AI Drafter - (New and Powerful) 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2022 (3) TMI 1370
X X X X Extracts X X X X
X X X X Extracts X X X X
....or the tax period 2017-18 (July, 2017 to March, 2018) was assigned to the Officer of Central Tax (hereinafter referred to as 'the Central Officer') but the show cause notice dated 25.6.2021 for assessment under section 73 of CGST Act/UPGST Act was issued by the Officer of the State Tax (hereinafter referred to as 'the State Officer') i.e. Dy. Commissioner, Commercial Tax Saharanpur, Sector 10, Saharanpur (B), Uttar Pradesh. The petitioner submitted reply to the show cause notice but did not raise any objection as to the jurisdiction on the ground of assignment of the case to Central Officer. The proper officer under the Act completed the assessment proceedings and passed the assessment order under section 73 of the UPGST Act/CGST Act dated 9.8.2021 for the tax period July, 2017 to March, 2018. Aggrieved the aforesaid assessment order dated 9.8.2021 the petitioner has filed the present writ petition praying to quash the show cause notice (DRC-01) dated 25.6.2021 issued by the State Officer i.e. the respondent no. 4 and the assessment order dated 9.8.2021 passed by the respondent no. 4. SUBMISSIONS ON BEHALF OF THE PETITIONER 3. (i) Learned counsel for the petit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ry tax as proper officer in certain circumstances (1) Without prejudice to the provisions of this Act, the officers appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act 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 State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as authorised by the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as the case may be, under intimation to the jurisdictional officer of State tax or Union territory tax; (b) where a proper officer under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act 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. (3) Any proceedings for....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of such services: PROVIDED that where an electronic commerce operator does not have a physical presence in the taxable territory, any person representing such electronic commerce operator for any purpose in the taxable territory shall be liable to pay tax: PROVIDED FURTHER that where an electronic commerce operator does not have a physical presence in the taxable territory and also he does not have a representative in the said territory, such electronic commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax. 6 Authorisation of officers of Central Tax as proper Officer in certain circumstances (1) Without prejudice to the provisions of this Act, 2017 the officers appointed under the Central Goods and Services Tax Act, 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ndations of the Council, by notification, specify categories of services the tax on intra-State supplies of which shall be paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services: Provided that where an electronic commerce operator does not have a physical presence in the taxable territory, any person representing such electronic commerce operator for any purpose in the taxable territory shall be liable to pay tax: Provided further that where an electronic commerce operator does not have a physical presence in the taxable territory and also he does not have a representative in the said territory, such electronic commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax. 6. The "Goods and Service Tax Council" (for short GST Council) took a decision vide minutes of the IX GST Council meeting held on 16.1.2017 (Agenda item no. 28) in respect of cross empowerment to ensure single interface under ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t and import as may be discussed in the Law Committee of officers and brought back to the Council for decision; x. The territorial water within the twelve nautical miles shall be treated as the territory of the Union of India unless the Hon'ble Supreme Court decides otherwise in the ongoing litigation on the issue but the power to collect the State tax in the territorial waters shall be delegated by the Central Government to the States." 7. Pursuant to the aforesaid decision of the GST Council, a circular no. 01/2017 dated 20.9.2017 (F no. 166/cross empowerment/GST/2017) was issued by the GST Council, New Delhi providing that the State Level Committee comprising Chief Commissioner/Commissioner Commercial Taxes of respective States and jurisdictional Central Tax Chief Commissioners/Commissioners are already in place for effective coordination between the Centre and State and the said Committee may take necessary steps for division of taxpayers in each State. 8. Pursuant to the aforesaid circular the Committee constituted for the State of Uttar Pradesh passed order No. 04/2018 dated 12.9.2018 assigning the taxpayers registered in the State of U.P. in terms of the afore....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ication specify. Clause (a) of sub-Section (2) of Section 6 of the UPGST Act provides that 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 as authorized by the said Act under intimation to the jurisdictional officer of central tax. Clause (b) of sub-Section (2) of Section 6 of the UPGST Act provides that where a proper officer under the CGST Act has initiated any proceeding on a subject matter, no proceeding shall be initiated by the proper officer under the UPGST Act on the same subject matter. 