Kishore Kumar Agrawal vs. Union Of INDIA

Held

The Court noted the submissions made by the petitioner and the nature of the relief sought. In view of these submissions, the Court decided to dispose of the writ petition. The petitioner was granted liberty to file a detailed representation before the Superintendent, Central Excise & GST, Bhawanipatna Range, within three weeks from the date of the order. The Court directed that if such a representation is filed, it shall be disposed of by the Superintendent by passing a reasoned order in accordance with the law and the decision of the GST Council that was quoted by the petitioner. Until a decision was taken on the representation, no coercive action was to be taken against the petitioner. The issue of interest liability on gross versus net cash liability was not directly decided by the Court but was to be considered in the reasoned order of the Superintendent.

Facts

The petitioner filed a writ petition challenging a letter dated February 19, 2020, issued by the Superintendent, Central Excise & GST, Bhawanipatna Range. This letter demanded payment of interest under Section 50(1) read with Sections 75(12) and 79 of the CGST Act, 2017. The petitioner argued that this demand was misconceived, citing a decision from the 39th GST Council Meeting held on March 14, 2020. This decision stipulated that interest should be charged only on the net cash liability (Gross Liability minus Input Tax Credit) and not on the gross amount. The petitioner also pointed out that a similar matter, W.P.(C) No.9412 of 2020, had been disposed of by the Court on March 17, 2020, and requested this petition be treated similarly.

Key Issues

1. Whether the demand for interest on the gross tax liability, as communicated by the Superintendent, Central Excise & GST, is legally sustainable in light of the decision of the 39th GST Council Meeting. (Question of law) Petitioner's arguments: The petitioner contended that the demand for interest was misconceived because the 39th GST Council Meeting had decided that interest should be charged only on the net cash liability, i.e., Gross Liability minus Input Tax Credit, with retrospective effect from July 1, 2017. They relied on the minutes of this meeting. Furthermore, the petitioner submitted that a similar issue had already been decided by this Court in W.P.(C) No.9412 of 2020, and therefore, this petition should be disposed of in terms of that order. Revenue's arguments: The judgment does not record any specific arguments made by the revenue or the opposite parties.