# M/S R.C. Infra Digital Solutions Thru. Auth v. U.O.I. & Ors

- **Citation:** (2024) 1 ILRA 1155
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-01-05
- **Case number:** Writ Tax No.229 of 2023
- **Bench:** Attau Rahman Masoodi, Om Prakash Shukla
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-r-c-infra-digital-solutions-thru-auth-v-u-o-i-ors-51044
- **Pages:** 11

## Headnote

Civil Law - The Central Goods and Services
Tax Act, 2017 - Section 70 -Challenge to
Notification No. 14/2017-Central Tax dated
01.07.2017 as ultra vires, jurisdiction of DGSI
officers under Section 67, and summons under
Section 70 of CGST Act, 2017 - Allegation of
coerced deposit of Rs. 40 Lakhs - Notification
upheld as Central Government has authority
under Section 3 to appoint officers, and Board
assigned functions via Circular No. 3/3/2017GST - No parallel proceedings found as inquiries
by Anti-Evasion Wing and DGSI distinct -
Payment of Rs. 40 Lakhs deemed voluntary, no
evidence of coercion.

Writ petition dismissed.

List of Cases cited:

## Text

1 All. M/S R.C. Infra Digital Solutions Thru. Auth Vs. U.O.I. & Ors.
1155
relationship. It only talks about "admitted
rent".

(vii) As per the judgment of
Kunwar Baldevji and etc. vs. The XI
Additional District Judge, Bulandshahr &
Ors. reported in (2003) 51 ALR 758 if the
amount of rent is not admitted then it is
required to be adjudicated by the Court. In
case, the tenant/defendant denies any rent to
be due, the Court would be required to decide
the same. Obviously then the Court will have
to adjudicate and arrive at a finding at the
first date of hearing contemplated under
Order XV Rule 5 CPC as to what is the rent
and what is payable. This issue has to be
framed and thereafter adjudicated upon on
the leading of evidence of the parties.

(viii) If the tenant-defendant denies
the relationship of landlord-tenant then as per
the judgment of the Supreme Court in Asha
Rani Gupta vs. Vineet Kumar reported in
(2022) 8 ADJ 572 (SC) and as per the
provisions of section 23 of the Provincial
Small Cause Courts Act, 1887, the Court will
have to determine whether the question raised
by the defendant with regard to title of the
plaintiff was a serious one or whether the
denial of the title was a question which was
to be determined with the help of evidence
which would be led by the parties. If the
denial was a definite denial with substantial
evidence then the Court of Small Causes,
which did not have the jurisdiction/authority
to determine the title of the plaintiff, would
have the discretion to return the plaint at any
stage of the proceedings to be presented
before the Court having jurisdiction to
determine the title.

32. The reference is thus, accordingly,
answered.

33. Since an interim order was
granted in favour of the defendant by the
learned Single Judge while making the
reference, we provide that the interim order
would continue till the decision of the
Revision. The case may now be listed
before the learned Single Judge.
----------
(2024) 1 ILRA 1155
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 05.01.2024

BEFORE

THE HON'BLE ATTAU RAHMAN MASOODI, J.
THE HON'BLE OM PRAKASH SHUKLA, J.

Writ Tax No.229 of 2023

M/S R.C. Infra Digital Solutions Thru. Auth
 ...Petitioner
Versus
U.O.I. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Siddharth Nandwani

Counsel for the Respondents:
A.S.G.I., Digvijay Nath Dubey, Dipak Seth

Civil Law - The Central Goods and Services
Tax Act, 2017 - Section 70 -Challenge to
Notification No. 14/2017-Central Tax dated
01.07.2017 as ultra vires, jurisdiction of DGSI
officers under Section 67, and summons under
Section 70 of CGST Act, 2017 - Allegation of
coerced deposit of Rs. 40 Lakhs - Notification
upheld as Central Government has authority
under Section 3 to appoint officers, and Board
assigned functions via Circular No. 3/3/2017GST - No parallel proceedings found as inquiries
by Anti-Evasion Wing and DGSI distinct -
Payment of Rs. 40 Lakhs deemed voluntary, no
evidence of coercion.

Writ petition dismissed.

