M/S. Shriram Raghavendra Chits Private Limited vs. Superintendent Of Central Tax
Original PDF →Facts
M/s. Shriram Raghavendra Chits Private Limited (Petitioner) filed a Writ Petition challenging an order dated December 20, 2023, passed by the Joint Commissioner (Appeals-II) (4th Respondent), which confirmed an order dated August 31, 2023, passed by the Assistant Commissioner of Central Tax (3rd Respondent). The impugned orders were for the tax periods 2017-18 to 2019-20. The Petitioner sought a declaration that it is not liable to pay GST on penal interest collected from subscribers for delayed chit subscription payments. The Petitioner also sought a stay on the recovery of the demand pending the disposal of the Writ Petition.
Held
The Court acknowledged that the GST Appellate Tribunal has not been constituted, even in 2024, leading to challenges to GST appellate orders being filed as Writ Petitions before the High Court. The Court noted the undertaking given by the Chairman of the Central Board of Indirect Taxes and Customs regarding no coercive steps. To strike a balance, the Court directed the Petitioner to pay 20% of the tax liability, as assessed by the Assessing Officer, within four weeks. The authorities were restrained from taking coercive steps for the enforcement of the orders until the disposal of the appeal. The Petitioner was permitted to approach the Tribunal within three months from its establishment/functional date. The Petitioner was also directed to file the part payment using Form GST DRC-03, clearly mentioning it as a part deposit against the challenged order and the intention to approach the Tribunal.
Key Issues
1. Whether the Petitioner is liable to pay GST on the penal interest collected from subscribers for delayed payment of chit subscriptions under the provisions of the CGST and SGST Acts, 2017? Petitioner's Contention: The Petitioner argued that the GST Appellate Tribunal, as envisaged under Section 109 of the Central Goods and Services Act, 2017, has not been constituted. This absence of a functional tribunal necessitates the filing of writ petitions before the High Court to challenge appellate orders. Respondents' Contention: The Department, through its counsel, submitted that in a similar case before the Bombay High Court (W.P. No. 10883 of 2019 and Batch), an undertaking was given by the Chairman of the Central Board of Indirect Taxes and Customs that no coercive steps would be taken against assessees pending the constitution of the Tribunal. This undertaking was stated to still hold good.
Sections Cited
Section 109, Section 112
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Cause title — parties, addresses and appearances
The Court made the following: ORDER
THE HONOURABLE SRI JUSTICE P.SAII! KOSI{Y AND THE HONOURABLE SRI WSTICE N.TUI(ARAMJI UIRIT PETITION No.5328 oF 2024 ORf,tER:(per Ho n'ble Si Justice P'SAM KOSHY) This Writ Petition is filed under Article 226 of the Constitution of India seeking for the following relief:- ". . . to issue a Writ of Mandamus or any other appropriate writ or order or direction setting aside the o.i".'of the 4e Respondent uide Order-in-Appeal No.HYD-GST-SC-AP2-c I O-2 023-24, dated 20'r2'2023 passed for the tax period 20'17 '18 to- 2O'19'2O in io.rn.-i"g the ordei passed by the 3d .Respondent ,ia. o ra.i- i" -o riginal N o. I o I 2023 -2a-Adj n (GST) -AC' dated 31.O8.202i and consequently declare that the p.titio.,.. is not liable to pay GST on the penal interest collected from the subscribers for the delayed payment of the chit subscription under the provisions otifr. CCST and SGST Acts, 2017 and pass"'"
Heard Sri K. Sudhakar Reddy, learned counsel for the petitioner and Sri Dominic Fernandes, learned Standing CounselforCBICfortherespondentNos.lto4,learnedSpecial Government Pleader for Commercial Tax for respondent No'6 and Sri B-Mukharjee, learned counsel representing Sri Gadi Praveen Kumar, Iearned Deputy Solicitor General of India' for respondent No.5-
The instant Writ Petition has been filed challenging the impugned order primarily on the ground that the G'S'T' (
