2023 (6) TMI 682 - HC - GST

Interpretation of statute - Constitutional Validity of Section 16(4) of the CGST Act - appealable order or not - HELD THAT - This writ petition is being entertained on condition of making payment of 10% of the disputed tax amount of Rs.2,26,74,585/- within two weeks from date. If such payment is made within the time stipulated herein, no coercive action for recovery of the demand arising out of the impugned order in original shall be taken by the respondents. In case of failure to make payment within the time stipulated herein, this interim order will not have any force. It is recorded that though the petitioners have made prayer challenging the Constitutional validity of Section 16(4) of the aforesaid Act and the relevant Rules but have not pressed for the same. List this matter for final hearing in the monthly list of August, 2023.

Summary

Issues involved: Challenge to legality and validity of impugned order under CGST Act, interpretation of Section 16(4) of CGST Act.

Challenge to Impugned Order:
The petitioners have challenged the legality and validity of the impugned order dated 19th January, 2023, passed by the respondent authority under the CGST Act. Despite being an appealable order, this writ petition is entertained due to a pure question of law involving the interpretation of Section 16(4) of the CGST Act. The judgment dated 22nd April, 2016, of the Hon'ble Supreme Court in the case of Aircel Ltd. vs. Commercial Tax Officer is considered relevant in this matter. The petitioners are required to make a payment of 10% of the disputed tax amount of Rs.2,26,74,585 within two weeks to avoid coercive action for recovery of the demand arising from the impugned order. Failure to make this payment within the stipulated time will render the interim order ineffective.

Procedural Directions:
The respondents are directed to file an affidavit-in-opposition within four weeks after the summer vacation, and the petitioners are to file a reply, if any, within two weeks thereafter. The matter is listed for final hearing in the monthly list of August, 2023. Both parties are instructed to be prepared with short written notes of arguments during the hearing.

Constitutional Challenge:
Although the petitioners have raised a prayer challenging the Constitutional validity of Section 16(4) of the CGST Act and the relevant Rules, they have not pressed for the same in this instance.