List of Cases cited:

1. J.K. Industries Ltd. Vs U.O.I., (2007) 13 SCC 673

2. St. of U.P. Vs Renusagar Co., AIR 1988 SC 1737
1156 INDIAN LAW REPORTS ALLAHABAD SERIES
3. Commissioner of Customs Vs Sayed Ali, 2011
(265) ELT 179 (SC)

(Delivered by Hon'ble Om Prakash Shukla,
J.)

(1) Heard Mr. Sameer Gupta, Mr.
Prashant Verma, Mr. Siddharth Nandwani,
learned
Counsel
representing
the
petitioners and Mr. Ashwani Kumar
Singh, learned Counsel representing the
respondent No.1, Mr. Manish Mishra,
learned Standing Counsel representing
the Central Board of Indirect Taxes &
Customs/respondent Nos.2, 3 and Mr.
Digvijay Nath Dubey, learned Standing
Counsel representing the Directorate of
Goods & Service Tax Intelligence.

(2) The petitioner has invoked the
extra-ordinary jurisdiction of this Court
under Article 226 of the Constitution of
India challenging the Notification No.
14/2017- Central Tax dated 01.07.2017
primarily on the ground of it being ultravires to the power of the Central
Government. A further challenge has
been laid to the jurisdiction of the
Additional Director General of Goods
and
Services
Tax
Intelligence
in
authorizing the other Intelligence Officer
to
carry
out
inspection/search
proceedings at the premises of the
petitioner under Section 67 of the Central
Goods and Services Tax Act, 2017
(hereinafter referred to as 'CGST Act,
2017'). A consequential challenge has
also been made by the petitioner to the
issuance of summons dated 06.06.2023
and 14.06.2023 issued by the Intelligence
Officer under Section 70 of the CGST
Act, 2017 as it has been alleged to have
been issued without authority of law.
Other issue of an amount of Rs. 40 Lakhs
having been deposited under coercion has
been raised by the petitioner in the instant
petition.

(3) The facts of the present case as is
pleaded in the writ petition can be capitulated
briefly by stating that the petitioner is a
partnership firm registered under Goods and
Services
Tax
having
GSTIN
09AAYFR5496BIZH and is engaged in the
business of work contract services. The
Additional Director General, Directorate
General of
Goods and Services Tax
Intelligence (hereinafter referred as 'DGSI'),
who had reasons to believe that documents
related to search were secreted at the
premises
of
the
petitioner,
authorized
Intelligence Officers (arrayed as respondent
Nos. 5 to 8) to conduct inspection/ search at
the premises of the petitioner on 06.06.2023
under Section 67 of the CGST Act, 2017,
wherein
a
punchnama
of
the
said
inspection/search was also got prepared by
the authority.

(4) It is the case of the petitioner that
although
during
the
aforesaid
inspection/search, the Intelligence Officer of
DGSI were apprised about an ongoing
enquiry being conducted by the Anti Evasion
Wing of CGST and apparently a summon
dated 16.05.2023 had also been issued by the
said Anti Evasion Wing for the period
November, 2018 to March, 2023, however,
the petitioner was coerced to deposit an
amount of Rs. 40,00,000/- under the threat of
arrest by the said officers of DGSI, who also
issued summon dated 06.06.2023 under
Section 70 of the CGST Act, 2017 and called
for the following information :-

"(i) Ledger of purchase and sale
for the period November 2018 to till date;

(ii) Ledger of ITC and details of
ITC available for the period November,
2018 to till date;
1 All. M/S R.C. Infra Digital Solutions Thru. Auth Vs. U.O.I. & Ors.
1157

(iii) Bank statement for the period
November 2018 to till date."

(5) Although, the petitioner had raised
a preliminary objection to the issuance of
the aforesaid summons without the DIN
number as being in violation of Circular
No. 122/41/2019-GST dated 05.11.2019,
however, this Court finds that the said
objection does not exist presently as it has
been submitted by the petitioner that
subsequently, the respondent rectified the
said objection by issuance of a fresh
summons dated 14.06.2023 and directing
the same set of information/documents
from the petitioner, to which again an
objection was raised by the petitioner on
the ground of jurisdiction, as according to
him the same set of documents have
already been furnished to the Anti Evasion
Wing of GST and now asking of the same
set of documents by the officers of DGSI
was not legal on the ground of exercise of
parallel jurisdiction.

