TaxTMI 
TaxTMI 
2021 (1) TMI 702
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....eferred to as 'DGST Act') read with Rule 139 of the DGST Rules, 2017. 4. The factual matrix giving rise to the present writ petition is as follows: The Petitioner company, duly registered under the CGST/ DGST Act, functions from its unit at Pitampura, North-West Delhi and has its godown/warehouse at Shahbad, Daulatpur, Delhi. It also has units in other states for which separate registration under the CGST Act exists at Rajasthan and Himachal Pradesh. On 30th September, 2020 at 3:30 PM, the Respondent No. 2 (Assistant Commissioner/VATO, Delhi) entered the Petitioner's place of business and godown, for the purpose of conducting a search. Petitioner was handed over a notice by Respondent No. 2 under Rule 56(18) of DGST Rules, 2017, inter-alia asking to produce books of accounts for the period 2017-18, 2018-19, 2019-20, and 2020-2021. Besides, Respondent No. 2 also provided: (i) a copy of authorisation in Form GST INS-01 dated 30th September, 2020, (ii) Deployment Order No. 119 dated 30th September, 2020 under Section 60 of the Delhi Value Added Tax Act, 2004, as well as (ii) Grant of Authority dated 30.09.2020 in Form DVAT-50 under Rule 65 of DVAT Rules, 2004. It ....
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....ll not exercise the powers and discharge the duties conferred or imposed on any other officer of State tax. Section 6: Authorisation of officers of central tax as proper officer in certain circumstances - (1) Without prejudice to the provisions of this Act, the officers appointed under the Central Goods and Services Tax Act, 2017 (Central Act 12 of 2017) are authorised to be the proper officers for the purposes of this Act, subject to such conditions as the Government shall, on the recommendations of the Council, by notification, specify. (2) Subject to the conditions specified in the notification issued under sub-section (1),- (a) where any proper officer issues an order under this Act, he shall also issue an order under the Central Goods and Services Tax Act, 2017 (Central Act 12 of 2017) as authorised by the said Act under intimation to the jurisdictional officer of central tax; (b) where a proper officer under the Central Goods and Services Tax Act, 2017 (Central Act 12 of 2017) has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter. ....
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.... Singh clarifies that there is no parallel investigation being carried out by the DGST authorities, as is portrayed by the Petitioner. To elucidate his contention, he submits that although the earlier notice issued under Rule 56(18) of the DGST Rules, 2017 requisitioned the documents for the period from 2017-18 to 2020-2021, but now the fresh notice is confined to 2020-21. As regards the contention of mentioning of the provisions of the Delhi Value Added Tax Act, 2004, he submits that the said provisions are saved in terms of Section 174(2)(c) of the CGST Act, 2017 and therefore, the rules framed thereunder and the DVAT Act can be resorted to for the purpose of adjudication, insofar as the dues pertain to the period prior to the promulgation of the CGST Laws. Lastly Mr. Ramesh Singh further states that the ground of coercion in respect of the statement recorded during search, is clearly an afterthought. He points out that Petitioner has never taken any steps to retract the said statement, and that the Petitioner, availing the benefit of Section 74(5), has agreed to pay the amount which is in fact a reduced amount and is instead paying only 15% of the entire penalty amount. 11. H....
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....cause notice under Section 74 of the CGST Act, for the years 2017-18 and 201819, then by virtue of Section 6 of CGST Act, the DGST authorities cannot carry out the investigation for the said period. To our mind, the request in the notice dated 30th September, 2020 cannot ipso facto lead to the conclusion that there is a parallel investigation for the same period by both the Central and State Authorities. 13. To counter the claim of the Petitioner, Mr. Singh has, during the course of the hearing, screen-shared the recent notice issued by the State Authorities dated 16th November, 2020, which was not brought to our notice by the Petitioner. This notice is evidently making a requisition for documents pertaining to 2020-21. The said letter reads as under:- "OFFICE OF THE ASSISTANT COMMISSIONER, (KCS WARD-201) GOVT OF NCT OF DELHI: DEPTT. OF TRADE & TAXES: 13TH FLOOR VYAPAR BHAWAN I.P. ESTATE : NEW DELHI-110002. F.NO. AC/KCS/WARD-201/2020-21/67 Dated: 16-11-2020 To, M/s. RCI Industries & Technologies Ltd. GSTN: 07AAACI45727Q2ZT 421, 4th Floor Pearl Omaxe, Netaji Subhash Place, Pitampura, Delhi-110034. Subject:- Notice for pe....
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....s report that as per the stock submission receipt dated 14/11/2017 available on DVAT portal for the stock details as on 30/06/2017, the stock declared was amounting to Rs. 21,40,99,505/- whereas the stock details furnished in form TRAN-I is Rs. 16,95,31,736/-. Hence, the difference in stock of Rs. 4,45,67,769/- . 5. The Enforcement team has intimated in its report that there is a difference between tax liability declared in GSTR 3b and ITC available in GSTR 2A and the same was not discharged by payment of tax. An explanation was called for in this regard but no reply/explanation has been received till the date of submission of report. 6. The Enforcement Team has intimated in its report that the dealer has undertaken in writing to submit the following information/documents with its clarification in the office but the same has not been submitted by the dealer till finalization of this report. i. Write up on the TRAN-1 credit availed. ii. Documents regarding search and seizure by DGGI Gurugram and Anti Evasion CGST Delhi. iii. Difference between ITC credit in GSTR 3B and tax liability in GSTR 313. iv. Details of inward and outward ....
