Exercise of Delegation Powers by State Officers under Section 5(3) of the Act.

Case Title: Maa Geeta Traders v. Commissioner Commercial Tax

Court: High Court of Allahabad

Petition No.: WRIT TAX No. 760 of 2021

Category of Dispute: Input Tax Credit, Jurisdiction of Proper Officer under Section 74

Date of Judgment: 15 November 2021

Relevant Sections: Section 2(24), 2(91), 3, 4, 5, 6, and 74 of the U.P. Goods and Services Tax Act, 2017

Facts of the Case

1. The petitioner challenged an ex-parte adjudication order dated 07.08.2021 passed by the Deputy Commissioner under Section 74(9) of the U.P. GST Act for FY 2018–19, rejecting ITC claims of ₹2,92,500/- under both CGST and SGST and imposing penaltiesMaaGeetaTradersvsCommis….
2. The core grievance was that the Deputy Commissioner lacked jurisdiction as he was not a “proper officer” under the Act, and no valid delegation of powers existed under Section 5(3) from the Commissioner to himMaaGeetaTradersvsCommis….
3. The petitioner relied on Commissioner of Customs v. Sayed Ali and Canon India Pvt. Ltd. v. Commissioner of Customs, arguing that the lack of proper assignment rendered the order without jurisdictionMaaGeetaTradersvsCommis….

Question(s) in Consideration

1. Whether the Deputy Commissioner had inherent jurisdiction to issue notice and pass adjudication order under Section 74 of the U.P. GST Act.
2. Whether Office Orders issued by the Commissioner constituted a valid function assignment/sub-delegation as per Sections 4(2) and 5(3) read with Section 2(91) of the ActMaaGeetaTradersvsCommis….

Observation of Court

1. The Court held that the Deputy Commissioner, being an officer under Section 3, did have territorial jurisdiction and could act as “proper officer” if functions were validly assigned by the CommissionerMaaGeetaTradersvsCommis….
2. It found that the Office Orders dated 01.07.2017 and 19.11.2018, issued by the Commissioner, clearly assigned adjudication powers under Section 74 to officers including Deputy Commissioners, thereby satisfying the requirements of Sections 2(91) and 5(3)MaaGeetaTradersvsCommis….
3. The absence of a notification under Section 6 was held to be irrelevant as it applies only to central officers; for State tax officers, a simple administrative order sufficesMaaGeetaTradersvsCommis….
4. Reliance on Sayed Ali and Canon India was held misplaced as those cases dealt with central officers under the Customs Act, which operates differently from the U.P. GST Act in terms of delegation mechanismsMaaGeetaTradersvsCommis….

Judgment of the Court

The Court dismissed the writ petition, holding that there was valid sub-delegation of adjudication powers to the Deputy Commissioner under Section 5(3) through the Office Orders. Thus, the Deputy Commissioner was a “proper officer” under the Act and had jurisdiction to pass the impugned order. However, the petitioner was granted liberty to file an appeal before the appropriate forum within four weeksMaaGeetaTradersvsCommis….

Between Fine Lines

• The judgment confirms that officers under Section 3 of the Act can exercise adjudication powers if such functions are assigned via administrative orders by the Commissioner.
• It draws a clear distinction between officers of State tax and Central tax regarding delegation of authority.
• The decision clarifies that notification under Section 6 is required only for central officers, not for state officers.
• Reliance on Canon and Syed Ali was considered inapplicable as they were based on the Customs Act’s framework.
• Ultimately, administrative orders by the Commissioner sufficed to confer jurisdiction.

Summary of Referred Cases