Page 137 - GSTL_2nd April 2020_Vol 35_Part 1

2020 ] BHAWANI TEXTILES v. ADDITIONAL DIRECTOR GENERAL 39
“LETTER D.O.F. NO. CBEC/20/43/01/2017-GST(PT.)
CLARIFICATIONS ON AMBIGUITY REGARDING INITIATION OF
ENFORCEMENT ACTION BY CENTRAL TAX OFFICERS IN CASE OF
TAXPAYERS ASSIGNED TO STATE TAX AUTHORITY AND VICE VERSA
LETTER D.O.F. NO. CBEC/20/43/01/2017-GST(PT), DATED 5-10-2018
It has been brought to the notice of the Board that there is ambiguity re-
garding initiation of enforcement action by the Central tax officers in case of
taxpayer assigned to the State tax authority and vice versa.
2 In this regard, GST Council in its 9th meeting held on 16-1-2017 had dis-
cussed and made recommendations regarding administrative division of
taxpayers and concomitant issues. The recommendation in relation to cross-
empowerment of both tax authorities for enforcement of intelligence based
action is recorded at para 28 of Agenda note no. 3 in the minutes of the
meeting which reads as follows :-
“viii. Both the Central and State tax administrations shall have the
power to take intelligence based enforcement action in respect of
the entire value chain”.
3 It is accordingly clarified that the officers of both Central tax and State
tax are authorized to initiate intelligence based enforcement action on the
entire taxpayer’s base irrespective of the administrative assignment of the
taxpayer to any authority. The authority which initiates such action is em-
powered to complete the entire process of investigation, issuance of SCN,
adjudication, recovery, filing of appeal etc. arising out of such action.
4 In other words, if an officer of the Central tax authority initiates intelli-
gence based enforcement action against a taxpayer administratively as-
signed to State tax authority, the officers of Central tax authority would not
transfer the said case to its Sate tax counterpart and would themselves take
the case to its logical conclusions.
5 Similar position would remain in case of intelligence based enforcement
action initiated by officers of State tax authorities against a taxpayer admin-
istrative assigned to the Central tax authority.
6 It is also informed that GSTN is already making changes in the IT sys-
tem in this regard.”
6. Thus, it appears that by way of instructions, it is clarified that if an
officer of the Central tax authority initiates intelligence based enforcement action
against a taxpayer administratively assigned to the State tax authority, the offic-
ers of the Central tax authority would not transfer the said case to its State tax
counterpart and would themselves take the case to its logical conclusions. In the
case on hand, there is nothing on record to indicate that the officer of the Central
tax authority has transferred the case of the writ applicant to any other authority
of the State. However, it appears that although the action was undertaken under
Section 67 of the Act by the DGGI, AZU, yet the two summons came to be issued
: one by the Deputy Commissioner of State Tax and another by the DGGI, Surat.
7. We dispose of this writ application with a direction to the DGGI,
AZU, Ahmedabad to look into the matter and ensure that no undue harassment
is caused to the writ applicant by different authorities on the same subject matter.
We clarify that we have otherwise not expressed any opinion on the merits of the
case. We dispose of this writ application with the limited observations. Direct
service is permitted.
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GST LAW TIMES  2nd April 2020  201