The Orissa High Court has held that the circular issued by central govt. not applicable to state Goods and Service Tax (GST) unless adopted by making a declaration.
The bench of Justice B.R. Sarangi and Justice G. Satapathy has observed that the Circular issued by Government of India dated 02.11.2021 is concerned, that ipso facto can only apply to the Central GST and not to the State GST unless the said circular is adopted by the State Government by making a declaration. Nothing has been placed on record to show that the circular has been adopted by the State Government for State GST.
Background
The petitioner/assessee to challenge the orders issued by the Deputy Commissioner of State Tax, contending that the Dy. Commissioner lacked the jurisdiction to block ITC under Rule 86(A)(1) of the OGST Rules.
The petitioner contended that the orders impugned having been passed by the Deputy Commissioner of State Tax, CT & GST Enforcement, the orders cannot be sustained in the eye of law as he has no jurisdiction to pass orders. The orders have been passed without complying with the principles of natural justice, for which the same should be quashed. The petitioner relied on the circular issued by the Principal Commissioner (GST), Government of India, to the Principal Chief Commissioners/Chief Commissioners/ Principal Commissioners/Commissioners of Central Tax (All).
The department contended that the reliance placed on the circular of the Central Government has no application to the State GST, because the circular has been specifically addressed to the Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/ Commissioners of Central Tax (All). The circular is applicable to the Central GST and not to the State GST, whereas the case is covered by the OGST Rules, 2017, more particularly Rule 86A (1) in which it has been indicated that the Commissioner or an officer authorised by him in this behalf not below the rank of an Assistant Commissioner can pass the order. The Deputy Commissioner, who is the higher officer in rank to the Assistant Commissioner having passed the orders, it cannot be said that the Deputy Commission has no jurisdiction to pass orders.
Conclusion
The court noted that the orders relate to State GST and the same having been passed by the Deputy Commissioner of the State Taxes, the contention raised that he has no jurisdiction to pass the order, cannot be a justifiable ground in view of Rule 86 A (1) of the OGST Rules, 2017.
Rule 86 A (1) of the OGST Rules, 2017 pertained to the conditions of use of the amount available in electronic credit ledger. The Commissioner or an officer authorised by him in this behalf, not below the rank of an Assistant Commissioner, having reasons to believe that credit of input tax available in the electronic credit ledger has been fraudulently availed or is ineligible.
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The court while disposing of the petition held that the claim made by the petitioner that the orders have been passed by an officer having no jurisdiction, cannot be sustained in the eye of law.
Case Title: M/s. Atulya Minerals, Jurudi Vs. Commissioner of State Tax, Cuttack Case No.: W.P.(C) No. 14540 of 2024
Case No.: W.P.(C) No. 14540 of 2024
Date: 20.06.2024
Counsel For Petitioner: J.M. Patnaik
Counsel For Respondent: Sunil Mishra
