TaxTMI 
TaxTMI 
2024 (3) TMI 1216
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....9878 of 2019 : Mr.Derric Sam for Mr.S.Durai Raj For Petitioner in W.P.Nos.30607, 30613, 30615 of 2019, 4922, 8495, 8496 of 2020, 12795, 12797 & 16324 of 2021 : Mr.T.Ramesh For Petitioner in W.P.Nos.3011, 3013, 3026, 3028 of 2020, 2861, 2863, 2865, 11004, 11006, 11008 of 2021, 4490 & 26586 of 2022 : Mr.T.Ramesh for Mr.J.Shankaraman For Petitioner in W.P.No.11319 of 2020 : Mr.Adithya Reddy For Petitioner in W.P.No.2723 of 2021 : Mr.S.Nirmal Aditya For Petitioner in W.P.Nos.18575 of 2022 & 12014 of 2023 : Mr.S.Raveekumar For Petitioner in W.P.No.22552 of 2022 : Mr.R.N.Amarnath For Petitioner in W.P.No.31013 of 2022 : Mr.K.Vaitheeswaran For Respondents in W.P.No.34792 of 2019 : Mr.Venkatasamy Babu Senior Panel Counsel For R3 & R6 in W.P.No.34792 of 2019 For R8 in W.P.No.29878 of 2019 For Respondent in W.P.Nos.30607, 30613, 30615 of 2019, 3011, 3013, 3026, 3028, 4922, 8495, 8496 of 2020, 2861, 2863, 2865, 11004, 11006, 11008, 12795, 12797& 16324 of 2021 For R3 in W.P.No.2723 of 2021 For R3 & R4 in W.P.No.18575 of 2022 For R3 in W.P.No.22552 of 2022 For R3 in W.P.No.26586 of 2022 For R1 in W.P.No.31013 of 2022For R3 & R4 in W.P.No.12014 of 2023. : Mr.Haja Nazir....
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....2017 r/w Section 20 of IGST Act, 2017 31.03.2022 6. 22552 of 2022 K. Sridhar Summons issued under Section 70 of CGST Act, 2017 7. 26586 of 2022 M/s.New Pandian Travels Pvt.Ltd Show Cause Notice issued under Rule 142(1) of the CGST Rules, 2017 05.08.2022 8. 4490 of 2022 M/s.S.S.M. Processing Mills Limited Assessment Order under Section 73 of the CGST Act, 2017 07.10.2021 9. 12014 of 2023 M/s. Sunrise Enterprises Assessment Order demanding ITC fraudulently availed under Section 74(1) of respective GST Acts and Demand of Interest under Section 50 of GST Acts 17.02.2023 4. In the above mentioned writ petitions, the petitioners have challenged the impugned proceedings of the respondents namely the Central Authorities. Therefore, the petitioners have challenged the impugned proceedings of the respondents namely the Central Authorities on the ground they are without Jurisdiction. 5. Following Writ Petitions have been filed by the petitioners who have been assigned to the Central Authorities. Proceedings have been initiated by the State Authorities. Details of the respective Writ Petitions are as under:- Sl.No. ....
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....d by the Central Authorities under the CGST Act, 2017 and have thus challenged the notices issued under Sections 62 & 67 of the TNGST Act, 2017 and orders passed under Section 73 and 74 of the TNGST Act, 2017 by the respondents therein namely the State Authorities. Therefore, in the above mentioned writ petitions, the petitioners have challenged the impugned proceedings of the respondents namely the State Authorities. 7. The dispute in these Writ Petitions have arisen on account of the fact that the respective petitioners who have been assigned either to the State Authorities or to the Central Authorities for administrative purposes under the provisions of the respective GST Enactments namely, the CGST Act, 2017, TNGST Act, 2017 and IGST Act, 2017 are/were being subjected proceedings by their counterpart. 8. Submissions of the petitioners are that in the absence of a proper Notification under Section 6 of the respective GST Enactments for cross-empowerment, the impugned proceedings by the respective counterparts were without jurisdiction. 9. The CGST Act, 2017, GST Act, 2017 of the respective States, Integrated GST Act, 2017, UTGST Act, 2017, GST (Composition to States) Ac....
