SUPERINTENDENT OF CENTAL TAX AS A ‘PROPER OFFICER’

[Mr. M. GOVINDARAJAN]

Proper Officer

Section 2(91) of Central Goods and Services Tax Act, 2017 defines the expression ‘proper officer’ in relation to any function to be performed under this Act, the Commissioner or the officer of the central tax who is assigned that function by the Commissioner in the Board.

Superintendent as proper officer

Vide Circular No/ 1/1/2017, dated 26.06.2017 the Board in exercise of the powers conferred by section 2(91) of CGST Act read with section 20 of IGST Act, and subject to section 5(2) of CGST Act, 2017, assigned the Superintendent of central tax as proper officer in the following cases –

• Section 25 (8) – Section 25 deals with the procedure for registration. Section 25(8) provides that where a person who is liable to be registered under this Act fails to obtain registration, the Superintendent may, without prejudice to any action which may be taken under this Act or under any other law for the time being in force, proceed to register such person in such manner as may be prescribed.
• Section 28 – Section 28 deals with the procedure for amendment of registration.  Section 28(1) provides that every registered person and a person to whom a Unique Identity Number has been assigned shall inform the Superintendent of any changes in the information furnished at the time of registration or subsequent thereto, in such form and manner and within such period as may be prescribed.

Section 28(2) provides that the Superintendent may, on the basis of information furnished under sub-section (1) or as ascertained by him, approve or reject amendments in the registration particulars in such manner and within such period as may be prescribed.  Approval of the Superintendent shall not be required in respect of amendment of such particulars as may be prescribed. The Superintendent shall not reject the application for amendment in the registration particulars without giving the person an opportunity of being heard.

• Section 29 – Section 29 deals with the procedure for cancellation of registration.  Section 29(1) provides that the Superintendent may, either on his own motion or on an application filed by the registered person or by his legal heirs, in case of death of such person, cancel the registration, in such manner and within such period as may be prescribed, having regard to the circumstances where,––
  • the business has been discontinued, transferred fully for any reason including death of the proprietor, amalgamated with other legal entity, demerged or otherwise disposed of; or
  • there is any change in the constitution of the business; or
  • the taxable person, other than the person registered under sub-section (3) of section 25, is no longer liable to be registered under section 22 or section 24.

Section 29(2) provides that the Superintendent may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where,–

• a registered person has contravened such provisions of the Act or the rules made there under as may be prescribed; or
• a person paying tax under section 10 has not furnished returns for three consecutive tax periods; or
• any registered person, other than a person specified in clause (b), has not furnished returns for a continuous period of six months; or
• any person who has taken voluntary registration under sub-section (3) of section 25 has not commenced business within six months from the date of registration; or
• registration has been obtained by means of fraud, willful misstatement or suppression of facts.

The Superintendent shall not cancel the registration without giving the person an opportunity of being heard.

• Rule 9 – Rule 9 provides the procedure for verification of the application for registration and approval by Superintendent.    Rule 9(1) provides that the application shall be forwarded to the Superintendent who shall examine the application and the accompanying documents and if the same are found to be in order, approve the grant of registration to the applicant within a period of three working days from the date of submission of the application.

Rule 9(2) provides that where the application submitted under rule 8 is found to be deficient, either in terms of any information or any document required to be furnished under the said rule, or where the Superintendent  requires any clarification with regard to any information provided in the application or documents furnished therewith, he may issue a notice to the applicant electronically in FORM GST REG-03 within a period of three working days from the date of submission of the application and the applicant shall furnish such clarification, information or documents electronically, in FORM GST REG-04, within a period of seven working days from the date of the receipt of such notice.

Rule 9(3) provides that where the Superintendent is satisfied with the clarification, information or documents furnished by the applicant, he may approve the grant of registration to the applicant within a period of seven working days from the date of the receipt of such clarification or information or documents.

