SLM Stationery Vs Union of India

FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT

The petitioner, a proprietorship concern is at the doors of this Court calling in question orders dated 25.11.2024 and 30.11.2024, both passed by the third respondent seeking extension of time for physical verification; a confiscation order dated 24.12.2024, passed by the fourth respondent; a consequent direction against the impugned auction notice of the confiscating material, all of which are issued on the score that they are without jurisdiction and a consequential mandamus is also sought for release of goods and vehicle without any condition.

2. Shorn of unnecessary details, facts in brief, germane, are as follows:

The petitioner is said to be the owner of certain goods – Arecanut, in the case at hand, which were to be supplied to one Pooja enterprises and it being transported, in a vehicle bearing registration No.KA-63, 3260. It is the case of the petitioner that prior to the movement of the goods as aforesaid, the petitioner has generated an invoice and handed over to the driver of the said vehicle but the e-way bill could not be generated due to network issues. The consignment and vehicle were intercepted by the fourth respondent – Commercial Tax Officer, (Enforcement -2), Vijayapura, an officer under the Karnataka Goods and Services Tax Act, 2017. The statement of the driver of the vehicle was recorded on 19.11.2024 and on the same day, an order for physical verification is passed by the fourth respondent, on the ground that the existence of the consignor and consignee, genuineness of the documents of the goods in transit, genuineness of the transactions within the consignor and consignee are suspicious, and would need further verification.

3. It is the claim of the petitioner that he visited the fourth respondent, tendered all necessary documents and requested for release of the goods and the conveyance and he had no intention to evade tax. The oral representation of the petitioner was not considered and on 25.11.2024, the third respondent – Joint Commissioner of Commercial Taxes, Enforcement Wing, Belagavi, passes an order extending the time limit for physical verification only on the score that the authorized person did not appear to conduct physical verification, which is disputed by the petitioner. On 26.11.2024, summons is issued under Section 70 of the Central Goods and Services Tax Act, 2017/ KGST, directing the petitioner to appear before him on 28.11.2024. In compliance of the summons, the petitioner appeared before the fourth respondent on 04.12.2024 and tendered his statement under Section 70 of the KGST read with Section 6 of the CGST and Section 20 of the Integrated Goods and Services Tax Act, 2017 and stated that the goods in question belonged to him and they were being transported to a buyer in Delhi.

4. Fourth respondent is said to have carried out physical verification on 04.12.2024, 14 days after the date of interception and then passes an order of detention of the goods on the ground that prima facie, the documents tendered were found to be defective apart from its genuineness of the transaction itself being in doubt. A show cause notice comes to be issued on 10.12.2024, seeking to show cause as to why the goods found in the vehicle should not be confiscated. The petitioner replies to the said notice on 16.12.2024. Not being convinced with the reply, the confiscation order is passed on 24.12.2024 and an auction notice, to auction the goods so confiscated is passed on 02.01.2025. Aggrieved by all the aforesaid orders, the petitioner is before this Court in the subject petition.

5. Heard Sri Sameer Gupta, learned counsel for Smt. Gayatri S.R., learned counsel for the petitioner, Sri Gangadhar J.M., learned Additional Advocate General along with Sri Sharad V. Magadum, learned Additional Government Advocate for respondent No.1 and Sri Girish S. Hulmani, learned counsel for respondent No.2.

SUBMISSIONS:

PETITIONER’S:

6. The learned counsel for the petitioner would vehemently contend that the fourth respondent is not the proper officer in terms of Section 4 of the IGST, as there is no notification issued specifically authorizing the fourth respondent to be the proper officer. It is his submission that in the absence of such authorization, the act of the fourth respondent becomes without jurisdiction. It is his further submission that it is for the Government of India to notify such authorization in a manner known to law. Therefore, if the fourth respondent is not the proper officer as obtaining under Section 4 of the IGST, all his actions are non est in the eye of law. He would place reliance upon the judgment of the High Court of Madras rendered in the case of TVL. VARDHAN INFRASTRUCTURES VS. HEAD OF THE GST, COUNCIL SECRETARIAT reported in (2024) 125 GSTR 334, with regard to cross empowerment. It is the further submission that the fourth respondent is only authorized or a proper officer under Section 6 of the CGST and KGST and not under Section 4 of the IGST.

RESPONDENT – STATE:

7. Per contra, learned Additional Advocate General – Sri Gangadhar J.M., would vehemently refute the submissions to contend that there is no necessity to issue a notification under Section 4 of the IGST. The cross empowerment under Section 6 of the CGST and KGST would ipso facto become applicable to the IGST and the fourth respondent is an authorised and proper officer. He would submit that the petition be dismissed as dehors the question of jurisdiction, the petitioner in the case a hand has alternative remedy in terms of Section 107 of the CGST Act.

8. Therefore, the matter was heard and reserved only for a decision with regard to the jurisdiction of the fourth respondent acting as a proper officer under IGST.

9. I have given my anxious consideration to the submissions made by the learned counsel for the respective parties and have perused, the material on record.

10. The afore-narrated facts, link in the chain of events and dates are all matter of record, they would not require any reiteration. Since the matter is reserved for determination whether the fourth respondent would be the proper officer or not, I deem it appropriate to notice the statutory frame work and interpretation on the said statutory frame work.

11. Three enactments form the fulcrum of the lis, they are, the Central Goods and Services Tax Act, 2017 (‘CGST’ for short), the Karnataka Goods and Services Tax Act, 2017 (‘KGST’ for short) and the Integrated Goods and Services Tax Act, 2017 (‘IGST’ for short). Certain provisions of the afore-quoted statutes are necessary to be noticed. Section 6 of the CGST deals with authorization of officers of State tax or Union territory tax as proper officer in certain circumstances. It reads as follows:

“6. Authorisation of officers of State tax or Union  territory tax as proper officer in certain  circumstances.—(1) Without prejudice to the provisions of this Act, the officers appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are authorised to be the proper officers for the purposes of this Act, subject to such conditions as the Government shall, on the recommendations of the Council, by notification, specify.

(2) Subject to the conditions specified in the notification issued under sub-section (1),—

(a) where any proper officer issues an order under this Act, he shall also issue an order under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as authorised by the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as the case may be, under intimation to the jurisdictional officer of State tax or Union territory tax;

(b) where a proper officer under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter.

(3) Any proceedings for rectification, appeal and revision, wherever applicable, of any order passed by an officer appointed under this Act shall not lie before an officer appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act.”

(Emphasis supplied)

12. Likewise, Section 6 of the KGST which also deals with an identical circumstance reads as follows:

“6. Authorisation of officers of central tax as proper officer in certain circumstances.—(1) Without prejudice to the provisions of this Act, the officers appointed under the Central Goods and Services Tax Act are authorised to be the proper officers for the purposes of this Act, subject to such conditions as the Government shall, on the recommendations of the Council, by notification, specify.

(2) Subject to the conditions specified in the notification issued under sub-section (1),—

(a) where any proper officer issues an order under this Act, he shall also issue an order under the Central Goods and Services Tax Act, as authorised by the said Act under intimation to the jurisdictional officer of central tax;

(b) where a proper officer under the Central Goods and Services Tax Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter.

(3) Any proceedings for rectification, appeal and revision, wherever applicable, of any order passed by an officer appointed under this Act, shall not lie before an officer appointed under the Central Goods and Services Tax Act.”

(Emphasis supplied)

Therefore, Section 6 in both the Central and State enactments deal with officer of the CGST or the KGST to be the proper officer in certain circumstances, subject to the conditions stipulated in Section 6 of both the Central and State enactments.

13. The third enactment is the IGST. Section 4 of the IGST which is germane to be noticed reads as follows:

“4. Authorisation of officers of State tax or Union  territory tax as proper officer in certain  circumstances.—Without prejudice to the provisions of this Act, the officers appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are authorised to be the proper officers for the purposes of this Act, subject to such exceptions and conditions as the Government shall, on the recommendations of the Council, by notification, specify.”

(Emphasis supplied)

Section 4 of the IGST deals with authorisation of officers appointed under the State Tax Act or Union Territory Tax Act as proper officer in certain circumstances. Section 4 of the IGST unequivocally mandates that the officer appointed under the KSGT or the Union Territory are authorised to be the proper officer for the purpose of IGST, subject to exceptions and conditions as the government shall on the recommendation of the Council, would specify by issuance of a notification.

14. It is an admitted fact that there is no notification issued by the Government of India specifying persons other than the officers who are found in Section 4 of the IGST. Section 4 of the IGST is unequivocal. The officers under Section 6 of the CGST or KGST are authorised to be the proper officers for the purposes of the IGST. The exceptions are to be notified by the Government of India, on consultation or on the recommendation of the Council. Therefore, a notification or recommendation should ensue only when the government wants to carve out exceptions to the definition of ‘proper officer’ under Section 4 of the IGST. The normal rule is that, the officers appointed under the CGST or KGST to be the proper officers under Section 4 of the IGST. There cannot be any other interpretation to Section 4 of the IGST. As the provisions of the IGST, envisages a cross empowerment and not an exception that is required by issuance of a notification.

15. The learned counsel for the petitioner has placed heavy reliance upon the judgment of the High Court of Madras in the case of TVL VARDHAN  The said judgment would not be applicable to the facts obtaining the case at hand as the judgment is dealt with a different set of circumstance.

16. It is now germane to notice the interpretation of Section 4 of the IGST and the cross empowerment that it envisages. A division bench of the High Court of Punjab and Haryana in the case of SODHI CARGO MOVERS (P) LTD. V. STATE OF HARYANA AND OTHERS¹ interpreting Section 4 of the IGST has held as follows:

“….             …..             ….

9. Pursuant to 10st Amendment of the Constitution three enactments were passed by the Parliament i.e. the Integrated Goods and Services Tax Act, 2017, the Central Goods and Services Tax Act, 2017, the Union Territory Goods and Services Tax Act, 2017. In addition to the aforesaid three enactments, the legislature of the State of Haryana on 8-6-2017 passed an enactment known as the Haryana Goods and Services Tax Act, 2017 (”the HGST Act”). In matters of inter-State trade and commerce, including import into the territory of India and out of it, the IGST Act, 2017 applies, whereas in matters of intra-State trade and commerce “the CGST Act, 2017″ and the State Goods Services Tax Act apply.

10. Reference was made to the pronouncement of the Hon’ble High Court of Madhya Pradesh in Advantage India Logistics (P) Ltd. Union of India [Advantage India Logistics (P) Ltd. v. Union of India, (2018) 58 GSTR 247 : 2018 SCC OnLine MP 1822] dated 23-8-2018 and the Hon’ble Allahabad High Court in Satyendra Goods Transport Corp. v. State of U.P. [Satyendra Goods Transport Corp. v. State of U.P., (2018) 54 GSTR 3 : 2018 SCC OnLine All 6079]

11. The abovesaid two judgments are on the proposition that cross-empowerment under Section 4 of the IGST Act, 2017 and Section 6 of the CGST Act, 2017 means that State authorities are empowered under the HGST Act, 2017 can also enforce the provisions of the CGST Act, 2017 or the IGST Act, 2017.”

(Emphasis supplied)

In the afore-quoted judgment, the division bench holds that Section 4 of the IGST would mean that the State authorities who are empowered under the HGST Act therein and can also enforce the provisions of the CGST and IGST. If the words in the HGST Act is paraphrased to the case at hand, which is the KGST, the same principle would become applicable.

17. A division bench of the High Court of Madhya Pradesh interpreting Section 4 of the IGST in the case of ADVANTAGE INDIA LOGISTICS PVT. LTD. V. UNION OF INDIA AND OTHERS², has held as follows:

“….                  …..             ….

4. The sole contention of the learned counsel for the petitioner is that in absence of any notification under Section 4 of IGST Act, 2017, the respondent No.4 is not competent to issue show cause notice and the impugned seizure memo dated 15.07.2018 is wholly without jurisdiction.

5. The IGST Act, 2017 deals with taxability of inter-State supply of goods and services. Section 4 of the IGST Act reads as under :

“4. Without prejudice to the provisions of this Act, the officers appointed under the State Goods and Services tax Act or the Union Territory Goods and Services tax Act are authorised to be the proper officers for the purposes of this Act, subject to such exceptions and conditions as the Government shall, on the recommendations of the council, by notification, specify.”

6. From perusal of the aforesaid, it is clear that the officers appointed under the MPGST Act, 2017 was authorized to be proper officers for the purposes of the IGST Act.

7. At present, no notification was issued by the Central Government under section 4 of the IGST Act. By order dated October 12,2017, respondent No. 4 was authorized as proper officer and was bestowed with powers such as inspection, search and seizure under section 68 of the MPGST Act. Serial Nos. 31 and 57 of the order dated October 12, 2017 (annexure-R/1) reads as under :

8. Section 20 of the IGST Act provides for the provisions of the Central Goods and Services tax Act (in short, “the CGST”) relating to inspection, search, seizure, etc. Section 68 of the MPGST Act provides the powers of inspection, search and seizure of goods in movement. Section 129 of the MPGST Act provides the power in respect of detention, seizure and release of goods and conveyance in transaction.

9. In the present case, it is an admitted position that the subject vehicle was transporting goods for inter-State supply of goods from Gurgaon, Haryana to Pune, Maharashtra. As per e-way bill system (annexure P/4), the number of vehicle was mentioned as HR-38-0823 whereas, the correct vehicle number is HR-38-X-0823. It was found by respondent No. 4 that the e-way bill was defective and not updated, therefore, show cause notice was issued on July 13, 2018 to inspect the subject vehicle on July 15, 2018. On inspection, respondent No. 4 in exercise of powers under section 129(1) of the MPGST Act passed the seizure order (annexure-P/1) on July 15, 2018.

10. Respondent No. 4 in compliance of the statutory mandate under section 129(6) has passed a final order dated July 23, 2018 directing the petitioner to pay an amount of Rs. 4,20,266 (minimum) as tax and penalty in terms of section 129(3) of the MPGST Act.

11. Against the aforesaid final order dated July 23, 2018, statutory appeal under section 109 of the Act has been provided.

12. The learned counsel for the petitioner has drawn our attention to articles 246A and 269A of the Constitution which was brought by One Hundred and First (101) Amendment on September 8, 2016 and submitted that Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce. As no notification has been issued under section 4 of the IGST Act and, therefore, respondent No. 4 was not competent to pass any order and, therefore, the petitioner without availing the statutory remedy has filed this writ petition. He has also drawn our attention to the notification dated October 13, 2017 issued by the Government of India, Ministry of Finance in respect of refund under section 20 of the IGST Act and submitted that similar type of notification is required and prayed for its quashment.

13. On due consideration of the arguments of the learned counsel for the parties so also the provisions of section 4 of the IGST Act, we are of the view that officers appointed under the MPGST Act are authorized to be proper officers for the purpose of IGST and, therefore, the contention of the petitioner that no notification was issued and in absence of any notification under section 4 of the IGST Act has no force, we cannot accept the contention of the petitioner that the action of respondent No. 4 is wholly without jurisdiction.”

(Emphasis supplied)

The division bench of the High Court of Madhya Pradesh holds that the officers appointed under the MPGST are authorised to be the proper officers for the purpose of the IGST. Therefore, the contention that the officer appointed under the MPGST is not a proper officer and has no jurisdiction was declined to be accepted.

18. Yet another division bench of the High Court of Punjab and Haryana dealing with identical circumstance of seizure, confiscation of goods and answering the very contention that the officer appointed under the State Tax Act therein, to be the proper officer for the purpose of the IGST and interpreting Section 4 of the IGST in the case of BRIGHT ROAD LOGISTICS V. STATE³, has held as follows:

“…                         ….                        ….

11. The following questions require consideration in the present case :

“1. Whether the Assistant Excise and Taxation Officer (Enf.) Gurugram was a ‘Proper Officer’ and was authorized to inspect and detain the vehicle which was carrying goods for inter-State transportation from Tamil Nadu to Delhi and was further authorized to pass an order under sections 129 and 130 of the GST Act, 2017 read with provisions of the IGST Act, 2017?

2. Whether the impugned order dated November 26, 2018 (annexure P-1) is liable to be quashed ?”

Question No.1

12. The appellate authority while passing the impugned order (annexure P-1) has dealt with a preliminary objection by discussing the history of new direct taxation regime including the applicability of IGST Act, 2017 for inter-State trade and commerce and held that in view of the provisions of section 4 of the IGST Act, 2017 and section 6 of the GST Act, 2017, the State authorities are empowered under the HGST Act, 2017 and they can also enforce the provisions of the CGST Act, 2017 and the IGST Act, 2017.

13. In the written statement, the respondents have taken a specific stand in a reply to para Nos. 32(xvi) and (xvii) that AETO (Enf.)-cum-proper officer of State Tax is duly empowered to check the goods and vehicle in inter-State transactions as per the provisions of section 6(1) of the CGST Act, 2017 and as per powers delegated under section 4 of the IGST Act, 2017. It has also been submitted in the written statement that cross-empowerment and delegation of powers to State Tax Officers appointed under MPGST Act has been upheld as per the decision dated August 27, 2018 by the High Court of Madhya Pradesh Bench at Indore in Writ Petition No. 16266/2018 in the matter of Advantage India Logistic Pvt. Ltd. v. Union of India.

14. We have considered the observations made by the appellate authority in view of the provisions of IGST Act, 2017, CGST Act, 2017, the Haryana Goods and Services Tax Act, 2017 (for short, “the HGST Act, 2017”) and the various notifications and orders made by the Government of India, Ministry of Finance.

15. The preamble of the IGST Act, 2017 clearly specify the applicability of the said Act provides for levy and collection of tax for inter-State supply of goods. The preamble reads as under :

“An Act to make a provision for levy and collection of tax on inter- State supply of goods or services or both by the Central Government and for matters connected therewith or incidental thereto.”

16. The CGST Act, 2017 makes provisions for levy and collection of the tax for intra-State supply of goods. The preamble of the said Act makes it clear which reads as follow:

“An Act to make a provision for levy and collection of tax on intra- State supply of goods or services or both by the Central Government and for matters connected therewith or incidental thereto”.

