All INDIA Federation Of Tax Practitioners And Another vs. Union Of INDIA And 2 Others

Facts

The petitioners, All India Federation of Tax Practitioners and The Telangana Tax Practitioners Association, filed a writ petition challenging Notification No. 63/2020-Central Tax dated 25.08.2020. They contended that this notification was issued contrary to the recommendations of the GST Council, a constitutional authority, and was therefore illegal, arbitrary, improper, and unconstitutional, violating Article 279A of the Constitution. They sought a direction to implement the GST Council's recommendations, particularly concerning the procedure for levying interest under Section 50 of the CGST Act, 2017, and to resolve an impasse on this issue as per a circular dated 18.08.2020. The respondents are the Union of India, the GST Council, and the Ministry of Finance.

Held

The Court was informed by the Assistant Solicitor General, through a memo dated 28.04.2021, that an amendment to Section 50 of the CGST Act, 2017, had been made effective from 01.07.2017 by the Finance Act, 2021. This amendment, as per Clause 112 of the Finance Act, 2021, was stated to satisfy the claim of the petitioners. The Senior Counsel for the petitioners stated that the contents of the letter from the Principal Commissioner of Central Tax, Hyderabad GST Commissionerate, to the Assistant Solicitor General be recorded and the matter be closed. In view of this submission, the letter dated 26.04.2021, confirming the amendment to Section 50 of the CGST Act, 2017, effective from 01.07.2017, was placed on record. Consequently, the Writ Petition was closed. No order as to costs was made. The ratio decidendi is that when the executive action taken addresses the grievance raised by the petitioner, and this is accepted by the petitioner, the writ petition can be closed.

Key Issues

1. Whether Notification No. 63/2020-Central Tax dated 25.08.2020, issued by the 3rd respondent, is illegal, arbitrary, improper, and unconstitutional for being contrary to the recommendations of the GST Council, a constitutional authority, thereby violating Article 279A of the Constitution of India? 2. Whether the respondents should be directed to implement the recommendations of the GST Council regarding the alteration of GST law, specifically Section 50 of the CGST Act, 2017, concerning the procedure for levying interest, and to enforce the circular dated 18.08.2020 for resolving the impasse on this issue? Petitioner's Arguments: The petitioners argued that the impugned notification was issued in contravention of the GST Council's recommendations, violating constitutional provisions. They sought enforcement of the Council's recommendations and the relevant circular. Respondents' Arguments: The Assistant Solicitor General, appearing for the respondents, filed a memo enclosing a letter stating that an amendment to Section 50 of the CGST Act, 2017, had been made effective from 01.07.2017 by the Finance Act, 2021, which would satisfy the petitioner's claim.