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Katyani Exports (through its Proprietor Sh. Ajay Singh Gautam) vs. Union of India & Ors. and connected matters

Writ Petition (Civil) · 2026:DHC:7854-DBDecided 16 Sept 2026New Delhi Bench
W.P.(C) 10607/2025, W.P.(C) 10609/2025, W.P.(C) 10613/2025, W.P.(C) 10614/2025, W.P.(C) 10670/2025, W.P.(C) 10718/2025, W.P.(C) 10720/2025, W.P.(C) 10721/2025CNR: DLHC010483562025
Justice Anil Kshetarpal · Justice Shail Jain

Background

GST intelligence officers uncovered a large fake-invoicing racket in which non-existent "supplier" firms issued paper-only invoices (with no real goods ever moving) up a three-layer chain, ultimately letting exporter firms falsely claim tax credit and refunds. Katyani Exports, one of several linked exporter and supplier firms allegedly controlled by two individuals, was issued a common show-cause notice along with 145 other parties and eventually hit with a tax demand and penalty. Rather than filing the ordinary tax appeal, the firm went straight to the High Court, arguing that the particular tax officer who decided its case (based in Delhi, though the firm was based in Haryana) never had valid jurisdiction over it, because that jurisdiction was assigned merely by an internal government circular rather than a proper notification.

Decision Breakdown

The Court held that the actual power to designate that class of officer as competent to decide such cases came from a valid government notification (not the circular): the circular in question was doing something much narrower: simply picking, among several equally competent officers already empowered by that notification, which one specific officer would handle a shared case involving many linked firms (namely, whichever officer covered whoever owed the "highest amount" in demand). Since this was just an administrative allocation method, and not a way of creating new jurisdiction, and since the firms had shown no actual unfairness or prejudice from having a Delhi-based officer decide their case, the Court found no jurisdictional defect. It dismissed the writ petition (along with the seven connected petitions involving related firms), directing the firms to pursue their substantive dispute over the tax demand itself through the ordinary statutory appeal process.

Lesson Learnt

When several linked businesses face a shared, combined tax fraud notice spread across different cities, the tax department is allowed to use an internal administrative rule (rather than a fresh formal notification) to pick one single officer, already otherwise validly empowered, to decide the whole combined case: this is not the same as illegally creating brand-new jurisdiction out of thin air.

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