(6) Learned Counsel for the petitioner
has taken this Court to various provisions
of the CGST Act, 2017 including Section 2
(24),
which
defines
the
term
'Commissioner', Section 3 which relates to
'officers appointed under the said Act',
Section 2 (53) which relates to 'notification
power of the Central Government to
appoint such class of officers as provided
under the Act', Section 2 (91) which
defines 'proper officer', Section 2 (25)
which defines 'commissioner in the Board',
Section 168 which relates to 'power to
issue instruction or directions'. According
to the learned Counsel, a conjoint reading
of Section 2 (91) with Section 168 (2) of
the CGST Act, 2017 signifies that the
proper officer would be the Commissioner
in Board or an Officer of Central Tax, who
is
assigned
that
function
by
the
Commissioner in Board and although
Commissioner in Board is the proper
officer for the purpose of CGST Act, 2017,
however, the definition clause does not
confer any power on the Commissioner in
Board to assign any power/function to the
Officer of the Central Tax. Further,
according to the learned Counsel, it is
Section 5 (3) of the CGST Act, 2017 which
confers the power on the Commissioner to
delegate his powers to officers who are
subordinate to him and thus according to
him, a reading of all these sections leads to
the inevitable conclusion that the proper
officer is Commissioner in Board and he
has been conferred with the power to
delegate the functions of proper officer to
other subordinate officer of Central Tax.

(7) Thus, it has been contended by the
learned Counsel for the petitioner that
although the Central Government under the
power conferred under Section 3 of the
CGST Act, 2017 has issued the impugned
Notification No. No. 14/2017- Central Tax
and appointed the officers of DGSI as
Central Tax Officers and also invested it
with all the powers that are exercisable by
the
officers
of
corresponding
ranks,
however, according to him Section 3 of the
CGST Act, 2017 only confers the power on
the Central Government to appoint the
class of officers by way of notification and
does not permit them the authority to
confer any power to such appointed
officers. Simply put forward, according to
the learned Counsel, the legislature has
invested the authority to delegate the
functions of proper function upon the
Commissioner in Board, however, no such
authority has been conferred upon the
Central Government and as such the
jurisdiction exercised by the Central
Government in issuance of Notification No.
14/2017- Central Tax is ultra vires to
1158 INDIAN LAW REPORTS ALLAHABAD SERIES
Section 5 of the CGST Act, 2017 and other
provisions of the said Act.

(8) It has been submitted by the
petitioner that the Central Government has
usurped the power of Commissioner in
Board by investing the powers with DGSI
vide the said impugned notification No.
14/2017- Central Tax. According to him,
the Central Government has no power to
delegate the power exercisable by the
Central Tax Officer to DGSI which has
been
specifically
entrusted
upon
the
Commissioner in Board by the statute and
has in that regard also quoted Sections 167
and 168 (2) of the CGST Act, 2017 to argue
that the Commissioner in Board may by
notification direct any power exercisable by
any authority, however, the same power is
not available to the Central Government
and merely by notifying DGSI as officer of
Central Tax would not automatically invest
them with the power to perform the
function of proper officer. Thus, according
to him, powers can be invested with DGSI
by
issuance
of
notification
by
the
Commissioner in Board under Section 167
of the CGST Act, 2017 or by specifically
delegating the power of proper officer by
issuance of a circular akin to the circular
No. 3/3/2017- GST dated 05.07.2017.

(9) The next leg of argument
addressed by the learned Counsel for the
petitioner is relating to the impugned
search/inspection
proceedings
and
the
summons having been issued by the
Intelligence Officer of DGSI amounted to
conducting parallel proceedings on the
same subject matter by two different wings
of same authority. According to the
petitioner, the DGSI Officers cannot
exercise their jurisdiction to conduct any
proceeding on the same subject matter
which is already being conducted by the
Anti Evasion Wing of GST Department. In
an another limb of his argument, the
learned Counsel vehemently submitted that
the coercive action of the respondent has
culminated into the recovery of an amount
of Rs. 40 Lakhs from the petitioner without
issuance of any show-cause notice or
finalization of demand pursuant to the
adjudication, which is also contrary to
Instruction
No.
01/2022-23
(GST-
Investigation)
dated
25.05.2022.
The
learned Counsel has also referred to the
judgment of the Apex Court passed in J.K.
Industries Ltd. Vs. Union of India :
(2007) 13 SCC 673 to argue that a delegate
cannot override the Act either by exceeding
the authority or making provisions which
are inconsistent with the Act. Judgments of
the Apex Court in State of U.P Vs.
Renusagar Co. AIR 1988 SC 1737 and
Commissioner of Customs Vs Sayed Ali :
2011 (265) ELT 179S.C) have also been
pressed for the proposition of subordinate
legislation.

