Proper officer

[Rajesh Kumar]

Sir/Madam,

On reading the Circular No. 171/03/2022-GST, Sr. No. 1 inter-alia specify that the registered person ‘A’ shall, however, be liable for penal action under section 122 (1)(ii) of the CGST Act for issuing tax invoices without actual supply of goods or services or both.

Similarly, penalty under section 122 is also mention at Sr. 2 & 3.

Now, the information of proper officer for difference actions and sections are laid down under Circular 1/1/2017-GST dated 26-Jun-2017, Circular 3/3/2017-GST dated 5-Jul-2017 and Circular No. 31/05/2018 dated 9’th February’2018.

I want to know that who is the proper officer to invoke Section 122 with Section 73 or 74 and only 122 for issuance of SCN and adjudication. As the proper officer is not mentioned any where under above mentioned circulars.

[GUNASEKARAN K]

The ‘proper officer’ has been empowered under GST law to execute and administer compliance of various Sections and Rules under GST law to protect the Government revenue and facilitates to the taxpayers to carry out day-to-day statutory compliance to run their business. The words ‘proper officer’ used in various parts of the GST law scattered through different provisions therein needs specific assignment to be performed under different sections of the statute to serve respective purpose of the relevant sections and rules made thereunder:

Section 2(91) of the CGST Act, 2017 defines “proper officer” in relation to any function to be performed under this Act, means the Commissioner or the officer of the Central tax who is assigned that function by the Commissioner in the Board.

C.B. & C, Vide its Circular 1/1/2017-GST dated 26-Jun-2017 [2017(2) G.S.T.L.45] has assigned powers of ‘Proper Officer’ for Registration and Composition levy under the CGST Act, 2017 or the Rules made thereunder to specified officers. The Board, hereby assigns the officers mentioned in Column (2) of the Table below, the functions as the proper officers in relation to the various sections of the said Act or the rules made thereunder mentioned in the corresponding entry in Column (3) of the said Table

Serial Number	Designation of the Officer	Functions under Section of the Central Goods and Services Tax Act,2017 or the rules made thereunder
(1)	(2)	(3)
1.	Assistant or Deputy Commissioners of Central Tax and Assistant or Deputy Directors of Central Tax	i. Sub-section (5) of Section 10- composition levy, determination of tax liability in case not being eligible. ii. Proviso to Sub-section (1) of Section 27- issue of certificate to casual and non-resident taxable person. iii. Section 30- Revocation of cancellation of registration. iv. Rule 6- Validity of composition levy. v. Rule 23-Revocation of cancellation of registration. vi. Rule 25- Physical verification of business premises in certain cases.
2.	Superintendent of Central Tax	i. Sub-section (8) of Section 25- Action taken against person who fails to obtain registration. ii. Section 28- Amendment of registration. iii. Section 29- Cancellation of registration. iv. Rule 9- Verification of application for registration. v. Rule 10- Issue of registration certificate. vi. Rule 12-Grant of registration to persons required to deduct TDS or TCS. vii. Rule 16- Suo moto registration viii. Rule 17- Assignment of UIN to certain special entities. ix. Rule 19- Amendment of registration. x. Rule 22- Cancellation of registration. xi. Rule 24- Migration of persons registered.

Further, C.B.I. & C, vide its Circular 3/3/2017-GST dated 5-Jul-2017 [2017(2) G.S.T.L. 314], has assigned the proper officer relating to provisions other than Registration and Composition under CGST Act. The Board , hereby assigns the officers mentioned in Column (2) of the Table below, the functions as the proper officers in relation to the various sections of the Central Goods and Services Tax Act,2017 or the rules made thereunder given in the corresponding entry in Column (3) of the said Table:-

