Raj Metal Industries VS Union of India

This application is filed under Article 226 of the Constitution of India where the writ petitioners challenge the constitutionality of Rule 86A of the CGST Rules/WBGST Rules and Section 16(2)(c) of the CGST Act/WBGST Act, while also contesting the actions initiated by the State GST authorities, particularly the issuance of summons on October 19, 2020

This is an application under Article 226 of the Constitution of India where the writ petitioners challenge the vires of Rule 86A of the CGST Rules/WBGST Rules and Section 16(2)(c) of the CGST Act/WBGST Act; they further challenge the actions initiated by the State GST authorities concerning summons issued on October 19, 2020, and also the blocking of the electronic credit ledger that was done on December 8, 2020

This application is filed under Article 226 of the Constitution of India where the writ petitioners are challenging the vires of Rule 86A of the CGST Rules and WBGST Rules as well as Section 16(2)(c) of the CGST Act and WBGST Act. The writ petitioners also challenge the actions initiated by the State GST authorities regarding the summons issued on October 19, 2020, and the subsequent blocking of the electronic credit ledger on December 8, 2020. Counsel Mr. Vinay Shraff, representing the petitioners, argues that since proceedings were already pending under the CGST Act, the State GST authorities had no jurisdiction to initiate further proceedings. He relies on Sub-Section 2(b) of Section 6 of the West Bengal GST Act, which indicates that when a proceeding has been initiated by the Central authorities, the State cannot interfere. On these grounds, he also contests the blocking of the credit ledger and supports his argument by referring to a Circular issued by the Ministry of Finance, Department of Revenue, dated October 5, 2018.

This application under Article 226 of the Constitution of India involves the writ petitioners challenging the vires of Rule 86A of the CGST Rules/WBGST Rules and Section 16(2)(c) of the CGST Act/WBGST Act The petitioners also contest the actions taken by the State GST authorities concerning summons issued on October 19, 2020, and the blocking of their electronic credit ledger on December 8, 2020 Mr. Vinay Shraff, counsel for the petitioners, argues that since proceedings were already pending under the CGST Act, the State GST authorities should not have initiated any parallel actions He refers to Sub-Section 2(b) of Section 6 of the West Bengal GST Act, which indicates that when a proceeding is initiated by Central authorities, the State cannot interfere based on this, he also challenges the blocking of the credit ledger Additionally, Mr. Shraff cites a Circular issued by the Ministry of Finance, Department of Revenue, dated October 5, 2018, to support his argument The case also includes arguments presented by Mr. Dastoor, learned Additional Solicitor General representing the Union of India, Mr. Abhratosh Majumdar, learned Additional Advocate General representing the State CGST, and Mr. Somnath Ganguly, learned counsel representing the CGST Upon consideration, the court finds that the summons issued on October 19, 2020, by the State GST appears to prima facie violate Section 6(2)(b) of the WBGST Act and therefore, the court directs a stay on the summons and any related proceedings

This application under Article 226 of the Constitution of India involves the writ petitioners challenging the vires of Rule 86A of the CGST Rules/WBGST Rules and Section 16(2)(c) of the CGST Act/WBGST Act, while also contesting the actions taken by the State GST authorities, particularly the summons issued on October 19, 2020, and the blocking of the electronic credit ledger on December 8, 2020. Mr. Vinay Shraff, counsel for the petitioners, argues that since proceedings were already pending under the CGST Act, the State GST authorities had no jurisdiction to initiate further actions, citing Sub-Section 2(b) of Section 6 of the West Bengal GST Act, which restricts the State from intervening when the Central authorities have already initiated proceedings. He also relies on a Circular issued by the Ministry of Finance, Department of Revenue, dated October 5, 2018, to support his argument. The learned Additional Solicitor General, Mr. Dastoor, represents the Union of India, while Mr. Abhratosh Majumdar, the learned Additional Advocate General, represents the State CGST, and Mr. Somnath Ganguly represents the CGST. After considering the arguments, it is observed that the summons issued by the State GST on October 19, 2020, appear to be in prima facie violation of Section 6(2)(b) of the WBGST Act, leading to a stay on the summons and any subsequent proceedings. Regarding the blocking of the electronic credit ledger, Mr. Majumdar clarifies that this action was taken by the State authorities as agents of the Central authorities and does not constitute a ‘proceeding’ under Section 6(2)(b) of the WBGST Act.