(10) Per contra, the learned Counsel
for the respondents have controverted the
arguments of the petitioner and the learned
Standing Counsel for Central board of
Indirect Taxes & Customs appearing for
respondent Nos.2 and 3 has also chosen to
file a written arguments. It has been the
common ground of the respondents that the
impugned Notification No. 14/2017 dated
1/7/2017 has subsequently been corrected
through corrigendum dated 29/07/2019 by
virtue of which the word "the Central
Board of excise and Customs" has been
omitted and in place thereof the word "the
Government" has been inserted in the said
impugned
notification.
The
learned
Counsel has also submitted that the present
writ
petition
has
been
filed
on
misinterpretation and misconception of
powers
of
the
Central
Government,
1 All. M/S R.C. Infra Digital Solutions Thru. Auth Vs. U.O.I. & Ors.
1159
inasmuch as Section 3 of the CGST Act,
2017 vividly says that the Government is
the only authority, which can appoint the
officers for the purpose of the CGST Act,
2017 through notification and further
Section 4 of the CGST Act, 2017 empowers
the Central Board of Indirect Taxes to
appoint such officers as it deem fit in
addition to the officers appointed by the
Government. Thus, it is the contention of
the learned Counsel that the basic power of
appointment
lies
with
the
Central
Government and the Board has been
merely given additional power. They have
also contended that a conjoint reading of
sub-section 1 of section 5 read with section
3
clarifies
that
the
Government
is
authorized to appoint the officers for the
administration of Act and the officers
holding the post will discharge their duties
as assigned under the CGST Act, 2017,
therefore according to them, it cannot be
said that only the Commissioner is
authorized to delegate his power to all other
officers. It has been contended that subsection 3 of section 5 of CGST Act, 2017
only provides that the Commissioner can
delegate his powers to any of his
subordinate officers which does not mean
that the power and authority of Central
Government or the Board has been
snatched by the legislation. It has also been
contended that even section 167 read with
sub section 2 of section 168 of CGST Act,
2017
also
does
not
empower
the
Commissioner alone to authorize the
officer for any particular act. Thus, it has
been submitted that since the decision
taken by the Central Government was only
with respect to assigning the powers of
Commissioner to certain other officers,
who are already recognized as Central Tax
Officers, it is well within the power
conferred by the enabling Act and such an
exercise of power cannot be termed as ultra
vires. As regards the summons issued and
the money deposited, it has been contended
that the summons were issued in June,
2023 and the deposits were also made in
the same month, however, the petitioner
chose to come to this Court only in
December, 2023 and since it is a case of
search and the enquiry proceeding is still
going on and the same is still not finalized,
the present writ is premature. According to
them, there is a mechanism to challenge the
further proceedings, which have been
provided in the CGST Act, 2017 itself and
as such the prayer for summons and deposit
are not maintainable before this Court in
exercise of its writ jurisdiction. Thus,
prayer for dismissal of the present petition
is made in defence.

(11) This Court has given an anxious
thought to the pleadings and contention of
the parties. The fulcrum of the submission
made by the parties are based on the
validity of Notification No. 14/2017 dated
1/7/2017 and as such this Court finds apt to
first deal with the said aspect.

(12) At the outset, it may be noted
that the submissions made by the learned
Counsel for the petitioner appears to be
very attractive in the first blush, however, a
deeper investigation into the submissions
made by the learned Counsel for the
petitioner would reveal that the same is
without
any
substance.
In
order
to
appreciate his submissions, it would be
beneficial to note that the impugned
Notification No. 14/2017-Central Tax
dated 01.07.2017 inter-alia states :-

"In
exercise
of
the
power
conferred under section 3 read with section
5 of the Central Goods and Services Tax
Act, 2017 ( 13 of 2017), the Central Board
of Excise and Customs hereby appoints the
1160 INDIAN LAW REPORTS ALLAHABAD SERIES
officers in the Directorate General of
Goods and Service Tax Intelligence,
Directorate General of Goods and Service
Tax, Directorate General of Audit as
specified in column(2) of the Table below,
as central Tax Officers and invest them
with all the powers under the Central
Goods and Service tax Act, 2017 and the
Integrated Goods and Services Tax Act,
2017 and the rules made there under,
throughout the territory of India, as are
exercisable by the central tax Officers of
the corresponding rank as specified in
column (3) of the said Table..."

