TaxTMI 
TaxTMI 
2023 (10) TMI 861
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....8 under the CGST Act and an equivalent amount under the MGST Act, totalling to Rs. 47,53,041.76. 3. The reasons for blocking of the petitioner's credit as available in the credit ledger, is on the ground that the petitioner had availed such input tax credit fraudulently during the period from 2021-22 and 2022-23 and the same was apparent from the records. The impugned order records that there were substantive reasons to believe the blocking of the said credit. In regard to the issues as raised in the petition, the relevant extract of the said order is required to be noted, which reads thus: "Therefore, as you have not fulfilled the conditions for utilizing the credit of following amount of credit available in your credit ledger, and in order to safeguard Government Revenue, it is hereby directed that no debit of an amount, equivalent to such credit in electronic credit ledger for discharge of any liability under section 49 or for claim of refund of any unutilized amount of input tax credit. Name of vendor GST No. Total Taxable value IGST Act, 2017 CGST Act, 2017 MGST Act, 2017 Total Tax JAI BHAVANI TRADING 27BAWPP7812E1Z7 6082820.00 0.00....
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....not below the rank of an Assistant Commissioner, having reasons to believe that credit of input tax available in the electronic credit ledger has been fraudulently availed or is ineligible in as much as- a) The credit of input tax has been availed on the strength of tax invoices or debit notes or any other document prescribed under rule 36 - (i) issued by a registered person who has been found non-existent or not to be conducting any business from any place for which registration has been obtained; or (ii) without receipt of goods or services or both; or b) the credit of input tax has been availed on the strength of tax invoices or debit notes or any other document prescribed under rule 36 in respect of any supply, the tax charged in respect of which has not been paid to the Government; or c) the registered person availing the credit of input tax has been found non-existent or not to be conducting any business from any place for which registration has been obtained; or d) the registered person availing any credit of input tax is not in possession of a tax invoice or debit note or any other document prescribed under rule 36, may,....
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....tronic credit ledger as above, no longer exist, allow such debit. (3) Such restriction shall cease to have effect after the expiry of a period of one year from the date of imposing such restriction." 6. Mr. Raichandani referring to Rule 86-A(1) of the CGST Rules would submit that the said Rule itself is clear when it mandates that the Commissioner or an officer authorized by him in this behalf, "not below the rank of an Assistant Commissioner", can be the only officer who can take an action under Rule 86-A, having reasons to believe, that the credit of input tax has been fraudulently availed or is ineligible, inter alia being the condition as set out in the said Rule. It is thus Mr. Raichandani's contention that ex-facie the State Tax Officer had no jurisdiction to block the input tax credit under the CGST Act as it would be contrary to Rule 86-A of the CGST Rules, as the State Tax Officer certainly is not an officer below the rank of an Assistant Commissioner. 7. Countering such submissions, Ms. Vyas, learned counsel for the State / MGST authorities would submit that the State Tax Officer would be the competent officer to exercise powers not only under Rule 86-A of ....
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.... (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 subsection (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 rectification, appeal and rev....
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....ion to pass an order under Rule 86-A of the CGST Rules as also the MGST Rules. 12. We find much substance in the contention urged by Ms. Vyas, for the reason that in regard to the powers being conferred on the Officers either under the CGST Act or the MGST Act, the provisions of both these Acts as noted by us, are required to be read in conjunction and not in a manner which is destructive to each other. The entire regime of the Goods and Service Tax, to be levied falls under the scheme of parallel enactments, namely, the CGST Act and the MGST Act. This is clear from the plain reading of the substantive provisions of Section 6 of the CGST / MGST Acts as noted by us hereinabove, insofar as such provision confers powers/authority on the officers of the Central Tax or of the State Tax or Union Territory as Officer under the said enactments being Officers authorized to exercise appropriate powers. 13. We cannot read Rule 86-A of the CGST Rules to override the powers which are conferred on the Commissioner under Section 5 of the MGST Act. We also cannot read Rule 86-A of the CGST Rules to be contrary to the provisions of Section 6 of the CGST Act. We further cannot read that Sectio....
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.... vs. State of Maharashtra) in which the Court in the facts of the case has held that Rule 86-A of the CGST Rules would not permit delegation of power to an officer who is below the rank of the Assistant Commissioner. However, in citing such orders Mr. Raichandani would fairly submit that the mandate of the substantive provisions of Section 5 of the MGST Act as also Section 6 of the CGST Act were not brought to the notice of the Court. In any event, in the context in hand, what is starring at the petitioner is the clear mandate of the provisions of Section 6 of the CGST Act and Section 5 of the MGST Act which the Court can neither overlook nor disregard when a question of authority of the officer is posed before the Court. Also as pointed out by Ms. Vyas in such case there was no challenge, either to the notification dated 24 January, 2020 issued by the Commissioner of State Tax in exercise of powers conferred by sub-section (1) and (3) of Section 5 of MGST Act, conferring powers on the Sales Tax Officer to pass orders under Rule 86A. 18. Insofar as Mr. Raichandani's contention on the merits of the order dated 10 March, 2023 is concerned, we find that the State tax officer in par....