AUTHORITIES UNDER GST LAW

[Dr. Sanjiv Agarwal]

Like any other activity or function, administration is also important for any tax law. Tax administration of GST at Central and State level broadly involves the tax structure, tax administration, taxable jurisdiction and enforcement. Under the present scheme, centre shall levy and administer CGST & IGST while respective states/UTs shall levy and administer SGST/UTGST.

To administer any tax law, various authorities have to be appointed as per provisions to perform such functions as may be entrusted under the legislation.

This article provides a brief discussion on meaning, role and functions of the following tax authorities:

• Adjudicating authority [Section 2(4)]
• Appellate Authority [Section 2(8)]
• Commissioner [Section 2(24)]
• Commissioner in the Board [Section 2(25)]
• Competent Authority [Section 2(29)]
• Designated Authority [Section 2(40)]
• Proper Officer [Section 2(91)]

Adjudicating authority [Section 2(4)]

As per section 2(4) of the CGST Act, 2017, ‘adjudicating authority’ means any authority, appointed or authorized to pass any order or decision under this Act, but does not include the Central Board of Indirect Taxes and Customs, the Revisional Authority, the Authority for Advance Ruling, the Appellate Authority for Advance Ruling, the National Appellate Authority for Advance Ruling, the Appellate Authority, the Appellate Tribunal and the Authority referred to in sub-section (22) of section 71.

It may be noted that ‘Adjudication’ is the process of deciding an issue relating to tax matters through departmental authorities empowered to determine issues relating to classification, valuation, refund claim, tax or duty payable etc. The department raises demands by way of Show Cause Notices (SCNs) to the assessees when irregularities are observed or suspected.

Adjudication pre-supposes issuance of a show cause notice (SCN) - an intimation to show cause, explain or defend the proposed action as mentioned in the SCN. Infact, SCN is the first limb of principle of natural justice i.e., no one should be condemned unheard. SCN should be clear, precise and unambiguous.

Appellate Authority [Section 2(8)]

(8) “Appellate Authority” means an authority appointed or authorised to hear appeals as referred to in section 107;

Like in any tax law, taxation laws in relation to Goods and Service Tax also provides for appellate provisions to enable the aggrieved person to make an appeal against any order or decision by which such person is aggrieved.

Tax laws (or any law, for that matter) impose obligations. Such obligations are broadly of two kinds: tax-related and procedure-related. The taxpayer’s compliance with these obligations is verified by the tax officer (by various instruments such as scrutiny, audit, anti-evasion, etc.), as a result of which, sometimes there are situations of actual or perceived non-compliance. If the difference in views persists, it results into a dispute, which is then required to be resolved.

Tax law recognizes that on any given set of facts and laws, there can be different opinions or viewpoints. Hence, it is likely that the taxpayer may not agree with the “adjudication order” so passed by the tax officer. It is equally possible that the Department may itself not be in agreement with the adjudication order in some cases. It is for this reason that the statute provides further channels of appeal, to both sides.

However, since the right to appeal is a statutory right, the statute also places reasonable fetters on the exercise of that right. The time limits prescribed by the statute for filing of appeals and the requirement of pre-deposit of a certain sum before the appeal can be heard by the competent authority are examples of such fetters on the statutory right.

GST implemented in India is a dual GST i.e. to say every supply attracting the levy will be leviable to both Central tax and State tax. So does this mean that if a taxpayer is aggrieved by any such transaction, he will have to approach both the authorities for exercising his right of appeal? The answer is a plain NO. The Act makes provisions for cross empowerment between CGST and SGST/UTGST officers so as to ensure that if a proper officer of one Act (say CGST) passes an order with respect to a transaction, he will also act as the proper officer of SGST for the same transaction and issue the order with respect to the CGST as well as the SGST/UTGST component of the same transaction. The Act also provides that where a proper officer under one Act (say CGST) has passed an order, any appeal/review/ revision/rectification against the said order will lie only with the proper officers of that Act only (GST Act). So also if any order is passed by the proper officer of SGST, any appeal/review /revision /rectification will lie with the proper officer of SGST only.

