Guidelines for defending Writ Petitions & Streamlining the process of Litigation by Department

After the implementation of GST, a number of Writ Petitions/PILs are being filed in Hon’ble Supreme Court & High Court(s) challenging various aspects of GST Law and rates. Therefore, CBIC in order to lay down a uniformity across the field formations has from time to time issued a number of Instructions laying out the procedure for efficaciously defending the interest of Government before the Court(s). In this regard, Master Instruction i.e., Instruction No. S-29012/12/2017-ST-1-DoR, dated 27-11-2017 in GST regime has been issued which has evolved over the period of time in order to streamline the procedure as mentioned below:

Nodal Cell under CBIC

Nodal Cell headed by Commissioner (Legal), CBIC - In order to effectively coordinate and monitor all GST related cases filed/pending before Hon’ble High Court(s). - commr.legal-CBIC@nic.in

Nodal Cell headed by Commissioner (Directorate of Legal Affairs), CBIC - In order to effectively coordinate and monitor all GST related cases filed/pending before Hon’ble Supreme Court. - dla-rev@nic.in.

The new cases or any updates in other cases, as and when received by the concerned officer/field formations etc., may be intimated to the respective Nodal Cell of CBIC.

Issuance of Unique Index Number

Commissioner (Legal)/Commissioner (DLA), CBIC will assign a unique Index Number to all High Court(s)/Supreme Court cases respectively, filed under GST regime, which will remain unchanged and may be used for all future references/correspondences.

Issuance of Authorisation to defend UOI, States & other respondent(s)

- To defend in GST related matters before the High Court(s) where Respondents are UOI and other Central Government respondents [including GST Council – stated vide Instruction F.No. 275/65/2013-CX.8A dated 12-10-2017] - Authorisation will be issued by Commissioner (Legal), CBIC - Authorisation should be issued in favour of Jurisdictional Principal Commissioner/Commissioner

- To defend in GST related matters before the High Court(s) in case no jurisdictional officer is joined as respondent(s) - Authorisation will be issued by Legal Cell - Authorisation should be issued in favour of Concerned Nodal Principal Commissioner/Commissioner in whose jurisdiction the bench of the High Court, where petition is filed, is located.

Field formations are also expected to closely monitor GST related petitions

The field formations are also expected to closely monitor GST related petitions being filed in the Hon’ble High Court(s) in their jurisdiction and upon filing of the petition, the same should be immediately brought to the notice of Commissioner (Legal), CBIC for issuance of Authorization.

Jurisdictional Commissioner cannot further authorize any of his subordinates to represent the interests of UOI or officers in Ministry/ Board - F. No 275/65/2013-CX.8A dated 19th June 2015

Since the Commissioner is authorized by the Board to file affidavit on behalf of the UOI and officers in the Ministry/ Board who are joined as respondents in any petition before the High Court, Commissioner cannot further authorize any of his subordinates to represent U0I or any of these officers of the Ministry/ Board. In fact, Commissioners do not have the authority to authorize anybody else. Accordingly, Commissioner should himself sign the vakalatnama and counter affidavit in all such cases. The said clarification holds true even in GST regime and is confirmed vide Member (Legal), CBIC’s D.O.Letter F. No 275/ 65/ 2013-CX.8A dated 5th September, 2017.

Procedure in respect of the petitions before the High Court where more than one Ministry/ Department are jointly made respondents. - F. No 275/65/2013-CX.8A dated 19th June 2015

In case where more than one Ministry/ Department are jointly made respondent in a petition before the High Court, then the petition needs to be forwarded to the concerned Ministry/ Department for filing the counter on behalf of the said Ministry/ Department. The said clarification holds true even in GST regime and is confirmed vide Member (Legal), CBIC’s D.O.Letter F. No 275/ 65/ 2013-CX.8A dated 5th September, 2017.

No transfer of Authorization should be done on unilateral basis

It is stated that it is the prerogative of the CBIC to authorize any Principal Commissioner/Commissioner to defend the UoI and others before the High Court(s). No transfer of Authorization should be done on unilateral basis and a reference should be made to Commissioner (Legal) clearly pointing out the reasons for change in the Authorization. The decision of the CBIC in this regard would be final.

