JJ Traders Vs Union of India & Ors. (Calcutta High Court)
Calcutta High Court held that GST Circular issued by Central Board of Indirect Taxes & Customs [CBIC] are binding on all the departmental officers but at the same time circular should not be treated as shield to ward off legal scrutiny and shelve legal action in cases involving undisclosed transaction, and/or dubious invoices and bills.
Facts- The petitioner is a dealer of areca nuts and has been conducting his business throughout India. This writ petition lays challenge to an order dated July 31, 2025, passed by the respondent No. 2, i.e. Assistant Commissioner (HAEU) Central GST & CX, Siliguri whereby penalties have been imposed upon the petitioner under Section 129 (1)(a) as well as Section 129(1)(b) of the WBGST Act of 2017/CGST Act of 2017.
Conclusion- This Court is of the considered view that the Circular dated 31.12.2018 cannot be applied to such cases where the very transaction or the genuineness thereof doubted and where the invoices and/or the e-way bill are/is under question.
It cannot be doubted that a circular issued by the Central Board of Indirect Taxes & Customs would be binding on all its officers but at the same time there can also not be any cavil to the proposition that a circular issued by the Board whether instructive or clarificatory or otherwise has to operate within the statutory framework and has to be applied only when there is no doubt raised regarding the genuineness of the consignment and the transaction and the documents are in order. The said Circular should not be treated as shield to ward off legal scrutiny and shelve legal action in cases involving undisclosed transactions, and/or dubious invoices and bills.
