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TMI Blog2024 (2) TMI 808X X X X Extracts X X X X X X X X Extracts X X X X ..... ovides that the Board may, in addition to the officers as may be notified by the Government under section 3, appoint such persons as it may think fit to be the officers under the CGST Act. Without prejudice to the provisions of sub-section (1) of Section 4, the Board may, by order, authorise any officer referred to in clauses (a) to (h) of Section 3 to appoint officers of central tax below the rank of Assistant Commissioner of Central Tax for the administration of the CGST Act. Section 5 of the CGST Act provides that subject to such conditions and limitations as the Board may impose, an officer of central tax may exercise the powers and discharge the duties conferred or imposed on him under the CGST Act. An officer of central tax may exercise the powers and discharge the duties conferred or imposed under the CGST Act on any other officer of central tax who is subordinate to him - Section 4, which begins with a non-obstante clause, provides that an Appellate Authority shall not exercise the powers and discharge the duties conferred or imposed on any other officer of central tax. The Central Government has issued the notification dated 19.06.2017 in the exercise of powers conferred b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstitution Bench in UUNION OF INDIA AND ANOTHER VERSUS TULSIRAM PATEL AND OTHERS [ 1985 (7) TMI 371 - SUPREME COURT ] where it was held that even the mention of a wrong provision or the omission to mention the provision which contains the source of power will not invalidate an order where the source of such power exists. Thus, no case is made out to strike down the impugned circulars or the impugned show cause notices inter alia on the ground that such show cause notices were issued by the officers who were not the proper officers as defined under Section 2(91) of the CGST Act - The respondents are permitted to give effect to the order dated 29.12.2023 disposing of the impugned show cause notices, subject no doubt to the petitioner s right of challenge to the order dated 29.12.2023 in accordance with law and on its own merits. Petition dismissed. - DEVENDRA KUMAR UPADHYAYA, CJ. AND M.S. SONAK, J. For the Petitioner : Mr Sandeep Sachdeva with Mr Damodar Vaidya (through VC), Mr Devang Bhashim, Mr Akhil Parrikar and Mr Mayank Goyal (through VC), Advocates. For the Respondent : Ms Asha Desai, Senior Standing Counsel for Central Government with Advocate Ms N. Volvoikar. JUDGMENT: 1. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms 2021 SCC OnLine SC 200 to submit that the power of assigning functions of a proper officer upon a customs officer cannot flow from the definition clause under Section 2(34) of the Customs Act, 1962. He submitted that the definition under Section 2(34) of the Customs Act and Section 2(91) of the CGST Act are almost pari materia. Therefore, the law laid down in Cannon India Pvt. Ltd. (supra) would squarely apply and, based upon the definition clause in Section 2(91) of the CGST Act, the Board would have no power to assign the functions of the proper officer to any central tax officers. 8. Mr Sachdeva submitted that the impugned circulars conflict with the respondent s stand in its Circular No. 07/2022- Customs dated 31.03.2022. He submitted that this circular acknowledges the error in relying upon the definition clause as constituting the source of power and rectified the lacuna pointed out by the Hon ble Supreme Court in Cannon India Pvt. Ltd. (supra) by inserting sub-sections (1A) and (1B) to Section 5 of the Customs Act and simultaneously changing the definition of the proper officer under Section 2(34) of the Customs Act, 1962. Mr Sachdeva submitted that since no such amen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atters, the quotation of the precise legal provision or even the quotation of an incorrect legal provision is not important as long as the power for assignment of the functions of a proper officer is vested in the authority issuing the impugned circulars. She, therefore, submitted that the challenge to the impugned circulars deserves to be rejected. 14. Ms Desai submitted that Cannon India Pvt. Ltd. (supra) was distinguishable because it dealt with the issue of whether the DRI officers could be conferred the power to issue show cause notices under the Customs Act, 1962. She pointed out that in the present case, even the petitioner has accepted the position that the Audit Commissionerate Officials could be appointed as Central Tax Officers. She pointed out that the impugned circulars had merely assigned the functions of a proper officer on Central Tax Officers and not upon some officials of DRI, as was the case in Cannon India Pvt. Ltd. (supra). Accordingly, she submitted that the law laid down in Cannon India Pvt. Ltd. (supra) was not applicable to the facts of the present case. 15. Ms Desai relied upon a decision of the Gujarat High Court in the case of Yasho Industries Limited v/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudication proceeded, and the Assistant Commissioner of Central GST, by order dated 29.12.2023, disposed of the show cause notices by confirming certain demands and dropping others. The operative portion of the order dated 29.12.2023 reads as follows:- ORDER (i) I confirm the demand of Rs. 16,61,634/- (Rupees Sixteen Lakhs Sixty-One Thousand Six Hundred Thirty- Four only) towards taxes short paid during the period 2017-18, 2018-19, 2019-20 and 2020-21; (ii) I drop the demand of Rs. 4,18,900/- (Rupees Four Lakhs Eighteen Thousand Nine Hundred only) demanded as short payment on mini bar services; (iii) I drop the demand of Rs. 1,26,00,000/- (Rupees One Crore Twenty-Six Lakhs only) on receiving consideration (waiver of loan) for outward supply; (iv) I drop the demand of interest of Rs. 6,74,947/- (Rupees Six Lakhs Seventy-Four Thousand Nine Hundred and Forty-Seven only) on wrong availment and utilization of input tax credit on alleged violation of Rule 36(4) of the CGST Rules, 2017; (v) I confirm the demand of interest in respect of demand confirmed at Sl. No.