2020 (3) TMI 478 - HC - GST

Jurisdiction - appropriate authority to complete the proceedings - state authority or central authority - grievance of the writ applicant herein is that the proceedings came to be initiated by the DGGI, AZU, Ahmedabad and therefore, the proceedings should be completed by the DGGI, AZU - HELD THAT - By way of a letter issued by the Central Board of Excise and Customs dated 5th October 2018, it is clarified that if an officer of the Central tax authority initiates intelligence based enforcement action against a taxpayer administratively assigned to the State tax authority, the officers of the Central tax authority would not transfer the said case to its State tax counterpart and would themselves take the case to its logical conclusions. In the case on hand, there is nothing on record to indicate that the officer of the Central tax authority has transferred the case of the writ applicant to any other authority of the State. However, it appears that although the action was undertaken under Section 67 of the Act by the DGGI, AZU, yet the two summons came to be issued one by the Deputy Commissioner of State Tax and another by the DGGI, Surat. This writ application is disposed off with a direction to the DGGI, AZU, Ahmedabad to look into the matter and ensure that no undue harassment is caused to the writ applicant by different authorities on the same subject matter.

Summary

Issues:
1. Jurisdictional conflict between Central tax authority and State tax authority in enforcement actions.

Analysis:
The writ applicant, a proprietary concern, sought relief through a writ application under Article 226 of the Constitution of India, challenging the proceedings initiated by respondent No.4 and respondent No.6 as bad and without authority of law. The search conducted under Section 67 of the Central Goods and Services Tax Act, 2017 at the office premises of the writ applicant led to the issuance of summons by different tax authorities. The applicant responded to the summons stating that all original books of accounts and documents had been seized by the Directorate General of Goods and Services Tax Intelligence (DGGI), Ahmedabad, during the search conducted earlier. Despite this, subsequent summons were issued by different authorities, causing confusion and inconvenience to the applicant.

The applicant contended that since the proceedings were initiated by the DGGI, AZU, Ahmedabad, they should be completed by the same authority without interference from other authorities. The Central Board of Excise and Customs issued a letter clarifying that officers of both Central tax and State tax are authorized to initiate intelligence-based enforcement actions on taxpayers, irrespective of administrative assignment. The initiating authority is empowered to complete the entire process of investigation, adjudication, recovery, and filing of appeals. Therefore, if a Central tax officer initiates enforcement action against a taxpayer assigned to the State tax authority, the case should be concluded by the Central tax authority.

The High Court disposed of the writ application with a direction to the DGGI, AZU, Ahmedabad to ensure that no undue harassment is caused to the writ applicant by different authorities on the same subject matter. The Court clarified that it did not express any opinion on the merits of the case but emphasized the need for a coherent approach in handling enforcement actions to prevent confusion and unnecessary inconvenience to taxpayers.