Jurisdiction of Mobile Squad Officers in Imposing CGST Penalties Explained

Jurisdiction of Mobile Squad Officers in Imposing Penalties under Section 129(3) of the CGST Act

This article examines whether a Mobile Squad Officer has the authority to issue a temporary registration ID in their state for imposing penalties under Section 129(3) of the CGST Act 2017 when the supplier, buyer, or transporter is registered in a different state.

Key Facts for Consideration

Supplier: Mr. “S” is registered in Haryana.
Buyer: Mr. “B” is registered in Rajasthan.
Transporter: Mr. “T” is registered in Madhya Pradesh.
Mobile Squad Officer: The officer is from Uttar Pradesh (UP).

Goods are being transported from Haryana to Rajasthan when the Mobile Squad Officer from UP intercepts the conveyance. During this inspection, a mistake on the invoice or e-way bill (e.g., an incorrect vehicle number) is identified. The officer, upon reviewing the documents, determines Mr. "S" is the rightful owner and imposes a penalty under Section 129(3) of the CGST Act 2017.

For the purpose of imposing this penalty, the Mobile Squad Officer generates a temporary ID, registers Mr. “S” in UP, and issues a notice to him under Section 129(1). Following Mr. "S's" response, the officer issues a formal order under Section 129(3), leading to Mr. "S" paying the penalty and the subsequent release of the goods and conveyance.

Question of Jurisdiction

Does the GST officer have the authority to create a temporary ID in UP solely to levy this penalty against Mr. “S”?

Relevant Legal Provisions

Section 25(8) of the CGST Act states:
- If a person required to register under this Act fails to do so, the proper officer may proceed to register them as necessary.
Sections 22 and 24 of the CGST Act outline the situations requiring registration:
- Section 22 mandates registration for individuals whose aggregate turnover exceeds a specified limit.
- Section 24 applies regardless of turnover for specified categories of persons.
Rule 16(1) - Suo Moto Registration states:
- During a survey, inspection, or other proceedings, if the proper officer identifies that an individual liable for registration has not registered, they may provisionally register that individual.

Given these provisions, we must consider whether Mr. ‘S’ failed to obtain registration as per the law. The response is no; Mr. ‘S’ holds a valid registration in Haryana as he is making taxable supplies from that state.

Analysis of Authority

Given that Mr. ‘S’ is not liable for registration in UP — he is duly registered in Haryana — the Mobile Squad Officer does not possess the necessary authority to issue a temporary registration ID in this circumstance. The provisions outlined in Section 25(8) and Rule 16(1) do not support using temporary registration for penalty collection under Section 129(3) of the CGST Act.

Furthermore, Rule 87(4) specifies that payments required by unregistered individuals must be made using a temporary identification number generated through the common portal. In this situation, since Mr. ‘S’ is registered, the Mobile Squad Officer’s action of creating a temporary ID for penalty payment would violate this rule.

Conclusion

In summary, when the supplier, buyer, or transporter is registered outside the Mobile Squad Officer's jurisdiction, the act of issuing a temporary ID solely for imposing a penalty under Section 129(3) of the CGST Act 2017 exceeds the officer’s lawful authority.

While the above analysis is presented for informational purposes, it is not intended as legal advice. Readers may form their own conclusions regarding the interpretations provided. Comments and discussions are welcomed.