Supreme Court Dismisses Petition on LPG Tax Circular, Preserves Petitioner's Right to Challenge Future Administrative Actions

SC disposed of writ petition challenging GST taxation circular on LPG domestic supply. Court noted prior administrative order by Commissioner already addressed taxation issues, leaving petitioner's legal remedies intact. Coercive action was prevented, and the circular's challenge remained open for potential future legal proceedings.

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Issues involved:
Challenge to show cause notice and circular regarding taxation on supply of LPG for domestic use.

Summary:
The writ petition under Article 226/227 challenges a show cause notice dated 22.09.2023 and Circular No. 80/54/2018-GST dated 31.12.2018, seeking to prevent coercive action during the petition's pendency. The petitioner's Senior Counsel presented relevant annexures in support of the petition to invoke Article 226 jurisdiction.

During arguments, it was noted that a similar show cause notice was issued by the Commissioner, Central Excise & Service Tax, Mangaluru, regarding the rate of taxation on LPG supply for domestic use. The issue was whether to levy 5% or 18% tax for the period from 01.07.2017 to 24.01.2018. Following justification provided by the assessee, the competent authority concluded no additional GST liability was due, leading to dropping of interest and proposed penalties as per Board clarifications in circulars. The Apex Court precedent emphasized utilizing alternate remedies rather than immediate judicial intervention.

Given the petitioner's reply to the show cause notice, it was deemed appropriate for respondents to assess the issue considering all defenses raised. The order dated 12.05.2023 by the Commissioner in Mangaluru had already addressed the challenged circular while dropping the demand. Consequently, the challenge to the circular was left open for the petitioner to pursue legal remedies.

The writ petition was disposed of with the above observations.

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