Vaibhav Global Limited vs. Union Of INDIA

Held

The Court held that the challenge laid in the present writ petition to the validity of Rule 96(10) of the CGST Rules had become academic. The reasoning was that the petitioner had initially questioned the issuance of summons, which led to a show cause notice. While the petitioner sought to amend the petition to challenge this show cause notice, this amendment application was filed after the final assessment order dated October 30, 2023, was passed. The Court observed that the show cause notice had merged into the final order. Consequently, no consequential relief could be granted to the petitioner in the present petition in light of the subsequent order. The Court explicitly stated that the question of the validity of Rule 96(10) of the CGST Rules was being kept open, but the present writ petition was dismissed as having become infructuous. The operative direction was the dismissal of the writ petition.

Facts

The petitioner, Vaibhav Global Limited, filed a writ petition on March 20, 2021, challenging the validity of Rule 96(10) of the CGST Rules and proceedings initiated by summons. During the pendency of the writ petition, a show cause notice dated March 22, 2022, was issued. The petitioner later filed an application to amend the writ petition to challenge this show cause notice, but this was after a final assessment order dated October 30, 2023, was passed. The respondents argued that the writ petition had become infructuous due to the passing of the final assessment order and the filing of a fresh petition (DBCWP No.19944/2023) challenging it. The petitioner contended that the issue of the validity of Rule 96(10) of the CGST Rules, being ultra vires Section 16(3)(b) of the IGST Act, remained undecided and thus the petition was not infructuous.

Key Issues

1. Whether the writ petition has become infructuous due to the passing of a final assessment order dated October 30, 2023, during its pendency, rendering the challenge to Rule 96(10) of the CGST Rules academic? (Mixed question of law and fact, concerning the procedural status of the petition and the impact of subsequent events). Petitioner's arguments: The petitioner argued that the validity of Rule 96(10) of the CGST Rules, being ultra vires Section 16(3)(b) of the IGST Act, was a substantive issue yet to be decided by the Court. Therefore, despite the subsequent order, the petition should not be considered infructuous as this core legal question remained live. Respondents' arguments: The respondents contended that the writ petition had been rendered infructuous. They pointed out that the petitioner had initially questioned the show cause notice, but a final assessment order had since been passed. They also noted that a fresh petition had been filed to challenge this subsequent order, implying that the current petition's purpose had been superseded.