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TMI Blog2024 (3) TMI 1216X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017) can be subjected to investigation and further proceeding by the counterparts under the respective GST Enactments - Validity of notices issued under Sections 62 67 of the TNGST Act, 2017 and orders passed u/s 73 and 74 of the TNGST Act, 2017 - HELD THAT:- The returns to be filed by the Assessee's under the respective GST Enactments are same. They capture all the details under the respective GST Enactments applicable to an assessee. The returns are to be filed in the common portal as defined in Section 2(26) of the respective GST Enactments. As per Section 2(26) of the respective GST Enactments Common portal means the common goods and services tax electronic portal referred to in Section 146. That apart, the payment of tax whether under the CGST Act, 2017 or under TNGST Act, 2017 are at the same rate. The only difference that may arise at the time of payment of tax due to utilization of the Input Tax Credit (ITC) availed on the inward supplies and their cross utilization for discharging the tax liability in terms of Chapter-X of the respective GST Enactments r/w Chapter-IX of the respective GST Rules, 2017. As per Section 49A of the CGST Act, 2017, Input Tax Credit availed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er such local areas as the Commissioner may, by an order, specify, in respect of all or any of the functions assigned to them, subject to such conditions as may be specified. Thus, the Commissioner has power to delegate powers under the Act to other Officer specified in Sub-clause (c) to (f) to Section 3 of the TNGST Act, 2017. There is no cross-empowerment u/s 4(2) of the TNGST Act, 2017. Thus, neither the Board u/s 4(1) and (2) of CGST Act, 2017 nor the Government and/or the Commissioner u/s 4(1) and (2) of SGST Act, 2017 can appoint such officers in addition to the officer notified under Section 3 of the respective Act. Thus, the Board can appoint and delegate only to Central Tax Officers appointed under the CGST Act, 2017 for CGST Act, 2017 and the Government and/or the Commissioner can appoint and delegate only to State Tax Officers appointed under the TNGST Act, 2017 for TNGST Act, 2017. These provisions are pari materia with Section 4 of the Customs Act, 1962 and Section 12(E) of the Central Excise Act, 1944. Section 6(1) of the respective GST Enactments empowers Government to issue notification on the recommendation of GST Council for cross-empowerment. However, no notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive petitioners have been assigned, proceedings should be initiated against each of the petitioners by the Authority to whom they have been assigned for the purported loss of Revenue under the respective GST Enactments. Therefore, while quashing the impugned proceedings, there shall be a direction to the Central Authority/State Authority as the case may be to whom the respective petitioners have been assigned for administrative purpose to initiate appropriate proceedings afresh against them strictly in accordance with the provisions of the respective GST Enactments and GST Enactments Rules and Circular issued thereunder. The time between the initiation of the proceedings impugned in these writ petitions and time during the pendency of the present writ petitions till the date of receipt of this order shall stand excluded for the purpose of computation of limitation. These writ petitions are disposed with the above observations. - And W.P.Nos. 4490, 18575, 22552, 26586, 31013 of 2022 and W.P.No. 12014 of 2023 And W.M.P.Nos. 35553, 30673, 30680, 30682 of 2019 W.M.P.Nos. 3513, 3516, 3534, 3538, 5831, 10258, 10259, 13797, 13799 of 2020 W.M.P.Nos. 3055, 3200, 3201, 3199, 11649, 11652, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er referred to as CGST Act, 2017) and/or Tamil Nadu Goods and Services Tax Act, 2017 (hereinafter referred to as TNGST Act, 2017) can be subjected to investigation and further proceeding by the counterparts under the respective GST Enactments. 3. Following Writ Petitions have been filed by the petitioners who have been assigned to the State Authorities. Proceedings have been initiated by the Central Authorities. Details of the respective Writ Petitions are as under:- Sl.No. W.P.No. Petitioner's name Challenge of the notice/ summons or assessment order Date of the notice/summons or assessment order 1. 34792 of 2019 Tvl.Vardha Infraastructure Summons issued by the 5th respondent u/s. 70 of the CGST 26.11.2019 2. 29878 of 2019 Tvl.KCP Engineers Pvt. Ltd. Mandamus to direct respondents 6 7 to avoid cross-empowerment 24.06.2019 (Scrutiny notice issued by the State Authority) + 10.09.2019 (Summon issued by the DGGI) 3. 11319 of 2020 TVl Power Tech Assessment Order under Section 73 of CGST Act, 2017 20.05.2020 4. 2723 of 2021 M/s. KPN Travels India Ltd., Summons issued under Section 70 of CGST Act, 2017 27.01.2021 5. 