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TMI Blog2024 (8) TMI 1458X X X X Extracts X X X X X X X X Extracts X X X X ..... initiated proceedings in the present case, the State Tax Officer, would be empowered to summon persons to give evidence and produce documents, while the other tax statutes provide for transfer of cases from one officer to another. The scheme of the Central Goods and Services Tax Act, 2017 or the Haryana Goods and Services Tax Act, 2017, no where provides for transferring the proceedings from one proper officer to another. Merely because the DGGI has information relating to similar fraudulent availment of ITC by other firms who may be related to the firm against which the proceedings have been initiated under Section 74 of the HGST Act by the State authority itself would not be a sufficient ground to presume that the State GST authority would not be able to conduct the proceedings or examine the culpability of the firm against whom proceedings under Section 74 of the HGST Act have been initiated. Merely because there may be other firm also against whom proceedings are initiated, there is no concept of joint proceedings. The import of the circular dated 05.10.2018 is to be understood to mean that when an inquiry is conducted by a proper officer of the State and investigation is requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a manufacturer of Lead alloys, Lead pure in shape of ingots, lead sub-oxide and red lead in power form and is operating in the State of Haryana. 2. An enquiry was initiated by the Haryana State Tax Department with regard to wrongful availment of Input Tax Credit (hereinafter to be referred as ITC ) against the petitioner company and also by multiple DGGI Zonal Units. Aggrieved by multiple enquires, the petitioner preferred CWP No. 21658 of 2019, which was disposed of on 23.01.2020 and the respondents were directed to take a decision in this regard for conducting proceedings by one agency alone for the period of 01.07.2017 to 31.12.2018. In pursuance thereto, the State Government GST Department decided to take up the enquiry proceedings against the petitioner vide order dated 08.07.2020 and the record including ledger account, sales and purchase invoices and proof of payment etc. were requisitioned upto 31.01.2021. 3. The Director General of Goods and Services Tax Intelligence (hereinafter to be referred as DGGI ), conducted search and seizure proceedings and a panchnama was also drawn on 19.02.2021. It was mentioned therein that records/ documents have already been seized by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period from July, 2019 to January, 2021. The petitioner also preferred CWP No. 13995 of 2020 assailing the vires of Section 69 and 132 of the CGST Act, 2017. 6. The Principal Director (Intelligence), DGGI, Headquarters has vide letter dated 15.03.2022 accorded permission to the office of the DGGI, Meerut Zonal Unit to conduct the centralized investigation against the petitioner company for the period after 2019. The petitioner has stated that another search and seizure proceedings were again conducted at the premises of the petitioner company by the DGGI, Meerut Zonal Unit. The State Tax Officer vide letter dated 15.03.2022 had transferred the proceedings pertaining to the petitioner company to the DGGI, Meerut Zonal Unit. 7. Feeling aggrieved of the transfer of all proceedings to DGGI, Meerut Zonal Unit, by the State Tax Officer vide his letter dated 15.03.2022, the petitioner has preferred this writ petition, inter-alia, stating that the action was in violation of provisions of Section 6 (2) (B) of the HGST Act and the proper officer in terms of Section 6 (2) (B) of the HGST Act was the officer who had initiated the proceedings under Section 74 (2) of the Act where after he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e permission of the Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. 12. Per contra Mr. R. Venkataraman, learned Assistant Solicitor General has relied on the affidavit filed by the Intelligence Officer, as noticed above, and submitted that so far as the period after 2019 is concerned, the State Government has not taken any steps for conducting investigation. It is further submitted that it is only for the overlapping periods i.e. 01.07.2017 to 31.03.2018 and 01.10.2018 to 31.12.2018 that the Court had passed an order in the writ petition filed by the petitioner and, therefore, the said proceedings are now being conducted by the proper officer under the Haryana GST Act. Since the suspicious suppliers are not falling in the State of Haryana and the statement of Anant Rastogi would have relevance and the petitioner company has been found to be prima facie involved in fraudulent ITC to the tune of Rs. 23.77 crores involving taxable supplies to the tune of Rs. 132.05 crores, it would be in the interest of justice that the enquiry is conducted by the DGGI, Meerut Zonal Unit. After detailed del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 17. Section 70 of Haryana Goods and Services Act, 2017 provides as under:- 70. Power to summon persons to give evidence and produce documents. (1) The proper officer under this Act shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry in the same manner as provided in the case of a civil court under the provisions of the Code of Civil Procedure, 1098 (Central Act 5 of 1908). (2) Every such inquiry referred to in sub-section (1) shall be deemed to be a judicial proceedings within the meaning of section 193 and section 228 of the Indian Penal Code (Central Act 45 of 1860). From the perusal of the aforesaid provisions, it is apparent that Section 70 of the HGST Act provides for inquiry which the proper officer is required to conduct. 