(13) Further, it has been contended
that
the
aforesaid
Notification
was
amended vide a corrigendum dated 29th
July, 2019, wherein for the word "Central
Board of Excise and Customs", the word
"Government"
has
been
substituted.
Therefore, it is the Government, who has
notified the impugned Notification No.
14/2017 dated 01.07.2017 and according to
this Court, section 3 of the CGST Act, 2017
is sufficiently couched with the powers
vested on the Government to appoint the
various class of officers for the purposes of
this Act. Thus, as regards the appointment
of officers in the Directorate General of
Goods and Service Tax Intelligence,
Directorate General of Goods and Service
Tax, Directorate General of Audit as
specified in column (2) of the said Table as
Central Tax Officers cannot be faulted with
in the Notification. However, as contended
by the petitioner, the power to these Central
Tax Officers can be conferred only under
Section 5 of the CGST Act and the
procedure to be followed ought to be as
mentioned under section 167 and 168 (2) of
the CGST Act, 2017.

(14) No doubt, this Court is clear in
its mind that in a taxation statute, any
officer performing a function under the said
statute
must
necessarily
meet
three
concomitants, namely, (i) existence of a
class/post, (ii) appointment of officers to
that said post/class and (iii) assignment
of power to the said post/class. Under the
CGST Act, 2017, it is seen and as has been
rightly contended by the learned Counsel
for the petitioner that section 3 of CGST,
2017 creates the class/post of officers and it
clearly says that the Government by
notification shall appoint the said class of
officers for the purposes of CGST Act.
Further, Section 4 of CGST, 2017 provides
for
appointment
of
officers/additional
officers by the Board in addition to the
notification by the Government under
Section 3 of the CGST Act, 2017. Most
significantly, section 5 of the CGST Act,
2017 says that the Board may impose
conditions/ limitations on exercise of
powers and discharge of duties conferred or
imposed on an officer of Central Tax under
the Act. It further says that an officer of
Central Tax may exercise the powers and
discharge the duties conferred or imposed
under the GST Act on any other officer of
Central Tax, who is subordinate to him.
Section 5(3) of the CGST Act, 2017 says
that the Commissioner may delegate his
powers to any other officer who is
subordinate to him subject to conditions
and limitation as may be specified by him.
Thus, it can be safely said that section 5 of
the CGST Act provides that any officer
who has been so appointed must be
assigned / entrusted / invested with
specified powers under CGST Act to enable
him to perform those functions.

(15)

Apparently,
unless
these
processes are undertaken, an officer cannot
perform the functions under the law. The
functions
are
specified
in
various
provisions where either it is assigned to a
1 All. M/S R.C. Infra Digital Solutions Thru. Auth Vs. U.O.I. & Ors.
1161
class of officers or to a 'Proper Officer'. A
Proper Officer as per Section 2(91) of the
CGST Act, 2017 is a 'Commissioner' or the
officer of the Central Tax, who has been
assigned that function by the Commissioner
in the Board. Thus, assignment of function
to a specific class of officers is an
inevitable requirement.

(16) Vide Notification No. 02/2017Central Tax dated June 19, 2017 issued
under Section 3 read with Section 5 of the
CGST Act, 2017, the Central Government
appointed classes of officers for Central
Tax and vested them with all the powers in
respect of the territory specified. However,
these provisions do not provide for
assignment/entrustment/investment
of
powers by the Government. The Central
Government issued another Notification
No. 14/2017-Central Tax dated July 1, 2017
under Section 3 read with 5 of the CGST
Act, 2017 notifying equivalent class/posts
for officers of DGGI. Thus, officers of
DGGI became Central Tax officers of
specified class / post. However, as pointed
out by the learned Counsel for the
petitioner, these DGGI officers were
merely appointed by the Government in
view of section 3 of the Act and they could
not have been assigned / entrusted /
invested with specified powers under
CGST Act to enable them to perform those
functions under section 5 of the Act, as it is
essentially the Board, which has been
empowered under the said section of the
GST Act to confer such power on the
Officer of Central Tax.

