TMI Blog2024 (2) TMI 808X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stitution 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. - DEVENDRA KUMAR UPADHYAYA, CJ. AND M.S. SONAK, J. For the Petitioner : Mr Sandeep Sachdeva with Mr Damodar Vaidya (through VC), Mr Devang Bhashim, Mr Akhil Parrikar and Mr Mayank Goyal (through VC), Advocates. For the Respondent : Ms Asha Desai, Senior Standing Counsel for Central Government with Advocate Ms N. Volvoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on Cannon India Pvt. Ltd. v/s. Commissioner of Customs 2021 SCC OnLine SC 200 to submit that the power of assigning functions of a proper officer upon a customs officer cannot flow from the definition clause under Section 2(34) of the Customs Act, 1962. He submitted that the definition under Section 2(34) of the Customs Act and Section 2(91) of the CGST Act are almost pari materia. Therefore, the law laid down in Cannon India Pvt. Ltd. (supra) would squarely apply and, based upon the definition clause in Section 2(91) of the CGST Act, the Board would have no power to assign the functions of the proper officer to any central tax officers. 8. Mr Sachdeva submitted that the impugned circulars conflict with the respondent s stand in its Circular No. 07/2022- Customs dated 31.03.2022. He submitted that this circular acknowledges the error in relying upon the definition clause as constituting the source of power and rectified the lacuna pointed out by the Hon ble Supreme Court in Cannon India Pvt. Ltd. (supra) by inserting sub-sections (1A) and (1B) to Section 5 of the Customs Act and simultaneously changing the definition of the proper officer under Section 2(34) of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred by Sections 3, 5, 168 r/w. Section 2(91) of the CGST Act. She submitted that in such matters, the quotation of the precise legal provision or even the quotation of an incorrect legal provision is not important as long as the power for assignment of the functions of a proper officer is vested in the authority issuing the impugned circulars. She, therefore, submitted that the challenge to the impugned circulars deserves to be rejected. 14. Ms Desai submitted that Cannon India Pvt. Ltd. (supra) was distinguishable because it dealt with the issue of whether the DRI officers could be conferred the power to issue show cause notices under the Customs Act, 1962. She pointed out that in the present case, even the petitioner has accepted the position that the Audit Commissionerate Officials could be appointed as Central Tax Officers. She pointed out that the impugned circulars had merely assigned the functions of a proper officer on Central Tax Officers and not upon some officials of DRI, as was the case in Cannon India Pvt. Ltd. (supra). Accordingly, she submitted that the law laid down in Cannon India Pvt. Ltd. (supra) was not applicable to the facts of the present cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue when making its orders. It was clarified that the orders should not be given effect until further orders in this petition. 22. The adjudication proceeded, and the Assistant Commissioner of Central GST, by order dated 29.12.2023, disposed of the show cause notices by confirming certain demands and dropping others. The operative portion of the order dated 29.12.2023 reads as follows:- ORDER (i) I confirm the demand of Rs. 16,61,634/- (Rupees Sixteen Lakhs Sixty-One Thousand Six Hundred Thirty- Four only) towards taxes short paid during the period 2017-18, 2018-19, 2019-20 and 2020-21; (ii) I drop the demand of Rs. 4,18,900/- (Rupees Four Lakhs Eighteen Thousand Nine Hundred only) demanded as short payment on mini bar services; (iii) I drop the demand of Rs. 1,26,00,000/- (Rupees One Crore Twenty-Six Lakhs only) on receiving consideration (waiver of loan) for outward supply; (iv) I drop the demand of interest of Rs. 6,74,947/- (Rupees Six Lakhs Seventy-Four Thousand Nine Hundred and Forty-Seven only) on wrong availment and utilization of input tax credit on alleged violation of Rule 36(4) of the CGST Rules, 2017; (v) I confirm the demand of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1944 shall be deemed to be officers appointed under the provisions of the CGST Act. 28. Section 4(1) 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. Section 4(2) provides that without prejudice to the provisions of subsection 1, 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. The term Board is defined under Section 2(16) to mean the Board constituted under the Central Boards of Revenue Act, 1963. 29. The audit provisions are contained in Chapter XIII of the CGST Act, comprising Sections 65 and 66. Section 65 is concerned with the audit by the tax authorities, and Section 66 is concerned with the special audit. Sub-sections (1) to (5) of Section 65 provide for audit provisions, and sub-section (6) provides that on the conclusion of the audit, the proper officer shall, within 30 days, inform the registered person, whose records are audite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t-II) (Respondent No. 5) under Section 74 of the CGST Act, 2017. 34. The impugned circulars constitute respondents No. 4 and 5 as proper officers as defined under Section 2(91) of the CGST Act authorised to issue the above-referred impugned show cause notices. However, the petitioner contends that the impugned circulars are legally infirm mainly on the ground that the Board had no powers to issue the same and, based thereon, to confer any power of assignment of functions of proper officer upon the central tax officers for issuing the audit report under Section 65(6) or the show cause notices under Section 73 or 74 r/w. Section 65(7) of the CGST Act. The petitioner contends that if the impugned circulars are set aside, then it would be apparent that the communication of the audit report under Section 65(6) or the issue of the impugned show cause notices under Sections 73 or 74 r/w. Section 65(7) of the CGST Act would be by the officers who were not the proper officers as defined under Section 2(91) of the CGST Act. The petitioner contends that, as such, the entire exercise of communicating the audit report or issuing the impugned show cause notices would be an exercise wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 5 of the Central Goods and Services Tax Act, 2017, the Board, hereby assigns the officers mentioned in Column (2) of the Table below, the functions as the proper officers in relation to the various sections of the Central Goods and Services Tax Act, 2017 or the rules made thereunder given in the corresponding entry in Column (3) of the said Table :- TABLE Sl.No. Designation of the officer Functions under Section of the Central Goods and Services Tax Act, 2017 or the rules made thereunder (1) (2) (3) 1. Principal Commissioner/Commissioner of Central Tax i. Sub-section (7) of Section 67 ii. Proviso to Section 78 2. Additional or Joint Commissioner of Central Tax i. Sub-sections (1), (2), (5) and (9) of Section 67 ii. Sub-section (1) and (2) of Section 71 iii. Proviso to section 81 iv. Proviso to sub-section (6) of Section 129 v. Sub-rules (1), (2), (3) and (4) of Rule 139 vi. