CBEC Circular Assigning Proper Officers Is Valid As Commissioner Forms Constituent Part Of Board
Issue
Whether Circular No. 3/3/2017-GST assigning functions to “proper officers” under Section 168(2) read with Section 2(91) of the CGST Act is unauthorized and invalid on the premise that such assignment powers belong exclusively to the “Commissioner in Board” rather than the Board itself.
Facts
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In an inquiry connected with M/s Midas Marketing Inc., the assessee was served with a summons under Section 70 of the CGST Act by a Superintendent/Appraiser/Senior Intelligence Officer.
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The officer issued the summons in reliance upon powers assigned under Circular No. 3/3/2017-GST dated 5-7-2017 issued by the Central Board of Excise and Customs (CBEC/CBIC).
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The assessee challenged the summons and the circular itself before the High Court, contending that the Board had no authority to assign functions to proper officers.
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The assessee argued under Section 168(2) read with Section 2(25) that the power to propose officer assignments rests exclusively with the “Commissioner in Board,” rendering the circular issued by the Board without authority of law.
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The High Court rejected the challenge, holding that the Commissioner is an integral constituent of the Board and that the circular is presumed to have been issued upon a proposal of the Commissioner in Board and approved by the Board under Section 168(2).
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The High Court permitted the assessee to appear before the competent officer on a specified date in compliance with the summons.
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Aggrieved by the High Court’s dismissal, the assessee preferred a Special Leave Petition (SLP) before the Supreme Court.
Decision
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The Supreme Court held that there was no good ground to interfere with the impugned judgment passed by the High Court.
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The Supreme Court dismissed the Special Leave Petition filed by the assessee.
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The ruling of the High Court affirming the statutory validity of CBEC Circular No. 3/3/2017-GST and the summons issued thereunder stands fully upheld.
Key Takeaways
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Presumption of Legality for CBIC Circulars: Subordinate administrative circulars carry a strong legal presumption of validity; the burden rests entirely on the challenger to prove lack of authority or procedural failure.
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Institutional Unity of Commissioner and Board: Since a “Commissioner in Board” is a constituent part of the Central Board, assignments of function issued under the Board’s name satisfy the requirements of Section 168(2) as being proposed by the Commissioner and approved by the Board.
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Jurisdictional Enforceability of Section 70 Summons: Officers designated under Circular No. 3/3/2017-GST possess valid statutory authority as “proper officers” to issue summonses and execute investigation proceedings.