However, it was noted that some field Commissioners, are suo motu transferring the Authorizations on the pretext that the Petitioner is falling under the jurisdiction of some other Commissionerate or is registered with the respective State tax authorities, as the case may be. In this regard, it has been clarified vide Instruction F.No. 280/05/2018-CX. 8A, dated 23-5-2018 wherein it has been stated that when these Petitions are filed on certain policy issues, wherein the jurisdiction of the Petitioner is irrelevant, the change in Authorization on the pretext of jurisdiction is unwarranted. In any case, the reference should be made to the Board for any change in authorization, pointing out cogent reasons for the said change. Nevertheless, original authorized Commissioner will continue to defend the interests of Revenue, till the amended authorization is not received by the concerned field formation. The decision of the Board in this regard would be final.

CGST Commissionerate is also authorized to defend the case before the Hon’ble High Court even if the taxpayer’s jurisdiction lies with the State Government and where the Union of India is one of the Respondents: - F.No.276/262/2015-CX.8A (Pt. III) – CBIC – LEGAL CELL – dated 27th October, 2020

The reason being Union of India being the one of the Respondents in the GST related petitions and also due to CGST Act akin to SGST Act. The said authorization does not cease to exist at the disposal of the Petition by the High Court but for protection of the interests of Revenue continue to rest with the authorized Commissionerate. Infact, CBIC has been processing SLP proposals and filing SLPs pertaining to the orders by the High Court’s wherein the Petitioners fall under respective State Jurisdiction. In such case, where an appeal is proposed to be filed, it shall be desirable that the Zone concerned interacts with the officials of the State GST so that there is no divergence of views while filing the appeal. Further, on the issue of TRAN-1, a number of SLPs have been filed, in terms of Board’s Instructions dated 13.11.2018 and 01.08.2019 vide file of even no, by Board, wherein the tax payers are assigned to State Jurisdiction. Since the order issued by the High Courts, irrespective of the jurisdictional control of the taxpayers, holds a precedence value, GST Council Secretariat has also been requested to sensitize the respective States/UTs to take necessary steps, including filing of Review Petition/Writ Appeal/ SLP, as the case may be, to safeguard the interests of Revenue.

Imperative for the Commissioner (State Taxes) to request policy comments directly from CBIC Policy wings where the taxpayer’s jurisdiction lies with the State Government but where the Union of India/Department of Revenue/CBIC is NOT one of the Respondents: - F.No.276/262/2015-CX.8A (Pt. III) – CBIC – LEGAL CELL – dated 27th October, 2020

It has been observed that in some cases, Union of India/ Department of Revenue/ CBIC has not been made as respondents, even though some central legislation/ delegated legislation is under challenge. At the outset, such practice is against the Principles of Natural justice as Union should be made a Respondent before assailing any law enacted by Union. Nevertheless, to ensure efficacious defence pertaining to GST related petitions, Addendum to Master Instruction dated 14.08.2019 was issued vide the letter dated 17.08.2020, which makes it imperative for Commissioner (State Taxes) to request policy comments directly from CBIC Policy wings in such cases.

Authorization where GSTN is the respondent

It is stated that CBIC will not issue authorization for GSTN as it is a Private Limited Company. However, now the stakeholding of the GSTN has been changed and therefore, is GSTN is no more a Private Limited Company and is now a 100% Government owned entity. Therefore, it is unclear if the authorization shall be given by the CBIC Legal Cell or not. A suitable clarification to this extent would be welcome.

Policy Comments on the impugned issue

To ensure uniformity of views in all cases filed before the High Court(s) under the GST regime filed across the country, it is desirable that comments should be sought directly from the concerned Wing of the Department as per Table below. It is expected that the:

· Authorized Principal Commissioner/Commissioner will carefully examine the petition and

· Send a self-contained reference directly to the concerned wing as per Table below,

· Under intimation to Commissioner (Legal), CBIC, clearly pointing out the exact policy issue(s) on which the comments are required.

· The authorized Principal Commissioner/Commissioner should not mechanically forward the petition for para-wise comments.

