Madras High Court
Tvl.Vardhan Infraastructre vs The Special Secretary
Author: C.Saravanan
Bench: C.Saravanan
W.P.No.34792 of 2019 and etc., batch
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved On 15.09.2023
Pronounced On . .2024
CORAM
THE HON'BLE MR.JUSTICE C.SARAVANAN
W.P.Nos.34792, 29878, 30607, 30613, 30615 of 2019 & W.P.Nos.3011,
3013, 3026, 3028, 4922, 8495, 8496, 11319 of 2020 & W.P.Nos. 2723,
2861, 2863, 2865, 11004, 11006, 11008, 12795, 12797, 16324 of 2021
and W.P.Nos.4490, 18575, 22552, 26586, 31013 of 2022 and
W.P.No.12014 of 2023
and
W.M.P.Nos.35553, 30673, 30680, 30682 of 2019 & W.M.P.Nos. 3513,
3516, 3534, 3538, 5831, 10258, 10259, 13797, 13799 of 2020 &
W.M.P.Nos.3055, 3200, 3201, 3199, 11649, 11652, 11654, 13594, 13596,
17292, 17289 of 2021 & W.M.P.Nos.4608, 17910, 21580, 25646, 30418
of 2022 and W.M.P.No.11864 of 2023.
W.P.No.34792 of 2019:-
Tvl.Vardhan Infraastructre,
No.3/2, Narasimmapuram,
Mylapore,
Chennai – 600 004,
Represented by its Partner, S.Manikandan ... Petitioner
Vs.
1. The Special Secretary,
Head of the GST Council Secretariat,
Office of the GST Council Secretariat,
5th Floor, Tower-II, Jeevan Bharti Building,
Janpath Road, Connaught Police,
New Delhi – 110 001.
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Page No 1 of 55
W.P.No.34792 of 2019 and etc., batch
2. The Chairman,
Central Board of Indirect Taxes,
North Block,
New Delhi – 110 001.
3. The Additional Chief Secretary & Commissioner of State Taxes,
Chepauk,
Chennai – 600 005.
4. The Director General of GST Intelligence, South,
C-3, C-Wing, II Floor,
Rajaji Bhavan, Besant Nagar,
Chennai – 600 090.
5. The Senior Intelligence Officer,
Directorate General of GST Intelligence,
Chennai Zonal Unit,
Chennai.
6. The Assistant Commissioner (ST),
Arumbakkam Assessment Circle. ... Respondents
Prayer in W.P.No.34792 of 2019:- Writ Petition filed under Article 226 of
the Constitution of India, for issuance of a Writ of Mandamus to direct the
Respondents 4 & 5 to refrain from cross-empowerment of tax authorities
under the provisions of Chapter XIV (inspection, search, seizure and arrest)
of Central Goods and Services Tax Act, 2017 and Tamil Nadu Goods and
Services Tax Act, 2017 till relevant notifications are issued in this regard
pusuant to the recommendations of the first respondent, and until such time,
to transfer all the proceedings initiated by the 5th respondent to the 6th
respondent, who is the jurisdictional assessing officer, for taking further
action.
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Page No 2 of 55
W.P.No.34792 of 2019 and etc., batch
For Petitioner in : Mr.Derric Sam
W.P.Nos.34792 & 29878 of for Mr.S.Durai Raj
2019
For Petitioner in : Mr.T.Ramesh
W.P.Nos.30607, 30613,
30615 of 2019, 4922, 8495,
8496 of 2020, 12795, 12797
& 16324 of 2021
For Petitioner in : Mr.T.Ramesh
W.P.Nos.3011, 3013, 3026, for Mr.J.Shankaraman
3028 of 2020, 2861, 2863,
2865, 11004, 11006, 11008
of 2021, 4490 & 26586 of
2022
For Petitioner in : Mr.Adithya Reddy
W.P.No.11319 of 2020
For Petitioner in : Mr.S.Nirmal Aditya
W.P.No.2723 of 2021
For Petitioner in : Mr.S.Raveekumar
W.P.Nos.18575 of 2022 &
12014 of 2023
For Petitioner in : Mr.R.N.Amarnath
W.P.No.22552 of 2022
For Petitioner in : Mr.K.Vaitheeswaran
W.P.No.31013 of 2022
..................
For respondents in : Mr.Venkatasamy Babu
W.P.No.34792 of 2019 Senior Panel Counsel
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https://www.mhc.tn.gov.in/judis
Page No 3 of 55
W.P.No.34792 of 2019 and etc., batch
For R3 & R6 in : Mr.Haja Nazirudden
W.P.No.34792 of 2019 Additional Advocate General I
for Mr.M.Venkateswaran,
For R8 in W.P.No.29878 of Special Government Pleader (Taxes)
2019 Assisted by Mr.P.Haribabu,
Government Advocate
For Respondent in
W.P.Nos.30607, 30613,
30615 of 2019, 3011, 3013,
3026, 3028, 4922, 8495,
8496 of 2020, 2861, 2863,
2865, 11004, 11006, 11008,
12795, 12797& 16324 of
2021
For R3 in W.P.No.2723 of
2021
For R3 & R4 in
W.P.No.18575 of 2022
For R3 in W.P.No.22552 of
2022
For R3 in W.P.No.26586 of
2022
For R1 in W.P.No.31013 of
2022
For R3 & R4 in
W.P.No.12014 of 2023.
For R2, R4 & R5 in : Mr.V.Sundareswaran
W.P.No.34792 of 2019 Senior Standing Counsel
For R7 in W.P.No.29878 of
2019
For R1 & R2 in
W.P.No.2723 of 2021
For R2 in W.P.No.26586 of
2022
For R2 & R3 in
W.P.No.31013 of 2022
For R1 to R5 in : Mr.S.R.Sundar
W.P.No.11319 of 2020 Standing Counsel
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https://www.mhc.tn.gov.in/judis
Page No 4 of 55
W.P.No.34792 of 2019 and etc., batch
For R1 & R2 in : Mr.S.Gurumoorthy
W.P.No.18575 of 2022 for Mrs.Hema Murali Krishnan
Senior Standing Counsel
For R1 & R2 in : Mr.Rajnish Pathiyil
W.P.No.22552 of 2022 Senior Panel Counsel
For R1 in W.P.No.26586 of
2022
For R3 & R4 in : Mr.K.Mohana Murali
W.P.No.12014 of 2023 Senior Panel Counsel
COMMON ORDER
By this common order all these writ petitions are being disposed of.
2. In these Writ Petitions, a common issue arises for consideration as to whether the petitioners who are assigned to either the Central Tax Authorities or the State Tax Authorities under respective Central Goods and Services Tax Act, 2017 (hereinafter referred to as CGST Act, 2017) and/or Tamil Nadu Goods and Services Tax Act, 2017 (hereinafter referred to as TNGST Act, 2017) can be subjected to investigation and further proceeding by the counterparts under the respective GST Enactments.
3. Following Writ Petitions have been filed by the petitioners who have been assigned to the State Authorities. Proceedings have been ______________ https://www.mhc.tn.gov.in/judis Page No 5 of 55 W.P.No.34792 of 2019 and etc., batch initiated by the Central Authorities. Details of the respective Writ Petitions are as under:-
Sl.No. W.P.No. Petitioner's name Challenge of the Date of the notice/ notice/ summons or summons or assessment order assessment order
1. 34792 of 2019 Tvl.Vardha Summons issued by the 26.11.2019 Infraastructure 5th respondent u/S.70 of the CGST
2. 29878 of 2019 Tvl.KCP Engineers Mandamus to direct 24.06.2019 Pvt. Ltd. respondents 6 & 7 to (Scrutiny notice issued avoid cross- by the State Authority) empowerment + 10.09.2019 (Summon issued by the DGGI)
3. 11319 of 2020 TVl Power Tech Assessment Order 20.05.2020 under Section 73 of CGST Act, 2017
4. 2723 of 2021 M/s. KPN Travels Summons issued under 27.01.2021 India Ltd., Section 70 of CGST Act,2017
5. 18575 of 2022 M/s. Sunrise Show Cause Notice 31.03.2022 Enterprises issued under Section 74 of CGST Act,2017 r/w Section 20 of IGST Act,2017
6. 22552 of 2022 K. Sridhar Summons issued under Section 70 of CGST Act,2017
7. 26586 of 2022 M/s.New Pandian Show Cause Notice 05.08.2022 Travels Pvt.Ltd issued under Rule 142(1) of the CGST Rules,201
8. 4490 of 2022 M/s.S.S.M. Assessment Order 07.10.2021 Processing Mills under Section 73 of the Limited CGST Act, 2017
9. 12014 of 2023 M/s. Sunrise Assessement Order 17.02.2023 Enterprises demanding ITC ______________ https://www.mhc.tn.gov.in/judis Page No 6 of 55 W.P.No.34792 of 2019 and etc., batch fraudulently availed under Section 74(1) of respective GST Acts and Demand of Interest under Section 50 of GST Acts
4. In the above mentioned writ petitions, the petitioners have challenged the impugned proceedings of the respondents namely the Central Authorities. Therefore, the petitioners have challenged the impugned proceedings of the respondents namely the Central Authorities on the ground they are without Jurisdiction.