18575 of 2022 M/s. Sunrise Enterprises Show Cause Notice issued unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aders Assessment Order under Section 74 of TNGST Act, 2017 29.01.2021 15. 12797 of 2021 M/S. Vetrivel Traders Assessment Order under Section 74 of TNGST Act, 2017 29.01.2021 16. 16324 of 2021 M/s. Sree Amman Traders Summon of Show Cause Notice under Section 74(1) of the TNGST Act,2017 Form DRC-07 19.02.2021 22.02.2021 17. 11004 of 2021 M/s.Cheran Steel Pvt. Ltd Assessment Order for the year 2017-2018 29.01.2021 18. 11006 of 2021 M/s.Cheran Steel Pvt. Ltd Assessment Order for the year 2018-2019 29.01.2021 19. 11008 of 2021 M/s.Cheran Steel Pvt. Ltd Assessment Order for the year 2019-2020 29.01.2021 20. 31013 of 2022 M/S.Khazana Jewewllery Private Limited Inspection proceedings/Summons issued under Section 70(1) of the TNGST Act,2017 and CGST Act,2017 08.11.2022 6. In the above Writ Petitions, the petitioners are assessed by the Central Authorities under the CGST Act, 2017 and have thus challenged the notices issued under Sections 62 67 of the TNGST Act, 2017 and orders passed under Section 73 and 74 of the TNGST Act, 2017 by the respondents therein namely the State Authorities. Therefore, in the above mentioned writ petitions, the petitioners have challenged the impugned proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmendations to the Union and the States on (a) the taxes, cesses and surcharges levied by the Union, the States and the local bodies which may be subsumed in the goods and services tax; (b) the goods and services that may be subjected to, or exempted from, the goods and services tax; (c) model Goods and Services Tax Laws, principles of levy, apportionment of Goods and Services Tax levied on supplies in the course of inter-State trade or commerce under article 269A and the principles that govern the place of supply; (d) the threshold limit of turnover below which goods and services may be exempted from goods and services tax; (e) the rates including floor rates with bands of goods and services tax ; (f) any special rate or rates for a specified period, to raise additional resources during any natural calamity or disaster; (g) special provision with respect to the States of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and (h) any other matter relating to the goods and services tax, as the Council may decide. 5) The Goods and Services Tax Council shall recommend the date on which the goods and se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment to ensure a single interface with authorities for the future GST Laws. 15. Para.No.28 of the Minutes of the 9th GST Council Meeting held on 16.01.2017 discussed the issue regarding cross-empowerment. Para.No.28 of the Minutes of the 9th GST Council Meeting held on 16.01.2017 is extracted as under:- 28. After further discussion, the Council agreed to the decisions as recorded below in respect of cross-empowerment to ensure single interface under GST. i. There shall be a division of taxpayers between the Central and the State tax administrations for all administrative purposes; ii. Of the total number of taxpayers below Rs. 1.5 crore turnover, all administrative control over 90% of the taxpayers shall vest with the State tax administration and 10% with the Central tax administration; iii. In respect of the total number of taxpayers above Rs. 1.5 crore turnover, all administrative control shall be divided equally in the ratio of 50% each for the Central and the State tax administration; iv. The division of taxpayers in each State shall be done by computer at the State level based on stratified random sampling and could also take into account the geographical location and type of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -empowerment was given after GST Bills were passed and enacted as respective GST Enactments with effect from 01.07.2018 vide Circular No.1/2017-GST (Council) dated 20.09.2017. Circular No.1/2017-GST (Council) dated 20.09.2017 was issued for a division of taxpayer base between the Centre and States to ensure a Single Interface under GST Enactments between Tax Officers and Central Tax Officers under CGST/IGST and SGST Acts of 2017 respectively. 18. Text of Circular No.1/2017-GST (Council) dated 20.09.2017 bearing reference F.No.166/Cross Empowerment/GSTC/2017 containing the guide lines for Division of Tax payers between the Centre and State Authorities to ensure single interface for the purpose of tax administration under the respective GST Enactment reads as below:- Subject: Guidelines for division of taxpayer base between the Centre and States to ensure Single Interface under GST-Regarding Based on the decisions taken in the 9th Meeting of the GST Council held on 16 January, 2017 and 21st Meeting of the GST Council held on 9 September, 2017, the following criteria should be followed for the division of taxpayer base between the Centre and the States to ensure single interface: i. