Calcutta HC directs Commissioner of CGST to File Affidavit to decide on Validity of Circular Issued by CBIC [Read Order]

In a recent case, the Calcutta High Court directed the Commissioner of  Central Goods and Service Tax ( CGST )  to file affidavit to decide on validity of Circular issued by Central Board of Indirect Taxes and Customs ( CBIC ).

Central Arya Road Transport , the petitioner challenged the order passed by the Tribunal rejecting the appeal filed by the appellant on the ground that the pre deposit has not been paid by cash but has been paid through the GST DRC-03.  According to the Tribunal it is not authorized by law and the pre deposit has to be made in accordance with the Finance Act, 1994, read with the Central Excise Act, 1944.

Be a GST Expert: Get Essential Questions, Key Judgements and Practical Guide, Click Here

The appellant assessee raised the question whether the Instruction No.CBIC-240137/14/2022-Service Tax Section-CBEC dated 28.10.2022 issued by CBIC with respect to pre-deposit payment method for cases pertaining to central excise and service tax wherein it was stated that form GST DRC-03 is not a valid mode of payment for making pre-deposits is infructuous as there has been no rationale provided by the CBIC for such decision .

The first substantial question of law challenges the instruction issued by the CBIC dated 28.10.2022 which appears to be pursuant to said observations/directions issued by the High Court of judicature at Bombay in the case of SODEXO INDIA SERVICES PVT. LTD. Versus UNION OF INDIA,2022 to decide this substantial question of law the Court will have to go into the aspect as to whether the circular issued by the CBIC is sustainable.

This decision can be taken only after an affidavit in opposition is filed by the appropriate authority. Therefore,the division bench comprising the Chief Justice T.S Sivagnanam and Justice Hiranmay Bhattacharyya directed the respondent or any other appropriate authority having jurisdiction to file affidavit in opposition in which the aspect regarding validity of the instruction  by the CBIC dated 28.10.2022 should be dealt with.

Since the appellant has already deposited the amount required therefore, the form GST DRC-03 and the said amount has not been reversed by the department till date, the same shall be retained as deposit in lieu of payment of cash as towards the pre deposit and the Court will take a decision on the substantial questions of law which have been raised.

Be a GST Expert: Get Essential Questions, Key Judgements and Practical Guide, Click Here

 The court listed the matter on 22.11.2024 under the same heading.In the meantime, the respondents are directed not to take any coercive action against the appellant.Mr. Ankit Kanodia, Adv. Ms. Megha Agarwal appeared for appellant. Mr. Kaushik Dey, Adv. Mr. Tapan Bhanja appeared for  the respondent.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates