Case Law Details
Abnco Vie Win Ent Private Limited Vs Union of India (Bombay High Court)
GST Demand Order Passed Despite Court Stay Set Aside; Challenge to Section 16(2)(c) on Vendor Tax Default Kept Open
The petitioner is a trader. It availed Input tax credit. A demand was confirmed on the ground that the supplier (vendor) had not paid tax. A show cause notice came to be issued. The validity of Section 16(2)(c) of the CGST was challenged in writ petition along with the show cause notice. The Hon’ble High Court stayed the show cause notice. Yet, an order came to be passed. The same was also impugned.
The Hon’ble Bombay High Court set aside the order and allowed the writ petition. It held: (i) the order was passed despite stay granted by the Court; (ii) the Revenue conceded that the State Tax officer was not aware of the stay and hence; proceeded to pass the order; (iii) accordingly; remands the matter back to the original adjudicating authority; (iv) following its decision in Lajawab Fabrics; keeps the challenge to the validity of section 16(2)(c) open.
Argued by Adv. Bharat Raichandani i/b UBR Legal
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. This Petition under Article 226 of the Constitution of India is filed praying for the following substantive reliefs :
(a) that this Hon’ble Court be pleased to issue a Writ of certiorari/ mandamus or any other appropriate Writ/ order/ direction under Article 226 or Article 227 of the Constitution of India calling for the records pertaining to the Petitioner case and after going into the validity and legality thereof to quash and set aside impugned Show cause notices dated 27.09.2023 to the extent challenged hereunder; Exhibit A
b) that this Honble Court be pleased to issue a Writ of certiorari/ mandamus or any other appropriate Writ/ order/ direction under Article 226 or Article 227 of the Constitution of India calling for the records pertaining to the Petitioner case and after going into the validity and legality thereof and hold that the impugned proceedings are completely biased and conducted in the pre-meditated manner;
(c) that this Hon’ble Court be pleased to issue a writ of mandamus or any other appropriate writ, order or direction under Article 226 of the Constitution of India ordering and directing the Respondent No. 4 by himself, his subordinates, servants and agents, pending disposal of the present petition, not to initiate recovery of input tax credit, interest and penalty, proposed to be denied vide impugned show cause notices dated 27.09.2023, from the Petitioner and stay the same thereof till the pendency of the present petition;
(d) that this Hon’ble Court be pleased to issue a Writ of certiorari/ mandamus or any other appropriate Writ/order/ direction under Article 226 or Article 227 of the Constitution of India calling for the records pertaining to the Petitioner case and after going into the validity and legality thereof to quash and set aside impugned show cause notice dated 27.09.2023 and the proceedings conducted prior to the issuance of the show cause notice, inter alia, on the count that the request for cross-examination has been brushed aside without assigning any reason;
(e) that this Hon’ble Court be pleased to issue a Writ of certiorari/ mandamus or any other appropriate Writ/order/ direction under Article 226 of the Constitution of India to declare impugned Section 16(2) (c) of the CGST Act and MGST Act as null, void, arbitrary and violative of Article 14 of the Constitution of India;
(f) that this Hon’ble Court be pleased to issue a Writ of certiorari/ mandamus or any other appropriate Writ/ order/ direction under Article 226 of the Constitution of India to declare impugned Section 16(2) (c) of the CGST Act and MGST Act as null, void, arbitrary and contrary to the provisions of Section 16(1) of the CGST and MGST Act; Exhibit A-2
(g) that this Hon’ble Court be pleased to issue a Writ of certiorari/ mandamus or any other appropriate Writ/order/ direction under Article 226 of the Constitution of India to declare impugned Section 16(2) (c) of the CGST certiorari/ mandamus or any other appropriate Writ/ order/ direction under Article 226 of the Constitution of India to declare impugned Section 16(2) (c) of the CGST Act and MGST Act as null, void, arbitrary and violative of principle of Lex Non Cogit Ad Impossibilia;
(h) that this Hon’ble Court be pleased to issue a Writ of Mandamus or any other appropriate Writ/ order/ direction under Article 226 of the Constitution of India to stay the operation of the impugned Section 16(2) (c) of the CGST Act and MGST Act till the pendency of the present petition;
2. We are informed that, although an interim order was passed on 18th December 2023 by a co-ordinate Bench of this Court (of which one of us, G.S. Kulkarni, J., was a member), the Designated Officer has inadvertently proceeded to adjudicate the show cause notice. According to the Petitioner, this amounts to a breach of the orders passed by this Court.
3. Ms. Jyoti Chavan, learned Additional Government Pleader, in these circumstances, submits that the order on the show cause notice dated 19th December 2023 came to be passed immediately on the next day after the adinterim order, as the concerned officer was not aware of the said order. On instructions she fairly submits that the order can be withdrawn. In view thereof, we permit the said order to be withdrawn. Accordingly, the order dated 19th December 2023 is quashed and set aside as withdrawn.
4. We are also of the opinion that, considering the orders passed by this Court on a batch of petitions in Lajwab Fabrics vs. Union of India & Ors. (WP No. 11423 of 2024), the issue regarding the challenge to the validity of Section 16(2)(c) of the CGST Act and MGST Act, 2017, needs to be expressly kept open.
5. Accordingly the show cause notice shall be adjudicated afresh in accordance with law, after granting an opportunity of hearing to the Petitioner. The proceedings pursuant to the show cause notice be concluded within a period of six weeks from today.
6. All contentions of the parties are expressly kept open.
7. The petition stands disposed of in the aforesaid terms. No order as to costs.
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