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Inspecting officers can issue GST show cause notices under Section 2(91) but must transfer to jurisdictional officer for adjudication The Madras HC disposed of writ petitions challenging a GST show cause notice (Form GST DRC-01) dated 25.09.2023 issued by an inspecting officer. The court ...
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Inspecting officers can issue GST show cause notices under Section 2(91) but must transfer to jurisdictional officer for adjudication
The Madras HC disposed of writ petitions challenging a GST show cause notice (Form GST DRC-01) dated 25.09.2023 issued by an inspecting officer. The court held that GST enactments do not prohibit inspecting officers from issuing show cause notices or adjudicating matters, provided they qualify as proper officers under Section 2(91). However, the court directed the State Tax Officer (Inspection) to transmit the notice to the jurisdictional proper officer for adjudication within two weeks, following Circular No. 13/2022-TNGST guidelines.
Issues involved: Challenge to impugned Show Cause Notice and vires of Circular No. 13/2022-TNGST.
Impugned Show Cause Notice: Petitioner challenged Show Cause Notice in Form GST DRC-01 dated 25.09.2023, issued based on inspection and statement obtained by State Tax Officer.
Circular No. 13/2022-TNGST: Petitioner challenged the circular dated 08.11.2022 issued by Commissioner of Commercial Taxes, alleging scope of bias and seeking quashing of both Circular and Show Cause Notice.
Petitioner's Argument: Petitioner claimed withdrawal of previous Circular for assessees' benefit and highlighted withdrawal of similar Circular by Principal Commissioner.
Respondent's Defense: Respondent defended the Show Cause Notice and Circular, asserting the second respondent as a proper officer u/s 2(91) of TNGST Act, 2017, with authority to issue Notice and adjudicate.
Content of Circular: Circular provided procedures for inspection reports, issuance of Show Cause Notices, and transfer of files for adjudication based on revenue effects.
Judgment: Court found no embargo on inspecting officer to issue Notice or adjudicate if meeting proper officer criteria. Emphasized elimination of bias and directed transmission of Notice to proper officer for adjudication within 2 weeks, with orders to be passed within 90 days. Petitioner's right to reply and be heard before final order. Writ Petitions disposed of with no costs.
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