Nikhil Gupta vs. Principal Additional Director General Dggi Gurugram Zonal Unit

Facts

The petitioner, Nikhil Gupta, filed a writ petition challenging an order passed under Section 83 of the Central Goods and Services Tax Act, 2017 (CGST Act) provisionally attaching his bank account and blocking his Electronic Credit Ledger (ECL). The impugned order was issued by the Principal Additional Director General, DGGI Gurugram Zonal Unit. The petitioner had filed objections under Rule 159(5) of the CGST Rules, but no order was passed thereon. The petitioner contended that the order was passed without jurisdiction as it was not issued by the Commissioner and lacked the necessary pre-condition of having reason to believe that such an order was necessary to protect government revenue.

Held

The Court found the petitioner's contention regarding the authority to pass the order to be unmerited. It clarified that the definition of 'Commissioner' under Section 2(24) of the CGST Act includes officers like the Principal Commissioner of central tax and Additional Directors General of Central Tax, as specified in Section 3(d) of the Act. The Court noted that Notification No. 14/2017 - Central Tax dated 01.07.2017 empowers the Principal Additional Director General of Goods and Services Tax Intelligence to exercise powers. Therefore, the impugned order, passed by the Principal Additional Director General, was deemed to be within the scope of authority. Regarding the 'reason to believe' for protecting revenue, the respondent stated it was on record. The Court, in light of these submissions, directed the Commissioner to decide the petitioner's objections expeditiously, within three weeks.

Key Issues

1. Whether the impugned order passed under Section 83(1) of the CGST Act is without jurisdiction as it was not passed by the 'Commissioner' as defined under the Act? (Question of law) 2. Whether the impugned order was passed without the necessary pre-condition of having reason to believe that such an order is necessary to protect the interest of the Government revenue? (Question of mixed law and fact) Petitioner's Arguments: The petitioner argued that only the 'Commissioner' can pass an order under Section 83(1) of the CGST Act, and the impugned order was not passed by the Commissioner, rendering it without jurisdiction. Furthermore, the petitioner contended that the order was issued without any reason to believe that it was necessary to protect government revenue, which is a mandatory pre-condition under Section 83(1). Respondent's Arguments: The respondent's counsel submitted that the 'reason to believe' is available on file and can be provided to the petitioner if necessary. The respondent also presented Notification No. 14/2017 - Central Tax dated 01.07.2017, which clarifies the authority of officers.