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SGST High Court Cases

GST – Proper Officer to conduct inspection of business premises of a registered dealer - Initiation of proceedings on the basis of report received from Regional Vigilance & Enforcement Officer of Home Department - Validity of notices issued by the Deputy Commissioner (ST) on the strength of the alert note forwarded by Regional Vigilance & Enforcement Officer - Petitioner case that there is no provision under the GST Act authorizing the Director of Vigilance & Enforcement in the State to conduct inspection of the business premises of a registered dealer under GST law - Whether the Regional Vigilance & Enforcement Officer is empowered to inspect the premises of the petitioner and forward alert note to the Deputy Commissioner (ST) regarding the suppression of sales turnover; and whether the impugned notices are unsustainable in law for want of authorization from the Proper Officer under Section 67 of the APGST Act, 2017 – HELD – Vigilance & Enforcement Department was constituted by the Government of A.P. to conduct enquiries / investigations into specific allegations affecting public interest and to take effective measures through its own machinery and achieve several objectives, one of which is prevention of leakage of revenues due to the Government - In the relevant G.O. states that the V&E Department is expected to carry out vigilance functions where Government spending is involved and enforcement functions in respect of the revenues due to the Government; it further states that the officers working in V&E Department have jurisdiction and powers throughout the State of Andhra Pradesh in respect of matters to which the Executive Authority of the State extends - Thus, the enforcement functions of the V&E Department are to safeguard revenues due to the Government and in that context it is permeable in all the departments including the Tax department - in the matter of protection of revenue due to the Government in the form of taxes, the officials of the V&E Department, if need be, can make inspection in the premises of taxable traders. During course of such inspection if the officials of the V&E Department found the attempts of such traders in evasion of tax, they can pass on the information to tax department - it is an exchange of information between two statutory authorities for safeguarding the revenue due to the Government. Therefore, no merit in the contention of petitioner that the V&E Department has no statutory right to conduct inspection in its premises and forward the alert note to the Deputy Commissioner (ST) and the latter cannot act upon such information – further, the powers conferred under G.O.Ms.Nos.269 and 504 are independent and exclusive and they are in aid to the Tax department but not in derogation to Section 72(2) of the CGST/APGST Act, 2017 and there is no conflict between the powers and functions of the V&E Department and the power of Chief Commissioner to make requisition to the Government under Section 72(2) of the APGST Act – However, the impugned notices suffer the vice of lack of authorization by the Proper Officer i.e., Chief Commissioner. Therefore, the impugned notices are set aside with an observation that the respondent authorities are at liberty to issue fresh notices under Rule 99 of the APGST Rules r/w Section 61 of the APGST Act either through the Chief Commissioner or any other Officer of the State Tax authorized by the Chief Commissioner in that regard – writ petition is partly allowed - Whether the impugned notices are unsustainable in law for want of authorization from the Proper Officer under Section 67 of the APGST Act, 2017 – HELD - in the light of alert note forwarded by V&E Department, the Deputy Commissioner (ST) issued impugned notices in terms of Rule 99(1) of the APGST Rules r/w Section 61 of the APGST Act and not under Section 67 of the APGST Act, 2017 - At this stage, no action was contemplated to inspect the premises of the petitioner or to search and seize any goods or books of accounts as contemplated under Section 67 of the Act. As such, no authorization is required to the 3rd respondent under Section 67 of the APGST Act to issue the impugned notices calling for objections. Therefore, the contention of the petitioner that the notices became illegal for want of authorization under Section 67 of the APGST Act is untenable - For acting under Rule 99(1) of the APGST Rules r/w Section 61 of the APGST Act, 2017, whether the Deputy Commissioner (ST) requires any authorization from Chief Commissioner – HELD – The officer who issued the impugned notices is the Deputy Commissioner (ST) but not the Chief Commissioner. Therefore, in order to issue the impugned notices, the Deputy Commissioner (ST) requires the authorization of the Chief Commissioner assigning the task of issuing notices under Rule 99 r/w Section 61 of the Act - In the impugned notices, neither any reference is made about such authorization nor it was filed separately in the Court. Therefore, the two impugned notices suffer the vice of lack of authorization by the Proper Officer i.e., Chief Commissioner. Therefore, the impugned notices are liable to be set aside. However, that will not preclude the Chief Commissioner or the officer authorized by him to issue fresh notices under Rule 99 of the APGST Rules r/w Section 61 of the APGST Act, 2017.
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