5. Following Writ Petitions have been filed by the petitioners who have been assigned to the Central Authorities. Proceedings have been initiated by the State Authorities. Details of the respective Writ Petitions are as under:-
Sl.No. W.P.No. Petitioner's name Challenge of the Date of the notice/ notice/ summons or summons or assessment order assessment order
1. 30607 of 2019 M/s.Sri Varahiamman Notice issued 04.09.2019 Steels Private Limited u/S.62of TNGST
2. 30613 of 2019 M/s.Sri Varahiamman Steels Private Limited Notice issued u/S.67 of TNGST for three cases 14.10.2019
3. 30615 of 2019 M/s.Sri Varahiamman Steels Private Limited ______________ https://www.mhc.tn.gov.in/judis Page No 7 of 55 W.P.No.34792 of 2019 and etc., batch
4. 3011 of 2020 M/s.Indoshell Assessment Order u/S. 25.10.2019
5. 3013 of 2020 Automotive Systems 62 of TNGST India Private Limited
6. 3026 of 2020 Assessment Order u/S. 25.10.2019
7. 3028 of 2020 M/S. Indoshell Mould 62 of TNGST Limited Assessment Order u/S. 25.10.2019 62 of TNGST
8. 4922 of 2020 M/S.Rosvar Steels Assessment Order u/S. 25.10.2019 Private Limited 62 of TNGST
9. 8495 of 2020 M/S.Rosvar Steels Assessment Order u/S. 25.10.2019 Private Limited 62 of TNGST
10. 8496 of 2020 M/S.Rosvar Steels Assessment Order u/S. 25.10.2019 Private Limited 62 of TNGST
11. 2861 of 2021 M/s.Season Motors Assessment Order u/S. 13.01.2020 62 of TNGST
12. 2863 of 2021 M/s.Season Motors Assessment Order u/S. 13.01.2020 62 of TNGST
13. 2865 of 2021 M/s.Season Motors Assessment Order u/S. 13.01.2020 62 of TNGST
14. 12795 of 2021 M/S. Vetrivel Traders Assessment Order 29.01.2021 under Section 74 of TNGST Act, 2017
15. 12797 of 2021 M/S. Vetrivel Traders Assessment Order 29.01.2021 under Section 74 of TNGST Act, 2017
16. 16324 of 2021 M/s.Sree Amman Summon of Show 19.02.2021 Traders Cause Notice under Section 74(1) of of the TNGST 22.02.2021 Act,2017 Form DRC-07
17. 11004 of 2021 M/s.Cheran Steel Pvt. Assessment Order for 29.01.2021 Ltd the year 2017-2018
18. 11006 of 2021 M/s.Cheran Steel Pvt. Assessment Order for 29.01.2021 Ltd the year 2018-2019
19. 11008 of 2021 M/s.Cheran Steel Pvt. Assessment Order for 29.01.2021 Ltd the year 2019-2020
20. 31013 of 2022 M/S.Khazana Inspection proceedings/ 08.11.2022 Jewewllery Private Summons issued under Limited Section 70(1) of the TNGST Act,2017 and CGST Act,2017
6. In the above Writ Petitions, the petitioners are assessed by the ______________ https://www.mhc.tn.gov.in/judis Page No 8 of 55 W.P.No.34792 of 2019 and etc., batch Central Authorities under the CGST Act, 2017 and have thus challenged the notices issued under Sections 62 & 67 of the TNGST Act, 2017 and orders passed under Section 73 and 74 of the TNGST Act, 2017 by the respondents therein namely the State Authorities. Therefore, in the above mentioned writ petitions, the petitioners have challenged the impugned proceedings of the respondents namely the State Authorities.
7. The dispute in these Writ Petitions have arisen on account of the fact that the respective petitioners who have been assigned either to the State Authorities or to the Central Authorities for administrative purposes under the provisions of the respective GST Enactments namely, the CGST Act, 2017, TNGST Act, 2017 and IGST Act, 2017 are/were being subjected proceedings by their counterpart.
8. Submissions of the petitioners are that in the absence of a proper Notification under Section 6 of the respective GST Enactments for cross-empowerment, the impugned proceedings by the respective counterparts were without jurisdiction.
9. The CGST Act, 2017, GST Act, 2017 of the respective States, ______________ https://www.mhc.tn.gov.in/judis Page No 9 of 55 W.P.No.34792 of 2019 and etc., batch Integrated GST Act, 2017, UTGST Act, 2017, GST (Composition to States) Act, 2017 came into force on 01.07.2017.
10. The Integrated Goods and Services Tax Act, (Extension to Jammu & Kashmir) Act (Act 27 of 2017) was passed on 23.08.2017 with retrospective effect from 08.07.2017.
11. These enactments were enacted in the light of Constitution [101 Amendments (Act 2016)] which introduced a slew of amendments to the Constitution of India Constitution [101 Amendments (Act 2016)] amending the Constitution of India came into force with effect from 12.09.2016. Constitution [101 Amendments (Act 2016) also inserted Article 279 A to the constitution. Article 279 A to the constitution created the Goods and Services Tax Council (GST Council). Article 279A of the Constitution of India reads as under :-
279A. Goods and Services Tax Council:-
1) The President shall, within sixty days from the date of commencement of the Constitution (One Hundred and First Amendment) Act, 2016, by order, constitute a Council to be called the Goods and Services Tax Council.
2) The Goods and Services Tax Council shall consist of the following members, namely:—
(a) the Union Finance Minister — Chairperson;
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(b) the Union Minister of State in charge of Revenue or Finance — Member;
(c) the Minister in charge of Finance or Taxation or any other Minister nominated by each State Government — Members.
3) The Members of the Goods and Services Tax Council referred to in sub-clause (c) of clause (2) shall, as soon as may be, choose one amongst themselves to be the Vice-Chairperson of the Council for such period as they may decide
4) The Goods and Services Tax Council shall make recommendations to the Union and the States on—
(a) the taxes, cesses and surcharges levied by the Union, the States and the local bodies which may be subsumed in the goods and services tax;
(b) the goods and services that may be subjected to, or exempted from, the goods and services tax;
(c) model Goods and Services Tax Laws, principles of levy, apportionment of Goods and Services Tax levied on supplies in the course of inter-State trade or commerce under article 269A and the principles that govern the place of supply;
(d) the threshold limit of turnover below which goods and services may be exempted from goods and services tax;
(e) the rates including floor rates with bands of goods and services tax ;
(f) any special rate or rates for a specified period, to raise additional resources during any natural calamity or disaster;
(g) special provision with respect to the States of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and
(h) any other matter relating to the goods and services tax, as the Council may decide.
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5) The Goods and Services Tax Council shall recommend the date on which the goods and services tax be levied on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel.
6) While discharging the functions conferred by this article, the Goods and Services Tax Council shall be guided by the need for a harmonised structure of goods and services tax and for the development of a harmonised national market for goods and services.
7) One-half of the total number of Members of the Goods and Services Tax Council shall constitute the quorum at its meetings.
8) The Goods and Services Tax Council shall determine the procedure in the performance of its functions.
9) Every decision of the Goods and Services Tax Council shall be taken at a meeting, by a majority of not less than three-fourths of the weighted votes of the members present and voting, in accordance with the following principles, namely:—
(a) the vote of the Central Government shall have a weightage of one-third of the total votes cast, and
(b) the votes of all the State Governments taken together shall have a weightage of two-thirds of the total votes cast, in that meeting.
10) No act or proceedings of the Goods and Services Tax Council shall be invalid merely by reason of:-
(a) any vacancy in, or any defect in, the constitution of the Council; or
(b) any defect in the appointment of a person as a Member of the Council; or
(c) any procedural irregularity of the Council not affecting the merits of the case
11) The Goods and Services Tax Council shall establish a mechanism to adjudicate any dispute—
a) between the Government of India and one or more States; or ______________ https://www.mhc.tn.gov.in/judis Page No 12 of 55 W.P.No.34792 of 2019 and etc., batch
b) between the Government of India and any State or States on one side and one or more other States on the other side; or
c) between two or more States, arising out of the recommendations of the Council or implementation thereof.
12. These respective GST Enactments were enacted based on the model GST Law structured by the GST Council in its deliberations.
