2021 (10) TMI 43 - HC - GST

Vires of Explanation I (ii) to Section 74 of the CGST Act, 2017 and Delhi GST Act, 2017 - proceedings against all the persons liable to pay penalty under Sections 122, 125, 129 and 130 of CGST Act - HELD THAT - Issue notice - List on 24th March, 2022.

Summary

Issues:
1. Challenge to Explanation I (ii) to Section 74 of the CGST Act, 2017 and Delhi GST Act, 2017.
2. Interpretation of Explanation 1 (ii) regarding conclusion of proceedings against persons liable to pay penalty under Sections 122, 125, 129, and 130 of CGST Act.

Issue 1: Challenge to Explanation I (ii) to Section 74 of the CGST Act, 2017 and Delhi GST Act, 2017:

The petitioner filed a writ petition seeking a declaration that Explanation I (ii) to Section 74 of the CGST Act, 2017 and Delhi GST Act, 2017, is violative of the Constitution of India and contrary to the scheme of GST Laws. The petitioner contended that the said Explanation imposes unreasonable restrictions on the rights of taxpayers and is against the principles of natural justice. The High Court issued notice on the petition, and the respondents were directed to file their counter-affidavits within six weeks. The matter was scheduled for the next hearing on 24th March, 2022.

Issue 2: Interpretation of Explanation 1 (ii) regarding conclusion of proceedings against persons liable to pay penalty under Sections 122, 125, 129, and 130 of CGST Act:

The petitioner also sought a declaration that Explanation 1 (ii) should be construed in a manner that the proceedings against all persons liable to pay penalty under Sections 122, 125, 129, and 130 of the CGST Act shall be deemed concluded in cases where the person chargeable with tax has paid tax, interest, and penalty as per the specified sections, irrespective of the timing of payment concerning the issuance of show cause notice. The court allowed the petitioner to withdraw the present application with liberty to pursue the same relief in the statutory appeal to be filed. Consequently, the application was disposed of with the mentioned liberty.

This judgment reflects the judicial consideration of challenges to statutory provisions under the CGST Act, 2017 and Delhi GST Act, 2017, emphasizing the need for a balanced approach between taxpayer rights and statutory requirements. The court's decision to allow withdrawal with liberty indicates a procedural step to enable the petitioner to pursue the relief sought through appropriate channels, ensuring a fair opportunity for redressal within the legal framework.