M/S. RAM AGENCIES, REP. BY ITS PROPRIETRIX MRS. ADAIKKAMMAL

VERSUS

THE ASSISTANT COMMISSIONER OF CENTRAL TAX, THANJAVUR

Citation:  2024 taxo.online 691

In the High Court of Madras, Justice C. Saravanan presided over the case of M/s RAM Agencies v. The Assistant Commissioner of Central Tax (W.P.(MD) No. 8674 of 2024 and W.M.P.(MD) Nos. 7920 & 7921 of 2024, dated 10.04.2024), which dealt with the issue of cross-empowerment under the Central Goods & Services Tax Act, 2017, specifically Section 6, and referenced Circular No.1/2017-GST (Council) dated 20.09.2017.

The petitioner challenged an Order-in-Original dated 26.12.2023 issued by the Central Tax Authorities for the assessment years 2017-2018, 2018-2019, and 2019-2020. The petitioner contended that the order was issued despite a stay granted by the Principal Seat of the Madras High Court against a notification extending the period of limitation, as seen in W.P. No. 33343 of 2023, dated 27.11.2023. Furthermore, the petitioner argued that they were assessed by the State Tax Authorities, making the order from the Central Tax Authorities contrary to the law established in Tvl. Vardhan Infraastructure v. The Special Secretary.

The respondent’s counsel confirmed that the petitioner was assessed by the State Tax Authorities as per Circular No.1/2017-GST (Council). However, they argued that the decision in Tvl. Vardhan Infraastructure was distinguishable, citing a Division Bench decision in Kuppan Gounder P.G. Natarajan v. Directorate General of GST Intelligence, which clarified that both State and Central tax authorities could take enforcement action based on intelligence, regardless of the taxpayer's assignment.

The court extensively reviewed the cross-empowerment and jurisdiction issues, reaffirming the conclusions drawn in Tvl. Vardhan Infraastructure. It was determined that without a specific notification for cross-empowerment, authorities from the counterpart department cannot initiate proceedings against an assessee assigned to the other department. Consequently, the impugned order from the Central Tax Authorities was set aside. However, the court granted liberty to the State Authorities to proceed against the petitioner in accordance with the observations in the Tvl. Vardhan Infraastructure case.

This judgment underscores the importance of adherence to jurisdictional boundaries established by law and notifications. It reiterates that any enforcement action must respect the designated jurisdiction of tax authorities unless explicitly cross-empowered through proper notification. The decision ensures that taxpayers are not subjected to conflicting demands from different tax authorities, thereby upholding the principles of fair and orderly administration under GST law. This case highlights the necessity for clear and consistent application of jurisdictional rules to prevent procedural overreach and protect the rights of taxpayers.

 

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