2024(07)LCX0558

Calcutta High Court

Natraj Electro Casting Private Limited

Versus

Commissioner CGST & Central Excise (Appeal)

WPA 13767 of 2024 decided on 10-07-2024

1

M/L58
10.07.2024
sb
Ct 5

IN THE HIGH COURT AT CALCUTTA
CONSTITUTIONAL WRIT JURISDICTION
APPELLATE SIDE

WPA 13767 of 2024

M/s Natraj Electro Casting Pvt. Ltd.
Versus
Commissioner, CGST & Central Excise (Appeal),
Siliguri Appeal Commissionerate & Ors.

Mr. Vinay Kumar Shraff
Ms. Swarnwarshi Poddar
Mr. Dev Kumar Agarwal
                                        … For the petitioner.

Mr. Bhaskar Prasad Banerjee
Ms. Ekta Sinha
                    … For the respondent CGST & CX

1. Affidavit of service filed in Court today is taken on record.

2. The present writ petition has been filed, inter alia, challenging the order dated 17th October, 2023, passed by the appellate authority under Section 107 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the “said Act”).

3. The moot question involved in the instant writ petition is whether the petitioner is entitled to carry forward 100% Cenvat credit of capital goods as transitional input tax credit, under Section 140(2) of the said Act, without availing any credit under Central Excise Tax Regime.

4. It appears that on the basis of a show cause issued on 31st August, 2022, the transitional credit availed by the petitioner by submitting a declaration on 27th December, 2017 was proposed to be disallowed on the grounds indicated therein.

5. According to the petitioner, despite the petitioner having appropriately explained the circumstances why the same should not be allowed, the proper officer by an order dated 25th April, 2023 held that the petitioner had wrongly availed the transitional credit of Rs. 1,80,73,416/- and hence, the same was recoverable under Section 73(1) of the said Act and accordingly had confirmed the determination for a sum of Rs. 1,80,73,416/-.

6. The aforesaid order dated 25th April, 2023 formed the subject matter of challenge in the appeal filed under Section 107 of the said Act.

7. Mr. Shraff, learned advocate appearing on behalf of the petitioner submits that the proper officer, at the first instance, while disposing the proceedings under Section 73, by passing the order dated 25th April, 2023 had determined the liability of the petitioner on the grounds which did not find place in the show cause notice. According to him, despite the same being highlighted before the appellate authority, the appellate authority did not appropriately consider the same. He submits that although, the statute recognized a right to prefer an appeal from the order passed under Section 107 of the said Act, however, since the Appellate Tribunal under Section 112 of the said Act is yet to be constituted, the present writ petition has been filed. It is submitted, in the given facts unless this Hon’ble Court admits the writ petition and stays the demand, the petitioner will suffer irreparable loss and injury.

8. Mr. Banerjee, learned advocate enters appearance on behalf of the respondents. According to him, although, there is no irregularity in the order impugned, however, he acknowledges the fact that the Appellate Tribunal is yet to be constituted.

9. Having heard the learned advocates appearing for the respective parties and taking into consideration the fact that the petitioner has a right of appeal under Section 112 of the said Act and the Appellate Tribunal is yet to be constituted, I am of the view that the writ petition should be heard.

10. Mr. Shraff, however, by placing before this Court the recommendations of the 53rd GST Council Meeting submits that the GST Council has already proposed to reduce the pre-deposit from 20% to 10%, for maintaining the appeal under Section 112 of the said Act, though such recommendation is yet to be accepted and notified. Let a copy of the aforesaid recommendation as placed by Mr. Shraff, be retained with the records.

11. Having regard to the aforesaid and taking note of the prima facie case made out by the petitioner and the provisions of Section 112(8) and 112(9) of the said Act, I am of the view that if the petitioner deposits with the GST authorities an additional amount of Rs. 18 lakhs which constitute roughly 10% of the amount of tax in dispute in addition to the amount already deposited by the petitioner in terms of Section 107(6) of the said Act, within a period of two weeks from date, the recovery of the balance amount forming subject matter of the demand as confirmed by the proper officer by his order dated 25th April, 2023 shall remain stayed until further orders of this Court.

12. Let affidavit-in-opposition to the present writ petition be filed within a period of six weeks from date. Reply thereto, if any, be filed within four weeks thereafter.

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

(Raja Basu Chowdhury, J.)