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2023 (6) TMI 406 - HC - GSTTerritorial Jurisdiction - SEZ is a foreign territory or not? - bone of contention of petitioners is that business premises of petitioners is situated in Special Economic Zone and as such, to be treated as foreign territory and not subjected to provisions whereby respondent authorities, i.e. State authorities No.4, 5 and 6 have no jurisdiction to carry out any search proceedings at the premises of the petitioners. HELD THAT:- Reading of provisions of Section 22 of the SEZ Act would suggest that any officer or agency who is authorized by Central Government may carry out search or seizure or investigation or inspection in the special economic zone or units situated therein and it also suggests that authorized officer of Central Government is empowered to carryout such process without any prior approval or intimation. So, moment authorization is reflecting, such measure can be undertaken against special economic zone or unit. Section 6 of the GGST Act in this context is also relevant to the issue which deals with authorization of the officer of Central Tax as proper officer in certain circumstances - A close perusal of provisions of Section 6 indicates that respondent authorities are empowered to carry out proceedings in SEZ. Their jurisdiction is unquestionable as Central Government has already authorized those officers by virtue of notification dated 5.8.2016. Sub-section (2) of Section 6 of GGST Act indicates that where any proper officer issues an order under this Act, he is also issuing an order under CGST Act as authorized by Act or under intimation to jurisdictional officer of Central Government and as such it appears that respondents are empowered to carry out search proceedings in SEZ. Therefore, it cannot said that they were acting without the authority of law or jurisdiction. Further, by virtue of circular dated 5.7.2017, functions of proper officers under CGST Act are also defined. Hence, once Central Government has notified the functions of proper officers, said functions shall also be applicable to be carried out by the officers under CGST Act and hence it cannot be said that there was any lack of authority on the part of respondents, as contended. Additionally, provisions of IGST Act, 2017 are applicable to whole of India and undisputedly, petitioner has got its registration under IGST Act, which is precisely mentioned in paragraph 4.6 of the petition. Provision contained under Section 7 of IGST Act, determines inter-State supply and sub-section (5) indicates that supply of goods or services of both, to or by a SEZ unit shall be treated to be a supply of goods or services or both in the course of inter-State trade or commerce and therefore, petitioner appears to be under mistaken belief that once business of petitioner is carried out through and within SEZ, they are outside the purview of authority of respondents and hence these SEZ units are not exempted from any investigation or inspection. In addition to this, uncontroverted facts which are stated in the affidavit and volume of such would also be one of the considerations which cannot be ignored while exercising equitable jurisdiction and once authorities are empowered, there is hardly any reason for this Court to intercept this process which is going against the petitioners right from March 2023 - when the conduct on the part of petitioners is also such in this peculiar background of facts, even otherwise we are not inclined to exercise our extraordinary equitable jurisdiction and conjoint reading of the provisions coupled with factual backgrounds, this is not a fit case in which we may allow the petitioners to invoke extraordinary jurisdiction. This is an attempt on the part of petitioners by filing these kind of petitions to thwart and delay the legal proceedings which are initiated by respondent authorities and as such this move of petitioners appears to be an abuse of process of law looking to the manner in which the irregularities alleged to have been committed. Such attempt on the part of petitioners deserves to be dealt with firmly so that litigants may not take disadvantage of situation by bringing such kind of litigation. Record has indicated that after issuance of notice, petitioners appear to have started not cooperating and have indicated to wait for orders from the Court. This conduct on the part of petitioners is not appreciable and as such we find it proper to impose costs upon the petitioners to have adopted such course of action. Petition dismissed with costs.
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