Case Law Details
Narayan Sahu Vs Union of India and others (Orissa High Court)
The Hon’ble Orissa High Court in the case of Narayan Sahu v. Union of India & Ors. [Writ Petition (Civil) No. 28012 of 2024 dated November 26, 2024] held that officers of State Tax are authorized to be Proper Officers as per Section 4 of the Integrated Goods and Services Tax Act, 2017 (“the IGST Act”). The officers of State Tax are authorized to be proper officers under IGST Act subject to exceptions and conditions to be notified by the Government. Noting that there was no notification to limit the State Tax authorities to cross-authorize on IGST matters, dismisses the petition accordingly and upholds the order
Facts:
Mr. Narayan Sahu (“the Petitioner”) were served a SCN by the proper officer i.e. Assistant Commissioner of State Tax, who lacked jurisdiction and power to issue the notice.
Subsequently, an Order dated September 26, 2024 (“the Impugned Order”) was issued which demanded of tax and penalty, by which total of almost INR 41,00,000/-.
It was contended that the cross authorization is vague inasmuch as subsequent notification have not been made delineating jurisdictions and functions.
Hence, aggrieved by the current circumstances, the Petitioner filed the present writ petition.
Issue:
Whether State-Tax Officers authorised can act as ‘proper-officer’ for IGST Act?
Held:
The Hon’ble Orissa High Court in Writ Petition (Civil) No. 28012 of 2024 held as under:
- Held that, provision in Section 4 of IGST Act is cross authorization, inter alia, of officers of State Tax. There is no dispute that notifications dated June 24, 2017 and June 25, 2017 for appointment of proper officers and assignment of powers and duties to them as officers of State Tax. For purposes of the IGST Act, the empowering cross authorization provision says that inter alia, officers of State Tax are authorized to be proper officers for the purposes of that Act. The authorization is subject to such exceptions and conditions as the Government shall, on the recommendations of the Council, by notification specify. It is clear that there has been no notification limiting authority of cross authorized officers by way of exception or condition. In the circumstances, the appointment and powers of officers of State Tax, as proper officers will, under the cross-authorization provision, empower them to correspondingly act under the IGST Act. The Court did not interfere and dismissed the writ petition.
Our Comments:
Section 2(91) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) defines ‘Proper Officer’. It states that in relation to any function to be performed under this Act, means the Commissioner or the officer of the central tax who is assigned that function by the Commissioner in the Board.
Further, as per Section 4 of the IGST Act, the officers appointed under State Goods and Services Tax Act, 2017 (“the SGST Act”) or Union Territory Goods and Services Tax Act, 2017 (“the UGST Act”) are authorised to be proper officers for IGST Act subject to exceptions and conditions as Government may specify by way of a notification. This shall be on the recommendations of GST Council. A similar provision exists in CGST Act, in Section 6 that officers of SGST or UTGST can be appointed as proper officers under CGST Act. Also, in case of UTGST, the Administrator may, by order, authorize any officer to appoint officers of Union Territory tax below the rank of Assistant Commissioner of Union Territory tax for the administration of the Act.
CBIC Clarifications on powers and delegation, monetary limits etc. for Proper Officer
CBIC has issued clarifications and instructions from time to time in relation to proper officers viz-a-viz delegation and distribution of powers under various sections, monetary limits, jurisdiction etc. as summarized below:
| S. No. | Circular No. | Date | Regarding | Comments |
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01.01.2017-GST | 26.06.2017 | Functions of proper officer for provision relating to registration and composition levy under CGST Act, 2017 and CGST Rules, 2017 | NIL |
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03.03.2017-GST | 05.07.2017 | Functions of proper officer in relation to various section of act / rules other than registration and composition levy | Functions relating to section 74 omitted from Deputy/Assistant Commissioner and added to Superintendent to Central Tax vide Circular No. 31.05.2018-GST dated 09.02.2018 |
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31/05/2018-GST (Since amended vide Circular No. 169/01/2022-GST dated 12.03.2022) | 09.02.2018 | 1. Empowering Superintendent of Central Excise to carry out functions under section 74
2. Omitting functions under section 74 from Deputy / Assistant Commissioner from Central Tax 3. Providing monetary limits for functions of limits for proper officers for section 73 and 74 |
Functions relating to section 74 omitted from Deputy / Assistant Commissioner and added to Superintendent to Central Tax vide Circular No. 03/03/2017-GST dated 05.07.2017 |
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157/13/2021-GST | 20.07.2021 | Extension of limitation under section 168A of CGST Act, 2017 under GST law as per Supreme Court order dated 27.04.2021 IN RE COGNIZANCE FOR EXTENSION OF LIMITATION [2021 (5) TMI 564 – SC ORDER] | NIL |
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Circular No. 169/01/2022-GST | 12.03.2022 | Appointment of proper officers for adjudication of notices issued by Audit Commissionerates and Directorate General of Goods and Services Tax Intelligence (DGGSTI) | Vide Notification No. 02/2022-Central Tax dated 11th March, 2022, para 3A has been inserted in the Notification No. 2/2017-Central Tax dated 19.06.2017, to empower Additional Commissioners of Central Tax/ Joint Commissioners of Central Tax of some of the specified Central Tax Commissionerates, with All India Jurisdiction for the purpose of adjudication of the show cause notices issued by the officers of the Directorate General of Goods and Services Tax Intelligence.
