TaxTMI 
TaxTMI 
2026 (10) TMI 92
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....kodi Dhinakaran, Additional Government Pleader (Taxes) Mr.R.Sethu Prabakaran, Government Advocate (Taxes) Mr.R.Sivaraman For M/s. D.Vairamoorthy 2932/2026 Ms.G.Dhana Madhri Special Government Pleader (Taxes) Assisted by Ms.Amrita Poonkodi Dhinakaran, Additional Government Pleader (Taxes) Mr.R.Sethu Prabakaran, Government Advocate (Taxes) No appearance 3371/2024 Mr.K.S.Ramaswamy Senior Standing Counsel Mr.C.J.Yeswanthram For M/s.K. Vaitheeswaran for R1 R2 - No appearance 2938/2026 Ms.G.Dhana Madhri Special Government Pleader (Taxes) Dr.S.Sathiyanarayanan 2936/2026 Ms.G.Dhana Madhri Special Government Pleader (Taxes) No appearance 2116/2024 Mr.K.S.Ramaswamy Senior Standing Counsel Mr.T.Ramesh for R1 R2 - No appearance 2841/2025 Ms.G.Dhana Madhri Special Government Pleader (Taxes) Assisted by Ms.Amrita Poonkodi Dhinakaran, Additional Government Pleader (Taxes) Mr.R.Sethu Prabakaran, Government Advocate (Taxes) No appearance 2199/2024 Mr.S.R.Sundar, Senior Standing Counsel R1 & R2 - No appearance 2848, 2857, 2925/2025 Ms.G.Dhana Madhri Special Government Pleader (Taxes) Assisted by Ms.Amrita Poonkodi Dhinakaran, Ad....
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....rayanan, for the assessee's/respondents. 5. The Supreme Court, in Armour Security (India) Ltd v Commissioner, CGST, Delhi East Commissionerate and another [145 GSTR 385: 2025 INSC 982] has decided the issue arising in these writ appeals, holding that cross-empowerment is a concept that is permissible in the scheme of the Act. The scheme under the GST Act was examined by the Supreme Court commencing from Section 59 of the Act relating to self-assessment, and the conclusions have been set out in paragraph 97 as follows:- 97. We summarize our final conclusion as under: i. Clause (b) of sub-section (2) of Section 6 of the CGST Act and the equivalent State enactments bars the "initiation of any proceedings" on the "same subject matter". ii. Any action arising from the audit of accounts or detailed scrutiny of returns must be initiated by the tax administration to which the taxpayer is assigned. iii. Intelligence based enforcement action can be initiated by any one of the Central or the State tax administrations despite the taxpayer having been assigned to the other administration. iv. Parallel proceedings should not be initiated by other t....
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....ave been initiated. b. Where an assessee becomes aware that the matter being inquired into or investigated is already the subject of an inquiry or investigation by another authority, the assessee shall forthwith inform, in writing, the authority that has initiated the subsequent inquiry or investigation. c. Upon receipt of such intimation from the assessee, the respective tax authorities shall communicate with each other to verify the veracity of the assessee's claim. We say, so as this course of action would obviate needless duplication of proceedings and ensure optimal utilization of the Department's time, effort, and resources, bearing in mind that action initiated by one authority enures to benefit of all. d. If the claim of the taxable person regarding the overlap of inquiries is found untenable, and the investigations of the two authorities pertain to different "subject matters", an intimation to this effect, along with the reasons and a specification of the distinct subject matters, shall be immediately conveyed in writing to the taxable person. e. The taxing authorities are well within their rights to conduct an inquiry or investigation u....
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....ered by the Supreme Court in paragraph 44 onwards. At paragraph 46, the Supreme Court has referred to, and noted Clarification in F. No. CBEC-20/10/07/2019-GST dated 22.6.2020 issued by the Central Board of Indirect Taxes, GST Policy Wing, extracted below:- "To The Principal Director General, Directorate General of GST Intelligence, 2nd Floor. Wing- VI, West Block- VIII R.K. Puram, New Delhi- 110066 Sir, Subject: Reference form DGGI on Cross empowerment under GST. reg. I am directed to refer to DGGI letter F.No.574/CE/66/2020/Inv./15308 dated 26.05.2020 on the issues related to cross empowerment of officers in terms of provisions of section 6 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as "the CGST Act"). 2. Issue raised in the reference is whether intelligence based enforcement actions initiated by the Central Tax officers against those taxpayers which are assigned to the State Tax administration gets covered under section 6(1) of the CGST Act and the corresponding provisions of the SGST/UTGST Acts or whether a specific notification is required to be issued for cross empowerment on....
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....ers by the section. In the absence or any such conditions, the power of Cross- empowerment under section 6(1) of the CGST Act is absolute and not conditional. Yours faithfully, (Sumit Bhatia) Deputy Commissioner (GST)" 9. The Circular clarifies that the purpose of the Notification provided for under Section 6(1) is only for the imposition of conditions on the power of cross-empowerment. Mere non-issuance of a Notification would not render Section 6 otiose or place it in limbo endlessly, to await the issuance of a Notification. Hence, this position has been noted by the Supreme Court in Armour Security India Limited (Foot Note Supra 1). 10. We may also usefully refer to the judgment in M/s Gannon Dunkerley And Co., and others v State of Rajasthan and Others [(1993) 1 SCC 364] cited by learned Special Government Pleader and the analogy drawn from that judgement. In that case, an argument had been raised to the effect that Article 369(29-A) would not be operational till such time the law specifying restrictions and conditions, as set out in Article 286(3)(b) had not been not implemented. In that context, this is what the Supreme Court has to say:- 37. On the ba....
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....of the nature referred to in Sub-clause s (b), (c) and (d) of Clause (29-A) of Article 366 would be subject to restrictions and conditions in regard to the system of levy rates and other incidents of tax contained in the said law. The existence of a law enacted under Article 286(3)(b) cannot, therefore, be regarded as a condition precedent for the exercise of the taxing power of the State under Entry 54 in List II to impose a tax of the nature referred to in Sub-clauses (b), (c) and (d) of Clause (29-A) of Article 366. This does not, however, absolve Parliament from enacting a law as envisaged by Article 286(3)(b). Keeping in view the grievance of the contractors that there is wide disparity in the sales tax legislation of the various States in the matter of imposition, mode of assessment, rates etc, of the tax on deemed sales resulting from transfer of property in goods involved in the execution of a works contract referred to. in Sub- clause (b)of Clause (29-A) of Article 366, the need for the law envisaged by Article 286(3)(b) cannot be minimised. 11. Hence, Section 6 would not be fettered merely by the absence of a Notification that may be issued in due course, stipulating c....