RELEVANT STATUTORY PROVISIONS

Section 5. Powers of officers under GST.— (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.

Section 167. Delegation of powers.— The Commissioner may, by notification, direct that subject to such conditions, if any, as may be specified in the notification, any power exercisable by any authority or officer under this Act may be exercisable also by another authority or officer as may be specified in such notification.

Section 168 of CGST Act: Power to issue instructions or directions.— (2) The Commissioner specified in clause (91) of section 2, sub-section (3) of section 5, clause (b) of sub-section (9) of section 25, sub-sections (3) and (4) of section 35, sub-section (1) of section 37, sub-section (2) of section 38, sub-section (6) of section 39, [sub-section (1) of section 44, sub-sections (4) and (5) of section 52]119, [sub-section (1) of section 143, except the second proviso thereof]120, sub-section (1) of section 151, clause (l) of sub-section (3) of section 158 and section 167 shall mean a Commissioner or Joint Secretary posted in the Board and such Commissioner or Joint Secretary shall exercise the powers specified in the said sections with the approval of the Board.

Section 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

Section 2(25) ―Commissioner in the Board means the Commissioner referred to in section 168.

Section 168 of State GST Act: Power to issue instructions or directions — The Commissioner may, if he considers it necessary or expedient so to do for the purpose of uniformity in the implementation of this Act, issue such orders, instructions or directions to the State tax officers as it may deem fit, and thereupon all such officers and all other persons employed in the implementation of this Act shall observe and follow such orders, instructions or directions.

MEANING OF THE TERM DELEGATION

The term ‘delegation’ has neither been defined in CGST Act nor in IGST Act.

Lets find the general meaning of the term ‘delegation’. Delegation is the act of making or commissioning a delegate. It generally means parting of powers by the person who grants the delegation and conferring of an authority to do things which otherwise that person would have to do himself. Delegation is defined in Black’s Law Dictionary as “the act of entrusting another with authority by the empowering another to act as an agent or representative”. In P. Ramanatha Aiyar’s, The Law Lexicon, “delegation is the act of making or commissioning a delegate. Delegation generally means parting of powers by the person who grants the delegation, but it also means conferring of an authority to do things which otherwise that person would have to do himself”.

Justice Mathew in Gwalior Rayon Silk Manufacturing (Wvg.) Co. Ltd. v. The Assistant Commissioner of Sales Tax and Others [1974 (4) SCC 98], has succinctly discussed the concept of delegation. Paragraph 37 reads as follows:

“37. … Delegation is not the complete handing over or transference of a power from one person or body of persons to another. Delegation may be defined as the entrusting, by a person or body of persons, of the exercise of Page 24 of 45 a power residing in that person or body of persons, to another person or body of persons, with complete power of revocation or amendment remaining in the grantor or delegator. It is important to grasp the implications of this, for, much confusion of thought has unfortunately resulted from assuming that delegation involves or may involve, the complete abdication or abrogation of a power. This is precluded by the definition. Delegation often involves the granting of discretionary authority to another, but such authority is purely derivative. The ultimate power always remains in the delegator and is never renounced.”  

As a general rule, whatever a person has power to do himself, he may do by means of an agent. This broad rule is limited by the operation of the principle that a delegated authority cannot be redelegated, delegatus non potest delegare. The naming of a delegate to do an act involving a discretion indicates that the delegate was selected because of his peculiar skill and the confidence reposed in him and there is a presumption that he is required to do the act himself and cannot redelegate his authority. As a general rule, “if the statute directs that certain acts shall be done in a specified manner or by certain persons, their performance in any other manner than that specified or by any other person than one of those named is impliedly prohibited. Normally, a discretion entrusted by the Parliament to an administrative organ must be exercised by that organ itself. At the same time, it is settled position of law that the maxim “delegatus nonpotest delegare” must not be pushed too far. The maxim does not embody a rule of law. It indicates a rule of construction of a statute or other instrument conferring an authority. Prima facie, a discretion conferred by a statute on any authority is intended to be exercised by that authority and by no other. However, the intention may be negatived by any contrary indications in the language, scope or object of the statute. The construction that would best achieve the purpose and object of the statute should be adopted.” 