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioners are already in place for effective coordination between the Centre and the States. The said Committees may now take necessary steps for division of taxpayers in each State keeping in view the principles stated above. Supplementary decisions, if any, may be taken by the said Committees to implement the decision of the GST Council, keeping in view the broad principles stated hereinabove. 4. Suitable notifications regarding cross-empowerment of State and Central Tax officers under CGST/IGST and SGST Acts respectively are being issued separately. 19. After the above decision was taken for allocating 90% of those assessees whose turnover were below Rs. 1.5 crores with the State Authorities and balance 10% with the Central Authorities and 50% each of those tax payers whose turn overs was above Rs. 1.5 crores equally between the State Authorities and the Central Authorities under the respective GST Enactments, the GST Council in its 22nd Meeting held on 06.10.2017 addressed the concern arising out of the gap between the issuance of Notifications under various GST Enactments of 2017 and IGST Act, 2017. Agenda No.9 of the 22nd Meeting held on 06.10.2017 captures the deliberations. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e applicant that the same refund claim has not been claimed from the other administration having jurisdiction over the applicant. The Council agreed to this suggestion. 36. For agenda item 9 , the Council approved the following:- i. To issue notifications by the Central Government and the State Governments, cross empowering officers of the Central and State Governments to sanction refund and that an order of refund passed by an officer of the Central or State Government shall cover both the Central tax and the State tax. Similar notification to be issued under the IGST Act by the Central Government; ii. Until the division of taxpayers is effected between the Central and State administration, an officer of the Central and the State Government was authorised to process any refund claim filed by an applicant under his jurisdiction subject to a declaration being given by the applicant that the same refund claim has not been claimed from the other administration having jurisdiction over the applicant. 20. The provisions of the respective GST Enactments contemplates power of the Central Government and the State Government to issue notifications on the recommendations of the GST Councils ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of Revenue No. 39/2017 - Central Tax dated the 13th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i) vide number G.S.R. 1253 (E) dated the 13th October, 2017, namely:- In the said notification, for the words and figures except rule 96 , the words, figures, brackets and letter except sub rules (1) to (8) and sub rule (10) of rule 96 shall be substituted. Note: * substituted with except sub rules (1) to (8) and sub rule (10) of rule 96 vide amendment in Notification No.10/2018-Central Tax dated 23.01.2018. 24. A similar Notification has also been issued by the State of Tamil Nadu in G.O.(MS).No.126, Commercial Taxes And Registration (B1) Department, dated 13.10.2017. 25. In line with the decision of the 22nd GST Council Meeting held on 06.10.2017, a separate Model Notification was also circulated for the purpose of Section 6 of the respective GST Enactments for other purpose which would have entitled cross-empowerment for other purpose. However, Model Notifications which was circulated during September, 2017 immediately after the GST Enactments came into force with effect from 01.07.2017 have not been notified either under the CG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 130 of the GST Act against any person and all consequential or incidental proceedings including appeals arising from such proceedings. No such proceedings have been initiated in respect of the said goods by the proper officer of GST Act. 4. All proceedings against a supplier or recipient of goods or services or both, who has remained unregistered although liable to be registered. No such proceeding has been initiated in respect of such person by the proper officer of GST Act. 5. Any proceedings arising out of Chapter XX of the GST Act. Except the issues related to or arising out of transitional provisions of the GST Act. Explanation 1: Assignment of registered persons refers to the distribution of registered persons between the central and state tax administrations, for exercising all administrative controls regarding enforcement of the provisions of the SGST Act, in such proportions and following such methods, as the Council may decide from time to time. Explanation 2: With respect to Sl. No. 2,3 4 of the said Schedule, information regarding intimation of proceedings in the format specified below should be furnished by the Commissioner to the jurisdictional Commissioner of the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the specified period in accordance with the recommendations of the Council. (ii) all consequential proceedings including appeals arising from such proceedings. 