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TMI Blog2024 (10) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... rred or imposed on him under this Act. An officer 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. 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. 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. This Court, therefore, is of the view that since the notification dated 01st July, 2017 has been issued in exercise of power conferred under Section 3 read with Section 5 under which the Board has been conferred with the power, in addition to appointment to be made by the Government, to impose the power upon the officer under the act and hence, the Additional Director General, Goods and Services Tax Intelligence or Additional Director General, Goods and Services Tax or Additional Director General, Audit has been notified to exercise the power of Commissioner and the Deputy/Assistant Director, Goods and Services Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sistant Director, Audit are having no power to initiate a proceeding under the Act, 2017. This Court is of the view that the Additional Director General, Goods and Services Tax Intelligence or Additional Director General, Goods and Services Tax or Additional Director General, Audit and the Deputy/Assistant Director, Goods and Services Tax Intelligence or Deputy/Assistant Director, Goods and Services Tax or Deputy/Assistant Director, Audit are having jurisdiction to issue show cause notices. This Court, therefore, is of the view that the writ petitioners are required to response to the said show cause notices for its consideration by the authority concerned, in accordance with law - Petition disposed off. - M/s AKA Logistics Private Limited , Gora Koley , Shourabh Agrawal , Coal Mines Associated Traders Private Limited, Mr. Sundeep De, one of the Directors of Coal Mines Associated Traders Private Limited (CMAT), M/s Ambey Mining Pvt. Ltd. Versus Union of India, The Additional Director, Directorate General of Goods Services Tax Intelligence Regional Unit, Jamshedpur , The Additional/Joint Commissioner (Adjudication), Central Goods Services Tax and Central Excise, Kolkata , The Seni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writ petitions have been held to be maintainable but if the same is read along with the observation made by the co-ordinate Bench at paragraph-8, wherein it has been observed on the basis of the consideration of the show cause notice and the factual aspect about the prima facie view of the Court that the writ petitioners have been able to establish a prima facie case of abuse of process of law and lack of jurisdiction, hence, it has been contended that since the Court on the basis of the prima facie view has held the writ petitions maintainable, as such, the same is to be decided conclusively by appreciating the statutory provisions and it has also been submitted by Mr. Pati, learned counsel for the respondent-Revenue that the issue of jurisdiction is still to be decided finally. For ready reference, paragraph- 8 and 10 of the said order is being referred as under: 08.--- After going through the showcause and the factual aspects, which are undisputed; it prima facie appears that the Petitioner has been able to establish a prima facie case of abuse of process of law and lack of jurisdiction--- 10. Having regard to the aforesaid discussions coupled with the background of the instant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty equivalent to the tax specified in the notice. 10. Heard learned counsel for the parties. 11. Since the show cause notice has been issued under section 74 of the Act, 2017, therefore for ready reference, Section 74(1) and other sub-sections of the Act, 2017 where the power has been conferred under the Proper Officer are being referred as under: 74. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willfulmisstatement or suppression of facts. (1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised by reason of fraud, or any wilful-misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resentation, if any, made by the person chargeable with tax, determine the amount of tax, interest and penalty due from such person and issue an order. (10) The proper officer shall issue the order under sub-section (9) within a periodof five yearsfrom the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within five years from the date of erroneous refund. (11) Where any person served with an order issued under sub-section (9) pays the tax along with interest payable thereon under section 50 and a penalty equivalent to fifty per cent. of such tax within thirty days of communication of the order, all proceedings in respect of the said notice shall be deemed to be concluded. 12. It is thus evident that the Proper Officer has been made competent to exercise the power for the purpose of initiating a proceeding under Section 74 of the Act, 2017. 13. At this juncture certain definitions are required to be referred herein which are relevant for the purpose of consideration of the instant issue. 