13.The GST Council had a difficult task to balance the concerns of the Trade and interest of the different States. To avoid multiple assessments and to avoid confusion, the GST Council had to arrive at a consensus with State and Central Government.
14. Even prior to the enactment of the respective GST Enactments with effect from 01.07.2017, in the 9th GST Council meeting held on 16.01.2017, a decision was taken regarding cross-empowerment to ensure a single interface with authorities for the future GST Laws.
15. Para.No.28 of the Minutes of the 9th GST Council Meeting held ______________ https://www.mhc.tn.gov.in/judis Page No 13 of 55 W.P.No.34792 of 2019 and etc., batch on 16.01.2017 discussed the issue regarding cross-empowerment.
Para.No.28 of the Minutes of the 9th GST Council Meeting held on 16.01.2017 is extracted as under:-
“28. After further discussion, the Council agreed to the decisions as recorded below in respect of cross-empowerment to ensure single interface under GST.
i. There shall be a division of taxpayers between the Central and the State tax administrations for all administrative purposes; ii. Of the total number of taxpayers below Rs. 1.5 crore turnover, all administrative control over 90% of the taxpayers shall vest with the State tax administration and 10% with the Central tax administration;
iii. In respect of the total number of taxpayers above Rs. 1.5 crore turnover, all administrative control shall be divided equally in the ratio of 50% each for the Central and the State tax administration;
iv. The division of taxpayers in each State shall be done by computer at the State level based on stratified random sampling and could also take into account the geographical location and type of the taxpayers, as may be mutually agreed;
v. The new registrants shall be initially divided one each between the Central and the State tax administration and at the end of the year, once the turnover of such new registrants was ______________ https://www.mhc.tn.gov.in/judis Page No 14 of 55 W.P.No.34792 of 2019 and etc., batch ascertained, those units with turnover below Rs. 1.5 crore shall be divided in the ratio of 90% for the State tax administration and 10% for the Central tax administration and those units above the turnover of Rs.l.5 crore shall be divided in the ratio of 50% each for the State and the Central tax administration; vi. The division of the taxpayers may be switched between the Centre and the States at such interval as may be decided by the Council; vii.The above arrangement shall be reviewed by the Council from time to time;
viii.Both the Central and the State tax administrations shall have the power to take intelligence-based enforcement action in respect of the entire value chain; ix. Powers under the IGST Act shall be cross- empowered to the State tax administration on the same basis as under the CGST and the SGST Acts either under law or under Article 258 of the Constitution but with the exception that the Central tax administration shall alone have the power to adjudicate a case where the disputed issue relates to place of supply, or when an affected State requests that the case be adjudicated by the CGST authority and for such issues of export and import as may be discussed in the Law Committee of officers and brought back to the Council for decision;
x. The territorial water within the twelve nautical miles shall be treated as the territory of the Union of India unless the Hon'ble Supreme Court decides otherwise in the ongoing litigation on the issue but the power to collect the State tax in the territorial waters shall be delegated by the Central Government to the States.” ______________ https://www.mhc.tn.gov.in/judis Page No 15 of 55 W.P.No.34792 of 2019 and etc., batch
16. At that stage, only the Model GST Laws were in circulation. It was not even in the form of Bills. It was in the form of a Model IGST Law, Model Central GST Law and Model State GST Law and Model State and Central GST Rules. At that time, the GST Council was yet to approve the Draft Model GST Acts, Draft Model IGST Act and Draft Model GST Rules for these future laws to enacted and passed.
17. After the Model GST law was approved by the GST Council, pursuant to the decisions taken in the 9th GST Council Meeting held on 16.01.2017, first impetus for cross-empowerment was given after GST Bills were passed and enacted as respective GST Enactments with effect from 01.07.2018 vide Circular No.1/2017-GST (Council) dated 20.09.2017. Circular No.1/2017-GST (Council) dated 20.09.2017 was issued for a division of taxpayer base between the Centre and States to ensure a Single Interface under GST Enactments between Tax Officers and Central Tax Officers under CGST/IGST and SGST Acts of 2017 ______________ https://www.mhc.tn.gov.in/judis Page No 16 of 55 W.P.No.34792 of 2019 and etc., batch respectively.
18. Text of Circular No.1/2017-GST (Council) dated 20.09.2017 bearing reference F.No.166/Cross Empowerment/GSTC/2017 containing the guide lines for Division of Tax payers between the Centre and State Authorities to ensure single interface for the purpose of tax administration under the respective GST Enactment reads as below:-
Subject: Guidelines for division of taxpayer base between the Centre and States to ensure Single Interface under GST-Regarding Based on the decisions taken in the 9th Meeting of the GST Council held on 16 January, 2017 and 21st Meeting of the GST Council held on 9 September, 2017, the following criteria should be followed for the division of taxpayer base between the Centre and the States to ensure single interface:
i. Of the total number of taxpayers below Rs. 1.5 crore turnover, all administrative control over 90% of the taxpayers shall vest with the State tax administration and 10% with the Central tax administration;
ii. In respect of the total number of taxpayers above Rs. 1.5 crore turnover, all administrative control shall be divided equally in the ratio of 50% each for the Central and the State tax administration;
iii. The division of taxpayers in each State shall ______________ https://www.mhc.tn.gov.in/judis Page No 17 of 55 W.P.No.34792 of 2019 and etc., batch be done by computer at the State level based on stratified random sampling and could also take into account the geographical location and type of the taxpayers, as may be mutually agreed;
2. Further, the broad guidelines for the purposes of computation of "Turnover as approved by the GST Implementation Committee in its meeting held on 31 August and 1 September, 2017 and subsequently by the GST Council in its 21st Meeting held on 9 September 2017 are as follows:-
i. For taxpayers registered only under VAT, the total annual State turnover under VAT (including inter-State sales, exports and exempt goods) shall be taken as the basis for division;
ii. For taxpayers registered under both VAT and Central Excise, the annual State turnover under VAT shall be taken as the basis for division as State-level Central Excise turnover is already included in it;
iii. For taxpayers registered only under Central Excise (and not under VAT), the total annual turnover declared in Central Excise returns shall be taken as the basis for division; iv. For taxpayers registered only under Service Tax in a State on a stand-alone basis, the annual turnover of the Services declared in the Service Tax returns shall be taken as the basis for division;
v. For taxpayers registered only under Service Tax having centralized registration, the annual all-india turnover of the Services declared in the Service Tax returns shall be taken as the basis for division;
______________ https://www.mhc.tn.gov.in/judis Page No 18 of 55 W.P.No.34792 of 2019 and etc., batch vi. For taxpayers registered under both VAT and Service Tax, the total non-overlapping turnover (total of VAT and Service Tax, excluding any turnover which is included in both) shall be calculated and used as the basis for division. The Service Tax turnover shall be on the basis of clauses (iv) and (v) as the case may be.
3. The State Level Committees comprising Chief Commissioner/ Commissioner Commercial Taxes of respective States and jurisdictional Central Tax Chief Commissioners/Commissioners are already in place for effective coordination between the Centre and the States. The said Committees may now take necessary steps for division of taxpayers in each State keeping in view the principles stated above. Supplementary decisions, if any, may be taken by the said Committees to implement the decision of the GST Council, keeping in view the broad principles stated hereinabove.
4. Suitable notifications regarding cross-empowerment of State and Central Tax officers under CGST/IGST and SGST Acts respectively are being issued separately.
19. After the above decision was taken for allocating 90% of those assessees whose turnover were below Rs.1.5 crores with the State Authorities and balance 10% with the Central Authorities and 50% each of those tax payers whose turn overs was above Rs.1.5 crores equally between the State Authorities and the Central Authorities under the respective GST Enactments, the GST Council in its 22nd Meeting held on ______________ https://www.mhc.tn.gov.in/judis Page No 19 of 55 W.P.No.34792 of 2019 and etc., batch 06.10.2017 addressed the concern arising out of the gap between the issuance of Notifications under various GST Enactments of 2017 and IGST Act, 2017. Agenda No.9 of the 22nd Meeting held on 06.10.2017 captures the deliberations. It is extracted below:-
“Agenda item 9: Proposal for issuing notifications on cross- empowerment for ensuring single interface under GST
35. The Commissioner (GST Policy), CBEC stated that it was proposed to issue notification on cross-
empowennent prepared in accordance with the decisions of the Council taken during its 9th Meeting (held on 16 January 2017) and 21st Meeting (held on 9 September 2017). He stated that while there was a broad agreement for cross-empowerment under the CGST and SGST Acts, there was disagreement on the issue of cross-empowerment under the IGST Act in relation to the Place of Supply Rules. The Secretary stated that notification of cross- empowerment was urgently required to enable refund to the taxpayers and this notification could be issued. He added that due to persistent differences on cross empowerment for the Place of Supply Rules issues under IGST, notification regarding cross empowerment in respect of other matters could be deferred. He stated that by cross empowering States and Central tax officers for giving refund, it would be ensured that only one officer issued an order of refund for both CGST and SGST. The Council approved the proposal to issue a notification by the Central Government and the State Governments cross empowering officers of the Central and State Government to sanction refund and that an order of refund passed by an officer of the Central or State ______________ https://www.mhc.tn.gov.in/judis Page No 20 of 55 W.P.No.34792 of 2019 and etc., batch Government shall cover both the central tax and the state tax and a similar notification to be issued under the IGST Act.
