DGGI officers empowered to issue summons under GST law - Gujarat HC.
In case of “Yasho Industries Limited (hereinafter referred as “Petitioner”) VS Union of India” (hereinafter referred as “Respondent”) (R/SPECIAL CIVIL APPLICATION NO. 7388 of 2021) wherein petitioner is engaged in the business of manufacturing & exporting of specialized chemicals and holding the Advance Authorisation (“AA”) licenses granted in terms of scheme set out in chapter-IV of FTP 2015-2020.
An enquiry was initiated against the petitioner on account of incorrect availement of double benefits i.e.
- Exemption of IGST on input material imported under AA/EOU schemes notified in Customs Laws(NN. 78/2017,79/2017 & 48/2017) and
- Refund of IGST paid on goods exported simultaneoulsy
Summons were also issued by Directorate General of Goods & Service Tax Intelligence (DGGI) U/s 70 of CGST Act, 2017 calling their presence to give evidence and/or produce the documents i.r.t. the inquiry.
Petitioner has challenged the said summon by filing petition under Article 226 of the Constitution of India.
The Ld. Counsel appearing on behalf of petitioner challenged the jurisdiction of the DGGI in issuing summons by submitting that:
- Power to issue summons vests with the “Proper Officer” as defined in Section 2(91) of the CGST Act, 2017.
- Summon is issued by the officer of DGGI designated as senior intelligence officer who is central tax officer with Superintendent rank under the statute.
- Since the person issuing summon is not of a commissioner rank , any delegation of power for issuing summon has to be made by commissioner which has to be effectuated through a notification in the light of section167 of CGST Act, 2017.
- Section-2(91) is merely a definition clause which does not confer any powers to assign the functions.
The Hon’ble High Court found no substance in the petitioner’s submissions and onserved that the officer of DGGI being a Central tax officer and Superintendent under CGST Act by virtue of NN.14-CT 2017 the powers of proper officer was also assigned to him by the board vide circular dated 05.07.2017 issued in exercise of the powers conferred by Section 2(91) of CGST Act, 2017.
Hence Hon’ble Gujarat High Court held that officer of DGGI is the “Proper Officer” in relation to the function performed under CGST Act 2017 as contemplated U/s 2(91) and as such entitled to issue summons U/s -70 of the CGST Act in relation to the enquiry initiated against the petitioner.