The Vigilance & Enforcement Department has the authority to inspect premises of taxable traders and share relevant information with the Tax department. Impugned notices must have proper authorization by the Proper Officer.

ORDER :

U. DURGA PRASAD RAO, J.

W.P.No.6599/2023 and 6601/2023 are filed by the petitioner challenging the notices in Form GST ASMT-10 dated 28.02.2023 issued by 2nd respondent under Rule 99 of the A.P. Goods and Service Tax Rules, 2017 (for short, ‘the AGPST Rules’) r/w Section 61 of the A.P. Goods and Service Tax Act, 2017 (for short, ‘the AGPST Act) calling for explanation of the petitioner with regard to the discrepancies found in respect of the returns submitted by the petitioner for the tax period April 2019 to March 2020 and April 2020 to March 2021 respectively.

2. The petitioner is engaged in supply of iron and steel purchased from the resident registered taxable persons. The petitioner is a registered dealer under the APGST Act and an assessee on the file of 3rd respondent herein. While so, the petitioner submitted its returns for the taxable period April 2019 to March 2020 and April 2020 to March 2021. The 3rd respondent, on having received alert note vide R.C.No.158/C/2020 dated 21.12.2022 from the Regional Vigilance & Enforcement Officer/2nd respondent, scrutinized the aforesaid returns and found the suppression of sales turnover in the returns submitted by the petitioner for both the taxable periods and accordingly, issued notices of intimation dated 28.02.2023 regarding the discrepancies in Form GST ASMT-10 under Rule 99(1) of the AGPST Rules r/w Section 61 of the APGST Act and called for the payment of the due tax/explanation within fifteen days of the receipt of the notice.

Hence, the instant two writ petitions.

3. Heard Sri M.V.K.Murthy, learned Senior Counsel representing Sri M.V.J.K. Kumar, learned counsel for petitioner, and learned Government Pleader for Commercial Tax-II representing the respondents 1 & 3, and learned Government Pleader for Home representing 2nd respondent.

4. Vehemently remonstrating the impugned notices, learned Senior Counsel would firstly argue that there is no provision authorizing the Director of Vigilance & Enforcement in the State to conduct inspection of the business premises of a registered dealer under GST law. Therefore, the impugned notices issued by 3rd respondent on the strength of the alert note forwarded by 2nd respondent is a gross infraction of the GST law and on that ground alone the impugned notices are liable to be set aside as they are based on the unauthorized alert notes. He alternatively argued that even assuming for argument sake that the 2nd respondent has power to inspect the premises of the petitioner still he cannot himself forward any alert notes to the 3rd respondent for the reason that under Section 72 of the APGST Act, whenever the Chief Commissioner required the assistance of any public officers for implementation of the provisions of the APGST Act, he may call upon to do so and on his requisition the Government may by notification empower and require any class of officers other than the officers mentioned in sub-section (1) of Section 72 to assist the proper officers in implementation of the Act. Learned counsel while referring to Section 72 would strenuously argue, in the instant case there is no material to show that either the Chief Commissioner issued any requisition to the Government seeking assistance of the 2nd respondent being the Regional Vigilance & Enforcement Officer or the Government issued any notification to that effect. Therefore, the impugned notices fell foul of the canons of law.

(a) Secondly, learned Senior Counsel argued that Section 67 of the APGST Act is the relevant provision which enables a Proper officer not below the rank of Joint Commissioner or any officer authorized by him to inspect any place of business of the taxable person on the ground that he has suppressed any transaction relating to supply of goods or services or claimed Input Tax Credit in excess of his entitlement or indulged in contravention of any of the provisions of the Act or engaged in business of transporting goods or keeping the goods which escaped payment of t