SCOPE AND AMBIT OF THE TERM 'PROCEEDING' UNDER THE GST LAW

The term "proceeding" is nowhere defined in the CGST Act. In layman's terms the term "proceeding" simply means "steps or measures taken in course of an action for enforcing rights, law or regulation".

- PARTH GONDIA

INTRODUCTION

However, the term "proceedings" has been used in different contexts under different provisions in the GST law. The question whether the term "proceeding" includes "investigation", "inquiry", "audit" or any other steps prior to adjudication within its ambit remains unclear which has created a dispute between the interests of the taxpayers on one side and the revenue department on the other side.

Before determining the scope and ambit of the term "proceedings", the author first tries to highlight the provisions under the CGST Act where a conflict of interest has emerged between taxpayers and the revenue department due to a lack of clarity on the term "proceeding".

SECTION 83 OF THE CGST ACT: ISSUE OF PROVISIONAL ATTACHMENT OF PROPERTY DURING THE "PENDENCY OF PROCEEDINGS":

 Section 83 (as it stood before the amendment effective from 1st January 2022) of the Central Goods and Services Act (CGST Act) provided for provisional attachment of property of the taxpayer by the Commissioner. It is an extraordinary power that hampers the normal business activities of the taxpayers. However, according to the language of the section, such powers could be used only during the "pendency of the proceeding". Section 83 of the CGST Act brought a lot of litigation to the courts as the scope of the term "pendency of proceedings" was not clear. There was no clarity on when the proceeding commences and when exactly the commenced proceeding ends.