Rule 9(4) provides that where no reply is furnished by the applicant in response to the notice issued under sub-rule (2) or where the Superintendent is not satisfied with the clarification, information or documents furnished, he shall, for reasons to be recorded in writing, reject such application and inform the applicant electronically in FORM GST REG-05.

Rule 9(5) provides that If the Superintendent fails to take any action, -

• within a period of three working days from the date of submission of the application; or
• within a period of seven working days from the date of the receipt of the clarification, information or documents furnished by the applicant under sub-rule (2),

       the application for grant of registration shall be deemed to have been approved.

• Rule 10 – Rule 10 provides for the procedure of issue of registration certificate.  Rule 10 (4) provides that every certificate of registration shall be duly signed or verified through electronic verification code by the Superintendent under the Act.
• Rule 12 – Rule 12 deals with the grant of registration to persons required to deduct tax at source or to collect tax at source.  Rule 12 (1) provides that any person required to deduct tax in accordance with the provisions of section 51 or a person required to collect tax at source in accordance with the provisions of section 52 shall electronically submit an application, duly signed or verified through electronic verification code, in FORM GST REG-07 for the grant of registration through the common portal, either directly or through a Facilitation Centre notified by the Commissioner.

Rule 12 (2) provides that the Superintendent  may grant registration after due verification and issue a certificate of registration in FORM GST REG-06 within a period of three working days from the date of submission of the application.

Rule 12(3) provides that where, upon an enquiry or pursuant to any other proceeding under the Act, the Superintendent  is satisfied that a person to whom a certificate of registration in FORM GST REG-06 has been issued is no longer liable to deduct tax at source under section 51 or collect tax at source under section 52, the said officer may cancel the registration issued under sub-rule (2) and such cancellation shall be communicated to the said person electronically in FORM GST REG-08.  The Superintendent  shall follow the procedure as provided in rule 22 for the cancellation of registration.

• Rule 16 – Rule 16 deals with the procedure for suo motu registration.  Rule 16(1) provides that where, pursuant to any survey, enquiry, inspection, search or any other proceedings under the Act, the Superintendent finds that a person liable to registration under the Act has failed to apply for such registration, such officer may register the said person on a temporary basis and issue an order in FORM GST REG- 12.
• Rule 17 – Rule 17 deals with the procedure of assignment of Unique Identity Number to certain special entities.  Rule 17(1) provides that every person required to be granted a Unique Identity Number in accordance with the provisions of sub-section (9) of section 25 may submit an application electronically in FORM GST REG-13, duly signed or verified through electronic verification code, in the manner specified in rule 8 at the common portal, either directly or through a Facilitation Centre notified by the Commissioner.  Rule 17(2) provides that the Superintendent may, upon submission of an application in FORM GST REG-13 or after filling up the said form, assign a Unique Identity Number to the said person and issue a certificate in FORM GST REG-06 within a period of three working days from the date of the submission of the application.
• Rule 19 – Rule 19 provides the procedure for the amendment of registration.  Rule 19(1) provides that where the change in registration certificate does not warrant cancellation of registration under section 29, the Superintendent  shall, after due verification, approve the amendment within a period of fifteen working days from the date of the receipt of the application in FORM GST REG-14 and issue an order in FORM GST REG-15 electronically and such amendment shall take effect from the date of the occurrence of the event warranting such amendment.

Rule 19(2) provides that where the reply furnished under sub-rule (3) is found to be not satisfactory or where no reply is furnished in response to the notice issued under sub-rule (2) within the period prescribed in sub-rule (3), Superintendent  shall reject the application submitted under sub-rule (1) and pass an order in FORM GST REG -05.

Rule 19(4) provides that Where the reply furnished under sub-rule (3) is found to be not satisfactory or where no reply is furnished in response to the notice issued under sub-rule (2) within the period prescribed in sub-rule (3), the Superintendent  shall reject the application submitted under sub-rule (1) and pass an order in FORM GST REG -05.

