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2019 (11) TMI 1144 - HC - GSTProper Officer - territorial Jurisdiction - Power of search, seizure and issuing summons - Constitutional validity of Annexure P-1 Circular dated 05.07.2017 issued by the Central Board of Indirect Taxes Customs and Annexure P-2 Gazette Notification dated 01.07.2017 - Power to appoint 'proper officer' is with the Government u/s 3(2) read with section 5 - By way of circular, and notification issued by the Board, Central Excise Officers entrusted the duties of Proper Officer under GST - Delegation of power. HELD THAT - The corrigendum notification' dated 29.07.2019 published in the official gazette clearly reveals that there was an inadvertent mistake in having issued the original notification dated 19.06.2017 and the subsequent Annexure P-2 Notification dated 01.07.2017, wrongly mentioning it as having issued by the 'Board', instead of stating as issued by the Government , and hence, it was corrected accordingly. Since this was definitely to cut the roots of the case filed by the Petitioners, this Court found it appropriate to cause the matter to be listed for consideration again. Accordingly, it was listed on 22.10.2019 and the parties were heard again. The course and conduct of the parties on both the sides in not bringing the relevant 'corrigendum notification' dated 29.07.2019 to the notice of this Court was deprecated and an opportunity was given to make appropriate submissions, after calling for the remarks/explanation from both the sides. Taking note of the fact that there was nothing intentional on the part of the learned counsel for the Petitioners, the learned Assistant Solicitor General or the learned counsel representing the 2nd Respondent/Board in relation to the omission in brining the 'corrigendum notification' dated 29.07.2017 to the notice of the Court, though it was a serious lapse on the part of the parties concerned, no further steps were decided to be pursued. The mistake which appeared in Annexure P-2 Notification dated 01.07.2017 and the previous notification dated 19.06.2017 showing them as issued by the 'Board' stands corrected, as having issued by the Government . The notification having already been published in the official gazette as stated in Section 2(80) of the CGST Act read with Section 3(39) of the General Clauses Act, 1897, the appointment effected in the said notification, in exercise of powers under Section 3, read with Section 5 of the CGST Act and Section 3 of the IGST Act, 2017 has been issued by the 'Government', with whom the exclusive power is vested in this regard. By virtue of the aforesaid notification issued by the Government, all the officers in the Directorate General of Goods Services Tax Intelligence, Directorate General of Goods and Services Tax and the Directorate General of Audit, as specified in Column No. 2 of the table given therein, came to be appointed as 'Central Tax Officers', investing all the powers upon them under the CGST Act, 2017, the IGST Act, 2017 and the Rules made thereunder throughout the country of India, as are exercisable by the Central Tax Officers of the corresponding rank as specified in Column No. 3 of the said table. The challenge raised against Annexure P-1 Circular and Annexure P-2 Notification with reference to the competence of the issuing authority and the manner of issuance does not hold any water at all - petition dismissed.
Issues Involved:
1. Constitutional validity of Annexure P-1 Circular and Annexure P-2 Gazette Notification. 2. Authority and jurisdiction of the 2nd Respondent to issue Annexure P-2 Notification. 3. Appointment and powers of 'Proper Officer' under the CGST Act. 4. Legality of the summons issued by the 6th Respondent. 5. Compliance with procedural requirements under the CGST Act and related statutes. Detailed Analysis: 1. Constitutional Validity of Annexure P-1 Circular and Annexure P-2 Gazette Notification: The petitioners challenged the constitutional validity of Annexure P-1 Circular dated 05.07.2017 and Annexure P-2 Gazette Notification dated 01.07.2017, issued by the Central Board of Indirect Taxes & Customs, assigning functions of 'Proper Officer' under the CGST Act. They argued that these were not issued by the Central Government as mandated under Section 3 of the CGST Act and lacked the necessary official gazette publication. 2. Authority and Jurisdiction of the 2nd Respondent to Issue Annexure P-2 Notification: The petitioners contended that the 2nd Respondent, the Central Board of Indirect Taxes & Customs, lacked the authority to issue Annexure P-2 Notification. They asserted that the power to appoint 'Proper Officers' is vested exclusively in the Central Government, not the Board. The respondents countered that the notification was validly issued following the approval of the Union Finance Minister and published in the official gazette. 3. Appointment and Powers of 'Proper Officer' under the CGST Act: The petitioners argued that the appointment of multiple authorities as 'Proper Officers' under Annexure P-2 was contrary to the scheme of the CGST Act, which envisages 'One Assessee, One Subject Matter, One Officer'. They cited the Supreme Court's decision in Commissioner of Customs v. Syed Ali and Another, (2011) 3 SCC 537, to support their argument. The respondents maintained that the officers were validly appointed and assigned functions per the statutory provisions. 4. Legality of the Summons Issued by the 6th Respondent: The petitioners challenged the summons issued by the 6th Respondent, arguing that they were being harassed by being required to appear before different officers in different states. They contended that they should only be required to have registration and comply with summons in the state of Chhattisgarh, where they are registered. The respondents justified the summons, stating that the investigation revealed fake transactions and the petitioners' testimony was necessary to verify the genuineness of the transactions. 5. Compliance with Procedural Requirements under the CGST Act and Related Statutes: The petitioners argued that the procedural requirements under the CGST Act were not followed, including the necessity of a gazette notification for appointing 'Proper Officers'. They cited various legal precedents to support their contention that the appointment process and the issuance of summons were flawed. The respondents pointed out that the corrigendum notification dated 29.07.2019 corrected the earlier mistake, confirming that the notifications were indeed issued by the Government, thus complying with the statutory requirements. Final Judgment: The court found that the corrigendum notification dated 29.07.2019 corrected the earlier mistake, confirming that the notifications were issued by the Government. The appointment of officers and the issuance of summons were deemed valid. The challenge against Annexure P-1 Circular and Annexure P-2 Notification was dismissed, and the writ petitions were found to be devoid of merit. The court upheld the respondents' version on all points and dismissed the petitions without costs.
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