S.No.	Designation of the officer	Functions under Section of the Central Goods and Services Tax Act, 2017 or the rules made thereunder
(1)	(2)	(3)
1.	Principal Commissioner/ Commissioner of Central Tax	i. Sub- section (7) of Section 67 ii. Proviso to Section 78
2.	Additional or Joint Commissioner of Central Tax	i. Sub- sections (1), (2), (5) and (9) of Section 67 ii. Sub-section (1) and (2) of Section 71 iii. Proviso to section 81 iv. Proviso to sub-section (6) of Section 129 v. Sub-rules (1),(2),(3) and (4) of Rule 139 vi. Sub-rule (2) of Rule 140
3.	Deputy or Assistant Commissioner of Central Tax	i. Sub-sections (5), (6), (7) and (10) of Section 54 ii. Sub-sections (1), (2) and (3) of Section 60 iii. Section 63 iv. Sub-section (1) of Section 64 v. Sub-section (6) of Section 65 2[****] vii. Sub-sections (2), (3), (6) and (8) of Section 76 viii. Sub-section (1) of Section 79 ix. Section 123 x. Section 127 xi. Sub-section (3) of Section 129 xii. Sub- sections (6) and (7) of Section 130 xiii. Sub- section (1) of Section 142 xiv. Sub-rule (2) of Rule 82 xv. Sub-rule (4) of Rule 86 xvi. Explanation to Rule 86 xvii. Sub-rule (11) of Rule 87 xviii. Explanation 2 to Rule 87 xix. Sub-rules (2) and (3) of Rule 90 xx. Sub-rules (2) and (3) of Rule 91 xxi. Sub-rules(1), (2), (3), (4) and (5) of Rule 92 xxii. Explanation to Rule 93 xxiii. Rule 94 xxiv. Sub-rule (6) of Rule 96 xxv. Sub-rule (2) of Rule 97 xxvi. Sub-rule (2), (3), (4), (5) and (7) of Rule 98 xxvii. Sub-rule (2) of Rule 100 xxviii. Sub-rules (2), (3), (4) and (5) of Rule 101 xxix. Rule 143 xxx. Sub-rules (1), (3), (4), (5), (6) and (7) of Rule 144 xxxi. Sub-rules (1) and (2) of Rule 145 xxxii. Rule 146 xxxiii. Sub-rules (1), (2), (3), (5), (6), (7), (8), (10),(11), (12), (14) and (15) of Rule 147 xxxiv. Sub-rules(1),(2) and (3) of Rule 151 xxxv. Rule 152 xxxvi. Rule 153 xxxvii. Rule 155 xxxviii. Rule 156
4.	Superintendent of Central Tax	i. Sub- section (6) of Section 35 - where registered person fails to account for the goods or services or both and determine such tax in terms of provisions of section 73 or section 74. ii. Sub-sections (1) and (3) of Section 61 - Scrutiny of returns and determination of tax in terms of provisions of section 73 or section 74. iii. Sub-section (1) of Section 62 - Assessment of non-filers of returns. iv. Sub-section (7) of Section 65 - Audit by tax authorities and initiate action in terms of section 73 or section 74. v. Sub-section (6) of Section 66 - Special Audit and initiate action in terms of section 73 or section 74. vi. Sub-section (11) of Section 67 -Prosecution for evade the payment of tax by registered person. vii. Sub-section (1) of Section 70 - Power to summon persons to give evidence and produce documents. viii. Sub-sections (1), (2), (3), (5), (6), (7), (9) and (10) of section 73 - - Determination of tax not paid , short paid, erroneously refunded, wrongly availed or utilised initiate action under section 73. 1[viii(a). Sub-sections (1), (2), (3), (5), (6), (7), (9) and (10) of section 74] - determination of tax. ix. Sub-rule (6) of Rule 56 - Determination of tax stored goods without cover of documents. x. Sub-rules (1), (2) and (3) of Rule 99 - Scrutiny of returns. xi. Sub-rule (1) of Rule 132 - Power to summon person to give evidence and produce documents. xii. Sub-rule (1), (2), (3) and (7) of Rule 142 - issue notice in FORM GST DRC-01 and issue order in FORM GST DRC-08 for recovery. xiii. Rule 150 - Seek assistance from police officer in-charge of jurisdiction.

Further, all officers up to the rank of Additional / Joint Commissioner of Central Tax are assigned as the proper officer for issuance of show cause notices and orders under sub-sections (1), (2), (3), (5), (6), (7), (9) and (10) of Section 73 and 74 of the CGST Act. Further, they are so assigned under the Integrated Goods and Services Tax Act, 2017 as well, as per Section 3 read with Section 20 of the said Act.

