The Ahmedabad High Court while dismissing a writ petition (WP), noted that the proper officer issuing order under Special Economic Zones (SEZ) Act, 2005, is equivalent to order under the Central Goods and Services Tax (CGST) Act, 2017.
So far as the first petition is concerned the petitioner, RHC Global Exports Private Limited, submitted that the entire proceedings initiated by respondent is without authority of law and thereby sought a relief for quashing and setting aside the proceedings initiated by respondent against the petitioners under Section 67 and 70(1) of GGST Act, 2017 as well as CGST Act, 2017 and sought consequential reliefs.
The second petition is to set aside the proceedings which are initiated by an authority against the petitioner on the similar line, but one additional prayer in this petition is to the effect that action initiated under Section 73 of GGST Act as well as CGST Act, 2017 also may be quashed and set aside.
The bone of contention of petitioners is that business premises of petitioners is situated in Special Economic Zone and as such, to be treated as foreign territory and not subjected to provisions whereby respondent authorities, i.e. State authorities have no jurisdiction to carry out any search proceedings at the premises of the petitioners.
The Counsel for the petitioner submitted that even if proceedings are initiated by respondent is 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.
The Counsel for the respondent contended that the respondent authorities are empowered to carry out proceedings in SEZ. Their jurisdiction is unquestionable as Central Government has already authorized those officers by virtue of notification dated 5.8.2016.
Sub-section (2) of Section 6 of GGST Act indicates that where any proper officer issues an order under this Act, he is also issuing an order under CGST Act as authorized by Act or under intimation to jurisdictional officer of Central Government and as such it appears that respondents are empowered to carry out search proceedings in SEZ.
A Division Bench of the Ahmedabad High Court comprising Justices Ashuthosh Shastri and JC Doshi observed that “Development Commissioner, SEZ had already been duly intimated before search and seizure by departmental officer while initiating proceedings under Section 67 of the CGST Act and that being so, submission made by petitioners appearing to be not worthy of acceptance.”
The Bench lashed against the petitioners by commenting that the petition was an attempt on the part of petitioners to thwart and delay the legal proceedings which are initiated by respondent authorities and as such this move of petitioners appears to be an abuse of process of law looking to the manner in which the irregularities alleged to have been committed.
The Court further directed the petitioner to deposit the costs of Rs.10,000/- (Rupees Ten Thousand only) for each petition to be paid to Gujarat State Legal Service Authority within ten days from the date of judgment.
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