17. Section 20 of the IGST Act, 2017 provides that the provisions of CGST Act, 2017 relating to various matters including inspection, search, seizure and arrest, etc., are applicable to the IGST Act, 2017 subject to the provisions of CGST, 2017. The same reads as under:

“20. Application of provisions of Central Goods and Services Tax Act.–Subject to the provisions of this Act and the rules made thereunder, the provisions of Central Goods and Services Tax Act relating to,

(i) scope of supply ;

(ii) composite supply and mixed supply ;

(iii) time and value of supply ;

(iv) input-tax credit ;

(v) registration ;

(vi) tax invoice, credit and debit notes ;

(vii) accounts and records ;

(viii) returns, other than late fee ;

(ix) payment of tax ;

(x) tax deduction at source ;

(xi) collection of tax at source ;

(xii) assessment ;

(xiii) refunds ;

(xiv) audit ;

(xv) inspection, search, seizure and arrest ;

(xvi) demands and recovery ;

(xvii) liability to pay in certain cases ;

(xviii) advance ruling ;

(xix) appeals and revision ;

(xx) presumption as to documents ;

(xxi) offences and penalties ;

(xxii) job work ;

(xxiii) electronic commerce ;

(xxiv) transitional provisions ; and

(xxv) miscellaneous provisions including the provisions relating to the imposition of interest and penalty,

shall, mutatis mutandis, apply, so far as may be, in relation to integrated tax as they apply in relation to Central tax as if they are enacted under this Act :

Provided that in the case of tax deducted at source, the deductor shall deduct tax at the rate of two per cent. from the payment made or credited to the supplier :

Provided further that in the case of tax collected at source, the operator shall collect tax at such rate not exceeding two per cent., as may be notified on the recommendations of the Council, of the net value of taxable supplies :

Provided also that for the purposes of this Act, the value of a supply shall include any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act, and the Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier :

Provided also that in cases where the penalty is leviable under the Central Goods and Services Tax Act and the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, the penalty leviable under this Act shall be the sum total of the said penalties :

Provided also that where the appeal is to be filed before the appellate authority or the Appellate Tribunal, the maximum amount payable shall be fifty crore rupees and one hundred crore rupees respectively.”

18. Since the vehicle was transporting the goods inter-State, therefore, the provisions of the IGST Act, 2017 as well the provisions of the GST Act, 2017 in so far applicable in view of the provisions of section 20 of the IGST Act, are applicable to the facts of the present case. In view of the said enabling provisions under section 20 of the IGST Act, 2017, the provisions of Chapter XIV of the GST Act, 2017 which deals with inspection, search, seizure and arrest and power of inspection, search and seizure (section 67 and 68 of the CGST Act, 2017) are applicable to the inter-State supply of goods.

19. As per the provisions of section 4 of the IGST Act, 2017, the officers who are appointed under the State Goods and Services Tax Act or Union Territory Goods and Services Tax Act are authorized to be the proper officers in the process of the IGST Act, 2017. The said section is reproduced as under :

“4. Authorization of officers of State tax or Union territory tax as proper officer in certain circumstances.—Without prejudice to the provisions of this Act, the officers appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are authorized to be the proper officers for the purposes of this Act, subject to such exceptions and conditions as the Government shall, on the recommendations of the Council, by notification, specify.”

20. Apart from the enabling provisions under the IGST Act, 2017, the Commissioner of State Tax, Haryana had issued the order dated December 7, 2017 (annexure P-46) exercising the powers conferred under sub-section (1) of section 5 read with clause (91) of section 2 of the Haryana Goods and Services Tax Act, 2017 assigning the functions to be performed under the said Act by a Proper Officer. As per entry of Sl. Nos. 51, 52 and 53 of the said order, the Assistant Excise and Taxation Officer of State Tax has been assigned the functions to be performed under section 129(1) and (3) ; 129(6) ; and section 130 of the Haryana Goods and Services Tax Act, 2017. Sections 129 and 130 of the said Act is having the similar provisions as under the said sections of the IGST Act, 2017.

21. As such, in view of the enabling provisions of sections 20 and section 4 of the IGST Act ; as well as the order dated December 7, 2017 (annexure P-46) passed by the Excise and Taxation Commissioner, Haryana, assigning the functions to the proper officer under the Haryana Goods and Services Tax Act, 2017, we are of the considered opinion that the Assistant. Excise and Taxation Officer of State Tax is competent and authorized to exercise the powers under sections 129 and 130 of the IGST Act, 2017.

22. As such the first point for determination is accordingly, answered that the Assistant Excise and Taxation Officer of State Tax was authorized to Act as a proper officer and was having the authority to act under sections 129 and 130 of the IGST Act. The decision of the appellate authority in this regard requires no interference.

(Emphasis supplied)

19. A division bench of the High Court of Orissa, at Cuttack, interpreting Section 4 of the IGST in the case of NARAYAN SAHU VS. UNION OF INDIA AND OTHERS⁴, holds as follows: “

“…..           …..              …..

6. Provision in section 4 of IGST Act is cross authorization, inter alia, of officers of State Tax. Before us there is no dispute that there has been aforesaid notifications for appointment of proper officers and assignment of powers and duties to them as officers of State Tax. For purposes of the IGST Act, the empowering cross authorization provision says that inter alia, officers of State Tax are authorized to be proper officers for the purposes of that Act. The authorization is subject to such exceptions and conditions as the Government shall, on the recommendations of the Council, by notification specify. It is clear that there has been no notification limiting authority of cross authorized officers by way of exception or condition. In the circumstances, the appointment and powers of officers of State Tax, as proper officers will, under the cross authorization provision, empower them to correspondingly act under the IGST Act.”

(Emphasis supplied)

The division bench in the afore-quoted judgment holds that Section 4 of the IGST authorizes cross empowerment inter alia of the officers under the State Tax Act or the Central Tax Act.

20. A division bench of the High Court of Kerala in the case of PINNACLE VEHICLES AND SERVICES PRIVATE LIMITED v. JOINT COMMISSIONER⁵, has held as follows:

4. The learned Single Judge, who considered the writ petition at first instance, in his reference order dated 07.11.2024, expressed the following prima facie view in the matter:

“4. Having heard the learned counsel for the petitioner and the learned Senior Government Pleader, I am prima facie of the view that the petitioner has not made out any case for interference with Ext.P4 show cause notice on the ground that it is issued without jurisdiction on account of the fact that there is no notification issued under the provisions of Section 6(1) of the CGST Act empowering the officers of the State Goods and Services Tax Act to issue such a show cause notice. Section 6(1) of the CGST Act reads as follows:

Section 6. Authorisation of officers of State tax or Union territory tax as proper officer in certain circumstances.

(1) Without prejudice to the provisions of this Act, the officers appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are authorised to be the proper officers for the purposes of this Act, subject to such conditions as the Government shall, on the recommendations of the Council, by notification, specify.

(2) Subject to the conditions specified in the notification issued under sub-section (1),—

(a) where any proper officer issues an order under this Act, he shall also issue an order under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as authorised by the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as the case may be, under intimation to the jurisdictional officer of State tax or Union territory tax;

(b) where a proper officer under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter.

(3) Any proceedings for rectification, appeal and revision, wherever applicable, of any order passed by an officer appointed under this Act shall not lie before an officer appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act.

A reading of Section 6(1) of the CGST Act makes it clear that the officers appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are authorised to be proper officers for the purposes of the Act, subject to such conditions as the Government shall, on the recommendations of the Council, by notification, specify. Unaided by authority, a reading of the provision suggests to me that by virtue of the operation of the provision itself, the officers appointed under the State Goods and Services Tax Act are proper officers for the purposes of the Central Goods and Services Tax Act, and it is only when any restriction or condition has to be placed on the exercise of power by any officer appointed under the State Goods and Services Tax Act that a notification as contemplated by the provisions of Section 6(1) of the CGST Act has to be issued. Paragraph Nos. 2 to 3.3 of the letter issued by the GST Policy Wing of the Central Board of Indirect Taxes and Customs as F. No. CBEC-20/10/07/2019-GST dated 22-06-2020, reads thus:

“2. Issue raised in the reference is whether intelligence based enforcement actions initiated by the Central Tax officers against those taxpayers which are assigned to the State Tax administration gets covered under section 6(1) of the CGST Act and the corresponding provisions of the SGST/UTGST Acts or whether a specific notification is required to be issued for cross empowerment on the same lines as notification No. 39/2017-CT dated 13.10.2017 authorizing the State Officers for the purpose or refunds under section 54 and 55 of the CGST Act.

3.1. The issue has been examined in the light of relevant legal provisions under the CGST Act, 2017. It is observed that Section 6 of the CGST Act provides for cross empowerment of State Tax officers and Central Tax officers and reads as:— “6. (1) Without prejudice to the provisions of this Act, the officers appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are authorised to be the proper officers for the purposes-of this Act, Subject to such conditions as the Government shall, on the recommendations of the Council, by Notification specify.

3.2. Thus in terms of sub-section (1) of section 6 of the CGST Act and sub-section (1) of section 6 of the respective State GST Acts respective State Tax officers and the Central Tax officers respectively are authorised to be the proper officers for the purposes of respective Acts and no separate notification is required for exercising the said powers in this case by the Central Tax Officers under the provisions of the State GST Act. It is noteworthy in this context that the registered person in GST are registered under both the CGST Act and the respective SGST/UTGST Act.

3.3. The confusion seems to be arising from the fact that, the said sub-section provides for notification by the Government if such cross empowerment is to be subjected to conditions. It means that notification would be required only if any conditions are to be imposed. For example, Notification No. 39/2017-CT dated 13.10.2017 restricts powers of the State Tax officers for the purposes of refund and they have been specified as the proper officers only under section 54 and 55 of the CGST Act and not under rule 96 of the CGST Rules, 2017 (IGST Refund on exports). If no notification is issued to impose any condition, it means that the officers of State and Centre have been appointed as proper officer for all the purpose of the CGST Act and SGST Acts”.

While the opinion expressed in the communication referred to above does not deter this Court from taking a view different from the view expressed therein, as already noted, I am prima facie of the view that the opinion expressed in the said communication represents the true meaning of the provisions of Section 6(1) of the CGST Act. The Madras High Court in Tvl. Vardhan Infrastracture (Supra) held thus:

“61. Thus, Section 6(1) of the respective GST Enactments empowers Government to issue notification on the recommendation of GST Council for cross-empowerment. However, no notification has been issued except under Section 6(1) of the respective GST Enactments for the purpose of refund although officers from the Central GST and State GST are proper officers under the respective GST Enactments.

