Interim protection against GST recovery where classification dispute and challenge to circular-based notice were under judicial scrutiny.

A writ petition challenged a show cause notice and recovery action under the CGST Act that relied on Circular No. 80/54/2018-GST, on the ground that the circular had already been set aside by another High Court and the issue was pending before the Supreme Court. The petitioner also contended that the dispute was one of goods classification and did not involve suppression on the stated facts. Pending further consideration, the court directed filing of a counter affidavit and restrained the respondents from taking coercive recovery measures under the impugned order.

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Issues: Whether the show cause notice and consequential recovery action under Section 74 of the Central Goods and Services Tax Act, 2017, which were based on Circular No. 80/54/2018-GST dated 31.12.2018, called for interim protection pending consideration of the writ petition.

Analysis: The petitioner questioned the use of the circular as the basis for the notice and the adjudication order, pointing out that the circular had been set aside by another High Court and that the issue was pending consideration before the Supreme Court. It was also urged that the dispute related to classification of goods and, on the facts stated, the matter did not attract allegations of suppression.

Outcome: Counter affidavit was directed to be filed and, in the meantime, the respondents were restrained from taking coercive measures for recovery pursuant to the impugned order.

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