Appellate Authority has been defined to means:

1. 1. Any authority duly appointed or authorized
   2. Such authority should be authorized to hear the appeals
   3. Such appeals should be as referred to in section 107 of CGST Act, 2017

The appellate authority in terms of section 2(8) and 107 of CGST Act, 2017 shall carry out the following functions / obligations:

1. To receive the appeal
2. To hear and adjudicate the dispute and issues under the appeal
3. To condone the delay in terms of statutory provisions
4. To give an opportunity to the appellant of being heard
5. To allow adjournments on a reasonable cause being shown
6. To issue show cause notice where he is of opinion that tax has not been paid or short paid or refund/ input tax credit is wrongly taken.
7. To decide the appeal to the extent possible within a period of one year of filing of appeal
8. To issue the appellate order with copies to all concerns including summary of order as required under the relevant rules.

Commissioner [Section 2(24)]

As per section 2(24) of the CGST Act, 2017, ‘Commissioner’ means the Commissioner of central tax and includes the Principal Commissioner of central tax appointed under section 3 and the Commissioner of integrated tax appointed under the Integrated Goods and Services Tax Act.

The term ‘Commissioner’ is also defined in Section 2(2) of UTGST Act, 2017 to mean the commissioner of Union Territory Tax appointed under section 3. Thus, the Commissioner is an officer of the respective tax appointed under section 3 of the respective acts.

Section 3 of these enactments provide for appointment of Commissioners and other class of officers for carrying out the purposes of these Acts. Such officers shall be deemed to be proper officer for the purposes as specified. There can be different class of Commissioners (e.g. Principal Commissioner, Chief Commissioner etc).

Commissioner in the Board [Section 2(25)]

As per section 2(25) of the CGST Act, 2017, ‘Commissioner in the Board’ means the Commissioner referred to in section 168.

Section 168 deals with powers of the Board (CBIC) to issue instructions and direction for the purpose of uniformity in implementation of the law, issue orders, instructions or directions to the Central Tax officers which shall be observed and followed by such officers.

Commissioner in the Board refers to a Commissioner or Joint Secretary posted in the Board and such Commissioner or Joint Secretary shall exercise the powers in various sections with the approval of the Board.

According to section 2(16) of CGST Act, 2017, ‘Board’ means the Central Board of Indirect Taxes and Customs (CBIC) constituted under the Central Boards of Revenue Act, 1963.

Central Board of Indirect Taxes and Customs (erstwhile Central Board of Excise & Customs) is a part of the Department of Revenue under the Ministry of Finance, Government of India. It deals with the tasks of formulation of policy concerning levy and collection of Customs, Central Excise duties, Central Goods & Services Tax and IGST, prevention of smuggling and administration of matters relating to Customs, Central Excise, Central Goods & Services Tax, IGST and Narcotics to the extent under CBIC's purview. The Board is the administrative authority for its subordinate organizations, including Custom Houses, Central Excise and Central GST Commissionerates and the Central Revenues Control Laboratory.

Competent Authority [Section 2(29)]

As per section 2(29) of the CGST Act, 2017, ‘competent authority’ means such authority as may be notified by the Government;

For example, Schedule-II to the CGST Act, 2017 defines ‘competent authority’ in relation to construction services. Accordingly, the expression ‘competent authority’ means the Government or any authority authorised to issue completion certificate under any law for the time being in force and in case of non-requirement of such certificate from such authority, from any of the following, namely:—

(i)   an architect registered with the Council of Architecture constituted under the Architects Act, 1972;

(ii)  a chartered engineer registered with the Institution of Engineers (India); or

(iii) a licensed surveyor of the respective local body of the city or town or village or development or planning authority;

However, in this case, it is for the specific purpose only.

Designated Authority [Section 2(40)]

As per section 2(40) of the CGST Act, 2017, ‘designated authority’ means such authority as may be notified by the Board.

‘Designated authority’ is also defined in section 2(3) of the UTGST Act, 2017 to mean such authority as may be notified by the Commissioner. Thus, while in CGST /SGST Acts, Board shall appoint a designated authority. In case of UTGST, it is the Commissioner who will appoint the designated authority for which a notification shall be issued.

A designated authority shall be so designated for specific purposes only. For example, in terms of section 107 (15) CGST Act, 2017, a designated authority can be appointed for the purposes of appeal.

Proper Officer [Section 2(91)]

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

●     Commissioner or the officer of Central tax

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

According to 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 goods and services 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.