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.... services tax ; (f) any special rate or rates for a specified period, to raise additional resources during any natural calamity or disaster; (g) special provision with respect to the States of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and (h) any other matter relating to the goods and services tax, as the Council may decide. 5) The Goods and Services Tax Council shall recommend the date on which the goods and services tax be levied on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel. 6) While discharging the functions conferred by this article, the Goods and Services Tax Council shall be guided by the need for a harmonised structure of goods and services tax and for the development of a harmonised national market for goods and services. 7) One-half of the total number of Members of the Goods and Services Tax Council shall constitute the quorum at its meetings. 8) The Goods and Services Tax Council shall determine the procedure in the performance of its functions. ....
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....ers between the Central and the State tax administrations for all administrative purposes; ii. Of the total number of taxpayers below Rs. 1.5 crore turnover, all administrative control over 90% of the taxpayers shall vest with the State tax administration and 10% with the Central tax administration; iii. In respect of the total number of taxpayers above Rs. 1.5 crore turnover, all administrative control shall be divided equally in the ratio of 50% each for the Central and the State tax administration; iv. The division of taxpayers in each State shall be done by computer at the State level based on stratified random sampling and could also take into account the geographical location and type of the taxpayers, as may be mutually agreed; v. The new registrants shall be initially divided one each between the Central and the State tax administration and at the end of the year, once the turnover of such new registrants was ascertained, those units with turnover below Rs. 1.5 crore shall be divided in the ratio of 90% for the State tax administration and 10% for the Central tax administration and those units above the turnover of Rs. l.5 crore shall be ....
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....T and SGST Acts of 2017 respectively. 18. Text of Circular No.1/2017-GST (Council) dated 20.09.2017 bearing reference F.No.166/Cross Empowerment/GSTC/2017 containing the guide lines for Division of Tax payers between the Centre and State Authorities to ensure single interface for the purpose of tax administration under the respective GST Enactment reads as below:- Subject: Guidelines for division of taxpayer base between the Centre and States to ensure Single Interface under GST-Regarding Based on the decisions taken in the 9th Meeting of the GST Council held on 16 January, 2017 and 21st Meeting of the GST Council held on 9 September, 2017, the following criteria should be followed for the division of taxpayer base between the Centre and the States to ensure single interface: i. Of the total number of taxpayers below Rs. 1.5 crore turnover, all administrative control over 90% of the taxpayers shall vest with the State tax administration and 10% with the Central tax administration; ii. In respect of the total number of taxpayers above Rs. 1.5 crore turnover, all administrative control shall be divided equally in the ratio of 50% each for the Ce....
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....ttees to implement the decision of the GST Council, keeping in view the broad principles stated hereinabove. 4. Suitable notifications regarding cross-empowerment of State and Central Tax officers under CGST/IGST and SGST Acts respectively are being issued separately. 19. After the above decision was taken for allocating 90% of those assessees whose turnover were below Rs. 1.5 crores with the State Authorities and balance 10% with the Central Authorities and 50% each of those tax payers whose turn overs was above Rs. 1.5 crores equally between the State Authorities and the Central Authorities under the respective GST Enactments, the GST Council in its 22nd Meeting held on 06.10.2017 addressed the concern arising out of the gap between the issuance of Notifications under various GST Enactments of 2017 and IGST Act, 2017. Agenda No.9 of the 22nd Meeting held on 06.10.2017 captures the deliberations. It is extracted below:- "Agenda item 9: Proposal for issuing notifications on cross-empowerment for ensuring single interface under GST 35. The Commissioner (GST Policy), CBEC stated that it was proposed to issue notification on cross-empowerment prepared in ....
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.... To issue notifications by the Central Government and the State Governments, cross empowering officers of the Central and State Governments to sanction refund and that an order of refund passed by an officer of the Central or State Government shall cover both the Central tax and the State tax. Similar notification to be issued under the IGST Act by the Central Government; ii. Until the division of taxpayers is effected between the Central and State administration, an officer of the Central and the State Government was authorised to process any refund claim filed by an applicant under his jurisdiction subject to a declaration being given by the applicant that the same refund claim has not been claimed from the other administration having jurisdiction over the applicant." 20. The provisions of the respective GST Enactments contemplates power of the Central Government and the State Government to issue notifications on the recommendations of the GST Councils to empower the Officers of the State Tax Officer or Union Territory Officer to issue Notifications under Section 6 of the CGST Act, 2017 the Central Tax Officers to be the "proper officer" under the respective GST Enact....
