A division bench of the Gujarat High Court has recently held that the Directorate General of Goods and Services Tax Intelligence (DGGI) is empowered to issue summons as per the Goods and Services Tax Act, 2017 and the relevant circulars issued by the Central Board of Indirect Taxes and Customs (CBIC).
The petitioner, Yasho Industries Ltd. is a public limited company, holding an Advance Authorization Licences granted in terms of the Scheme set out in Chapter-IV (AA Scheme) of Foreign Trade Policy 2015-2020. The petitioner approached the High Court to direct the GST department to issue refund/allow recredit of INR 3 Crore paid by the petitioners vide Form No.GST DCR-03. They also sought direction to quash and set aside the impugned Circular, 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.
Advocate Mr.Abhishek Rastogi contended that the said assignment of function has to be by way of Notification and not by way of Circular in view of Section 167 of the CGST Act is thoroughly misplaced. Section 167 of the CGST Act pertains to the delegation of powers by the Commissioner exercisable by any authority or officer under the Act to be exercisable also by another authority or officer as may be specified in the Notification. According to them, the officer of Directorate General of Goods and Services Tax Intelligence (DGGI) and holds the designation of a Senior Intelligence Officer and his appointment under the CGST Act could be traced to the Notification dated 1.7.2017 and thus, respondent No.3 is appointed as a Central Tax Officer and is in the rank of Superintendent under CGST Act
The division bench of Justice Bela M. Trivedi and Justice A.C.Joshi observed that Section 2(91) pertains to the proper officer in relation to any function to be performed under the CGST Act to be the Commissioner or the officer of Central Tax, who is assigned that function by the Commissioner in the Board.
“Here the Board means the “Central Board of Indirect Taxes and Customs” as defined in Section 2(16) of the CGST Act. Vide the Circular dated 5.7.2017 the said Board namely the Central Board of Excise and Customs in the exercise of the powers conferred by Section 2(91) of the CGST Act read with Section 20 of the IGST Act and subject to Section 5(2) of the CGST Act has assigned the officers the functions as that of proper officers in relation to the various sections of the CGST Act and the Rules made thereunder, and as such the Superintendent of Central Tax has been assigned the function of Section 70(1) of the CGST Act. Thus, there being no delegation of powers by the Commissioner, the provisions contained in Section 167 of the CGST Act could not be said to have been attracted, nor was there any necessity to issue Notification as sought to be submitted by Mr.Rastogi. There could not be any disagreement to the proposition of law laid down by the Supreme Court in the case of Canon India Pvt. Limited (supra) relied upon by the learned Advocate Mr.Rastogi that when a statute directs that the things to be done in a certain way, it must be done in that way alone,” the Court said.
Rejecting the plea of the petitioner, the Court added that “However, in the instant case, the Board has assigned the officers to perform the function as proper officers in relation to various Sections of CGST Act and the Rules made thereunder by issuing the Circular in question, the question of issuing Notification for delegation of powers by the Commissioner as contemplated under Section 167 of the CGST Act does not arise. Mr.Rastogi appears to have misread the powers of the Board to assign the officers to perform the function as proper officers in relation to the various sections of the CGST Act, as the delegation of powers by the Commissioner to the other authority or the officer as contemplated in Section 167 of the CGST Act. The Court, therefore, does not find any substance in the submission of Mr.Rastogi that respondent No.3 was not the ‘proper officer’ as per the definition contained in Section 2(91) of the CGST Act, and therefore, had no powers to issue summons under Section 70 of the CGST Act.
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