Case Law Details
Apar Fragrances Vs Union of India (Rajasthan High Court)
In a recent case before the Rajasthan High Court, Apar Fragrances has raised significant concerns regarding the Goods and Services Tax (GST) recovery process in a dispute with the Union of India. The court’s intervention sheds light on critical issues within the GST framework.
The petitioner’s counsel argued that the order dated 16th August 2023, issued by the authority (Annexure – 10), failed to consider the petitioner’s assertion of having made payments to the supplier through a banking channel. It was emphasized that the authority primarily relied on form GSTR – 2A of the supplier, neglecting the petitioner’s plea.
Drawing parallels to a similar case, MAT 1218/2023: Suncraft Energy Private Limited & Anr. Vs. The Assistant Commissioner, State Tax Ballygunge Charge & Ors., decided on 2nd August 2023, in the Calcutta High Court, the petitioner’s counsel argued that certain norms must be followed before passing such orders. The Calcutta High Court, in the aforementioned case, highlighted the necessity for establishing facts about missing dealers, closure of business by the supplier, or the supplier lacking adequate assets.
While the respondents’ counsel suggested that the petitioner should pursue alternative remedies, such as appealing against the impugned order, the court found merit in the petitioner’s submissions.
After careful consideration of the petitioner’s arguments and a review of the impugned order, the court issued notices and a stay application. The respondents, represented by their counsel, were directed to file a reply to the petition by the next hearing date, scheduled for 7th February 2024.
As an interim measure, the court ordered a stay on further recovery from the petitioner, pursuant to the order dated 16th August 2023 (Annexure – 10). Acknowledging the presence of the respondents’ counsel during the interim order, the court granted them the flexibility to file an application seeking vacation of the interim order after responding to the petition.
This case marks a crucial juncture in addressing issues related to GST recovery, emphasizing the need for a thorough examination of the facts before passing such orders. The upcoming hearing on 7th February 2024 will play a pivotal role in determining the resolution of this dispute between Apar Fragrances and the Union of India.
T OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
1. Learned counsel for the petitioner, inter-alia, submitted that the authority, while passing the order dated 16th August, 2023 (Annexure – 10), has only looked at form GSTR – 2A of the supplier and has not taken into consideration the plea, raised by the petitioner, as reflected in the response, regarding having paid the amount to the supplier through banking channel.
2. Submissions have been made that Calcutta High Court in MAT 1218/2023 : Suncraft Energy Private Limited & Anr. Vs. The Assistant Commissioner, State Tax Ballygunge Charge & Ors., decided on 02nd August, 2023, in similar circumstances, has come to the conclusion that without following the norms wherein press release has been issued by the respondents requiring to establish the fact about missing dealer, closer of business by the supplier or supplier not having adequate asset, could not have passed the order impugned.
3. Advance copy of the petition has been served on learned counsel for the respondents, who pray for time, however, submissions have been made that the petitioner has an adequate alternative remedy by way of appeal against the order impugned. Therefore, the petition may not be entertained by the Court.
4. In view of the submissions made by learned counsel for the petitioner and on perusal of the order impugned, passed by the authority, the matter requires consideration.
5. Issue notice. Issue notice of the stay application as well.
6. As the respondents are represented through their counsel, notice need not to be issued.
7. Learned counsel for the respondents are directed to file reply to the petition on or before the next date of hearing.
8. Let this petition be listed on 07th February, 2024.
9. In the meanwhile and till further order, further recovery from the petitioner, pursuant to the order dated 16th August, 2023 (Annexure – 10) shall remain stayed.
10. As interim order, in favour of the petitioner, has been passed in the presence of learned counsel for the respondents, they would be free to file an application seeking vacation of interim order after filing reply to the petition