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....dated the 13th October, 2017, namely:- In the said notification, for the words and figures "except rule 96", the words, figures, brackets and letter "except sub rules (1) to (8) and sub rule (10) of rule 96" shall be substituted. Note: * substituted with 'except sub rules (1) to (8) and sub rule (10) of rule 96' vide amendment in Notification No.10/2018-Central Tax dated 23.01.2018. 24. A similar Notification has also been issued by the State of Tamil Nadu in G.O.(MS).No.126, Commercial Taxes And Registration (B1) Department, dated 13.10.2017. 25. In line with the decision of the 22nd GST Council Meeting held on 06.10.2017, a separate Model Notification was also circulated for the purpose of Section 6 of the respective GST Enactments for other purpose which would have entitled cross-empowerment for other purpose. However, Model Notifications which was circulated during September, 2017 immediately after the GST Enactments came into force with effect from 01.07.2017 have not been notified either under the CGST Act, 2017 or under the SGST Act, 2017. 26. These Notifications remain as draft Notifications till date. They have not been notified. Text of the Draft Noti....
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....ental proceedings including appeals arising from such proceedings. No such proceedings have been initiated in respect of the said goods by the proper officer of GST Act. 4. All proceedings against a supplier or recipient of goods or services or both, who has remained unregistered although liable to be registered. No such proceeding has been initiated in respect of such person by the proper officer of GST Act. 5. Any proceedings arising out of Chapter XX of the GST Act. Except the issues related to or arising out of transitional provisions of the GST Act. Explanation 1: Assignment of registered persons refers to the distribution of registered persons between the central and state tax administrations, for exercising all administrative controls regarding enforcement of the provisions of the SGST Act, in such proportions and following such methods, as the Council may decide from time to time. Explanation 2: With respect to Sl. No. 2,3 & 4 of the said Schedule, information regarding intimation of proceedings in the format specified below should be furnished by the Commissioner to the jurisdictional Commissioner of the Central Goods and Services Tax....
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.... registered persons, excluding those referred at Sl. No. 2, 3, 4 and 5 of this Schedule. Jurisdiction in respect of the said registered person has been assigned to the said officers for the specified period in accordance with the recommendations of the Council. (ii) all consequential proceedings including appeals arising from such proceedings. 2. Inspection, search, seizure or any other proceedings under section 67 of the Central Goods and Services Tax Act, 2017 as made applicable to the Integrated Tax vide section 20 of the IGST Act or intelligence-based enforcement action against any person including all consequential or incidental proceedings including appeals arising from such proceedings. Such proceedings have not been initiated by the proper officer of central tax within one year from the date on which said proceedings are initiated by the said officers. Explanation. -For the purposes of this clause, the period of one year shall be counted from the date of initiation of the said proceedings as specified in the format for intimation of such proceedings. 3. Detention, seizure and release of goods and conveyances in transit under section 129 of the Central Good....
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....rment was urgently required to enable the tax payer and therefore, the notification can be issued. It highlighted that there was a persistent difference regarding the cross-empowerment for the Place of supply rules regarding IGST, Notification regarding the cross-empowerment in respect of other matters were to be deferred in 22nd GST Council Meeting held on 06.10.2017. 28. Thus, there is no cross-empowerment. 29. The learned counsel for the petitioners relied on the following decisions:- i. Pahwa Chemicals Pvt. Ltd., Vs. Commissioner of Central Excise, Delhi, 2005 (181) E.L.T. 339 (S.C.); ii. Duncan Agro Industries Ltd., Vs. Union of India, 1989 (39) E.L.T. 211 (Del.); iii. M/s.Muthu Metals represented by K.Bhommal, Proprietor, Madras - 3 Vs. State of Tamil Nadu represented by the Commissioner and Secretary to Govt., C.T. & R.E. Dept., Madras - 9 and others in W.P.Nos.4949 of 1986, etc., batch; iv. Raghunath International Ltd., Vs. Union of India, 2012 (280) E.L.T. 321 (All.); v. National Building Construction Co. Ltd., Vs. Union of India, 2019 (20) G.S.T.L. 515 (Del.); vi. Yasho Industries Ltd., Vs. Union of India, Manu/G....