Thus, the proper has been assigned different roles under GST Law to facilitate and extend cooperation to the taxpayers for their day-to-day statutory compliance. The proper officer sometimes perform as an administrative, adjudicating and quasi-judiciary authority to protect the Government revenue. In the recent judgement the Hon’ble High Court of Telangana in the Case of P.V.Ramana Reddy v. UOI- reported in2019 (4) TMI 1320 - TELANGANA AND ANDHRA PRADESH HIGH COURT, held that “ the arrested person should be produced by the authorized officer before the Magistrate within 24 hours who may either remand him to judicial custody or release him on bail. The question of giving such person to police custody or custody to proper officer does not arise. The contention that the proper officer not being a police officer could not seek custody of arrested person, was held to be not tenable.” This view was approved by the Apex Court reported in 2019 (5) TMI 1528 - SUPREME COURT

[Sadanand Bulbule]

Dear Sir

It is the adjudicating authority who is authorized to invoke powers under Section 122 read with Section 73/74 as the case may be.

Further refer the following provisions:

Section 74 (11) Where any person served with an order issued under sub-section (9) pays the tax along with interest payable thereon under section 50 and a penalty equivalent to fifty per cent. of such tax within thirty days of communication of the order, all proceedings in respect of the said notice shall be deemed to be concluded.

Explanation 1.- For the purposes of section 73 and this section,-

(i) the expression “all proceedings in respect of the said notice” shall not include proceedings under section 132;

(ii) where the notice under the same proceedings is issued to the main person liable to pay tax and some other persons, and such proceedings against the main person have been concluded under section 73 or section 74, the proceedings against all the persons liable to pay penalty under sections 122 and 125 are deemed to be concluded.

It means, once the notice or adjudication proceedings are issued against the main person fastening liability of tax, interest and penalty under Section 73/74, penal proceedings in respect of all other persons in the chain of similar transactions are deemed to be automatically concluded under Section 122 and 125. Such other persons enjoy the embedded immunity from penalty under Section 122/125.

[KASTURI SETHI]

I concur with the views of both experts.

[Rajesh Kumar]

Sir ,

If a person takes goods less invoices and further he also issues goods less invoices, then section 122(1)(Vii) & (ii) respectively are invokable. In this scenario section 73,& 74 are not invokable.

I want to know who will be the proper officer to issue SCN or adjudicate when only section 122 is invokable in absence of Section 73 &74 ?

As proper officer for Section 122 is not provided anywhere.

[Padmanathan KV]

Dear Rajesh Ji,

Consider this proposition.

Section 122 provides for only levy of penalty.

Section 79 has to be invoked for recovery of sale.

Proper officer has been notified for section 79. Why cant proper officer invoke section 79 for recovery of penalty leviable under section 122?

[Rajesh Kumar]

Sir,

In a situation where a taxpayer received goods less invoices and further issued goods less invoices. There being no supply, section 73, 74 are not invokable. Only penalty under section 122(1)(ii) for supply and 122(1)(vii) to receive such goods less invoices are invokable.

But there is no proper officer to invoke or issue SCN under these sections as per my knowledge. Further the above said matter doesn’t fall to invoke section 79.

I want to know how SCN be issued for Section 122 only.

[Padmanathan KV]

Rajesh sir,

I am of the view officer can issue SCN under section 79 directly without resorting to section 73 or section 74.

[Padmanathan KV]

please read "same" instead of "sale" in post 5 above.

sorry for inconvenience.

AI Summary

Proper officer designation for GST penalty provision uncertain; SCN issuance and recovery routes debated as practical solutions. Statutory definition and Board circulars allocate the designation of 'proper officer' to Commissioners or officers assigned by the Commissioner and list specific delegations to ranks (Principal/Commissioner, Additional/Joint Commissioner, Deputy/Assistant Commissioner, Superintendent, Assistant/Deputy Commissioners) to issue show cause notices, initiate scrutiny and assessment proceedings and exercise recovery functions; however, the circulars do not expressly identify a distinct proper officer solely for invocation of the standalone penalty provision, prompting reliance on adjudicating authority, delegated assessment powers, or recovery provisions to issue SCNs and recover penalties.