(i) above only and hold that no interest is payable in view of the demand being dropped at Sl. No. (ii) and (iii) above; (vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Government under Section 3, appoint such persons as it may think fit to be the officers under the CGST Act. Section 4(2) provides that without prejudice to the provisions of subsection 1, the Board may, by order, authorise any officer referred to in Clauses (a) to (h) of Section 3 to appoint officers of central tax below the rank of Assistant Commissioner of Central Tax for the administration of the CGST Act. The term Board is defined under Section 2(16) to mean the Board constituted under the Central Boards of Revenue Act, 1963. 29. The audit provisions are contained in Chapter XIII of the CGST Act, comprising Sections 65 and 66. Section 65 is concerned with the audit by the tax authorities, and Section 66 is concerned with the special audit. Sub-sections (1) to (5) of Section 65 provide for audit provisions, and sub-section (6) provides that on the conclusion of the audit, the proper officer shall, within 30 days, inform the registered person, whose records are audited, about findings, his rights and obligations and reasons for such findings. Sub-section (7) of Section 65 then provides that when an audit conducted under sub-section (1) results in the detection of tax not p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notices. However, the petitioner contends that the impugned circulars are legally infirm mainly on the ground that the Board had no powers to issue the same and, based thereon, to confer any power of assignment of functions of proper officer upon the central tax officers for issuing the audit report under Section 65(6) or the show cause notices under Section 73 or 74 r/w. Section 65(7) of the CGST Act. The petitioner contends that if the impugned circulars are set aside, then it would be apparent that the communication of the audit report under Section 65(6) or the issue of the impugned show cause notices under Sections 73 or 74 r/w. Section 65(7) of the CGST Act would be by the officers who were not the proper officers as defined under Section 2(91) of the CGST Act. The petitioner contends that, as such, the entire exercise of communicating the audit report or issuing the impugned show cause notices would be an exercise without jurisdiction and consequently liable to be set aside. 35. The petitioner, vide Exh. A (pages 103 to 129) has placed on record the Board s notification dated 19.06.2017 issued in the exercise of powers under Section 3 r/w. Section 5 of the CGST A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said Table :- TABLE Sl.No. Designation of the officer Functions under Section of the Central Goods and Services Tax Act, 2017 or the rules made thereunder (1) (2) (3) 1. Principal Commissioner/Commissioner of Central Tax i. Sub-section (7) of Section 67 ii. Proviso to Section 78 2. Additional or Joint Commissioner of Central Tax i. Sub-sections (1), (2), (5) and (9) of Section 67 ii. Sub-section (1) and (2) of Section 71 iii. Proviso to section 81 iv. Proviso to sub-section (6) of Section 129 v. Sub-rules (1), (2), (3) and (4) of Rule 139 vi. Sub-rule (2) of Rule 140 3. Deputy or Assistant Commissioner of Central Tax i. Sub-sections (5), (6), (7) and (10) of Section 54 ii. Sub-sections (1). (2) and (3) of Section 60 iii. Section 63 iv. Sub-section (1) of Section 64 v. Sub-section (6) of Section 65 vi. Sub-sections (1), (2), (3), (5), (6), (7), (9), (10) of Section 74 vii. Sub-sections (2), (3), (6) and (8) of Section 76 viii. Sub-section (1) of Section 79 ix. Section 123 x. Section 127 xi. Sub-section (3) of Section 129 xii. Sub-sections (6) and (7) of Section 130 xiii. Sub-section (1) of Section 142 xiv. Sub-rule (2) of Rule 82 xv. Sub-rule (4) of Rule 86 xvi. Explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Audit Commissionerate and Directorate General of Goods and Services Tax Intelligence (DGGSTI) shall exercise the powers only to issue show-cause notices. A show cause notice issued by them shall be adjudicated by the competent central tax officer of the Executive Commissionerate in whose jurisdiction the noticee is registered. This circular also deals with the show cause notices issued by officers of DGGSTI, with which we are not concerned in the present petition. Thus, the main circular is the circular dated 05.07.2017. 40. The main circular dated 05.07.2017 provides that the Board issues the same in the exercise of powers conferred by Section 2(91) of the CGST Act r/w. Section 20 of the IGST Act. The circular also refers to Section 20 of the IGST Act and Sections 3 and 5 of the CGST Act. Mr Sachdeva, however, contended that none of the sections quoted confer power upon the Board to assign the functions of proper officer to the officers listed in the circular dated 05.07.2017. He submitted that Section 2(91), which is the principal provision based upon which the Board claims to have assigned functions of the proper officer , is a definition clause. Such a clause cannot consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (34) of the Customs Act is competent to issue notice under Section 28 of the Customs Act. The Court held that any other reading of Section 28 would render the provisions of Section 2(34) of the Customs Act otiose in as much as the test contemplated under Section 2(34) of the Act is that of specific conferment of such functions upon the customs officers or officers of customs . 