The Kerala High Court has held that cross-empowerment of GST officers to function as proper officers under the CGST Act is through the legislative mandate under Section 6(1) of the CGST Act.
The bench of Justice A.K.Jayasankaran Nambiar and Justice Easwaran S. has observed that while the statutory mandate at present is unqualified, it will be qualified in the event the Government specifies conditions for the exercise of power under the statutory mandate, pursuant to the recommendations of the Council.
“We cannot persuade ourselves to read the statutory mandate as one that does not presently bring about a cross-empowerment but merely envisages such a situation as and when a notification is issued at some time in the future,” the bench said.
The petitioner/assessee was essentially authorisation and show cause notice, respectively, served on it in connection with proceedings initiated against under Section 74 of the Central Goods and Services Tax Act.
The petitioner has challenged the jurisdiction of the Officers of the State GST Department to issue the aforesaid authorisation and show cause notice to the petitioner. Under Section 6 of the CGST Act, the officers appointed under the GST cannot be authorised as proper officers for the purposes of the CGST Act unless and until conditions for exercise of the powers of a proper officer are first specified by the Government on the recommendation of the GST Council through a notification issued for the purpose.
The petitioner relied on the judgment of a Single Judge of the Madras High Court in Tvl. Vardhan Infrastructure v. Special Secretary, Head of the GST Council Secretariat – that takes the view that Section 6(1) of the CGST Act empowers the Government to issue a notification, based on the recommendation of the GST Council, for cross-empowerment and, in the absence of such an enabling notification, the proceedings initiated by the State GST Authority are to be seen as without jurisdiction.
The Single Judge bench, who considered the writ petition at first instance, in his reference order dated 07.11.2024, expressed the prima facie view that the petitioner has not made out any case for interference with show cause notice on the ground that it is issued without jurisdiction on account of the fact that there is no notification issued under the provisions of Section 6(1) of the CGST Act empowering the officers of the State Goods and Services Tax Act to issue such a show cause notice.
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The single judge bench observed that A reading of Section 6(1) of the CGST Act makes it clear that the officers appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are authorised to be proper officers for the purposes of the Act, subject to such conditions as the Government shall, on the recommendations of the Council, by notification, specify.
Unaided by authority, a reading of the provision suggests to me that by virtue of the operation of the provision itself, the officers appointed under the State Goods and Services Tax Act are proper officers for the purposes of the Central Goods and Services Tax Act, and it is only when any restriction or condition has to be placed on the exercise of power by any officer appointed under the State Goods and Services Tax Act that a notification as contemplated by the provisions of Section 6(1) of the CGST Act has to be issued.
The single judge bench stated that since the issue raised in the writ petition will affect several proceedings, and taking note of the view expressed by the Madras High Court in Tvl. Vardhan Infrastructure, which is contrary to the prima facie view that the issue requires an authoritative pronouncement by a Division Bench.
The Division bench agreed with the prima facie view taken by the learned Judge [Justice Gopinath P.] in the reference order.
Case Details
Case Title: Pinnacle Vehicles And Services Private Limited Versus Joint Commissioner, (Intelligence & Enforcement)
Case No.: W.P(C).NO.25724 OF 2024
Date: 15/01/2025
Counsel For Petitioner: Ammu Charles
Counsel For Respondent: Mohammed Rafeeq
