Rasathe Garments Vs State Tax Officer (ST) (Inspn.) (Madras High Court)
In a recent judgment, the Madras High Court addressed the legality of show cause notices issued by intelligence officers under the Goods and Services Tax (GST) Act. The case, Rasathe Garments Vs State Tax Officer (ST) (Inspn.), centered on whether such officers have the authority to issue and adjudicate show cause notices. The court examined the definition of “proper officer” under Section 2(91) of the GST Act and upheld the validity of these notices.
The petitioner, Rasathe Garments, challenged a show cause notice issued in Form GST DRC-01 on 25th September 2023. Additionally, they questioned the validity of Circular No.13/2022-TNGST issued on 8th November 2022 by the Commissioner of Commercial Taxes. The petitioner argued that the intelligence officer lacked the authority to issue the notice and that the circular allowed for bias in the adjudication process.
The court carefully reviewed the relevant provisions of the GST Act. It was noted that the GST Act does not explicitly prohibit intelligence officers from issuing show cause notices, provided they meet the definition of a “proper officer.” Under Section 2(91) of the GST Act, a “proper officer” includes any officer who has been assigned specific functions by the Commissioner.
