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2019 (9) TMI 872 - HC - GSTProper officer under GST - Vires of Section 6(1) of the Goods and Service Tax Act, 2017 - it is submitted that the State authority lacks jurisdiction to investigate and bring to assessment any amounts having regard to the peculiar circumstances of the case - basic ground on which Section 6 has been challenged is that Section 6(1) is arbitrary. HELD THAT - This Court is of the opinion that challenge to the provisions i.e. Section 6(1), has not been made at all. The GST Act, which was enacted pursuant to 101st amendment to the Constitution, completely changed the tax structure in the country and unified the tax levied by the Centre and State for the first time, in terms of principles of taxation as well as the common provisions. The constitutional authority such as the Goods and Service Tax (GST) Council was created, to lay down the policy which are binding on all States and the Union, which are authorised to collect the levies under the GST. The Act also unifies levies, such as Central Excise Service Tax and State VAT enactments under one regime. The Court is of the opinion that the circular merely works out the authorisation under Section 6(1). It is also a matter of policy. Furthermore, the Court was informed that assessment has been completed pursuant to the show-cause notice on 22.03.2019. It is not appropriate for the Court, to consider the validity or otherwise of the show-cause notice having regard to the fact that an alternative remedy by way of an appeal exists in favour of the petitioner. In case, if so advised, the petitioner prefers such an appeal, the same shall be decided on merits - Petition dismissed.
Issues:
Challenge to the vires of Section 6(1) of the Goods and Service Tax Act, 2017; Jurisdiction of State and Central authorities delineated by GST Council; Challenge to the proceedings initiated by State authority; Allegations of curtailment of rights to claim input credit and transitional credit; Validity of show-cause notice under Section 6 and 73. Analysis: The petitioner challenged the vires of Section 6(1) of the GST Act, arguing that the State authority lacks jurisdiction to investigate and assess amounts due to the delineation of jurisdiction by the GST Council. The State contended that the enquiry was limited to enforcement actions and that investigation related to credit claims under the CST Act and State VAT was permissible under Section 140(3) of the GST Act. The challenge was based on the alleged arbitrariness of Section 6(1) and the curtailment of rights to claim input and transitional credit, with claims that the show-cause notice transgressed the law. The Court found that the challenge to Section 6(1) was unfounded, highlighting the transformative nature of the GST Act in unifying taxation structure and principles across the country. Section 6 was enacted to provide a mechanism for assessment and collection by authorizing officers under State and Union Territory Acts, ensuring a common approach. The Court noted that the circular merely operationalized the authorization under Section 6(1) and that assessment had been completed post the show-cause notice. Regarding the challenge to the circular and show-cause notice, the Court emphasized that the circular aligned with Section 6(1) and represented a policy decision. As an alternative remedy through appeal existed, the Court dismissed the writ petition, advising the petitioner to pursue the appeal if desired. The judgment upheld the validity of Section 6(1) and the actions taken under it, emphasizing the need for a common mechanism in the complex GST regime.
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