A THRESHOLD JURISDICTIONAL DEFECT IN GST DEMAND ORDERS

• The issue. A demand order under Section 73 or 74 of the CGST Act (and, for FY 2024-25 onwards, Section 74A) is valid only if it is passed by the officer to whom adjudication of a demand of that magnitude stands assigned. The Board's assignment of proper officers is, in terms, capped by monetary limits: beyond Rs. 1 crore of central tax, and beyond Rs. 2 crore on the combined central-and-integrated basis, only an Additional or Joint Commissioner is competent. An order on a larger demand passed by a Deputy or Assistant Commissioner (or a Superintendent) is coram non judice, without jurisdiction, and a nullity; and the first-appellate order built upon it is, by the rank-sensitive scheme of Rule 109A, equally without jurisdiction.
• Why it matters. The defect goes to the root. It voids the entire demand — tax, interest and penalty — without the assessee being put to the merits, and it may be raised for the first time before the Tribunal even where the assessee contested below.
• Strength. The proposition rests on the Board's own circulars, the rank-sensitive appellate rule, two decisions of the Supreme Court on jurisdictional nullity, and a directly-on-point decision of the Allahabad High Court under the GST Act itself.
• The watch-point. On the contrary, older line treats such circulars as a mere administrative distribution of work. The ground must therefore be advanced as a threshold point, with the merits preserved in the alternative — not staked on jurisdiction alone.
• Recommendation. Where the rank-quantum mismatch appears on the face of the order, plead this as the first ground, put the Revenue to strict proof of the officer's assignment, and argue the merits in the alternative.

At a glance

Section 2(91) defines the “proper officer” as the Commissioner or the officer to whom the Commissioner assigns the function. Section 5 provides that an officer exercises only the powers and duties assigned to him, and only subject to the conditions and limits imposed. The power to determine tax and pass an order therefore vests in the assigned officer alone, and only within the limits of that assignment; an officer cannot enlarge his own jurisdiction.

Because the assignment is conferred up to monetary limits, those limits are a condition of competence, not a matter of internal convenience. The rank-sensitive appellate scheme — Rule 109A, which routes the first appeal to the Commissioner (Appeals) for an order of an Additional or Joint Commissioner, but to the Joint Commissioner (Appeals) for an order of a Deputy or Assistant Commissioner or a Superintendent — confirms that the rank of the adjudicating officer is treated by the statute itself as jurisdictional.

The proper officer is fixed by reference to the period of the demand. For Sections 73 and 74 (periods up to FY 2023-24) the assignment is by Circular No. 31/05/2018-GST dated 09.02.2018; for Section 74A (FY 2024-25 onwards) it is by Circular No. 254/11/2025-GST dated 27.10.2025. The bands are identical:

Source: CBIC Circular No. 31/05/2018-GST dated 09.02.2018 and Circular No. 254/11/2025-GST dated 27.10.2025.

Combined basis. Where a notice covers both central and integrated tax, competence is fixed on the combined central-plus-integrated tax (including cess), irrespective of whether either head independently crosses the ceiling — now expressly clarified in para 5.2 of Circular No. 254/11/2025-GST.

Central or State order. These circulars bind central tax officers. Where the order is of a State tax officer, the governing instrument is the State Government's own assignment under Section 5 of the State GST Act, which mirrors the central scheme; the central circular and the authority below then stand as confirmation that the limit is jurisdictional.

• The test is mechanical: identify the rank of the officer who passed the order, compute the combined tax in dispute, and compare it with that officer's ceiling. Any combined demand exceeding Rs. 2 crore is, on its face, beyond the competence of a Deputy or Assistant Commissioner and could be adjudicated only by an Additional or Joint Commissioner. The larger the multiple by which the demand exceeds the ceiling, the starker the want of jurisdiction.