62. Since, no notifications have been issued for cross-empowerment with advise of GST Council, except for the purpose of refund of tax under Chapter-XI of the respective GST Enactments r/w Chapter X of the respective GST Rules, impugned proceedings are to be held without jurisdiction. Consequently, the impugned proceedings are liable to be interfered in these writ petitions.

63. Thus, if an assessee has been assigned administratively with the Central Authorities, pursuant to the decision taken by the GST Council as notified by Circular No. 01/2017 bearing Reference F. No. 166/Cross-Empowerment/GSTC/2017 dated 20.09.2017, the State Authorities have no jurisdiction to interfere with the assessment proceedings in absence of a corresponding Notification under Section 6 of the respective GST Enactments.

64. Similarly, if an assessee has been assigned to the State Authorities, pursuant to the decision taken by the GST Council as notified by Circular No. 01/2017 bearing Reference F. No. 166/Cross-Empowerment/GSTC/2017 dated 20.09.2017, the officers of the Central GST cannot interfere although they may have such intelligence regarding the alleged violation of the Acts and Rules by an assessee.

65. The manner in which the provisions have been designed are to ensure that there is no cross interference by the counterparts. Only exception provided is under Section 6 of the respective GST enactment. Therefore, in absence of a notification for cross-empowerment, the action taken by the respondents are without jurisdiction. Officers under the State or Central Tax Administration as the case may be cannot usurp the power of investigation or adjudication of an assessee who is not assigned to them.

66. Therefore, the proceedings initiated by the respondents so far against the respective petitioners by the Authorities other than the Authority to whom they have been assigned to are to be held as without jurisdiction. Therefore, the impugned proceedings warrants interference”.

Since the issue raised in this writ petition will affect several proceedings, and taking note of the view expressed by the Madras High Court in Tvl. Vardhan Infrastructure (Supra), which is contrary to the prima facie view that I have taken, I am of the opinion that this issue requires an authoritative pronouncement by a Division Bench of this Court.

The writ petition is, therefore, adjourned to be heard by a Division Bench. The Registry shall place the matter before the Division Bench, if necessary, after obtaining orders of Hon’ble the Chief Justice.”

5. We find ourselves in complete agreement with the prima facie view taken by the learned Judge [Justice Gopinath P.] in the reference order. The provisions of Section 6(1) of the CGST Act make it abundantly clear that the cross-empowerment of the Officers of the SGST/UTGST Department to function as proper officers under the CGST Act is through the legislative mandate under Section 6(1) of the CGST Act. It is a mandate and empowerment that is presently unqualified but expressly made subject to such conditions as the Government shall, on the recommendation of the Council, by notification, specify. In other words, while the statutory mandate at present is unqualified, it will be qualified in the event the Government specifies conditions for the exercise of power under the statutory mandate, pursuant to the recommendations of the Council. We cannot persuade ourselves to read the statutory mandate as one that does not presently bring about a cross-empowerment but merely envisages such a situation as and when a notification is issued at some time in the future.

6. We also find that the view taken by us accords with the view taken by a Division Bench of the Delhi High Court in Indo International Tobacco Ltd. v. Additional Director General, DGGI, [(2022) 97 GSTR 414 (Delhi)], where at paragraphs 56 to 62, it is held as follows:

“56. Sub-clause (1) of Section 6 of the CGST Act provides for the cross empowerment of the Officer appointed under the SGST Act or the UTGST Act as a ‘proper officer’ for the purpose of the CGST Act. We are informed that pari materia provisions of cross empowerment of the Central Tax Officer are contained in the various SGST Act(s).

57. Sub-section (2)(a) of Section 6 of the CGST Act provides that where a ‘proper officer’ issues an order under the CGST Act, he shall also issue an order under the SGST Act and the UTGST Act, as the case may be.

58. Sub-section 2(b) of Section 6 of the CGST Act further states that where the ‘proper officer’ under the SGST Act or the UTGST Act has initiated any proceedings on the subject matter, no proceedings shall be initiated by the ‘proper officer’ under the CGST Act on the same subject matter.

59. We are informed that similar provisions in the reverse are contained in the various SGST Act(s), with the State Tax Officer being required to pass an order under the CGST Act while passing an order under the SGST Act, and being prohibited from initiating any proceedings on the subject matter on which the Central Tax officer has already initiated some proceeding.

60. Section 6 of the CGST Act is clearly guided by the object of providing a common national market of goods and services and to eliminate the subjection of the taxpayers to multiple jurisdictions. It aims to provide protection to the taxpayers against being subjected to multiple agencies for the same set of transactions, at the same time empowering the Officers under the CGST Act or the SGST Act or the UTGST Act to pass a comprehensive order and take action, keeping in view and extending to the other Acts. There should, therefore, be only one order insofar as the tax entity is concerned.

61. To give effect to the above intent, Section 6(2)(b) of the CGST Act states that where the proper officer under the SGST Act or the UTGST Act has initiated any proceedings on a subject matter, the Central Tax Officer shall not initiate proceedings on the same subject matter. Clearly the intent being that as the State Tax Officer is empowered to pass an order even under the CGST Act, there is no occasion for the Central Tax Officer to initiate parallel proceedings on the same subject matter.

62. As stated hereinabove, Section 6 of the CGST Act is intended to give the effect of harmonious convergence of the States and the Union for the same event for taxation.”

The Special Leave Petition preferred against the said judgment has also been dismissed as withdrawn, as is evident from the order dated 07.11.2022 of the Supreme Court in SLP (C). No. 5434 of 2022.

Thus, we answer the reference by upholding the view taken by the learned Single Judge in the reference order for the reasons stated therein, as supplemented by the reasons in this judgment. Further, as we find that no other issue arises for consideration in the writ petition, we also deem it appropriate to dismiss the writ petition through this judgment. Needless to say, it will be open to the petitioner to pursue its statutory remedies against the show cause notice issued to it by raising all contentions available in law and thereafter getting the matter adjudicated in terms of the statutory provisions.”

(Emphasis supplied)

The matter was referred to the Division Bench by the learned single Judge and the Division Bench answering the reference, holds that Section 6(1) of the CGST cross empowers the officer of the State GST Act or Union Territory GST Act to function as the proper officers under the CGST. While so doing, the Division Bench considers the judgment of the High Court of Madras rendered in TVL VARDHAN supra, upon which, the learned counsel for petitioner has placed heavy reliance upon. The Division Bench takes a contrary view to VARDHAN and chooses to follow the judgment of the Division Bench of High Court of Delhi in case of INDO INTERNATIONAL TOBACCO LTD. V. ADDITIONAL DIRECTOR GENERAL reported in (2022) 97 GSTR 414 (Delhi).

21. On a blend of the enunciation of law by several division benches of different High Courts, what would unmistakably emerge is Section 4 of the IGST generates cross empowerment to become a proper officer, upon an officer who is appointed under Section 6 of the CGST or KGST. It is an admitted fact that the fourth respondent is declared to be the proper officer under Section 6 of the KGST and confers cross empowerment in terms of Section 4 of the IGST, which unequivocally mandates that the officer under Section 6 of the KGST would be the proper officer under Section 4 of the IGST and only an exception to the norm requires a separate notification by the Government of India, or not otherwise. The Government of India has not issued any notification carving out an exception declaring someone else to be the proper officer.

22. In that light, the mandate of Section 4 of the IGST runs and runs for all time to come. There is no substance in the submissions of the learned counsel for the petitioner that the fourth respondent is not a proper officer. Since the judgment was reserved only for the aforesaid determination, the DETERMINATION is as follows:

The fourth respondent who is an authorized officer under Section 6 of the KGST, is declared to be the proper officer under Section 4 of the IGST.

23. The issue now would be, whether the petition could be entertained before this Court or the petitioner should be left to avail the statutory remedy available under Section 107 of the KGST.

24. The matter was heard on the issue of whether the remedy of appeal would be available or otherwise, and reserved the matter on the said issue of availability of remedy under Section 107 of the KGST.

25. This Court had reserved the subject petition on 08-01-2025 to determine who would be the proper officer under Section 4 of the IGST. It was determined that the officer appointed under Section 6 of the KGST would be the proper officer under Section 4 of the IGST. Therefore, the jurisdiction, as aforesaid, was determined against the petitioner who had contended that an officer under Section 6 of the KGST, unless notified by the Government of India under IGST, would not become the proper officer, to initiate proceedings under the IGST. It was opined while disposing the petition that the petitioner could avail the remedy of filing an appeal before the Appellate Authority under Section 107 of the KGST.

26. The learned counsel for the petitioner submitted that there was no remedy of filing an appeal for the kind of order that is passed, as there is specific bar under the KGST. Therefore, appeal neither, under Section 107 of the KGST or Section 20 of the IGST was submitted to be unavailable to the petitioner. Therefore, the matter was heard on 24-02-2025 on the issue of whether appeal would be maintainable in the fact circumstance, before the Appellate Authority, and the following order was passed:

“This Court had reserved the matter only to answer the issue qua who would be the appropriate Officer under the IGST. The answer is that the Officer appointed under Section 6 of the KGST is held to be the appropriate Officer. Therefore the question of jurisdiction has gone against the petitioner. The issue now would be whether the petition would be entertainable or the petitioner should be relegated to avail of the statutory remedy of filing appeal before the appellate authority.

