A division bench of the Andhra Pradesh High Court has held that the proceeding issued by Joint Commissioner authorizing the Assistant Commissioner (ST) to conduct inspection/search etc. of the premises of the petitioner is valid under section 71(1) of the Andhra Pradesh GST Act, 2017.
The petitioner, M/s.Bommineni Ramanjaneyulu was engaged in the business of works contracts and specialized in laying pipelines for water supply projects. The case of the petitioner was selected for Audit in accordance with Section 65 of CGST Act, by the Central GST Audit Circle, Nellore, covering the period July-2017 to March-2019 vide proceedings dated 17.08.2020. Pursuant to the same, the records were submitted with the authorities for finalization of the Audit proceedings.
The petitioner challenged the impugned authorization issued under Section 71(1) of the APGST Act to inspect the business premises of the petitioner, verify and check the transactions to safeguard the interest of the Revenue. The petitioners contended that the said impugned proceedings came to be issued basing on an information furnished by the second respondent.
After considering the arguments from both sides, Justice C. Praveen Kumar and Justice A.V. Ravindra Babu held that “A reading of Section 71(1) of the APGST Act, clearly demonstrate that any Officer under this Act, authorized by a Proper Officer not below the rank of Joint Commissioner shall have access to place of any business of registered person to inspect the books of accounts, documents ……… The Proper Officer referred to in Section 71(1) of the Act would mean the Chief Commissioner or the Officer of the State who is assigned that function by the Chief Commissioner as defined in Section 2(91) of APGST Act.”
“Serial 21 of the list, refers to Section 71(1), (2) & (2)(i) of the Act. In the column ‘Function’, it is shown as “to access business premises, inspect books of accounts, documents, etc for Audit, Scrutiny, Verification”. While in the column ‘Designation of Officer authorised’, it is mentioned as “JCST working in the divisions/Addl. CST/Commissioner ST working in the office of CCST entrusted with the enforcement activities”,” the Court observed.
Based on the above finding, the Court held that “From the above, it is very much evident that the Proper Officer for the functions referred to Section 71(1) of the Act, would be the three officers referred to in the column designation of officer authorized and one such Officer being Joint Commissioner (ST) working in the Division. In the instant case, as seen from the impugned proceedings, the authorization for access to business purpose under Section 71(1) of APGST Act was issued by Joint Commissioner (ST). Hence, the argument though appeared to be impressive at the first stage, but on a close perusal of the Notification issued, proved to be incorrect.”
“Therefore, the authorization given by the Joint Commissioner pursuant to the Gazette Notification issued by the Chief Commissioner authorizing certain categories of persons cannot be found fault with. It is also to be noted here that the authorization by the Chief Commissioner came to be issued in terms of Section 2(91) of the Act which categorically states that the “Proper Officer” would mean not only the Chief Commissioner but also Officer of the State Tax, who is assigned that function by the Chief Commissioner,” the Court said.
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