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2024 (2) TMI 808 - HC - GSTPower of CBIC to issue circular and delegate the functions of 'Proper officer' to issue Audit Report - Validity of Circular No. 3/3/2017-GST dated 05.07.2017, Circular No. 31/05/2018- GST dated 09.02.2018 and Circular No. 169/01/2022-GST dated 12.03.2022 - impugned circulars challenged mainly on the ground that the Central Board of Indirect Taxes and Customs (Board) had no powers to issue the same - jurisdiction to issue the audit report - functions of a proper officer as defined under Section 2(91) of the CGST Act - HELD THAT:- In the present case, not even any dispute was raised about the officers referred to in the impugned circulars being central tax officers. Section 4 of the CGST Act provides that the Board may, in addition to the officers as may be notified by the Government under section 3, appoint such persons as it may think fit to be the officers under the CGST Act. Without prejudice to the provisions of sub-section (1) of Section 4, the Board may, by order, authorise any officer referred to in clauses (a) to (h) of Section 3 to appoint officers of central tax below the rank of Assistant Commissioner of Central Tax for the administration of the CGST Act. Section 5 of the CGST Act provides that subject to such conditions and limitations as the Board may impose, an officer of central tax may exercise the powers and discharge the duties conferred or imposed on him under the CGST Act. An officer of central tax may exercise the powers and discharge the duties conferred or imposed under the CGST Act on any other officer of central tax who is subordinate to him - Section 4, which begins with a non-obstante clause, provides that an Appellate Authority shall not exercise the powers and discharge the duties conferred or imposed on any other officer of central tax. The Central Government has issued the notification dated 19.06.2017 in the exercise of powers conferred by Section 3 r/w. Section 5 of the CGST Act constitutes the Commissioner of Central Tax (Audit) and Central Tax officers subordinate to him as central tax officers. About this, not even any dispute was raised on behalf of the petitioner. The impugned circular dated 05.07.2017 is issued by the Board which is the proper authority in terms of Section 2(91) of the CGST Act. This is the reason why reference was made to Section 2(91) of the CGST Act. By the impugned circular dated 05.07.2017, the Board has inter alia assigned the Deputy or the Assistant Commissioner of Central Tax to function as a “proper officer” in relation to the CGST Act. This includes clause (v) of Section 65(6) concerning the communication of the audit report on the conclusion of the audit. The respondent No. 4 in the present case is the Deputy Commissioner of CGST (Audit). Consequently, he was the “proper officer” to communicate the audit report under Section 65(6) of the CGST Act to the petitioner vide the communication dated 15.11.2022 - Merely because the impugned circular dated 05.07.2017 refers to Section 2(91) of the CGST Act as one of its sources of power, no case is made out to strike down the impugned circulars on the ground that the Board had no power to issue the same by reference to the said section. As noted above, the source of power is contained in other provisions of the CGST Act, which were also referred to in the impugned circular. Whether the impugned circulars are intra vires and not whether any correct provision quoting the source of power was stated or there was an omission to quote the correct source? - HELD THAT:- In THE MUNICIPAL CORPORATION OF THE CITY OF AHMEDABAD VERSUS BEN HIRABEN MANILAL [983 (4) TMI 291 - SUPREME COURT], the Hon’ble Supreme Court has explained that the exercise of power, if there is indeed power, will be referred to a jurisdiction when the validity of the exercise of that power is in issue, which confers validity upon it and not to a jurisdiction under which it would be nugatory, though the Section was not referred, and a different or a wrong section of different provisions was mentioned. A wrong reference of the provision under which the Government takes action will not per se vitiate that action for it can be justified under some other power if the Government could lawfully do that act. Ben Hiraben Manilal was also cited with approval by the Constitution Bench in UUNION OF INDIA AND ANOTHER VERSUS TULSIRAM PATEL AND OTHERS [1985 (7) TMI 371 - SUPREME COURT] where it was held that even the mention of a wrong provision or the omission to mention the provision which contains the source of power will not invalidate an order where the source of such power exists. Thus, no case is made out to strike down the impugned circulars or the impugned show cause notices inter alia on the ground that such show cause notices were issued by the officers who were not the “proper officers” as defined under Section 2(91) of the CGST Act - The respondents are permitted to give effect to the order dated 29.12.2023 disposing of the impugned show cause notices, subject no doubt to the petitioner’s right of challenge to the order dated 29.12.2023 in accordance with law and on its own merits. Petition dismissed.
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