High Court grants stay on UPGST/CGST Act notices for ENA sales taxability challenge

M/s Radico Khaitan Limited Versus Deputy Commissioner Commercial Tax And 5 Others

M/s Radico Khaitan Limited Versus Deputy Commissioner Commercial Tax And 5 Others - 2020 (33) G. S. T. L. J134 (All.) Issues involved:
1. Challenge to notices issued under Section 73(1) of UPGST/CGST Act for the period July 2017 to July 2019.
2. Maintaining status quo as decided by the Goods and Service Tax Council.
3. Prohibition on respondent no. 1 from proceeding with the notices until a decision by the Goods and Service Tax Council.
4. Costs of the writ petition.

Analysis:
1. The petitioner challenged the notices dated 14.11.2019, 15.11.2019 & 16.11.2019 issued by respondent no. 1 under Section 73(1) of UPGST/CGST Act for the period July 2017 to July 2019. The petitioner contended that no GST is leviable on the sale of un-denatured ENA to liquor manufacturers. In response to a previous notice, the petitioner had submitted that the issue of taxability of such supply is under consideration by the Goods and Service Tax Council, which decided to maintain status quo. The High Court found merit in the petitioner's submissions and stayed further proceedings pending a response from the respondents.

2. The petitioner sought a writ directing respondent no. 1 to maintain status quo as decided by the Goods and Service Tax Council. The issue of taxability of outward supply of un-denatured ENA to liquor manufacturers was under the Council's consideration, and the petitioner had highlighted this in their reply to the notice. Despite this, respondent no. 1 issued a show cause notice for determining GST, interest, and penalty on the supply of un-denatured ENA. The Court acknowledged the petitioner's contentions and stayed proceedings until further responses are received.

3. Additionally, the petitioner requested a writ prohibiting respondent no. 1 from proceeding with the notices until a decision by the Goods and Service Tax Council is made. The Court noted the petitioner's argument that the Council had decided to maintain status quo on the issue in question. The High Court granted the stay on further proceedings pending responses from the respondents and emphasized the need for a comprehensive consideration of the matter.

4. Finally, the petitioner sought the costs of the writ petition. The Court directed the respondents to file their counter affidavits within four weeks and allowed for a rejoinder affidavit within two weeks thereafter. The case was listed for further hearing on a specified date, and the Court ensured that the proceedings before respondent no. 1 regarding the notices issued under Section 73(1) of UPGST/CGST Act remained stayed until the next listing date.