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TMI Blog2024 (1) TMI 809X X X X Extracts X X X X X X X X Extracts X X X X ..... he Respondent No. 5 that the proceedings initiated by the Respondent No. 5 is on the basis of an information received from Noida; in that event also, it will be at loss to say that the DGGI is raising a question about credibility and competence of the State GST Authorities, in carrying out the investigation concerning wrong/inadmissible availment of Input Tax Credit, inasmuch as, the officers of the DGGI does not enjoy any special power or privilege in comparison with the officers of the State GST Authorities. The Preventive Wing of the CGST and DGGI Wing of the CGST, shall forward all their investigation carried out as against the petitioner and inter-related transaction to the State Authorities, who shall continue with the proceedings from the same stage - the Respondent No. 4 5 to make over the entire investigations carried till date to Respondent No. 3, who shall carry out further proceedings as against the petitioner in accordance with law. Application disposed off. - HON BLE MR. JUSTICE RONGON MUKHOPADHYAY AND HON BLE MR. JUSTICE DEEPAK ROSHAN For the Petitioner : M/s. Nitin Kr. Pasari, Ms. Sidhi Jalan Shubham Choudhary, Advocates For the Respondent No. 1 to 3 : Mr. Sachin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in terms thereof GST INS-01 has been issued and after the inspection is concluded, the GST Officers fixed the date for furnishing books of accounts. As per the Petitioner an amount of Rs. 34.00 lakhs from the Cash ledger of the Petitioner and Rs. 06.00 lakhs from the proprietorship firm of his wife were made to deposit. While the proceedings had been initiated by the State Goods Services Tax Department, the Petitioner was served with a notice dated 10.04.2023 by the Preventive Branch of Central Goods Services Tax, Ranchi with a direction to reverse the Input Tax Credit along with interest and penalty on account of alleged purchases from the non-existent entity. While two departments were in seisin of the proceedings, a search was carried out by the DGGI, Intelligence Branch of CGST on 06.06.2023 and various seizures were made and a Panchnama was also drawn to that effect. Followed by the earlier notices of the Preventive Branch dated 10.04.2023, various notices were issued from time to time viz., 07.06.2023; 21.06.2023 including Summons by the Preventive Wing dated 26.06.2023. Simultaneously after the search was carried out by the DGGI Unit, simultaneous Summons were issued vide Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst those taxpayers which are assigned to the State Tax administration gets covered under section 6(1) of the CGST Act and the corresponding provisions of the SGST/UTGST Acts or whether a specific notification is required to be issued for cross empowerment on the same lines as notification No. 39/2017-CT dated 13.10.2017 authorizing the State Officers for the purpose or refunds under section 54 and 55 of the CGST Act. 3.1 The issue has been examined in the light of relevant legal provisions under the CGST Act, 2017. It is observed that Section 6 of the CGST Act provides for cross empowerment of State Tax officers and Central Tax officers and reads as: 6. (1) Without prejudice to the provisions of this Act, the officers appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are authorised to be the proper officers for the purposes- of this Act, subject to such conditions as the Government shall, on the recommendations of the Council, by Notification specify. 3.2. Thus in terms of sub-section (1) of section 6 of the CGST Act and subsection (1) of section 6 of the respective State GST Acts respective State Tax officers and the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation issued under subsection (1), (a) where any proper officer issues an order under this Act, he shall also issue an order under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as authorised by the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as the case may be, under intimation to the jurisdictional officer of State tax or Union territory tax; (b) where a proper officer under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter. (3) Any proceedings for rectification, appeal and revision, wherever applicable, of any order passed by an officer appointed under this Act shall not lie before an officer appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act. Much emphasis has been laid by Mr. Pasari on the issue of cross empowerment viz., section. 6(2)(b) read with the Notification the Clarification issued dated 05.10.2018 and 22.06.2020. He contends that undisputedly and undenia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. Since contentions have been raised with respect to the cross-empowerment of the Central and the State authorities, and it is asserted that there are no guidelines prescribed under the Act or the Rules, it would be profitable to throw some light on the issue. In this context, the letter issued by the Central Board of Indirect Taxes and Customs dated 5 October, 2018 which also finds mentions in the order of the Gujarat High Court in R/Special Civil Application No. 23279 of 2019 dated 27 December, 2019 titled Sureshbhai Gadhecha v. State of Gujarat, relied upon by the Petitioner, reads as under: LETTER D.O.F. NO. CBEC/20/43/01/2017-GST(FT.) CLARIFICATIONS ON AMBIGUITY REGARDING INITIATION OF ENFORCEMENT ACTION BY CENTRAL TAX OFFICERS IN CASE OF TAXPAYERS ASSIGNED TO STATE TAX AUTHORITY AND VICE VERSA LETTER D.O.F. NO. CBEC/20/43/01/2017-GST(PT), DATED 5-10- 2018 It has been brought to the notice of the Board that there is ambiguity regarding initiation of enforcement action by the Central tax officers in case of taxpayer assigned to the State tax authority and vice versa. 