Case Law Details
Gopal Samanta Vs Union of India & Ors. (Calcutta High Court)
In the case of Gopal Samanta vs. Union of India & Ors., the Calcutta High Court addressed the validity of notifications extending the time limit for tax recovery under Section 73(9) of the WBGST/CGST Act, 2017. The petitioner, represented by advocate Ray, challenged the notifications issued by the Central Board of Indirect Taxes and Customs on July 5, 2022, March 31, 2023, and December 28, 2023, arguing that they improperly extended the deadline for recovering unpaid taxes and wrongly availed input tax credits for the period February 2018 to March 2018. Ray contended that Section 168A, which permits extensions in special circumstances due to force majeure, did not apply as no force majeure conditions existed when the show cause cum demand notice was issued on September 1, 2023. The petitioner claimed the notifications and subsequent actions constituted a colorable exercise of power, infringing on their accrued rights, and sought a stay on the demand order dated December 26, 2023. The Court, acknowledging the jurisdictional issue and the prima facie case presented, decided to hear the writ petition and invited affidavits from the State GST authorities. Citing a similar case (OSL Exclusive Pvt. Ltd. vs. Union of India & Ors.), the Court granted an interim stay on the impugned demand until the end of December 2024 or further orders, providing time for the exchange of affidavits and further proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
1. Affidavits of service filed in Court today is retained with the record.
2. Ray, learned advocate appearing for the petitioner, by placing reliance on the notifications dated 5th July 2022, 31st March 2023 and 28th December 2023 submits that the Central Board of Indirect Taxes and Customs by the aforesaid notifications have extended the time limit as specified in Section 73(10) of the WBGST/CGST Act, 2017 (hereinafter referred to as the “said Act”) for issuance of the order under Section 73(9) of the said Act for recovery of tax not paid or short paid or of input tax credit wrongly availed or utilized, relating to the period as specified in the said notifications.
3. By referring to Section 168A of the said Act, the petitioner claims that the said section has been introduced with effect from 31st March, 2020, whereunder a power has been conferred on the government to extend the time limit prescribed or notified under the said Act in special circumstances in respect of actions which cannot be completed or complied with due to force majeure. By referring to the order dated 26th December 2023 it is submitted that the show cause cum demand notice under Section 73 of the said Act was issued on 1st September 2023 in respect of the tax period February 2018 to March 2018. Since, there was no force majeure prevailing then, the respondents could not have relied on the aforesaid notifications for extending the time for initiation of proceeding in September 2023. According to the petitioner the aforesaid notifications as also the aforesaid show cause notice and the adjudication order had been issued in colourable exercise of power. A valuable right has already accrued in favour of the petitioner. In such circumstances, Mr. Ray, prays for stay of operation of the aforesaid order and the consequential demand.
4. Banerjee, learned advocate appearing on behalf of the State GST authorities submits that the present writ petition cannot be decided without calling for affidavits. He submits that the respondents should be granted opportunity to file affidavit-in-opposition.
5. Having regard to the aforesaid and since a jurisdictional issue has been raised, the writ petition shall be heard. Let affidavit-in-opposition to the present writ petition be filed within a period of four weeks from date. Reply thereto, if any, be filed within three weeks thereafter.
6. Taking into consideration the fact that a prima facie case has been made out by the petitioner, and the fact that a Coordinate Bench of this Court by an order dated 13th February, 2024 in an identical matter in the case of OSL Exclusive Pvt. Ltd. v. Union of India & Ors., reported in 2024 SCC OnLine Cal 2826 had been pleased to pass a limited interim order, I propose to stay the impugned demand made in the order dated 26th December 2023 as appearing at annexure P-7 to the writ petition till the end of December, 2024 or until further order whichever is earlier.
Liberty to mention after expiry of the period for exchange of affidavits.
Author Bio
