DGGI has no special power over state GST officials: Jharkhand HC

NEW DELHI: The Jharkhand High Court has ruled that the Directorate General of Goods and Services Tax Intelligence (DGGI) does not enjoy any special power or privilege compared to the officers of the state GST authorities, if they are investigating the same taxpayer for the same offence.

Justices Rongon Mukhopadhyay and Deepak Roshan came down heavily on the DGGI, saying the agency cannot use attachment of bank account as "arm twisting method" to make the petitioner succumb to the particular authority.

"Prior to any determination or finding of any irregular or inadmissible availment of input tax credit, attachment of bank account of the petitioner appears to be an 'arm twisting method' to make the petitioner succumb to the particular authority, which cannot be the dictum of the Act," the court said in a ruling on January 15.


The court was hearing a petition, filed by Vivek Narsaria, proprietor of Ranchi-based Manish Trading Company, regarding an alleged tax evasion which was being probed by the DGGI, central GST officials and state GST officials, and even though the state GST authorities had concluded their probe, the DGGI froze seven bank accounts of the entity concerned. The court directed the DGGI and central GST officials to hand over the investigation proceedings carried out against the petitioner to state GST officers and to defreeze the bank account of the petitioner.

"The officers of the DGGI do not enjoy any special power or privilege in comparison with the officers of the state GST authorities," the court ruled.

The ruling may have larger implications for cases where taxpayers are being investigated by both state and central GST authorities and the DGGI.

The petitioner had moved the court after he received notices from several authorities. The petitioner had sought a declaration that the authority which had initiated the proceedings would be the only authority to carry out the proceedings.