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2), (3) and (7) of Rule 142 xiii. Rule 150 5. Inspector of Central Tax i. Sub-section (3) of Section 68 ii. Sub-rule (17) of Rule 56 iii. Sub-rule (5) of Rule 58 2. It is requested that suitable trade notices may be issued to publicize the contents of this circular. 3. Difficulty, if any, in implementation of the above instructions may please be brought to the notice of the Board. Hindi version would follow. 38. The second impugned circular is dated 09.02.2018, and the same is at Exh. B Colly on pages 132 to 133 of the paper book. This circular provides that the Board has now decided that certain additional central tax officers shall also be empowered to issue show cause notices or exercise powers and discharge duties conferred or imposed under the CGST Act as specified. In a sense, therefore, the second impugned circular dated 09.02.2018 adds to or modifies the first impugned circular dated 05.07.2017. 39. The third impugned circular dated 12.03.2022 is again in continuation of the second impugned circular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt noted that the reason why such a power is conferred on the Central Government is obvious, and that is because the Central Government is the authority which appoints both the officers of the Directorate of Revenue Intelligence, which is set up under the Notification dated 04.12.1957 and the officers under the Customs Act, 1962. It was in this context that the Court relied on Commissioner of Customs v/s. Sayed Ali (supra). 43. In Commissioner of Customs v/s. Sayed Ali (supra), the Hon ble Supreme Court, again in the context of the definition of proper officer under Section 2(34) of the Customs Act, 1962, held that it was clear from a mere look of the definition clause that only such officers of customs who have been assigned specific functions would be proper officers . Specific entrustment of functions by either the Board or the Commissioner of Customs was, therefore, the governing test to determine whether the officer of customs was the proper officer . 44. The Court held that from a conjoint reading of Section 2(34) and 28 of the Customs Act, it was manifest that only such a customs officer who had been assigned specific functions of assessment and re-assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner is not disputing the appointment of Audit Commissionerate as Central Tax Officers. In fact, the petitioner is raising the challenge with regard to the source of power of the Board in assigning functions of proper officer to Audit Commissionerate. To reiterate, the core of the challenge in this petition is not of the manner of assignment rather the enabling provision for such assignment of function as Proper Officer. 48. The above admission is more than sufficient to distinguish the decisions in Canon India Pvt. Ltd. (supra) and Sayed Ali (supra). As noted above, the issue involved in both these decisions was whether an officer of DRI could be appointed as a proper officer in terms of Section 2(34) of the Customs Act without the Central Government designating officers of DRI as customs officers . Since it is admitted that the officers of the Audit Commissionerate are central tax officers, based upon the decisions in Canon India Pvt. Ltd. (supra) and Sayed Ali (supra), at least, the assignment of functions by the Board to the central tax officers vide the impugned circulars, cannot be faulted. Therefore, the contention-based upon Canon India Pvt. Ltd. (supra) and Sayed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned the officers to perform the function as proper officers in relation to various Sections of CGST Act and the Rules made thereunder by issuing the Circular in question, the question of issuing Notification for delegation of powers by the Commissioner as contemplated under Section 167 of the CGST Act does not arise. Mr. Rastogi appears to have misread the powers of the Board to assign the officers to perform the function as proper officers in relation to the various Sections of the CGST Act, as the delegation of powers by the Commissioner to the other authority or the officer as contemplated in Section 167 of the CGST Act. The Court, therefore, does not find any substance in the submission of Mr. Rastogi that the respondent No. 3 was not the 'proper officer' as per the definition contained in Section 2(91) of the CGST Act, and therefore, had no powers to issue summons under Section 70 of the CGST Act. 50. The observation in Canon India Pvt. Ltd. (supra) in the context of the Central Board s notification dated 02.05.2012 to the effect that Section 2(34) of the Customs Act does not confer any powers on any authority to entrust any functions to officers must be read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder 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. 54. 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. Similarly, the Commissioner may, subject to such conditions and limitations as may be specified in this behalf by him, delegate his powers to any other officer who is subordinate to him. However, 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds alleged by the petitioner or otherwise. Accordingly, no case is made out to either strike down the impugned circulars or the impugned show cause notices on the ground that they were not issued by the proper officer as defined under Section 2(91) of the CGST Act. 58. 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. In such matters, the real issue is 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. 59. In Municipal Corporation of the City of Ahmedabad v/s. Ben Hiraben Manilal (1983) 2 SCC 422 , 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
