The Patna High Court has rejected a challenge to three CBIC circulars assigning GST proper-officer functions to Central Tax officers. In M/s Moral Pharmaceuticals Private Limited v. Union of India, CWJC No. 5336 of 2025, decided on 18 September 2026, the court treated the officers’ undisputed status as Central Tax officers as a key distinction from the Customs Act cases on which the company relied. The ruling addresses the circulars and record before the court; it does not establish that every GST officer has jurisdiction in every case.
What did the Patna High Court decide?
A division bench of the High Court of Judicature at Patna—Justice Rajeev Ranjan Prasad and Justice Sunil Dutta Mishra—rejected Moral Pharmaceuticals’ challenge to Circular No. 3/3/2017-GST, Circular No. 31/05/2018-GST and Circular No. 169/01/2022-GST. Justice Prasad delivered the oral judgment. The court agreed with the Bombay High Court’s reasoning in Fomento Resorts & Hotels Ltd. v. Union of India and concluded that the company’s pleas against the circulars had no basis to stand.
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The ruling turned on the statutory setting and the officers’ status, not on a general conclusion that any officer may issue any GST notice. The judgment considered whether the CGST Act framework supported assigning the relevant functions to the Central Tax officers involved.
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Why did the court distinguish Canon India and Sayed Ali?
Moral Pharmaceuticals relied on Supreme Court decisions under the Customs Act: Canon India and Sayed Ali. Those disputes concerned whether Directorate of Revenue Intelligence (DRI) officers who were not officers of customs could exercise customs proper-officer functions. In Moral Pharmaceuticals, the relevant officers’ status as officers of Central Tax was not disputed. The Patna Bench treated that difference as material rather than carrying the Customs Act rulings across to this GST dispute.
| Issue | Customs Act cases | Moral Pharmaceuticals |
|---|---|---|
| Officer-status question | Whether DRI officers were “officers of customs” with authority to act as proper officers. | The officers’ status as Central Tax officers was not disputed. |
| Legal dispute | Whether officers outside the relevant customs officer class could exercise the functions. | Whether the CGST Act framework and CBIC circulars permitted assignment of the functions to Central Tax officers. |
The distinction limits what the Patna decision says about the Customs Act precedents: it does not purport to displace them in their own statutory context.
How did the court understand appointment and assignment under the CGST Act?
The judgment’s reasoning separates appointment of officers from assignment of particular proper-officer functions. It discusses the Central Government’s notification of 19 June 2017 under sections 3 and 5 of the CGST Act, as well as section 4’s provision for appointment or authorisation by the Board. It also describes the later circulars as assigning section 74 functions to subordinate Central Tax officers by monetary limits.
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The court did not treat section 2(91), which defines “proper officer,” as the enabling source of appointment power merely because the circulars refer to that definition. The point was the wider appointment-and-assignment framework, rather than the definition standing alone.
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| CBIC instrument | Date | What the available record establishes |
|---|---|---|
| Circular No. 3/3/2017-GST | 5 July 2017 | One of the three circulars challenged in the petition; the judgment considered it alongside the appointment and assignment framework. |
| Circular No. 31/05/2018-GST | 9 February 2018 | The CBIC index describes it as concerning proper officers under sections 73 and 74 of the CGST and IGST Acts. |
| Circular No. 169/01/2022-GST | 12 March 2022 | The CBIC index identifies it as an amendment to Circular No. 31/05/2018-GST. |
What happened in the underlying tax proceedings?
The dispute concerned alleged underpayment for July 2017 through March 2018. The show-cause notice proposed a combined CGST and Bihar GST amount of ₹5,10,00,146. The adjudication order found ₹2,91,39,160 in tax payable, split equally between CGST and state GST, and also dealt with interest and penalty. These are amounts in this taxpayer’s case, not general measures of GST enforcement.
The judgment’s reproduced order refers to unreconciled turnover and consignment sales. It also records that the company responded to the notice, explained discrepancies in its GSTR-9C, participated in a hearing, and provided documents. The competent authority considered the defence reply and documents before issuing the adjudication order and provided a personal hearing. Those procedural facts form part of the record; they do not establish that a different taxpayer’s notice or adjudication would necessarily be valid.
What does the decision establish—and what does it leave open?
- It rejects this company’s challenge to the three identified CBIC circulars in the circumstances considered by the Patna High Court.
- It treats the undisputed Central Tax status of the officers and the CGST Act’s appointment-and-assignment structure as important to the result.
- It does not decide that every GST officer has jurisdiction over every taxpayer, that all notices issued under the circulars are valid, or that procedural objections can never succeed.
- Its account of the company’s reply and hearing is specific to this case and should not be read as a finding about other proceedings.
The judgment reproduced this passage from the Bombay High Court’s Fomento Resorts reasoning about how precedent should be applied: “Every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there is not intended to be the exposition of the whole law but governed and qualified by the particular facts of the case in which such expressions are to be found.” The Patna Bench agreed with that reasoning in deciding the challenge before it.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What was the appellate status of Fomento Resorts?
A Legal Republic analysis dated 23 September 2026 reported that an appeal from the Bombay High Court’s Fomento Resorts judgment was pending before the Supreme Court at that time. That is a status report as of 23 September 2026, not confirmation of the appeal’s position after that date.
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