2024 (1) TMI 287 - HC - GST

Board's power to assign DGGSTI as proper officers under CGST Act ss.2(91), 70, 74(5) upheld; writ dismissed

HC upheld the validity of N/N. 14/2017-Central Tax and Circular No. 3/3/2017-GST, holding that the Board was competent to assign powers to DGGSTI officers ... Power of GST authorities - Power to issue summons or to conduct search and seizure - Delegation of power - Challenge to N/N. 14/2017- Central Tax dated 01.07.2017 primarily on the ground of it being ultra-vires to the power of the Central Government - jurisdiction of the Additional Director General of Goods and Services Tax Intelligence in authorizing the other Intelligence Officer to carry out inspection/search proceedings at the premises of the petitioner - HELD THAT:- A conjoint reading of Notification No. 14/2017 dated 01.07.2017 and Circular No. 3/3/2017-GST dated 05.07.2017 sufficiently contemplates the assigning of powers to DGSI officers by the Board - The jurisprudence on the implications of invocation of a wrong provision suggests that as long as an authority has power, which is traceable to a source, the mere fact that source of power is not indicated or wrongly indicated in an instrument does not render the instrument invalid - this Court is not inclined to hold that the impugned Notification No. 14/2014 dated 01.07.2017 is ultra vires to the powers provided to the Government under the CGST Act, 2017. From a bare reading of Section 70 of the CGST Act, 2017, it clearly emerges that the proper officer has the power to summon any person whose attendance he considers necessary either to give evidence or to produce the documents in any inquiry in the same manner in the case of a Civil Court under the Civil Procedure Code - the respondents are proper officer in relation to the function to be performed under the CGST Act, 2017 as contemplated under Section 2 (91) of the CGST Act, 2017, and as such, was entitled to issue summons under Section 70 of the CGST Act, 2017 in connection with the inquiry initiated against the petitioner. In the instant case, the petitioners having made payment under Section 74 (5) of the CGST Act, 2017, they appear to have informed the Proper Officer of such payment in the Form GST DRC-03 (Annexure No. 7) as contemplated in Rule 142(2) of the said Rules. It is needless to say that the said payment shall be dealt with or adjusted by the concerned respondent No.3 in accordance with law more particularly as per the provisions contained in Section 74 of the CGST Act, 2017. This Court does not find any merits in the present petition and as such the same is dismissed. Issues Involved:1. Validity of Notification No. 14/2017-Central Tax dated 01.07.2017.2. Jurisdiction of the Additional Director General of Goods and Services Tax Intelligence.3. Issuance of summons under Section 70 of the CGST Act, 2017.4. Allegation of coercion in the deposit of Rs. 40 Lakhs.Summary:1. Validity of Notification No. 14/2017-Central Tax dated 01.07.2017:The petitioner challenged the notification on the grounds that it was ultra vires to the power of the Central Government. The court examined the notification and corrigendum dated 29.07.2019, which substituted 'the Central Board of Excise and Customs' with 'the Government.' The court held that Section 3 of the CGST Act, 2017 empowers the Government to appoint officers for the purposes of the Act. The court found that the notification was valid and not ultra vires, as the Government has the authority to appoint and invest officers with powers under the CGST Act, 2017.2. Jurisdiction of the Additional Director General of Goods and Services Tax Intelligence:The petitioner argued that the jurisdiction exercised by the Additional Director General in authorizing inspection/search was not legal. The court referred to Section 5 of the CGST Act, 2017, which allows the Board to impose conditions on the exercise of powers by officers. The court concluded that the officers of the Directorate General of Goods and Services Tax Intelligence (DGSI) were properly appointed and invested with powers as Central Tax Officers. The court found no merit in the petitioner's argument regarding the jurisdiction.3. Issuance of summons under Section 70 of the CGST Act, 2017:The petitioner contended that the summons issued by the Intelligence Officer were without authority. The court examined Section 70 of the CGST Act, 2017, which grants the proper officer the power to summon any person to give evidence or produce documents. The court noted that the officers of DGSI were appointed as Central Tax Officers and were assigned the functions of proper officers by the Board. The court held that the summons issued were within the legal authority of the officers.4. Allegation of coercion in the deposit of Rs. 40 Lakhs:The petitioner alleged that the deposit of Rs. 40 Lakhs was made under coercion. The court examined the Form GST DRC-03, where the payment was marked as 'voluntary' under Section 74(5) of the CGST Act, 2017. The court found no evidence of coercion or duress in the payment. The court noted that the petitioner did not file any complaint regarding coercion. The court held that the payment would be dealt with according to the provisions of Section 74 of the CGST Act, 2017.Conclusion:The court dismissed the petition, holding that the notification was valid, the officers had proper jurisdiction, the summons were legally issued, and there was no evidence of coercion in the deposit of Rs. 40 Lakhs. There was no order as to costs.