35.1. The CCT, Karnataka stated that the Council could also take a decision that till the division of taxpayers was effected between the Central administration and the State administrations, an officer of the Central and the State Government was authorised to process any refund claim filed by an applicant under his jurisdiction. The Secretary stated that division of taxpayers was likely to be done soon. The CCT, Karnataka stated that a lot of ground work was still required to be done and data such as turnover details of migrated taxpayers, removing from it the data of turnover of taxpayers with centralised registration, etc, would take time and for such period, a taxpayer should be given the freedom to approach any tax administration for claiming refund. The Secretary stated that this could be permitted subject to a declaration being given by the applicant that the same refund claim has not been claimed from the other administration having jurisdiction over the applicant. The Council agreed to this suggestion.
36. For agenda item 9, the Council approved the following:-
i. To issue notifications by the Central Government and the State Governments, cross empowering officers of the Central and State Governments to sanction refund and that an order of refund passed by an officer of the Central or State Government shall cover both the Central tax and the State tax. Similar notification to be issued under the IGST Act by the Central Government;
ii. Until the division of taxpayers is effected between the Central and State administration, an officer of ______________ https://www.mhc.tn.gov.in/judis Page No 21 of 55 W.P.No.34792 of 2019 and etc., batch the Central and the State Government was authorised to process any refund claim filed by an applicant under his jurisdiction subject to a declaration being given by the applicant that the same refund claim has not been claimed from the other administration having jurisdiction over the applicant.”
20. The provisions of the respective GST Enactments contemplates power of the Central Government and the State Government to issue notifications on the recommendations of the GST Councils to empower the Officers of the State Tax Officer or Union Territory Officer to issue Notifications under Section 6 of the CGST Act, 2017 the Central Tax Officers to be the “proper officer” under the respective GST Enactments.
21. Thus, the Central Government issued Notification No.39/2017-
Central Tax on 13.10.2017. This Notification was later modified by Notification No.10/2018-CT dated 23.01.2018.
22. By this amending Notification No.10/2018-CT dated ______________ https://www.mhc.tn.gov.in/judis Page No 22 of 55 W.P.No.34792 of 2019 and etc., batch 23.01.2018, the words “except rule 96” was substituted with except sub rules (1) to (8) and sub rule (10) of rule 96”.
23. Text of Notification No.39/2017-Central Tax dated 13.10.2017 and amending Notification No.10/2018 dated 23.01.2018 are reproduced below:-
______________ https://www.mhc.tn.gov.in/judis Page No 23 of 55 W.P.No.34792 of 2019 and etc., batch Notification No.39/2017-Central Tax Notification No.10/2018-Central Tax Notification No. 39/2017 – Central Tax Notification No. 10/2018 – Central Tax New Delhi, the 13th October, 2017 Delhi, the 23rd January, 2018 G.S.R….(E).- In exercise of the G.S.R....(E).- In exercise of the powers powers conferred by sub-section (1) conferred by sub-section (1) of section of section 6 of the Central Goods and 6 of the Central Goods and Services Services Tax Act, 2017 (12 of 2017) Tax Act, 2017 (12 of 2017) (hereafter in (hereafter in this notification referred this notification referred to as the to as the “CGST Act”), on the “CGST Act”), on the recommendations recommendations of the Council, the of the Council, the Central Government Central Government hereby specifies hereby makes the following amendment that the officers appointed under the in the notification of the Government of respective State Goods and Services India in the Ministry of Finance, Tax Act, 2017 or the Union Territory Department of Revenue No. 39/2017 - Goods and Service Tax Act, 2017 (14 Central Tax dated the 13th October, of 2017) (hereafter in this notification 2017, published in the Gazette of India, referred to as “the said Acts”) who Extraordinary, Part II, Section 3, are authorized to be the proper Subsection (i) vide number G.S.R. 1253 officers for the purposes of section 54 (E) dated the 13th October, 2017, or section 55 of the said Acts namely:-
(hereafter in this notification referred to as “the said officers”) by the In the said notification, for the words Commissioner of the said Acts, shall and figures “except rule 96”, the act as proper officers for the purpose words, figures, brackets and letter of sanction of refund under section 54 “except sub rules (1) to (8) and sub or section 55 of the CGST Act read rule (10) of rule 96” shall be with the rules made thereunder except substituted. rule 96* of the Central Goods and Services Tax Rules, 2017, in respect of a registered person located in the territorial jurisdiction of the said officers who applies for the sanction of refund to the said officers.
Note: * substituted with ‘except sub rules (1) to (8) and sub rule (10) of rule 96’ vide amendment in Notification No.10/2018-Central Tax dated 23.01.2018.
24. A similar Notification has also been issued by the State of Tamil ______________ https://www.mhc.tn.gov.in/judis Page No 24 of 55 W.P.No.34792 of 2019 and etc., batch Nadu in G.O.(MS).No.126, Commercial Taxes And Registration (B1) Department, dated 13.10.2017.
25. In line with the decision of the 22nd GST Council Meeting held on 06.10.2017, a separate Model Notification was also circulated for the purpose of Section 6 of the respective GST Enactments for other purpose which would have entitled cross-empowerment for other purpose.
However, Model Notifications which was circulated during September, 2017 immediately after the GST Enactments came into force with effect from 01.07.2017 have not been notified either under the CGST Act, 2017 or under the SGST Act, 2017.
26. These Notifications remain as draft Notifications till date. They have not been notified. Text of the Draft Notifications that fell for deliberation during the 22nd GST Council Meeting held on 06.10.2017 are reproduced below:-
“Notification No….. /2017 –State Tax ______________ https://www.mhc.tn.gov.in/judis Page No 25 of 55 W.P.No.34792 of 2019 and etc., batch ……., the …. September, 2017 G.S.R….(E).-In exercise of the powers conferred by sub-section (1) of section 6 of the Goods and Services Tax Act, 2017 ( --- of 2017) (hereinafter referred to as “GST Act”), and on the recommendations of the Council, the Government of ……….hereby specifies that the officers appointed under the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the “CGST Act”)who are authorized to be the proper officers for the purposes of the CGST Act (hereinafter referred to as “the said officers”)by the Commissioner in the Board, shall perform all or any of the duties and functions assigned to them, from time to time, as detailed in column (B) of the Schedule below, subject to the conditions specified in the corresponding entry in column (C) of the said Schedule;-
SCHEDULE
Sl.No. Duty or function or authority or scope Conditions
of authority or power
(A) (B) (C)
All proceedings with respect to a Jurisdiction in respect of the said
registered person, excluding those registered person has been
referred in Sl. No 2, 3, 4 and 5 of assigned to the said officers for
this Schedule. the specified period in accordance
1 with the recommendations of the
Council.
(ii) all consequential proceedings including appeals arising from such proceedings Inspection, search, seizure or any Such proceedings have not been other proceeding under section 67 initiated by the proper officer of of the GST Actor intelligence-based the GST Act within one year from enforcement action against any the date on which the said person including all consequential proceedings are initiated by the or incidental proceedings including said officers. Explanation. -For 2. appeals arising from such the purposes of this clause, the proceedings. period of one year shall be counted from the date of initiation of the said proceedings as specified in the format for intimation of -such proceedings ______________ https://www.mhc.tn.gov.in/judis Page No 26 of 55 W.P.No.34792 of 2019 and etc., batch Detention, seizure and release of No such proceedings have been goods and conveyances in transit initiated in respect of the said under section 129 of the GST Actor goods by the proper officer of GST of confiscation of goods or Act.
conveyances and levy of penalty 3. under section 130 of the GST Act against any person and all consequential or incidental proceedings including appeals arising from such proceedings.
All proceedings against a supplier No such proceeding has been or recipient of goods or services or initiated in respect of such person
4. both, who has remained by the proper officer of GST Act.
unregistered although liable to be registered.
Any proceedings arising out of Except the issues related to or
5. Chapter XX of the GST Act. arising out of transitional provisions of the GST Act.
Explanation 1: Assignment of registered persons refers to the distribution of registered persons between the central and state tax administrations, for exercising all administrative controls regarding enforcement of the provisions of the SGST Act, in such proportions and following such methods, as the Council may decide from time to time.