14. The definition of Commissioner which has been defined under Section 2(24), C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er or Joint Secretary shall exercise the powers specified in the said sections with the approval of the Board. 17. It is evident from the provision as contained under Section 168 of the Act, 2017 that the Board has been conferred with the power to issue instructions or directions and from sub-section (2) thereof it would be evident that the Commissioner specified in clause (91) of section 2, sub-section (3) of section 5, clause (b) of sub-section (9) of section 25, sub-sections (3) and (4) of section 35, sub-section (1) of section 37, sub-section (2) of section 38, sub-section (6) of section 39, [sub-section (1) of section 44, sub-sections (4) and (5) of section 52]103, [sub-section (1) of section 143, except the second proviso thereof]104, sub-section (1) of section 151, clause (l) of sub-section (3) of section 158 and section 167 shall mean a Commissioner or Joint Secretary posted in the Board and such Commissioner or Joint Secretary shall exercise the powers specified in the said sections with the approval of the Board. 18. The aforesaid statutory provision clarifies that the Board has been conferred with the power to issue instructions or directions upon the Commissioner to exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under, throughout the territory of India, as are exercisable by the central tax officers of the corresponding rank as specified in column (3) of the said Table, namely:- TABLE Sl. No. Officers Officers whose powers are to be exercised (1) (2) (3) 1. Principal Director General, Goods and Services Tax Intelligence or Principal Director General, Goods and Services Tax Principal Chief Commissioner 2. Director General, Audit Chief Commissioner 3. Principal Additional Director General, Goods and Services Tax Intelligence or Principal Additional Director General, Goods and Services Tax or Principal Additional Director General, Audit Principal Commissioner 4. Additional Director General, Goods and Services Tax Intelligence or Additional Director General, Goods and Services Tax or Additional Director General, Audit Commissioner 5. Additional Director, Goods and Services Tax Intelligence or Additional Director, Goods and Services Tax or Additional Director, Audit Additional Commissioner 6. Joint Director, Goods and Services Tax Intelligence or Joint Director, Goods and Services Tax or Joint Director, Audit Joint Commissioner 7. Deputy/Assistant Director, Goods and Services Tax Intelligence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax, (c) Principal Commissioners of Central Tax or Principal Additional Directors General of Central Tax, (d) Commissioners of Central Tax or Additional Directors General of Central Tax, (e) Additional Commissioners of Central Tax or Additional Directors of Central Tax, (f) Joint Commissioners of Central Tax or Joint Directors of Central Tax, (g) Deputy Commissioners of Central Tax or Deputy Directors of Central Tax, (h) Assistant Commissioners of Central 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. 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. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e powers and discharge the duties conferred or imposed under this Act on any other officer of central tax who is subordinate to him. 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. 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. 26. This Court, after going through the provisions of Sections 3, 4 and 5 of the Act, 2017, is of the view that as per Section 3, it is the Government, by notification, is to appoint the officers for the purpose of the Act while Section 4 confers power upon the Board in addition to the appointment which is to be made in pursuance of the provision of Section 3 to appoint such persons as it may think fit to be the officers under the Act. 27. This Court, after having discussed the aforesaid statutory provision and coming to the notification dated 01st July, 2017 reading it together with the notification dated 29th July, 2019, is of the view that both are under Sections 3 and 5 since Section 3 conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Commissioner or the officer of the central tax who is assigned that function by the Commissioner in the Board. 31. Since the notification dated 01st July, 2017 has been issued in exercise of power conferred also under Section 5 of the Act, 2017 wherein the power upon the Board may impose/confer powers upon the Officers in addition to the Government in view of the provision of Section 3 and as such, the notification dated 01st July, 2017 clarifies that the Additional Director General, Goods and Services Tax Intelligence or Additional Director General, Goods and Services Tax or Additional Director General, Audit has been conferred with the power to exercise the power of Commissioner by the authority as conferred to the Board under Section 5 of the Act, 2017, hence, according to the considered view of this Court, Additional Director General, Goods and Services Tax Intelligence or Additional Director General, Goods and Services Tax or Additional Director General, Audit will be the Proper Officer within the meaning of Section 2(91) of the Act, 2017. 