M/S. Indo International Tobacco LTD. vs. Shri Vivek Prasad, Additional Director General, Dggi & Ors.

Held

The Court held that the Circular dated 05.10.2018 was not applicable to the facts of the present writ petitions. The Court reasoned that the DGGI, AZU, possesses pan-India jurisdiction and that there is no prohibition in the CGST Act or SGST Act against the transfer of investigations to the DGGI for consolidation, especially when common threads are found across different investigations. The Court found that Section 6(2)(b) of the CGST Act had limited application and was not relevant to the present petitions. The Court also distinguished the Gujarat High Court judgment in Bhawani Textile (supra), noting that it did not express an opinion on the merits of the case and was factually different. The Court further clarified that while a 'proper officer' with limited territorial jurisdiction must act within their limits, situations may arise where investigations necessitate actions beyond territorial boundaries, and the transfer of such investigations would depend on the facts of each case. The Court found no merit in the writ petitions.

Facts

The petitioners, M/s. Indo International Tobacco Ltd. and M/s. SSM Exports, filed writ petitions challenging multiple search operations and summons issued by various GST authorities, including CGST Commissionerates and the Directorate General of Goods and Services Tax Intelligence (DGGI). The petitioners alleged harassment due to repeated actions by different agencies. In one case, a refund claim for February 2020 was challenged, and the petitioner's bank account was provisionally attached. The DGGI, with pan-India jurisdiction, took over the investigations, consolidating them under one umbrella. The petitioners relied on a Circular dated 05.10.2018, which they contended governed inter-agency investigations. The respondents argued that the DGGI had the authority to conduct investigations and that the transfer of investigations was permissible under the CGST Act.

Key Issues

1. Whether the Circular dated 05.10.2018, issued by the Central Board of Excise and Customs, is applicable to the facts of the present writ petitions, thereby restricting the jurisdiction of the DGGI in conducting investigations and consolidating them under its purview? (Question of law) 2. Whether the transfer of investigations from various jurisdictional CGST Commissionerates to the DGGI, AZU, is permissible under the CGST Act and SGST Act, and whether the DGGI, AZU, possesses the necessary jurisdiction to conduct such investigations? Petitioner's arguments: The petitioners contended that the Circular dated 05.10.2018 mandated that intelligence-based enforcement actions initiated by one authority should not be transferred to another, and that the multiple searches and summons constituted harassment. They relied on the said Circular and the Gujarat High Court judgment in Bhawani Textile (supra). Respondents' arguments: The respondents argued that the DGGI, AZU, has pan-India jurisdiction and that there is no prohibition in the CGST Act or SGST Act against the transfer of investigations to the DGGI. They asserted that the Circular dated 05.10.2018 was not applicable to the facts of the case and that the transfer of investigations was for consolidation and efficient handling of common threads found in the inquiries.