2024 (12) TMI 128 - HC - GST

Challenge to SCN on the ground that the SCN has been issued by the State Tax Authority without jurisdiction and without there being any notification as contemplated by the provisions of Section 6 (1) of the Central Goods and Services Tax Act, 2017 - HELD THAT - The petitioner has not made out any case for interference with Ext. P4 show cause notice on the ground that it is issued without jurisdiction on account of the fact that there is no notification issued under the provisions of Section 6 (1) of the CGST Act empowering the officers of the State Goods and Services Tax Act to issue such a show cause notice. A reading of Section 6 (1) of the CGST Act makes it clear that the officers appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are authorised to be proper officers for the purposes of the Act, subject to such conditions as the Government shall, on the recommendations of the Council, by notification, specify. Unaided by authority, a reading of the provision suggests to me that by virtue of the operation of the provision itself, the officers appointed under the State Goods and Services Tax Act are proper officers for the purposes of the Central Goods and Services Tax Act, and it is only when any restriction or condition has to be placed on the exercise of power by any officer appointed under the State Goods and Services Tax Act that a notification as contemplated by the provisions of Section 6 (1) of the CGST Act has to be issued. In the decision of Tvl. Vardhan Infrastructure 2024 (3) TMI 1216 - MADRAS HIGH COURT it was ruled that, the proceedings initiated by the respondents so far against the respective petitioners by the Authorities other than the Authority to whom they have been assigned to are to be held as without jurisdiction. Therefore, the impugned proceedings warrants interference Since the issue raised in this writ petition will affect several proceedings, and taking note of the view expressed by the Madras High Court in Tvl. Vardhan Infrastructure 2024 (3) TMI 1216 - MADRAS HIGH COURT , which is contrary to the prima facie view taken here, it is opined that this issue requires an authoritative pronouncement by a Division Bench of this Court. The writ petition is, therefore, adjourned to be heard by a Division Bench. The Registry shall place the matter before the Division Bench, if necessary, after obtaining orders of Hon ble the Chief Justice.

Summary

Issues:
Challenge to show cause notice issued without jurisdiction under CGST Act.

Analysis:
The petitioner, a registered person under CGST/SGST Acts, challenged a show cause notice (Ext. P4) issued by the State Tax Authority, alleging lack of jurisdiction and absence of necessary notification under Section 6(1) of the CGST Act. The petitioner relied on a Madras High Court judgment (Ext. P8) emphasizing the need for proper empowerment under the Act for initiating proceedings. The Senior Government Pleader argued that Section 6(1) of the CGST Act authorizes State Authorities as proper officers, with notification required only for placing restrictions on their powers. A letter from the GST Policy Wing supported this stance, clarifying that no separate notification is needed for cross-empowerment of officers under CGST and SGST Acts.

The Court examined Section 6(1) of the CGST Act, which allows officers under State Goods and Services Tax Act to be proper officers for CGST Act purposes, subject to conditions specified by the Government through notification. The Court interpreted the provision to suggest that State officers are automatically empowered for CGST Act unless restrictions are imposed via notification. Referring to a communication from the GST Policy Wing, the Court concurred with the view that no separate notification is necessary for cross-empowerment, as officers from both State and Central tax administrations are proper officers for all purposes of the Acts.

Citing the Madras High Court's decision in a similar case, the Court noted that proceedings without proper notification for cross-empowerment could be deemed jurisdictionally flawed. The judgment highlighted the importance of adherence to assigned authorities to prevent cross interference, emphasizing that actions by officers not assigned to a taxpayer's jurisdiction are without jurisdiction. Given the potential impact on various proceedings and the conflicting views, the Court decided to adjourn the case for a Division Bench hearing to provide an authoritative pronouncement on the issue.