2024 (4) TMI 656 - HC - GST

Validity of assessment order - Violation of Stay Order against the operation of a notification extending the period of limitation - Jurisdiction of Central GST authorities since the petitioner is assessed to the State Tax Authorities - Cross Empowerment - HELD THAT - The issue regarding cross-empowerment and the jurisdiction of the counterparts to initiate proceedings when an assessee has been allocated either to Central Tax Authorities or to the State Tax Authorities was examined in detail by this Court in Tvl.Vardhan Infraastructure's case 2024 (3) TMI 1216 - MADRAS HIGH COURT . After examining the provisions, this Court has concluded that in the absence of notification issued for cross-empowerment, the authorities from the counterpart Department cannot initiate proceedings where an assessee is assigned to the counterpart. Therefore, the impugned Order-in-Original No.24/2023-GST, dated 26.12.2023 passed by the respondent is quashed. However, liberty is given the State authorities to proceed against the petitioner in terms of the observations contained in the order passed by this Court in Tvl.Vardhan Infraastructure's case cited supra . Petition allowed.

Summary

Issues:
The petitioner challenged Order-in-Original No.24/2023-GST passed by the respondent for assessment years 2017-2018, 2018-2019, and 2019-2020. The petitioner claimed that the order was passed despite a stay granted by the Principal Seat of the Court against the operation of a notification extending the period of limitation. Additionally, the petitioner argued that being assessed by State Tax Authorities, the order by Central Tax Authorities was contrary to established law.

Stay Order Issue:
The petitioner contended that the impugned order was passed despite a stay granted by the Court against the operation of the notification extending the period of limitation. This stay was issued in a previous case, and the petitioner argued that the respondent should not have proceeded with the assessment during the pendency of the stay order.

Jurisdiction Issue:
The petitioner argued that being assessed by State Tax Authorities, the order by Central Tax Authorities was against the law. Reference was made to a previous case where the Court had discussed the issue of cross-empowerment and jurisdiction of authorities when an assessee is allocated to either Central Tax Authorities or State Tax Authorities.

Cross-Empowerment and Jurisdiction:
The Court examined the issue of cross-empowerment and jurisdiction of authorities in cases where an assessee is allocated to different tax authorities. Referring to previous decisions and the provisions of the CGST Act, the Court concluded that in the absence of notification for cross-empowerment, authorities from the counterpart Department cannot initiate proceedings. The impugned order was quashed, allowing the State authorities to proceed against the petitioner as per previous observations.

Conclusion:
The Court allowed the Writ Petition, quashed the impugned order, and granted liberty to State authorities to proceed against the petitioner. No costs were awarded, and connected Miscellaneous Petitions were closed.