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 
2024 (10) TMI 314
X X X X Extracts X X X X
X X X X Extracts X X X X
....entral Excise, Deoghar HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD And HON'BLE MR. JUSTICE ARUN KUMAR RAI For the Petitioner : Mr. Kartik Kurmy, Advocate Mr. Nitin Kr. Pasari, Advocate Ms. Sidhi Jalan, Advocate For the Resp.-CGST : Mr. P.A.S. Pati, Sr. Standing Counsel Mr. Amit Kumar, Sr. Standing Counsel Mr. Anurag Vijay, Jr. Standing Counsel Mr. Om Prakash, Advocate Mr. Srijan, Advocate For the Resp.-DVC : Mrs. Debolina Sen Hirani, Advocate ORDER Per Sujit Narayan Prasad, J. 1. The instant writ petitions have been filed under Article 226 of the Constitution of India wherein demand notice-cum-show cause notices dated 31.03.2023 issued by the respondent no.2 in exercise of power conferred under Section 74(1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the Act, 2017) for the period from July, 2020 to March, 2022; November, 2017 to April, 2020; November, 2017 to April, 2020; July, 2020 to March, 2022; April, 2019 to March, 2022 and; April, 2019 to March, 2022, respectively, have been assailed on the ground of lack of jurisdiction. 2. Since in all these writ petitions, common issue has been raised, as such, are being taken up togeth....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der passed by the co-ordinate Bench of this Court has not disputed the aforesaid fact rather he is fair enough to submit that since the co-ordinate Bench has expressed the prima facie view and as such, the same needs to be decided for the purpose of coming to the conclusive finding. 7. This Court, considering the observation made as under paragraphs-8 and 10 of the order dated 18.06.2024, is of the view that if the co-ordinate bench on the basis of the prima facie view has held the writ petitions maintainable, as such, the same is to be considered by coming to the conclusive finding as to whether the writ petitions are maintainable or not. 8. Mr. Kartik Kurmy, learned counsel for the petitioners assisted by Mr. Nitin Kr. Pasari, learned counsel has advanced his argument that the show cause notices are under challenge on the ground of jurisdiction of the authority who has issued the said show cause notices, since according to him, the said notices have been issued under the signature of Additional Director, Directorate General of Goods and Services Tax Intelligence, Regional Unit, Jamshedpur and Deputy Director, Directorate General of Goods and Services Tax Intelligence, Regio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he tax specified in the notice. (2) The proper officer shall issue the notice under sub-section (1) at least six months prior to the time limit specified in sub-section (10) for issuance of order. (3) Where a notice has been issued for any period under sub-section (1), the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for such periods other than those covered under sub-section (1), on the person chargeable with tax. (4) The service of statement under sub-section (3) shall be deemed to be service of notice under sub-section (1) of section 73, subject to the condition that the grounds relied upon in the said statement, except the ground of fraud, or any wilful-misstatement or suppression of facts to evade tax, for periods other than those covered under subsection (1) are the same as are mentioned in the earlier notice. (5) The person chargeable with tax may, before service of notice under sub-section (1), pay the amount of tax along with interest payable under section 50 and a penalty equivalent to fifteen per cent. of such tax on th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er Section 2(91) are being referred as under: "2(24) ―Commissioner means the Commissioner of central tax and includes the Principal Commissioner of central tax appointed under section 3 and the Commissioner of integrated tax appointed under the Integrated Goods and Services Tax Act; 2(25) ―Commissioner in the Board means the Commissioner referred to in section 168; 2(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;" 15. It is thus evident from the definition of 'Commissioner' as defined under Section 2(24) of the Act, 2017 which means the Commissioner of central tax and includes the Principal Commissioner of central tax appointed under section 3 and the Commissioner of integrated tax appointed under the Integrated Goods and Services Tax Act. While the 'Commissioner in the Board' which has been defined under Section 2(25) which means the Commissioner referred to in Section 168. 16. Section 168 also needs to be referred herein of the Act, 2017 as per which power has been given to issu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ons with the approval of the Board. 