Learned counsel Shri Samir Gupta appearing for the petitioner submits that the appeal available under Section 20 of the IGST as an appeal against order passed under the IGST, the present order is passed not by an Officer who is the appropriate Officer under section 6 of the KGST. Therefore, the appeal should lie in fact under the KGST under Section 107 of the KGST. It is the submission of the learned counsel that appeals cannot be entertained which arise out of IGST. Therefore there is a quagmire as to who should be the appellate authority in the fact circumstance. He would seek to place reliance upon the interim order granted by the High Court of Judicature at Allahabad on the same lines interpreting Section 6 of the Uttar Pradesh GST which is in para material with the KGST. Therefore the matter requires an answer there as well.

Therefore, the matter is reserved for orders on this issue as well

The respondents are restrained from precipitating the matter till the next date of hearing.

List the matter on 03.03.2025.”

Therefore, the subject order is in continuation of the order dated 20-02-2025. To determine whether the remedy of appeal is available or otherwise, it becomes germane to notice certain provisions of the Act and the Rules. The Act and the Rules would be the CGST Act and Rules, the KGST Act and Rules, the IGST Act and Rules.

….

(4) “adjudicating authority” means any authority, appointed or authorised to pass any order or decision under this Act, but does not include the Central Board of Indirect Taxes and Customs, the Revisional Authority, the Authority for Advance Ruling, the Appellate Authority for Advance Ruling, [the National Appellate Authority for Advance Ruling, 5[the Appellate Authority, the Appellate Tribunal and the Authority referred to in sub-section (2) of Section 171;

…..

(8) “Appellate Authority” means an authority appointed or authorised to hear appeals as referred to in Section 107;

………..

(4) “adjudicating authority” means any authority, appointed or authorised to pass any order or decision under this Act, but does not include the Commissioner, Revisional Authority, the Authority for Advance Ruling, the Appellate Authority for Advance Ruling, the National Appellate Authority for Advance Ruling, the Appellate Authority, the Appellate Tribunal and the Authority referred to in sub-section (2) of Section 171;

(8) “Appellate Authority” means an authority appointed or authorised to hear appeals as referred to in Section 107;

(a) Principal Chief Commissioners of Central Tax or Principal Directors General of Central Tax,

(b) Chief Commissioners of Central Tax or Directors General of Central Tax,

(c) Principal Commissioners of Central Tax or Principal Additional Directors General of Central Tax,

(d) Commissioners of Central Tax or Additional Directors General of Central Tax,

(e) Additional Commissioners of Central Tax or Additional Directors of Central Tax,

(f) Joint Commissioners of Central Tax or Joint Directors of Central Tax,

(g) Deputy Commissioners of Central Tax or Deputy Directors of Central Tax,

(h) Assistant Commissioners of Central Tax or Assistant Directors of Central Tax, and

(i) any other class of officers as it

may deem fit:

Provided that the officers appointed under the Central Excise Act, 1944(1 of 1944.) shall be deemed to be the officers appointed under the provisions of this Act.

(e) Assistant Commissioners of State tax, and

(f) any other class of officers as it may deem fit:

Provided that, the officers appointed under the Karnataka Value Added Tax Act, 2003 (Karnataka Act 32 of 2004) shall be deemed to be the officers appointed under the provisions of this Act.

(2) Without prejudice to the provisions of sub-section (1), the Board may, by order, authorise any officer referred to in clauses (a) to (h) of Section 3 to appoint officers of central tax below the rank of Assistant Commissioner of central tax for the administration of this Act.

(2) The Commissioner shall have jurisdiction over the whole of the State and all other officers shall, subject to such conditions as may be specified, have jurisdiction over the whole of the State or over such local areas as the Commissioner may, by order, specify.

(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.

(2) An officer of State tax may exercise the powers and discharge the duties conferred or imposed under this Act on any other officer of State 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 State tax. 

(2) Subject to the conditions specified in the notification issued under sub-section (1),—

(a) where any proper officer issues an order under this Act, he shall also issue an order under the Central Goods and Services Tax Act, as authorised by the said Act under intimation to the jurisdictional officer of central tax;

(b) where a proper officer under the Central Goods and Services Tax Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter.

(6) No appeal shall be filed under sub-section (1), unless the appellant has paid—

(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and

(b) a sum equal to ten per cent of the remaining amount of tax in dispute arising from the said order, subject to a maximum of twenty crore rupees, in relation to which the appeal has been

filed:

Provided that no appeal shall be filed against an order under subsection (3) of Section 129, unless a sum equal to twenty-five per cent. of the penalty has been paid by the appellant.

(7) Where the appellant has paid the amount under sub-section (6), the recovery proceedings for the balance amount shall be deemed to be stayed.

(8) The Appellate Authority shall give an opportunity to the appellant of being heard.

(9) The Appellate Authority may, if sufficient cause is shown at any stage of hearing of an appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing:

Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.

(10) The Appellate Authority may, at the time of hearing of an appeal, allow an appellant to add any ground of appeal not specified in the grounds of appeal, if it is satisfied that the omission of that ground from the grounds of appeal was not wilful or unreasonable.

(11) The Appellate Authority shall, after making such further inquiry as may be necessary, pass such order, as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against but shall not refer the case back to the adjudicating authority that passed the said decision or order:

Provided that an order enhancing any fee or penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund or input tax credit shall not be passed unless the appellant has been given a reasonable opportunity of showing cause against the proposed order:

Provided further that where the Appellate Authority is of the opinion that any tax has not been paid or short-paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised, no order requiring the appellant to pay such tax or input tax credit shall be passed unless the appellant is given notice to show cause against the proposed order and the order is passed within the time limit specified under Section 73 or Section 74 or Section 74-A.

(12) The order of the Appellate Authority disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for suc h decision.

(13) The Appellate Authority shall, where it is possible to do so, hear and decide every appeal within a period of one year from the date on which it is filed:

Provided that where the issuance of order is stayed by an order of a court or Tribunal, the period of such stay shall be excluded in computing the period of one year.

(14) On disposal of the appeal, the Appellate Authority shall communicate the order passed by it to the appellant, respondent and to the adjudicating authority.

(15) A copy of the order passed by the Appellate Authority shall also be sent to the jurisdictional Commissioner or the authority designated by him in this behalf and the jurisdictional Commissioner of State tax or Commissioner of Union Territory Tax or an authority designated by him in this behalf.

(16) Every order passed under this section shall, subject to the provisions of Section 108 or Section 113 or Section 117 or Section 118 be final and binding on the parties.

(6) No appeal shall be filed under sub-section (1), unless the appellant has paid —

(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and

(b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order, subject to a maximum of twenty crore rupees, in relation to which the appeal has been

filed.

Provided that no appeal shall be filed against an order under sub-section (3) of Section 129, unless a sum equal to twenty five per cent. of the penalty has

been paid by the appellant.

(7) Where the appellant has paid the amount under sub-section (6), the recovery proceedings for the balance amount shall be deemed to be stayed.

(8) The Appellate Authority shall give an opportunity to the appellant of being heard.

(9) The Appellate Authority may, if sufficient cause is shown at any stage of hearing of an appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing:

Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.

(10) The Appellate Authority may, at the time of hearing of an appeal, allow an appellant to add any ground of appeal not specified in the grounds of appeal, if it is satisfied that the omission of that ground from the grounds of appeal was not wilful or unreasonable.

(11) The Appellate Authority shall, after making such further inquiry as may be necessary, pass such order, as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against but shall not refer the case back to the adjudicating

authority that passed the said decision or order:

Provided that an order enhancing any fee or penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund or input tax credit shall

not be passed unless the appellant has been given a reasonable opportunity of showing cause against the proposed order:

Provided further that where the Appellate Authority is of the opinion that any tax has not been paid or short-paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised, no order requiring the appellant to pay such tax or input tax credit shall be passed unless the appellant is given notice to show cause against the proposed order and the order is passed within the time limit specified under Section 73 or Section 74 or Section 74-A.

(12) The order of the Appellate Authority disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for such decision.

(13) The Appellate Authority shall, where it is possible to do so, hear and decide every appeal within a period of one year from the date on which it is filed:

Provided that where the issuance of order is stayed by an order of a court or Tribunal, the period of such stay shall be excluded in computing the period of one year.

(14) On disposal of the appeal, the Appellate Authority shall communicate the order passed by it to the appellant, respondent and to the adjudicating authority.

(15) A copy of the order passed by the Appellate Authority shall also be sent to the Commissioner or the authority designated by him in this behalf and the jurisdictional Commissioner of central tax or an authority designated by him in this behalf.

(16) Every order passed under this section shall, subject to the provisions of Section 108 or Section 113 or Section 117 or Section 118 be final and binding on the parties.

(a) an order of the Commissioner or other authority empowered to direct transfer of proceedings from one officer to another officer; or

(b) an order pertaining to the seizure or retention of books of account, register and other documents; or

(c) an order sanctioning prosecution under this Act; or

(d) an order passed under Section 80.

(a) an order of the Commissioner or other authority empowered to direct transfer of proceedings from one officer to another officer; or

(b) an order pertaining to the seizure or retention of books of account, register and other documents; or

(c) an order sanctioning prosecution under this Act; or

(d) an order passed under Section 80.

(i) supplies or receives any goods in contravention of any of the provisions of this Act or the rules made  hereunder with intent to evade payment of tax; or

(ii) does not account for any goods on which he is liable to pay tax under this Act; or

(iii) supplies any goods liable to tax under this Act without having applied for registration; or

(iv) contravenes any of the provisions of this Act or the rules made thereunder with intent to evade payment of tax; or

(v) uses any conveyance as a means of transport for carriage of goods in contravention of the provisions of this Act or the rules made thereunder unless the owner of the conveyance proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance, 

then, all such goods or conveyances shall be liable to confiscation and the person shall be liable to penalty under Section 122.

