M/S Urs Gehna vs. Union Of INDIA

Facts

The petitioner, M/s Urs Gehna, through its partner Upendra Kumar Soni, filed a writ petition before the Rajasthan High Court, Bench at Jaipur. The petition sought to quash Circular No. 2 of 2015 dated 18.03.2015, contending it was ultra vires the Finance Act, 1994. The respondents, including the Union of India and various GST authorities, were directed to provide instructions regarding the provision under which the impugned circular was issued. Subsequently, the respondents' counsel submitted that the circular was an internal guideline and not binding on Adjudicating Officers or Appellate Authorities. In light of this submission, the petitioner's counsel stated they were not pressing the petition and sought liberty to avail the remedy of appeal.

Held

The Court did not render a decision on the merits of the petitioner's challenge to Circular No. 2 of 2015. Instead, based on the submission by the respondents' counsel that the circular was an internal guideline and not binding on statutory authorities, the petitioner withdrew the writ petition. The Court disposed of the petition as not pressed, granting the petitioner liberty to avail the remedy of appeal. The Court further directed that if an appeal is filed within six weeks from the date of the order, subject to its maintainability, it shall be considered to have been filed within the limitation period.

Key Issues

1. Whether Circular No. 2 of 2015 dated 18.03.2015 is ultra vires the Finance Act, 1994? The petitioner argued that the circular, by its nature and content, exceeded the statutory powers conferred by the Finance Act, 1994, rendering it invalid. The respondents, through their counsel, submitted that the impugned circular was merely an internal guideline and was neither binding on the Adjudicating Officer nor on the Appellate Authority. This statement effectively conceded that the circular did not have the force of law and was not an exercise of statutory power that could be challenged as ultra vires.