19. The 'Proper Officer' as has been defined under Section 2(91) of the Act, 2017 means 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, meaning thereby, the Proper Officer will be said to be the Officer either the Commissioner or the Officer of the Central Tax who is assigned that function by the Commissioner in the Board. 20. If the definition of the Poper Officer will be taken into consideration along with the provision of Section 168 of the Act, 2017, the Commissioner if authorized to act by the Board in view of the power as conferred under Section 168 of the Act, 2017, the Commissioner or the Joint Secretary will be said to exercise the power of Commissioner or Joint Secretary construed to be with the approval of the Board. 21. The reference of a notification dated 01st July, 2017 has been made upon which much emphasis has been given by the learned counsel for the petitioners. The said notification has been issued under the authority of the Ministry of Finance, Department of Revenue, Cent....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ommissioner 7. Deputy/Assistant Director, Goods and Services Tax Intelligence or Deputy/Assistant Director, Goods and Services Tax or Deputy/Assistant Director, Audit Deputy Commissioner or Assistant Commissioner 8. Senior Intelligence Officer, Goods and Services Tax Intelligence or Superintendent, Goods and Services Tax or Superintendent, Audit Superintendent 9. Intelligence Officer, Goods and Services Tax Intelligence or Inspector, Goods and Services Tax or Inspector, Audit` Inspector 2. This notification shall come into force with effect from the 1st day of July, 2017. [F. No.349/52/2017-GST] (Dr. Sreeparvathy S.L.) Under Secretary to the Government of India" 22. Subsequent to the aforesaid notification, a corrigendum has been issued on 29th July, 2019 whereby and whereunder, the notification which was issued on 01st July, 2017 has been modified to the extent that in place of "Central Board of Excise and Customs", the same shall be read as "the Government" in view of the provision of Section 3. For ready reference, the said notification is also being referred as under: "Ministry of Finance (Depar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rsons as it may think fit to be the officers under this Act. (2) Without prejudice to the provisions of sub-section (1), the Board may, by order, authorise any officer referred to in clauses (a) to (h) of section 3 to appoint officers of central tax below the rank of Assistant Commissioner of central tax for the administration of this Act. 5. Powers of officers under GST.- (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 may, subject to such conditions and limitations as may be specified in this behalf by him, delegate his powers to any other officer who is subordinate to him. (4) Notwithstanding anything contained in this section, an Appellate Authority shall not exercise the powers and discharge the duties conferred or imposed on any other officer of central tax." 25. It is evident from the bare pe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Act while Section 4 confers power upon the Board in addition to the appointment which is to be made in pursuance of the provision of Section 3 to appoint such persons as it may think fit to be the officers under the Act. 27. This Court, after having discussed the aforesaid statutory provision and coming to the notification dated 01st July, 2017 reading it together with the notification dated 29th July, 2019, is of the view that both are under Sections 3 and 5 since Section 3 confers power upon the Government to appoint the officers to act under the Act while Section 4 of the Act, 2017 confers power upon the Board in addition to the appointment which is to be made by the Government, the Board can also appoint officers under this Act. 28. It is evident from the notification dated 01st July, 2017, particularly from the tabular chart, in column-(2), the reference of Officers is there and in column-(3) Officers whose powers are to be exercised has been referred. It appears from sl. no. 4 that the Additional Director General, Goods and Services Tax Intelligence or Additional Director General, Goods and Services Tax or Additional Director General, Audit is an officer who has ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r by the authority as conferred to the Board under Section 5 of the Act, 2017, hence, according to the considered view of this Court, Additional Director General, Goods and Services Tax Intelligence or Additional Director General, Goods and Services Tax or Additional Director General, Audit will be the Proper Officer within the meaning of Section 2(91) of the Act, 2017. 