ACME Cleantech Solution Pvt. Ltd. Vs Union of India & Ors. (Rajasthan High Court)

The Hon’ble Rajasthan High Court in the case of Acme Cleantech Solutions Pvt. Ltd. v. Union of India & Ors. [Civil Writ Petition No. 11503/2025 order dated August 13, 2025] issued notice and stayed a show cause notice issued by Additional Director, DGGI, while examining the constitutional validity of Notification No. 14/2017-CT and Circular No. 3/3/2017 that vest Additional Director, DGGI with powers of “Proper Officer” under Section 74 of the CGST Act.Facts:Acme Cleantech Solutions Pvt. Ltd., (“the Petitioner”) a company engaged in waste-to-energy plant operations.The Petitioner challenged a show cause notice (SCN) issued by the Additional Director, DGGI under Section 74 of the CGST Act. The company received the SCN during ongoing proceedings and contested the jurisdiction of the Additional Director, DGGI to act as a “proper officer.”The Petitioner argued that under Section 2(91) of the CGST Act, the power to assign functions of a ‘Proper Officer’ vests solely in ‘the Commissioner’ and not the ‘Board’ itself.The Petitioner challenged Notification No. 14/2017-CT read with Corrigendum dated July 29, 2019, and Circular No. 3/3/2017 as being ultra vires Sections 2(91), 3, and 5 of the CGST Act to the extent they vest Additional Director, DGGI with powers of ‘Proper Officer’.Beyond jurisdictional issues, the Petitioner also challenged Para 11 of Circular No. 80/54/2018-GST on Applicability of GST on supply of Waste to Energy Plant, arguing it erroneously restricts the concessional 5% GST rate to goods under Chapters 84, 85, and 94 only, misreading Entry 234 and Entry 201A of Notification No. 1/2017-CT (Rate).Issues:Held:The Hon’ble Rajasthan High Court in Civil Writ Petition No. 11503/2025 held as under:Our Comments:This case raises fundamental questions about the constitutional validity of GST enforcement structure and the scope of Board’s power to delegate “proper officer” functions. The distinction drawn between “Commissioner in the Board” versus “the Board itself” is crucial for understanding the delegation hierarchy under GST law.Relevant Provisions:Section 2(91), the CGST Act, 2017“Proper Officer in relation to any function to be performed under this Act, means the Commissioner or the officer of the central tax who is assigned that function by the Commissioner in the Board.”