Sursarita Vanijya Private LTD Thro Its Power Of Attorney Holder V K Bhalotia vs. Principal Commissioner Of Central Goods And Services Tax

Held

The Court did not decide on the merits of the case. The Respondent CGST raised a preliminary objection regarding the maintainability of the writ petition, citing the availability of an alternative remedy of appeal under Section 107 of the CGST Act, 2017. The Petitioner's counsel had no objection to this preliminary submission. Consequently, the Court disposed of the writ petition, granting the Petitioner liberty to file an appeal within two weeks from the date of receiving a copy of the order. The Court directed that if an appeal is filed, the appellate authority shall decide it within four weeks from the date of receipt of the order, in accordance with the law. No specific findings were made on the issues raised by the Petitioner regarding the merits of the demand or the principles of natural justice.

Facts

Sursarita Vanijya Private Limited (the Petitioner) filed a writ petition challenging an order dated December 6, 2023, issued by the Assistant Commissioner, Central GST & Central Excise, Deoghar (Respondent No. 2). This order directed the Petitioner to pay Rs. 42,58,557/- under Section 73 of the CGST Act, 2017, along with interest under Section 50 and penalties under Section 122 (2)(a) and Section 122 (1). The demand arose from the alleged contravention of Section 16(2)(c) of the Act, specifically regarding the availment of Input Tax Credit (ITC) where the seller had undergone liquidation under the Insolvency and Bankruptcy Code, 2016 (IBC). The Petitioner contended that this fact was known to the revenue authorities.

Key Issues

1. Whether the order dated December 6, 2023, issued by Respondent No. 2, directing the Petitioner to pay Rs. 42,58,557/- under Section 73, along with interest and penalties, is liable to be quashed on the grounds of merit and violation of the principles of natural justice, particularly considering the seller's liquidation under the IBC and the Petitioner's knowledge of this fact. Petitioner's Arguments: The Petitioner argued that the liability of the supplier under the Act, being in the nature of an operational debt, was subsumed and extinguished in the liquidation process under the IBC. Therefore, this liability could not be recovered from the Petitioner under Section 16(2)(c) of the CGST Act. Revenue's Arguments: The Respondent CGST raised a preliminary objection regarding the maintainability of the writ petition, asserting that the Petitioner had an alternative remedy of appeal under Section 107 of the CGST Act, 2017.