Assessee cannot be adjudicated by the CGST, assigned to SGST authority or vice-versa

By: Admin
May 23, 2024
Categories: Important Pronouncements
4 Min Read

The Hon’ble Madras High Court in Ram Agencies v. Assistant Commissioner of Central Tax [W.P. (MD) NO. 8674 of 2024 and W.M.P (MD) NOS. 7920 & 7921 of 2024 dated April 10, 2024] has quashed the impugned order-in-original issued by the Assistant Commissioner of Central Taxes (“the Respondent”) as it was held that in absence of a notification issued for cross empowerment, authorities from counterpart department cannot initiate proceedings where an assessee is assigned to other counterpart.

Facts:

M/s. Ram Agencies (“the Petitioner”) is assessed by the State Tax authorities pursuant to the allocation made by the Central Government in terms of Circular No.1/2017-GST(Council), dated September 20, 2017, however the order was passed by the Central Tax authorities in respect of the assessment years 2017-18, 2018-19, 2019-20.

The Petitioner is also aggrieved by the fact that the order has been passed despite stay being granted by the Principal Seat of the Madras High Court against the operation of notification extending the period of limitation vide G.O.(Ms)Nos.9 and 56 and G.O.(Ms)Nos.41 and 1, which has been stayed in W.P.No.33343 of 2023, on November 27, 2023.

Issue:

Whether proceedings can be initiated against an assessee from the counterpart department when the assessee is assigned to the other counterpart department?

Held:

The Hon’ble Madras High Court in W.P. (MD) NO. 8674 of 2024 and W.M.P (MD) NOS. 7920 & 7921 of 2024 dated April 10, 2024, held as under:

Noted that, the issue regarding cross-empowerment and the jurisdiction of the counterparts to initiate proceedings when an assessee has been allocated either to Central Tax Authorities or to the state tax authorities was examined in detail by this Court in Tvl. Vardhan Infraastructure’s case [W.P. No. 34792 & Ors. dated March 11, 2024].
Wherein the hon’ble court has concluded that in absence of notification issued for cross empowerment, the authorities from the counterpart department cannot initiate proceedings where an assessee is assigned to the counterpart.
Quashed the Impugned Order-in-Original passed by the Assistant Commissioner of Central Tax in the absence of notification issued for cross empowerment.
However stated that, liberty is given to the State authorities to proceed against the petitioner.