M/S. Subash Kumar Sanjay Kumar vs. Union Of INDIA

Held

The Court held that, by virtue of the amendment to the Central Goods and Services Tax Act, 2017, by the Finance Act, 2021, the levy of interest in terms of the impugned order dated February 24, 2020, has been rendered unsustainable in law. The Court acknowledged that this was not in dispute between the parties. Consequently, the impugned notice on demand and recovery dated February 24, 2020, was set aside. The matter was then remanded to the Superintendent, GST & Central Excise, Cuttack VI Range, CDA, for a fresh order. This fresh order is to be passed in light of the aforementioned amendment. The writ petition was disposed of with these directions.

Facts

The petitioner, M/s Subash Kumar Sanjay Kumar, challenged an order dated February 24, 2020, issued by the Superintendent, GST & Central Excise, Cuttack VI Range, CDA. This order demanded the payment of interest under the Goods and Services Tax regime. The Opposite Parties, including the Union of India, were represented by Mr. R. Chimanka, Senior Standing Counsel. The core of the dispute revolved around the legality of the interest levy based on the prevailing law at the time the order was passed.

Key Issues

1. Whether the levy of interest in terms of the impugned order dated February 24, 2020, is sustainable in law, considering the subsequent amendment to the Central Goods and Services Tax Act, 2017, by the Finance Act, 2021? The Petitioner argued that the amendment introduced by the Finance Act, 2021, has rendered the levy of interest, as demanded in the impugned order, unsustainable in law. The Petitioner contended that the amendment has retrospective effect or at least impacts the validity of such levies made prior to the amendment. The Revenue, represented by Mr. R. Chimanka, Senior Standing Counsel, did not dispute this contention. The judgment notes that it is not in dispute that the amendment makes the levy unsustainable.