DGGI has power to issue show cause notices, rules Gujarat High Court

The Gujarat High Court has ruled that the Directorate General of GST Intelligence (DGGI) can issue show cause notices, in a relief to the indirect tax department which was taken to court by a Mumbai-based company over its investigation arm's power to issue tax notices.

The arguments in court were over who at DGGI can issue a notice--whether any official at DGGI or only a few high-ranking officials. The companies that had brought the matter to court said only “proper official” can issue notices and not any official at DGGI.

The court ruled that DGGI has a right to issue notices, and that the proper officials as defined in the GST framework would include almost anyone working at DGGI.


“The ruling makes a distinction between DGGI officers and is different from an earlier Supreme Court ruling in case of Canon India. The top court had ruled that the Directorate of Revenue Intelligence (DRI) cannot issue show cause notice,” said Puneet Bansal, managing partner at Nitya Tax Associates.

The court ruled that while “the submissions made by the petitioners may appear very attractive” there was no substance of the same. “A 'proper officer' in relation to any function to be performed under the CGST Act means the commissioner or the officer of the central tax, who is assigned that function by the commissioner,” the court ruled.