2024 (2) TMI 62 - HC - GST

Classification of supply - rate of GST - supply of LPG for domestic use - whether 5% tax is to be levied or 18% tax is to be levied for the period from 01.07.2017 to 24.01.2018? - HELD THAT - Apparently, keeping in view the justification which was raised by the assessee, the competent authority came to the conclusion while passing the order dated 12.05.2023 that there was no additional liability payable of the GST as demanded in the show cause notice. The demand of interest and proposed penalties thus did not survive, keeping in view the clarification furnished by the Board in various circulars referred to. Resultantly, the authority dropped the proceedings initiated in the show cause notice. The Apex Court in the case of THE STATE OF MAHARASHTRA AND OTHERS VERSUS GREATSHIP (INDIA) LIMITED 2022 (9) TMI 896 - SUPREME COURT has also held that when there is an alternate remedy available, judicial prudence demands that the Court refrains from exercising its jurisdiction under the constitutional provisions. The said observations came to be passed against an order whereby the High Court of Judicature at Bombay had entertained the writ petition against the assessment order and the observations were that the assessee should avail the statutory remedy of appeal and thereafter avail other remedies provided under the statute. It would be appropriate if the respondents take a call on the said issue by examining all the defences which have been raised in the reply. A perusal of the order dated 12.05.2023 passed by the Commissioner at Mangaluru would also go on to show that the circular in question which is subject matter of challenge has already been discussed while dropping the demand - Petition disposed off.

Summary

Issues involved:
Challenge to show cause notice and circular regarding taxation on supply of LPG for domestic use.

Summary:
The writ petition under Article 226/227 challenges a show cause notice dated 22.09.2023 and Circular No. 80/54/2018-GST dated 31.12.2018, seeking to prevent coercive action during the petition's pendency. The petitioner's Senior Counsel presented relevant annexures in support of the petition to invoke Article 226 jurisdiction.

During arguments, it was noted that a similar show cause notice was issued by the Commissioner, Central Excise & Service Tax, Mangaluru, regarding the rate of taxation on LPG supply for domestic use. The issue was whether to levy 5% or 18% tax for the period from 01.07.2017 to 24.01.2018. Following justification provided by the assessee, the competent authority concluded no additional GST liability was due, leading to dropping of interest and proposed penalties as per Board clarifications in circulars. The Apex Court precedent emphasized utilizing alternate remedies rather than immediate judicial intervention.

Given the petitioner's reply to the show cause notice, it was deemed appropriate for respondents to assess the issue considering all defenses raised. The order dated 12.05.2023 by the Commissioner in Mangaluru had already addressed the challenged circular while dropping the demand. Consequently, the challenge to the circular was left open for the petitioner to pursue legal remedies.

The writ petition was disposed of with the above observations.