Bombay High Court Stays Final Order on GST Show Cause Notice Pending Appeal Against Earlier Ruling.


16 December 2024 GST >> Tax Laws  

The Bombay High Court addressed a petition in the matter of Shampoorji Pallonji Energy Integrated Solutions Pvt. Ltd. & Another v/s Union of India challenging a show cause notice issued to a petitioner for short payment of tax amounting to Rs. 115.58 crore, along with interest, for the period of August 2017 to May 2018. The issue arose because the department insisted that the petitioner should have classified its services under the tariff heading ‘9988’, despite the fact that the Joint Commissioner (Appeals-II) had already upheld the petitioner’s classification under ‘9973’ by an order dated 24th February 2021.

The petitioner challenged the notice on the grounds that the classification decision for the mentioned period had already been accepted and was not appealed by the department. In response, the respondents stated that they were in the process of filing an appeal, but the GST tribunal was non-functional, delaying the process.

 
 

While the Court generally refrains from intervening in matters of show cause notices, it noted that issuing a final order based on the disputed notice could unfairly prejudice the petitioner. Consequently, the Court allowed the respondents to proceed with adjudicating the show cause notice but prohibited them from issuing a final order until the Joint Commissioner’s decision of 24th February 2021 was either set aside or stayed. The Court disposed of the petition with a clarification that this ruling would not obstruct the respondents from challenging the earlier order in accordance with the law. No costs were imposed on either party.