Deputy Commissioner lacks authorization to issue GST notices under Rule 99 without Chief Commissioner approval

The AP HC set aside GST notices dated 28.02.2023 issued by Deputy Commissioner under Rule 99 r/w Section 61 of APGST Act for lack of proper authorization. The court held that while the Vigilance and Enforcement Department could share information with Commercial Tax Department without prior requisition under G.O.Ms.No.269, the Deputy Commissioner required authorization from Chief Commissioner to issue notices under Rule 99. Since no such authorization was referenced or filed, the notices were invalid. The court allowed writ petitions but permitted authorities to issue fresh notices through Chief Commissioner or authorized officers.

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Issues Involved:
1. Authority of the 2nd respondent to inspect the premises and issue alert notes.
2. Validity of the impugned notices for want of authorization under Section 67 of the APGST Act.

Judgment Summary:

Issue 1: Authority of the 2nd Respondent
The petitioner challenged the notices issued by the 3rd respondent based on alert notes from the 2nd respondent, arguing that the 2nd respondent lacked statutory authority under GST law to inspect business premises and issue alert notes. The court examined G.O.Ms.No.504 and G.O.Ms.No.269, which delineate the role of the Vigilance & Enforcement (V&E) Department, including the prevention of revenue leakage. The court found that the V&E Department has the authority to inspect premises and share relevant information with the tax department to safeguard government revenue. Thus, the contention that the 2nd respondent lacked authority was rejected.

Issue 2: Validity of Impugned Notices
The petitioner argued that the impugned notices were unsustainable for lack of proper authorization under Section 67 of the APGST Act. The court clarified that the notices were issued under Rule 99(1) r/w Section 61 of the APGST Act, which pertains to the scrutiny of returns and does not require authorization under Section 67. However, the court noted that the term "Proper Officer" in Section 61 implies that the officer issuing the notices must be authorized by the Chief Commissioner. Since the 3rd respondent did not demonstrate such authorization, the notices were deemed invalid for lack of proper authorization.

Conclusion:
The writ petitions were allowed, and the impugned notices dated 28.02.2023 were set aside. The court permitted the respondent authorities to issue fresh notices under Rule 99 of the APGST Rules r/w Section 61 of the APGST Act, provided they are issued by the Chief Commissioner or an authorized officer. The petitioner must then submit objections within the stipulated time, and the Proper Officer should pass an appropriate order after a personal hearing. No costs were awarded, and any pending interlocutory applications were closed.

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