M/S Sugoi Motors PVT LTD vs. Union Of INDIA Through Secretary Ministay Of Finance & Ors.

Facts

The petitioner, M/s Sugoi Motors Pvt Ltd, filed a writ petition challenging an order dated February 12, 2020, passed by the Superintendent (CGST), Range 98, New Delhi, and a notification dated February 10, 2020, issued by the Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs. The core of the dispute appears to relate to the recovery of interest on tax liability. The parties acknowledged that an Administrative Instruction dated September 18, 2020, issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs (GST Policy), addressed the grievance raised in the writ petition.

Held

The Court held that the grievance raised by the petitioner in the writ petition no longer survived in view of the Administrative Instruction dated September 18, 2020, issued by the Central Board of Indirect Taxes and Customs. This instruction clarified that for the period July 1, 2017, to August 31, 2020, field formations should recover interest only on the net cash tax liability. It also stipulated that Show Cause Notices (SCNs) issued on gross tax payable should be kept in Call Book until a retrospective amendment to Section 50 of the CGST Act is carried out. The Court found that the parties admitted that this administrative instruction addressed the petitioner's concerns. Consequently, the writ petition and pending application were disposed of in accordance with this administrative instruction.

Key Issues

1. Whether the grievance raised by the petitioner regarding the recovery of interest on tax liability stands addressed by the Administrative Instruction dated September 18, 2020, issued by the Central Board of Indirect Taxes and Customs. Petitioner's Contention: The petitioner, through its counsel, did not explicitly argue its case but was present. The judgment indicates that the petitioner's grievance was addressed by the subsequent administrative instruction. Revenue/State's Contention: The respondents, including the Union of India and GNCT of Delhi, through their respective counsel, admitted that the Administrative Instruction dated September 18, 2020, resolved the petitioner's grievance. This instruction was based on recommendations from the GST Council regarding charging interest on net cash tax liability.