45. Although Mr Sachdeva is right in submitting that the definitions of proper officer under Section 2(34) of the Customs Act, 1962 and Section 2(91) of the CGST Act are similar, the issue involved in Canon India Pvt. Ltd. (supra) or Sayed Ali (supra) was different from the issue involved in the present case. The ratio of Canon India Pvt. Ltd. (supra) and Sayed Ali (supra) was that the Board, relying upon the definition clause under Section 2(34), could not have assigned functions of the proper officer upon the officers of DRI, who were admittedly not the customs officers or officers of customs , which was one of the prerequisites under Section 2(34) of the Customs Act, 1962. 46. Section 2(91) of the CGST Act inter alia provides that in relation to any functions to be performed under the CGST Act, means the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shi, J. rejected a contention similar to what is now raised on behalf of the petitioner in the present petition. The Division Bench also distinguished Canon India Pvt. Ltd. (supra) and Sayed Ali (supra). The relevant observations in this regard are found in paragraph 14, which reads as follows:- [14] The submission of Mr. Rastogi that the said assignment of function has to be by way of Notification and not by way of Circular in view of Section 167 of the CGST Act is thoroughly misplaced. Section 167 of the CGST Act pertains to the delegation of powers by the Commissioner exercisable by any authority or officer under the Act to be exercisable also by another authority or officer as may be specified in the Notification. So far as Section 2(91) is concerned, it pertains to the proper officer in relation to any function to be performed under the CGST Act to be the Commissioner or the officer of Central Tax, who is assigned that function by the Commissioner in the Board. Here the Board means the Central Board of Indirect Taxes and Customs as defined in Section 2(16) of the CGST Act. Vide the Circular dated 5.7.2017 the said Board namely the Central Board of Excise and Customs in exercis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned to the officers of DRI, who were admittedly not the officers of customs or who admittedly had not been entrusted with the functions of officers of customs. 51. Given the law in Union of India v/s. Dhanwanti Devi And Others (1996) 6 SCC 44, this would be a proper manner of construing the precedent in Canon India Pvt. Ltd. (supra) or Sayed Ali (supra). In such matters, it would not be proper to read a sentence or a word torn out of the context in which such sentence or word may have been employed. Every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there is not intended to be the exposition of the whole law but governed and qualified by the particular facts of the case in which such expressions are to be found. It would, therefore, not be profitable to extract a sentence here and there from the judgment and to build upon it because the essence of the decision is its ratio and not every observation found therein. 52. Though the impugned Circular dated 05.07.2017 does, inter alia, refer to Section 2(91) of the CGST Act, it is not as if this definition clause is the source of po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assigning the functions of proper officer upon the Commissioner or the officers of the Central Tax. The Central Government has issued the notification dated 19.06.2017 in the exercise of powers conferred by Section 3 r/w. Section 5 of the CGST Act constitutes the Commissioner of Central Tax (Audit) and Central Tax officers subordinate to him as central tax officers. About this, not even any dispute was raised on behalf of the petitioner. The impugned circular dated 05.07.2017 is issued by the Board which is the proper authority in terms of Section 2(91) of the CGST Act. This is the reason why reference was made to Section 2(91) of the CGST Act. 56. Section 5 of the CGST Act provides that subject to such conditions and limitations as the Board may impose, an officer of central tax may exercise the powers and discharge the duties conferred or imposed on him under the said Act. Further, Section 5 of the CGST Act inter alia provides that an officer of central tax may exercise the powers and discharge the duties conferred or imposed under the said Act on any other officer of central tax who is subordinate to him. By the impugned circular dated 05.07.2017, the Board has inter alia as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government takes action will not per se vitiate that action for it can be justified under some other power if the Government could lawfully do that act. 60. Ben Hiraben Manilal (supra) was also cited with approval by the Constitution Bench in Union of India And Anr. v/s. Tulsiram Patel (1985) 3 SCC 398, where it was held that even the mention of a wrong provision or the omission to mention the provision which contains the source of power will not invalidate an order where the source of such power exists. 61. In N. Mani v/s. Sangeetha Theatre And Others (2004) 12 SCC 278 the Hon ble Supreme Court has held that it is well settled that if any authority has a power under the law, then merely because while exercising that power, the source of power is not specifically referred to or a reference is made to a wrong provision of law, that by itself does not vitiate the exercise of power so long as the power does exist and can be traced to a source available in law. N. Mani (supra) was followed with the approval in Ram Sunder Ram v/s. Union of India And Others (2007) 13 SCC 255. 62. For all the above reasons, we are satisfied that no case is made out to strike down the impugned circulars or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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