32. Further, it would be evident from the Circular No.3/3/2017-GST dated 05.07.2017 issued by the Ministry of Finance, Department of Revenue, Central Board of Excise and Customs, Government of India, wherein the Officers, particularly in sl. No.3, the Deputy or Assistant Commissioner, Central Tax has been mentioned, who has been empowered to function as "Proper Officer" under sub-sections (1), (2), (3), (5), (6), (7), (9) and (10) of Section 74 of the Act. 33. Further, it would be evident from the Circular No.31/05/2018-GST dated 09.02.2018 issued by the Ministry of Finance, Department of Revenue, Central Board of Excise and Customs, Government of India, wherein at paragraph-5, pecuniary limit was fixed and specific power was provided to the Superintendent of Central Tax; Deputy or Assistant Commissioner of Ce....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l or Joint Commissioner of Central Tax Above Rupees 1 crore without any limit Above Rupees 2 crores without any limit Above Rupees 2 crores without any limit 34. The said issue has been taken note by different High Courts. In the case of Yasho Industries Limited Versus Union of India reported in 2021 SCC Online Guj 3131, wherein at para 13, the Gujrat High Court has held that "proper officer" in relation to any function to be performed under the CGST Act means the Commissioner or the officer of the Central Tax, who is assigned that function by the Commissioner in the Board and respondent No. 3 is an officer of Directorate General of Goods and Services Tax Intelligence (DGGI) holding the designation of Senior Intelligence Officer, who was appointed as the Central Tax Officer with all the powers under the CGST Act and IGST Act and the Rules made thereunder, as are exercisable by the Central Tax Officers of the corresponding rank of Superintendent as specified in the Notification No. 14 of 2017-CT dated July 1, 2017 issued by the Central Board of Excise and Customs. The Gujrat Haigh Court further observed that respondent No. 3 being the officer of the Central Tax and the S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rity of Government who issued Notification No. 14/2017-CT dated 01-07-2017 was under challenge contending that U/s 5(2) of the CGST Act, on the ground that only the Board could have issued the said notification not Government. The Division Bench has observed which is quoted as under: "14. No doubt, this Court is clear in its mind that in a taxation statute, any officer performing a function under the said statute must necessarily meet three concomitants, namely, (i) existence of a class/post; (ii) appointment of officers to that said post/class; and (iii) assignment of power to the said post/class. Under the CGST Act, 2017, it is seen and as has been rightly contended by the learned counsel for the petitioner that Section 3 of the CGST, 2017 creates the class/post of officers and it clearly says that the Government by notification shall appoint the said class of officers for the purposes of the CGST Act. Further, Section 4 of the CGST Act, 2017 provides for appointment of officers/additional officers by the Board in addition to the notification by the Government under Section 3 of the CGST Act, 2017. Most significantly, Section 5 of the CGST Act, 2017 says that the Board m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er of central tax. 19. However, the question of investing powers on the central tax officers by the Board or the Government does not end there as this Court finds that the Circular No. 3-3-2017-GST, dated 5-7-2017 (Annexure 11) issued by the Commissioner in Board relates to assignment of various functions under the CGST Act, 2017 to different class of officers, who had been construed to be DGSI officers in terms of Notification No. 14/2017. 20. A conjoint reading of Notification No. 14/2017, dated 1-7-2017 and Circular No. 3-3-2017-GST, dated 5-7-2017 sufficiently contemplates the assigning of powers to DGSI officers by the Board. Let's take an example, as per the circular of 5-7-2017, a Superintendent of Central Tax has been assigned the power to function as is mentioned in Sub-section (1) of Section 70 and a reading of Notification No. 14/2017 leads us to conclude as mentioned in Serial No. 8 that a Senior Intelligence Officer, Goods and Service Tax Intelligence or Superintendent, Goods and Services Tax or Superintendent, audit has been notified to be appointed under Section 3 of the GST Act as a central tax officer and is invested with all the powers under ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as defined in Section 2(34) of the Customs Act, 1962, did not have the jurisdiction to issue show-cause notice in terms of Section 28 of the Act. However, in the second set of