The mandate of the concerned Wing of the CBIC/Department of Revenue/GST Council, is to give inputs on the specific policy issue(s). The subject-wise concerned Policy Wing of the CBIC/Deptt. of Revenue are as follows:

1.Commissioner (GST)

● Notifying jurisdiction of formations of GST; ● All CGST Act related work except in respect of Ø Chapter V (Input Tax Credit), Ø Chapter XIV (Inspection, Search, Seizure and Arrest), Ø Chapter XVII (Advance Ruling), Ø Chapter XVIII (Appeals & Revision), Ø Chapter XIX (Offences & Penalties), and Ø Chapter XX (Transitional Provisions); ● All IGST Act related work except in respect of Ø Chapter V (Place of supply).

2.Commissioner (Service Tax)

● All IGST Act related work, in respect of Chapter V (Place of supply).

3.Commissioner (Central Excise)

● All CGST Act related work in respect of Chapter V (Input Tax Credit) and Chapter XX (Transitional Provisions).

4.Commissioner (Inv-GST)

● All CGST Act related work in respect of Chapter XIV (Inspection, Search, Seizure and Arrest) and Chapter XIX (Offences & Penalties).

5.Commissioner (Legal)

● All CGST Act related work in respect of Chapter XVII (Advance Ruling) and Chapter XVIII Appeals & Revision (Only in respect of HC & SC).

6.Commissioner (IT & Compliance Verification)/ Member (IT)

● Coordination with GSTN.

7.Joint Secretary (Review)

● All CGST Act related work in respect of Chapter XVIII-Appeals and Revision (Except HC & SC).

8.Commissioner (Customs & EP)

● GST related Customs Work

9.Joint Secretary (Customs)

● Work related to IGST Customs Interface

10.Commissioner (PAC)

● Audit related work in GST by CAG

11.Joint Secretary (Drawback)

● GST related work pertaining to Drawback and Export Promotion Schemes

12.Joint Secretary (TRU-I)

● Matters pertaining to tax rate on goods

13.Joint Secretary TRU-II

● Matters pertaining to tax rate on services

14.Joint Secretary (Revenue), Department of Revenue

● Work related to GST (Compensation to States) Act, Compensation Cess and erstwhile Central Sales Tax Act.

Defense on behalf of National Anti-profiteering Authority (GST), New Delhi before Hon’ble Courts

In this regard, CBIC has requested vide F.No.280/26/2018-CX.8A dated 23rd October, 2018 that the Field formations shall henceforth, also defend the cases on behalf of National Anti‑profiteering Authority (GST), New Delhi pending before the Hon’ble courts. It is also requested that the Government Counsels may be directed to accept notices on behalf of the Authority. Further, DG Anti-profiteering may also be kept in the loop with respect to the cases wherein the Authority is made respondent. The Authorized Commissionerates may seek the policy comments directly from the Authority, under intimation to Legal Cell, CBIC.

Review Petition/ Writ Appeal/ SLP against the directions of Hon’ble High Courts pertaining to issues related to IT glitches - F.No.276/262/2015-CX.8A Pt. III dated 15th October, 2020.

Wherever Hon’ble Courts have allowed the reopening of portal or manual submission of Transitional Forms, which is against the current statutory framework, the same may be agitated by filing Review Petition/ Writ Appeal, as the case may be, and if the Review Petition/ Writ Appeal is not possible, a self-contained SLP Proposal may be forwarded to Board.

CBIC has been filing SLPs regularly on the said issue, however, one of the SLP in the case of M/s Adfert Technologies has been dismissed in limine by Hon’ble Supreme Court vide order dated 28.02.2020. Further, there are many cases where orders have been passed by various High Courts based on order of M/s Adfert Technologies. In this regard, CBIC while addressing on the future course of action, it has stated that legal opinion has been sought. Further, it has stated that the law is well settled that when there is in limine dismissal of SLP by Hon’ble Apex Court, there is no enunciation of law, no doctrine of merger and accordingly, question of law remains open. Hence, there is no bar on agitating the same question of law before Hon’ble Supreme Court.