12. From bare perusal of Section 6 of the CGST Act and the UPGST Act it is clear that a proper officer under the UPGST Act is also a proper officer under the CGST Act within his territorial jurisdiction. Likewise a proper officer appointed under the CGST Act is also the proper officer under the UPGST Act within his territorial jurisdiction. So as to avoid possibility of conflicting orders, an in built provision in both the CGST Act and UPGST Act has been made in Section 6 that when a proper officer under the CGST Act passes an order, he shall intimate it to the jurisdictional officer under the State ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d the Chief Commissioner of Central Tax, Meerut Zone, Lucknow, the assessment of petitioner under the Act was assigned to the Central Officer and not to the respondent no. 4. However, the respondent no. 4 took up the matter and issued the impugned show cause notice dated 25.6.2021 which was replied by the petitioner without raising any objection as to jurisdiction on account of assignment of case to the Central Officer. It was also not brought to the notice of the respondent no. 4 by the petitioner that his case is assigned to a Central Officer. Instead, the petitioner participated in the assessment proceeding and the assessing officer i.e. the proper officer (respondent No.4) has passed the impugned assessment order dated 9.8.2021, which can be said to be contributory error of jurisdiction. The GST Act came into force from 01.07.2017. Prior to it the petitioner was registered under the U.P. VAT Act and was carrying on business in partnership. But he migrated as proprietary concern under the GST Act and carried the entire stock of the partnership firm as on 30.06.2017 to the proprietary concern. Neither on issuance of notice nor during the course of assessment proceedings, did the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r officer under the CGST Act i.e. Central Officer and not to the respondent no. 4. CONSEQUENCES OF "SUBMITTING TO THE JURISDICTION" 20. Present case is not a case of inherent lack of jurisdiction rather it is a case of error of jurisdiction on account of non allotment of case of the petitioner assessee to the respondent no. 4/State officer. 21. In the case of Municipal Commissioner, Kolkata and others Vs. Salil Kumar Banerji (2000) 4 SCC 108 (para 4), Hon'ble Supreme Court considered the validity of an order passed by a Tribunal not properly constituted. Hon'ble Supreme Court held that "...Even assuming that it ought to have consisted of three or more Members, had that objection been taken at the initial stage of the hearing of the appeal before the Tribunal, that position could have been rectified. Certainly, in circumstances such as these, the High Court ought not to have exercised its discretion in favour of the first respondent." 22. In the case of Kedar Shashikant Deshpandey and others Vs. Bhor Municipal Council and others (2011) 2 SCC 654 (para 29) Hon'ble Supreme Court considered the principle "submitting to the jurisdiction of the authority" and held....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ibunal and a court. The appellant does not contend that any procedure in holding the enquiry has been violated or that there was no compliance with principles of natural justice." 25. In the case of Central Bank of India Vs. C. Bernard (1991)1 SCC 319 (para 9), Hon'ble Supreme Court considered the submission that in the event the respondent succeeded in getting the order of punishment quashed on a mere technicality and that too on the contention belatedly raised before the High Court for the first time and, therefore, the High Court was in error in directing payment of all consequential benefits.; and held as under: "We think there is merit in this contention. If the objection was raised at the earliest possible opportunity before the Enquiry Officer the appellant could have taken steps to remedy the situation by appointing a competent officer to enquire into the charges before the respondent's retirement from service......." 26. In the case of Nusli Neville Wadia Vs. Ivory Properties and others (2020) 6 SCC 557 (paras 20, 21 and 22) Hon'ble Supreme Court has explained the meaning of the word "jurisdiction" and distinction between jurisdiction to entertai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....teral attack on the ground of nullity. It has co-relation with the constitutional and statutory power of tribunal or court to hear and determine. It means the power or capacity fundamentally to entertain, hear, and determine. 22. Jurisdiction to entertain is distinguished from merits, error in the exercise of jurisdiction or excess of jurisdiction." 27. In the case of Nusli (supra) vide paragraph 37 Hon'ble Supreme Court explained the difference between "existence of jurisdiction" and "exercise of jurisdiction" and held as under : "37. There is a difference between the existence of jurisdiction and the exercise of jurisdiction. In case jurisdiction is exercised with material irregularity or with illegality, it would also constitute jurisdictional error. However, if a court has jurisdiction to entertain a suit but in exercise of jurisdiction, a mistake has been committed, though it would be a jurisdictional error but not lack of it. It may be a jurisdictional error open for interference in appellate or revisional jurisdiction." 28. In the case of Hridya Narain Roy Vs. Ram Chandra Barna Sarma AIR 1921 Cal 34 (FB) quoted with approval by Hon'ble Supreme....