32. Further, it would be evident from the Circular No.3/3/2017-GST dated 05.07.2017 issued by the Ministry of Finance, Department of Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd integrated tax wrongly availed or utilized for issuance of show cause notices and passing of orders under sections 73 and 74 of CGST Act made applicable to integrated tax vide section 20 of the IGST Act (1) (2) (3) (4) (5) 1. Superintendent of Central Tax Not exceeding Rupees 10 lakhs Not exceeding Rupees 20 lakhs Not exceeding Rupees 20 lakhs 2. Deputy or Assistant Commissioner of Central Tax Above Rupees 10 lakhs and not exceeding Rupees 1 crore Above Rupees 20 lakhs and not exceeding Rupees 2 crores Above Rupees 20 lakhs and not exceeding Rupees 2 crores 3. Additional or Joint Commissioner of Central Tax Above Rupees 1 crore without any limit Above Rupees 2 crores without any limit Above Rupees 2 crores without any limit 34. The said issue has been taken note by different High Courts. In the case of Yasho Industries Limited Versus Union of India reported in 2021 SCC Online Guj 3131, wherein at para 13, the Gujrat High Court has held that proper officer in relation to any function to be performed under the CGST Act means the Commissioner or the officer of the Central Tax, who is assigned that function by the Commissioner in the Board and respondent No. 3 is an officer of Direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exercise of the powers conferred by clause (91) of section 2 of the CGST Act read with section 20 of the IGST Act. Therefore, respondent No. 3 is a proper officer in relation to the function to be performed under the CGST Act as contemplated under section 2(91), and as such, was entitled to issue summons under section 70 of the CGST Act in connection with the inquiry initiated against the petitioner. 35. Further the Allahabad High Court in the case of R.C. Infra Digital Solutions Vs. UOI reported in 2024 SCC Online All 36, wherein the authority of Government who issued Notification No. 14/2017-CT dated 01-07-2017 was under challenge contending that U/s 5(2) of the CGST Act, on the ground that only the Board could have issued the said notification not Government. The Division Bench has observed which is quoted as under: 14. No doubt, this Court is clear in its mind that in a taxation statute, any officer performing a function under the said statute must necessarily meet three concomitants, namely, (i) existence of a class/post; (ii) appointment of officers to that said post/class; and (iii) assignment of power to the said post/class. Under the CGST Act, 2017, it is seen and as has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of DGGI became central tax officers of specified class/post. However, as pointed out by the learned counsel for the petitioner, these DGGI officers were merely appointed by the Government in view of Section 3 of the Act and they could not have been assigned/entrusted/invested with specified powers under the CGST Act to enable them to perform those functions under Section 5 of the Act, as it is essentially the Board, which has been empowered under the said section of the GST Act to confer such power on the officer of central tax. 19. However, the question of investing powers on the central tax officers by the Board or the Government does not end there as this Court finds that the Circular No. 3-3-2017-GST, dated 5-7-2017 (Annexure 11) issued by the Commissioner in Board relates to assignment of various functions under the CGST Act, 2017 to different class of officers, who had been construed to be DGSI officers in terms of Notification No. 14/2017. 20. A conjoint reading of Notification No. 14/2017, dated 1-7-2017 and Circular No. 3-3-2017-GST, dated 5-7-2017 sufficiently contemplates the assigning of powers to DGSI officers by the Board. Let's take an example, as per the circula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stoms (Preventive), Mumbai, pursuant to the issuuance of show-cause notices under Section 28 of the Act has been questioned. Since the question of law arising in all the appeals was similar, as such Hon ble Apex Court had disposed of the said appeals by the common judgment. In the first set of appeals, Customs, Excise and Gold (Control) Appellate Tribunal (for short Cegat ) has held that the Commissioner of Customs (Preventive), Mumbai, not being a proper officer as defined in Section 2(34) of the Customs Act, 1962, did not have the jurisdiction to issue show-cause notice in terms of Section 28 of the Act. However, in the second set of appeals (Nos. 4603-604 of 2005), the Customs, Excise and Service Tax Appellate Tribunal (for short Cestat ) has, to the contrary, held that the Commissioner of Customs (Preventive), Mumbai had the jurisdiction to issue notice under Section 28 of the Act. However, to appreciate the controversy, facts in Civil Appeal being CAs Nos. 4294-95 of 2002 has been taken into consideration by the Hon ble Apex Court wherein the Respondent No. 1 was a partner in Respondent No. 2 firm viz. M/s Handloom Carpet, which was engaged in the business of carpet manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imports have taken place at Bombay Customs House. Further, the facts of another set of Civil Appeals being CAs Nos. 4603-604 of 2005 were similar to those in CAs Nos. 4294-95 of 2002, but, in the former case, the Cestat while upholding the issue of show-cause notice by the Collector of Customs (Preventive) under Section 28 of the Act, set aside the order of adjudication passed by the said officer with a direction that the issues be determined afresh by the jurisdictional Collector of Customs who had earlier assessed the bill of entry in question at Bombay Port. Hence, the cross-appeals were preferred by the Revenue and the importers. 