The Bombay High Court was recently faced with multiple petitions pertaining to the quashing of demand notices issued under the Goods and Services Tax ( GST ) Acts, filed by separate entities involved in the construction business. The High Court advised the Petitioners to first approach all alternate remedies available to them to contest their case before approaching the High Court for relief.
The High Court of Bombay considered the Writ Petition filed by Oberoi Constructions Ltd. against the Revenue and its subsidiaries as the leading case for the joint adjudication of the entailing cases. All of the Petitioners sought to challenge demands or show-cause notices (SCN) issued by the Revenue against the Petitioners under the provisions of the Central Goods and Services Tax Act, 2017 (CGST Act), Integrated Goods and Services Tax Act, 2017 (IGST Act) and Maharashtra Goods and Services Tax Act, 2017 (MGST Act).
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Senior Advocate V. Sridharan, appearing for Oberoi Constructions referred to Notification No.12/2017 – Central Tax (Rate) dated 28.06.2017 to submit that nil rate of tax is leviable on services by Central Government, State Government, Union Territories, Local Authorities or Governmental Authorities by way of any activity in relation to any function entrusted to the Municipality under Article 243W of the Constitution of India.
The Counsel relied on the cases of East India Commercial Co. Ltd. Calcutta V/s. Collector of Customs, Calcutta and State of UP and Ors. V/s. Indian Hume Pipe Co. Ltd. among others to contend that there is no constitutional or statutory rule mandating the exhaustion of alternative remedies and that such decision is self-imposed. Further, it was averred that the Show-Cause Notices had been issued by the Revenue without jurisdiction, praying that the petitioners not be relegated to alternative remedies.
The Division Bench of the Bombay High Court comprising Justice M.S. Sonak & Justice Jitendra Jain observed that whether tax demands purported against the Petitioners concerns any activity in relation to the functions of the Municipality under Article 243W may only be determinable through the proper adjudicatory process and not by the High Court exercising extraordinary and summary jurisdiction under Article 226 of the Constitution as the same may require examination of factual aspects that cannot be conveniently undertaken by the High Court at this stage.
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Referring to Viswaat Chemicals Ltd. and Anr. V/s. Union of India and Ors (2024) and Dow Chemical International Pvt. Ltd. V/s. Commissioner of Customs NS-II Special Investigation and Intelligence Branch (X) and Anr (2024) the Bench pronounced that no case had been made by the Petitioners so as to permit the bypass of statutory alternate remedies and entertainment of the matters by the High Court.
Taking into account all the observations made, the Bombay High Court disposed of the matters but granted liberty to the Petitioners to avail the alternate remedies and time of six weeks to file responses towards the impugned Show-Cause Notices.
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