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7. Learned senior advocate Mr. Saurabh Soparkar appearing for petitioners has submitted that since petitioner's Unit is within the area earmarked and is SURSEZ unit which is a distinct foreign territory and as such, are tax neutral/ revenue neutral area and hence outside the ambit of provision of CGST C/SCA/5978/2023 CAV JUDGMENT DATED: 06/06/2023 Act, 2017 or SGST Act, 2017, particularly from Chapter-IX, X, XII, XIII, XIV, XV, XVI and XIX of CGST Act and accordingly, action initiated by respondent Nos.4, 5 and 6 is beyond jurisdiction, hence relief deserves to be granted. The main substantial issue which has been raised by learned senior counsel is that by virtue of provisions contained in SEZ Act, State authorities are not empowered to initiate any action since every SEZ unit is tax neutral zone. According to Mr. Soparkar, supplies to the petitioners SURSEZ Unit are considered as Zero Rated Supply under the provisions of IGST Act, 2017 and as such they are not subjected to provisions relating to levy, collection, evasion or otherwise of GST in the unit. It has been submitted that in both cases, whether it is an input supply to SEZ unit or is an outward supply by SEZ unit, SEZ unit does not suffer any tax incidence on supply either way. Insofar as incidence of GST Laws are concerned, petitioner's unit will be governed under Integrated Goods and Services Tax (IGST) as it is not to be considered as a part of India. Preamble to IGST Act itself is making it clear that petitioners are not subjected to the domain of any of the respondent authorities, i.e. respondent C/SCA/5978/2023 CAV JUDGMENT DATED: 06/06/2023 Nos.4, 5 and 6 and as such, even if proceedings are initiated by respondent Nos.4, 5 and 6, assumed to be sanctioned under Chapter XVI by way of any coercive proceedings, same will not have any sanction at all and as such since entire proceedings initiated by respondents against petitioners being without authority, or jurisdiction, there is hardly any reason to allow said proceedings to be concluded. By referring to certain provisions of SEZ Act, particularly 2nd Proviso of Section 22 read with Clause (2) of Section 21 of SEZ Act 2005 which authorizes only ADG of DRI or ADG of DGCEI as Authorized Officers for the purposes of enforcement of provisions of the Customs Act, Central Excise Act and Finance Act and for no other Statute. Even offences under CGST Act, 2017, SGST Act, 2017, UTGST, 2017 or even IGST Act, 2017 are not notified offices under the provisions of Section 21(1) of SEZ Act and as such there is a serious act on the part of respondent authorities without jurisdiction. Further, entire proceedings launched against petitioners are devoid of any 'due process' doctrine and for that purpose, learned senior counsel Mr. Soparkar has drawn attention of the Court to Section 67 of the Act, which C/SCA/5978/2023 CAV JUDGMENT DATED: 06/06/2023 indicates sufficient safeguards before launching proceedings against any person and therefore, concept of 'due process' which has been clearly stipulated in Section 67, activities undertaken by respondent Nos.4 to 6 are nothing but mere fishing and roving inquiry and that inquiry or process being without jurisdiction, relief prayed for deserves to be granted.
10. As against this, learned Government Pleader Mrs. Manisha Shah appearing on behalf of respondent Nos.4,5 and 6 has pointed out detailed circumstance which has constrained the authority to initiate action against petitioners and relevant narration has been made with regard to factual background of petitioners from the affidavit-in-reply and a contention is raised that this is not a fit case to exercise extraordinary equitable jurisdiction and has submitted that authority has acted well within the scope of authority. To substantiate this, learned Government Pleader Mrs. Shah has drawn attention to relevant provisions of SEZ Act, 2005 as well as GGST Act, 2017 and also notifications issued by the Central Government and thereby submitted that it is absolutely within the domain of respondents authority to proceed against petitioners when such shocking factual background is that of the present petitioners. Mrs. Shah has contended that a bare reading of provisions contained under Section 22 of SEZ Act, 2005 would clearly indicate that any C/SCA/5978/2023 CAV JUDGMENT DATED: 06/06/2023 officer or agency who is authorized by Central Government may carry out search and seizure, investigation or inspection in any Special Economic Zone or unit as the case may be, without even prior intimation or approval of Development officer and to further strengthen her submission, Mrs. Shah has also drawn attention to Section 6 of GGST Act which also deals with authorization of officers of Central Tax as proper officer in certain circumstances and thereby by referring to two provisions, namely Section 22 of SEZ Act read with Section 6 of GGST Act, a contention is raised that respondent authorities are empowered to carry out proceedings in SEZ since Central Government has already authorized the officers vide notification dated 5.8.2016 since by virtue of Section 2 of GGST Act, an order passed under CGST Act shall also be construed to have been passed under GGST Act and as such it is ill-founded for the petitioners to contend that there is no jurisdiction with respondent authorities. Apart from that, circular dated 5.7.2017 has also been pointed out to indicate that functions of proper officers which are defined under CGST Act and has submitted that Section 6(2) of GGST Act is with regard to cross-
41.3.2 The movement of goods from the Domestic Tariff Area to the Special Economic Zone has been treated as export by a legal fiction created under the SEZ Act, 2005. A legal fiction is to be restricted to the statute which creates it.

Reference is made to the decisions of the Apex Court in the case of State of West Bengal V/s. Sadan K. Bormal and another, (2004) 6 SCC 59, Meghraj Biscuits Industries Limited V/s. Commissioner of Central Excise U.P., (2007) 3 SCC 780, MORIROKU UT INDIA (P) LIMITED V/s. State of Uttar Pradesh and others, (2008) 4 SCC 548. Moreover, such legal fiction should be confined to the purpose for which it has been created. Reference is made to the decisions of the Apex Court in the case of State of Karnataka V/s. K. Gopalakrishna Shenoy and antoher, (1987) 3 SCC 655; Mancheri Puthusseri Ahmed and others V/s. Kuthiravattam Estate Receiver, (1996) 6 SCC 185. As stated above, such movement has been treated as export under the SEZ Act 2005 for the purpose of making available benefits as in the case of actual exports like duty drawback, DEPB benefits, etc. to the Special Economic Zone Unit / Developer or the Domestic Tariff Area supplier at their option. Construing this movement of goods as entailing a liability of payment of duty runs absolutely counter to the purpose of the legal fiction created under the SEZ Act, 2005.

41.3.4 Similarly, reliance on Section 53 of the SEZ Act 2005 to contend that a Special Economic Zone is a territory outside India, is misconceived. Section 53 provides that the Zone would be deemed to be a territory outside the customs territory of India for the purposes of undertaking the authorized operations. The term 'customs territory' cannot be equated to the territory of India and in fact, such term has been defined in the General Agreement of Tariffs & Trade, to which India is a signatory, to mean an area subject to common tariff and regulations of commerce and that there could be more than one customs territory in a country. Moreover such an interpretation would lead to a situation where a Special Economic Zone would not be subject to any laws whatsoever. The entire SEZ Act 2005 would be rendered redundant since it is stated to extend the whole of India. In any case, various provisions of the SEZ Act would be rendered redundant and unworkable if the Special Economic Zone was to be considered an area outside India. This is apart from the fact that such a declaration would be constitutionally impermissible. So from aforesaid discussion and perusal of provisions, as indicated above, we are satisfied that respondent Nos.4, 5 and 6 authorities are acting not beyond their authorities and facts are such in which we are of the considered opinion that this is not a C/SCA/5978/2023 CAV JUDGMENT DATED: 06/06/2023 fit case in which we may exercise our extraordinary jurisdiction, which is equitable in nature, and as such, petition being merit less, deserves to be dismissed.