The Sikkim High Court stayed the show cause notice issued under Rule 31 A of the Central Goods and Service Tax Rules (CGST Rules), 2017 as it is ultra vires of the Constitution of India.
Ms Shadhna Pradhan appearing for the petitioner Delta Corp Limited & Anr submitted that all the respondents have been duly served and an affidavit of service has been duly filed. It is further submitted that in addition the respondents have also been notified that the matter is to be heard today. She undertakes to file a further affidavit of service stating the above facts within the day.
Mr. Harish Salve, Senior Counsel for the petitioners. The Senior Counsel submitted that the petitioners have challenged, among other things, Rule 31A of the Central Goods and Service Tax Rules, 2017 as ultra vires the Constitution of India. The petitioners have also challenged the show cause notice dated 27.09.2023 issued against the petitioners; the rate notification dated 28.06.2017; the circular dated 04.01.2018 and the FAQ clarification dated 06.09.2017.
It was submitted that although Rule 31A was inserted in the year 2018 the petitioners were issued show cause notice only in the year 2023. However, the issuance of the show cause notice has compelled the petitioners to approach the court challenging the vires of Rule 31A.
The Deputy Solicitor General of India on behalf of respondent no.1 and the Additional Advocate General on behalf of respondent no.2 accept notice and waive formal notice thereof. Justice Bhaskar Raj Pradhan directed the respondents to file their response to the interim application praying for a stay of the proceedings within two weeks. The respondents shall maintain the status quo as of today. The counsel for the parties is requested not to delay the hearing of the interim application.
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