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of <h1>Inspecting officers can issue GST show cause notices under Section 2(91) but must transfer to jurisdictional officer for adjudication</h1> <h3>M/s. Rasathe Garments Versus The State Tax Officer (ST) (Inspn.), Tirunelveli, The Commissioner of Commercial Taxes</h3> 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 ... Challenge to SCN in Form GST DRC-01 dated 25.09.2023 issued, based on the inspection and the statement obtained from the petitioner - HELD THAT:- There is no embargo under the Scheme of the respective GST Enactments on the inspecting officer to issue Show Cause Notice. In fact, there is also no embargo on such officer to adjudicate the issue as long as such officer also satisfies the definition of a “proper officer” in Section 2(91) of the respective GST enactments. These Writ Petitions are disposed of by directing the second respondent State Tax Officer (ST) (Inspn.) to transmit the Notice to the jurisdictional proper officer for adjudication in accordance with Paragraphs 4 and 5 of the impugned Circular No. 13/2022-TNGST dated 08.11.2022. This exercise shall be carried out by the second respondent State Tax Officer (ST) (Inspn.), within a period of 2 weeks from today. Petition disposed off. 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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