Explanation 2: With respect to Sl. No. 2,3 & 4 of the said Schedule, information regarding intimation of proceedings in the format specified below should be furnished by the Commissioner to the jurisdictional Commissioner of the Central Goods and Services Tax Act on the common portal or manually with due acknowledgment till such time the facility for uploading the said information is not available on the common portal.
Format for intimation of proceedings ______________ https://www.mhc.tn.gov.in/judis Page No 27 of 55 W.P.No.34792 of 2019 and etc., batch Serial GSTIN No. Date of initiation of Subject matter Period under No. proceedings under investigation investigation (1) (2) (3) (4) (5)
2.This notification shall come in force with effect from ---
[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)] Government of India Ministry of Finance Department of Revenue Central Board of Excise and Customs Notification No….. /2017 –Integrated Tax New Delhi, the …. September, 2017 G.S.R….(E).-In exercise of the powers conferred by section 4 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017) (hereinafter referred to as the “IGST Act”), on the recommendations of the Council, the Central Government hereby specifies that the officers appointed under the respective State Goods and Services Tax Act, 2017 or the Union Territory Goods and Services Tax Act (14 of 2017), (hereinafter collectively referred to as “the said Acts”), and who are authorized to be the proper officers for the purposes of the said Acts(hereinafter referred to as “the said officers”) by the Commissioner of the said Acts, shall exercise their powers except in respect of the following purposes, namely:-
a) any disputed issues requiring determination of place of supply under Chapter V of the IGST Act;
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b) where one of the states involved in an Inter-State transaction requests that the case be adjudicated by the officer appointed under section 3 of the IGST Act;
c) refund of IGST paid on export of goods other than the supply of goods to SEZ unit or SEZ supplier;
d) any other purpose that is recommended by the Council from time to time:
2. The said officers shall perform the duties and functions assigned to them, from time to time, as detailed in column (B) of the Schedule below, subject to the conditions specified in the corresponding entry in column (C) of the said Schedule; -
SCHEDULE Sl.No. Duty or function or authority or scope Conditions of authority or power (A) (B) (C) All proceedings with respect to Jurisdiction in respect of the said registered persons, excluding registered person has been those referred at Sl. No. 2, 3, 4 assigned to the said officers for and 5 of this Schedule. the specified period in
1. accordance with the recommendations of the Council.
(ii) all consequential proceedings including appeals arising from such proceedings.
2. Inspection, search, seizure or any Such proceedings have not been other proceedings under section initiated by the proper officer of 67 of the Central Goods and central tax within one year from Services Tax Act, 2017 as made the date on which said applicable to the Integrated Tax proceedings are initiated by the vide section 20 of the IGST Act said officers. Explanation. -For or intelligence-based the purposes of this clause, the enforcement action against any period of one year shall be person including all counted from the date of initiation ______________ https://www.mhc.tn.gov.in/judis Page No 29 of 55 W.P.No.34792 of 2019 and etc., batch consequential or incidental of the said proceedings as proceedings including appeals specified in the format for arising from such proceedings. intimation of such proceedings. Detention, seizure and release of No such proceedings have been goods and conveyances in transit initiated in respect of the said under section 129 of the Central goods by the proper officer of the Goods and Services Tax Act, central tax. 2017 or of confiscation of goods or conveyances and levy of penalty under section 130 of the
3. Central Goods and Services Tax Act, 2017 made applicable to the integrated tax vide section 20 of the IGST Act, against any person and all consequential or incidental proceedings including appeal arising from such proceedings.
All proceedings against a No such proceedings have been supplier or recipient of goods or initiated in respect of such person
4. services or both, who has by the proper officer of the remained unregistered, although central tax. liable to be registered.
Any proceedings arising out of Except the issues related to or Chapter XX of the Central Goods arising out of transitional
5. and Services Tax Act, 2017 made provisions of the Central Goods applicable to the integrated tax and Services Tax Act, 2017. vide section 20 of the IGST Act.
Explanation 1: Assignment of registered persons refers to the distribution of registered persons between the central and state tax administrations, for exercising all administrative controls regarding en forcement of the provisions of the IGST Act, in such proportions and following such methods, as the Council may decide from time to time.
Explanation 2: With respect to Sl. No. 2, 3& 4 of the said Schedule, information regarding intimation of proceedings in the format specified below should be furnished by the Commissioner to the jurisdictional Commissioner of the respective State Goods and Ser vices Tax Act or the Union Territory Goods and Ser vices Tax Act on the common portal or manually with ______________ https://www.mhc.tn.gov.in/judis Page No 30 of 55 W.P.No.34792 of 2019 and etc., batch due acknowledgment till such time the facility for up loading the said information is not available on the common portal:
Format for intimation of proceedings Serial GSTIN No. Date of Subject matter Period under No. initiation of under investigation investigation proceedings (1) (2) (3) (4) (5)
2.This notification shall come in force with effect from
---”
27. During the aforesaid Meeting, it was highlighted that there was disagreement of issue under IGST Act in relation to place of supply rules.
While the Secretary stated that investigation of cross-empowerment was urgently required to enable the tax payer and therefore, the notification can be issued. It highlighted that there was a persistent difference regarding the cross-empowerment for the Place of supply rules regarding IGST, Notification regarding the cross-empowerment in respect of other matters were to be deferred in 22nd GST Council Meeting held on 06.10.2017.
28. Thus, there is no cross-empowerment.
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29. The learned counsel for the petitioners relied on the following decisions:-
i. Pahwa Chemicals Pvt. Ltd., Vs. Commissioner of Central Excise, Delhi, 2005 (181) E.L.T. 339 (S.C.);
ii. Duncan Agro Industries Ltd., Vs. Union of India, 1989 (39) E.L.T. 211 (Del.);
iii. M/s.Muthu Metals represented by K.Bhommal, Proprietor, Madras – 3 Vs. State of Tamil Nadu represented by the Commissioner and Secretary to Govt., C.T. & R.E. Dept., Madras – 9 and others in W.P.Nos.4949 of 1986, etc., batch;
iv. Raghunath International Ltd., Vs. Union of India, 2012 (280) E.L.T. 321 (All.);
v. National Building Construction Co. Ltd., Vs. Union of India, 2019 (20) G.S.T.L. 515 (Del.); vi. Yasho Industries Ltd., Vs. Union of India, Manu/GJ/1470/2021;
vii.Kuppan Gounder P.G.Natarajan Vs. Directorate General of GST Intelligence, New Delhi, 2022 (58) G.S.T.L. 292 (Mad.); viii.Ambika Food Industries Pvt. Ltd., Vs. Union of India Rep. by its Secretary, Ministry of Finance Department of Revenue, 2021 SCC Online TS 3390;
ix. Ajay Verma Vs. Union of India and Ors., Manu/UP/1822/2022;
x. M/s.VGN Projects Estates Private Limited Vs. Assistant Commissioner (State Taxes) and another in W.P.No.2391 of 2023 and xi. Tvl Metal Trade Incorporation Vs. The Special Secretary and others in W.P.No.3033 of 2023.
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30. I have considered the arguments advanced by the learned counsel for the petitioner and the respondent.
31. The Model Law which were in circulation before the respective Central GST Bill and the State GST Bill and Union Territory GST Bill were introduced in the Parliament and in the respective State Legislatures of the country are in slight variance.
32. The scheme of enactments as mentioned above makes it clear that the assessees whether assigned to the Central Tax Authorities or the State Tax Authorities as the case may be are required to file only one set of Return under Chapter-IX of the respective GST Enactments of 2017 r/w Chapter-VIII of the respective GST Rules. The returns that are contemplated under Chapter-IX of the respective GST Enactments and Chapter-VIII of the respective GST Rules are parimateria with each other.
33. The returns to be filed by the Assessee's under the respective GST Enactments are same. They capture all the details under the respective GST Enactments applicable to an assessee.
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34. The returns are to be filed in the common portal as defined in Section 2(26) of the respective GST Enactments . As per Section 2(26) of the respective GST Enactments “Common portal” means the common goods and services tax electronic portal referred to in Section146. Section 2(26) and Section146 of the respective GST Enactments reads as under :-
Section 2(26) of the respective GST Enactments-
Definition -Common portal means the common goods and services tax electronic portal referred to in section146;
Section 146 of the respective GST Enactments – Common Portal- The Government may, on the recommendations of the Council, notify the Common Goods and Services Tax Electronic Portal for facilitating registration, payment of tax, furnishing of returns, computation and settlement of integrated tax, electronic way bill and for carrying out such other functions and for such purposes as may be prescribed.
