TaxTMI 
TaxTMI 
TaxTMI 
2021 (6) TMI 918
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....also sought direction to quash and set aside the impugned Circular dated 5.7.2017 (Annexure-B), in connection with the assignment of functions to the officers as the 'proper officers' in relation to the various functions of the CGST Act and the Rules made thereunder. 2. The petitioner No.1 is a public limited company engaged in the business of manufacturing and exporting specialized chemicals having its factory set up at GIDC Plot Nos.2514, 2515, 2505/A Phase-IV, Vapi and the petitioner No.2 is the Factory Manager of the petitioner No.1. The petitioner Company is the holder of Advance Authorization Licences granted in terms of the Scheme set out in Chapter-IV (AA Scheme) of Foreign Trade Policy 2015-2020. It appears that the Directorate of Revenue Intelligence, Kolkata Zonal Unit vide the Communication dated 11.11.2020 addressed to the Mumbai Office of the petitioner No.1, had intimated that an inquiry was initiated against the petitioner and other importers, who had incorrectly availed the benefits of EOU Scheme extra in terms of the Customs Notification Nos.78/2017-Cus, 79/2017-Cus, and 48/2017-Cus respectively, and also simultaneously availed the benefit of refund of du....
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....Pressing into service Section 167 of the CGST Act, Mr. Rastogi submitted that the delegation of powers by the Commissioner has to be specified by way of the Notification as contemplated in the said section. According to him, the respondent No.3 is an officer of Directorate General of Goods and Services Tax Intelligence (DGGI) and holds the designation of a Senior Intelligence Officer and his appointment under the CGST Act could be traced to the Notification dated 1.7.2017 and thus, the respondent No.3 is appointed as a Central Tax Officer and is in the rank of Superintendent under CGST Act. Elaborating the said arguments, Mr.Rastogi submitted that since the respondent No.3 did not hold the designation of the Commissioner, the specific function under Section 70 has to be assigned to him by a Commissioner in the Board as contemplated under Section 2(91) and such assignment has to be through the medium of Notification in the light of Section 167 of the CGST Act. 5. Placing reliance on the decision of the Supreme Court in case of Canon India Pvt. Ltd. Vs. Commissioner of Customs, reported in 2021 SCC Online SC 200, Mr.Rastogi submitted that the entrustment of functions is a vital ingr....
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....y submitted that the action of the respondent No.3 is also in violation of the principles of natural justice and that the parallel proceedings against the petitioners on the same issue are not sustainable. 8. At the outset, it may be noted that the submissions made by the learned Advocate Mr.Rastogi for the petitioners, though may appear or sound very attractive, the Court has not found any substance in the same. In order to appreciate his submissions it would be beneficial to reproduce the relevant provisions of CGST Act and IGST Act. The definition of 'Proper Officer' is contained in Section 2(91) of the CGST Act, which reads as under:- "Section 2. In this Act, unless the context otherwise requires,- (91) "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." 9. Section 70 empowers the proper officer under the Act to summon any person to give evidence and produce documents in connection with the inquiry initiated against him and the said proceedings are deemed to be judicial proceedings within the meaning of Section 193 and ....
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....ceipt of such information, shall not serve any notice under sub-section (1), in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made thereunder. (7) Where the proper officer is of the opinion that the amount paid under sub-section (5) falls short of the amount actually payable, he shall proceed to issue the notice as provided for in sub-section (1) in respect of such amount which falls short of the amount actually payable. (8) xxx (9) The proper officer shall, after considering the representation, if any, made by the person chargeable with tax, determine the amount of tax, interest and penalty due from such person and issue an order. (10) The proper officer shall issue the order under subsection (9) within a period of five years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilized relates to or within five years from the date of erroneous refund." 11. Since the learned Advocate Mr.Rastogi has placed heavy reliance on Section 167 pertaining to the delegation of powers by the Commission is reproduced as under:- "167. De....
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.... CGST Act in connection with the inquiry initiated against the petitioner. 14. The submission of Mr.Rastogi that the said assignment of function has to be by way of Notification and not by way of Circular in view of Section 167 of the CGST Act is thoroughly misplaced. Section 167 of the CGST Act pertains to the delegation of powers by the Commissioner exercisable by any authority or officer under the Act to be exercisable also by another authority or officer as may be specified in the Notification. So far as Section 2(91) is concerned, it pertains to the proper officer in relation to any function to be performed under the CGST Act to be the Commissioner or the officer of Central Tax, who is assigned that function by the Commissioner in the Board. Here the Board means the "Central Board of Indirect Taxes and Customs" as defined in Section 2(16) of the CGST Act. Vide the Circular dated 5.7.2017 the said Board namely the Central Board of Excise and Customs in exercise of the powers conferred by Section 2(91) of the CGST Act read with Section 20 of the IGST Act and subject to Section 5(2) of the CGST Act has assigned the officers the functions as that of proper officers in relation to....
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....ondent No.3 has issued summons to the petitioner at Vapi in relation to the inquiry in connection with the refund of ITC under the CGST Act. It is needless to say that the proceedings of issuing summons under Section 70 of the CGST Act are the proceedings of judicial nature and the petitioners are bound to respect the same, and cooperate with the inquiry. As such, no prejudice is going to be caused to the petitioners if the statement is tendered or the documents are produced as required by the respondent No.3. 16. It may be noted that in the writ petition filed by the Bombay office of the petitioner before the Bombay High Court challenging the communication dated 11.11.2020 issued by the Directorate of Revenue Intelligence, Kolkata Zonal Unit, there is no interim order passed in favour of the petitioner restraining the respondent authorities from proceeding further with the inquiry proceedings initiated against the petitioner. 17. As regards the payment of Rs. 3 crore made by the petitioners on 9.2.2021 vide Form GST DRC-03 under Rule 142(2) and 142(3) of the GST Rules (Annexure-F), it may be noted that for the particulars at Sr. No.3 i.e. "cause of payment", it is shown as "volu....