Section 174 of the CGST Act, 2017 — Authority of DGGI to issue SCNs in respect of Service Tax  – The common issue in these petitions relate to liability to Service tax under the Finance Act 1994 for transfer of copyright in musical work by music composers and the exemption they seek in terms of Exemption Notification 25/2012 dated 20.06.2012. The petitioner argued that the proceedings are without jurisdiction as there is no provision under which the DGGI could have drawn power to have issued the show cause notice. The source of power emanates from Notifications issued in the era prior to GST that have not been expressly saved under the new regime. The activity of dissemination of education, as part of a curriculum for obtaining a qualification recognised by law or as part of an approved vocational course, would fall under the negative list. The court observed that Section 174, unequivocally saved all rights, obligations, privileges and liabilities that had enured under the old laws which would continue in the new regime. Section 3 of the Act deals with officers under the Act and states that Government shall, by Notification, appoint various classes of officers for the purpose of this Act and thereafter, Notifications/Circulars have been issued in F.No349/75/2017 – GST Circular No. 31/05/2018 dated 09.02.2018 on the subject of designation of Proper Officer under Sections 73 and 74 of the Act. Section 174(2) states that repeal as per subsection (1) shall not affect any rights, privileges or obligations or liability acquired, accrued or incurred under the old Act and the proviso carves out an exception in regard to tax exemption granted as an investment against investment through 'Notification'. In such cases, such exemptions shall continue until rescinded.

Held that:- The Hon’ble High Court hold that the assumption of jurisdiction by the officials of the DGGI is valid and dismissed the petitions and granted liberty to the petitioners to approach the appellate authority by way of statutory appeal. Such appeal, if filed within four weeks, shall be entertained by the authority without reference to limitation, but subject to all other statutory compliances. The petitioner who challenged a show cause notice is permitted to file a response within four weeks.