CX - Default - Condition contained in erstwhile 8(3A) of CER, 2002 for payment of duty without utilizing CENVAT credit is unconstitutional: Gujarat High Court

The Modi sarkar did well to amend in the recent budget the draconian sub rule 3A of Rule 8 which singlehandedly could stop any manufacturing business from carrying on in effect if they failed to remit excise dues within thirty days even when such tax debt is acknowledged in the tax returns but the business lacked funds to pay to the government for genuine reasons. Thus the Rule dismally and unfairly failed to differentiate between deliberate defaulters and those having real and verifiable financial difficulties. The government of course did not touch the past injustices emanating from the application of the dreaded rule. Now the Gujarat High Court has called a spade a spade by declaring the exit of this obnoxious provision from the rule of law by judging it as unconstitutional. But the Hon'ble High Court in an unwarranted gesture for tax cases of this nature which could not be appreciated has put the judgment in freeze till 15th January 2015. The judgment did not deserve to be kept away even for a day since the rule has been declared seriously unconstitutional.

Dr. Ravindran Pranatharthy
Advocate

Ravindran Pranatharthy 03/12/2014