Delhi High Court Upholds CBIC Circular on Proper Officer Powers

The Delhi High Court has ruled against a challenge to the validity of a Central Board of Indirect Taxes and Customs (CBIC) circular concerning the powers of “proper officers” under the CGST Act. The court determined that the circular cannot be invalidated unless the petitioner demonstrates that it was issued without proper authority. This decision stems from a writ petition filed by Lovelesh Singhal, the proprietor of Shivani Overseas, contesting Circular No. 3/3/2017, dated July 5, 2017, and a summons issued on November 3, 2025, under Section 70 of the CGST Act.

In his petition, Singhal argued that the Board lacks the authority to assign duties to proper officers. His legal team contended that only the “Commissioner in the Board” can delegate such responsibilities, referencing Sections 2(91) and 2(25) of the CGST Act. They claimed that this limitation renders both the circular and the subsequent summons invalid. Additionally, they pointed out procedural issues regarding the timing of the summons, which was dated for November 10, 2025, yet served a day later.

The department defended the circular, citing Section 168(1) of the CGST Act, which empowers the Board to issue directions for maintaining uniformity. They noted that the circular was signed by the Commissioner (GST), indicating it was issued by the Commissioner in the Board with the necessary Board approval under Section 168(2). The department also expressed willingness to reschedule the date of Singhal’s appearance.

A Division Bench comprising Justice Nitin Wasudeo Sambre and Justice Ajay Digpaul observed that there exists a legal presumption of validity for such circulars, placing the burden of proof on the petitioner to establish its invalidity. The judges remarked that since the Commissioner is part of the Board, there was no reason to doubt that the circular was issued with the required approval. The petitioner did not provide sufficient evidence to contest this assertion, leading the court to dismiss the challenge against the circular.

While the court upheld the circular, it did partially grant the petition by allowing the rescheduling of the summons, thus permitting Singhal to appear before the appropriate officer.

This ruling highlights the ongoing legal discourse surrounding the interpretation of authority under the CGST Act and may have implications for future cases involving the powers of proper officers in tax matters.