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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 ..... ces Tax Act, 2017 as also the provision of Integrated Goods and Services Act, 2017, read with clarifications issued from time to time, the authority once initiated the proceedings commencing from enquiry/ search and seizure, is empowered to complete the entire process of investigation and complete the modalities, in the case in hand State Goods and Services Tax and not by the Preventive Wing of Central Goods & Services Tax or by the Directorate General of Goods & Services Tax Intelligence. (b) Consequent upon holding and declaring that the initiation and conclusion by the prior authority is the rule of law, hence, the notices issued subsequently viz., (Annexure-3, Annexure-4, Annexure-5, Annexure- 7, Annexure-8, Annexure-10, Annexure-12 Series & Annexure-14) issued by the two different Wings of Central Goods & Services Tax be quashed and set aside and the State GST be allowed to carry the further proceedings. 2. During the pendency of the writ petition, the Petitioner filed an Interlocutory Application vide I.A. No. 9286/2023 inter-alia challenging the attachment of bank accounts of the Petitioner by issuing Form GST DRC-22 dated 30.04.2023, issued by the Respondent No. 5 here ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Under the circumstances, since the petitioner has received summons from 3 Departments of GST, the petitioner has approached this Court, seeking a declaration that the authority who has initiated the proceedings prior in point of time, shall be the only authority to carry out the proceedings. In order to buttress the argument, the petitioner has relied upon Notification No. 39/2017-Central Tax dated 13.10.2017 and the Clarification bearing D.O.F. No. CBEC/20/43/01/2017- GST(Pt.) dated 5.10.2018, in terms of which, it is sought to be impressed: 3. It is accordingly clarified that the officers of both Central tax and State tax are authorized to initiate intelligence-based enforcement action on the entire taxpayer's base irrespective of the administrative assignment of the taxpayer to any authority. The authority which initiates such action is empowered to complete the entire process of investigation, issuance of SCN, adjudication, recovery, filing of appeal etc. arising out of such action. 4. In other words, if an officer of the Central tax authority initiates intelligence-based enforcement action against a taxpayer administratively assigned to State tax authority, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be arising from the fact that, the said sub-section provides for notification by the Government if such cross empowerment is to be subjected to conditions. It means that notification would be required only if any conditions are to be imposed. For example, Notification No. 39/2017-CT dated 13.10.2017 restricts powers of the State Tax officers for the purposes of refund and they have been specified as the proper officers only under section 54 and 55 of the CGST Act and not under rule 96 of the CGST Rules, 2017 (IGST Refund on exports). If no notification is issued to impose any condition, it means that the officers of State and Centre have been appointed as proper officer for all the purpose of the CGST Act and SGST Acts. 4. Further, it may kindly be noted that a notification under section 6(1) of the CGST Act would be part of subordinate legislation which instead of empowering the officer under the Act, can only be used to impose conditions on the powers given to the officers by the section. In the absence or any such conditions, the power of Cross- empowerment under section 6(1) of the CGST Act is absolute and not conditional. 5. Mr. Nitin Pasari, learned counsel for the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended that attachment of Bank Accounts by issuing GST DRC 22 has been carried out, exercising powers under section 83 of the Central Goods & Services Tax Act, 2017, which is in conflict with the notification issued by the CBEC from time to time, concerning guidelines for attachment of Bank Accounts. In order to buttress this submissions, the petitioner has relied upon the judgments rendered in the case of Vipul Chandra Pursottam Das Mahant Vs. Assistant Commissioner of State Taxes passed by the Gujarat High Court in R/Special Civil Application No. 9488 of 2023 dated 22.06.2023, relevant portion of which reads as follows: 5. In view of the aforesaid facts and circumstances of the present case, when the respondent no. 4 has initiated the inquiry and inspected the documents and carried out the inspection at the place of the petitioner and inquiry is going on in connection with five different Firms at present including M/s. J.M. Enterprise, for which, the summon was issued by the Respondent No. 1, whereas M/s Galaxy Enterprise, summon was issued by Respondent No. 2. Hence, we are of the view that the present petition deserves consideration. 5.1. The respondents no. 1 & 2 are dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to take intelligence based enforcement action in respect of the entire value chain". 3. It is accordingly clarified that the officers of both Central tax and State tax are authorized to initiate intelligence based enforcement action on the entire taxpayer's base irrespective of the administrative assignment of the taxpayer to any authority. The authority which initiates such action is empowered to complete the entire process of investigation, issuance of SCN, adjudication, recovery, filing of appeal etc. arising out of such action. 