Tvl. Dr. M. Sundaram Hospital Private Limited Vs State Tax Officer-II (RS) (Madras High Court)
State GST Authorities Can Initiate Enforcement Because Cross-Empowerment Exists Under GST Law; Writ Petition Not Maintainable Because GST Classification and Suppression Issues Involve Disputed Facts; State GST Department Had Jurisdiction Despite Central GST Registration, Rules High Court; High Court Refuses to Interfere Because GST Dispute Must Be Decided in Statutory Appeal.
In Tvl. Dr. M. Sundaram Hospital Private Limited Vs State Tax Officer-II (RS), the Madras High Court considered writ appeals challenging assessment orders passed under the CGST Act for the assessment year 2020-21. The appellant hospital contended that it was registered under the Central GST authorities and therefore the State GST authorities lacked jurisdiction to initiate enforcement and assessment proceedings. The appellant also argued that there was no fraud, wilful misstatement, or suppression of facts, and therefore proceedings under Section 74 of the CGST Act were not sustainable. It was further contended that the hospital had collected tax on supply of medicines to inpatients, claimed input tax credit, and adjusted the credit against tax liability.
The Division Bench observed that the issues raised involved disputed questions of fact, particularly regarding classification and alleged suppression, which could not be adjudicated in writ jurisdiction. Referring to the Supreme Court decision in Armour Security (India) Ltd. Vs Commissioner, CST, Delhi East Commissionerate, the Court held that intelligence-based enforcement action can be initiated by either Central or State GST authorities irrespective of administrative assignment. Accordingly, the Court held that the State authorities had jurisdiction to initiate proceedings. The Court further observed that if the appellant disputed the invocation of Section 74 or the finding regarding suppression, the proper remedy was to file an appeal under Section 107 of the CGST Act. Finding no infirmity in the earlier writ court order granting liberty to pursue statutory appeal remedies, the High Court dismissed the writ appeals and left it open to the appellant to raise all grounds before the appellate authority.
