TMI Blog2023 (10) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Act would not initiate proceedings on the same subject matter . This provision of CGST is also mirrored by Clause (b) of Section 6(2) of the SGST Act and UGST Act as well. Thus, where a proper officer under the CGST Act had initiated proceedings on a subject matter, no proceedings would be initiated by proper officer authorized under the SGST Act or UGST Act on the same subject matter. In the present case, the focus of investigation by the DGGI was in respect of the diversion of agriculture urea for sale as technical grade urea. The issue regarding wrongful availment of the ITC is also inextricably linked with the subject matter of investigation by respondent no. 3. In terms of Section 6(2)(b) of the Act, where a proper officer has initiated the proceedings in respect of the subject matter, no proceedings in respect of the same subject matter are required to be initiated by a proper officer under the said Act and the SGST Act and vise versa. Confining the proceedings to silos of a subject matter may in certain cases lead to parallel proceedings. Therefore, the device of transferring investigations or proceedings inter se proper officers to ensure that a taxpayer is not su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch. Thereafter, the concerned officer of the DGGI issued a summon to the petitioner seeking certain documents. The petitioner claims that he made representations informing the concerned officers of the DGGI regarding the proceedings commenced by respondent no. 3 and calling upon them to de-seal the premises and refrain from any further proceedings, as parallel proceedings were impermissible. 4. It is the petitioner s grievance that despite the same, respondents no.5 has repeatedly issued summons and has not refrained from continuing with the investigation. 5. During the course of the proceedings the learned counsel appearing for the petitioner and the DGGI requested the Court to fix a date and time when the petitioner would be present both in the business premises as well as the godown for de-sealing the said premises and conducting the search. Accordingly, this Court directed the petitioner to be present at his business premises situated at 2105-B, Ground Floor, Bawana Road, Narela, North-Delhi, Delhi-110040 on 06.06.2022 at 11:00 AM and to be present at the godown located at Ground Floor, Plot No.72/20, 21, Bawana Road, Gali No. 2, Prem Colony, Narela, Delhi-110040 on 07.06.2022 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e investigation conducted by respondents no. 3 would be transferred to the DGGI and its officers would continue the investigations from the same stage as obtaining before the Jurisdictional Commissionerate (respondent no. 3). However, the learned counsel appearing for the petitioner objected to the same. According to the petitioner, the DGGI has no jurisdiction to carry out any investigation in terms of Section 6(2)(b) of the Act as respondent no. 3 had already initiated the proceedings first by issuing summons on 03.03.2022. 13. Thus, the limited question to be addressed in the present petition is whether the DGGI is precluded from conducting any investigations on account of summons issued by respondent no. 3 on 03.03.2022 and proceedings pursuant to the said summons. 14. It is material to note that the petitioner carries on business in trading of urea in the name of his sole proprietorship concerns, namely, M/s Shyam Trading Company and M/s Garg Trading Company. Both the sole proprietorship concerns are registered as separate tax entities under the Act. The petitioner claims that trading of commercial urea is carried on under the name of M/s Shaym Trading Company and the trading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the investigation by one authority to other. She submitted that there is no express provision under the Act for affecting any such transfer. 20. Mr. Singla has handed over a communication dated 23.08.2023, which indicates that the DGGI is willing for consolidation of the investigation being conducted in respect of M/s Shyam Trading Co. (the sole proprietorship concern of the petitioner). The said letter also indicates that the DGGI, Ghaziabad Zonal Unit is also investigating the diversion of agriculture grade urea for commercial use on an allIndia basis in respect of various entities including M/s Shyam Trading Co. In response to the said letter, respondent no. 3 had forwarded the copies of the relevant documents pertaining to M/s Shyam Trading Co. s, report regarding allegedly non-existing firm (M/s Yadav Industries), statement of the petitioner dated 04.03.2022 along with certain other documents for further action. Clearly, respondent no. 3 is agreeable for the investigations to be continued by the DGGI. 21. Thus, insofar as the respondents are concerned, there is now no dispute that the investigations would be conducted by a singular agency. 