Koenig Solutions Private Limited vs. Union Of INDIA & Ors.

Held

The Court noted that the Respondents had withdrawn and closed the inquiry proceedings initiated against the Petitioner via the impugned summons dated March 30, 2021. The Respondents' counsel submitted an affidavit confirming this withdrawal, stating that the State GST authority had confirmed the deposition of the amount in dispute. The Petitioner, however, insisted that the issue of jurisdiction of Central Tax Officers over them, based on GST Council decisions and Circular No. 01/2017, must be decided. The Court, considering that the impugned summons and inquiry had been withdrawn, was of the view that the issue sought to be adjudicated could not be decided in a vacuum. Consequently, the writ petition and application were disposed of, leaving the question of law regarding the jurisdiction of Central Tax Officers open to be decided in the event of any fresh proceedings or issuance of summons by the Central Tax Officers to the Petitioner.

Facts

The Petitioner, Koenig Solutions Private Limited, filed a writ petition challenging the jurisdiction of Central Tax Officers (Respondents No. 2 and 3) to initiate inquiry proceedings and issue a summons dated March 30, 2021. The Petitioner contended that jurisdiction had been assigned to State Tax Officers based on GST Council decisions and Circular No. 01/2017. The impugned summons sought recovery of Rs. 20,94,361/- for additional liability declared in GSTR-9C but not disclosed in GST returns. The Respondents, through their counsel, informed the Court that the inquiry proceedings initiated by the impugned summons had been withdrawn and closed, as confirmed by the State GST authority that the dues had been discharged. This withdrawal was communicated to the Petitioner via a letter dated May 20, 2021.

Key Issues

1. Whether Central Tax Officers (Respondents No. 2 and 3) have jurisdiction over the Petitioner, considering the decisions of the GST Council vide Circular No. 01/2017 dated September 20, 2017, which allegedly assigned jurisdiction to State Tax Officers? (Question of law) 2. Whether Central Tax Officers are barred from exercising powers under Section 6(2)(b) of the Central Goods and Services Tax Act, 2017, given that powers have already been exercised by a State GST Officer? (Question of law) 3. Whether the proceedings/inquiry initiated by the Respondents, including the summons dated March 30, 2021, are arbitrary, illegal, without jurisdiction, and motivated, and thus liable to be quashed? (Question of mixed law and fact) Petitioner's Arguments: The Petitioner argued that Central Tax Officers lacked jurisdiction based on GST Council decisions and Circular No. 01/2017. They further contended that Section 6(2)(b) of the CGST Act barred the Central Tax Officers from proceeding as State GST officers had already exercised powers. The Petitioner also asserted that the inquiry and summons were illegal, arbitrary, and motivated. Revenue's Arguments: The Revenue stated that the inquiry proceedings initiated by the impugned summons dated March 30, 2021, had been withdrawn and closed. They provided an affidavit confirming this withdrawal after receiving confirmation from the State GST authority regarding the deposition of the amount.