Directions by the Hon’ble Courts to dispose the representation by GST Council - F.No.276/187/2018-CX.8A Part dated 20th November’2019

The Ld. Single Judge of Hon’ble Kerala High Court in W.A. No. 2061 of 2017 filed against order dated 02.08.2017 in W.P.(C) No. 25613/2017 in the case of M/s Plastic Recycling Industrial Association in his judgment dated 02.08.2017 directed the GST Council to “consider and pass orders on” the representation submitted by the Petitioner, “within a period of one month from the date of receipt of a copy of” the judgement, “after hearing the parties.” Subsequently, W.A. No. 2061 of 2017 was preferred before the Ld. Division Bench, and vide order dated 11.04.2019, the Hon’ble Court set aside the impugned judgement dated 02.08.2017. The Hon’ble Court held that on perusal of Article 279A of the Constitution of India, “it is evident that there is no mechanism provided in the Constitution or any other statute for the Goods and Services Tax Council to adjudicate the grievances raised by the general public. There is no mechanism for consideration and disposal of representations made by the general public to the Council after conducting personal hearing of the parties who make such representations.” Accordingly, it is requested that judgment dated 11.04.2019 may kindly be considered before filing any affidavit before the Courts under similar circumstances, and necessary action may be taken to safeguard the interests of UOI/GST Council. Further, the disposed matters, wherein the similar directions have been issued by the High Courts, may be agitated before the appropriate forum, in terms of extant instructions, by following the ratio enunciated by the Hon’ble Kerala High Court in the judgement dated 11.04.2019.

Providing all necessary and timely assistance to the Government Counsels

CBIC has issued Instruction of even no. dated 9-11-2017 directing all the field formations to provide all necessary and timely assistance to the Government Counsel in order to efficaciously defend the interest of Government before the Hon’ble High Court(s). Further all efforts should be made to engage senior government counsels to defend GST related cases.

However, CBIC have come to the notice that the Government Counsel defending UOI & Ors. in the Hon’ble High Court(s) are not being assisted by the Department properly or the representative of the Department suffers from lack of relevant knowledge and information. In this regard, CBIC vide C.B.I. & C. Instruction F. No. 275/15/2018-CX.8A, dated 4-7-2018 has directed that:

· All field formations may be directed to promptly and effectively brief the Counsels representing the Department so that no case goes unattended.

· An officer, at least of Deputy Commissioner level, should be made personally in-charge for keeping track of the cases, the next dates of hearing, briefing the Counsel and follow-up action. [Earlier, the same matter was instructed vide D.O.F. No. 1080/05/DLA/SC/2015 dated 2nd February, 2018]

· Regular updates and personal monitoring of Writ Petitions involving GST matters, should be done by the jurisdictional Chief Commissioner/Director General of Central Taxes. [Earlier it has been stated to have weekly updates on Writ Petitions by the jurisdictional Chief Commissioner and in cases where the GST Council is one of the respondents then it shall be immediately communicated to GST Council – F. No.278A/07/2018-Legal dated 12th March, 2018]

Coordination with State Governments

CBIC has issued Instruction of even no. dated 9-10-2017 emphasizing that both the Centre and States should take a uniform stand in GST related petitions before the High Court(s) so as to obviate any contradictory orders or judgments. The said Instruction should also be scrupulously followed. Further, vide Instruction F.No.275/65/2013-CX.8A dated 22-11-2017 it has been stated that CBIC should be informed if the uniform stand has been taken by all the respondents where both UOI and the State Government are impleaded as Respondents. Further, CBIC has instructed them that they may also call for counter-affidavits filed by other respondents and examine whether uniform stand have been taken or otherwise. In case of any divergence, the issue(s) may be sorted out in consultation with the concerned State Government so as to take uniform stand in cases before the High Courts.

Filing of Additional Affidavits pursuant to GST Council decisions and the respective Notifications

GST Council in its recent meetings have taken a number of decisions so as to rationalize and simplify the procedure and rate under the GST Law and Rules. Subsequently, the respective Policy Wings issues the Notification to give effect to the decisions. The field formations should continuously follow the changes in the law and procedure and file additional affidavits in the related petitions pending in High Court(s), if required.

Filing of SLP in the Hon’ble Supreme Court against Orders of Hon’ble High Court(s) staying collection of Tax under GST

CBIC has issued Instruction F. No. 275/11/2017-CX.8A, dated 18-9-2017 directing the field formations to send a self-contained proposal against interim or final orders of High Court(s) where the levy of GST has been questioned or stayed. The field formations should constantly monitor court proceedings to keep a watch against any such order in the High Court(s).

