M/S.Srinithi Enterprises PVT. LTD. vs. The State Tax Officer (Intelligence)

Facts

The petitioner, M/s. Srinithi Enterprises Private Limited, filed multiple writ petitions challenging assessment orders and rectification orders dated June 12, 2023, issued by the 1st Respondent, the State Tax Officer (Intelligence). The petitioner argued that the 1st Respondent lacked the authority to pass such orders, citing Circular No. 72/2019 and Circular No. 23/2021. Additionally, the petitioner contended that the revenue effect in dispute exceeded Rs. 2 Crores, a threshold that, according to a Circular dated November 8, 2022, vests jurisdiction solely with the Assistant Commissioner, not the State Tax Officer. The respondents, represented by the Special Government Pleader, argued that the assessment order was passed prior to the issuance of the relevant circulars. The Court suo motu impleaded the Assistant Commissioner of GST and Central Excise as the 2nd Respondent.

Held

The Court held that the impugned order is liable to be quashed based on the second contention regarding pecuniary jurisdiction. The Court found that the revenue effect in the present case exceeded Rs. 2 Crores, and according to the Circular dated November 8, 2022, only the Assistant Commissioner possesses the power to pass an assessment order in such circumstances. Therefore, the State Tax Officer lacked the necessary jurisdiction. While the Court acknowledged the petitioner's first ground regarding the State Tax Officer's authority based on other circulars, it found the pecuniary jurisdiction issue decisive. The Court directed that the matters be remitted back to the 2nd Respondent, the Assistant Commissioner, for fresh consideration and passing of orders within three months from the date of receipt of the order. The writ petitions were allowed with these directions.

Key Issues

1. Whether the 1st Respondent, the State Tax Officer (Intelligence), had the authority to pass the impugned assessment order, considering Circular No. 72/2019 and Circular No. 23/2021, which allegedly do not empower the State Tax Officer to pass assessment orders? The petitioner argued that these circulars divest the State Tax Officer of such power, thus violating principles of natural justice. The respondents contended that the assessment order predated the circulars. 2. Whether the impugned assessment order is liable to be quashed on grounds of pecuniary jurisdiction, as per the Circular dated November 8, 2022? The petitioner argued that the revenue effect exceeded Rs. 2 Crores, meaning only the Assistant Commissioner had jurisdiction, not the State Tax Officer. The respondents did not present a specific argument on this point.