• A defect of jurisdiction is fatal and incurable. In Kiran Singh v. Chaman Paswan, AIR 1954 SC 340, the Supreme Court held that an order passed without jurisdiction is a nullity, that its invalidity may be set up whenever and wherever it is relied upon — even collaterally — and that a defect of pecuniary, territorial or subject-matter jurisdiction cannot be cured even by consent. The principle was reaffirmed in Sushil Kumar Mehta v. Gobind Ram Bohra, (1990) 1 SCC 193.
• Under the GST Act itself, the Allahabad High Court in M/s Mansoori Enterprises v. Union of India [2024 TAXONATION 360 (ALLAHABAD)], held that the adjudicating officer's power is circumscribed by the monetary limits in Circular No. 31/05/2018-GST, and that an order passed in excess of the assigned limit is without jurisdiction and liable to be set aside. The principle applies with greater force where the demand exceeds the ceiling not marginally but by a multiple.

The Revenue may contend that the monetary limits are a mere administrative distribution of work, so that every officer up to the rank of Additional or Joint Commissioner is a proper officer, relying on the central-excise line (e.g. Pahwa Chemicals) that a circular cannot curtail a statutory power. The answer is threefold: the assignment in the very circular relied upon is, in terms, “up to the monetary limits” — a capped assignment cannot authorise adjudication beyond the cap; the rank-sensitive appellate scheme of Rule 109A treats rank as jurisdictional; and the recent, GST-specific decision in Mansoori Enterprises is directly in point. Where two views are tenable, the one favourable to the assessee prevails (in dubio contra fiscum). Prudence nonetheless dictates that the merits be argued in the alternative.

Where the order discloses a rank-quantum mismatch, advance the jurisdictional defect as the first and threshold ground; put the Revenue to strict proof of the notification or order assigning the adjudicating officer competence over a demand of the size in issue; and plead the merits fully in the alternative so that nothing turns solely on the jurisdictional point. Confirm the limitation position (including the 30 June 2026 backlog deadline for legacy orders), compute and deposit the pre-deposit through the Electronic Cash Ledger, and verify the DIN on the impugned orders before filing.

ANNEXURE A — MODEL GROUND OF APPEAL (FORM GST APL-05)

To be engrossed under the appellant's cause-title and the authorised representative on record. The firm's identity does not appear on the document as filed. Items in blue are to be completed from the record.

1.0  The Order-in-Original is without jurisdiction and a nullity: it was passed by a [adjudicating officer] who lacked the monetary competence to adjudicate a demand of this magnitude, a function assigned exclusively to an officer of the rank of Additional or Joint Commissioner; and the impugned Order-in-Appeal, having been entertained by the [appellate authority] rather than the Commissioner (Appeals), is for the same reason without jurisdiction.

1.1  The proposition. The Order-in-Original dated [date] in FORM GST DRC-07 was passed by the [adjudicating officer], [office / division], raising a demand of tax of Rs. [total tax] and a total demand, with interest and penalty, of Rs. [total demand]. Under the scheme of assignment of proper officers, the adjudication of a demand of this magnitude is reserved exclusively to an officer of the rank of Additional or Joint Commissioner. The [adjudicating officer] had no authority to pass it. The order is, accordingly, coram non judice and a nullity, as is the Order-in-Appeal founded upon it.

1.2  The statutory scheme. Section 2(91) of the CGST Act, and the corresponding Section 2(91) of the [State] GST Act, define the proper officer to mean the Commissioner or the officer to whom the Commissioner assigns that function. Section 5 provides that an officer of tax shall exercise such powers and discharge such duties as are assigned to him, subject to such conditions and limits as may be imposed. The power to determine tax and pass an order under Section [73(9) / 74(9) / 74A] therefore vests only in the officer to whom that function stands assigned, and only within the limits of that assignment; jurisdiction so conferred cannot be enlarged by the officer upon himself.