Commissioner (Commercial Taxes) of the States requested not to file replies to Writ Petitions/PILs pending before Hon’ble High Courts pertaining to GST without consulting

Commissioner (Commercial Taxes) of the States are requested not to file replies to Writ Petitions/PILs pending before Hon’ble High Courts pertaining to GST without consulting the authorized Principal Commissioner/ Commissioner of CBIC.

Streamlining the processing of litigation before Courts and Tribunal - CBIC vide F.No. 275/65/2013-CX.8A(Pt.) dated 23rd December, 2020

CBIC vide F.No. 275/65/2013-CX.8A(Pt.) dated 23rd December, 2020 has clarified that instructions laid down in CBEC Circular No. 935/25/2010-CX dated 21.09.2010 which stipulates on detailed procedure for streamlining the processing of litigation and Instruction F.No. 1080/DLA/50/Tech/Monitoring/SLPs-Appeals/16 dated 1.6.2017 wherein fresh timelines were prescribed for filing SLP and Civil Appeals are not followed scrupulously which are leading to delays in filing of appeals/petitions before the Hon’ble Courts. Accordingly, the instant Circular has prescribed the measures to be adopted under the jurisdiction of all Principal Chief Commissioners/ Chief Commissioners of Customs & GST, Principal Director Generals/ Director Generals of Customs & GST, as mentioned below:

(i) Time lines are enumerated in the Instruction vide F. No. 1080/DLA/50/Tech/ Monitoring / SLPs-Appeals /16-dated 01.06.2017 may strictly be adhered.

(ii) All orders/ Judgments of the Tribunal/ High Court/ Supreme Court should be put up to the Principal/ Commissioners/ Principal ADGs/ Commissioners/ ADGs at the receipt/ DAK stage. No Order/ Judgment of the Tribunal/ High Court/ Supreme Court should be directly submitted at the section without being put up to the Principal Commissioners/ Principal ADGs/ Commissioners/ ADGs.

The Order/ Judgment should be examined at the DAK stage and prima facie view should be taken on whether appeal/ petition has to be filed along with necessary instruction to the concerned section for submitting the matter on file within the time limit as prescribed by the Board under various categories. All such orders and Judgements may invariably be under “special watch” of the Principal Commissioner/ Principal ADG/ Commissioner/ ADG till the time decision has been taken and appeal filed. In case, the appeal is to be filed, it may be done within the timelines as prescribed by the Board vide letter dated 01.06.2017.

(iii) It was directed vide letter dated 07.01.2020, that High Court orders in favour of Revenue may be communicated to Legal Cell, CBIC so that the same may be considered for circulation. Accordingly, it is requested that orders/ Judgements of High Courts, specifically on the Policy/ recurrent issues in favour of Revenue, may immediately be mailed to osd-legal@gov.in, possibly within 48 hours of the pronouncement of the order/ judgement.

(iv) Regular interaction with the Standing Counsels has already been emphasized by the Board a number of times, latest vide instruction dated 30.09.2020 through F. No. 278A/36/2020 – Legal. However, it has been seen that sometimes the field formations cast the onus on the Standing Counsel for belated action pursuant to a High Court Order. Hence, apart from close and regular interaction with the Counsels, the officers concerned, who are well conversant with the case, should witness the High Court proceedings, specifically on important cases. Parallelly, the website of the respective Courts may also be checked on daily basis to ascertain the status of the case.

It may also be ensured that, with a view to monitor legal issues with all-India ramifications and to monitor performance of the Standing Counsels, the monthly report as desired vide CBIC Instruction dated 30-9-2020 vide F.No. 278A/36/2020-Legal are forwarded to the Board on time.