Analysis of Delegation of Power under GST

COMPARISON OF CENTRAL AND STATE LAW

Section 5(3) of both the Central and State law uses the word ‘Commissioner’ who may delegate his powers to any other officer who is subordinate to him.

The word Commissioner has been defined in Section 2(24) of the central CGST Act to mean that Commissioner includes Principal Commissioner appointed u/s 3 of the Act.

The word Commissioner in Board has been defined in Section 2(25) of the central CGST Act to mean that the Commissioner referred to in section 168.

The comparison of the provisions of the State GST Act and the CGST would indicate that there is a vast difference between the two. Section 168(2) of the CGST Act clarifies that the Commissioner specified in subsection (3) of Section 5 shall mean a Commissioner or Joint Secretary posted in the Board and such Commissioner or Joint Secretary shall exercise the powers specified in the said section with the approval of the Board.

Thus, the distinguishing feature is that so far as the CGST Act is concerned, the power of delegation under Section 5(3) of the Act therein is with the Commissioner in the Board and not the Commissioner of the Central Tax. Whereas, so far as Section 5(3) of the State GST Act is concerned, the Commissioner would be the Commissioner of the State Tax.

DELEGATION TO EXERCISE POWER U/S 83 – WHETHER VALID?

Many State governments, by issuing notification or order, have delegated powers of Commissioner exercisable under section 83, to his subordinate officers.

The moot question here is whether such delegation is permissible under law keeping in view the provisions of section 83 which specifically empowers the commissioner to form his opinion while exercising power u/s 83.

Section 83 makes it abundantly clear that it is the Commissioner’s opinion which is relevant. The Legislature has thought fit to confer this power upon the Commissioner. Whether such power conferred upon the Commissioner by the legislature could have been delegated to the three subordinate officers referred to above by virtue of an order or notification passed in exercise of power under subsection (3) of Section 5 read with clause 19 of Section 2 of the Act and the rules framed thereunder. Let’s see whether it will stand the judicial scrutiny.

DELEGATION OF POWER U/S 167 

Lets dissect the provisions u/s 167 contained in both central as well as state law.

  • The Commissioner may,
  • by notification,
  • direct that subject to such conditions, if any, as may be specified in the notification,
  • any power exercisable by any authority or officer under this Act
  • may be exercisable also by another authority or officer
  • as may be specified in such notification.

Lets analyze now.

  1. Section 167 of central law and state law are the same and para material to each other. The only exception is the meaning of the word commissioner employed in both the laws. The word Commissioner employed in section 167 of the central law shall means ‘Commissioner in Board’ by virtue of sec 168(2) of CGST Act. The word Commissioner employed in section 167 of the state law shall means ‘Commissioner of State Tax’ as defined in section 2(24) of the State GST Act.
  1. Direction must be exercised by the commissioner only issuing a notification.
  1. Meaning of ‘any power exercisable by any authority or officer under this Act’ – There must be a power already given to any officer or any officer or any authority.
  1. Such power can also be given to another authority or other officer, but under the act only. Both the laws have used the word ‘also’ before the expression ‘by another authority or officer’. The use of the word ‘also’ makes it abundantly clear that commissioner can assign power exercisable by one authority or officer to another authority or officer.
  1. The use of Marginal Note – ‘Delegation of Power’ in section 167 is unnecessarily creating confusion. There is no provision in the body of the section for delegation of power rather it talks of additional assignment of power to one which is already assigned to another.

*****

Disclaimer: The contents of this document are solely for informational and knowledge purpose. Neither have I accepted any liability for any loss or damage of any kind arising out of any inaccurate or incomplete information in this document nor for any action taken in reliance thereon.

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