Rule 19(5) provides that If the Superintendent  fails to take any action,-

• within a period of fifteen working days from the date of submission of the application, or
•  within a period of seven working days from the date of the receipt of the reply to the notice to show cause under sub-rule (3),

the certificate of registration shall stand amended to the extent applied for and the amended certificate shall be made available to the registered person on the common portal.

• Rule 22 – Rule 22 provides the procedure for cancellation of registration.  Rule 22(1) provides that where the Superintendent has reasons to believe that the registration of a person is liable to be cancelled under section 29, he shall issue a notice to such person in FORM GST REG-17, requiring him to show cause, within a period of seven working days from the date of the service of such notice, as to why his registration shall not be cancelled.

Rule 22(3) provides that where a person who has submitted an application for cancellation of his registration is no longer liable to be registered or his registration is liable to be cancelled, the Superintendent shall issue an order in FORM GST REG-19, within a period of thirty days from the date of application submitted under sub-rule (1) of  rule 20 or, as the case may be, the date of the reply to the show cause issued under sub-rule (1), cancel the registration, with effect from a date to be determined by him and notify the taxable person, directing him to pay arrears of any tax, interest or penalty including the amount liable to be paid under sub-section (5) of section 29.

Rule 22 (4) provides that Where the reply furnished under sub-rule (2) is found to be satisfactory, the Superintendent shall drop the proceedings and pass an order in FORM GST REG –20.

• Rule 24 – Rule 24 provides for the procedure of migration of persons registered under the existing law.  Rule 24(2)(c) provides that  if the information and the particulars furnished in the application are found, by the Superintendent, to be correct and complete, a certificate of registration in FORM GST REG-06 shall be made available to the registered person electronically on the common portal.

Rule 24(3) provides that where the particulars or information specified in sub-rule (2) have either not been furnished or not found to be correct or complete, the Superintendent  shall, after serving a notice to show cause in FORM GST REG-27 and after affording the person concerned a reasonable opportunity of being heard, cancel the provisional registration granted under sub-rule (1) and issue an order in FORM GST REG-28.

Rule 24(4) provides that every person registered under any of the existing laws, who is not liable to be registered under the Act may, within a period of thirty days from the appointed day, at his option, submit an application electronically in FORM GST REG-29 at the common portal for the cancellation of registration granted to him and the Superintendent shall, after conducting such enquiry as deemed fit, cancel the said registration

Vide circular No. CBE&C no.3/3/2017, dated 05.07.2017 the Board in exercise of the powers conferred by section 2(91) of CGST Act read with section 20 of IGST Act, and subject to section 5(2) of CGST Act, 2017, assigned the Superintendent of central tax as proper officer in the following cases –

• Section 35(6) – This section comes under Chapter VIII dealing with accounts and records.  This section provides that where the registered person fails to account for the goods or services or both in accordance with the provisions of section 35(1), the Superintendent shall determine the amount of tax payable on the goods or services or both that are not accounted for, as if such goods or services or both had been  supplied by such person and the provisions of section 73 or section 74 shall mutatis mutandis apply for determination of goods.
• Section 61(1) and (3)- Section 61 deals with the scrutiny of returns.  Section 61 (1) that the Superintendent of central tax may scrutinize the return and related particulars furnished by the registered person to verify the correctness of the return and inform him of the discrepancies noticed, if any, in such manner as may be prescribed and seek his explanation thereto.

Section 61(3) provides that in case no satisfactory explanation is furnished within a period of 30 days of being informed by the Superintendent or such further period as may be permitted by him or where the registered person, after accepting the discrepancies, fails to take the corrective measure in his return for the month in which the discrepancy is accepted, the Superintendent may initiate appropriate action including those under section 65 or section 66 of section 67, or proceed to determine the tax and other dues under section 73 or section 74;

