1. The petitioner challenges the vires of Section 6(1) of the Goods and Service Tax Act, 2017. The said provision reads as follows:-
“6. Authorisation of officers of State tax or Union territory tax as proper officer in certain circumstances.-(1). Without prejudice to the provisions of this Act, the officers appointed under the State Goods and Service Tax Act or the Union Territory Goods and Services Tax Act are authorised to be the proper officers for the purposes of this Act, subject to such conditions as the Government shall, on the recommendations of the Council, by notification, specify.”
2. Arguing that in this case the GST Council had delineated jurisdiction of the State and Central authorities by Notification dated 20.9.2017 (No.1 of 2017), it is submitted that the State authority lacks jurisdiction to investigate and bring to assessment any amounts having regard to the peculiar circumstances of the case.
3. The State’s arguments while resisting challenge to the proceedings initiated is that pursuant to the decision of the CST Council, the enquiry was only with respect to the enforcement action. As far as the components of claim towards the credit under the Central Sales Tax Act (CST) and State Value Added Tax (VAT) are concerned, it was submitted that having regard to the investigation and orders made pursuant to the TRAN-01 claims for credit under Section 140(3) of the GST Act, which was limited in character, even in terms of circular 1 of 2017, which the petitioner relies again by way of investigation and intelligence gathering is not precluded.
4. The basic ground on which Section 6 has been challenged is that Section 6(1) is arbitrary. It is contended that the provisions curtail and severely limit the rights to claim the input credit and transitional credit. In this regard, the learned Counsel also submitted that the show-cause notice in this case transgressed the provisions of law, especially Section 6 and 73.
5. This Court is of the opinion that challenge to the provisions i.e. Section 6(1), has not been made at all. The GST Act, which was enacted pursuant to 101st amendment to the Constitution, completely changed the tax structure in the country and unified the tax levied by the Centre and State for the first time, in terms of principles of taxation as well as the common provisions. The constitutional authority such as the Goods and Service Tax (GST) Council was created, to lay down the policy which are binding on all States and the Union, which are authorised to collect the levies under the GST. The Act also unifies levies, such as Central Excise Service Tax and State VAT enactments under one regime. Naturally, to cater to such a complex structure, common principles in the form of mechanism and authorities were deviced. It was in these circumstances that Section 6 was enacted, which enables such Officers appointed under the State Act and the Union Territories Act and also authorisied the proper Officers for the purpose- subject to certain conditions prescribed by the Central Government. Section 6(2)- much like Section 9(2) of the CST Act empowers the State Goods and Services Tax Act and the authorised Officers to act commonly on behalf of the Centre and the State having regard to the long standing statutory precedent in the form of Section 9(2). The formation of a mechanism convenient for the purpose of assessment and collection by Section 6(1) cannot be charactersied as per se arbitrary.
6. So far as the challenge to the circular and the show-cause notice is concerned, the Court is of the opinion that the circular merely works out the authorisation under Section 6(1). It is also a matter of policy. Furthermore, the Court was informed that assessment has been completed pursuant to the show-cause notice on 22.03.2019.
7. In these circumstances, it is not appropriate for the Court, to consider the validity or otherwise of the show-cause notice having regard to the fact that an alternative remedy by way of an appeal exists in favour of the petitioner. In case, if so advised, the petitioner prefers such an appeal, the same shall be decided on merits.
8. The writ petition is accordingly dismissed.