Case Law Details
Saru Silver Alloys Pvt Ltd Vs Union of India and 7 others (Allahabad High Court)
Rule 96(10) of CGST Rules, 2017, albeit prospectively, has been omitted and (iii) review petition has been allowed by Gujarat High Court in Cosmo Films case.
We share the recent order passed by the Hon’ble Allahabad High Court.
The petitioner is an exporter. It imported duty free raw material under Advance authorisation in terms of Notification No.79. It exported final products on payment of IGST. It claimed refund and it was sanctioned. Recovery was sought to be undertaken alleging violation of Rule 96(10) of the CGST Rules, 2017. Demand was confirmed. The petitioner applied for rectification. The same was rejected relying upon decision of Gujarat High Court in Cosmo Films. Hence, writ petition came to be filed challenging the legality and constitutional validity of Rule 96(10).
The Hon’ble Allahabad High Court issue notice and grants stay on recovery pursuant to order confirming demand and rectification. It notes the contention that:
(i) Kerala High court has already struck down the impugned Rule 96(10);
(ii) the rule, albeit prospectively, has been omitted and
(iii) review petition has been allowed by Gujarat High Court in Cosmo Films case.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. It is, inter alia, submitted by counsel for the petitioner that the provisions of Rule 96 (10) of the CGST Rules, 2017, based on which the order impugned has been passed, has been struck down by the Kerala High Court in M/s. Sance Laboratories Private Limited Vs. Union of India & Ors. 2024 SCC OnLine Ker 6334. Further submissions have been made that the authority has relied on the judgment of Gujarat High Court in Cosmo Films Vs. Union of India & Ors. 2020 (43) GSTL 577, which judgment has subsequently been reviewed by order dated 19.09.2024.
2. Submissions have also been made that the Central Government itself though prospectively by notification dated 08.10.2024 has amended Rule 86 (4B) (b) wherein the provision ‘in contravention of sub-rule (10) of Rule 96’ has been omitted.
3. In view of the submissions made, issue notice.
4. Counter affidavit to the petition be filed within a period of six weeks. Rejoinder affidavit, if any, be filed within a period of two weeks thereafter.
5. In the meanwhile and till further orders, the recovery pursuant to order in original dated 16.04.2024 (Annexure-4) as rectified by order dated 12.06.2024, shall remain stayed.
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