GST Update on whether amendment in writ petition permissible after the trial has commenced? 151/2020-21

GST Update on whether amendment in writ petition permissible after the trial has commenced?

It is settled principle of law that the petitioner can take additional grounds only with the permission of the appellate authority wherein there is discretion as regards allowing admissibility of additional evidence/grounds only if there was sufficient cause for not taking those grounds earlier by the petitioner. Recently, the Hon’ble Sikkim High Court dismissed the “I.A.” (Interitum Application) filed by M/s SUN PHARMA LABORATORITES LIMITED VERSUS UNION OF INDIA & OTHERS on the grounds that the there is no justification for raising additional grounds after the main writ petition was finally heard. The decision rendered by the Hon’ble Sikkim High Court is the subject matter of consideration of our present update.

The petitioner, at the outset, filed main writ petition for granting them refund of entire CGST and 50% IGST paid through electronic cash ledger in view of Budgetary Support Scheme introduced vide notification no. 21/2017-CE dated 18.07.2017 which was in lieu of area based exemption granted in Central Excise Laws for North-Eastern States. However, since the issue regarding grant of benefit on the grounds of principle of promissory estoppel filed before Supreme Court was decided against the petitioner, they sought to make amendments in their writ petition by challenging the vires of proviso to section 174(2)(c) of the CGST Act, 2017 and notification no. 21/2017-CE dated 18.07.2017 as unconstitutional being contrary to Article 14 of the Constitution of India.

The hon’ble High Court held that as per Order VI Rule 17 of the CPC, the Court has powers to allow either party to alter or amend their pleadings at any stage of proceedings on such terms as may be just. It requires that all such amendments shall be made as may be necessary for the purpose of determining the real question in controversy between the parties provided that no application for amendment shall be allowed after the trial has commenced unless the Court comes to the conclusion that inspite of due diligence, the party could not have raised the matter before the commencement of trial. However, in the present case, the writ petition was finally heard on 03.09.2019 and judgment reserved.

By the proposed amendments the Petitioner seeks to challenge the vires of Section 174(2)(c) of the Central Goods and Services Tax Act, 2017 and Notification No.21/2017-C.E., dated 18-07-2017, on the ground that it takes away the vested rights of the Petitioner by reducing the exemption/benefits to the Petitioner. The prayers in the Writ Petition are confined to enabling the Petitioner to claim full refund of the CGST and 50% of the IGST paid through the electronic cash ledger. It cannot be said that the Petitioner was unaware of the provision of the statute the vires of which they now seek to assail, nor was it inserted at some point later in time to the filing of the Writ Petition. The question of the Petitioner’s inability to raise the matter in spite of due diligence, before the matter was heard or was taken up for hearing, therefore, does not arise. In view of the questions involved in the instant Writ Petition it cannot be said that the amendments are necessary for determining the real question in controversy between the parties considering the prayers of the Petitioner referred above. The proposed amendments if permitted would in fact change the very nature and character of the Writ Petition and introduce an entirely different Cause of action, which is not permissible. Hence, the I.A. to the writ petition was dismissed.

The above decision indicates that it is not easy to take additional grounds for writ petition filed before the High Court, specially when final hearing of main writ petition has already been convened. Hence, the petitioners should be careful while drafting their grounds of writ petition so that unnecessary efforts of filing I.A. are avoided.

This is solely for educational purpose.
You can reach us at www.capradeepjain.com , at our facebook page on https://www.facebook.com/GSTTODAYBYPRADEEPJAIN/ as well as follow us on twitter at https://www.twitter.com/@capradeepjain21 and u may also follow us on Linkedin https://www.linkedin.com/in/ca-pradeep-jain-b6a31a16
GST Update on whether amendment in writ petition permissible after the trial has commenced?

It is settled principle of law that the petitioner can take additional grounds only with the permission of the appellate authority wherein there is discretion as regards allowing admissibility of additional evidence/grounds only if there was sufficient cause for not taking those grounds earlier by the petitioner. Recently, the Hon’ble Sikkim High Court dismissed the “I.A.” (Interitum Application) filed by M/s SUN PHARMA LABORATORITES LIMITED VERSUS UNION OF INDIA & OTHERS on the grounds that the there is no justification for raising additional grounds after the main writ petition was finally heard. The decision rendered by the Hon’ble Sikkim High Court is the subject matter of consideration of our present update.

The petitioner, at the outset, filed main writ petition for granting them refund of entire CGST and 50% IGST paid through electronic cash ledger in view of Budgetary Support Scheme introduced vide notification no. 21/2017-CE dated 18.07.2017 which was in lieu of area based exemption granted in Central Excise Laws for North-Eastern States. However, since the issue regarding grant of benefit on the grounds of principle of promissory estoppel filed before Supreme Court was decided against the petitioner, they sought to make amendments in their writ petition by challenging the vires of proviso to section 174(2)(c) of the CGST Act, 2017 and notification no. 21/2017-CE dated 18.07.2017 as unconstitutional being contrary to Article 14 of the Constitution of India.

The hon’ble High Court held that as per Order VI Rule 17 of the CPC, the Court has powers to allow either party to alter or amend their pleadings at any stage of proceedings on such terms as may be just. It requires that all such amendments shall be made as may be necessary for the purpose of determining the real question in controversy between the parties provided that no application for amendment shall be allowed after the trial has commenced unless the Court comes to the conclusion that inspite of due diligence, the party could not have raised the matter before the commencement of trial. However, in the present case, the writ petition was finally heard on 03.09.2019 and judgment reserved.

By the proposed amendments the Petitioner seeks to challenge the vires of Section 174(2)(c) of the Central Goods and Services Tax Act, 2017 and Notification No.21/2017-C.E., dated 18-07-2017, on the ground that it takes away the vested rights of the Petitioner by reducing the exemption/benefits to the Petitioner. The prayers in the Writ Petition are confined to enabling the Petitioner to claim full refund of the CGST and 50% of the IGST paid through the electronic cash ledger. It cannot be said that the Petitioner was unaware of the provision of the statute the vires of which they now seek to assail, nor was it inserted at some point later in time to the filing of the Writ Petition. The question of the Petitioner’s inability to raise the matter in spite of due diligence, before the matter was heard or was taken up for hearing, therefore, does not arise. In view of the questions involved in the instant Writ Petition it cannot be said that the amendments are necessary for determining the real question in controversy between the parties considering the prayers of the Petitioner referred above. The proposed amendments if permitted would in fact change the very nature and character of the Writ Petition and introduce an entirely different Cause of action, which is not permissible. Hence, the I.A. to the writ petition was dismissed.

The above decision indicates that it is not easy to take additional grounds for writ petition filed before the High Court, specially when final hearing of main writ petition has already been convened. Hence, the petitioners should be careful while drafting their grounds of writ petition so that unnecessary efforts of filing I.A. are avoided.

This is solely for educational purpose.
You can reach us at www.capradeepjain.com , at our facebook page on https://www.facebook.com/GSTTODAYBYPRADEEPJAIN/ as well as follow us on twitter at https://www.twitter.com/@capradeepjain21 and u may also follow us on Linkedin https://www.linkedin.com/in/ca-pradeep-jain-b6a31a16

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GST Update on whether amendment in writ petition permissible after the trial has commenced? 151/2020-21

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