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....tion, payment of tax, furnishing of returns, computation and settlement of integrated tax, electronic way bill and for carrying out such other functions and for such purposes as may be prescribed. 35. The returns that are contemplated under these Rules are composite returns which will not only capture the tax liability under the CGST Act, 2017 but also TNGST Act, 2017 and IGST Act, 2017. The returns also capture the Input Tax Credit that are availed by an assessee under the respective GST Enactments. 36. That apart, the payment of tax whether under the CGST Act, 2017 or under TNGST Act, 2017 are at the same rate. The only difference that may arise at the time of payment of tax due to utilization of the Input Tax Credit (ITC) availed on the inward supplies and their cross utilization for discharging the tax liability in terms of Chapter-X of the respective GST Enactments r/w Chapter-IX of the respective GST Rules, 2017. 37. The utilization of Input Tax Credit under the respective GST Enactments are in terms of Sub-Section (4) to Section 49 of the respective Central and TNGST Enactments. They read as under:- "49. Payment of tax, interest, penalty and other amounts- ....
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....zation of input tax credit:- Input tax credit on account of integrated tax shall first be utilised towards payment of integrated tax, and the amount remaining, if any, may be utilised towards the payment of central tax and State tax or Union territory tax, as the case may be, in any order: Provided that the input tax credit on account of central tax, State tax or Union territory tax shall be utilised towards payment of integrated tax, central tax, State tax or Union territory tax, as the case may be, only after the input tax credit available on account of integrated tax has first been utilised fully. 43. A similar provision is absent under the TNGST Act, 2017 and TNGST Rules 2017. 44. As per Rule 86(2) of the CGST Rules, 2017 , the electronic credit ledger shall be debited to the extent of discharge of any liability in accordance with the provisions of section 49 [or section 49A or section 49B]. 45. As per Rule 86(2) of the TNGST Rules, 2017, the electronic credit ledger shall be debited to the extent of discharge of any liability in accordance with the provisions of Section 49. 46. As per Section 88A of the TNGST Rules, 2017, Input tax credit on account of integrate....
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....oint the following classes of officers for the purposes of this Act, namely:-- (a) Principal Chief Commissioners of Central Tax or Principal Directors General of Central Tax; (b) Chief Commissioners of Central Tax or Directors General of Central Tax; (c) Principal Commissioners of Central Tax or Principal Additional Directors General of Central Tax; (d) Commissioners of Central Tax or Additional Directors General of Central Tax; (e) Additional Commissioners of Central Tax or Additional Directors of Central Tax; (f) Joint Commissioners of Central Tax or Joint Directors of Central Tax; (g) Deputy Commissioners of Central Tax or Deputy Directors of Central Tax; (h) Assistant Commissioners of Central Tax or Assistant Directors of Central Tax, and ; (i) any other class of officers as it may deem fit: Provided that the officers appointed under the Central Excise Act, 1944 shall be deemed to be the officers appointed under the provisions of this Act. 3. Officers under this Act.- The Government shall, by notification, appoint the following classes of officers for the purposes of this Act, namely....
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....t to such conditions as may be specified. Thus, the Commissioner has power to delegate powers under the Act to other Officer specified in Sub-clause (c) to (f) to Section 3 of the TNGST Act, 2017. There is no cross-empowerment under Section 4(2) of the TNGST Act, 2017. 54. Thus, neither the Board under Section 4(1) and (2) of CGST Act, 2017 nor the Government and/or the Commissioner under Section 4(1) and (2) of SGST Act, 2017 can appoint such officers in addition to the officer notified under Section 3 of the respective Act. Thus, the Board can appoint and delegate only to Central Tax Officers appointed under the CGST Act, 2017 for CGST Act, 2017 and the Government and/or the Commissioner can appoint and delegate only to State Tax Officers appointed under the TNGST Act, 2017 for TNGST Act, 2017. 55. These provisions are pari materia with Section 4 of the Customs Act, 1962 and Section 12(E) of the Central Excise Act, 1944. 56. Section 4 of the respective GST Enactments namely CGST Act, 2017 and TNGST Act, 2017 and the corresponding Sections from the Model Law are reproduced below:- Section 4 of the Central Goods and Services Tax Act, 2017 Section 5 of the Model Centr....
