Orders Passed by High Court Contrary to Section 67 of CGST Act, 2017 shall not be given effect to by the Authorities: Supreme Court [Read Judgment]

Customs Valuation - Foreign Contribution - Income Tax Act - SC - Taxscan

In a significant ruling, the Supreme Court of India held that the orders passed by the High Court which are contrary to the Section 67 (8) of the Central Goods and Services Act, 2017 shall not be given effect to by the authorities. Instead, the authorities shall process the claims of the concerned assessee afresh as per Section 67 of the Act.

The first set of appeals is filed by the State of U.P, questioning the interim order passed by the High Court directing the State to release the seized goods, subject to deposit of security other than cash or bank guarantee or in the alternative, indemnity bond equal to the value of tax and penalty to  the satisfaction of the Assessing Authority. The High Court, after passing the said interim order would then dispose of the main Writ Petition as having become infructuous, consequent to release of goods by the appropriate authority in terms of the interim order of the High Court. In the context of that grievance, this Court has passed an order. After the aforementioned order of this Court, the High Court in disposing of Writ Petitions by referring to Section 67 (8) of the Central Goods and Services Act,   2017 and Rule 141 of the relevant Rules Such order passed by the High Court, which is challenged by the assessee in the second set of appeal filed before this Court.

The state submitted that a complete mechanism is predicated in the Act and the Rules for release and disposal of the seized goods and for which reason, the High Court ought to have been loathed to entertain the Writ Petitions questioning the seizure of goods and to issue directions for its release.

The division bench comprising of Justice A.M. Khanwilkar and Justice Dinesh Maheshwari held that the assesses must take recourse to the mechanism already provided for in the Act and the Rules for release, on a provisional basis upon execution of a bond and furnishing of a security, in such manner and of such quantum respectively, as may be prescribed or on payment of applicable taxes, interest and penalty payable, as the case may be, as predicted in Section 67 (6) of the Act. In the interim orders passed by the High Court which are the subject matter of assail before this Court, the High Court has erroneously extricated the assesses. The orders passed by the High Court which are contrary to the stated provisions shall not be given effect to by the authorities. Instead, the authorities shall process the claims of the concerned assessee afresh as per Section 67 of the Act read with the relevant rules in that regard. The appeals are disposed of.

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