Delta Corp Limited & Anr. Vs Union Of India & Ors. (Bombay High Court)
Introduction: In the legal battle of Delta Corp Limited & Anr. vs. Union Of India & Ors. before the Bombay High Court, the primary contention revolves around the validity of Rule 31A of the CGST Rules, 2017. The petitioners have also challenged a show cause notice dated 27.09.2023, primarily based on Rule 31A, Section 15(5) of the CGST Act, and related notifications and Circulars under the CGST Act.
Detailed Analysis: The petitioners, represented by prominent Senior Advocates, challenge the constitutionality of Rule 31A and the legality of the show cause notice. Their argument extends to questioning Section 15(5) of the CGST Act and several notifications and Circulars issued under the CGST Act and associated rules.
Notably, an order from the High Court of Sikkim admitting a similar challenge by Delta Corp Limited and Another against Union of India is brought to the Bombay High Court’s attention. This order adds weight to the ongoing legal battle.
The court has issued a Rule in these petitions, and respondents have waived service after the Rule. Additionally, because there is a challenge to Section 15(5) of the CGST Act, the learned Attorney General has been served notice.
The Senior Standing Counsel for the respondents proposes that the petitioners, without compromising their rights and contentions, may file a response to the show cause notice dated 27.09.2023. Furthermore, the respondents she represents commit not to pass any final orders on the show cause notice without the Court’s leave, a commitment accepted by the Court.
Mr. Salve, representing the petitioners, agrees to file a response to the show cause notice while preserving their rights and contentions. This response is expected by 15.12.2023.
The respondents commit to submitting their response to the Rule within six weeks, followed by any rejoinder from the petitioners within four weeks.
These matters are scheduled for final disposal on 05.02.2024 and are to be collectively considered by the Court.
Conclusion: The Bombay High Court has taken a significant step by restraining the GST department from taking any final action on the demand notices against Delta Corp Limited. The case involves critical legal challenges to the GST rules and regulations, setting the stage for a substantial legal precedent. The legal battle’s outcome will have implications for both the petitioners and the broader GST framework in India.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Heard Mr. Harish Salve, learned Senior Advocate who appears along with Mr. Harish Narasappa, learned Senior Advocate and Mr. Parag Rao, learned counsel for the Petitioners.
2. P. Faldessai, learned Deputy Solicitor General of India appears for Respondent No.1.
3. D. Pagnam, learned Advocate General appears along with Mr. N. Vernekar, Mr. Deep Shirodkar and Ms Maria Correia, learned Additional Government Advocates for Respondent no.2 in WP No. 715 of 2023 , 716 of 2023 and 717 of 2023 respectively.
4. Ms Asha Desai, learned Senior Standing Counsel appears for Respondent Nos.3 to 9.
5. The challenge in these petitions is to vires of Rule 31A of the CGST Rules, 2017. The Petitioners have also challenged the show cause notice dated 27.09.2023, which according to the Petitioners is based mainly on Rule 31A of the CGST Rules, 2017. There is also a challenge to Section 15(5) of the CGST Act and to certain notifications and Circulars issued under the CGST Act and Rules made thereunder.
6. Salve, learned Senior Advocate apart from making his submissions in support of the petitions has placed on record an order dated 20.10.2023 made by the High Court of Sikkim admitting a petition involving a similar challenge in the case of Delta Corp Limited and Another Vs Union of India and others in W.P.(C) No.41 of 2023.
7. Accordingly, we issue Rule in these petitions.
8. The learned counsel for the Respondents waive service after Rule.
9. Since there is a challenge to Section15(5) of the CGST Act, we also issue notice to the learned Attorney General.
10. Ms Desai, learned Senior Standing Counsel submits that the Petitioners without prejudice to their rights and contentions in these petitions may file response to the impugned show cause notice dated 27.09.2023. On instructions, she states that the Respondents whom she represents will not pass any final orders on the show cause notice without leave of this Court. This statement about not passing any final orders on the impugned show cause notice is accepted and the concerned Respondents will have to abide by the same.
11. Mr Salve states that the Petitioners will file a response to the impugned show cause notice without prejudice to their rights and contentions in these petitions by 15.12.2023.
12. Mr Faldessai and Ms Desai state that the response to the Rule would be filed within six weeks from today by serving advance copies on the learned counsel for the Petition Rejoinder, if any, to be filed within four weeks thereafter.
13. After the pleadings are complete, place these matters for final disposal on 05.02.2024. Place the matters high onboard subject to any overnight part-heard matters.
14. All these matters are to be considered together.