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....he whole of the State or where the State Government so directs, over any local area thereof, and all other officers shall, subject to such conditions as may be specified, have jurisdiction over the whole of the State or over such local areas as the State Government may specify. 57. Section 5 of the Central GST Act, 2017 and TNGST Act, 2017 circumscribes the powers of the officers mentioned in Section 3 and 4 of the respective GST Enactments. Section 5 of the respective GST Enactments read slightly differently from Section 6 of the respective Model CGST Act and Model State GST Act. These provisions are reproduced below:- Section 5 of the Central Goods and Services Tax Act, 2017 Section 5 of the Tamil Nadu Goods and Services Tax Act, 2017. 5. Powers of officers:- 1) Subject to such conditions and limitations as the Board may impose, an officer of Central Tax may exercise the powers and discharge the duties conferred or imposed on him under this Act. 2) An officer of central tax may exercise the powers and discharge the duties conferred or imposed under this Act on any other officer of central tax who is subordinate to him. 3) The Commissioner ma....
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....vices Tax Act:- 1) Subject to such conditions and limitations as the Commissioner may impose, an officer of the State Goods and Services Tax may exercise the powers and discharge the duties conferred or imposed on him under this Act. 2) An officer of State Goods and Services Tax may exercise the powers and discharge the duties conferred or imposed under this Act on any other officer of State Goods and Services Tax who is subordinate to him. 3) The Commissioner may, subject to such conditions and limitations as may be specified in this behalf by him, delegate his powers to any other officer subordinate to him. 59. Thus, the delegation only is to the officers under the respective GST Enactments, unlike in Section 6 of the Model GST Laws which contemplated wide powers with the Board/Commissioner under the respective Model GST Laws to delegate the powers to officers from their counterpart Department. 60. Section 6 of the respective Central GST Act, 2017 and TNGST Act, 2017 are relevant for cross-empowerment. It read slightly differently from Section 7 of the respective Model Central and State GST laws which were in circulation in February, 2016. Section....
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....er the Central Goods and Services Tax Act, 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 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 revision, wherever applicable, of any order passed by an officer appointed under this Act, shall not lie before an officer appointed under the Central Goods and Services Tax Act. Section 7 of the Model Central Goods and Services Tax, 2017 7. Powers of SGST/CGST officers under the Act (1) Notwithstanding anything contained in this Act, the proper officers for the purposes of any one or more Sections (........) of the {SGST/CGST Act}, shall be deemed to be the proper officers for the purposes of the corresponding section or sections, as the case may be, of this Act to such extent and subject to such conditions as may be prescribed in the rules made in this behalf. (2) Where any proper officer issues an order or acts under any one or more sect....
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....essee has been assigned to the State Authorities, pursuant to the decision taken by the GST Council as notified by Circular No.01/2017 bearing Reference F.No.166/Cross Empowerment/GSTC/2017 dated 20.09.2017, the officers of the Central GST cannot interfere although they may have such intelligence regarding the alleged violation of the Acts and Rules by an assessee. 65. The manner in which the provisions have been designed are to ensure that there is no cross interference by the counterparts. Only exception provided is under Section 6 of the respective GST enactement. Therefore, in absence of a notification for cross-empowerment, the action taken by the respondents are without jurisdiction. Officers under the State or Central Tax Administration as the case may be cannot usurp the power of investigation or adjudication of an assesse who is not assigned to them. 66. Therefore, the proceedings initiated by the respondents so far against the respective petitioners by the Authorities other than the Authority to whom they have been assigned to are to be held as without jurisdiction. Therefore, the impugned proceedings warrants interference. 67. At the same time, it is noticed tha....