35. The returns that are contemplated under these Rules are composite returns which will not only capture the tax liability under the CGST Act, 2017 but also TNGST Act, 2017 and IGST Act, 2017. The returns also capture the Input Tax Credit that are availed by an assessee under the ______________ https://www.mhc.tn.gov.in/judis Page No 34 of 55 W.P.No.34792 of 2019 and etc., batch respective GST Enactments.
36. That apart, the payment of tax whether under the CGST Act, 2017 or under TNGST Act, 2017 are at the same rate. The only difference that may arise at the time of payment of tax due to utilization of the Input Tax Credit (ITC) availed on the inward supplies and their cross utilization for discharging the tax liability in terms of Chapter-X of the respective GST Enactments r/w Chapter-IX of the respective GST Rules, 2017.
37. The utilization of Input Tax Credit under the respective GST Enactments are in terms of Sub-Section (4) to Section 49 of the respective Central and TNGST Enactments. They read as under:-
“49. Payment of tax, interest, penalty and other amounts-(1) (2) (3)
(4) The amount available in the electronic credit ledger may be used for making any payment towards output tax under this Act or under the Integrated Goods and Services Tax Act in such manner and subject to such conditions and within such time as may be prescribed.”
38. Thus, the Input Tax Credit availed under the provisions of the Central GST Act, 2017 can be used for payment of Output Tax under the ______________ https://www.mhc.tn.gov.in/judis Page No 35 of 55 W.P.No.34792 of 2019 and etc., batch said Act or under the IGST Act, in such manner as may be and subject to such conditions as may be prescribed.
39. Similarly, the Input Tax Credit availed under the provisions of TNGST Act, 2017 can be utilised only for payment of Output Tax under the provisions of said IGST Act, 2017 in such manner and subject to such conditions and within such time as may be prescribed under the Rules.
40. However, powers of assessment has been vested with the proper officers to whom the assessee have assigned by virtue of Circular No.01/2017-GST (council) dated 20.09.2017 bearing reference: F.No.199/ Cross-Empowerment/GSTC/2017.
41. As per Section 49A of the CGST Act, 2017, Input Tax Credit availed on account of Central Tax, State Tax or Union Territory Tax can be utilized towards payment of Integrated Tax, Central Tax, State Tax or the Union Territory Tax as the case may be, only after the Input Tax Credit available on account of Integrated Tax Credit has been first available on such cases. Section 49A of the CGST Act, which was inserted with effect from 01.02.2019 and notified vide Notification No.2/2019-CT 29/1-2019 as ______________ https://www.mhc.tn.gov.in/judis Page No 36 of 55 W.P.No.34792 of 2019 and etc., batch amended by GST (Amendment) Act 2018 (31 of 2018) has to be read in conjunction with Rules 88 A of the CGST Rules, 2017 as inserted by Notification No.16/2019-CT dated 29.03.2019 with effect from 29.03.2019.
42. Section 49A of CGST Act, 2017 and Rule 88A of the CGST Rules, 2017 reads as under:-
CGST Act, 2017 CGST Rules, 2017 49A. Utilisation of input tax credit 88A. Order of utilization of input tax subject to certain conditions:- credit:-
(1) Notwithstanding anything Input tax credit on account of contained in section 49, the input tax integrated tax shall first be utilised credit on account of central tax, State towards payment of integrated tax, tax or Union territory tax shall be and the amount remaining, if any, utilised towards payment of integrated may be utilised towards the payment tax, central tax, State tax or Union of central tax and State tax or Union territory tax, as the case may be, only territory tax, as the case may be, in after the input tax credit available on any order: Provided that the input account of integrated tax has first tax credit on account of central tax, been utilised fully towards such State tax or Union territory tax shall payment.
be utilised towards payment of integrated tax, central tax, State tax or Union territory tax, as the case may be, only after the input tax credit available on account of integrated tax has first been utilised fully.
43. A similar provision is absent under the TNGST Act, 2017 and TNGST Rules 2017.
44. As per Rule 86(2) of the CGST Rules,2017 , the electronic credit ledger shall be debited to the extent of discharge of any liability in ______________ https://www.mhc.tn.gov.in/judis Page No 37 of 55 W.P.No.34792 of 2019 and etc., batch accordance with the provisions of section 49 [or section 49A or section 49B].
45. As per Rule 86(2) of the TNGST Rules, 2017, the electronic credit ledger shall be debited to the extent of discharge of any liability in accordance with the provisions of Section 49.
46. As per Section 88A of the TNGST Rules, 2017, Input tax credit on account of integrated tax shall first be utilised towards payment of integrated tax, and the amount remaining, if any, may be utilised towards the payment of central tax and State tax or Union territory tax, as the case may be, in any order. Provided that the input tax credit on account of central tax, State tax or Union territory tax shall be utilised towards payment of integrated tax, central tax, State tax or Union territory tax, as the case may be, only after the input tax credit available on account of integrated tax has first been utilised fully.
47. As per Rule 49A of the TNGST Rules, 2017, a bill of supply referred to in clause (c) of sub-section (3) of section 31 shall be issued by the supplier containing the following details, namely:-
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(a) name, address and Goods and Services Tax Identification Number of the supplier;
(b) a consecutive serial number not exceeding sixteen characters, in one or multiple series, containing alphabets or numerals or special characters
-hyphen or dash and slash symbolised as “-” and “/” respectively, and any combination thereof, unique for a financial year;
(c) date of its issue;
(d) name, address and Goods and Services Tax Identification Number or Unique Identity Number, if registered, of the recipient;
(e) Harmonised System of Nomenclature Code for goods or services;
(f) description of goods or services or both;
(g) value of supply of goods or services or both taking into account discount or abatement, if any; and
(h) signature or digital signature of the supplier or his authorised representative: Provided that the provisos to rule 46 shall, mutatis mutandis, apply to the bill of supply issued under this rule:
Provided further that any tax invoice or any other similar document issued under any other Act for the time being in force in respect of any non- taxable supply shall be treated as a bill of supply for the purposes of the Act.
48. Under Section 3 of the respective Central and State GST Enactments of 2017, both the Central Government and the State Government have appointed a “class of officers” for the purpose of enforcement of the respective GST Enactments of 2017. Section 3 of the CGST Act, 2017 and the TNGST Act, 2017 read as under:-
CGST Act, 2017 TNGST Act, 2017 ______________
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3. Officers under this Act.— 3. Officers under this Act.- The Government shall, by notification, The Government shall, by notification, appoint the following classes of officers for appoint the following classes of officers for the purposes of this Act, namely:–– the purposes of this Act, namely:-
(a) Principal Chief Commissioners (a) Commissioner of State tax;
of Central Tax or Principal (b) Additional Commissioners of Directors General of Central State tax; Tax; (c) Joint Commissioners of State tax;
(b) Chief Commissioners of Central (d) Deputy Commissioners of State Tax or Directors General of tax;
Central Tax; (e) Assistant Commissioners of State
(c) Principal Commissioners of tax, and Central Tax or Principal (f) any other class of officers as it Additional Directors General of may deem fit: Central Tax;
(d) Commissioners of Central Tax or Additional Directors General of Central Tax;
(e) Additional Commissioners of Central Tax or Additional Directors of Central Tax;
(f) Joint Commissioners of Central Tax or Joint Directors of Central Tax;
(g) Deputy Commissioners of Central Tax or Deputy Directors of Central Tax;
(h) Assistant Commissioners of Central Tax or Assistant Directors of Central Tax, and ;
(i) any other class of officers as it may deem fit:
Provided that, the officers appointed Provided that the officers under the Tamil Nadu Value Added Tax appointed under the Central Act, 2006 shall be deemed to be the Excise Act, 1944 shall be deemed officers appointed under the provisions to be the officers appointed under of this Act.
the provisions of this Act.
49. Apart from the officers mentioned above under Section 4(1) of the respective Central GST Act, 2017 and TNGST Act, 2017, the Board (the Central Board of Indirect Taxes and Customs [CBIC]) as defined in ______________ https://www.mhc.tn.gov.in/judis Page No 40 of 55 W.P.No.34792 of 2019 and etc., batch Section 2(16) of the CGST Act, 2017 and the Government as defined in Section 2(53) of TNGST Act, 2017, can appoint such officers as they may deem fit to be the officers under these GST Enactments.
50. Without prejudice to the provisions of sub-section (1) to Section 4, the Board under Section 4(2) of the CGST Act, 2017 may, by an order, authorize any officer referred to in clauses (a) to (h) of section 3 to appoint any officers of the Central Tax below the rank of Assistant Commissioner of Central Tax to be the Central Tax Officer for the administration of the CGST Act, 2017.
51. Thus, the Board can authorize any officer referred to in clauses
(a) to (h) of Section 3 of CGST Act, 2017 to appoint any officers of the Central Tax below the rank of Assistant Commissioner of Central Tax to be the Central Tax Officer for the administration of the CGST Act, 2017 alone. Thus, under Section 4(2) of the CGST Act, 2017, these can be only a linear delegation.