18. Section 72 of the Haryana Goods and Services Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... General has submitted that the purpose of transferring the matter to DGGI is only because the DGGI would have the authority and jurisdiction Pan India while the State GST authority would be unable to carry out investigation concerning wrongful / inadmissible availment of ITC by the firms outside the State. It was his submission that DGGI having larger jurisdiction to investigate would be, therefore, more competent authority to examine such issues. 22. We have considered his submission but find ourselves unable to accept the same in terms of scheme of the GST Act. As noticed above, the GST Act of 2017 empowers both the State authority as well as Central authority with equal powers. Once we have held that the proceedings are in the nature of judicial proceedings. The corollary, such judicial proceedings cannot be transferred by administrative actions. Merely because the DGGI has information relating to similar fraudulent availment of ITC by other firms who may be related to the firm against which the proceedings have been initiated under Section 74 of the HGST Act by the State authority itself would not be a sufficient ground to presume that the State GST authority would not be able ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at once the officer of the State Tax Authority has initiated action, it would be the proper officer who would conduct further proceedings under the Act. 25. The import of the aforesaid circular dated 05.10.2018 is to be understood to mean that when an inquiry is conducted by a proper officer of the State and investigation is required to be done by the Central Tax Officer, the Central Tax Officer would exercise the said power for the purpose of investigation. However, it would not mean that the proceedings being conducted by the State Tax Officer would also be transferred to them. They would only be in a position as investigating officer as is done in any criminal case. Their report relating to their investigation at the level of Pan India will have to be submitted to the State Tax Officer who has initiated the proceedings and as a State Tax Officer has the power to issue summons and warrants of arrest which would be applicable to Pan India. There is no reason to believe that the proceedings in any manner would be hampered or would suffer as against the company/ firm against which proceedings have been initiated under Section 74 of the Act. 26. It appears that there is another inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 27. Thus, it is apparent that the State and the Central Governments have same powers under the CGST/ HGST Acts and if one of the officers has already initiated proceedings, the same cannot be transferred to another and he alone be allowed to issue process under the Act and on the same subject matter no proceedings shall be initiated by another officer. However, in the present case, we find that the State authorities have issued notice to the petitioner company and initiated proceedings for the period from 01.07.2017 to 22.07.2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the DGGI or the action of the State Tax Officer in transferring the proceedings pertaining to the petitioner firm which were pending before it by his letter dated 15.03.2022. We, accordingly, quash the same and direct the State Tax Officer under the GST Act to proceed and conclude the proceedings in terms of the provisions of the Act. 31. In a federal structure, the Central Government authorities and the State authorities would be required to act in tandem and not to operate in exclusion with one another. The investigation which may be conducted would, therefore, have to be based on one another and once the State or the Central authority has initiated proceedings, the other authority, State or the Central would act in support of the same and provide all necessary inputs so that the proceedings may reach to a final conclusion and achieve its results. 32. In view of the aforesaid findings and conclusion drawn, action of the respondents in transferring the proceedings to DGGI, Meerut vide their orders are not sustainable in law. The proper officer, namely, Excise Taxation Officer, Shahbad had no jurisdiction to transfer the proceedings to the Central Government vide letter dated 08.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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