Interim protection against double levy on coal stock granted, with credit utilisation allowed pending verification and final disposal.

Pending the writ petition challenging the GST Compensation to States Act, 2017, the Delhi HC granted interim protection against further compensation cess on coal stock already shown to have suffered Clean Energy Cess under the Finance Act, 2010. Subject to verification of proof of prior payment, no additional levy was to be insisted upon during the pendency of the petition, and the petitioner was protected from coercive recovery while departmental verification continued. The Court also permitted continued tax compliance by utilising available credit, pending development of an appropriate electronic return mechanism.

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Issues: Whether the petitioner was entitled, pending the writ petition, to protection against further levy and coercive recovery of compensation cess on coal stock on which Clean Energy Cess had already been paid, and to be allowed to continue payments by availing credit for cess already paid.

Analysis: The petition challenged the validity of the Goods and Services Tax (Compensation to States) Act, 2017. For interim purposes, the Court accepted the petitioner's position that a substantial quantity of coal in stock had already suffered Clean Energy Cess under Chapter VII of the Finance Act, 2010. In respect of such stock, the Court directed that no further payment under the impugned levy should be insisted upon during the pendency of the petition, subject to verification of proof of prior payment. The Court further protected the petitioner from coercive recovery action while the departmental verification exercise was carried out, and allowed the petitioner to continue paying taxes by utilising available credit, pending evolution of an appropriate system for electronic returns.

Conclusion: The petitioner was granted interim protection against double levy and coercive recovery in respect of coal stock on which Clean Energy Cess had already been paid, and was permitted to avail credit and continue compliance pending final disposal.

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