This is an application under Article 226 of the Constitution of India where the writ petitioners have challenged the validity of Rule 86A of the CGST Rules/WBGST Rules and Section 16(2)(c) of the CGST Act/WBGST Act The petitioners further challenge the actions initiated by the State GST authorities concerning the summons issued on October 19, 2020, and the blocking of the electronic credit ledger on December 8, 2020 Mr. Vinay Shraff, counsel for the petitioners, argues that since proceedings were pending under the CGST Act, the State GST authorities had no jurisdiction to initiate separate proceedings, citing Sub-Section 2(b) of Section 6 of the West Bengal GST Act, which indicates that when a proceeding has been initiated by the Central authorities, the State authorities cannot intervene He also challenges the blocking of the credit ledger on the same grounds, further relying on a Circular issued by the Ministry of Finance, Department of Revenue, dated October 5, 2018, to support his argument Mr. Dastoor, learned Additional Solicitor General, representing the Union of India, Mr. Abhratosh Majumdar, learned Additional Advocate General, representing the State CGST, and Mr. Somnath Ganguly, learned counsel for the CGST, were heard by the court Upon consideration, the court found that the summons issued by the State GST on October 19, 2020, were prima facie in violation of Section 6(2)(b) of the WBGST Act and ordered a stay on the summons and any related proceedings Regarding the blocking of the electronic credit ledger, Mr. Majumdar argued that the State authorities were acting as agents of the Central authorities and that this action did not constitute a ‘proceeding’ under Section 6(2)(b) of the WBGST Act Since the validity of Rule 86A of the CGST Rules/WBGST Rules and Section 16(2)(c) of the CGST Act/WBGST Act is under challenge, the court has directed the exchange of affidavits in the matter, with affidavits-in-opposition to be filed within four weeks and replies within two weeks thereafter

This application under Article 226 of the Constitution of India involves the writ petitioners challenging the vires of Rule 86A of the CGST Rules/WBGST Rules and Section 16(2)(c) of the CGST Act/WBGST Act, along with the actions taken by the State GST authorities concerning summons issued on October 19, 2020, and the blocking of the electronic credit ledger on December 8, 2020; counsel for the petitioners, Mr. Vinay Shraff, argues that since proceedings were pending under the CGST Act, the State GST authorities should not have initiated separate proceedings, relying on Sub-Section 2(b) of Section 6 of the West Bengal GST Act, which he contends prevents the State from intervening in proceedings already initiated by Central authorities, and challenges the blocking of the credit ledger on the same basis, further supported by a Circular from the Ministry of Finance, Department of Revenue, dated October 5, 2018; after hearing arguments from the learned Additional Solicitor General, Mr. Dastoor, representing the Union of India, the learned Additional Advocate General, Mr. Abhratosh Majumdar, representing the State CGST, and learned counsel Mr. Somnath Ganguly representing the CGST, the court finds that the summons issued on October 19, 2020, by the State GST, prima facie, violates Section 6(2)(b) of the WBGST Act, and therefore stays the summons and any proceedings under it; however, with regard to the blocking of the electronic credit ledger, Mr. Majumdar submits that this action was taken by the State authorities as agents of the Central authorities and does not constitute a ‘proceeding’ under Section 6(2)(b) of the WBGST Act; given that the vires of Rule 86A of the CGST Rules/WBGST Rules and Section 16(2)(c) of the CGST Act/WBGST Act are under challenge, affidavits are to be exchanged within stipulated timeframes, and the court clarifies that the Central GST authorities are not precluded from continuing any proceedings initiated by them according to law; the matter is set to appear after the exchange of affidavits, and an urgent photostat certified copy of the order, if requested, is to be provided to the parties upon fulfilling necessary formalities.

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