Ms Bharat Coking Coal LTD Through Its Manager Finance Virender Sharma vs. Principal. Commissioner Central Goods And Service Tax And Central Excise

Held

The Court did not delve into the merits of the case. The respondents raised a preliminary objection regarding the maintainability of the writ petition, citing the availability of an alternative remedy under Section 107 of the CGST Act. After some arguments, the learned Senior Counsel for the petitioner sought permission to withdraw the writ petition to prefer an appeal. The petitioner stated they would make the mandatory pre-deposit by the following Monday and file an appeal. Considering these submissions and the facts, the Court was of the view that the petitioner should avail the remedy of appeal under Section 107 of the CGST Act. Consequently, the Court made no comments on the merits of the pleas raised by the petitioner and dismissed the writ petition as withdrawn with liberty to file an appeal.

Facts

M/s Bharat Coking Coal Ltd. (Petitioner No. 1) and its Director Finance (Petitioner No. 2) filed a writ petition challenging an Order-in-Original dated March 2, 2022, passed by the Additional Commissioner, Central Goods & Service Tax, Sub-Commissionerate, Dhanbad. This order imposed a GST liability of Rs. 90 crores, interest under Section 40 of the CGST Act, and a 100% penalty under Section 74(8) of the Act on Petitioner No. 1 for the period 2017-18. A penalty of Rs. 1,00,000/- under Section 137(2) read with Section 122 of the Act was imposed on Petitioner No. 2. The petitioners argued that the entire Rs. 500 crores deposited as an upfront payment for coal blocks had been refunded by the Ministry of Coal due to the surrender of these blocks, and this fact was not considered. They also challenged the Demand-cum-Show Cause Notice dated October 26, 2021, issued by the Additional Commissioner, arguing it was without jurisdiction as the proposed classification of services under Service Code 997337 and Residuary Entry No. 17(viii) of Notification No. 11/2017-C.T.(Rate) was not in existence on June 28, 2017.

Key Issues

1. Whether the Order-in-Original No. 15/2021-22/ADC/DNB dated 02.03.2022, imposing GST liability, interest, and penalties, is illegal and arbitrary for failing to consider the refund of the upfront payment of Rs. 500 crores and the surrender of coal blocks, thereby violating principles of natural justice? (Mixed question of law and fact, turning on principles of natural justice and the facts of refund). 2. Whether the Demand-cum-Show Cause Notice dated 26.10.2021 is without jurisdiction due to the proposed classification of services under Service Code 997337 and Residuary Entry No. 17(viii) of Notification No. 11/2017-C.T.(Rate), which was allegedly not in existence on June 28, 2017, for the period 2017-18? (Question of law, turning on the interpretation of Notification No. 11/2017-C.T.(Rate) and its applicability). Petitioner's Contentions: The petitioners contended that the adjudicating authority acted illegally and arbitrarily by not considering the refund of Rs. 500 crores received from the Ministry of Coal for the surrendered coal blocks, violating principles of natural justice. They further argued that the Demand-cum-Show Cause Notice was without jurisdiction as the classification of services relied upon was not in existence on the relevant date. They sought a declaration that Petitioner No. 2 cannot be held liable for GST on the upfront amount which was refunded. Respondents' Contentions: The respondents raised a preliminary objection regarding the maintainability of the writ petition, asserting that no exceptional grounds were made out to entertain the writ petition in the presence of an alternative remedy under Section 107 of the CGST Act.