The Hon’ble Madras High Court in M/s. Sakthi Industries v. Union of India [W.P.No.26901 dated September 12, 2023] admitted the writ challenging amendment to Rule 61(5) of the Central Goods and Services Tax Rules, 2017 (“the CGST Rules”) and directed the Petitioner to pay 10% of the disputed amount within a period of 4 weeks to get the interim stay from all further proceedings.
Facts:
M/s. Sakthi Industries (“the Petitioner”) availed Input Tax Credit (“ITC”) which as per the Revenue Department is beyond the limitation prescribed under Section 16(4) read with Section 39 of the CGST Act (“the CGST Act”) read with Rule 61(5) of the CGST Rules and accordingly issued the demand cum show cause notice.
Thereafter, the Adjudicating Authority vide an Order dated July 25, 2023 (“the Impugned Order”) on the ground that the ITC availed by the Petitioner being beyond the time limit prescribed under Section 16(4) confirmed the demand.
Aggrieved by the Impugned Order the Petitioner filed writ before the Hon’ble Madras High Court challenging the Impugned Order.
Held:
The Hon’ble Madras High Court in W.P.No.26901 of 2023 held as under:
- Noted that, the Petitioner has availed ITC, which, according to the Respondent is beyond the limitation prescribed under Section 16(4) read with Section 39 of CGST Act read with Rule 61(5) of the CGST Rules.
- Further noted that, the petitioner has also challenged the amendment to Rule 61(5) of the CGST Rules vide Notification No. 49/2019 – Central Tax dated October 09, 2019.
- Stated that, the Petitioner has an alternate remedy and challenged the impugned order on the strength of the challenge to the amendment to Rule 61(5) of the CGST Rule vide Notification No. 49/2019-Central Tax dated October 09, 2019. Therefore, the court admitted the writ.
- Directed the Petitioner to pay 10% of the disputed tax that as confirmed vide the Impugned order within four weeks. Subject to such compliance, there shall be an interim stay of all further proceedings.
- Listed the matter on October 10, 2023.
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