2020 (12) TMI 1042 - HC - GST

Vires of Rule 96(10) of the CGST Rules as amended by Notification No. 54/2018-19 Central Tax dated 9.10.2018 - retrospective effect or prospective effect - HELD THAT - The Coordinate Bench in COSMO FILMS LIMITED VERSUS UNION OF INDIA 3 ORS. 2020 (10) TMI 1099 - GUJARAT HIGH COURT took the view that the notification No. 54 of 2018 should be made applicable with effect from 23.10.2017 and not prior thereto i.e. from the inception of Rule 97(10) of the CGST Act. Mr. Sheth, the learned counsel has drawn our attention to Annexure A page-20 of the paper book. It is the Notification No. 54 of 2018 dated 9.10.2018. According to Mr. Sheth, the Notification itself makes it clear that the same shall come into force from the date of its publication in the official gazette - According to Mr. Sheth, what has been observed in para-9 of the order passed in the Special Civil Application No. 15833 of 2018 needs to be re-looked, as the Department has started issuing notices indiscriminately on the premise that the Notification would apply with effect from 23.10.2017. Let notice be issued to the respondents returnable on 24.02.2020. Till the next date of hearing, the proceedings pursuant to the notice dated 24.11.2020 Annexure B shall remain stayed.

Summary

Issues:
1. Interpretation of Rule 96(10) of the CGST Rules.
2. Applicability of Notification No. 54/2018-Central Tax dated 9.10.2018.
3. Jurisdiction and legality of giving retrospective effect to notifications.
4. Issuance of writ of mandamus or other orders to quash impugned notice.
5. Stay on further proceedings pending the final hearing.

Analysis:
1. The petitioners sought a declaration regarding the applicability of Rule 96(10) of the CGST Rules as amended by Notification No. 54/2018. They argued that the retrospective effect given to the notification was without jurisdiction and violated Article 14 of the Constitution of India.

2. A previous judgment by a coordinate Bench of the Court had held that Notification No. 54/2018 should be effective from 23.10.2017 and not earlier. The petitioners contended that the notification itself stated it would come into force from the date of its publication in the official gazette, contrary to the Department's interpretation.

3. The Court noted the concerns raised by the petitioners regarding indiscriminate issuance of notices by the Department based on the retrospective application of the notification. The respondents were directed to clarify the issue raised by the petitioners.

4. Considering the arguments presented by the learned counsel, the Court issued notice to the respondents returnable on a specified date. It was ordered that proceedings pursuant to the impugned notice dated 24.11.2020 shall remain stayed until the next hearing date, providing interim relief to the petitioners.

In conclusion, the judgment addressed the interpretation and applicability of Rule 96(10) of the CGST Rules in light of Notification No. 54/2018, focusing on the retrospective effect and jurisdictional aspects. The Court's decision to issue notice to the respondents and stay further proceedings reflected a cautious approach to ensure a fair and thorough examination of the legal issues involved in the case.