Gopal Samanta Vs Union of India

Date: August 5, 2024

Court: High Court

Bench: Calcutta

Type: Writ Petition

Judge(s)/Member(s): Raja Basu Chowdhury

Download

Subject Matter

Validity of notifications extending the time limit for tax recovery under Section 73(9)

Summary

In the case of Gopal Samanta vs. Union of India & Ors., the Calcutta High Court evaluated the validity of certain notifications issued by the Central Board of Indirect Taxes and Customs that extended the time for tax recovery under the WBGST/CGST Act. The petitioner, represented by advocate Ray, argued that these notifications, which were enacted on July 5, 2022, March 31, 2023, and December 28, 2023, improperly extended the deadlines for recovering unpaid taxes and for claiming erroneously availed input tax credits for the period of February 2018 to March 2018. Ray contended that Section 168A, allowing extensions due to force majeure, did not apply since there was no force majeure when a show cause cum demand notice was issued on September 1, 2023. The notifications were claimed to be a misuse of power, infringing on the petitioner’s rights and seeking a stay on a demand order issued on December 26, 2023. The Court acknowledged the jurisdictional issue raised and agreed to hear the writ petition, allowing time for the State GST authorities to file affidavits. Citing a similar case (OSL Exclusive Pvt. Ltd. vs. Union of India & Ors.), the Court temporarily stayed the impugned demand until the end of December 2024 or until further orders, thus granting the petitioner a reprieve while the case is further examined.

FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT

1. Affidavits of service filed in Court today is retained with the record.

2. Ray, learned advocate appearing for the petitioner, by placing reliance on the notifications dated 5^th July 2022, 31^st March 2023 and 28^th December 2023 submits that the Central Board of Indirect Taxes and Customs by the aforesaid notifications have extended the time limit as specified in Section 73(10) of the WBGST/CGST Act, 2017 (hereinafter referred to as the “said Act”) for issuance of the order under Section 73(9) of the said Act for recovery of tax not paid or short paid or of input tax credit wrongly availed or utilized, relating to the period as specified in the said notifications.

3. By referring to Section 168A of the said Act, the petitioner claims that the said section has been introduced with effect from 31st March, 2020, whereunder a power has been conferred on the government to extend the time limit prescribed or notified under the said Act in special circumstances in respect of actions which cannot be completed or complied with due to force majeure. By referring to the order dated 26^th December 2023 it is submitted that the show cause cum demand notice under Section 73 of the said Act was issued on 1st September 2023 in respect of the tax period February 2018 to March 2018. Since, there was no force majeure prevailing then, the respondents could not have relied on the aforesaid notifications for extending the time for initiation of proceeding in September 2023. According to the petitioner the aforesaid notifications as also the aforesaid show cause notice and the adjudication order had been issued in colourable exercise of power. A valuable right has already accrued in favour of the petitioner. In such circumstances, Mr. Ray, prays for stay of operation of the aforesaid order and the consequential demand.

4. Banerjee, learned advocate appearing on behalf of the State GST authorities submits that the present writ petition cannot be decided without calling for affidavits. He submits that the respondents should be granted opportunity to file affidavit-in-opposition.

5. Having regard to the aforesaid and since a jurisdictional issue has been raised, the writ petition shall be heard. Let affidavit-in-opposition to the present writ petition be filed within a period of four weeks from date. Reply thereto, if any, be filed within three weeks thereafter.

6. Taking into consideration the fact that a prima facie case has been made out by the petitioner, and the fact that a Coordinate Bench of this Court by an order dated 13^th February, 2024 in an identical matter in the case of OSL Exclusive Pvt. Ltd. v. Union of India & Ors., reported in 2024 SCC OnLine Cal 2826 had been pleased to pass a limited interim order, I propose to stay the impugned demand made in the order dated 26^th December 2023 as appearing at annexure P-7 to the writ petition till the end of December, 2024 or until further order whichever is earlier.

Liberty to mention after expiry of the period for exchange of affidavits.