1. This is an application seeking the following reliefs:

(a) That the Hon’ble Court may be pleased to allow the present Application;

(b) That pending the hearing and final disposal of the captioned Special Civil Application, the initiation of recovery proceedings in pursuance of the Impugned Order by the Opponent No.4 against the Applicant may be stayed;

(c) for such further and other reliefs, as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case.

2. The applicant challenges the constitutionality, vires and legality of Section 28 of the Central Goods and Services Tax (Amendment) Act, 2018 (hereinafter referred to as “the Impugned Amendment”) and Circular No.87/06/2019–GST dated 02.01.2019 issued by opponent No.1, since, it seeks to retrospectively disallowed the transaction and carry forward of credit of Education Cess and Secondary and Higher Education Cess into the GST regime, which was levied on inputs, capital goods and inputs services used in the manufacture of excisable products which were cleared on payment of Central Excise Duty under the CGST Act. This Court issued notice on 24.02.2021, and now the main matter is fixed on 30.11.2022 as there are group of matters which require urgent attention of this Court.

3. A show-cause notice has been issued on 01.12.2021 upon the applicant seeking to appropriate the credit of Education Cess and Secondary and Higher Education Cess under Section 140(1) of CGST Act along with the interest under Section 50 and the penalty under Section 122(2)(a) of the CGST Act read with Section 73(9) of the CGST Act. The Jurisdictional Authority has issued an Order-in-Original during the pending proceedings although the request was made to keep the said show-cause notice in abeyance. Since the Order-in-Original confirms the demand raised in the show-cause notice, the request is made for the stay on the ground that the executive authority cannot start parallel proceedings. The applicant is before this Court urging that amendment to explanation 2 to Section 140 of the CGST Act vide Section 28 of the Impugned Amendment itself has not been enforced till date, and therefore, the issuance of show-cause notice and the impugned order placing reliance on the same is untenable. The Bombay High Court decision on this issue rendered in the case of Godrej & Boyce Mfg. Co. Ltd. Vs. Union of India [Writ Petition No.3226 of 2019] reported in 2021 SCC OnLine Bom 13893.

3.1 Relying on the said decision, the applicant seeks the above-mentioned reliefs.

4. Learned advocate Mr. Hardik P. Modh has urged that the show-cause notice, which has been issued without any jurisdiction and which has resulted into passing of an Order-in- Original requires indulgence. He, in the alternative, has urged that under Section 107(7) of the CGST Act, let the stay of recovery for the balance amount be granted, if the assessee has paid the amount equal to 10% of the amount of tax under dispute be granted.

5. It has been strongly resisted by learned Standing Counsel Mr. Priyank P. Lodha on the ground that challenge is to the vires and presently there will be no requirement for the Court to grant any stay.

5.1 According to him, the decision of Madras High Court rendered in case of Assistant Commissioner of CGST and Central Excise and Ors. Vs. Sutherland Global Services Private Limited and Ors. reported in [2020] 83 GSTR 259 (Mad.), is favoring the Revenue however, the same has been challenged by the respondent Sutherland Global Services Private Limited by way of Special Leave Petition No.7780 of 2021, where the Apex Court has issued the notice. Lastly, the matter had been listed on 02.11.2022. According to him, this is a prematured demand of stay and the same may not be entertained.

6. Having noticed the averments as also the detailed submissions made by both the sides and the challenge which has been found in the main petition coupled with the order passed by this Court in Civil Application (for Stay) No. 1 of 2022 in Special Civil Application No.11061 of 2019, this Court is of the opinion that presently, no such request shall be granted.

6.1 The subject matter of challenge in the main petition is to the constitutional validity of the amended Section 140 of the CGST Act. The main matter is coming up for hearing on 30.11.2022. The grievance on the part of the applicant is that the Adjudicating Authority has not awaited the outcome of the challenge which has already been made by questioning the constitutional validity of the amended Act. And now, there will be a requirement to pay the penalty and the interest, which according to learned advocate Mr. Modh would be around Rs.9,00,000/- in the instant case. It is only one time that the said amount needs to be paid. He, therefore, has also urged to stay that requirement till the Court finalizes the constitutional validity.

7. On our opinion, as the Court is yet to apply its mind to the challenge which has been made before this Court and as the appeal is already statutorily provided, the applicant shall be at liberty to file an appeal and can make a request for stay of appeal. Any further proceedings, at the instance of the appellate authority shall be subject to the final outcome of the main matter. If the issue of limitation is the reason for hampering the chance of the applicant in preferring the appeal, let that not be raised against him.

7.1 In the main proceedings, let the pleadings be completed, without fail, within a week’s time.

8. The civil application stands disposed of accordingly.