39. In the aforesaid backdrop of the facts the Hon ble Apex Court while taking into consideration a conjoint reading of Sections 2(34) and 28 of the Act of the Act 1962 wherein proper officer and Notice for payment of duties, interest, etc has been dealt respectively, has observed that only such a Customs Officer who has been assigned the specific functions of assessment and reassessment of duty in the jurisdictional area where the import concerned has been affected, by either the Board or the Commissioner of Customs, in terms of Section 2(34) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r officer in terms of Section 28 of the Act is accepted, it would lead to a situation of utter chaos and confusion, inasmuch as all officers of Customs, in a particular area be it under the Collectorate of Customs (Imports) or the Preventive Collectorate, would be proper officers . Therefore, the Hon'ble Apex Court has observed that it is only the officers of Customs, who are assigned the functions of assessment, which of course, would include reassessment, working under the jurisdictional Collectorate within whose jurisdiction the bills of entry or baggage declarations had been filed and the consignments had been cleared for home consumption, will have the jurisdiction to issue notice under Section 28 of the Act. 45. The Hon'ble Apex Court has decided that the view taken in opposition that the source of power to act as a proper officer is Sections 4 and 5 of the Act and not sub-section (34) of Section 2 of the Act, as such, said sections merely authorise the Board to appoint officers of Customs and confer on them the powers and duties to be exercised/discharged by them, but for the purpose of Section 28 of the Act, an officer of Customs has to be designated as proper offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. Sayed Ali and Anr. (supra) is not available, therefore, this Court is of the view that by virtue of the power exercised by the Board under Section 5 of the Act, 2017, a notification has been issued conferring power upon the Additional Director General, Goods and Services Tax Intelligence or Additional Director General, Goods and Services Tax or Additional Director General, Audit to act as a Commissioner and the Deputy/Assistant Director, Goods and Services Tax Intelligence or Deputy/Assistant Director, Goods and Services Tax or Deputy/Assistant Director, Audit to act as Deputy Commissioner/Assistant Commissioner and as such, it is incorrect on the part of the writ petitioners to take the ground that the Additional Director General, Goods and Services Tax Intelligence or Additional Director General, Goods and Services Tax or Additional Director General, Audit and the Deputy/Assistant Director, Goods and Services Tax Intelligence or Deputy/Assistant Director, Goods and Services Tax or Deputy/Assistant Director, Audit are having no power to initiate a proceeding under the Act, 2017. 50. This Court, therefore, is of the view based upon the aforesaid discussion that the ground which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot hesitate to interfere even at the stage of issuance of show-cause notice. The interference at the show-cause notice stage should be rare and not in a routine manner. Mere assertion by the writ petitioner that notice was without jurisdiction and/or abuse of process of law would not suffice. It should be prima facie established to be so. Where factual adjudication would be necessary, interference is ruled out. 53. Further the Hon ble Apex Court in the case of State of U.P. v. Arezzo Developers (P) Ltd., (2016) 12 SCC 530 has reiterated the same view which is being quoted as under: 4. Normally, this Court does not interfere with the show-cause notice, but when any show-cause notice is issued without jurisdiction, the Court has to see whether it is patently illegal, without jurisdiction, arbitrary or mala fide in nature. In the present case, when the landed properties were exchanged amongst the bhumidhars without any consideration, can it be treated to be an instrument of transfer so as to attract stamp duty. 54. This Court, therefore, is of the view that the writ petitioners are required to response to the said show cause notices for its consideration by the authority concerned, in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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