PROPER OFFICER UNDER GST LAW

[Dr. Sanjiv Agarwal]

Proper Officer [Section 2(91)]

As per section 2(91) of the CGST Act, 2017, “proper officer” in relation to any function to be performed under this Act, means the Commissioner or the officer of the central tax who is assigned that function by the Commissioner in the Board.

As per section 2(91) of the CGST Act, 2017, in relation to any functions to be performed under GST Act, proper officer means -

●     Commissioner or the officer of Central tax

●     Who is assigned that function by the Commissioner in the Board.

It may be noted that in relation to CGST or IGST, an officer shall be the proper officer who has been assigned any function, to be performed, by the Board/Commissioner of CGST or IGST.

Such person shall be considered as proper officer for the function (s) assigned to him under the Act by the Commissioner in the Board. For example, an officer may be assigned adjudication of a particular show cause notice.

As per section 4 of the IGST Act 2017, the officers appointed under SGST or UTGST are authorised to be proper officers for IGST Act subject to exceptions and conditions as Government may specify by way of a notification. This shall be on the recommendations of GST Council. A similar provision exists in CGST Act, 2017 in section 6 that officers of SGST or UTGST can be appointed as proper officers under CGST Act. Also, in case of UTGST, the Administrator may, by order, authorize any officer to appoint officers of Union Territory tax below the rank of Assistant Commissioner of Union Territory tax for the administration of the Act.

Relevant Judicial Pronouncements

• In M/S MAA GEETA TRADERS VERSUS COMMISSIONER COMMERCIAL TAX AND ANOTHER [2021 (12) TMI 119 - ALLAHABAD HIGH COURT], on an issue of jurisdiction in adjudication by Deputy Commissioner of State Tax, court observed that section 5(3) is the source of the power to sub-delegate the function-jurisdiction vested in the Commissioner, to be exercised in favour of any officer subordinate to him. Neither there exists any procedure or stipulation prescribed by law with respect to the mode or the manner in which that power to sub-delegate maybe exercised nor the Commissioner was required to obtain any approval of the State Government in that regard nor there exists any requirement in law prescribing issuance of a notification etc. to evidence a valid sub-delegation made under section 5(3) of the CGST Act. Non-recital of section 5(3) of the CGST Act in the orders is inconsequential and even extraneous to the valid exercise of power made by the Commissioner. The power was admittedly existing and it is seen to have been exercised. It is not shown to have been exercised in contravention of any statutory provision or principle of law. Hence, the validity of the power exercised would remain by established firm and undoubted.

It was held that as to the description of a "proper officer", by virtue of section 2(91) of the Act it has to be either the "Commissioner" himself and/or the officer of the "State tax", who may have been assigned that function by the Commissioner. In the instant case, there was no dispute between the parties that the Office Orders dated 1-7-2017 and 19-11-2018 were issued by the "Commissioner" as defined under section 2(91) of the Act. Its effect will be examined a little later. Thus, there would be no dispute between the parties, if the "Commissioner" had himself issued the notice or passed the order giving rise to the present petition. The issues that arise are whether there is any function assignment/sub-delegation made in favour of the Deputy Commissioner, with reference to section 74 of the Act and, whether the assignment made, if any, validly confers jurisdiction on the Deputy Commissioner.

It was further held that only with respect to officers appointed under the Central Act, the exercise of jurisdiction would be circumscribed by a notification that would have to be first issued by the State Government, before such jurisdiction may be created in their favour. Upon clear language of the provisions of the Act, the officers appointed under the Act would continue to be governed by the provisions of sections 3 and 4 read with section 2(91) of the Act and the general orders issued by the "Commissioner" in that regard, issued with reference to the power exercised under section 5 of the Act.

The court observed and held that the Commissioner of Customs (Preventive), Mumbai COMMISSIONER VERSUS SYED ALI [2011 (9) TMI 947 - SC ORDER] and the Additional Director, Directorate of Revenue Intelligence M/S CANON INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS [2021 (3) TMI 384 - SUPREME COURT] were not officers of Customs (under section 5 of the Customs Act), in the first place. Hence, though appointed (clearly with reference to section 4 of the Act, no function came to be entrusted to them under the Customs Act, in absence of any sub-delegation made in their favour by a further notification under section 6 of that Act. That analogy and reasoning would arise and apply (in the context of the Act), to officers of the 'Central tax', only. It would not apply to functioning of officers of the 'State tax' who may draw their function-jurisdiction from simple sub-delegation under an administrative order issued by the 'Commissioner' with reference to his powers to sub-delegate granted under section 5 of the Act, without any gazette notification of such order. The petition was therefore, dismissed.

• In YASHO INDUSTRIES LIMITED VERSUS UNION OF INDIA [2021 (6) TMI 918 - GUJARAT HIGH COURT], court observed that section 167 of the CGST Act, 2017 deals with delegation of power by which the Commissioner may, by notification, direct that subject to such conditions, if any, as may be specified in the notification, any power exercisable by any authority or officer under the CGST Act may be exercisable also by another authority or officer as may be specified in such notification.

As per the definition of 'proper officer' in Section 2(91), a 'proper officer' in relation to any function to be performed under the CGST Act means the Commissioner or the officer of the Central Tax, who is assigned that function by the Commissioner in the Board. It is pertinent to note that this case, the respondent No.3 is an officer of Directorate General of Goods and Services Tax Intelligence (DGGI) holding the designation of Senior Intelligence Officer, who was appointed as the Central Tax Officer with all the powers under the CGST Act and IGST Act and the Rules made thereunder, as are exercisable by the Central Tax Officers of the corresponding rank of Superintendent as specified in the Notification No.14 of 2017-CT dated 1.7.2017 issued by the Central Board of Excise and Customs. It is further pertinent to note that the respondent No.3 being the officer of the Central Tax and the Superintendent under the CGST Act by virtue of the said Notification dated 1.7.2017, he was also assigned the powers of proper officer by the Board vide Circular dated 5.7.2017 issued in exercise of the powers conferred by Clause (91) of Section 2 of the CGST Act read with Section 20 of the IGST Act. Therefore, the respondent No.3 is a proper officer in relation to the function to be performed under the CGST Act as contemplated under Section 2(91).

The Court, therefore, did not find any substance in the submission that the respondent No.3 was not the ‘proper officer’ as per the definition contained in Section 2(91) of the CGST Act, and therefore, had no powers to issue summons under Section 70 of the CGST Act.

• In M/S BIHARILAL CHHATERPAL THRU PROP. RAMESH KUMAR GUPTA VERSUS STATE OF U.P. THRU PRIN. SECY. TAX AND REGISTRATION AND ORS. [2021 (11) TMI 720 - ALLAHABAD HIGH COURT]  , it was held that cross empowerment under section 4 of IGST Act, 2017 and section 6 of CGST Act, 2017 merely means that state authorities empowered under State Act can also enforce provisions of CGST Act, 2017 and / or IGST Act, 2017.