allocation circular in force at the time of the notice in fact designate the adjudicating officer selected by the Department — as this case shows, that inquiry can turn on granular facts, such as which noticee in a large common notice bears the single highest demand and which Commissionerate’s PIN code range that noticee’s address falls within.
Taxpayers relying on Circular No. 171/03/2022-GST to argue that wholly fictitious, both-sided invoicing forecloses recovery under Section 74 should treat that defence as a merits argument to be developed with full evidentiary support before the Appellate Authority, not as a basis for a writ petition; a writ court is unlikely to resolve, in the first instance, which of the Circular’s factual categories a taxpayer’s transactions fall into, particularly where the taxpayer’s own primary case is that the transactions were genuine and the Circular is invoked only in the alternative. Subcontractors in works-contract chains who rely on back-to-back arrangements with sub-subcontractors should maintain complete documentary trails — work orders, correlated invoices, payment records and independent evidence of execution — since the adequacy of an adjudication order’s reasons will often be tested against how thoroughly the taxpayer’s own submissions engaged with exactly this kind of paper trail.
The decision also confirms that an Appellate Authority’s inability to remand is not, by itself, a ground to bypass Section 107; taxpayers should expect courts to treat the appellate power to decide (rather than remand) as adequate for testing factual and circular-based defences. Finally, the extension of interim protection for four weeks to permit the filing of a statutory appeal with pre-deposit, coupled with the Court’s direction that a timely appeal will not be dismissed on limitation grounds, gives taxpayers who unsuccessfully test jurisdiction by writ a practical route to preserve their appellate remedy — provided they act within the window granted and comply with the pre-deposit requirement under Section 107(7).
5. Conclusion
RPP Infra Projects applies settled and recent Supreme Court authority to a recurring pattern in multi-State DGGI enforcement: a taxpayer’s day-to-day administrative home with a State GST officer does not immunise it from Central intelligence-based investigation, and the “highest demand” allocation mechanism for composite notices will be upheld where the facts, traced through successive allocation circulars, continue to point to the same Commissionerate. On the questions going to the taxpayer’s actual liability — whether its documents establish a genuine subcontracting chain, and whether Circular No. 171/03/2022-GST excludes recovery on its facts — the Court declined to substitute its own assessment for that of the statutory Appellate Authority, holding that authority’s power to decide on a fresh appreciation of the record, even without a power to remand, sufficient for the task.
For practitioners, the durable lesson is to separate jurisdictional objections, which a writ court will resolve definitively and which this decision narrows considerably after Armour Security, from evidentiary and circular-based defences, which are best marshalled for the Appellate Authority with the underlying documentation fully developed. Where both are raised together, as here, taxpayers should expect the writ court to dispose of the former conclusively while relegating the latter — with whatever interim protection is necessary to preserve the appellate remedy — to Section 107.
Authorities
Applied by the Court
- Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East Commissionerate and Anr., 2025 SCC OnLine SC 1700 — applied for the principle that administrative allocation of a taxpayer to Central or State tax administration does not exclude intelligence-based enforcement action by the other administration.
Referenced without independent examination
- Shub Conductors LLP and Ors. v. Joint Commissioner, Central Tax GST, Delhi East and Ors., decision dated 5 August 2026 in W.P.(C) 4126/2025, Delhi High Court — noted as the reason the petitioners did not press their Section 6(2)(b) contention; not examined or applied by the Court in this order.
Legislation, notifications and circulars considered
| Instrument | Provisions / reference | Source |
|---|---|---|
| Central Goods and Services Tax Act, 2017 | Sections 50, 74(1), 74(9), 75(6), 107, 107(7), 107(11), 122(3)(a), 155 | https://www.indiacode.nic.in/ |
| Integrated Goods and Services Tax Act, 2017 | Section 20 | https://www.indiacode.nic.in/ |
| Notification No. 14/2017-Central Tax dated 01.07.2017 | Appointment of DGGI officers as Central tax officers with pan-India powers | Referenced in judgment |
| Notification No. 2/2022-Central Tax dated 11.03.2022 | Pan-India adjudicatory jurisdiction for specified Commissionerates over DGGI notices | Referenced in judgment |
| Circular No. 169/01/2022-GST dated 12.03.2022 | “Highest demand” Common Adjudicating Authority allocation | Referenced in judgment |
| Notification No. 27/2024-Central Tax dated 25.11.2024 | Revised allocation table | Referenced in judgment |
| Circular No. 239/33/2024-GST dated 04.12.2024 | Revised Common Adjudicating Authority allocation | Referenced in judgment |
| Circular No. 171/03/2022-GST dated 06.07.2022 | Recovery under Section 74 distinguished for unsupported inward vs. unsupported inward-and-outward invoicing | Referenced in judgment |
| Constitution of India | Article 226 | https://www.indiacode.nic.in/ |
Judgment
RPP Infra Projects Ltd, Karnataka v. Union of India & Ors. and connected matters (W.P.(C) 10852/2025, W.P.(C) 10853/2025, W.P.(C) 10861/2025), High Court of Delhi at New Delhi (Anil Kshetarpal and Shail Jain, JJ.), order reserved 20 August 2026, pronounced 16 September 2026 — https://indiankanoon.org/doc/33761314/
FAQ
Does a taxpayer’s GST registration being administered by a State tax officer prevent DGGI from investigating it? No. The Delhi High Court, applying the Supreme Court’s decision in Armour Security, held that administrative allocation of a taxpayer to State tax administration does not exclude intelligence-based enforcement by the Directorate General of GST Intelligence, whose officers hold pan-India powers under a separate notification.
If a common show cause notice names noticees across several Commissionerates, how is the adjudicating officer determined? Under Circular No. 169/01/2022-GST, the notice is adjudicated by reference to the noticee bearing the single highest tax demand in the entire notice; the officer having jurisdiction over that noticee’s address adjudicates for all noticees, even after a later reallocation circular, provided the highest-demand noticee’s address still falls within that officer’s revised Commissionerate.
Does Circular No. 171/03/2022-GST automatically bar a Section 74 demand if a taxpayer claims its invoices were genuine on both sides? Not automatically. This decision treats the question of which of the Circular’s factual scenarios applies — and what follows for the demand and penalties — as a fact-sensitive issue for the statutory Appellate Authority under Section 107, not a ground for a writ court to quash the adjudication.
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.