Commissioner Of CGST And Cx Haldia CGST And Cx Commissionerate And Anr vs. Bisweswar Midhya Proprietor Of Midhya Construction And Ors

Facts

This matter concerns a review application filed by the Commissioner of CGST & CX, Haldia CGST & CX Commissionerate (the applicant/department) seeking to review a judgment and order dated September 1, 2022. The original appeal had been allowed, with two directions issued. The first direction, to revoke the suspension of the respondent no.1's license, has been complied with. The second direction mandated the applicant/department to issue a show cause notice, hear the respondent, and decide the matter. The applicant/department argues that this latter direction sets a wrong precedent in light of an explanation to Sub-Section (12) of Section 75 of the CGST Act, 2017, which became effective on January 1, 2022. The department considers this explanation retrospective, while the respondent no.1 contends it is prospective.

Held

The Court held that the review application cannot be maintained on the ground raised by the department, as this issue was not urged during the original appeal. The Court clarified that the direction issued in the previous order, to issue a show cause notice, hear the respondent, and decide the matter, was based on the peculiar facts and circumstances of that case. Therefore, the order and direction issued by the Court cannot be treated as a precedent and will apply only to the specific case of the respondent no.1. The Court did not definitively rule on whether the explanation to Section 75(12) of the CGST Act, 2017, is retrospective or prospective, as it deemed this point irrelevant for the review application given it was not raised earlier. The review application was disposed of with these clarifications.

Key Issues

1. Whether the explanation to Sub-Section (12) of Section 75 of the CGST Act, 2017, is retrospective or prospective in nature, and if retrospective, whether it impacts the Court's previous direction to issue a show cause notice and decide the matter in the original appeal. This issue turns on the interpretation of Section 75(12) of the CGST Act, 2017. Contentions: Petitioner/Applicant (CGST & CX Authority): Argues that the explanation to Section 75(12) of the CGST Act, 2017, is retrospective and that the Court's previous direction to issue a show cause notice and decide the matter sets a wrong precedent. They rely on the explanation to Section 75(12) of the CGST Act, 2017. Respondent no.1 (Bisweswar Midhya): Contends that the explanation to Section 75(12) of the CGST Act, 2017, is prospective. Furthermore, they argue that the issue of the explanation's retrospective nature was not raised by the department during the original appeal hearing, and therefore, a review application cannot be maintained on this new ground.