Where Enforcement Meets Its Legal Limit
A transporter carrying goods registered under a valid GSTIN in Assam is intercepted while passing through West Bengal. The documents are examined, discrepancies are alleged, and penalty proceedings are initiated under Section 129 of the CGST Act.
At first glance, the action appears routine. Yet beneath this familiar enforcement exercise lies a fundamental legal disconnect. The officer initiating the proceedings belongs to a Commissionerate whose authority extends only within the territorial limits of West Bengal, while the taxable person is registered under a completely different State jurisdiction.
This raises a critical and often overlooked question under the GST regime:
Can a tax officer of one State legally impose penalty upon a taxable person registered in another State, without first acquiring jurisdiction over that person?
The answer lies not merely in Section 129, but in the deeper architecture of jurisdiction under GST law.
I. GST Enforcement Is Territory-Based, Not National in Character
Although GST was introduced as a unified indirect tax system, its enforcement mechanism remains territorially structured.
Under Section 2(91) of the CGST Act, a “proper officer” is one who is assigned specific functions by the Commissioner. This assignment is not abstract. It is geographically defined through Notification No. 02/2017–Central Tax, which demarcates Commissionerate's, divisions, and ranges with clearly notified territorial boundaries.
An officer, therefore, does not derive authority merely from designation. Jurisdiction flows only from territorial assignment.
Consequently, a GST officer stationed in West Bengal exercises authority only within the jurisdiction assigned to that Commissionerate. That authority does not automatically extend to taxable persons registered under the Assam Commissionerate.
GST may be uniform in rate and structure, but jurisdiction remains strictly local.
II. Registration Under GST Is State-Specific and Jurisdiction-Bound
This territorial limitation is reinforced by the structure of GST registration itself.
Section 25 of the CGST Act mandates registration on a State-wise basis. Each GSTIN is treated as a distinct taxable person, even where the same PAN is involved. Registration under Assam GST does not create a pan-India taxable identity.
As a result, when an Assam-registered dealer’s goods are intercepted in West Bengal, the officer there does not exercise administrative control over that registrant.
For enforcement purposes, such person does not exist within the officer’s territorial database.
This leads to a legally unusual but doctrinally correct position:
an out-of-State registered dealer stands in the position of an “unregistered person” before the intercepting authority.
The Calcutta High Court in Satyam Shivam Papers Pvt. Ltd. v. Assistant Commissioner (2022, 63 GSTL 129) recognised that GST registration does not travel beyond the territorial jurisdiction of the registering authority and that officers cannot assume cross-State jurisdiction merely because goods transit through their territory.
III. Power to Intercept Goods Is Not Power to Assume Jurisdiction Over the Person
Section 129 of the CGST Act authorises detention of goods and conveyance where violations are noticed during transit. This power is location-based and arises at the point of interception.
However, the statute draws a clear though often ignored distinction between:
- power over goods, and
- jurisdiction over the taxable person.
While an officer may intercept goods present within his territorial limits, the authority to impose penalty or adjudicate liability presupposes jurisdiction over the person against whom proceedings are initiated.
Courts have consistently held that physical presence of goods cannot substitute legal jurisdiction over the taxpayer.
Thus, Section 129 permits interception, but it does not, by itself, cure the jurisdictional gap created by State-specific registration.
IV. The Statutory Bridge: Suo Motu Temporary Registration
Recognising this jurisdictional vacuum, the GST framework provides a specific legal mechanism to bridge it.
Section 25(8) of the CGST Act, read with Rule 16(1) of the CGST Rules, empowers the proper officer to grant suo motu temporary registration to a person who is liable to be proceeded against but does not hold registration within that State.
This mechanism is not discretionary.
It has been categorically clarified by Circular No. 41/15/2018–GST, which mandates that:
- where action under Section 129 is taken against a person treated as unregistered,
- the officer must first generate a temporary GSTIN,
- and only thereafter proceed through the common portal.
The temporary ID is therefore not a procedural courtesy; it is the legal instrument through which jurisdiction is lawfully assumed.
Without it, the officer remains powerless to proceed against the person.
V. Why Absence of Temporary ID Vitiates the Entire Proceeding
Failure to generate temporary registration strikes at the root of jurisdiction and renders the entire proceeding unsustainable.
First, GST enforcement is entirely portal driven. Forms such as MOV-01, MOV-02, MOV-06, MOV-09 and MOV-11 are required to be uploaded electronically. Rule 87(4) further mandates that payment by an unregistered person can only be made using a temporary ID.
Without such ID, the taxpayer cannot:
- access the portal,
- submit responses,
- make payment, or
- retrieve statutory orders.
Second, and more critically, absence of temporary registration denies the taxpayer access to the statutory appellate mechanism under Section 107.
High Courts have consistently held that proceedings which deny the right to appeal violate principles of natural justice.
In Shree Nanak Ferro Alloys Pvt. Ltd. v. Union of India (2022, 61 GSTL 257), the Jharkhand High Court quashed Section 129 proceedings solely on the ground that no temporary GSTIN was generated, rendering portal compliance impossible.
Similarly, in K.P. Sugandh Ltd. v. State of Chhattisgarh (2023, 72 GSTL 321), the Court held that non-generation of temporary ID vitiates proceedings as it effectively extinguishes the statutory right of appeal.
VI. Jurisdictional Defects Are Not Curable
One of the settled principles of tax jurisprudence is that lack of jurisdiction cannot be cured by subsequent compliance.
The Supreme Court in Canon India Pvt. Ltd. v. Commissioner of Customs (2021, 376 ELT 3) reaffirmed that only a legally empowered “proper officer” can initiate proceedings, and actions taken without jurisdiction are void ab initio.
Applied to GST enforcement, this principle means that:
- if jurisdiction is not lawfully assumed at inception,
- all consequential orders automatically collapse.
Revenue considerations cannot legitimise jurisdictional illegality.
When Procedure Defines Power
GST was introduced to remove economic borders and not legal safeguards.
While officers may lawfully intercept goods based on geography, their authority over persons remains firmly bound by jurisdictional limits. The statutory requirement of temporary registration is the bridge between physical control and legal authority.
When that bridge is not crossed, enforcement loses its legal foundation.
This recurring border-level conflict serves as a crucial reminder under GST law:
Power does not flow from presence, but it flows from jurisdiction, and jurisdiction flows from procedure.