Madhya Pradesh High Court quashes Rs. 7 Cr GST Demand for Lack of Proper Authorisation

The High Court of Madhya Pradesh at Indore heard two writ petitions, WP-2510/2026 and WP-2532/2026, which challenged an order dated December 30, 2025, that imposed a total tax liability of Rs. 7,01,61,092/-.

The order was issued by the Assistant Commissioner of State Tax, Anti-Evasion Bureau, Indore (respondent No. 4), and the petitioners contended that this authority lacked the necessary jurisdiction to act as the “Proper Officer” as defined under Section 2(91) of the CGST Act, 2017, further arguing that the officer lacked the requisite pecuniary jurisdiction to adjudicate the matter based on the petitioner’s annual turnover.

Issue of the case

1. Whether the assistant commissioner (respondent No. 4) possessed the legal competence and jurisdiction to pass the impugned order?

2. Whether the writ petition was maintainable despite the existence of an alternative remedy of appeal?

Decision of the Court

The Court decided that it is acceptable to file a lawsuit directly with the High Court instead of going through the usual appeal process if the original order was made by someone who didn’t have the legal power to do so.

During the case, the State’s lawyer admitted that the GST Council had never officially recommended that the officer (respondent No. 4) be allowed to act as the “Proper Officer” for this specific case. Because the officer did not have the proper authority, the Court canceled the tax bill.

However, the Court allowed the government to restart the process and have a legally authorized officer issue a new order if they choose to follow the correct legal steps.