Allahabad High Court Declines to Interfere with GST Cess Show Cause Notice And Directs Assessee to Avail Statutory Remedies

The Allahabad High Court dismissed the Writ Petition and held that the assessee must first pursue the statutory remedy by filing objections. M/s Dev Trading Company challenged the show cause notice dated 16th April 2026 and the corrigendum notice dated 4 May 2026 issued by the Assistant Commissioner, Central GST, Division-I, Kanpur, under the Health Security and National Security Cess Rules, 2026.

The petitioner pleaded that it had already informed the authorities in February 2026 about its intention to manufacture Pan Masala manually and later, the declarations were filed regarding the proposed use of one machine from March 2026 and a second machine from April 2026. Despite these declarations, the department has assumed installation of two machines and initiated proceedings demanding cessation.

It was contended by the petitioner after referring to CBIC Orders Nos. 01/2026 and 02/2026 dated 29 January 2026 that the officers functioning under the CGST Act lacked jurisdiction to issue notices under the Health Security and National Security Cess Act, 2025. The Court observed that the notice merely contained a proposal to demand cess and did not amount to a final determination.

With respect to the objection regarding jurisdiction, the Court held the impugned orders have vested Deputy Commissioners and Assistant Commissioners with jurisdiction under the CGST Act and Rule 11 of the Health Security and National Security Cess Rules, 2026. The Bench also noted that the show cause notice did not reveal any finality of opinion and that the allegations would be subject to consideration after the petitioner’s objections were examined.

The Allahabad High Court refused to interfere with the impugned show cause notice and dismissed the writ petition but the Court granted liberty to the petitioner to submit an additional reply within two weeks in view of the corrigendum notice dated 4 May 2026. It directed the concerned authority to consider all replies filed by the assessee and pass a reasoned and speaking order in accordance with law.