2024 (2) TMI 994 - HC - GST

Seeking to restraint respondents from taking any coercive action to recover the Input Tax Credit (ITC) together with interest thereon and penalties - whether the petitioners are liable to pay GST @ 28% on tubes and flaps? - HELD THAT - Prima facie, the contentions advanced by the petitioner are not insubstantial. Accordingly, it is considered apposite to restrain the respondent from taking any coercive steps, pursuant to the order dated 13.09.2023, till the next date of hearing. List on 01.03.2024.

Summary

Issues Involved:
The issue involves the liability to pay GST at different rates on tubes, tyres, and flaps, and the denial of Input Tax Credit (ITC) by the Revenue.

Issue 1: Liability to Pay GST at Different Rates
The petitioners, who are manufacturers and suppliers of tyres, tubes, and flaps, are disputing the Revenue's claim that they are liable to pay GST at 28% on tubes and flaps as part of a bundled supply. The petitioners argue that tubes and tyres are separate products, supplied individually to customers. Despite having paid duty at 28%, the Revenue is denying them ITC for the tax paid. The High Court finds the petitioner's contentions not insubstantial and, therefore, restrains the respondent from taking coercive steps until the next hearing date.

Issue 2: Denial of Input Tax Credit (ITC)
The petitioners seek an ad-interim order to prevent the respondents from recovering the Input Tax Credit of Rs. 31,68,31,656/-, along with interest and penalties, based on an Order-in-Original dated 13.09.2023. The controversy arises from the interpretation of GST rates on tubes, tyres, and flaps, with the Revenue claiming a bundled supply attracting 28% GST rate. However, the petitioners maintain that tubes and tyres are distinct products, charged at 18% GST rate. The High Court acknowledges the need for further examination and schedules the next hearing for 01.03.2024.