1.3  The monetary limits that define competence. For the issuance of notices and the passing of orders under the said provisions, the function has been assigned only up to defined monetary limits — by Circular No. 31/05/2018-GST dated 09.02.2018 in respect of Sections 73 and 74 (periods up to FY 2023-24), and by Circular No. 254/11/2025-GST dated 27.10.2025 in respect of Section 74A (FY 2024-25 onwards) — in the following bands, namely:

• 1.3.1  a Superintendent, where the central tax does not exceed Rs. 10 lakh (integrated tax not exceeding Rs. 20 lakh, and the combined amount not exceeding Rs. 20 lakh);

• 1.3.2  a Deputy or Assistant Commissioner, where the central tax is above Rs. 10 lakh and does not exceed Rs. 1 crore (integrated tax above Rs. 20 lakh and not exceeding Rs. 2 crore, and the combined central and integrated tax above Rs. 20 lakh and not exceeding Rs. 2 crore); and

• 1.3.3  an Additional or Joint Commissioner, where the central tax exceeds Rs. 1 crore (and the integrated or combined tax exceeds Rs. 2 crore), without any upper limit.

1.4  The assignment is conditional and capped. Beyond Rs. 1 crore of central tax, and beyond Rs. 2 crore on the combined basis, a [adjudicating officer] is simply not the assigned proper officer; the function vests solely in the Additional or Joint Commissioner. The State of [State] has, in exercise of the power under Section 5 of the [State] GST Act, issued a corresponding assignment of proper officers and adjudication limits ([State assignment notification]), and the Respondent is put to strict proof of the assignment under which the [adjudicating officer] claimed competence.

1.5  Application to the admitted figures. The demand confirmed by the Order-in-Original comprises central tax of Rs. [CGST], State tax of Rs. [SGST] and integrated tax of Rs. [IGST], a combined Rs. [combined], and a total tax of Rs. [total tax]. The combined figure is more than [N] times the Rs. 2 crore ceiling of a Deputy or Assistant Commissioner. The proper officer being, in any event, to be determined on the combined central-and-integrated tax basis, the adjudication lay exclusively with an Additional or Joint Commissioner, and the [adjudicating officer] acted wholly beyond the authority assigned to him.

1.6  The defect carries into the appellate forum. Rule 109A of the CGST Rules, and the identically worded Rule 109A of the [State] GST Rules, provide that an appeal lies to the Commissioner (Appeals) where the order is passed by an Additional or Joint Commissioner, and to an officer not below the rank of Joint Commissioner (Appeals) only where the order is passed by a Deputy or Assistant Commissioner or a Superintendent. Founded upon an order wrongly passed by the [adjudicating officer], the first appeal was entertained and decided by the [appellate authority]. The impugned Order-in-Appeal is, on that further and independent ground, without jurisdiction.

1.7  The defect is fatal, incurable, and may be raised at any stage. An order without jurisdiction is a nullity: Kiran Singh v. Chaman Paswan, AIR 1954 SC 340, reaffirmed in Sushil Kumar Mehta v. Gobind Ram Bohra, (1990) 1 SCC 193. It cannot be waived, is not cured by the Appellant's participation, and is open to be raised for the first time before this Tribunal (quod ab initio non valet in tractu temporis non convalescit). It is also settled under the GST Act in M/s Mansoori Enterprises v. Union of India [2024 TAXONATION 360 (ALLAHABAD)], that an order beyond the officer's assigned monetary limit is without jurisdiction.

1.8  Relief. The Order-in-Original dated [date] and the impugned Order-in-Appeal dated [date] being nullities for want of jurisdiction, the entire demand of Rs. [total demand] is liable to be set aside on this threshold ground alone, and without the Appellant being put to the merits of the several heads of demand.

ANNEXURE B — AUTHORITIES

DEVENDRA SARAF & ASSOCIATES

Chartered Accountants · Firm Registration No. 163794W · Mumbai

e - devendra@fcpdevendrasaraf.com,  m - +91 9800046477,  w - https://fcpdevendrasaraf.com/