Section 6 of GST Act is enacted to Avoid Possibility of Conflicting Orders: Allahabad High Court holds No Inherent Lack of Jurisdiction [Read Order]

The Allahabad High Court held that section 6 of GST Act is enacted to avoid possibility of conflicting orders and holds no inherent lack of jurisdiction in the impugned order.

The petitioner, Ajay Vermaengaged in the business of lubricants. According to the petitioner as per division of work his case for the tax period July, 2017 to March, 2018 was assigned to the Officer of Central Tax but the show cause notice for assessment under section 73 of CGST

Act/UPGST Act was issued by the Officer of the State Tax. The petitioner submitted reply to the show cause notice but did not raise any objection as to the jurisdiction on the ground of assignment of the case to Central Officer.

The Honorable High Court observed that it is admitted fact that the petitioner has been assigned to the Central Officer whereas the impugned show cause notice was issued by the State Officer i.e. the respondent no. 4 before whom, despite show cause notice, the petitioner did not raise any objection as to the jurisdiction and instead participated in the proceedings and submitted to his jurisdiction. Thereafter the respondent no. 4 passed the impugned assessment order creating certain demand against the petitioner. It is thereafter that the petitioner filed the present writ petition and challenged the show cause notice and the assessment order solely on the ground that it is without jurisdiction.

It was further observed by the Honorable High Court that Section 6 of the CGST Act and the UPGST Act it is clear that a proper officer under the UPGST Act is also a proper officer under the CGST Act within his territorial jurisdiction. Likewise a proper officer appointed under the CGST Act is also the proper officer under the UPGST Act within his territorial jurisdiction. So as to avoid possibility of conflicting orders, an in built provision in both the CGST Act and UPGST Act has been made in Section 6 that when a proper officer under the CGST Act passes an order, he shall intimate it to the jurisdictional officer under the State Act or the Union territory Act and likewise when a proper officer under the UPGST Act passes an order, he shall intimate it to the jurisdictional officer of Central Tax. Thus a cross empowermentwith sufficient provision to remove the possibility of conflicting orders has been provided under the CGST Act and UPGST Act.

The State Officer took up the matter and issued the impugned show cause notice dated 25.6.2021 which was replied by the petitioner without raising any objection as to jurisdiction on account of assignment of case to the Central Officer. It was also not brought to the notice of the respondent no. 4 by the petitioner that his case is assigned to a Central Officer. Instead, the petitioner participated in the assessment proceeding and the assessing officer i.e. the proper officer (respondent No.4) has passed the impugned assessment order, which can be said to be contributory error of jurisdiction. The GST Act came into force from 01.07.2017. Prior to it the petitioner was registered under the U.P.VAT Act and was carrying on business in partnership. But he migrated asproprietary concern under the GST Act and carried the entire stock of the partnership firm as to the proprietary concern. Neither on issuance of notice nor during the course of assessment proceedings, did the petitioner inform the respondent No.4 that his case was assigned to a Central Officer. After the assessment order was passed by the respondent No.4, it came to notice that the case was assigned to a Central Officer. Hence, the respondent No.4 wrote letters to the Central Officer who informed vide letters that as per Act the proceedings shall be completed by the officer who initiated it, i.e. by the respondent No.4.

The honorable division bench presided by Honorable Justice Surya Prakash Kesarwani and Honorable Justice Jayant Banerji, while dismissing the writ has held that“considering the facts and circumstances and discussions made above, we find that the impugned show cause notice and the impugned assessment order do not suffer from any inherent lack of jurisdiction and instead it is the result of contributory error of jurisdiction by the respondent no. 4., in the circumstances that the petitioner submitted to the jurisdiction of the respondent no. 4 without informing or without raising objection as to the assignment of the case to the central officer and after well participating in the assessment proceedings allowed the assessment order to be passed by the respondent no. 4. Had the petitioner objected to it at the initial stage or during the course of assessment proceedings, the position could have been rectified by the respondent no. 4 by informing the central officer to complete the assessment proceedings”.

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.