Strict compliance to Limitation while filing Appeals/Petitions before Courts/ Tribunal - Circular No. 1077/01/2021 – CX dated 19-1-2021

Despite numerous instructions issued by CBIC from time-to-time and non-adherence of the same has led the CBIC to issue the aforesaid Circular stating that the appeals/ petitions are being filed before High Courts and Supreme Court belatedly, highlighting no extra-ordinary circumstances while filing Condonation of Delay Applications. In this regard, Hon’ble Supreme Court has been viewing practice of filing appeals after inordinate delay critically and consequently imposing costs on the Petitioners. In one such case of Union of India v. Jitendra in SLP (Crl.) Diary No. 24676/2020, Hon’ble Apex Court in judgment dated 08.01.2020 noted

“We have been repeatedly deprecating the practice of authorities coming before this Court after inordinate delays assuming as if the Law of Limitation does not apply to them. Repeatedly, reliance is placed on the judgments of vintage when technology was not easily available. No reference is made to the subsequent judgment in the Office of the Chief Post Master General & Ors. v. Living Media India Ltd. & Anr. –(2012) 3 SCC 563 which has dealt with the issue that consideration of the ability of the Government to file appeal in time would have to be dealt with in the context of the technology now available and merely shuffling files from one table to the other would no more be a sufficient reason. We have also categorized such cases as “certificate cases”.

We have specified the object to file such cases to obtain a certificate of dismissal from the Supreme Court to put a quietus to the issue and thus, record that nothing could be done because the highest Court has dismissed the appeal. It is a completion of formality with endeavourer to save the skin of the officers who may be in default in following the appropriate legal process in time. The irony is that despite our repeated orders, very little is done at least in taking action against concerned officers who sit on files and do nothing. The presumption is as if this Court will condone the delay for the asking. We refuse to follow such a course.” (emphasis supplied)

and imposed costs on the Petitioner. Identical stand was taken by Hon’ble Supreme Court in the cases of State of Madhya Pradesh v. Bherulal in SLP (C) Dy No. 9217/2020 and Municipal Corporation of Greater Mumbai & Ors. v. Uday N. Murdukar in SLP (C) Dy No. 9228/2020.

It is also imperative to highlight certain observations of Hon’ble Supreme Court in the case of Office of the Chief Post General & Ors. v. Living Media India Ltd in Civil Appeal No. 2474- 2475 of 2012, wherein it is stated that ‘The law of limitation undoubtedly binds everybody including the Government. …..The government departments are under a special obligation to ensure that they perform their duties with diligence and commitment. Condonation of delay is an exception and should not be used as an anticipated benefit for government departments.’

Hence, the field formations are directed to strictly adhere to the aspect of limitation in filing appeals/ petitions before Courts/ Tribunal. Reference may also be made to Instruction vide F.No. 1080/DLA/50/Tech/Monitoring/SLPs-Appeals/16 dated 01.06.2017 (copy available on CBIC website) wherein the fresh timelines for filing SLP and Civil Appeals were provided. The practice of filing Condonation of Delay Application in a mechanical fashion, without attributing cogent reasons, if any, must be discouraged by the field formations under your jurisdiction. The jurisdictional Principal Chief Commissioner / Principal Director General/ Chief Commissioner/ Director General should personally monitor that appeals/petitions are filed on time in the interests of Revenue as mentioned in Para 2(ii) of Board’s Instruction dated 23.12.2020. Any appeal/petition dismissed, solely on the grounds of limitation, may be scrupulously examined and corrective steps may be taken, including disciplinary action, wherever merited.

Hence, the field formations are directed to strictly adhere to the aspect of limitation in filing appeals/ petitions before Courts/Tribunal. Reference may also be made to Instruction vide F.No. 1080/DLA/50/Tech/Monitoring/SLPs-Appeals/16 dated 01.06.2017 wherein the fresh timelines for filing SLP and Civil Appeals were provided. The practice of filing Condonation of Delay Application in a mechanical fashion, without attributing cogent reasons, if any, must be discouraged by the field formations. The jurisdictional Principal Chief Commissioner / Principal Director General/ Chief Commissioner/ Director General should personally monitor that appeals/petitions are filed on time in the interests of Revenue as mentioned in Para 2(ii) of Board’s Instruction dated 23.12.2020. Any appeal/petition dismissed, solely on the grounds of limitation, may be scrupulously examined and corrective steps may be taken, including disciplinary action, wherever merited.

Important petitions/appeals filed before Hon’ble High Courts, which would have all India ramifications and would require policy inputs from the Board should be immediately brought to the notice of policy section concerned of the Board along with Commissioner (Legal). The same should also be mentioned separately in the monthly report being submitted to the Board.