2021 (9) TMI 905 - HC - GST

Validity of section 96(10) of the CGST Rules as amended by N/N. 54/2018 Central Tax dated 9th October, 2018 - validity of retrospective operation to N/N. 54/2018 Central Tax dated 9th October, 2018 - issuance of the summons by Senior Intelligence Officer of Directorate General of Goods Service Tax Intelligence, Zonal Unit, Ahmedabad - HELD THAT - Issue urgent Notice making it returnable on 30th September, 2021. It is noticed that this summons which had been issued was in the month of February, 2021 in compliance with which the process is on and therefore, the apprehension is ventilated by the petitioner of possible coercive action on the part of the authority. Without prior permission of the Court, no coercive action shall be taken till the returnable date. Matter to be tagged with Special Civil Application no.12835 of 2021 and allied matters.

Summary

Issues:
Challenge to Rule 96(10)(b) of the Central Goods and Service Tax Rules, 2017 on grounds of ultra vires Article 14 and 19(1)(g) of the Constitution of India; Demand for payment of refund by respondent based on summons issued; Allegation of arbitrary and unsustainable demand without adjudication order.

Analysis:
1. Challenge to Rule 96(10)(b): The petitioner contests Rule 96(10)(b) of the CGST Rules, 2017, arguing that it infringes upon rights under the Constitution. The prayers in the petition seek to quash the rule as being without jurisdiction, arbitrary, and violative of constitutional provisions. The petitioner asserts that the rule curtails their rights and is manifestly arbitrary, thereby seeking relief through a writ of mandamus or any other appropriate order.

2. Demand for Payment of Refund: The petitioner availed benefits under specific notifications related to exemptions from IGST for importing goods against advance authorization licenses. However, a summons dated 3rd February, 2021 was issued by the Senior Intelligence Officer seeking details of imports made under these notifications. Despite providing necessary documents in compliance with the summons, the respondent is persistently demanding the repayment of the entire refunded amount, which the petitioner deems as an unsustainable demand without any formal adjudication order.

3. Allegations of Arbitrary Demand: The petitioner's counsel argues that the demand for repayment is unwarranted and lacks legal basis. With no adjudication order in place, the demand for the full refund amount is considered arbitrary and harassing. The counsel highlights that the petitioner is already challenging the validity of Rule 96(10)(b) in this petition and others, emphasizing the need for protection against such demands made without proper legal backing.

4. Court's Response: The High Court, presided over by Honourable Ms. Justice Sonia Gokani and Honourable Mr. Justice Rajendra M. Sareen, acknowledged the urgency of the matter and issued an urgent notice returnable on 30th September, 2021. The Court noted the summons issued in February 2021 and restrained any coercive action until the returnable date, emphasizing the need for protection against potential arbitrary actions by the authorities. Additionally, the matter was ordered to be tagged with another related case for consolidated consideration.

This detailed analysis covers the key issues raised in the legal judgment, providing a comprehensive overview of the petitioner's challenges, the demand for refund, allegations of arbitrariness, and the Court's response to the urgent matter at hand.