Thriveni Sainik Mining Private Limited Through Its Chief Financial Officer Manoj Kumar vs. The Union Of INDIA Through The Commissioner Central Goods And Services Tax

Held

The petitioner, on instructions, sought permission to withdraw the writ application. The Court noted that the withdrawal was in view of the administrative instruction of the Central Board of Indirect Taxes and Customs dated September 18, 2020. The respondent-CGST counsel did not object to the withdrawal. Consequently, the High Court dismissed the writ petition as withdrawn. The Court did not adjudicate on the merits of the issues raised by the petitioner regarding the legality of the interest demand under Section 50 of the CGST Act or the procedural violation of Article 265 of the Constitution. The specific amount of interest disputed was Rs. 4,04,89,043/- for the financial year 2018-19. No issue was expressly left undecided as the matter was disposed of on withdrawal.

Facts

The petitioner, Thriveni Sainik Mining Private Limited, approached the Jharkhand High Court challenging two orders. The first order, dated February 14/17, 2020, issued by the Deputy Commissioner (Prev), Central GST & Central Excise, Ranchi, imposed a liability for interest under Section 50 of the GST Act, 2017, for delayed filing of GSTR-3B returns and consequent delayed payment of gross tax liability for the financial year 2018-19. The second order, dated February 14, 2020, from the Superintendent, CGST & CX Range-IV, Hazaribagh, directed the petitioner to pay this interest amount of Rs. 4,04,89,043/- within seven days. The petitioner sought to quash these orders and declare the demand of interest as arbitrary and illegal, arguing it was levied without a show cause notice or adjudicatory order, violating Article 265 of the Constitution.

Key Issues

1. Whether the demand for interest under Section 50 of the Central Goods and Service Tax Act, 2017, for the financial year 2018-19, calculated from the due date of filing GSTR-3B to the actual date of filing, is arbitrary, illegal, and contrary to the provisions of Section 50 of the Act? 2. Whether the action of the respondent authorities in demanding and realizing interest amounting to Rs. 4,04,89,043/- for the financial year 2018-19 from the petitioner without issuing any show cause notice and without passing any adjudicatory order is wholly illegal, arbitrary, and violative of Article 265 of the Constitution of India? Petitioner's contentions: The petitioner argued that the demand for interest was arbitrary and illegal, contrary to Section 50 of the CGST Act, 2017. They further contended that the demand and realization of interest without a show cause notice and adjudicatory order violated Article 265 of the Constitution of India. The petitioner sought to quash the impugned orders and declare the demand illegal. Respondent's contentions: The judgment records no specific contentions from the respondent-CGST. However, the petitioner's counsel, on instructions, sought permission to withdraw the writ application.