2025 (1) TMI 838 - HC - GST

Jurisdiction of the Officers of the State GST Department to issue the aforesaid authorisation and show cause notice to the petitioner - proper officers for the purposes of the CGST Act - HELD THAT - The provisions of Section 6 (1) of the CGST Act make it abundantly clear that the cross-empowerment of the Officers of the SGST/UTGST Department to function as proper officers under the CGST Act is through the legislative mandate under Section 6 (1) of the CGST Act. It is a mandate and empowerment that is presently unqualified but expressly made subject to such conditions as the Government shall, on the recommendation of the Council, by notification, specify. In other words, while the statutory mandate at present is unqualified, it will be qualified in the event the Government specifies conditions for the exercise of power under the statutory mandate, pursuant to the recommendations of the Council. It cannot be persuaded to read the statutory mandate as one that does not presently bring about a cross-empowerment but merely envisages such a situation as and when a notification is issued at some time in the future. Conclsuion - Section 6(1) of the CGST Act inherently provides cross-empowerment of State and Union Territory GST officers as proper officers under the CGST Act, without the need for a specific notification unless conditions are to be imposed.

1. ISSUES PRESENTED and CONSIDERED

The core legal issue in this judgment revolves around the jurisdiction of State GST officers to issue authorizations and show cause notices under the Central Goods and Services Tax Act (CGST Act). Specifically, the question is whether officers appointed under the State Goods and Services Tax Act (SGST Act) or the Union Territory Goods and Services Tax Act (UTGST Act) can be considered "proper officers" for the purposes of the CGST Act in the absence of a specific notification issued by the Government on the recommendation of the GST Council.

2. ISSUE-WISE DETAILED ANALYSIS

Relevant legal framework and precedents:

The relevant legal framework is primarily Section 6 of the CGST Act, which addresses the authorization of officers of State tax or Union territory tax as proper officers in certain circumstances. Section 6(1) stipulates that officers appointed under the SGST Act or UTGST Act are authorized as proper officers for the purposes of the CGST Act, subject to conditions specified by the Government through a notification based on the GST Council's recommendations.

The petitioner relied on the judgment of the Madras High Court in Tvl. Vardhan Infrastructure v. Special Secretary, which held that in the absence of a notification for cross-empowerment, proceedings initiated by the State GST Authority are without jurisdiction.

Court's interpretation and reasoning:

The Kerala High Court interpreted Section 6(1) of the CGST Act as providing a legislative mandate for cross-empowerment of officers from the SGST/UTGST to function as proper officers under the CGST Act. This empowerment is unqualified unless the Government specifies conditions through a notification. The court found that the statutory mandate inherently allows for cross-empowerment and does not require a notification to be effective unless conditions are to be imposed.

Key evidence and findings:

The court considered the reference order of the learned Single Judge and the judgment of the Madras High Court, along with the opinion expressed by the GST Policy Wing of the Central Board of Indirect Taxes and Customs, which clarified that no separate notification is required unless conditions are to be imposed.

Application of law to facts:

The court applied Section 6(1) of the CGST Act to conclude that the officers of the SGST/UTGST are already empowered to act as proper officers under the CGST Act. The absence of a specific notification does not invalidate the jurisdiction of these officers unless conditions are specified by the Government.

Treatment of competing arguments:

The court acknowledged the competing argument presented by the petitioner, supported by the Madras High Court decision, but found it unpersuasive. The court emphasized the legislative intent of Section 6(1) to provide cross-empowerment without the necessity of a notification unless conditions are imposed.

Conclusions:

The court concluded that the proceedings initiated by the State GST officers are within jurisdiction under the CGST Act. The absence of a notification does not negate their authority as proper officers.

3. SIGNIFICANT HOLDINGS

Preserve verbatim quotes of crucial legal reasoning:

"The provisions of Section 6 (1) of the CGST Act make it abundantly clear that the cross-empowerment of the Officers of the SGST/UTGST Department to function as proper officers under the CGST Act is through the legislative mandate under Section 6 (1) of the CGST Act."

Core principles established:

The judgment establishes that Section 6(1) of the CGST Act inherently provides cross-empowerment of State and Union Territory GST officers as proper officers under the CGST Act, without the need for a specific notification unless conditions are to be imposed.

Final determinations on each issue:

The court upheld the jurisdiction of State GST officers to issue authorizations and show cause notices under the CGST Act, dismissing the writ petition. The petitioner is advised to pursue statutory remedies against the show cause notice.

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