Kerala HC: Separate Notification Not Required for Cross-Empowerment of State GST Officials

The Kerala High Court in a ruling securing a wide impact on distinct due cases (January 15) carried that held that separate notification is not needed for the cross-empowerment of State officials under the Goods and Services Tax Act.

A division bench forming Justice Dr AK Jayasankaran Nambiar and Justice S Easwaran gave this judgment while answering a reference made by a single bench.

The presumption opinion of the single bench (Justice P Gopinath) supported by the division bench that notification was not essential for cross-empowerment.

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It was noted by the division bench that the absence of a notification citing the conditions for the cross-empowerment is not directed that the State or Union Territory officials are not empowered to practice the powers under the GST act.

It mentioned that-

“The provisions of Section 6(1) of the CGST Act make it abundantly clear that the cross-empowerment of the Officers of the SGST/UTGST Department to function as proper officers under the CGST Act is through the legislative mandate under Section 6(1) of the CGST Act. It is a mandate and empowerment that is presently unqualified but expressly made subject to such conditions as the Government shall, on the recommendation of the Council, by notification, specify. In other words, while the statutory mandate at present is unqualified, it will be qualified in the event the Government specifies conditions for the exercise of power under the statutory mandate, pursuant to the recommendations of the Council. We cannot persuade ourselves to read the statutory mandate as one that does not presently bring about a cross-empowerment but merely envisages such a situation as and when a notification is issued at some time in the future.”

It was noted by the division bench that the identical view was stated by the Delhi High Court in Indo International Tobacco Ltd. and Ors. v. Additional Director General, DGGI and Ors. – [(2022) 97 GSTR 414 (Delhi)]. The Special Leave Petition submitted in the Supreme Court against the ruling of the Delhi High Court was withdrawn.

While making the reference the single bench disagreed with the opinion mentioned under the Madras High Court in Tvl. Vardhan Infrastructure v. Special Secretary, Head of the GST Council Secretariat that without a distinctive notification u/s 6(1) of the GST Act, the State authorities are not authorised to exercise the powers under the GST Act.

For the petitioner advocate Ammu Charles appeared.

For the Union. Special Govt Pleader Advocates S.Sreejith and J Vishnu appeared, and Mohammed Rafeeq appeared for the State.