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2020 (5) TMI 126 - HC - GSTCollection of cess of the respondent Assam State Agricultural Marketing Board - Restriction on collection due to restraint order - Section 21 of the Assam Agricultural Produce Market Act, 1972, as amended - HELD THAT - The respondent Board has been permitted to collect the cess in accordance with the judgment and order passed by the Division Bench of this Court on 12.09.2008 2008 (9) TMI 1012 - GAUHATI HIGH COURT . In so far as the contention regarding impermissibility to levy cess in terms of the provisions of Section 21 of the Act, 1972 in view of the advent of GST, a communication dated 31.07.2017 issued by the Government of Assam in the Agricultural Department to the Chief Executive Officer of the respondent Board has been brought to the notice of this Court. On perusal of the same, it transpires that the State Government has observed that normal realization of cess under Section 21 of the Act, 1972 on specified agricultural commodities from market areas will continue. It is observed therein that prudence, discretion and circumspection are called for at the time of passing such an interim order. Mere existence of a prima facie case is not sufficient to grant an interim order against Revenue but several other factors like balance of convenience, irreparable injury, public interest, etc. are also to be taken into consideration. Having due regard to the observations made in the order dated 30.03.2010 which is stated to be in operation till date; the fact situation obtaining in the present case and the consideration required to be given before passing any interim order against collection of revenue, as laid down in Dunlop India Ltd. 1984 (11) TMI 63 - SUPREME COURT and in P. V. Suresh 1993 (9) TMI 367 - SUPREME COURT , I am of the prima facie view that the extension of the interim order dated 26.02.2020 is not found expedient at this stage and accordingly, the same is not extended. List the matter on 08.04.2020.
Issues Involved:
1. Existence of "Assam Marketing Committee" as a respondent. 2. Interim order preventing cess collection. 3. Authority of Assam State Agricultural Marketing Board to levy cess under Section 21 of the Assam Agricultural Produce Market Act, 1972. 4. Impact of the Goods and Services Act, 2017 on cess collection. 5. Previous judgments and their implications on cess collection. 6. Pending appeals and their effects on the current case. 7. Consideration of interim orders against revenue. Issue-wise Detailed Analysis: 1. Existence of "Assam Marketing Committee" as a respondent: At the outset, it was submitted by Mr. Choudhury that there is no entity called "Assam Marketing Committee," arrayed in this writ petition as party respondent no. 3. 2. Interim order preventing cess collection: The interim order dated 26.02.2020 prevented the Assam State Agricultural Marketing Board (the Board) from collecting cess. Mr. Choudhury argued that this interim order, which was operative till the returnable date without assigning any reason, affected the entire operation of cess collection by the Board, which is otherwise entitled to collect under Section 21 of the Assam Agricultural Produce Market Act, 1972. 3. Authority of Assam State Agricultural Marketing Board to levy cess under Section 21 of the Assam Agricultural Produce Market Act, 1972: Section 21 of the Act authorizes the levy and collection of cess on agricultural produce bought or sold in the market area at a rate not exceeding two rupees for every one hundred rupees of the aggregate amount. The petitioner contended that the Board has no authority to collect cess for "agricultural produce" transported into the notified market area in Assam, a point upheld by a Full Bench of this Court in a previous judgment dated 04.04.2001. 4. Impact of the Goods and Services Act, 2017 on cess collection: The petitioner argued that with the enactment of the Goods and Services Act, 2017, which came into force on 01.07.2017, the cess levied by the Board has been subsumed in the Goods and Services Tax (GST), thus no State is empowered to levy cess on the buying, selling, and supply of goods and services. 5. Previous judgments and their implications on cess collection: The Full Bench judgment dated 04.04.2001 was challenged before the Supreme Court, which stayed the operation of the Full Bench's decision. The Division Bench of this Court, in a judgment dated 12.09.2008, upheld the amendments to Section 21 of the Act, 1972, and provided a detailed mechanism for the levy and collection of cess. The Division Bench also noted that the legal fiction in Section 21 would apply only in the absence of direct evidence of sale or purchase in the market area. 6. Pending appeals and their effects on the current case: The judgment dated 12.09.2008 has been challenged before the Supreme Court, and the appeals are pending without any interim restraint order. The Supreme Court permitted the Board to collect cess in accordance with the Division Bench's judgment dated 12.09.2008. 7. Consideration of interim orders against revenue: The Supreme Court's decisions in Assistant Collector of Central Excise Chandan Nagar West Bengal vs. Dunlop India Ltd. & Ors. and Union Territory of Pondicherry vs. P.V. Suresh and Ors. were considered, emphasizing prudence, discretion, and circumspection in passing interim orders against revenue. Mere existence of a prima facie case is not sufficient; factors like balance of convenience, irreparable injury, and public interest must also be considered. Conclusion: Given the observations made in the Supreme Court's order dated 30.03.2010, the fact situation in the present case, and the considerations required for passing interim orders against revenue, the extension of the interim order dated 26.02.2020 was not found expedient at this stage. However, it was clarified that if the Board collects cess and the petitioner succeeds in the writ petition, the Board would be liable to refund the cess collected during the pendency of the writ petition. This order applies to both the writ petition and the interlocutory application, I.A.(Civil) No. 938/2020, which stands closed. The matter is listed for further hearing on 08.04.2020.
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