(2) Whenever confiscation of any goods or conveyance is authorised by this Act, the officer adjudging it shall give to the owner of the goods an option to pay in lieu of confiscation, such fine as the said officer thinks fit:

Provided that such fine leviable shall not exceed the market value of the goods confiscated, less the tax chargeable thereon:

Provided further that the aggregate of such fine and penalty leviable shall not be less than the penalty equal to hundred per cent of the tax payable on such goods:

Provided also that where any such conveyance is used for the carriage of the goods or passengers for hire, the owner of the conveyance shall be given an option to pay in lieu of the confiscation of the conveyance a fine equal to the tax payable on the goods being transported thereon.

(3) * * *

(4) No order for confiscation of goods or conveyance or for imposition of penalty shall be issued without giving the person an opportunity of being heard.

(5) Where any goods or conveyance are confiscated under this Act, the title of such goods or conveyance shall thereupon vest in the Government.

(6) The proper officer adjudging confiscation shall take and hold possession of the things confiscated and every officer of Police, on the requisition of such proper officer, shall assist him in taking and holding such possession.

(7) The proper officer may, after satisfying himself that the confiscated goods or conveyance are not required in any other proceedings under this Act and after giving reasonable time not exceeding three months to pay fine in lieu of confiscation, dispose of such goods or conveyance and deposit the sale proceeds thereof with the Government.

(i) supplies or receives any goods in contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of tax; or

(ii) does not account for any goods on which he is liable to pay tax under this Act; or

(iii) supplies any goods liable to tax under this Act without having applied for registration; or

(iv) contravenes any of the provisions of this Act or the rules made thereunder with intent to evade payment of tax; or

(v) uses any conveyance as a means of transport for carriage of goods in contravention of the provisions of this Act or the rules made thereunder unless the owner of the conveyance proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance, 

then, all such goods or conveyances shall be liable to confiscation and the person shall be liable to penalty under Section 122.

(2) Whenever confiscation of any goods or conveyance is authorised by this Act, the officer adjudging it shall give to the owner of the goods an option to pay in lieu of confiscation, such fine as the said officer thinks fit:

Provided that such fine leviable shall not exceed the market value of the goods confiscated, less the tax chargeable thereon:

Provided further that the aggregate of such fine and penalty leviable shall not be less than the penalty equal to hundred per cent. of the tax payable of such goods:

Provided also that where any such conveyance is used for the carriage of the goods or passengers for hire, the owner of the conveyance shall be given an option to pay in lieu of the confiscation of the conveyance a

fine equal to the tax payable on the goods being transported thereon.

(3) * * *

(4) No order for confiscation of goods or conveyance or for imposition of penalty shall be issued without giving the person an opportunity of being heard.

(5) Where any goods or conveyance are confiscated under this Act, the title of such goods or conveyance shall thereupon vest in the Government.

(6) The proper officer adjudging confiscation shall take and hold possession of the things confiscated and every officer of Police, on the requisition of such proper officer, shall assist him in taking and holding such possession.

(7) The proper officer may, after satisfying himself that the confiscated goods or conveyance are not required in any other proceedings under this Act and after giving reasonable time not exceeding three months to pay fine in lieu of confiscation, dispose of such goods or conveyance and deposit the sale proceeds thereof with the Government

Provided that an appeal to the Appellate Authority may be filed manually in FORM GST APL01, along with the relevant documents, only if—

(i) the Commissioner has so notified, or

(ii) the same cannot be filed electronically due to nonavailability of the decision or order to be appealed against on the common portal, and in such case, a provisional acknowledgement shall be issued to the appellant immediately.

(2) The grounds of appeal and the Form of verification as contained in Form GST APL-01 shall be signed in the manner specified in Rule 26.

(3) Where the decision or order appealed against is uploaded on the common portal, a final acknowledgment, indicating appeal number, shall be issued in FORM GST APL-02 by the Appellate Authority or an officer authorised by him in this behalf and the date of issue of the provisional acknowledgment shall be considered as the date of filing of appeal:

Provided that where the decision or order appealed against is not uploaded on the common portal, the appellant shall submit a self-certified copy of the said decision or order within a period of seven days from the date of filing of FORM GST APL-01 and a final acknowledgment, indicating appeal number, shall be issued in FORM GST APL-02 by the Appellate Authority or an officer authorised by him in this behalf, and the date of issue of the provisional acknowledgment shall be considered as the date of filing of appeal:

Provided further that where the said self-certified copy of the decision or order is not submitted within a period of seven days from the date of filing of FORM GST APL-01, the date of submission of such copy shall be considered as the date of filing of appeal.

Explanation.—For the provisions of this rule, the appeal shall be treated as filed only when the final acknowledgement, indicating the appeal number, is issued.

Explanation.—For the provisions of this rule, the appeal shall be treated as filed only when the final acknowledgement, indicating the appeal number is issued.

Provided that an appeal to the Appellate Authority may be filed manually in FORM GST APL03, along with the relevant documents, only if—

(i) the Commissioner has so notified, or

(ii) the same cannot be filed electronically due to nonavailability of the decision or order to be appealed against on the common portal, and in such case, a provisional acknowledgement shall be issued to the appellant immediately.

(2) Where the decision or order appealed against is uploaded on the common portal, a final acknowledgment, indicating appeal number, shall be issued in FORM GST APL-02 by the Appellate Authority or an officer authorised by him in this behalf and the date of issue of the provisional acknowledgment shall be considered as the date of filing of appeal under sub-rule (1):

Provided that where the decision or order appealed against is not uploaded on the common portal, the appellant shall submit a self-certified copy of the said decision or order within a period of seven days from the date of filing of FORM GST APL-03 and a final acknowledgment, indicating appeal number, shall be issued in FORM GST APL-02 by the Appellate Authority or an officer authorised by him in this behalf, and the date of issue of the provisional acknowledgment shall be considered as the date of filing of appeal:

Provided further that where the said self-certified copy of the decision or order is not submitted within a period of seven days from the date of filing of FORM GST APL-03, the date of submission of such copy shall be considered as the date of filing of appeal.

(2) A certified copy of the decision or order appealed against shall be submitted within seven days of the filing the application under sub-rule (1) and an appeal number shall be generated by the Appellate Authority or an officer authorised by him in this behalf.

(a) the Commissioner (Appeals) where such decision or order is passed by the Additional or Joint Commissioner;

(b) the Additional Commissioner (Appeals) where such decision or order is passed by the Deputy or Assistant Commissioner or Superintendent, within three months from the date on which the said decision or order is communicated to such person.

(2) An officer directed under subsection (2) of Section 107 to appeal against any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act may appeal to −

(a) the Commissioner (Appeals) where such decision or order is passed by the Additional or Joint Commissioner;

(b) the Additional Commissioner (Appeals) where such decision or order is passed by the Deputy or Assistant Commissioner or the Superintendent,

within six months from the date of communication of the said decision or order.

(a) the Additional Commissioner (Appeals) where such decision or order is passed by the Joint Commissioner;

(b) the Joint Commissioner (Appeals) where such decision or order is passed by the Deputy or Assistant Commissioner or Commercial Tax Officer within three months from the date on which the said decision or order is communicated to such person.

(2) An officer directed under sub-section (2) of Section 107 to appeal against any decision or order passed under this Act or the Central Goods and Services Tax Act may appeal to—

(a) the Additional Commissioner (Appeals) where such decision or order is passed by the Joint Commissioner;

(b) the Joint Commissioner (Appeals) where such decision or order is passed by the Deputy or Assistant Commissioner or Commercial Tax Officer within six months from the date of communication of the said decision or order.

(Emphasis supplied)

IGST Act, 2017

“20. Application of provisions of Central Goods and Services Tax Act.—Subject to the provisions of this Act and the rules made thereunder, the provisions of Central Goods and Services Tax Act relating to,—

(i) scope of supply;

(ii) composite supply and mixed supply;

(iii) time and value of supply;

(iv) input tax credit;

(v) registration;

(vi) tax invoice, credit and debit notes;

(vii) accounts and records;

(viii) returns, other than late fee;

(ix) payment of tax;

(x) tax deduction at source;

(xi) collection of tax at source;

(xii) assessment;

(xiii) refunds;

(xiv) audit;

(xv) inspection, search, seizure and arrest;

(xvi) demands and recovery;

(xvii) liability to pay in certain cases;

(xviii) advance ruling;

(xix) appeals and revision;

(xx) presumption as to documents;

(xxi) offences and penalties;

(xxii) job work;

(xxiii) electronic commerce;

(xxiv) transitional provisions; and

(xxv) miscellaneous provisions including the provisions relating to the imposition of interest and penalty,

shall, mutatis mutandis, apply, so far as may be, in relation to integrated tax as they apply in relation to central tax as if they are enacted under this Act:

Provided that in the case of tax deducted at source, the deductor shall deduct tax at the rate of two per cent. from the payment made or credited to the supplier:

Provided further that in the case of tax collected at source, the operator shall collect tax at such rate not exceeding two per cent, as may be notified on the recommendations of the Council, of the net value of taxable supplies:

Provided also that for the purposes of this Act, the value of a supply shall include any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act, and the Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier:

Provided also that in cases where the penalty is leviable under the Central Goods and Services Tax Act and the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, the penalty leviable under this Act shall be the sum total of the said penalties:

Provided also that a maximum amount of forty crore rupees shall be payable for each appeal to be filed before the Appellate Authority or the Appellate Tribunal.”

