Case tittle | Coal Benefication (India) Ltd. VS Union of India |
Court | Delhi High Court |
Honourable Judge | Justice S.Muralidhar Justice Prathiba M. Singh |
Citation | 2017 (09) GSTPanacea 18 HC Delhi W.P. (C) No. 7965 Of 2017 |
Judgment Date | 08-September-2017 |
The petition at hand challenges the validity of the Goods and Services Tax (Compensation to States) Act, 2017 (‘Act’), raising issues akin to those previously addressed in W.P. (C) No. 7459/2017 (Mohit Minerals Pvt. Ltd. v. Union of India). Ms. Shiva Lakshmi, representing Respondent No. 1 as the learned Counsel for the Central Government Standing Counsel, accepted notice on behalf of Respondent No. 1, while Mr. Satyakam, the learned Additional Solicitor General, accepted notice for Respondent No. 2. The court directed that a counter affidavit must be filed within four weeks, followed by a rejoinder.
In this petition, the primary issue concerns the challenge to the validity of the Goods and Services Tax (Compensation to States) Act, 2017 (‘Act’). The issues raised parallel those in a previous case, W.P. (C) No. 7459/2017 (Mohit Minerals Pvt. Ltd. v. Union of India).
Ms. Shiva Lakshmi, representing Respondent No.1, and Mr. Satyakam, representing Respondent No. 2, have accepted notice. They are directed to file a counter affidavit within four weeks, with a rejoinder to follow.
The Petitioner asserts that it has already paid the Clean Energy Cess under Chapter VII of the Finance Act, 2010 (‘FA 2010’) on coal held in stock as of June 30, 2017, amounting to approximately 2,85,418 tonnes, with cess payments totaling Rs. 11.41 crores.
The Petitioner argues that no further payment should be required under the impugned legislation for the coal on which Clean Energy Cess has already been paid, pending the outcome of this petition. However, for coal stocks on which no Clean Energy Cess was paid, any payments made under the impugned legislation should be contingent upon the petition’s resolution. This arrangement is duly ordered.
If the Petitioner succeeds in this petition, they will be entitled to receive a refund of the compensation cess paid under the challenged legislation. The specific terms of this refund will be determined by the Court in its final order.
In order to effectively implement this interim order, it is essential for the officers of the relevant department responsible for levying and collecting Clean Energy Cess on coal to assign a team to handle
In the event that the Petitioner succeeds in the current petition, they will be entitled to a refund of the compensation cess amount paid under the challenged legislation. The specific terms of this refund will be determined by the Court in its final order.
To facilitate the interim implementation of this order, it is imperative for the officers from the relevant Department responsible for levying and collecting Clean Energy Cess on coal to assign a team to visit the Petitioner’s business premises. Their task will be to verify the amount of Clean Energy Cess already paid on the stock of coal under the Finance Act, 2010. Upon the Petitioner satisfactorily proving such payments to the officers, they will receive credit for these payments. Consequently, the Petitioner will not be required to make any further payments under the disputed Act concerning sales and clearances.
During the period until this verification process is completed, no coercive actions will be taken against the Petitioner to recover the levy under the challenged Act.
Paragraph 7 outlines that if the Petitioner succeeds in their current petition, they will be entitled to a refund of the compensation cess paid under the contested legislation. The specifics of this refund will be determined by the Court in the final order.
Paragraph 8 details the interim measures to facilitate the implementation of the Court’s order. Officers from the relevant department responsible for levying and collecting Clean Energy Cess on coal are instructed to visit the Petitioner’s business premises. Their task is to verify the amount of Clean Energy Cess already paid under the Finance Act, 2010, for the existing stock of coal. Once the Petitioner provides satisfactory proof of such payments, they will receive credit for these payments. Consequently, they will not need to make further payments under the contested Act for sales and clearances. Until this verification process is completed, no coercive actions will be taken to recover the levy under the contested Act.
Paragraph 9 clarifies that for stocks where the Petitioner cannot provide adequate proof of having already paid the Clean Energy Cess under the Finance Act, 2010, they will be required to pay the cess under the contested Act. This requirement is subject to the directions issued in the preceding paragraphs.
These paragraphs collectively outline the interim relief and procedural steps intended to address the Petitioner’s claims regarding compensation cess payments under the disputed legislation.
7. If the Petitioner succeeds in the current petition, they will receive a refund of the compensation cess paid under the contested legislation, as determined by the Court in the final order.
8. To implement this interim order, officials responsible for levying and collecting Clean Energy Cess on coal must send a team to the Petitioner’s business premises. This team will verify how much Clean Energy Cess has already been paid on the stock of coal under the Finance Act, 2010. Upon satisfactory proof of payment provided by the Petitioner, they will receive credit for these payments and will not need to pay further under the contested Act for sales and clearances. No coercive measures will be taken against the Petitioner to recover this levy until this verification is completed.
9. However, for stocks where the Petitioner cannot provide satisfactory proof of prior Clean Energy Cess payment under the Finance Act, 2010, they must pay the cess under the contested Act, subject to the earlier directions.
10. In another recent order related to a different case, the Court noted that the Central Board of Excise and Customs (CBEC) is developing a method to implement an earlier interim order allowing petitioners to utilize credits of already paid cess while paying taxes. Due to difficulties faced by petitioners in utilizing and reflecting this credit in electronic returns, the Court has issued further interim directions.
11. Similarly, the Petitioner in this case is directed to continue paying taxes as they become due after utilizing credits for already paid cess, subject to final orders.
These points outline the conditions and procedures related to cess payments and refunds under the current legal proceedings.
If the Petitioner succeeds in the current petition, they will be entitled to a refund of the compensation cess paid under the challenged legislation, as determined by the Court in the final order.
To facilitate this interim order, officials from the relevant department responsible for levying Clean Energy Cess on coal must visit the Petitioner’s business premises. Their task is to verify the amount of Clean Energy Cess already paid under the Finance Act, 2010, for the stock of coal. Upon satisfactory proof of payment, the Petitioner will receive credit for these payments, exempting them from further payments under the impugned Act for sales and clearances. No coercive measures will be taken against the Petitioner until this verification is completed.
For stocks where the Petitioner cannot provide satisfactory proof of prior payment of Clean Energy Cess under the Finance Act, 2010, they will be required to pay the cess under the impugned Act, subject to the earlier directions.
In another related order issued today concerning a different case, it was noted that the Central Board of Excise and Customs (CBEC) is developing a method to implement an interim order from August 25, 2017. This order allowed another petitioner to utilize credits for cess payments while paying taxes. Due to difficulties in using and reflecting these credits in electronic returns, the Court has issued additional interim directions.
Similarly, the Petitioner in this case is directed to continue paying taxes as they become due, after utilizing credits for cess payments. This directive is subject to final orders from the Court. Until a system is developed by the Respondent to facilitate credit utilization in electronic returns, no coercive actions will be taken against the Petitioner for delayed electronic filings.
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