Director General Of GST Intelligence Officer Can Issue Summons Under CGST Act, 2017

Dear Friends,

The Hon'ble Gujarat High Court, Ahmedabad Bench in Civil Appeal No. 7388/2021 dated 24/06/2021 in case of Yasho Industries Ltd. v. UOI has upheld the validity of summons issued by Director General of Goods and Services Tax Intelligence Officer (DGGI Officer) under the Central Goods and Services Tax Act, 2017 (CGST Act).

FACTS

The petitioners by the present petition filed under Article 226 of the Constitution of India have challenged the Summons dated 12.4.2021 issued under Section 70 of the Central Goods and Services Tax Act, 2007 (herein after referred to as 'CGST Act"), calling upon the petitioners to give evidence and produce the documents as mentioned therein in connection with the inquiry initiated against the petitioners. The petitioners also have sought directions against the respondent No.3 to issue refund/allow recredit of INR 3 Crore paid by the petitioners on 9.2.2021 vide Form No.GST DCR-03 . The petitioners have also sought direction to quash and set aside the impugned Circular dated 5.7.2017, in connection with the assignment of functions to the officers as the 'proper officers' in relation to the various functions of the CGST Act and the Rules made thereunder.

The key contention of the Petitioner was that the issuance of summons by the DGGI Officer was without jurisdiction, based on the fact that:

- The definition of 'proper officer' under Section 2(91) of the CGST Act does not cover DGGI Officers and therefore DGGI Officers are not empowered to issue summons under CGST Act on behalf of the Central Board of Indirect Taxes and Customs (CBIC).

- Section 167 of the CGST Act requires a notification to be issued for delegation of power by the Commissioner and no such notification has been issued by the Commissioner delegating power to DGGI officers.

DECISION

From the bare reading of Section 70 of the CGST Act, it clearly emerges that the proper officer has the power to summon any person whose attendance he considers necessary either to give evidence or to produce the documents in any inquiry in the same manner in the case of a Civil Court under the CPC. Now, as per the definition of 'proper officer' as contained in Section 2(91) , a 'proper officer' in relation to any function to be performed under the CGST Act means the Commissioner or the officer of the Central Tax, who is assigned that function by the Commissioner in the Board.

It is pertinent to note that as stated in the petition itself, the respondent No.3 is an officer of Directorate General of Goods and Services Tax Intelligence (DGGI) holding the designation of Senior Intelligence Officer, who was appointed as the Central Tax Officer with all the powers under the CGST Act and IGST Act and the Rules made thereunder, as are exercisable by the Central Tax Officers of the corresponding rank of Superintendent as specified in the Notification No.14 of 2017-CT dated 1.7.2017 issued by the Central Board of Excise and Customs.

It is further pertinent to note that the respondent No.3 being the officer of the Central Tax and the Superintendent under the CGST Act by virtue of the said Notification dated 1.7.2017, he was also assigned the powers of proper officer by the Board vide Circular dated 5.7.2017 issued in exercise of the powers conferred by Clause (91) of Section 2 of the CGST Act read with Section 20 of the IGST Act. Therefore, the respondent No.3 is a proper officer in relation to the function to be performed under the CGST Act as contemplated under Section 2(91) , and as such, was entitled to issue summons under Section 70 of the CGST Act in connection with the inquiry initiated against the petitioner.

The Court held that the definition of 'proper officer' in relation to any function to be performed under the CGST Act means, the Commissioner or a Central Tax officer who is assigned that function by the Commissioner.

Noting the distinction between assignment of functions as per section 2(91) and delegation of powers by the Commissioner under Section 167, the Court noted that no particular notification under Section 167 is required to be issued in such a case, as the power exercised by DGGI officer is not a delegated power from the Commissioner.

DISCLAIMER: Above write up is only for information and knowledge of readers. It is advisable to consult professionals before acting any part of this article.