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....he DGST authorities pertains to a period which is covered by the investigation carried out by the Central GST authorities, the Petitioner can take recourse to the appropriate remedies in that regard. 15. Since contentions have been raised with respect to the cross-empowerment of the Central and the State authorities, and it is asserted that there are no guidelines prescribed under the Act or the Rules, it would be profitable to throw some light on the issue. In this context, the letter issued by the Central Board of Indirect Taxes and Customs dated 5th October, 2018 which also finds mentions in the order of the Gujarat High Court in R/Special Civil Application No. 23279 of 2019 dated 27th December, 2019 titled Sureshbhai Gadhecha v. State of Gujarat, relied upon by the Petitioner, reads as under: "LETTER D.O.F. NO. CBEC/20/43/01/2017-GST(FT.) CLARIFICATIONS ON AMBIGUITY REGARDING INITIATION OF ENFORCEMENT ACTION BY CENTRAL TAX OFFICERS IN CASE OF TAXPAYERS ASSIGNED TO STATE TAX AUTHORITY AND VICE VERSA LETTER D.O.F. NO. CBEC/20/43/01/2017-GST(PT), DATED 5-10-2018 It has been brought to the notice of the Board that there is ambiguity regarding initiation o....
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....Wing- VI, West Block- VIII R.K. Puram, New Delhi- 110066 Sir, Subject: Reference form DGGI on Cross empowerment under GST. reg. I am directed to refer to DGGI letter F.No.574/CE/66/2020/Inv./15308 dated 26.05.2020 on the issues related to cross empowerment of officers in terms of provisions of section 6 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as "the CGST Act"). 2. Issue raised in the reference is whether intelligence based enforcement actions initiated by the Central Tax officers against those taxpayers which are assigned to the State Tax administration gets covered under section 6(1) of the CGST Act and the corresponding provisions of the SGST/UTGST Acts or whether a specific notification is required to be issued for cross empowerment on the same lines as notification No. 39/2017-CT dated 13.10.2017 authorizing the State Officers for the purpose or refunds under section 54 and 55 of the CGST Act. 3.1 The issue has been examined in the light of relevant legal provisions under the CGST Act, 2017. It is observed that Section 6 of the CGST Act provides for cross empowerment of State Tax officers....
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....ransfer the said case to their counterparts in the latter department and they would themselves take the case to its logical conclusion. At this stage, we are only concerned with the search action initiated and the ultimate logical conclusion would have to be gone into at the appropriate stage, when the Revenue proceeds for determination of tax. The Respondents would be bound by the aforenoted circulars and we reiterate that in case the action of the State and Central Authorities is overlapping, the Petitioner would be at liberty to take action to impugn the same in accordance with law. 17. As regards the absence of the two independent witnesses, we may first note that there is no panchnama on record. In essence, the main thrust of Petitioner's argument is that the statement of Mr. Rajeev Gupta does not record the presence of the two independent witnesses or signatures, making the search action illegal. We have already dealt with the contention of the Petitioner regarding the alleged involuntary/forced statement and in view of our observations made hereinabove, this issue, is rendered insignificant. Further, no specific provision is shown to us that deals with recording of statem....
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.... the exercise of power to be bad in law only if the grounds on which reason to believe is founded have no rational connection between the information or material recorded; or are non-existent; or are such on which no reasonable person can come to that belief. The reasons to believe shown to us demonstrate that the Appropriate authority had the reasons, as per mandate of Section 67(2) of the DGST Act alongwith relevant Rules, for formation of belief to carry out the search. Applying the test of reasonable man, we cannot say that there is no application of mind while issuing search warrant. Thus, we would not like to countermand the action taken against the Petitioner. Accordingly, the present petition is disposed of in the above terms. We clarify that we have not expressed any opinion on the merits of the case. ============= Document 1 Subject: Analysis ir: respect of M/S RCI Industries & Technologies, Delhi May kindly see the detail as under: Name of the dealer/firm GST No. Date of Regn. in GST Name of Managing Director/Director Registered Mobile NO./ Email of Firm Principal place of business premise Additional place of business premise I....
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....r GSTR-38 ITC Claimed in GSTR-3B ITC as per GSTR-2A 2017-18 939,44,29514 112,72,52222 112,69,54851 109,95,07418 110,97,50741 297371 1,0243323 2018-19 863,35,09080 155,59,03079 155,40,38254 132,12,78868 132,25,67930 1864825 -12,89062 2019-20 219,25,43868 i 39,45,27412 39,46,57898 34,71,37000 36,39,09134 -130486 1,67,72134 *Remarks: As per electronic Cash Ledger/Return of the Dealer has made tax paid in cash of Rs. 603591/ (2017-18), Rs. 773067/- (2018-19) and Rs. 645474/- (2019-20] on account of reverse charge. Rest of the tax liability has been adjusted through ITC. Observations: From the GST database as analysis above it has been observed as under: 1. "High GTO- Rs. 939.44 crore in 2017-18, Rs. 863.35 crore in 2018-19, Rs. 219.24 crore in 2019-20. Document 3 2. The dealer is dealing in High Risk Commodities, taxable at 18% GST. 3. The payment of tax in cash is negligible (and i.e. on account of Reverse Charge) in comparison of GTO. 4. There is high difference in ITC claimed in GSTR-3B and accrued as per GSTR-2A. 5. As per GST database the dealer is under the Overall Risk Score "....