52. Similarly, under Section 4(2) of the TNGST Act, 2017, the Commissioner has jurisdiction over the whole of State. The Additional Commissioner shall have jurisdiction over the whole of the State in ______________ https://www.mhc.tn.gov.in/judis Page No 41 of 55 W.P.No.34792 of 2019 and etc., batch respect of all or any of the functions assigned to them. Where the State Government so directs, the Additional Commissioner shall have jurisdiction, over any local area thereof. Again Such delegation is only to officers appointed under TNGST Act, 2017. Here also the delegation is linear.
53. Under Section 4(2) of the TNGST Act, 2017, all other officers shall have jurisdiction over the whole of the State or over such local areas as the Commissioner may, by an order, specify, in respect of all or any of the functions assigned to them, subject to such conditions as may be specified. Thus, the Commissioner has power to delegate powers under the Act to other Officer specified in Sub-clause (c) to (f) to Section 3 of the TNGST Act, 2017. There is no cross-empowerment under Section 4(2) of the TNGST Act, 2017.
54. Thus, neither the Board under Section 4(1) and (2) of CGST Act, 2017 nor the Government and/or the Commissioner under Section 4(1) and (2) of SGST Act, 2017 can appoint such officers in addition to the officer notified under Section 3 of the respective Act. Thus, the Board can appoint and delegate only to Central Tax Officers appointed under the CGST Act, 2017 for CGST Act, 2017 and the Government and/or the ______________ https://www.mhc.tn.gov.in/judis Page No 42 of 55 W.P.No.34792 of 2019 and etc., batch Commissioner can appoint and delegate only to State Tax Officers appointed under the TNGST Act, 2017 for TNGST Act, 2017.
55. These provisions are pari materia with Section 4 of the Customs Act, 1962 and Section 12(E) of the Central Excise Act, 1944.
56. Section 4 of the respective GST Enactments namely CGST Act, 2017 and TNGST Act, 2017 and the corresponding Sections from the Model Law are reproduced below:-
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4. Appointment of officers:- 5.Appointment of officers under the Central Goods and Services Tax Act
1) The Board may appoint such
1) The Board may, in addition to the persons as it may think fit to be officers as may be notified by the officers under the Central Goods Government under section 3, and Services Tax Act appoint such persons as it may think fit to be the officers under this Act. 2) Without prejudice to the provisions
2) Without prejudice to the of sub-section (1), the Board may provisions of sub-section (1), the authorize a Principal Chief Board may, by order, authorise Commissioner/Chief Commissioner any officer referred to in clauses of Central Goods and Services Tax
(a) to (h) of section 3 to appoint or a Principal Commissioner officers of central tax below the /Commissioner of Central Goods rank of Assistant Commissioner and Services Tax or an of Central Tax for the Additional/Joint or Deputy/Assistant administration of this Act. Commissioner of Central Goods and Service Tax to appoint officers of Central Goods and Services Tax below the rank of Assistant Commissioner of Central Goods and Services Tax.
Section 4 of the Tamil Nadu Goods and Section 5 of the Model State Goods and Services Tax Act, 2017 Services Tax, 2017
4. Appointment of officers:- 5.Appointment of officers under the State Goods and Services Tax Act.
1) The Government may, in addition 1) The Government may appoint to the officers as may be notified such persons at it may think fit under section 3, appoint such to be officers under the State persons as it may think fit to be the Goods and Services Tax Act. officers under this Act.
2) The Commissioner shall have 2) The Commissioner shall have jurisdiction over the whole of the jurisdiction over the whole of State, the Additional the State, the Special Commissioner, in respect of all or Commissioner and an any of the functions assigned to Additional Commissioner shall them, shall have jurisdiction over have jurisdiction over the the whole of the State or where the whole of the State or where the State Government so directs, over State Government so directs, any local area thereof, and all over any local area thereof, other officers shall, subject to such and all other officers shall, ______________ https://www.mhc.tn.gov.in/judis Page No 44 of 55 W.P.No.34792 of 2019 and etc., batch conditions as may be specified, subject to such conditions as have jurisdiction over the whole of may be specified, have the State or over such local areas jurisdiction over the whole of as the Commissioner may, by the State or over such local order, specify. areas as the State Government may specify.
57. Section 5 of the Central GST Act, 2017 and TNGST Act, 2017 circumscribes the powers of the officers mentioned in Section 3 and 4 of the respective GST Enactments. Section 5 of the respective GST Enactments read slightly differently from Section 6 of the respective Model CGST Act and Model State GST Act. These provisions are reproduced below:-
Section 5 of the Central Goods and Section 5 of the Tamil Nadu Goods and Services Tax Act, 2017 Services Tax Act, 2017.
5. Powers of officers:- 5.Powers of Officers:-
1) Subject to such conditions and
1) Subject to such conditions and limitations as the Board may impose, an officer of Central limitations as the Commissioner Tax may exercise the powers may impose, an officer of State and discharge the duties Tax may exercise the powers and conferred or imposed on him discharge the duties conferred or under this Act. imposed on him under this Act.
2) An officer of central tax may 2) An officer of State tax may exercise the powers and exercise the powers and discharge discharge the duties conferred the duties conferred or imposed or imposed under this Act on under this Act on any other officer any other officer of central tax of State tax who is subordinate to who is subordinate to him. him.
3) The Commissioner may, subject 3) The Commissioner may, subject to to such conditions and such conditions and limitations as limitations as may be specified may be specified in this behalf by in this behalf by him, delegate him, delegate his powers to any his powers to any other officer other officer who is subordinate to him ______________ https://www.mhc.tn.gov.in/judis Page No 45 of 55 W.P.No.34792 of 2019 and etc., batch who is subordinate to him. 4) Notwithstanding anything
4) Notwithstanding anything contained in this section, an contained in this section, an Appellate Authority shall not Appellate Authority shall not exercise the powers and discharge exercise the powers and the duties conferred or imposed discharge the duties conferred on any other officer of State tax.
or imposed on any other officer of central tax.
58. For the sake of clarity Section 6 of the respective Model GST Laws are reproduced below:-
Section 6 of the Model Central Goods and Section 6 of the Model State Goods and Services Tax, 2017 Services Tax, 2017
6.Powers of officers under the Central Goods 6.Powers of officers under the State Goods and Services Tax Act :- and Services Tax Act:-
1) Subject to such conditions and limitations as the Board may 1) Subject to such conditions and impose, an officer of the Central limitations as the Commissioner Goods and Services Tax may may impose, an officer of the State exercise the powers and discharge Goods and Services Tax may the duties conferred or imposed on exercise the powers and discharge him under this Act. the duties conferred or imposed on
2) An officer of Central Goods and him under this Act.
Services Tax may exercise the 2) An officer of State Goods and powers and discharge the duties Services Tax may exercise the conferred or imposed under this Act powers and discharge the duties on any other officer of Central conferred or imposed under this Goods and Services Tax who is Act on any other officer of State subordinate to him. Goods and Services Tax who is
3) The Commissioner may, subject to subordinate to him. such conditions and limitations as 3) The Commissioner may, subject to may be specified in this behalf by such conditions and limitations as him, delegate its powers to any may be specified in this behalf by other officer subordinate to him. him, delegate his powers to any
4) Notwithstanding anything other officer subordinate to him. contained in this section, a First Appellate Authority shall not exercise the powers and discharge the duties conferred or imposed on an officer of Central Goods and ______________ https://www.mhc.tn.gov.in/judis Page No 46 of 55 W.P.No.34792 of 2019 and etc., batch Services Tax other than those specified in section 98 of this Act.
59. Thus, the delegation only is to the officers under the respective GST Enactments, unlike in Section 6 of the Model GST Laws which contemplated wide powers with the Board/Commissioner under the respective Model GST Laws to delegate the powers to officers from their counterpart Department.
60. Section 6 of the respective Central GST Act, 2017 and TNGST Act, 2017 are relevant for cross-empowerment. It read slightly differently from Section 7 of the respective Model Central and State GST laws which were in circulation in February, 2016. Section 6 of the respective GST Enactments and the corresponding provisions from the Model GST Law are reproduced below:-
Section 6 of the Central Goods and Section 6 of the Tamil Nadu Goods and Services Tax Act, 2017 Services Tax Act, 2017
6. Authorisation of officers of State tax or 6. Authorisation of officers of Central tax as ______________ https://www.mhc.tn.gov.in/judis Page No 47 of 55 W.P.No.34792 of 2019 and etc., batch Union territory tax as proper officer in proper officer in certain circumstances.–– certain circumstances.–– (1) Without prejudice to the (1) Without prejudice to the provisions of this Act, the officers provisions of this Act, the officers appointed under the State Goods appointed under the Central and Services Tax Act or the Union Goods and Services Tax Act are Territory Goods and Services Tax authorised to be the proper Act are authorised to be the officers for the purposes of this proper officers for the purposes of Act, subject to such conditions as this Act, subject to such conditions the Government shall, on the as the Government shall, on the recommendations of the Council, recommendations of the Council, by notification, specify.
by notification, specify.
