Facts of the Case

The petitioner, M/s. Crane Betel Nut Powder Works, Guntur, had filed a writ petition before the Andhra Pradesh High Court challenging paragraphs 7.1 and 7.2 of CBIC Circular No. 163/19/2021-GST dated 06.10.2021 as ultra vires Section 168 of the CGST Act, 2017, and seeking to quash Show Cause Notice No. 49/2022 dated 06.05.2022 issued by the Additional Director, DGGI, Chennai Zonal Unit, relying on that circular, along with a writ of prohibition restraining further proceedings under the SCN. An interim application seeking stay of adjudication proceedings under the impugned SCN was also filed. When the matter was taken up on 22.12.2023 before the Division Bench, learned counsel for the petitioner sought to withdraw the writ petition; no reasons for the withdrawal are recorded in the order.

Issues Involved

  1. Whether paragraphs 7.1 and 7.2 of CBIC Circular No. 163/19/2021-GST dated 06.10.2021 were ultra vires Section 168 of the CGST Act, 2017.
  2. Whether Show Cause Notice No. 49/2022 dated 06.05.2022, issued relying on the impugned circular, was liable to be quashed.
  3. Whether the writ petition, once sought to be withdrawn by the petitioner, should be permitted to be withdrawn rather than decided on merits.

Petitioner's Arguments

  • The circular's classification-related paragraphs (7.1 and 7.2) were ultra vires Section 168 of the CGST Act, and the resultant SCN issued relying on it was liable to be set aside/prohibited, as originally pleaded in the writ petition.
  • At the hearing on 22.12.2023, counsel for the petitioner sought to withdraw the writ petition without pressing these grounds further.

Respondent's Arguments

  • No specific opposing submissions on the merits are recorded, since the petitioner elected to withdraw the writ petition before any adjudication on the challenge to the circular or the SCN.

Court Order/Findings

  • Noting that learned counsel for the petitioner sought to withdraw the writ petition, the Court dismissed it as withdrawn, without expressing any opinion on the validity of the circular or the show cause notice.
  • The writ petition was dismissed as withdrawn, with no order as to costs, and pending miscellaneous applications, if any, were closed.
  • No liberty was separately reserved in the order; the order itself is silent on the petitioner's ability to raise the same challenge afresh.

Important Clarification

A writ petition challenging a GST classification circular and a consequential show cause notice, once withdrawn by the petitioner, is disposed of as withdrawn without any adjudication on the merits of the challenge to the circular's validity under Section 168 of the CGST Act — leaving the underlying legal question open for another case.

Sections Involved

  • Section 168 of the Central Goods and Services Tax Act, 2017 — power to issue instructions/circulars.
  • CBIC Circular No. 163/19/2021-GST dated 06.10.2021 issued under the CGST Act, 2017.
  • Article 226 of the Constitution of India, 1950 — writ jurisdiction invoked.
  • Section 151 of the Code of Civil Procedure, 1908 — interim relief sought.

Decision – In Favour of

Neither party on merits. The writ petition was dismissed solely as withdrawn at the petitioner's own request, without any finding on the validity of the CBIC circular or the show cause notice.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court for the State of Andhra Pradesh, Amaravati
  • Case No.: Writ Petition No.19393 of 2022
  • CNR: Not available
  • Coram: Hon'ble Mr. Justice Dhiraj Singh Thakur, Chief Justice, and Hon'ble Mr. Justice R. Raghunandan Rao
  • Decision Date: 22.12.2023
  • Disposal Nature: Dismissed as withdrawn

Link to Download the Order

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