OFFICER’S ROLE IN ACCESS TO BUSINESS PREMISES IN GST LAW

[Dr. Sanjiv Agarwal]

As per section 71 of the CGST Act, 2017, any proper officer duly authorized by the Joint Commissioner of GST is empowered to have access to any business premises. Such authorization shall be in writing and shall be restricted to business premises of the taxable person.

Rule 139(1) of CGST Rules, 2017 provides that the proper officer (Additional Commissioner or Joint Commissioner of Central Tax) shall issue an authorization in Form GSTN INS-01 authorizing any other officer subordinate to him to conduct his inspection or search or, seizure of goods, documents, books or things liable to confiscation.

Officers to Assist Proper Officer (Section 72)

Section 72 of CGST Act, 2017 requires that various officers of Government, taxation Department and other officers dealing in collection of land revenue shall assist proper officers under the GST law.

It requires all officers of Police, Railways, Customs and those officers engaged in the collection of land revenue including village officers, officers of State and Union Territory tax to assist the proper officers in the implementation of CGST Act, 2017.

Officers required to assist Proper Officers [Sub-section 1]

Following officers are empowered and required to assist the proper officers in the implementation of provisions of the Act:

• Officers of Police,
• Officers of Customs,
• Officers of Railways,
• Officers of State Government engaged in collection of State tax,
• Officers of Union Territory tax
• Officers of State/Central Government engaged in the collection of land revenue, and
• All village officers.

Power to authorize officers [Sub-section 2]

Section 72(2) of the CGST Act, 2017, provides that the board/commissioner of SGST may by notification, empower and require any other class of officers to assist the proper officers in the execution of provisions of this Act.

Such officers shall assist the proper officer for the purpose of implementation of CGST Act, 2017 whenever called upon by the Commissioner. It implies that authorized officers shall assist the proper officer only upon being called by the Commissioner in situations warranting such assistance.

Relevant judicial pronouncements in GST regime

• In M/S. VASAVI WEDDING AND EVENT PLANNERS VERSUS STATE OF ANDHRA PRADESH, ASSISTANT COMMISSIONER (ST) , BHANUPRASAD - 2022 (7) TMI 869 - ANDHRA PRADESH HIGH COURT, where assessee engaged in event management services was given opportunity of raising objections but assessee never responded to notice and, hence, authorities gathered information from social media platform of assessee to levy penalty and it could not be said that assessee had not conducted any event during relevant period. The court held that writ petition was to be dismissed. However, liberty to assessee was given to approach appellate authority and avail remedy so as to avail remedy for grievances.

• In M/S. SUDHAKAR TRADERS VERSUS THE STATE OF ANDHRA PRADESH - 2023 (5) TMI 170 - ANDHRA PRADESH HIGH COURT, it was held that officials of Vigilance and Enforcement Department (V&E Department) have statutory right to conduct inspection in assessee's premises and can share relevant information with Commercial Tax Department without any prior requisition under section 72(2) of CGST Act, 2017. Further, there was no conflict between powers and functions of V&E Department and power of Chief Commissioner to make requisition to Government under Section 72(2).
• In MAA BHAGWATI SPONG IRON PVT. LTD., VERSUS THE UNION OF INDIA, THE COMMISSIONER (A.E.) , CGST AND OTHERS - 2021 (6) TMI 763 - PATNA HIGH COURT, where a notice was issued under section 71 but search and seizure operations were carried out under section 67, it was held that intent, purpose and scope of both sections are distinct, independent and not subject to each other. However, the court directed the adjudicating authority to adjudicate the matter within three months.

• In M/S KANAL ENTERPRISE VERSUS STATE OF GUJARAT - 2020 (9) TMI 879 - GUJARAT HIGH COURT, it was prayed to issue a writ of Mandamus or any other appropriate writ, order or direction and thereby be pleased to quash and set aside the order of provisional attachment of the stock of goods valued at Rs. 1,26,00,000 dated 30-7-2019 passed by the Respondent, to issue a writ of Mandamus or any other appropriate writ, order or direction and thereby be pleased to quash and set aside the order of provisional attachment of the Petitioner’s Current account bearing A/c No. 655305600366 maintained with ICICI Bank, dated 30-7-2019 passed by the passed by the Respondent, issue a writ of Mandamus or any other appropriate writ, order or direction and thereby be pleased to quash and set aside the action of blocking of input tax credit of Rs. 24,30,850 vide communication dated 20.07.2019 by the Respondent and Pending admission, hearing and final disposal of the present Petition, to issue an appropriate writ, order or direction and thereby be pleased to stay the operation and implementation of the orders of provisional attachment dated 30.07.2019 passed by the Respondent and action of blockage of input tax credit vide communication dated 20.07.2019 by the Respondent.

Earlier, by way of interim order dated 10.10.2019 in M/S KANAL ENTERPRISE VERSUS STATE OF GUJARAT - 2019 (10) TMI 521 - GUJARAT HIGH COURT, the respondents were directed to forthwith release the attachment of the bank account of the petitioner bearing No. 655305600366 maintained with the ICICI Bank, Rajkot made vide order dated 20.07.2019 and unblock the credit of the petitioner of Rs. 24,30,850/- available in the electronic credit ledger.

The short point falling for court’s consideration in this petition was whether the impugned order of attachment of property under Section 83 of the Act could have been passed on the ground of proceedings instituted under Section 71(1) of the Act.

Court observed that the plain reading of Section 83 of the Act would indicate that the powers can be invoked during the pendency of proceedings under Sections 62, 63, 64, 67, 73 and 74 of the Act. There is no power vested in the authorities to invoke the provisions of Section 83 during the pendency of the proceedings instituted under Section 71(1) of the Act. In fact, there could not be any proceedings, which could be instituted under Section 71 of the Act. Section 71 of the Act talks about access to the business premises.

In such circumstances, the impugned order of attachment under Section 83 of the Act was quashed and set aside. The Appeal preferred by the writ-applicant against the final order of assessment shall be decided in accordance with law by the Appellate Authority.