• Section 62(1) – Section 62 deals with the assessment of non filers of return.  This section provides that where a registered person fails to furnish the return under section 39 or section 45, even after the service of a notice under section 46, the Superintendent may proceed to assess the tax liability of the said person to the best of his judgment taking into account all the relevant material which is available or which he has gathered and issue an assessment order within a period of five years from the date specified under section 44 for furnishing of the annual return for the financial year to which the tax paid not relates.
• Section 65 (7) – Section 65 deals with the audit by tax authorities.  Section 65(7) provides that where the audit conducted results in determination of tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilized, the Superintendent may initiate action under section 73 or section 74.
• Section 66 (6) – Section 66 deals with the special audit to be ordered to be conducted.  Section 66(6) provides that where the special audit conducted  results in detection of tax not paid or short paid or erroneously paid, the Superintendent may initiate action under section 73 or 75.
• Section 67 (11) – Section 67 deals with inspection,  search, seizure and arrest.  Section 67 (11) provides that where the Superintendent has reasons to believe that any person has evaded or is attempting to evade the payment of any tax, he may, for reasons to be recorded in writing, seize the accounts, registers or documents of such persons produced before him and shall grant a receipt for the same, and shall retain the same for so long as may be necessary in connection with any proceedings under this Act or the rules made there under for prosecution.
• – Section 70(1) provides that the Superintendent shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry in the same manner, as provided in the case of a civil court under the provisions of the Code of Civil Procedure,1908.
• Section 73(1) – Section 73 deals with the determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for any reason other than fraud or any willful misstatement or suppression of facts.  Section 73 (1) provides that  where it appears to the Superintendent  that any tax has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilized for any reason, other than the reason of fraud or any willful-misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilized input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty leviable under the provisions of this Act or the rules made there under.
• Section 73(2) –  Section 73 (2) provides that the Superintendent  shall issue the notice under sub-section (1) at least three months prior to the time limit specified in sub-section (10) for issuance of order.
• Section 73(3) – Section 73(3) provides that where a notice has been issued for any period under sub-section (1), the Superintendent may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for such periods other than those covered under sub-section (1), on the person chargeable with tax.
• Section 73(5) – Section 73 (5) provides that the person chargeable with tax may, before service of notice under sub-section (1) or, as the case may be, the statement under sub-section (3), pay the amount of tax along with interest payable thereon under section 50 on the basis of his own ascertainment of such tax or the tax as ascertained by the Superintendent and inform the Superintendent in writing of such payment.
• Section 73 (6) – Section 73 (6) provides that the Superintendent, on receipt of such information, shall not serve any notice under sub-section (1) or, as the case may be, the statement under sub-section (3), in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made there under.
• Section 73 (7) –  Section 73(7) provides that where the Superintendent  is of the opinion that the amount paid under sub-section (5) falls short of the amount actually payable, he shall proceed to issue the notice as provided for in sub-section (1) in respect of such amount which falls short of the amount actually payable.
• Section 73 (9) – Section 73 (9) provides that the Superintendent  shall, after considering the representation, if any, made by person chargeable with tax, determine the amount of tax, interest and a penalty equivalent to 10% of tax or ten thousand rupees, whichever is higher, due from such person and issue an order.
• Section 73(10). – Section 73 (10) provides that  the Superintendent  shall issue the order under sub-section (9) within three years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilized relates to or within three years from the date of erroneous refund.
• Rule 56 (6) – Rule 56 deals with the maintenance of accounts by registered person.  Rule 56(6) provides that if any taxable goods are found to be stored at any place(s) other than those declared under sub-rule (5) without the cover of any valid documents, the Superintendent shall determine the amount of tax payable on such goods as if such goods have been supplied by the registered person.
• Rule 99 (1) – Rule 99 deals with the scrutiny of returns.  Section 99(1) provides that where any return furnished by a registered person is selected for scrutiny, the Superintendent shall scrutinize the same in accordance with the provisions of section 61 with reference to the information available with him, and in case of any discrepancy, he shall issue a notice to the said person in FORM GST ASMT-10, informing him of such discrepancy and seeking his explanation thereto within such time, not exceeding thirty days from the date of service of the notice or such further period as may be permitted by him and also, where possible, quantifying the amount of tax, interest and any other amount payable in relation to such discrepancy.
• Rule 99(2) – Rule 99(2) provides that the registered person may accept the discrepancy mentioned in the notice issued under sub-rule (1), and pay the tax, interest and any other amount arising from such discrepancy and inform the same or furnish an explanation for the discrepancy in FORM GST ASMT- 11 to the Superintendent.
• Rule 99(3) –  Rule 99(3) provides that where the explanation furnished by the registered person or the information submitted under sub-rule (2) is found to be acceptable, the Superintendent  shall inform him accordingly in FORM GST ASMT-12
• Rule 132 (1) – Rule 132 deals with the power to summon persons to give evidence and produce documents.  Rule 132 (1) provides that the Director General of Safeguards, or an officer authorized by him in this behalf, shall be deemed to be the Superintendent  to exercise the power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing under section 70 and shall have power in any inquiry in the same manner, as provided in the case of a civil court under the provisions of the Code of Civil Procedure, 1908 (5 of 1908).
• Rule 142 (1) – Rule 142 deals with the issue of notice and order for of demand payable under this Act.  Rule  142 (1) provides that the Superintendent  shall serve, along with the-
  •  notice under sub-section (1) of section 73 or sub-section (1) of section 74 or sub-section (2) of section 76, a summary thereof electronically in FORM GST DRC-01,
  • statement under sub-section (3) of section 73 or sub-section (3) of section 74, a summary thereof electronically in FORM GST DRC-02,

