Supreme Court reinstates special rate application, directs GST department to assess promptly

The Supreme Court reinstated Notification No.20/2008-Central Excise, allowing manufacturers to apply for a special rate if value addition exceeded specified rates. Petitioner's special rate application was pending when the Notification was challenged and reinstated. Despite this, the GST department did not consider the application, leading to coercive measures against the petitioner. The Court directed the GST department to assess the application within six weeks, prohibiting coercive actions in the meantime. The petitioner was granted liberty to challenge the imposition of interest separately.

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Issues:
1. Claim for special rate under Notification No.20/2008-Central Excise.
2. Non-consideration of special rate application by the GST department.
3. Coercive measures against the petitioner.
4. Imposition of interest by the GST department.

Claim for Special Rate under Notification No.20/2008-Central Excise:
The petitioner, engaged in the manufacture of instant tea, sought benefits under the Northeast Industrial Policy, entailing exemptions from excise duties. Initially, 100% refund of excise duty was granted. However, Notification No.20/2008-Central Excise altered this, allowing manufacturers to apply for a special rate if the value addition exceeded the rates specified. The petitioner applied for a special rate under Clause 3(1) of the Notification, which was pending when the Notification was challenged in various High Courts and set aside by this Court. Subsequently, the Supreme Court reinstated the Notification, leading to the petitioner's grievance that their special rate application was not considered.

Non-Consideration of Special Rate Application by the GST Department:
Following the Supreme Court's judgment reinstating the Notification, the petitioner submitted applications for a special rate under Clause 3(1) on 28.09.2020. The petitioner alleged that despite the Notification being restored, the GST department did not evaluate their special rate claim. Consequently, the department intended to attach the petitioner's bank accounts based on the rates in the Notification. The Court emphasized that without a decision on the special rate claim, it was inappropriate for the department to proceed with coercive measures based on the Notification's rates.

Coercive Measures Against the Petitioner:
Acknowledging the need for a fair assessment of the petitioner's special rate claim, the Court directed the Principal Commissioner of GST Guwahati to consider the application within six weeks. Until a decision was reached, the Court prohibited any coercive actions against the petitioner, including attachment of bank accounts. Notably, if any coercive measures had been initiated, they were to be reverted to the original status.

Imposition of Interest by the GST Department:
The petitioner contested the imposition of interest by the GST department on the amount due. As the Court had not addressed this issue in the current judgment, it granted the petitioner liberty to approach the Court again regarding the imposition of interest, if necessary. The writ petition was allowed to the extent of directing the consideration of the special rate application and halting coercive actions until a decision was made.

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