Gail (India) Limited Vs. Union Of India

Heard learned advocate Mr. Akshat Khare for the petitioner and learned advocate Mr. Priyank Lodha for respondents no.1, 2, and 3. By invoking the writ jurisdiction of this Court under Article 226 of the Constitution, the petitioner has prayed to set aside the order-in-original dated 30.04.2021 passed by respondent no.3, the Deputy Commissioner, Central Tax, GST Division-II, Vadodara. It is also prayed to set aside the order-in-appeal dated 24.09.2021, passed by the appellate authority-Commissioner, GST & Central Excise (Appeals), respondent no.2 herein. The petitioner contends that the orders were passed without proper consideration of the facts and circumstances presented, leading to an erroneous conclusion. The petitioner argues that the decision to impose tax liabilities and penalties was based on a misinterpretation of the applicable laws and ignored critical evidence that could have influenced the outcome favorably for the petitioner.

The core issue revolves around the applicability of certain provisions under the Central Goods and Services Tax Act, 2017 (CGST Act) and the subsequent rules framed thereunder. The petitioner maintains that the interpretation of these provisions by the respondents was flawed, leading to an unjust imposition of tax. The petitioner further asserts that there were significant procedural lapses during the adjudication process, including the denial of a fair hearing and the failure to provide adequate opportunities to present their case. These procedural irregularities, according to the petitioner, violate the principles of natural justice and have resulted in a substantial miscarriage of justice.

The petitioner also highlights discrepancies in the evaluation of the financial records and the computation of the tax liability. It is contended that the authorities did not accurately account for certain transactions and misclassified others, thereby inflating the tax demand. The petitioner argues that the appellate authority, in its order dated 24.09.2021, failed to rectify these errors and instead upheld the flawed findings of the original adjudicating authority. This, the petitioner claims, underscores a lack of due diligence and a mechanical approach in the appellate proceedings.

In support of their claims, the petitioner refers to several precedents where higher courts have intervened in similar circumstances to correct administrative and procedural lapses. The petitioner urges the court to exercise its writ jurisdiction to ensure that justice is served and that the petitioner is not subjected to unwarranted financial burden due to administrative oversight or legal misinterpretation. The petitioner also seeks interim relief in the form of a stay on the enforcement of the impugned orders to prevent any coercive action by the tax authorities until the final disposal of the writ petition.

The learned advocates for the respondents, on the other hand, argue that the orders passed by the authorities are well-reasoned and based on a thorough examination of the records. They contend that the petitioner was given ample opportunity to present their case and that the procedural requirements were duly followed. The respondents assert that the tax demand and penalties were computed strictly in accordance with the provisions of the CGST Act and the rules framed thereunder. They further argue that the writ petition is not maintainable as the petitioner has an alternative remedy available under the law, which they have not exhausted.

The respondents also emphasize that the appellate authority’s order comprehensively addresses the petitioner’s grievances and provides a detailed rationale for upholding the original order. They contend that the court should refrain from interfering in the quasi-judicial functions of the tax authorities, especially when there is no apparent violation of law or procedural fairness. The respondents urge the court to dismiss the writ petition and allow the tax authorities to proceed with the recovery of the dues as determined in the impugned orders.

It is prayed for against the respondent department to refund the service tax paid in cash along with the applicable interest under the transitional provision of Central Goods & Service Tax as claimed by the petitioner. The facts are to be noticed only for the purpose of having an idea of the controversy raised in the petition.

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