statement under sub-section (3) of section 73 or sub-section (3) of section 74, a summary thereof electronically in FORM GST DRC-02,

• Rule 142 (2) – Rule 142 (2) provides that where, before the service of notice or statement, the person chargeable with tax makes payment of the tax and interest in accordance with the provisions of sub-section (5) of section 73 or, as the case may be, tax, interest and penalty in accordance with the provisions of sub-section (5) of section 74, he shall inform the Superintendent of such payment in FORM GST DRC-03 and the Superintendent shall issue an acknowledgement, accepting the payment made by the said person in FORM GST DRC–04.
• Rule 142– Rule 142 provides for the issue of notice for demand of amounts payable under this Act.

Rule 142(1) provides that the Superintendent shall serve, along with the-

• notice under sub-section (1) of section 73 or sub-section (1) of section 74 or sub-section (2) of section 76, a summary thereof electronically in FORM GST DRC-01,
•  statement under sub-section (3) of section 73 or sub-section (3) of section 74, a summary thereof electronically in FORM GST DRC-02,

specifying therein the details of the amount payable.

Rule 142(2) provides that where, before the service of notice or statement, the person chargeable with tax makes payment of the tax and interest in accordance with the provisions of sub-section (5) of section 73 or, as the case may be, tax, interest and penalty in accordance with the provisions of sub-section (5) of section 74, he shall inform the Superintendent  of such payment in FORM GST DRC-03 and the Superintendent  shall issue an acknowledgement, accepting the payment made by the said person in FORM GST DRC–04.

Rule 142(3) provides that  where the person chargeable with tax makes payment of tax and interest under sub-section (8) of section 73 or, as the case may be, tax, interest and penalty under sub-section (8) of section 74 within thirty days of the service of a notice under sub-rule (1), he shall intimate the Superintendent of such payment in FORM GST DRC-03 and the Superintendent shall issue an order in FORM GST DRC-05 concluding the proceedings in respect of the said notice.

Rule 142 (7) provides that any rectification of the order, in accordance with the provisions of section 161, shall be made by the Superintendent  in FORM GST DRC-08.

• Rule 150 –Rule 150 provides that the Superintendent may seek such assistance from the officer-in-charge of the jurisdictional police station as may be necessary in the discharge of his duties and the said officer-in-charge shall depute sufficient number of police officers for providing such assistance.

Conclusion

In the above said sections and rules in the place of ‘proper officer’ the term ‘Superintendent’ has been substituted.  This article may be useful to the clients, professionals and also the officials in the Department to have the details of powers and functions of Superintendent in the GST regime.