2. Inspection, search, seizure or any other proceedings under section 67 of the Central Goods and Services Tax Act, 2017 as made applicable to the Integrated Tax vide section 20 of the IGST Act or intelligence-based enforcement action against any person including all consequential or incidental proceedings including appeals arising from such proceedings. Such proceedings have not been initiated by the proper officer of central tax within one year from the date on which said proceedings are initiated by the said officers. Explanation. -For the purposes of this clause, the period of one year shall be counted from the date of initiation of the said proceedings as specified in the format for intimation of such proceedings. 3. Detention, seizure and release of goods and conveyances in transit under section 129 of the Central Goods and Services Tax Act, 2017 or of confiscation of goods or conveyances and levy of penalty under section 130 of the Central Goods and Services Tax Act, 2017 made applicable to the integrated tax vid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Meeting held on 06.10.2017. 28. Thus, there is no cross-empowerment. 29. The learned counsel for the petitioners relied on the following decisions:- i. Pahwa Chemicals Pvt. Ltd., Vs. Commissioner of Central Excise, Delhi , 2005 (181) E.L.T. 339 (S.C.); ii. Duncan Agro Industries Ltd., Vs. Union of India , 1989 (39) E.L.T. 211 (Del.); iii. M/s.Muthu Metals represented by K.Bhommal, Proprietor, Madras 3 Vs. State of Tamil Nadu represented by the Commissioner and Secretary to Govt., C.T. R.E. Dept., Madras 9 and others in W.P.Nos.4949 of 1986, etc., batch; iv. Raghunath International Ltd., Vs. Union of India , 2012 (280) E.L.T. 321 (All.); v. National Building Construction Co. Ltd., Vs. Union of India , 2019 (20) G.S.T.L. 515 (Del.); vi. Yasho Industries Ltd., Vs. Union of India , Manu/GJ/1470/2021; vii. Kuppan Gounder P.G.Natarajan Vs. Directorate General of GST Intelligence, New Delhi , 2022 (58) G.S.T.L. 292 (Mad.); viii. Ambika Food Industries Pvt. Ltd., Vs. Union of India Rep. by its Secretary, Ministry of Finance Department of Revenue , 2021 SCC Online TS 3390; ix. Ajay Verma Vs. Union of India and Ors. , Manu/UP/1822/2022; x. M/s.VGN Projects Estates Private Limited Vs. Assista ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T Enactments. 36. That apart, the payment of tax whether under the CGST Act, 2017 or under TNGST Act, 2017 are at the same rate. The only difference that may arise at the time of payment of tax due to utilization of the Input Tax Credit (ITC) availed on the inward supplies and their cross utilization for discharging the tax liability in terms of Chapter-X of the respective GST Enactments r/w Chapter-IX of the respective GST Rules, 2017. 37. The utilization of Input Tax Credit under the respective GST Enactments are in terms of Sub-Section (4) to Section 49 of the respective Central and TNGST Enactments. They read as under:- 49. Payment of tax, interest, penalty and other amounts- (1) (2) (3) (4) The amount available in the electronic credit ledger may be used for making any payment towards output tax under this Act or under the Integrated Goods and Services Tax Act in such manner and subject to such conditions and within such time as may be prescribed. 38. Thus, the Input Tax Credit availed under the provisions of the Central GST Act, 2017 can be used for payment of Output Tax under the said Act or under the IGST Act, in such manner as may be and subject to such conditions as may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as first been utilised fully. 43. A similar provision is absent under the TNGST Act, 2017 and TNGST Rules 2017. 44. As per Rule 86(2) of the CGST Rules, 2017 , the electronic credit ledger shall be debited to the extent of discharge of any liability in accordance with the provisions of section 49 [or section 49A or section 49B]. 45. As per Rule 86(2) of the TNGST Rules, 2017, the electronic credit ledger shall be debited to the extent of discharge of any liability in accordance with the provisions of Section 49. 46. As per Section 88A of the TNGST Rules, 2017, Input tax credit on account of integrated tax shall first be utilised towards payment of integrated tax, and the amount remaining, if any, may be utilised towards the payment of central tax and State tax or Union territory tax, as the case may be, in any order. Provided that the input tax credit on account of central tax, State tax or Union territory tax shall be utilised towards payment of integrated tax, central tax, State tax or Union territory tax, as the case may be, only after the input tax credit available on account of integrated tax has first been utilised fully. 47. As per Rule 49A of the TNGST Rules, 2017, a bill o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Tax or Assistant Directors of Central Tax, and ; (i) any other class of officers as it may deem fit: Provided that the officers appointed under the Central Excise Act, 1944 shall be deemed to be the officers appointed under the provisions of this Act. 3. Officers under this Act.