(17) Section 5 of the CGST Act, 2017
states inter-alia :-

(1) Subject to such conditions and
limitations as the Board may impose, an
officer of central tax may exercise the
powers and discharge the duties conferred
or imposed on him under this Act.

(2) An officer of central tax may
exercise the powers and discharge the
duties conferred or imposed under this Act
on any other officer of central tax who is
subordinate to him.

(3)
The
Commissioner
may,
subject to such conditions and limitations
as may be specified in this behalf by him,
delegate his powers to any other officer
who is subordinate to him.

(4)
Notwithstanding
anything
contained in this section, an Appellate
Authority shall not exercise the powers and
discharge the duties conferred or imposed
on any other officer of central tax.

(18) It is apparent from the above that
as per section 5 (1) of CGST Act, 2017, it is
the Board, which confers and impose such
conditions and limitation on an officer of
central tax for exercising the powers and
duties conferred under the CGST Act, 2017
and section 5(3) of CGST Act, 2017
empowers the commissioner to delegate his
powers to any other officer, who is
subordinate to him. Further, section 2 (16)
of the CGST Act, 2017 says that "Board"
means the Central Board of Indirect Taxes
and Customs constituted under the Central
Boards of Revenue Act, 1963 (54 of 1963).
Further, section 3 of the Central Boards of
Revenue Act, 1963 relating to Constitution
of Central Boards for Indirect Taxes and
Customs says that it is the Central
Government, which shall constitute the
Central Board of Indirect Taxes and
Customs and the said Board shall be
subject to the control of the Central
Government and shall exercise such powers
and perform such duties, as may be
1162 INDIAN LAW REPORTS ALLAHABAD SERIES
entrusted to that Board by the Central
Government or by or under any law. Thus,
it appears that the Board is subservient to
the Government under the Act and it could
be well argued that when the power has
been invested with the Board to do certain
things, how can the Government not
exercise such a power.

(19) However, the question of
investing powers on the central tax officers
by the Board or the government does not
end there as this court finds that the
Circular No.3/3/2017-GST dated July 5,
2017
(Annexure-11)
issued
by
the
Commissioner
in
Board
relates
to
assignment of various functions under
CGST Act, 2017 to different class of
officers, who had been construed to be
DGSI officers in terms of Notification No.
14/2017.

(20)

A
conjoint
reading
of
Notification No. 14/2017 dated 01.07.2017
and Circular No. 3/3/2017-GST dated
05.07.2017 sufficiently contemplates the
assigning of powers to DGSI officers by
the Board. Let's take an example, as per the
circular of 05.07.2017, a Superintendent of
Central Tax has been assigned the power to
function as is mentioned in Sub-section (1)
of section 70 and a reading of Notification
14/2017 leads us to conclude as mentioned
in serial No. 8 that a senior Intelligence
officer, Goods and Service Tax Intelligence
or Superintendent, Goods and Service Tax
or Superintendent, Audit has been notified
to be appointed under section 3 of the GST
Act as a central Tax officer and is invested
with all the powers under the central Goods
and Service Tax Act, 201, throughout the
territory of India, as are exercisable by the
central Tax officers of the rank of
"superintendent". In any case, this court
does not find any force in holding that such
technical nuances to be fatal for the
Notification or to the functions performed
by
various
DGGI
officers.
The
jurisprudence on the implications of
invocation of a wrong provision suggests
that as long as an authority has power,
which is traceable to a source, the mere fact
that source of power is not indicated or
wrongly indicated in an instrument does
not render the instrument invalid.

(21) For all the aforesaid reasons, this
Court is not inclined to hold that the
impugned Notification No. 14/2014 dated
01.07.2017 is ultra vires to the powers
provided to the Government under the
CGST Act, 2017.

(22) Since, the present issue is
relating to the power related to Inspection,
search, seizure, arrest etc. by the DGSI
officer, it can be seen from the CGST Act,
2017 itself that the said powers are
mentioned under chapter XIV, wherein
section 67 of CGST Act, 2017 relates to
power of inspection, search and seizure.
Section 69 of the CGST Act, 2017 relates
to power of arrest, Section 71 of CGST Act,
2017 relates to access to business premises,
section 72 of the CGST Act, 2017 relates to
officers to assist proper officers and section
70 of the CGST Act, 2017 relates to power
to summon persons to give evidence and
produce document. Since, the said power
invested under section 70 of the CGST Act,
2017 has been an issue in the present writ
petition, it would be beneficial to quote
section 70 of the CGST Act, 2017 which
inter-alia states:

"70 (1) The proper officer under
this Act shall have power to summon any
person whose attendance he considers
necessary either to give evidence or to
produce a document or any other thing in
1 All. M/S R.C. Infra Digital Solutions Thru. Auth Vs. U.O.I. & Ors.
1163
any inquiry in the same manner, as
provided in the case of a civil court under
the provisions of the Code of Civil
Procedure, 1908 (5 of 1908).

