Zuari Agro Chemicals LTD., Thr. Its Aut. Sign., Naresh Kumar Gupta. vs. The Union Of INDIA, Rep. By Its Under Secretary, Ministry Of Finance, New Delhi And 2 Ors.

Held

The Court rejected the Civil Application seeking a stay on the impugned orders. The Court observed that there was no substantive challenge to the Order-in-Original dated August 19, 2019, and therefore, entertaining an application solely for interim relief was not permissible. The Court further noted that granting the requested interim relief would effectively mean directing the Respondents to act contrary to Rule 89(5) of the CGST Rules. The Court held that normally, a stay on legislation or statutory rules would not be granted unless a case much stronger than a mere prima facie case is made out. Additionally, the Court found that the Applicant was essentially seeking a mandatory relief, a refund of amounts retained by the Respondents, which is not typically granted in mandatory terms at the interim stage. The main Writ Petition was scheduled for final disposal.

Facts

The Applicant, Zuari Agro Chemicals Ltd., filed a Civil Application seeking a stay on two Orders-in-Original dated January 10, 2019, and August 19, 2019, both passed by the Assistant Commissioner of Central Goods and Service Tax. The Applicant argued that the August 19, 2019 order merely implemented the January 10, 2019 order, which is the subject of the main Writ Petition. The main Petition challenges Rule 89(5) of the CGST Rules, which restricts the refund of input services. The Applicant sought interim relief to prevent the enforcement of these orders.

Key Issues

1. Whether the Court should grant a stay on the operation of the Order-in-Original dated January 10, 2019, and the Order-in-Original dated August 19, 2019, passed by the Assistant Commissioner of Central Goods and Service Tax, in light of the pending challenge to Rule 89(5) of the CGST Rules. Petitioner's Argument: The Applicant contended that the Order-in-Original dated August 19, 2019, was merely an implementation of the January 10, 2019 order, which is challenged in the main petition. They sought interim relief to prevent the operation of these orders. Revenue's Argument: The Revenue did not explicitly record any arguments in the judgment. However, the Court's reasoning implies that granting the stay would require acting contrary to the provisions of Rule 89(5) of the CGST Rules, which has statutory force. The Court also noted that the Applicant was seeking a mandatory relief in the form of a refund at the interim stage.