appeals (Nos. 4603-604 of 2005), the Customs, Excise and Service Tax Appellate Tribunal (for short "Cestat") has, to the contrary, held that the Commissioner of Customs (Preventive), Mumbai had the jurisdiction to issue notice under Section 28 of the Act. However, to appreciate the controversy, facts in Civil Appeal being CAs Nos. 4294-95 of 2002 has been taken into consideration by the Hon'ble Apex Court wherein the Respondent No. 1 was a partner in Respondent No. 2 firm viz. M/s Handloom Carpet, which was engaged in the business of carpet manufacture/export. Respondent No. 2 was charged with misusing the Export Passbook Scheme by selling goods cleared duty free in the open market or selling the passbook on premium in violation of the ITC restriction imposed on such sale. Investigations in the matter were conducted by the Marine and Preventive Wing of the Customs and the Assistant Collector of Customs (Preventive), Mumbai, issued to the respondents a show-cause notice, alleging violation of the provisi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d afresh by the jurisdictional Collector of Customs who had earlier assessed the bill of entry in question at Bombay Port. Hence, the cross-appeals were preferred by the Revenue and the importers. 39. In the aforesaid backdrop of the facts the Hon'ble Apex Court while taking into consideration a conjoint reading of Sections 2(34) and 28 of the Act of the Act 1962 wherein "proper officer" and "Notice for payment of duties, interest, etc" has been dealt respectively, has observed that only such a Customs Officer who has been assigned the specific functions of assessment and reassessment of duty in the jurisdictional area where the import concerned has been affected, by either the Board or the Commissioner of Customs, in terms of Section 2(34) of the Act is competent to issue notice under Section 28 of the Act. It has further been observed that only the officers of Customs, who are assigned the functions of assessment, which of course, would include reassessment, working under the jurisdictional Collectorate within whose jurisdiction the bills of entry or baggage declarations had been filed and the consignments had been cleared for home consumption, will have the jurisdiction to is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....functions of assessment, which of course, would include reassessment, working under the jurisdictional Collectorate within whose jurisdiction the bills of entry or baggage declarations had been filed and the consignments had been cleared for home consumption, will have the jurisdiction to issue notice under Section 28 of the Act. 45. The Hon'ble Apex Court has decided that the view taken in opposition that the source of power to act as a "proper officer" is Sections 4 and 5 of the Act and not sub-section (34) of Section 2 of the Act, as such, said sections merely authorise the Board to appoint officers of Customs and confer on them the powers and duties to be exercised/discharged by them, but for the purpose of Section 28 of the Act, an officer of Customs has to be designated as "proper officer" by assigning the function of levy and collection of duty, by the Board or the Commissioner of Customs. 46. This Court, after going through the aforesaid judgment and again adverting to the factual aspect of the present case, is of the view that the factual aspect of the aforesaid case is quite different to that of the present case since herein the issue pertains to the Act, 2017 w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eral, Audit to act as a Commissioner and the Deputy/Assistant Director, Goods and Services Tax Intelligence or Deputy/Assistant Director, Goods and Services Tax or Deputy/Assistant Director, Audit to act as Deputy Commissioner/Assistant Commissioner and as such, it is incorrect on the part of the writ petitioners to take the ground that the Additional Director General, Goods and Services Tax Intelligence or Additional Director General, Goods and Services Tax or Additional Director General, Audit and the Deputy/Assistant Director, Goods and Services Tax Intelligence or Deputy/Assistant Director, Goods and Services Tax or Deputy/Assistant Director, Audit are having no power to initiate a proceeding under the Act, 2017. 50. This Court, therefore, is of the view based upon the aforesaid discussion that the ground which has been taken by the petitioner to quash the show cause notices due to want of jurisdiction is having no substance. 51. Accordingly, this Court is of the view that the Additional Director General, Goods and Services Tax Intelligence or Additional Director General, Goods and Services Tax or Additional Director General, Audit and the Deputy/Assistant Director, Goods....