Supreme Court lists batch of petitions challenging validity of GST rule for final hearing on April 28, issues directions for smooth proceedings.

Case Name:

Union of India & Anr. vs. The Quarry Owners Association & Ors. (GST SC Case)

Key Takeaways:

- The case deals with the validity of Explanation (a) to Rule 89(5) of the CGST Rules, 2017, which has been challenged in various High Courts.

- The Supreme Court has listed the batch of petitions for final hearing on April 28, 2021, to resolve the conflicting views of the Gujarat and Madras High Courts.

- The court has issued directions for smooth proceedings, including filing of counter-affidavits, circulation of statutory provisions and case laws, and submission of written arguments.

Issue:

The central legal question is whether Explanation (a) to Rule 89(5) of the CGST Rules, 2017, is valid or ultra vires (beyond the legal power or authority).

Facts:

The Gujarat High Court had held that Explanation (a) to Rule 89(5) of the CGST Rules, 2017, is ultra vires, while the Madras High Court took a contrary view. A large number of petitions are pending in various High Courts on the same issue. The Supreme Court has listed the present batch of cases for final hearing on April 28, 2021, to resolve the conflicting views.

Arguments:

The arguments from both sides are not explicitly stated in the judgment. However, it can be inferred that the petitioners argue that Explanation (a) to Rule 89(5) of the CGST Rules, 2017, is ultra vires, while the respondents (Union of India) argue that the rule is valid and within the legal authority

Key Legal Precedents:

The judgment does not mention any specific legal precedents cited by the parties or the court.

Judgement:

The Supreme Court has not yet delivered its final judgment on the validity of Explanation (a) to Rule 89(5) of the CGST Rules, 2017. The court has listed the batch of petitions for final hearing on April 28, 2021, and issued directions to facilitate the proceedings, including filing of counter-affidavits, circulation of statutory provisions and case laws, and submission of written arguments.

FAQs:

Q1. What is the main issue in this case?

A1. The main issue is the validity of Explanation (a) to Rule 89(5) of the Central Goods and Services Tax (CGST) Rules, 2017, which has been challenged in various High Courts.

Q2. What is the significance of the Supreme Court's decision to list the cases for final hearing?

A2. By listing the cases for final hearing, the Supreme Court aims to resolve the conflicting views of the Gujarat and Madras High Courts on the validity of the rule in question.

Q3. What directions has the Supreme Court issued for the proceedings?

A3. The court has issued directions for smooth proceedings, including filing of counter-affidavits within two weeks, circulation of statutory provisions and case laws by the parties, and submission of written arguments at least two weeks before the hearing date.

Q4. What is the potential impact of the Supreme Court's decision on the validity of the rule?

A4. The Supreme Court's decision will have a significant impact on the interpretation and application of Rule 89(5) of the CGST Rules, 2017, and will provide clarity on the legal validity of Explanation (a) to the rule.

Q5. When is the final hearing scheduled?

A5. The final hearing is scheduled for April 28, 2021, at the top of the Board.

1. This batch of petitions arises from the judgments of the High Court of Gujarat and of the High Court of Madras. The Gujarat High Court has held that Explanation (a) to Rule 89(5) of the CGST Rules 2017 is ultra vires, while a contrary view has been taken by the High Court of Madras. Since a large number of petitions are pending in the High Courts on the same issue, it is appropriate that we list the present batch of cases at an early date, which we do by posting the cases for final hearing on 28 April 2021. The entire batch of petitions shall be listed at the top of the Board on that date.

2. In order to facilitate the learned counsel and the Court in appreciating the gamut of the matter, certain house-keeping directions are required, which are issued as follows:

(i) Counter affidavits, if any, shall be filed within a period of two weeks

from today and no adjournment shall be granted on the next date of hearing;

(ii) Mr Balbir Singh, learned Additional Solicitor General shall, within a

period of ten days, circulate an index of statutory provisions as well as

circulars on which the Revenue would seek to place reliance at the final hearing. Within three days of the receipt of the e-mails, all the learned

counsel shall indicate to the Additional Solicitor General the additions

which they request to be made to the index so that a common compilation can be filed;

(iii) As regards case law and precedent, it has been agreed that Mr Sujit

Ghosh, learned senior counsel appearing on behalf of the first respondent in some of the cases, shall likewise circulate an index of the case law on which he seeks to place reliance. All the learned counsel who wish to make any additions to the case law shall indicate this to Mr Sujit Ghosh within three days of the receipt of the emails;

(iv) In the above manner, two separate common compilations shall be made

available to the Court in the soft form, one containing the statutory provisions and circulars and material associated with it and the second

consisting of the precedent on the subject; and

(v) Written submissions shall be filed by all the learned counsel appearing

on behalf of the contesting parties at least two weeks before the date of

hearing.

3. The Registry shall ensure that the PDF format together with consecutive

pagination is circulated to all the learned counsel appearing in the matter so as to ensure that the page references which are made available to the Court are also made available to all the learned members of the Bar for facilitating their submissions.

4. In the event that there is any difficulty experienced by the learned counsel in accessing the PDF files, they may contact the Court Masters of this Court, Mr Sanjay Kumar or Mr Chetan Kumar, as the case may be.

5. List the Special Leave Petitions on 28 April 2021 at the top of the Board.

(CHETAN KUMAR) (SAROJ KUMARI GAUR)

A.R.-cum-P.S. Court Master

Date: 08/04/2021