2 PSI(,J 6E fl:rR,J W.P.No.S328 of 2024 Appellate Tribunal (for short "Tribunal"), as has been envisaged under Section 109 of the Central Goods and Services Act, 2017, (for short "the Act, 20 17") has not be'en constituted. 4. . Learned counsel for the Department W.P.No. 10883 of 2Ol9 and Batch, before submits that in the order Bombay High passed by the the Court where the challenge was to appellate authorit5r under the G.S.T law, the Chairman of the Central Board of Indirect Taxes and Customs had hled an aflidavit, dated I2.7O.2O22 whereby the Chairman had given an undertaking that the Department shall not be taking any coercive steps against the assessees pending the constitution of the Tribunal and it becoming functional. The said order of the Division Bench of the Bombay High Court and the undertaking given by the Chairman of the Central Board o[ lndirect Taxes and Customs still holds good,
In the instant case also, admittedly, the factual matrix is that even though we are in the year, 2024, the Tribunal till date has not been constituted / established. [n the absence of which all the challenges to the orders passed by the G.S.T. Appellate Authorities are being challenged by way of Writ Petitions before this High Court. In thc absence of the Tribunal being functional, wq, are compelled to entertain these Wril Petitions
3 PSI(,J& M[R,J W.P.No.5328 oJ 2024 and keep the m pe nding after admitting the same till the Tribunal is established to hear the appeals or the Writ Petitions itself coming up for hearing whichever is earlier. 6. .ln the given factual circumstances, we are of the considered opinion that it lvould be more appropriate to dispose of the Writ Petition at this juncture permitting the petitioner to approach the Tribunal immediately within a period of three (3) months from the date of it being established/ functional.
As regards the interim relief raised by the petitioner, considering the fact that the Chairman has already given an undertaking that no coercive steps shall be taken, nonetheless, we are of the view that in order to strike a balance it would be more appropriate if the petitioner is directed to pay the 2Oo/o of the tax liability as assessed by the Assessing Officer, in terms of Section 112 of the Act, 2Ol7 within a period of four (4) weeks from today. The authorities concemed shall thereafter be restrained from taking any coercive steps for the enforcement of the order o[ the Assessing Ofhcer and the Appellate Authority till the disposal of the aPPeal.
The payment of the 2O7o of tax liability, as has been directed as inte'im measure to the petitioner, shall be done by I t
-l 4 PSI(,J6!,.MIR,J W.P.No.5328 ot' 2024 frlling up Form GST DRC-03, wherein at Clause 8 it must clearly be mentioned that the part deposit is being made against the challenge made to the Order-in-App6al against which they have come to the High Court and further against which they intend to approach the Tribunal.
Accordingly, the Writ Petition stands disposed of. There shall be no order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed. t / MOHD.IS AIL ASSISTANT REGIST //// sEcTtoN o CER To, Superintendent of Central Tax, Group 12, Ctcle-\, Audit-ll Commissionerate, Madhapur, Hyderabad-500081 . Assistant Commissioner, Audit Circle-1, Audit - ll Commissionerate, Madhapur, Hyderabad-50008 1 Assistant Commissioner of Central Tax, Begumpet GST Division, Secunderabad GST Commissionerate, Hyd e ra bad-500003 Joint Commissioner (Appeals-ll), Hyderabad Commtssionerate, GST Bhavan, Basheerbagh, Hyderabad. The Secretary, Union of lndia, Ministry of Finance, Jeevan Deep Building, 3rd Floor, Sansad Marg, New Delhi-110 001. The Principal Secretary to Government, State of Telangana, Revenue (CT-ll) Department, Secretariat, Hyderabad. One CC to Sri K. Sudhakar Reddy, Advocate [OPUC] One CC to Gadi Praveen Kumar, Deputy Solicitor General[IOPUC] One CC to M/s. Dominic Fernandes (senior standing counsel for CBIC) loPUCl 10.Two CCs to GP for Commercial Tax, High Court for the State of Telangana, at Hyderabad [OUT] 1 1.Two CD Copies TJ SB 1 2 3 4 5 6 7 8 o t! o
HIGH COURT DATED:2910212024 ORDER WP.No.5328 of 2024 DISPOSING OF THE WRIT PETITION WITHOUT COSTS. )-\ 1Bf. Si iA re e o ( Jo,J $ 7 il[Y 2[24
C: .r, * * DEsparc o
Reproduced from the public record of the Telangana High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.