2021 (5) TMI 557 - HC - GST

Vires of Rule 96(10) of the CGST Rules as amended by Notification No.54/2018-Central Tax dated 9.10.2018 - retrospective operation to N/N. 4/2018-Central Tax dated 9.10.2018 - 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. It is the Notification No. 54 of 2018 dated 09.10.2018. 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 the case mentioned, it needs to be relooked, 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 22.03.2020 . Till the next date of hearing, the proceedings pursuant to the notice dated 04.02.2021 Annexure B shall remain stayed.

Summary

Issues:
1. Interpretation of Rule 96(10) of the CGST Rules as amended by Notification No.54/2018-Central Tax dated 9.10.2018.
2. Jurisdiction and legality of giving retrospective effect to Notification No.54/2018.
3. Applicability of Notification No.54/2018 from the date of its publication or retrospectively from 23.10.2017.
4. Challenge to impugned notices issued based on retrospective operation of the notification.

Analysis:
1. The petitioners sought a declaration that Rule 96(10) of the CGST Rules, as amended by Notification No.54/2018, should be applied prospectively from the date of the notification. They argued that giving retrospective effect to the notification is without jurisdiction, arbitrary, and violates Article 14 of the Constitution of India.

2. The Coordinate Bench previously addressed a similar issue in Special Civil Application No.15833 of 2018. The Bench held that Notification No.54/2018 should be effective from 23.10.2017, not prior to the inception of Rule 96(10) of the CGST Act. This interpretation clarified the applicability of the notification.

3. The petitioners' counsel highlighted that the notification itself states it will come into force from the date of its publication in the official gazette. They argued that the Department's indiscriminate issuance of notices based on the notification's retrospective application from 23.10.2017 needs reconsideration.

4. In response to the arguments raised, the Court decided to issue notice to the respondents, returnable on a specific date, to address the concerns raised by the petitioners regarding the retrospective effect of the notification. The Court also stayed further proceedings pursuant to the impugned notices until the next hearing date.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the Court's decision to address the interpretation and legality of the retrospective application of Notification No.54/2018 in relation to Rule 96(10) of the CGST Rules.