Maa Geeta Traders v/s Commissioner Commercial Tax

In a recent legal proceeding, Ms. Pooja Talwar represented the petitioner, while Mr. Manu Ghildyal represented the revenue. The petition contested an ex-parte adjudication order issued on 07.08.2021 by the Deputy Commissioner of Commercial Tax, Sector-I, Shajahanpur, under section 74(9) of the U.P. Goods and Services Tax Act, 2017, concerning the tax period/Financial Year 2018-2019.

The crux of the petition centered on the alleged lack of inherent jurisdiction of the Deputy Commissioner to initiate proceedings and issue the impugned order under section 74 of the Act. The petitioner’s counsel argued that as per section 2(24) of the Act, the Commissioner, State Tax, holds jurisdiction over the entire state of Uttar Pradesh and is authorized to exercise all powers and functions under the Act. It was contended that other officers, including the Deputy Commissioner, do not possess the requisite jurisdiction to conduct proceedings or pass orders under section 74.

The petitioner’s challenge thus revolves around the interpretation of statutory provisions concerning jurisdictional authority within the framework of the U.P. Goods and Services Tax Act. Ms. Pooja Talwar emphasized the exclusive jurisdiction of the Commissioner, State Tax, and the purported lack thereof in the actions taken by the Deputy Commissioner. Conversely, Mr. Manu Ghildyal, representing the revenue, presumably defended the validity of the Deputy Commissioner’s actions, arguing for a broader interpretation of the statutory provisions or presenting alternative legal arguments to justify the adjudication order.

The outcome of this legal challenge will likely hinge on the court’s interpretation of the relevant provisions of the U.P. Goods and Services Tax Act and the precedents established in similar cases. Depending on the court’s ruling, it could potentially set a precedent regarding the distribution of jurisdictional authority among different officers under the Act, thus impacting future tax proceedings and adjudication orders within the state of Uttar Pradesh.

The Commissioner’s authority to initiate, continue, and conclude adjudication proceedings hinges upon a valid delegation of power under section 5(3) of the Act. It’s argued that the Deputy Commissioner, lacking such delegation, conducted adjudication proceedings without inherent jurisdiction. The absence of a notification authorizing the Deputy Commissioner as a “proper officer” under the Act further undermines his jurisdiction, as highlighted with reference to Commissioner of Customs Vs Sayed Ali and another, and M/s Canon India Private Limited vs Commissioner of Customs.

In response, the revenue’s counsel contends that section 5(3) of the Act doesn’t apply here since the Deputy Commissioner is listed under section 3 of the Act. Additionally, they point to office orders issued by the Commissioner, exercising powers under section 2(91) read with section 4(2) of the Act, to argue that the Deputy Commissioner’s function is duly authorized.

In the present case, a critical dispute revolves around the authority vested in the Deputy Commissioner to conduct adjudication proceedings under the relevant statute. It is contended that the Deputy Commissioner lacked inherent jurisdiction to initiate and conclude such proceedings due to the absence of a valid delegation of power under section 5(3) of the Act. This contention finds support in legal precedent, particularly two Supreme Court decisions: Commissioner of Customs Vs Sayed Ali and another (2011) and M/s Canon India Private Limited vs Commissioner of Customs (2021). These cases underscore the necessity of a valid delegation of power for an officer to act as a “proper officer” under the Act.

In response, the revenue’s counsel argues that section 5(3) does not apply in this instance, as the Deputy Commissioner falls within the category of officers specified under section 3 of the Act. Furthermore, it is asserted that the Deputy Commissioner’s authority as a “proper officer” was duly established through office orders issued by the Commissioner, exercising powers under section 2(91) of the Act read with section 4(2). These orders effectively assigned the necessary functions to the Deputy Commissioner, rendering their actions in the adjudication proceedings valid and lawful for the relevant tax period.

The court, after considering arguments from both sides and examining the record, notes that the impugned order disbelieves the inward supply received by the petitioner against specific invoices and rejects the Input Tax Credit (ITC) claim, consequently imposing penalties. Before delving into further analysis, the court deems it pertinent to highlight key definitions provided in the Act. Notably, the term “Commissioner” is defined under section 2(24), encompassing various positions within the tax administration hierarchy. Similarly, section 2(91) defines the term “proper officer,” establishing the regulatory framework for officials empowered to undertake enforcement actions under the Act.

In light of these provisions and the arguments presented, the court must ascertain the validity of the Deputy Commissioner’s actions in conducting the adjudication proceedings and rendering the impugned order. The resolution of this dispute hinges on the interpretation of statutory provisions, the scope of delegated authority, and the adherence to procedural requirements outlined in the Act.

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