(2) Every such inquiry referred to
in sub-section (1) shall be deemed to be a
"judicial proceedings" within the meaning
of section 193 and section 228 of the Indian
Penal Code (45 of 1860)."

(23) From a bare reading of Section
70 of the CGST Act, 2017, 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 Civil
Procedure Code. Now, as per the definition
of 'proper officer' as contained in Section 2
(91) of the CGST Act, 2017, a 'proper
officer' in relation to any function to be
performed under the CGST Act, 2017
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.4 to 8 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 ranks as specified in the
Notification No.14 of 2017-CT dated
1.7.2017 issued by the Government. It is
further
pertinent
to
note
that
the
respondents being the officer of the Central
Tax under the CGST Act, 2017 by virtue of
the said Notification dated 1.7.2017, they
were 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, 2017 read with Section 20
of the IGST Act. Therefore, the respondents
are proper officer in relation to the function
to be performed under the CGST Act, 2017
as contemplated under Section 2 (91) of the
CGST Act, 2017, and as such, was entitled
to issue summons under Section 70 of the
CGST Act, 2017 in connection with the
inquiry initiated against the petitioner.

(24) There is another aspect of the
matter, inasmuch as it has been submitted
by the learned Counsel for the petitioner
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, 2017 and in any case, the power
was to be invested by the commissioner in
Board. This court finds that Section 167 of
the CGST Act, 2017 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. So far as
Section 2(91) of CGST Act, 2017 is
concerned, it pertains to the proper officer
in relation to any function to be performed
under the CGST Act, 2017 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, 2017. Vide the
Circular dated 5.7.2017 the said Board
namely the Central Board of Excise and
Customs in exercise of the powers
conferred by Section 2(91) of the CGST
Act, 2017 read with Section 20 of the IGST
Act and subject to Section 5(2) of the
CGST Act, 2017 has assigned the officers
1164 INDIAN LAW REPORTS ALLAHABAD SERIES
the functions as that of proper officers in
relation to the various Sections of the
CGST Act, 2017 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,
2017. Thus, there being no delegation of
powers
by
the
Commissioner,
the
provisions contained in Section 167 of the
CGST Act, 2017 could not be said to have
been attracted, nor was there any necessity
to issue any such Notification. The Court,
therefore, does not find any substance in
the submission of the Ld. Counsel that the
respondent No. 4 to 8 was not the 'proper
officer' as per the definition contained in
Section 2(91) of the CGST Act, 2017 and
therefore, had no powers to issue summons
under Section 70 of the CGST Act, 2017.

(25) This Court also does not find any
force in the submission made by learned
Counsel for the petitioner that two parallel
proceedings in connection with the same
issue were not sustainable. It may be noted
that the communication dated 10.05.2023
was issued by the Anti-Evasion Department
of the GST for limited inquiry in
connection with irregular availment of ITC
during the period 2018-19 to 2022-23
under the CGST, 2017 and as such has
required the petitioner to produce (i)
Ledger of purchase and sales for period
November, 18 to March, 2023, (ii) Ledger
of ITC availed for period Nov 18 to Mar
23, (iii) Bank Statement for period Nov 18
to Mar 23., whereas the officers of the
DGSI have issued summons for making
inquiry in the entire activities of the
petitioner under the GST Act, 2017.
Pertinently the stage is of enquiry and not
of show-cause and apparently, the inquiry
being conducted by the Ant evasion
department
and
the
inquiry
being
conducted by the officers of DGSI does not
appears to be over-lapping. It is needless to
say that the proceedings of issuing
summons under Section 70 of the CGST
Act, 2017 are the proceedings of judicial
nature and the petitioners are bound to
respect the same, and cooperate with the
inquiry. As such, no prejudice is going to be
caused to the petitioner if the statement is
tendered or the documents are produced as
required by the respondents and adequate
safeguards are already in place for ensuring
that these enquiries are conducted in a fair
and reasonable manner.

