Key Ruling: State Tax Officers Authorized as Proper Officers under IGST Act
Case: Narayan Sahu v. Union of India & Ors.
Court: Orissa High Court
Date: November 26, 2024
Facts of the Case
1. Background
The Assistant Commissioner of State Tax issued a Show Cause Notice (SCN) to the Petitioner, Narayan Sahu, alleging tax evasion under the Integrated Goods and Services Tax Act, 2017 (IGST Act). The notice demanded approximately ₹41,00,000, including tax and penalty, through an order issued on September 26, 2024.
2. Petitioner’s Contention
Narayan Sahu challenged the jurisdiction of the Assistant Commissioner of State Tax, arguing that the officer could not act as a “Proper Officer” under the IGST Act. He also claimed that Section 4 of the IGST Act, which allows cross-authorization, lacked clarity due to the absence of specific notifications defining the role and jurisdiction of State Tax officers.
Issue
Can State Tax Officers act as Proper Officers under the IGST Act without specific notifications limiting their jurisdiction?
Court’s Observations and Judgment
1. Authorization of State Tax Officers
The Court highlighted that Section 4 of the IGST Act empowers the Government to cross-authorize State Tax officers as Proper Officers for IGST matters. Notifications issued on June 24, 2017, and June 25, 2017, explicitly authorized these officers to function under the IGST Act.
2. No Limitation by Notification
The Court observed that while cross-authorization is subject to conditions specified through notifications, no such notification has been issued to restrict the jurisdiction of State Tax officers under the IGST Act.
3. Dismissal of the Petition
The Orissa High Court upheld the cross-authorization provisions under the IGST Act. It ruled that State Tax officers are empowered to act as Proper Officers and dismissed the writ petition. The demand for tax and penalty, as per the Impugned Order, was deemed valid.
Key Takeaways
1. State Tax Officers’ Jurisdiction
State Tax officers have the authority to act as Proper Officers for IGST matters under Section 4 of the IGST Act. This ensures that tax administration can function seamlessly.
2. Validity of Cross-Authorization
The Court reinforced the legitimacy of cross-authorization, emphasizing that the absence of restrictive notifications strengthens the officers’ authority under IGST.
3. Judicial Clarity
The ruling confirmed that as long as the statutory framework and supporting notifications are in place, State Tax officers can exercise jurisdiction under the IGST Act.
This judgment provides clarity on the role of State Tax officers in IGST administration, ensuring a unified tax structure across jurisdictions.