The Central Tax officers of DGGSTI shall exercise the powers only to issue show cause notices. |
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02/2021-22 GST Investigation | 22.09.2021 | Clarification on issuance of show cause notice in time bound manner under section 73 and 74 of CGST Act. | Instructions to officers on issue of refund of tax wrongfully paid under section 77(1) of CGST Act, and its implementation |
In a pari materia case of M/s Biharilal Chhaterpal v. State of Uttar Pradesh [2021 (55) G. S. T. L. 130 (All.)] the Hon’ble Allahabad High Court, held that cross empowerment under Section 4 of the IGST Act and Section 6 of the CGST Act merely means that state authorities empowered under State Act can also enforce provisions of CGST Act or IGST Act.
FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT
1. Mr. Gupta, learned advocate virtually appears on behalf of petitioner. He submits, impugned is order dated 26th September, 2024 said to be demand of tax and penalty, by which total of almost ₹41,00,000/- (forty one lakhs) has been demanded. The notice stood issued by the proper officer, who is Assistant Commissioner of State Tax. He submits, the authority lacked the jurisdiction and power to issue the notice.
2. He draws attention to section 4 in Integrated Goods and Services Tax Act, 2017. The provision is reproduced below.
“4. Authorisation of officers of State tax or Union territory tax as proper officer in certain circumstances.– Without prejudice to the provisions of this Act, the officers appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are authorised to be the proper officers for the purposes of this Act, subject to such exceptions and conditions as the Government shall, on the recommendations of the Council, by notification, specify.”
He submits, the cross authorization is vague inasmuch as subsequent notifications have not been made delineating jurisdictions and functions.
3. He draws attention to disclosures in the writ petition to demonstrate that the Council had proposed delineation of the jurisdictions and functions by suggesting both, provisions in the Act as well as notifications to be made thereunder. On query from Court he submits, the Act does not contain the suggested provisions nor the notifications were made. He reiterates, the Council was aware that this would lead to confusion for and hardship to the dealers.
4. On Mr. Mishra, learned advocate, Standing Counsel having had interjected to submit petitioner did not have locus, Mr. Gupta relies on circular dated 31st December, 2018 issued by Central Board of Indirect Taxes and Customs, paragraph-6, being a question on who will be considered as owner of the goods for the purposes of section 129(1) of Central Goods and Services Tax Act, 2017. He demonstrates the answer to be either the consignor or the consignee should be deemed to be the owner. His client is consignee and therefore deemed owner of the goods detained. He seeks interference.
5. Mishra hands up notifications dated 24th June and 25th July, both of year, 2017. He submits, thereby there was clear authorization of proper officers under Odisha Goods and Services Tax Act, 2017. The two notifications read together leaves no room for petitioner to contend that impugned demand suffers lack of jurisdiction. There be no interference and the writ petition dismissed. Mr. Gupta submits in reply, the notifications stand issued by the State authority. He reiterates, no notification stands issued under the IGST Act.
6. Provision in section 4 of IGST Act is cross authorization, inter alia, of officers of State Tax. Before us there is no dispute that there has been aforesaid notifications for appointment of proper officers and assignment of powers and duties to them as officers of State Tax. For purposes of the IGST Act, the empowering cross authorization provision says that inter alia, officers of State Tax are authorized to be proper officers for the purposes of that Act. The authorization is subject to such exceptions and conditions as the Government shall, on the recommendations of the Council, by notification specify. It is clear that there has been no notification limiting authority of cross authorized officers by way of exception or condition. In the circumstances, the appointment and powers of officers of State Tax, as proper officers will, under the cross authorization provision, empower them to correspondingly act under the IGST Act.
7. Second contention of petitioner is that it is deemed to be owner of the consignment being consignee under paragraph-6 of said circular dated 31st December, 2018. The prerogative to deem, as appears from paragraph-6, is with revenue.
8. We do not find reason to interfere. The writ petition is dismissed.
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