Officer designated by Board is "proper officer" under s.2(91) and can issue summons under s.70; s.74(5) payments valid

HC held that the officer designated by the Board under the CGST Act qualifies as a "proper officer" under s.2(91) and was empowered to issue summons under s.70 in connection with inquiries arising from proceedings under s.67 and related provisions. The Board's assignment of functions obviated the need for a separate delegation under s.167. Interim guidelines from a prior interim order addressing voluntary payments during search/seizure were inapplicable where no s.67 search occurred and the taxpayers had made payments under s.74(5) and notified the proper officer. Petition dismissed.

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Issues Involved:

1. Challenge to Summons under Section 70 of CGST Act.
2. Request for refund/recredit of INR 3 Crore.
3. Challenge to Circular dated 5.7.2017 regarding assignment of functions to officers under CGST Act.
4. Allegation of coercive recovery of INR 3 Crore.
5. Jurisdiction of respondent No.3 to issue summons.
6. Parallel proceedings by different authorities.
7. Voluntariness of payment made under Section 74(5) of CGST Act.

Issue-wise Detailed Analysis:

1. Challenge to Summons under Section 70 of CGST Act:
The petitioners challenged the summons dated 12.4.2021 issued under Section 70 of the CGST Act, which required them to provide evidence and documents. The court examined the definition of "Proper Officer" under Section 2(91) of the CGST Act and concluded that the respondent No.3, being a Senior Intelligence Officer of DGGI and appointed as a Central Tax Officer, had the authority to issue the summons. The court found that the Circular dated 5.7.2017, which assigned functions to officers, was valid and did not require a separate notification under Section 167 of the CGST Act.

2. Request for Refund/Recredit of INR 3 Crore:
The petitioners sought a direction for the refund or recredit of INR 3 Crore paid on 9.2.2021. The court noted that the payment was made under Section 74(5) of the CGST Act and was reflected in Form GST DRC-03. The court emphasized that the payment was marked as "voluntary" and "under protest" related to an inquiry into an incorrect claim of double benefits. The court stated that the payment would be dealt with or adjusted by the concerned respondent in accordance with the law, particularly under Section 74 of the CGST Act.

3. Challenge to Circular dated 5.7.2017:
The petitioners challenged the Circular dated 5.7.2017, arguing that the assignment of functions to officers should be through a notification as per Section 167 of the CGST Act. The court rejected this argument, clarifying that Section 2(91) pertains to the assignment of functions by the Commissioner in the Board, not the delegation of powers under Section 167. The court upheld the validity of the Circular, stating that the Board had the authority to assign functions to officers through the Circular.

4. Allegation of Coercive Recovery of INR 3 Crore:
The petitioners alleged that the INR 3 Crore payment was made under duress. The court examined the Form GST DRC-03, which marked the payment as "voluntary" and "under protest." The court found no evidence of coercion, noting that no search or seizure proceedings were conducted under Section 67 of the CGST Act, and the petitioners did not file any complaint regarding coercion. The court concluded that the payment was voluntary and would be adjusted as per the provisions of Section 74 of the CGST Act.

5. Jurisdiction of Respondent No.3 to Issue Summons:
The petitioners questioned the jurisdiction of respondent No.3 to issue the summons. The court reaffirmed that respondent No.3, being a Senior Intelligence Officer of DGGI and appointed as a Central Tax Officer, had the authority to issue the summons under Section 70 of the CGST Act. The court emphasized that the Circular dated 5.7.2017 validly assigned the function of issuing summons to the proper officers.

6. Parallel Proceedings by Different Authorities:
The petitioners argued that they were subjected to parallel proceedings by the Directorate of Revenue Intelligence (DRI) and respondent No.3. The court clarified that the DRI's inquiry was related to the incorrect availment of double benefits under the EOU Scheme, while respondent No.3's inquiry pertained to the refund of ITC under the CGST Act. The court found no issue with parallel proceedings, as they were related to different aspects of the petitioners' activities.

7. Voluntariness of Payment Made under Section 74(5) of CGST Act:
The court examined the voluntariness of the INR 3 Crore payment made under Section 74(5) of the CGST Act. The court noted that the payment was marked as "voluntary" in Form GST DRC-03 and found no evidence of coercion. The court emphasized that the payment would be dealt with according to the law, particularly under Section 74 of the CGST Act.

Conclusion:
The court dismissed the petition, finding no merit in the arguments presented by the petitioners. The court upheld the validity of the summons issued under Section 70 of the CGST Act, the Circular dated 5.7.2017, and the voluntariness of the INR 3 Crore payment made by the petitioners. The court emphasized that the payment would be adjusted according to the provisions of Section 74 of the CGST Act.

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