4. In other words, if an officer of the Central tax authority initiates intelligence based enforcement action against a taxpayer administratively assigned to State tax authority, the officers of Central tax authority would not transfer the said case to its Sate tax counterpart and would themselves take the case to its logical conclusions. 5. Similar position would remain in case of intelligence based enforcement action initiated by officers of State tax authorities against a taxpayer administrative assigned to the Central tax authority. 6. It is also informed that GSTN is already making changes in the IT system in this regard. 16. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation is required for exercising the said powers in this case by the Central Tax Officers under the provisions of the State GST Act. It is noteworthy in this context that the registered person in GST are registered under both the CGST Act and the respective SGST/UTGST Act. 3.3 The confusion seems to be arising from the fact that, the said subsection provides for notification by the Government if such cross empowerment is to be subjected to conditions. It means that notification would be required only if any conditions are to be imposed. For example, Notification No. 39/2017-CT dated 13.10.2017 restricts powers of the State Tax officers for the purposes of refund and they have been specified as the proper officers only under section 54 and 55 of the CGST Act and not under rule 96 of the CGST Rules, 2017 (IGST Refund on exports). If no notification is issued to impose any condition, it means that the officers of State and Centre have been appointed as proper officer for all the purpose of the CGST Act and SGST Acts." 4. Further, it may kindly be noted that a notification under section 6(1) of the CGST Act would be part of subordinate legislation which instead of empowering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 3.42 crores, clearly goes on to suggest that the petitioner is not fly by the night assessee and has been discharging his statutory obligations under the Act. The petitioner has also contended that the attachment of Bank Accounts is bad in law, since the same suffers from the vices of excessive jurisdiction, inasmuch as, till date there is no determination of any liability whatsoever and the petitioner is not in a position to understand as to whom he has to furnish documents or give statement, inasmuch as, the petitioner cannot be made to succumb to the jurisdiction of all the three departments and as such, the attachment also is bad in law. 10. Counter affidavit has been filed by the respective Respondents, inter-alia denying the allegation and contending therein: 1) Respondent No. 5 (DGGI) 4. M/s Manish Trading Company have been initiated by the Director General of Goods & Service Tax Intelligence, New Delhi vide F.No. 56/INT/DGGI/HQ/2022 Pt.1/5584 dated 06.06.2023 consequent to the busting of "Fake GST Invoicing Gang" of Noida, now referred as Noida cases in the month of June 2023. M/s Manish Trading Company, Prop: Vivek Narsaria (herein referred to as the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6. The instant proceedings have not been initiated by the State GST authority but by the centre at Apex level i.e., DGGI, New Delhi and as such DGGI, JRU, Jamshedpur is well within its jurisdiction under Section 6 of the Act read with letter F.No. CBEC/20/43/01/2017-GST(pt) dated 05.10.2018 and letter F.No. CBEC-20/10/07/2019-GST dated 22.06.2020 to proceed and conclude it. 2) Respondent No. 4 (Assistant Commissioner, CGST & CX, Ranchi) 5. Instant proceedings have been initiated by the other formation of CGST i.e, CGST & CX, Jamshedpur Commissionerate, CGST & CX. Raipur Commissionerate and further follow-up action was initiated by the Respondent no. 4. 7. The investigation conducted by the Respondent no. 4 is based upon E-way Bill data revelation that the Petitioner had received fake GST Tax Invoices from multiple fake GSTIN entities pertaining to different states and supplied in turn equal amount of fake GST invoices to different GSTIN entities. 3) Respondent no. 1, 2 & 3 (State of Jharkhand) 10. The writ petitioner is an assessee under the answering respondents and hence the answering respondents are duly competent to enquire into the same. 17. The investig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised by the petitioner herein and manifestly crystalizes that since all the proceedings are interrelated, the State Authorities should continue with the proceedings. The issue since has also been raised with attachment of bank account, which we failed to understand as to what had become so emergent that prior to any determination or finding of any irregular/inadmissible/wrong availment of Input Tax Credit, the bank account had to be attached, which appears to be an 'arm twisting method' to make the petitioner succumb to the particular authority, which cannot be the dictum of the Act and we deprecate the same. 16. We are therefore of the opinion that 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. 17. Consequently, we therefore direct 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. 18. We further direct the Respondent No. 3 to take immed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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