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2023 (11) TMI 874 - HC - GSTJurisdiction of GST officers - Validity of proceedings initiated under Section 149 of the CGST Act, 2017 - proceedings are wholly without jurisdiction and without the authority of law or not - supply of goods to the job worker - inter-state supply or intra-state supply? - HELD THAT - From construction of Section 7,8 and 10, it would be evident that to determine whether the supply is inter-state supply or intra-state supply, it would depend on the place of supply and not delivery of the goods. In case, where the supply is made on the direction of a 3rd party, then place of the principal or the 3rd party shall be the place of supply as per Section 10(1)(b) of the IGST Act. In the present case, the delivery of goods was destined to M/s.Carbomix Polymers (India) Pvt.Limited, Kannur, Kerala, on instructions by MRF Limited to whom the goods were sold and invoice was issued in the name of MRF Limited. - the supply of goods in the present case was inter-state supply and not intra-state supply and the same would attract the tax under the IGST Act. In the present case, Ext.P1 invoice issued by the petitioner describes the buyer/principal as the customer and the job worker as the consignee and it is in compliance of job work procedure contemplated under Section 143 of the Act read with Ext.P12 circular - the supply being intra-state supply, the said supply would be governed under the IGST Act and Rules made thereunder and not under the CGST/KSGST Act and Rules. In the present case, the place of supply is in the state of Tamil Nadu but the delivery of the goods is within the State of Kerala i.e, from Ernakulam to kannur. The goods of the petitioner were not intercepted for non-generation of KER-1 and was not part of Ext.P4 notice. The only allegation was that the petitioner had charged IGST instead of CGST and SGST. Even otherwise, this was time when the transition from the Kerala VAT tax regim to CGST/SGST tax regim was taking place, and the E-way bill system was being introduced and therefore, for not generating the KER-1 declaration, when the goods were accompanied with the other required documents such as invoices etc., itself would not be sufficent that the supply was in violation of the provisions of the Act and Rules. As the respondents did not have the jurisdiction and they assumed the jurisdiction which was not vested in them for issuing Ext.P4 notice and Ext.P8 order, it is found that the whole proceedings are without jurisdiction and therefore, the argument of learned Government Pleader that the petitioner has approached this Court at the stage of issuing show cause notice and the writ petition should not be entertained, does not require much consideration. Petition allowed.
Issues Involved:
1. Determination of whether the supply of goods to the job worker is inter-state or intra-state supply. 2. Jurisdiction of the proceedings initiated under Section 129 of the CGST Act/KGST Act. Summary: Issue 1: Determination of Supply Type The petitioner, a dealer under the CGST and KGST Acts, challenged the proceedings initiated under Section 149 of the CGST Act, 2017. The petitioner argued that the supply of goods to the job worker at Kannur, Kerala, on the instructions of MRF Limited, Tamil Nadu, should be considered an inter-state supply. The court examined Section 10(1)(b) of the IGST Act, which states that when goods are delivered to a third party on the direction of the buyer, the place of supply is deemed to be the principal place of business of the buyer. The court concluded that the supply in question was indeed an inter-state supply, as the goods were directed by MRF Limited to the job worker in Kerala, making the place of supply Tamil Nadu. Issue 2: Jurisdiction of Proceedings The petitioner contended that the proceedings under Section 129 were without jurisdiction, as the supply was inter-state and governed by the IGST Act, not the CGST/KGST Acts. The court examined the procedural requirements under Section 143 of the CGST Act and the relevant circular (Ext.P12) issued by the Central Board of Excise and Customs. The court found that the petitioner had complied with the job work procedure by issuing the invoice with the buyer/principal as the customer and the job worker as the consignee. The court also noted that the goods were accompanied by the necessary documents, and the non-generation of KER-1 was not a valid ground for interception, especially during the transition to the E-way bill system. Conclusion: The court held that the supply was an inter-state supply governed by the IGST Act, and the respondents did not have jurisdiction to issue the notice and order under Section 129 of the CGST/KGST Acts. Consequently, the impugned proceedings were set aside, and the writ petition was allowed.
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