2. In this regard, GST Council in its 9 meeting held on 16-1- 2017 had discussed and made recommendations reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 2017 (hereinafter referred to as the CGST Act ). 2. Issue raised in the reference is whether intelligence based enforcement actions initiated by the Central Tax officers against those taxpayers which are assigned to the State Tax administration gets covered under section 6(1) of the CGST Act and the corresponding provisions of the SGST/UTGST Acts or whether a specific notification is required to be issued for cross empowerment on the same lines as notification No. 39/2017-CT dated 13.10.2017 authorizing the State Officers for the purpose or refunds under section 54 and 55 of the COST Act. 3.1 The issue has been examined in the light of relevant legal provisions under the CGST Act, 2017. It is observed that Section 6 of the CGST Act provides for cross empowerment of State Tax officers and Central Tax officers and reads as: 6.(1) Without prejudice to the provisions of this Act, the officers appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are authorised to be the proper officers for the purposes-of this Act, Subject to such conditions as the Government shall, on the recommendations of the Council, by Notification specify. 3.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t clear as to why different wings of the very same department have been issuing notices and summons to the appellants without taking any of the earlier proceedings to the logical end. 6. Therefore, on that ground, we are of the view that the spot memos, which have been furnished along with the communications dated 22 March, 2021 cannot be enforced. However, we make it clear that the issue whether CERA audit can be conducted against a private entity as contended by the appellants is not gone into as this Court is of the view that it is too premature for the Court to give a ruling on the said issue. This is more so because the authorities have not taken forward the proceedings, which they have initiated earlier from May, 2018. 7. Therefore, it is appropriate for the concerned authority to take the proceedings to the logical end after affording an opportunity of personal hearing to the appellants. 8. From the records placed before us, we find that there is no allegation against the appellants that they have not cooperated with the department in not responding to the summons issued earlier. Conveniently, the communications dated 22 March, 2021 issued by the Superintendent, Range - III, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority but by the Centre at Apex Level i.e. DGGI, New Delhi and DGGI, JRU, Jamshedpur is well within the jurisdiction authority under provisions of Section 6 of the Act read with letter F.No. CBEC/20/43/01/2017-GST(pt). dated 05.10.2018 (Annexure-19 of the writ petition) and letter F.No. CBEC- 20/10/07/2019-GST dated 22.06.2020 (Annexure-20 of the writ petition) to proceed and conclude the instant investigation. Investigation so far conducted reveals that many fake GSTIN entities have been created all over the India misusing Permanent Account Number (PAN) Aadhaar Number of another person(s) for the purpose of preparing bogus bills and auto populating fake Input Tax Credit in the GSTR-2A of the targeted beneficiaries firms. These so created GSTIN entities are not real business entity, supplying goods or services as their corresponding income tax returns are not commensurate with their GSTIN transactions. Further, investigation so far conducted also revealed that the petitioner have availed fake GST input tax credit from GSTIN entities of other states like West Bengal, Chhattisgarh, Delhi etc. and utilized it by passing it to other states GSTIN entity like Bihar, Odisha etc.. Hence t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, especially Section 6(2)(b), when read with the Clarification dated 05.10.2018, further read with Clarification dated 22.06.2020, when read together, it clearly denotes and implies that it is a chain of a particular event happening under the Act and every any enquiry/investigation carried out at the behest of any of the Department are interrelated. Even if, we accept the submission of the Respondent No. 5 that the proceedings initiated by the Respondent No. 5 is on the basis of an information received from Noida; in that event also, we are at loss to say that the DGGI is raising a question about credibility and competence of the State GST Authorities, in carrying out the investigation concerning wrong/inadmissible availment of Input Tax Credit, inasmuch as, the officers of the DGGI does not enjoy any special power or privilege in comparison with the officers of the State GST Authorities. 15. We are little hesitant to accept such argument, inasmuch as, the State Authorities has also initiated the same very proceeding for wrong/illegal availment of Input Tax Credit. Undeniably, the proceedings at the instance of State Authorities or the Preventive Wing or the DGGI is at initial ..... X X X X Extracts X X X X X X X X Extracts X X X X
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