(Emphasis supplied)

IGST RULES, 2017

“2. Application of Central Goods and Services Tax Rules.— The Central Goods and Services Tax Rules, 2017, for carrying out the provisions specified in Section 20 of the Integrated Goods and Services Tax Act, 2017 shall, so far as may be, apply in relation to integrated tax as they apply in relation to central tax.”

27. While hearing a challenge to the confiscation order passed under Section 130 of the CGST, the Apex Court in the case of FALCON ENTERPRISES VS. STATE OF GUJARAT⁶ holds that such orders can only be challenged by way of an appeal under Section 107 of CGST. The Apex Court holds as follows:

“1.Being aggrieved by the order of confiscation of Goods and Demand of Tax, Fine and Penalty dated 31-8­2020 passed by the Government of Gujarat, State Tax Department, the Petitioner filed a writ petition which was not entertained on the ground that the order which was passed Under Section 130 of the Central Goods and Services Tax Act, 2017 (‘the CGST Act’) is appealable Under Section 107 of the CGST Act.

2. Meenakshi Arora, Learned Senior Counsel appearing for the Petitioner relies upon Rule 141 which proves that the seized goods may be released if the taxable person pays an amount equivalent to the market price of such goods or things or the amount of tax, interest and penalty that is or may become payable by the taxable person, whichever is lower.

3. Section 107(6) provides that an appeal shall not be entertained unless the Appellant pays the amount of tax, interest, fine, fee and penalty arising out of the impugned order in full, as is admitted by him, and a sum equivalent to 10% of the remaining amount of tax in dispute arising out of the said order. She contends that the appeal under Section 107 of the CGST Act is not an efficacious remedy. Section 107 of the CGST Act provides that an appeal lies against any decision or order passed by the adjudicating authority.

4. The Petitioner is at liberty to raise all issues before the appellate authority.

5. With the above observation, the special leave petition is disposed of. Pending application(s), if any, shall also stand disposed of.”

(Emphasis supplied)

28. Later, the Apex Court in the case of COMMR. OF STATE TAX V. COMMERCIAL STEEL LTD.⁷, while deciding the issue of maintainability of a writ petition challenging an order of detention passed under Section 129(3) of the CGST r/w Section 20 of the IGST, holds that the such orders should be challenged by way of the statutory remedy of appeal provided under Section 107 of CGST and the Writ Petition is only maintainable in certain circumstances mentioned below. The Apex Court holds as follows;

“9. Section 107 is extracted below:

“107. Appeals to appellate authority.—(1) Any person aggrieved by any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such appellate authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person.

(2) The Commissioner may, on his own motion, or upon request from the Commissioner of State tax or the Commissioner of Union territory tax, call for and examine the record of any proceedings in which an adjudicating authority has passed any decision or order under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, for the purpose of satisfying himself as to the legality or propriety of the said decision or order and may, by order, direct any officer subordinate to him to apply to the appellate authority within six months from the date of communication of the said decision or order for the determination of such points arising out of the said decision or order as may be specified by the Commissioner in his order.

(3) Where, in pursuance of an order under sub­section (2), the authorised officer makes an application to the appellate authority, such application shall be dealt with by the appellate authority as if it were an appeal made against the decision or order of the adjudicating authority and such authorised officer were an appellant and the provisions of this Act relating to appeals shall apply to such application.

(4) The appellate authority may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months or six months, as the case may be, allow it to be presented within a further period of one month.

(5) Every appeal under this section shall be in such form and shall be verified in such manner as may be prescribed.

(6) No appeal shall be filed under sub-section (1), unless the appellant has paid—

(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and

(b) a sum equal to ten per cent of the remaining amount of tax in dispute arising from the said order, subject to a maximum of twenty-five crore rupees, in relation to which the appeal has been filed:

Provided that no appeal shall be filed against an order under sub-section (3) of Section 129, unless a sum equal to twenty-five per cent of the penalty has been paid by the appellant.

(7) Where the appellant has paid the amount under sub-section (6), the recovery proceedings for the balance amount shall be deemed to be stayed.

(8) The appellate authority shall give an opportunity to the appellant of being heard.

(9) The appellate authority may, if sufficient cause is shown at any stage of hearing of an appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing:

Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.

(10) The appellate authority may, at the time of hearing of an appeal, allow an appellant to add any ground of appeal not specified in the grounds of appeal, if it is satisfied that the omission of that ground from the grounds of appeal was not wilful or unreasonable.

(11) The appellate authority shall, after making such further inquiry as may be necessary, pass such order, as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against but shall not refer the case back to the adjudicating authority that passed the said decision or order:

Provided that an order enhancing any fee or penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund or input tax credit shall not be passed unless the appellant has been given a reasonable opportunity of showing cause against the proposed order:

Provided further that where the appellate authority is of the opinion that any tax has not been paid or short-paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised, no order requiring the appellant to pay such tax or input tax credit shall be passed unless the appellant is given notice to show cause against the proposed order and the order is passed within the time-limit specified under Section 73 or Section 74.

(12) The order of the appellate authority disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for such decision.

(13) The appellate authority shall, where it is possible to do so, hear and decide every appeal within a period of one year from the date on which it is filed:

Provided that where the issuance of order is stayed by an order of a court or Tribunal, the period of such stay shall be excluded in computing the period of one year.

(14) On disposal of the appeal, the appellate authority shall communicate the order passed by it to the appellant, respondent and to the adjudicating authority.

(15) A copy of the order passed by the appellate authority shall also be sent to the jurisdictional Commissioner or the authority designated by him in this behalf and the jurisdictional Commissioner of State tax or Commissioner of Union Territory Tax or an authority designated by him in this behalf.

(16) Every order passed under this section shall, subject to the provisions of Section 108 or Section 113 or Section 117 or Section 118 be final and binding on the parties.”

10. The respondent had a statutory remedy under Section 107. Instead of availing of the remedy, the respondent instituted a petition under Article 226. The existence of an alternative remedy is not an absolute bar to the maintainability of a writ petition under Article 226 of the Constitution. But a writ petition can be entertained in exceptional circumstances where there is:

(i) a breach of fundamental rights;

(ii) a violation of the principles of natural justice;

(iii) an excess of jurisdiction; or

(iv) a challenge to the vires of the statute or delegated legislation.

11. In the present case, none of the above exceptions was established. There was, in fact, no violation of the principles of natural justice since a notice was served on the person in charge of the conveyance. In this backdrop, it was not appropriate for the High Court to entertain a writ petition. The assessment of facts would have to be carried out by the appellate authority. As a matter of fact, the High Court has while doing this exercise proceeded on the basis of surmises. However, since we are inclined to relegate the respondent to the pursuit of the alternate statutory remedy under Section 107, this Court makes no observation on the merits of the case of the respondent.

12. For the above reasons, we allow the appeal and set aside the impugned order [Commercial Steel Co. v. Commr. of State Tax, 2020 SCC OnLine TS 291] of the High Court. The writ petition filed by the respondent shall stand dismissed. However, this shall not preclude the respondent from taking recourse to appropriate remedies which are available in terms of Section 107 of the CGST Act to pursue the grievance in regard to the action which has been adopted by the State in the present case.

(Emphasis supplied)

29. The Division Bench of this Court in the case of KESAR FARM v. ADDL. COMMISSIONER⁸ , while upholding an order of a Singe Bench of this Court regarding availability of an appeal under section 107 of CGST, challenging an order under Section 129 of the KGST and CGST r/w Section 20 of the IGST, holds as follows:

“….  ….    ….

2. The appellant is the writ petitioner, who challenged the notice of tax and penalty under sub-Section (1)(b) of Section 129 of the Karnataka Goods and Services Act, 2017 and the Central Goods and Services Act, 2017 as well as Section 20 of the Integrated Goods and Service Tax Act, 2017. On the basis of the said notice, an order of demand has been issued on 15th October 2019. The learned Single Judge has declined to entertain the petition on the ground that an efficacious remedy of an appeal under Section 107 of the Central Goods and Services Act of 2017 (for short ‘the Central Act of 2017’) is available.

3. The submission of the learned counsel for appellant is that Sections 129 and 130 of the Central Act of 2017 start with a non obstante clause. Inviting our attention to sub-Section (6) of Section 107 of the Central Act of 2017, he submitted that obviously the remedy under Section 107 of the Central Act of 2017 will not be available. He pointed out various sub-Sections forming a part of Sections 129 and 130 of the Central Act of 2017.

4. Sub-Section (1) of Section 107 of the Central Act of 2017 provides that any person aggrieved by any decision or order passed under the Act or the State Goods and Services Act or the Union Territory Goods and Services Tax Act by an Adjudicating Authority may appeal to the Appellate Authority within the time specified therein. We fail to understand how the non obstante Clauses in both Sections 129 and 130 of the Central Act of 2017, will affect the remedy of an appeal under Section 107 of the Central Act of 2017, in any manner, in as much as, Section 107 of the Central Act of 2017, provides for an appeal against any decision or order. Section 121 of the Central Act of 2017, which starts with a non obstante clause provides that in certain category of cases, no appeal shall lie. The order subject matter of challenge before the learned Single Judge is not covered by Section 121. The submission of the learned counsel for appellant was that in Section 121 of the Central Act of 2017, there is a mistake and it should be read as if the provision is applicable only to a particular Chapter, in which the said provision is there.

5. However, it is not permissible for us to read something in Section 121 of the Central Act of 2017, which is not expressly provided by the Legislature.

6. We, therefore, concur with the view taken by the learned Single Judge that a remedy of an appeal under Section 107 of the Central Act of 2017 was available to the appellant. Hence, we find no merit in the appeal and the same is accordingly dismissed. Time granted by the learned Single Judge to prefer the appeal is extended by another four weeks from today. All contentions urged on merits of the appeal are not considered.”