(2) Subject to the conditions specified (2) Subject to the conditions in the notification issued under specified in the notification sub-section (1),–– issued under sub-section (1),—
(a) where any proper officer
(a) where any proper officer issues an issues an order under this Act, he order under this Act, he shall also shall also issue an order under issue an order under the State the Central Goods and Services Goods and Services Tax Act or the Tax Act, as authorised by the Union Territory Goods and said Act under intimation to the Services Tax Act, as authorised by jurisdictional officer of Central the State Goods and Services Tax tax; (b) where a proper officer Act or the Union Territory Goods under the Central Goods and and Services Tax Act, as the case Services Tax Act has initiated may be, under intimation to the any proceedings on a subject jurisdictional officer of State tax matter, no proceedings shall be or Union territory tax; initiated by the proper officer
(b) where a proper officer under the under this Act on the same State Goods and Services Tax Act subject matter. or the Union Territory Goods and (3) Any proceedings for rectification, Services Tax Act has initiated any appeal and revision, wherever proceedings on a subject matter, applicable, of any order passed no proceedings shall be initiated by an officer appointed under by the proper officer under this this Act, shall not lie before an Act on the same subject matter. officer appointed under the Central Goods and Services Tax (3) Any proceedings for rectification, Act. appeal and revision, wherever applicable, of any order passed by an officer appointed under this Act shall not lie before an officer appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act.
______________ https://www.mhc.tn.gov.in/judis Page No 48 of 55 W.P.No.34792 of 2019 and etc., batch Section 7 of the Model Central Goods Section 7 of the Model State Goods and and Services Tax, 2017 Services Tax, 2017
7.Powers of SGST/CGST officers under 7.Powers of SGST/CGST officers under the the Act Act (1) Notwithstanding anything The officers appointed under the contained in this Act, the SGST Act shall, to such extent and proper officers for the subject to such conditions, as may be purposes of any one or more prescribed in the rules made in this Sections (........) of the behalf, be the proper officers for the {SGST/CGST Act}, shall be purposes of sections (......) of this Act. deemed to be the proper officers for the purposes of the corresponding section or sections, as the case may be, of this Act to such extent and subject to such conditions as may be prescribed in the rules made in this behalf.
(2) Where any proper officer issues an order or acts under any one or more sections .......... of this Act, he shall also issue an order or take action, as he may deem fit, under the corresponding section of the {SGST/CGST} Act as being the proper officer under sub-section Error! Reference source not found. of the SGST/CGST Act as a part of his order or action under this Act, under intimation to the jurisdictional SGST/CGST officer.
(3) Any proceeding for rectification, appeal and revision, wherever applicable, of any order issued under sub-section (2) shall lie before the officer appointed under section 4 of this Act.
(4) Where a proper officer under the SGST/CGST Act has initiated a proceeding on a subject matter under any one or more sections (.........) of this Act, no action under the ______________ https://www.mhc.tn.gov.in/judis Page No 49 of 55 W.P.No.34792 of 2019 and etc., batch relevant section shall be initiated under this Act on the same subject matter.
61. Thus, Section 6(1) of the respective GST Enactments empowers Government to issue notification on the recommendation of GST Council for cross-empowerment. However, no notification has been issued except under Section 6(1) of the respective GST Enactments for the purpose of refund although officers from the Central GST and State GST are proper officers under the respective GST Enactments.
62. Since, no notifications have been issued for cross-empowerment with advise of GST Council, except for the purpose of refund of tax under Chapter-XI of the respective GST Enactments r/w Chapter X of the respective GST Rules, impugned proceedings are to be held without jurisdiction. Consequently, the impugned proceedings are liable to be interfered in these writ petitions.
63. Thus, if an assessee has been assigned administratively with the Central Authorities, pursuant to the decision taken by the GST Council as notified by Circular No.01/2017 bearing Reference F.No.166/Cross ______________ https://www.mhc.tn.gov.in/judis Page No 50 of 55 W.P.No.34792 of 2019 and etc., batch Empowerment/GSTC/2017 dated 20.09.2017, the State Authorities have no jurisdiction to interfere with the assessment proceedings in absence of a corresponding Notification under Section 6 of the respective GST Enactments.
64. Similarly, if an assessee has been assigned to the State Authorities, pursuant to the decision taken by the GST Council as notified by Circular No.01/2017 bearing Reference F.No.166/Cross Empowerment/GSTC/2017 dated 20.09.2017, the officers of the Central GST cannot interfere although they may have such intelligence regarding the alleged violation of the Acts and Rules by an assessee.
65. The manner in which the provisions have been designed are to ensure that there is no cross interference by the counterparts. Only exception provided is under Section 6 of the respective GST enactement.
Therefore, in absence of a notification for cross-empowerment, the action taken by the respondents are without jurisdiction. Officers under the State or Central Tax Administration as the case may be cannot usurp the power of investigation or adjudication of an assesse who is not assigned to them.
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66. Therefore, the proceedings initiated by the respondents so far against the respective petitioners by the Authorities other than the Authority to whom they have been assigned to are to be held as without jurisdiction. Therefore, the impugned proceedings warrants interference.
67. At the same time, it is noticed that there is possibly case made out against each of the petitioners and since same power ought to have been exercised by the respective counterparts of the respondents, namely the Central Authority/State Authority as the case may be, to whom the respective petitioners have been assigned, proceedings should be initiated against each of the petitioners by the Authority to whom they have been assigned for the purported loss of Revenue under the respective GST Enactments.
68. Therefore, while quashing the impugned proceedings, there shall be a direction to the Central Authority/State Authority as the case may be to whom the respective petitioners have been assigned for administrative purpose to initiate appropriate proceedings afresh against them strictly in ______________ https://www.mhc.tn.gov.in/judis Page No 52 of 55 W.P.No.34792 of 2019 and etc., batch accordance with the provisions of the respective GST Enactments and GST Enactments Rules and Circular issued thereunder. The time between the initiation of the proceedings impugned in these writ petitions and time during the pendency of the present writ petitions till the date of receipt of this order shall stand excluded for the purpose of computation of limitation.
69. These writ petitions are disposed with the above observations. No costs. Consequently, connected miscellaneous petitions are closed.
. .2024
Neutral Citation : Yes/No
Internet : Yes/No
Index : Yes / No
rgm
To
1. The Special Secretary,
Head of the GST Council Secretariat, Office of the GST Council Secretariat, 5th Floor, Tower-II, Jeevan Bharti Building, ______________ https://www.mhc.tn.gov.in/judis Page No 53 of 55 W.P.No.34792 of 2019 and etc., batch Janpath Road, Connaught Police, New Delhi – 110 001.
2. The Chairman, Central Board of Indirect Taxes, North Block, New Delhi – 110 001.
3. The Additional Chief Secretary & Commissioner of State Taxes, Chepauk, Chennai – 600 005.
4. The Director General of GST Intelligence, South, C-3, C-Wing, II Floor, Rajaji Bhavan, Besant Nagar, Chennai – 600 090.
5. The Senior Intelligence Officer, Directorate General of GST Intelligence, Chennai Zonal Unit, Chennai.
6. The Assistant Commissioner (ST), Arumbakkam Assessment Circle.
C.SARAVANAN, J.
rgm ______________ https://www.mhc.tn.gov.in/judis Page No 54 of 55 W.P.No.34792 of 2019 and etc., batch W.P.Nos.34792, 29878, 30607, 30613, 30615 of 2019 & W.P.Nos.3011, 3013, 3026, 3028, 4922, 8495, 8496, 11319 of 2020 & W.P.Nos. 2723, 2861, 2863, 2865, 11004, 11006, 11008, 12795, 12797, 16324 of 2021 and W.P.Nos.4490, 18575, 22552, 26586, 31013 of 2022 and W.P.No.12014 of 2023 and W.M.P.Nos.35553, 30673, 30680, 30682 of 2019 & W.M.P.Nos. 3513, 3516, 3534, 3538, 5831, 10258, 10259, 13797, 13799 of 2020 & W.M.P.Nos.3055, 3200, 3201, 3199, 11649, 11652, 11654, 13594, 13596, 17292, 17289 of 2021 & W.M.P.Nos.4608, 17910, 21580, 25646, 30418 of 2022 and W.M.P.No.11864 of 2023.
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