Shree Madhav Sol Vextracts PVT. LTD. vs. Union Of INDIA And Ors.
Original PDF →Facts
The appellant, Shree Madhav Sol Vextracts Pvt. Ltd., filed an application for refund. The Original Authority, the Assistant Commissioner of Central Taxes, Kharagpur Division, issued a show cause notice that did not mention any demand for tax. However, the final order dated 30.11.2020 imposed a demand of Rs. 29,63,488/- under Section 74 of the GST Act, along with interest under Section 50, and simultaneously rejected the entire refund claim. Upon appeal to the Joint Commissioner (Appeals), CGST & CX, Appeal-II Committee, Kolkata, the appellate order only addressed the correctness of the refund rejection and made no mention of the Rs. 29,63,488/- tax demand. Crucially, no demand notice had been issued to the appellant to date. The appellant's writ petition before the learned Single Bench was met with an order directing the filing of an affidavit-in-opposition, with no interim relief granted.
Held
The intra-Court appeal was disposed of by granting liberty to the appellant to file a fresh stay application before the learned Single Bench. This liberty is contingent upon the issuance of a demand notice by the respondent Department. The Court found no error in the learned Single Bench's order dated 17.08.2023, which observed that there was no scope for granting an interim order at that stage, as no demand notice had been issued to the appellant. The Court acknowledged the appellant's grievance regarding the imposition of a demand and rejection of refund without a proper demand notice and the appellate order's silence on the demand. The Court requested the learned Single Bench to consider any fresh stay application on its merits if filed after a demand notice is issued. The time for filing the affidavit-in-opposition was extended by three weeks, with a further week for the reply.
Key Issues
1. Whether the learned Single Bench erred in not granting any interim order when the Original Authority imposed a tax demand of Rs. 29,63,488/- along with interest, simultaneously rejecting the refund claim, without issuing a specific demand notice, and the Appellate Authority's order failed to address this demand. (Mixed question of law and fact, turning on principles of natural justice and procedural fairness under the GST Act). Contentions: Petitioner/Appellant: Argued that the Original Authority's final order created a demand of Rs. 29,63,488/- and rejected the refund claim, despite the show cause notice not mentioning any tax demand. Further, the Appellate Authority's order did not address this significant demand, and no demand notice had been issued. The learned Single Bench should have considered these procedural irregularities and granted interim relief. Revenue/State: The judgment records no specific arguments made by the Revenue/State before this Court. The learned Single Bench directed the filing of an affidavit-in-opposition.
Sections Cited
Section 74, Section 50
AI-generated summary — verify with the full judgment below
2024 Item No.17 RP/KC Ct. No.1
MAT 2434 OF 2023 + IA NO.CAN 1 of 2023 Shree Madhav Sol Vextracts Pvt. Ltd. Vs. Union of India & Ors. Ms. Sweta Mukherjee …..for the Appellant
This intra-Court appeal is directed against the order dated 17.08.2023 passed in WPA 19418 of 2023 by which the learned Single Bench observed that there is no scope for granting any interim order on the writ petition and directed affidavit-in-opposition to be filed by the Department. We find that there is no error in the said order since as on date no demand notice has been issued on the appellant by the authority concerned.
The learned advocate appearing for the appellant would contend that that the Original Authority while issuing a show cause notice on an application for refund filed by the appellant had not mentioned anything about demand of tax but in the final order a demand of Rs.29,63,488/- was made in terms of Section 74 of the GST Act along with appropriate interest thereon in terms of Section 50 of the Act. By the said order dated 30.11.2020 the Assistant Commissioner of Central Taxes, Kharagpur Division
2 has also simultaneously rejected the entire refund claim. When the order was tested before the Appellate Authority, namely, the Joint Commissioner (Appeals), CGST & CX, Appeal-II Committee, Kolkata, we find that the order only deals with the correctness of the rejection of the refund claim and there is no mention about anything with regard to the demand of tax to the tune of Rs.29,63,488/-. That apart, till date no demand notice was issued.
For the above reasons, the appeal along with the connected application stand disposed of granting liberty to the appellant to file a fresh stay application before the learned Single Bench as and when demand notice is issued by the respondent Department and if such an application is filed the learned Single Bench is requested to consider the same on merit. Time to file affidavit-in-opposition as granted by the learned Single Bench stands extended by a period of three weeks from date and reply, if any, shall be filed within a week thereafter. (T. S. SIVAGNANAM) CHIEF JUSTICE (SUPRATIM BHATTACHARYA, J.)
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.