- The Government shall, by notification, appoint the following classes of officers for the purposes of this Act, namely:- (a) Commissioner of State tax; (b) Additional Commissioners of State tax; (c) Joint Commissioners of State tax; (d) Deputy Commissioners of State tax; (e) Assistant Commissioners of State tax, and (f) any other class of officers as it may deem fit: Provided that, the officers appointed under the Tamil Nadu Value Added Tax Act, 2006 shall be deemed to be the officers appointed under the provisions of this Act. 49. Apart from the officers mentioned above under Section 4(1) of the respective Central GST Act, 2017 and TNGST Act, 2017, the Board (the Central Board of Indirect Taxes and Customs [CBIC]) as defined in Section 2(16) of the CGST Act, 2017 and the Government as defined in Section 2(53) of TNGST Act, 2017, can appoint such officers as they may deem fit to be the officers under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms Act, 1962 and Section 12(E) of the Central Excise Act, 1944. 56. Section 4 of the respective GST Enactments namely CGST Act, 2017 and TNGST Act, 2017 and the corresponding Sections from the Model Law are reproduced below:- Section 4 of the Central Goods and Services Tax Act, 2017 Section 5 of the Model Central Goods and Services Tax, 2017 4. Appointment of officers:- 1) 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 this Act. 2) Without prejudice to the provisions of sub-section (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 this Act. 5. Appointment of officers under the Central Goods and Services Tax Act 1) The Board may appoint such persons as it may think fit to be officers under the Central Goods and Services Tax Act 2) Without prejudice to the provisions of sub-section (1), the Board may authorize a Principal Chief Commissioner/Chief Commissioner of Central Goods and Services Tax or a Princ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of central tax may exercise the powers and discharge the duties conferred or imposed under this Act on any other officer of central tax who is subordinate to him. 3) The Commissioner may, subject to such conditions and limitations as may be specified in this behalf by him, delegate his powers to any other officer who is subordinate to him. 4) Notwithstanding anything contained in this section, an Appellate Authority shall not exercise the powers and discharge the duties conferred or imposed on any other officer of central tax. 5. Powers of Officers:- 1) Subject to such conditions and limitations as the Commissioner may impose, an officer of State Tax may exercise the powers and discharge the duties conferred or imposed on him under this Act. 2) An officer of State tax may exercise the powers and discharge the duties conferred or imposed under this Act on any other officer of State tax who is subordinate to him. 3) The Commissioner may, subject to such conditions and limitations as may be specified in this behalf by him, delegate his powers to any other officer who is subordinate to him 4) Notwithstanding anything contained in this section, an Appellate Authority shall not exercis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws which were in circulation in February, 2016. Section 6 of the respective GST Enactments and the corresponding provisions from the Model GST Law are reproduced below:- Section 6 of the Central Goods and Services Tax Act, 2017 6. Authorisation of officers of State tax or Union territory tax as proper officer in certain circumstances. Section 6 of the Tamil Nadu Goods and Services Tax Act, 2017 6. Authorisation of officers of Central tax as proper officer in certain circumstances. (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. (2) Subject to the conditions specified in the notification issued under sub-section (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e may deem fit, under the corresponding section of the {SGST/CGST} Act as being the proper officer under sub-section Error! Reference source not found. of the SGST/CGST Act as a part of his order or action under this Act, under intimation to the jurisdictional SGST/CGST officer. (3) Any proceeding for rectification, appeal and revision, wherever applicable, of any order issued under sub-section (2) shall lie before the officer appointed under section 4 of this Act. (4) Where a proper officer under the SGST/CGST Act has initiated a proceeding on a subject matter under any one or more sections (.........) of this Act, no action under the relevant section shall be initiated under this Act on the same subject matter. Section 7 of the Model State Goods and Services Tax, 2017 7. Powers of SGST/CGST officers under the Act The officers appointed under the SGST Act shall, to such extent and subject to such conditions, as may be prescribed in the rules made in this behalf, be the proper officers for the purposes of sections (......) of this Act. 61. Thus, Section 6(1) of the respective GST Enactments empowers Government to issue notification on the recommendation of GST Council for cross-emp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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