The Jaipur Bench of Rajasthan High Court while dismissing a writ petition challenging the show cause notice held that Directorate General of GST Intelligence (DGGI) is empowered on PAN India Basis to issue show cause notice (SCN).
The bench of Justice Avneesh Jhingan and Justice Ashutosh Kumar has observed that multiple searches were conducted by the DGGI at different locations to unearth the availment of the fake ITC at the instance of fake invoices without actual delivery of goods and the DGGI being the Central Tax Authority has been empowered on PAN India basis to make investigations and to issue Show cause notices by the Board on intelligence based enforcement actions; as such, the SCN so issued by the DGGI is not lacked jurisdiction.
The petitioner/assessee alleged in writ petition that it has been assigned for the administrative purposes to the counterpart State tax authorities while the SCN has been issued by the DGGI which is a Central tax Authority, and as such, lacks jurisdiction to issue the SCN.
The petitioner contended that the allocation of the petitioner is of the State jurisdiction. The Deputy Director of DGGSTI cannot be an Adjudicating Authority. Reliance was placed upon Section 6(1) of the Act of 2017.
The department contended that as a result of the intelligence input received, investigation and the searches carried out, it was found that the petitioner is indulging in generating fake Input Tax Credits (ITC) by doing cash transactions and relying upon the fake invoices issued. As per the circular dated 09.02.2018 the Central Tax Officers of Audit Commissionerates and DGGSTI shall have power to issue show cause notice.
The court held that for determining the contention that DGGSTI cannot be adjudicating authority the writ is premature and is dismissed accordingly.
Read More: Delhi High Court Stays Proceedings Under Show Cause Notice Issued By GST Anti-Evasion Wing
Case Details
Case Title: Baba Minerals Versus UOI
Case No.: WP No. 14894/2024
Date: 22/11/2024
Counsel For Petitioner: Ravi Gupta
Counsel For Respondent: Naresh Gupta, Senior Standing Counsel for DGGSTI