22. It is also relevant to note tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scheme of statutes in respect of Goods and Services Tax Act (the Act, the SGST Act and the UGST Act) officers under any of the said statutes can be authorized as proper officers for the purposes of proceeding under the other GST statutes as well. Section 6(1) of the Act empowers the officers appointed under the SGST Act and the UGST Act to act as proper officers for the purposes of the Act. Section 6 of the SGST Act and the UGST Act mirrors Section 6 of the Act. Consequently, the officers under the said enactments are also authorized as proper officers under the Act. 27. In conformity with the scheme of cross empowering officers under the said enactments, Clause (a) of Section 6(2) of the Act also empowers a proper officer to issue orders under the SGST Act and the said Act. Similarly, officers under the SGST Act and the UGST Act are also empowered to issue orders under the Act. The only condition is that the issuance of such orders is required to be intimated to the Jurisdictional Officer of the central tax or the state tax, as the case may be. 28. To ensure that there are no multiple proceedings in regard of the central and the state officers being authorized as proper office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the taxpayer to any authority. The authority which initiates such action is empowered to complete the entire process of investigation, issuance of SCN, adjudication, recovery, filing of appeal etc. arising out of such action. 4. In other words, if an officer of the Central tax authority initiates intelligence based enforcement action against a taxpayer administratively assigned to State tax authority, the officers of Central tax authority would not transfer the said case to its State tax counterpart and would themselves take the case to its logical conclusions. 5. Similar position would remain in case of intelligence based enforcement action initiated by officers of State tax authorities against a taxpayer administratively assigned to the Central tax authority. 6. It is also informed that GSTN is already making changes in the IT system in this regard. With best Wishes, Your Sincerely, (Mahender Singh) 32. The opening sentence of the said Circular issued by the Central Board of Excise and Customs expressly sets out the reason for issuing the Circular: it is to clarify the ambiguity regarding initiation of enforcement action by Central Tax Officers in case of taxpayers assigned t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proper officers are constrained to not expand the scope of investigation. The scope of investigation of respondent no. 3 cannot be confined to verify the invoices for determining whether the ITC claimed by the petitioner is genuine and disregard the source of the urea sold by the petitioner. Similarly, the issue of fake invoices is integral to the investigation initiated by the DGGI. Sensu stricto , the subject matter of the two investigations conducted by the DGGI and respondent no. 3 may be slightly different and the intelligence developed by them may be sourced on varying facts. 37. In terms of Section 6(2)(b) of the Act, where a proper officer has initiated the proceedings in respect of the subject matter, no proceedings in respect of the same subject matter are required to be initiated by a proper officer under the said Act and the SGST Act and vise versa. Confining the proceedings to silos of a subject matter may in certain cases lead to parallel proceedings. Therefore, the device of transferring investigations or proceedings inter se proper officers to ensure that a taxpayer is not subjected to parallel proceedings, in effect, subserves the object of Section 6(2)(b) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fact situation presented by the two petitions before us as they do not operate and are not intended to operate in a situation where the intelligence based enforcement action has repercussion or involvement of taxpayers beyond the territorial jurisdictional limit of the officer initiating such an action. It also does not address a situating where two or more Officers, may be Central or State or only Central or State, initiate separate intelligence based enforcement action but having a common thread or involvement of multiple taxpayers, like a case of conspiracy. In the first case, the officer initiating the intelligence based enforcement action cannot travel beyond his territorial jurisdiction. To strictly enforce Section 6 and the abovementioned Circular would therefore, lead to compelling such officer to restrict his investigation and findings and resultant action only to the taxpayer within his territorial jurisdiction, thereby leading to an incomplete and inconclusive investigation/action. In the abovementioned second scenario, as all officers who have initiated intelligence based enforcement action are otherwise having jurisdiction over the taxpayer, strictly enforcing the m ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
