M/S Global Seamless Tubes And Pipes PVT LTD vs. Assistant Commissioner Of CGST And Cx Shyambazar Division Kolkata North Commissionerate And Ors

Held

The Court held that the classification of an exporter as 'risky' and the issuance of a show-cause notice are distinct processes. While the department can affix a 'risky exporter' tag pending investigation, this tag cannot be indefinitely maintained as it infringes upon the exporter's right to conduct business based on mere suspicion. The Court noted that the timelines stipulated in Circular No. 131/1/2020-GST for taking action by the authorities had been ignored. The Court directed the sixth respondent (presumably the authority responsible for the 'risky exporter' tag) to consider the appellant's representation dated 10th March 2022 within 15 days of receiving a copy of the judgment, after providing an opportunity for a personal hearing. The Court also clarified that the adjudication proceedings could proceed independently by issuing a show-cause notice. The appeal was disposed of with these directions.

Facts

The appellant, M/s. Global Seamless Tubes & Pipes Private Limited, filed a writ petition seeking a direction for the completion of an investigation initiated against them. The appellant was aggrieved by being classified as a 'risky exporter,' which led to delays or denial of their export consignments. The writ court had directed the completion of the investigation. The appellant is now appealing this direction. The appellant stated that they had complied with four notices for document production and had paid the alleged amount of illegal availment of Input Tax Credit (ITC) without prejudice. The revenue indicated that the investigation was in its final stages and a show-cause notice was to be issued shortly.

Key Issues

1. Whether the classification of the appellant as a 'risky exporter' and the consequent affixing of a tag can be maintained indefinitely pending investigation, thereby impeding the appellant's right to carry on exports? (Section 129 of CGST Act, 2017, and relevant circulars). Contentions: Petitioner/Appellant: The appellant argued that they had complied with all departmental notices and paid the disputed ITC amount. They contended that the 'risky exporter' tag, which impedes their export business, should not be perpetually affixed, especially when the investigation is ongoing and they have cooperated. They relied on Circular No. 131/1/2020-GST, which prescribes timelines for such actions. Revenue/State: The revenue stated that the investigation was in its final stages and a show-cause notice was imminent. They defended the affixing of the 'risky exporter' tag as a measure taken pending investigation in terms of departmental circulars and directions to facilitate verification of export consignments.