(26) As regards the payment of Rs. 40
Lakhs made by the petitioners on 8.06.2023
vide Form GST DRC-03 under Rule 142(2)
and 142(3) of the GST Rules (Annexure
No.7), it may be noted that for the
particulars at Sr. No.3 i.e. "cause of
payment", it is shown as "voluntary" and at
Sr. No. 4 i.e. "section under which
voluntary payment is made", it is shown as
"Section 74 (5)". At the bottom of the table
in the said Form, at Sr. No.8 with regard to
"reasons", it has been mentioned that "DRC
against IGST Tax financial year 2023 ".
Apparently, the said receipt does not
mention any words like ""under protest" or
"without prejudice" etc. and as such it
cannot be prima-facie said that the said
payment was made by the petitioners under
duress and was not made voluntarily.
Further, there was no complaint made by
the petitioner before the grievance cell or
before any authority of the respondent that
the said payment was made under duress
and was not made voluntarily.

(27) In the instant case, the petitioners
having made payment under Section 74 (5)
of the CGST Act, 2017, they appear to have
informed the Proper Officer of such
payment in the Form GST DRC-03
(Annexure No. 7) as contemplated in Rule
1 All. M/S Dial For Cool, Noida Vs. State of U.P. & Ors.
1165
142(2) of the said Rules. It is needless to
say that the said payment shall be dealt
with
or
adjusted
by
the
concerned
respondent No.3 in accordance with law
more particularly as per the provisions
contained in Section 74 of the CGST Act,
2017.

(28) For all the aforesaid reasons, this
Court does not find any merits in the
present petition and as such the same is
dismissed. However, in the facts of the
present case, there shall be no order as to
costs.
----------
(2024) 1 ILRA 1165
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 30.11.2023

BEFORE

THE HON'BLE AJAY BHANOT, J.

Writ Tax No. 1338 of 2022

M/S Dial For Cool, Noida ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Prathamesh Upadhyay

Counsel for the Respondents:
C.S.C.

Civil Law - The Central Goods and Services
Tax Act, 2017 - Section 107 - Challenge to
dismissal of appeal by order dated 28.09.2022
as time-barred under Section 107 of CGST Act -
Appellate authority failed to verify mode of
service or record satisfaction of communication
of order dated 04.03.2022 cancelling GST
registration - Limitation period commences from
date of communication, not order date -
Impugned order lacks findings on service or
knowledge, rendering it legally flawed - Order
set aside, matter remitted to appellate authority
for fresh adjudication with hearing, to be
completed within two months.
List of Cases cited:

1. S/S Patel Hardware Vs Commissioner, St.
G.S.T. & ors., Writ Tax No.1388 of 2018

2. Singh Traders Vs Additional Commissioner
Grade-2 & ors., Writ Tax No.661 of 2020

3. M/s. Pearl and Co. Vs The Commissioner of
Commercial Taxes & anr., W.P.(MD) No.19127 of
2022 and W.M.P.(MD) No.13962 of 2022

4. Tvl. Suguna Cutpiece Vs Appellate Deputy
Commissioner (ST) (GST) & ors., W.P.Nos.
25048, 25877, 12738 of 2021, decided on
31.01.2022

(Delivered by Hon'ble Ajay Bhanot, J.)

1. Heard Shri Prathamesh Upadhyay,
learned counsel for the petitioner and Shri
Bipin Kumar Pandey, learned Additional
Chief
Standing
Counsel
for
the
respondents-State.

2. The GST registration of the
petitioner
was
cancelled
by
the
authority/Assistant Commissioner, Noida
Sector-10/respondent No.3 in the first
instance by the order dated 04.03.2022. The
petitioner carried the said order in appeal
before
the
learned
appellate
authority/Additional Commissioner, Grade2 (Appeal)-Ist, State Tax, Noida.

3. The petitioner has assailed the
order dated 28.09.2022 passed by the
learned
appellate
authority/Additional
Commissioner, Grade-2 (Appeal)-Ist, State
Tax, Noida, wherein the learned appellate
authority has rejected the appeal filed by
the petitioner under Section 107 of the
CGST Act on the footing that the appeal
was barred by limitation. The impugned
order references the provisions of Section
107 of the Act and notices that the period of
limitation of three months has been