(Emphasis supplied)

The Division Bench holds that the non-obstante clauses in Sections 129 and 130 of CGST will not affect the remedy of appeal under Section 107 of the CGST and Section 121 of the CGST does not specifically state that orders under Section 129 and 130 of the CGST are not appealable.

30. A co-ordinate bench of this Court in RAJALAKSHMI ENTERPRISES v. ADDITIONAL CHIEF SECRETARY TO GOVERNMENT FINANCE DEPARTMENT⁹, following the judgment of the Division Bench in the case of KESAR FARM supra holds that confiscation orders passed under Section 130 of the KGST Act and CGST Act r/w the IGST Act can only be challenged by way of an appeal under Section 107 of the CGST Act. The coordinate bench holds as follows:

“….  ….    ….

2. The Commercial Tax Officer (Enforcement)-16 South Zone, Bangalore by the impugned order has passed orders for confiscation of ‘Goods’ and ‘Conveyance’ under Section 130 of the Karnataka Goods and Services Tax Act, 2017 (For short, ‘KGST Act’) and the Central Goods and Services Tax Act, 2017 (For short, ‘CGST Act’) as well as Integrated Goods and Services Tax Act, 2017 (For short, ‘IGST Act’).The said officer has concluded that there is contravention of Sub-Sections (i) and (v) of the provisions of Section 130(1) of the KGST Act/CGST Act.

3. The learned Counsel for the petitioner submits that the petitioner’s transaction viz., purchase of arecanut from Kaduru, Chikkamagaluru District and transfer thereof to the recipient in Delhi is an inter-state transaction and in terms of Section 10 of the IGST Act, the State of Delhi would be the authority to collect taxes. The failure to produce e-way bill by the driver at the time of interception of the vehicle on Huliyal – Shira road enroute to Delhi is a bona fide error. In any event, the officer by the impugned order could not have levied tax, penalty or fine on the market value of the property.

4. Sri N.Hema Kumar, learned Additional Government Advocate submits that the petitioner has an alternative remedy under Section 107 of the CGST Act and the time within such alternative remedy could be availed has not expired. On the question whether an appeal could lie under Section 107 of the CGST Act, a Division Bench of this Court in Writ Appeal No.3974/2019 has affirmed that indeed such remedy would be available.

5. In the facts and circumstances of the case, and in the light of the enunciation by the Division Bench in W.A.No.3974/2019, this Court is of the considered view that the petitioner must avail the alternative remedy under Section 107 of the CGST Act. At this point of time, Sri Hema Kumar, learned Additional Government Advocate points out that the authorities have not taken any precipitous action because the appeal time has not lapsed. If this be so, it would be just and reasonable to dispose of this writ petition with liberty to the petitioner to avail alternative remedy under Section 107 of the CGST Act, while directing the authorities not to take precipitous action in the limitation period within which appropriate appeal could be filed by the petitioner.

(Emphasis supplied)

31. On a similar issue of non-availability of an appeal under Section 107 of the CGST, a co-ordinate Bench of this Court in the case of K.B. PROCESSING AND TRADING V. JOINT COMMISSIONER OF COMMERCIAL TAXES¹⁰, holds as follows:

“….    ….      ….

2. The petitioner is before this Court questioning the order at Annexure-A, dated 07.06.2023, passed by the 2nd respondent. The order is passed by the Authority under Section 130 of the Central Goods and Service Tax Act 2017 (‘CGST Act’ for short).

3. The learned counsel for the respondents raised a preliminary objection relating to the maintainability of the writ petition on the premise that the impugned order is appealable under Section 107 of CGST Act.

4. The learned counsel for the petitioner to substantiate his contention that writ petition is maintainable, urged the following contentions:

a. The Authority who passed the order under Section 130 of the CGST Act has no jurisdiction to pass the order under Section 130 of CGST Act as the conditions precedent to pass the order under Section 130 of CGST Act have not been met;

b. The Authority which passed the impugned order has no power to impose tax and the Authority imposing penalty equivalent to tax, could not have imposed the penalty as he had no authority to impose the tax without there being adjudication under Section 74 of the CGST Act;

c. The Officer who passed the impugned order claims to be the “proper officer” under the Act and claims that authority is duly assigned to him by the Commissioner. In such an event, the authority does not come under the definition of ‘Adjudicating Authority’ as defined under Section 2(4) of the KGST Act as the “Commissioner” is not an Adjudicating Authority under Section 2(4) of the KGST Act. Since the appeal is provided under Section 107 of the CGST Act, only against the order of an ‘Adjudicating Authority’, and as the Commissioner is not the adjudicating authority under Section 2(4) of the KGST Act, the appeal under Section 107 of the CGST Act is not maintainable.

5. This Court has considered the contentions raised at the bar.

6. As far as the jurisdiction of the officer under the KGST Act to take appropriate action in respect of goods which are supposed to be the goods coming under Integrated Goods and Services, the learned counsel for the respondent-revenue refers to Circular dated 22.06.2020. On perusal of the said circular, it is apparent that the officer under the State Goods and Service Tax Act is also empowered to exercise the power under the IGST Act. This being the position, the contention that the officer under the State Act has no jurisdiction to pass any orders in respect of the transaction covered under the IGST Act, has no merit.

7. The contention that penalty imposed under Section 130 of the CGST Act equivalent to the tax payable is one without jurisdiction, as the Authority under Section 74 of the CGST Act has not yet determined the tax, is concerned, same is not acceptable for the simple reason that proper officer under the CGST Act is enabled under the State Act to impose the penalty determined under Section 122 of the CGST Act.

8. Section 122 of CGST Act provides for imposing penalty of Rs.10,000/- or an amount equivalent to tax evaded and such other amount of tax specified in the said provision. If the Authority empowered to impose penalty equivalent to the tax evaded, then by necessary implication, it can be concluded that the Authority also has power to determine the tax. Thus, the contention that there is no authority for the proper officer exercising power under Section 130 of the CGST Act to impose penalty, cannot be accepted.

9. As far as the contention that appeal remedy is not available, it is to be noticed that definition of ‘Adjudicating Authority’ as defined in Section 2(4) of the KGST Act, cannot be made applicable to hold that the petitioner has no appeal remedy under Section 107 of CGST Act.

10. Section 2(4) of the CGST Act defines the term “Adjudicating Authority” and under the said definition, the Commissioner is not kept out of the purview of the definition of “Adjudicating Authority” as is done under the KGST Act.

11. The definition of “Adjudicating Authority” under the State Act, cannot be made applicable to the definition of “Adjudicating Authority” under Section 107 of the CGST Act as the expression Adjudicating Authority under the CGST Act is defined including the Commissioner as the Adjudicating Authority. To interpret the meaning of expression “Adjudicating Authority” found in Section 107 of CGST Act, one has to refer to the definition found in the very same Act and not any other Act, unless such prescription is found in the Act. No provision is pointed out to support the contention.

12. Thus, this Court is of the view that the petitioner has alternative remedy of appeal before the Appellate Authority. No exceptional case is made to entertain the writ petition despite alternative remedy being available. Accordingly writ petition is not entertained.”

(Emphasis supplied)

The coordinate bench holds that an officer under the State Goods and Service Tax Act is also an officer under the IGST and the Commissioner is not kept out of the purview of the definition of Adjudicating Authority under Section 2(4) of the CGST and therefore, an order under Section 130 of the CGST is appealable under Section 107 of the CGST.

32. In the case at hand, the order of confiscation is passed under Section 130 of the KGST supra, exercising power under the IGST. The issue with regard to jurisdiction is answered in favour of the Revenue holding that the Officer appointed under Section 6 of the KGST is a proper officer under Section 4 of the IGST. On the same reason, the appeal against an order of confiscation by an officer under Section 130 of the KGST would undoubtedly be maintainable under Section 107 of the KGST or Section 20 of the IGST, as the case would be.

33. In view of the preceding analysis, I hold that the petition before this Court is not entertainable, in the light of existence of an alternative statutory remedy of filing an appeal under Section 107 of the KGST r/w Section 20 of the IGST. Petitioner is granted 4 weeks time to file an appeal. In the event, the appeal is preferred within 4 weeks from the date of receipt of the copy of this order, the Appellate Authority shall consider the issue on its merit, without reference to limitation.

34. The petitioner is at liberty to prefer an application before the Appellate Authority seeking release of the confiscated material and if an application of the kind is filed before the Appellate Authority, the Appellate Authority shall decide the application within an outer limit of one(1) week from the date of its filing, in accordance with law, owing to the fact that the confiscated material is a perishable commodity – Areca nut.

35. Till the application of the petitioner is considered, the confiscated goods shall not be auctioned, it would be subject to the orders that would be passed by the Appellate Authority.

36. With the above observations and the liberty so granted to the petitioner, the petition stands disposed.

Ordered accordingly.

Notes:

¹ 2023 SCC OnLine P&H 3949

² (2018) 58 GSTR 247

³2023 SCC ONLINE P&H 4242

⁴ W.P.(C)28012/2024, disposed on 26.11.2024

⁵ 2025 SCC OnLine Ker 231

⁶ SLP (C) No. 6923 of 2021, decided on 01.06.2021

⁷ (2022)16 SCC 447

⁸ Writ Appeal No.3974 OF 2019, Dated 02.12.2019.

⁹ Writ Petition No. 12554/2020, Dated 13.11.2020.

¹⁰ Writ Petition No. 105711 of 2023, Decided on 08.12. 2023