Case Law Details
Poulami Ghoshal Vs Assistant Commissioner of Revenue (Calcutta High Court)
The Calcutta High Court considered a writ petition challenging a show-cause notice dated 19 July 2024 issued under Section 74 of the CGST/WBGST Act, 2017 for the tax period 2023–24 (up to February 2024). The petitioner questioned the jurisdiction and competence of the issuing authority, contending that proceedings under Section 74 must be initiated by the “proper officer” handling the matter. It was argued that although the Assistant Commissioner of Revenue may be authorised to act as Assistant Commissioner of State Tax, while exercising powers under the Act, the officer must act in the latter capacity; issuance of the notice as Assistant Commissioner of Revenue was alleged to be without authority and a non-starter.
The State opposed the challenge, relying on a notification dated 29 March 2019 by which the Commissioner of State Tax delegated powers under various provisions of the Act to officers posted in the Directorate of Revenue Intelligence and Enforcement, West Bengal. Reference was made to the relevant entry indicating that an Assistant Commissioner of Revenue, by virtue of such delegation, is competent to act as a “proper officer” under Section 74. It was also submitted that interference at the show-cause stage was unwarranted, particularly as the petitioner had not yet responded to the notice.
Upon hearing the parties, the Court held that the writ raised a jurisdictional issue warranting consideration. Balancing the prima facie case and convenience, the Court permitted the petitioner to respond to the show-cause notice, while granting limited protection that any order passed by the proper officer would not be given effect to without the Court’s leave. The respondents were granted liberty to file an affidavit-in-opposition after the annual vacation, with a reply thereafter. Liberty to apply was reserved.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
The Court: 1.Challenging the show-cause notice dated 19th July, 2024 under Section 74 of the CGST/WBGST Act, 2017 (hereinafter referred to as the said Act) for the tax period 2023-24 (upto on February 2024), the instant writ petition has been filed.
2. Mr. Mehta, learned Advocate appearing in support of the aforesaid writ petition by drawing attention to the provisions contained in Section 74 of the said Act would submit that the same contemplates the matters in relation to the said section to be decided by the proper officer and not by any proper officer meaning thereby, the officer, who was dealing with the matter is only competent to initiate the proceeding under Section 74 of the said Act. He would also submit by placing the notification dated 8th March, 2019 (1st Notification) issued by the Government of West Bengal, Finance Department, Revenue published in the Kolkata Gazette on 1st April, 2019, that Assistant Commissioner of Revenue, Directorate of Revenue Intelligence and Enforcement does not have competence, in his capacity as the Assistant Commissioner of Revenue, to issue the above show-cause notice, as according to him though the Assistant Commissioner of Revenue may be authorised to act as the Assistant Commissioner of State Tax, however, while exercising powers under the said Act, he is required to act as the Assistant Commissioner of State Tax and not as the Assistant Commissioner of Revenue. According to him the above show cause issued by the Assistant Commissioner of Revenue is a non starter and should not be permitted to be proceeded with.
3. Per contra Mr. Siddiqui, learned Additional Government Pleader by drawing attention of this Court to a separate notification dated 29th March, 2019 would submit that the Commissioner State Tax in exercise of powers conferred on him under Sub Section (3) of Section 5, read with Section (91) of Section 2 the West Bengal Goods and Services Tax Act 2017, and rules made thereunder and in exercise of powers conferred by paragraph 2 of the Notification dated 8th March, 2019 has delegated his powers under different Sections of the said Act, specified in column 2 and described in column 3, to the classes of officers posted in the Directorate of Revenue Intelligence and Enforcement, West Bengal as specified in Column 4.
4. By drawing attention of this Court to entry No. 25, he would submit that Assistant Commissioner of Revenue by virtue of the above delegation is competent to act as a proper officer within the meaning of Section 74 of the said Act. According to him since the challenge is only at the show cause stage, no interference is called for, especially having regard to the fact, the petitioner is yet to respond to the show cause.
5. Having heard the learned Advocates appearing for the respective parties, I am of the view, that the writ petition raises a jurisdictional issue, the same is required to be heard. Considering the prima facie case and the balance of convenience, however, at the same time, since the show-cause notice has already been issued and the petitioner is yet to respond to the same, it would be prudent at this stage to permit the petitioner to respond to such show cause with a limited protection that the order to be passed by the proper officer shall not be given effect to without the leave of this Court.
6. I may record that Mr. Mehta, learned Advocate representing the petitioner has submitted that the petitioner shall not seek unnecessary adjournment in the matter.
7. The respondents shall be at liberty to file affidavit-in-opposition to the present writ petition within a period of two weeks after annual vacation, reply, if any, be filed within a week thereafter.
8. Liberty is given to the parties to apply.
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