The Gujarat High Court recently issued directives to the Revenue Department to refrain from undertaking all forms of coercive action in a dispute regarding the payability of Goods and Services Tax (GST) on royalties paid by an entity who had entered into a contract with the State Government for the lease of a mining quarry.
The directives were issued by the Gujarat High Court while entertaining a Special Civil Application filed by Rainbow Infrastructure, a multidisciplinary engineering company having made inroads in structural, civil, industrial, electrical & architectural engineering fields.
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The Civil Application was filed by the Petitioner against the Union of India and wings operating under the Department of Revenue pertained to a Show-Cause Notice dated 28.03.2024 and subsequent Order dated 09.08.2024 issued under Section 74 of the Gujarat Goods and Sales Tax Act, 2017.
Section 74 of the Gujarat GST Act, 2017 permits the Department to determine any tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful misstatement or suppression of facts.
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In the present case, Krutarth K Desai and Abhay Y Desai appeared for the Petitioner while the Respondents were represented by Shashvata U Shukla and Neel P Lakhani, along with the Government Pleader for the State of Gujarat.
A Division Bench comprising Justice Bhargav D. Karia and.Justice D.N.Ray observed that similar matters were pending before the Gujarat High Court, and directed the issuance of a Notice through an Oral Order.
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Granting temporary relief to the Petitioner, Rainbow Infrastructure, the Division Bench of the Gujarat High Court ordered that no coercive action may be taken by the Respondent Governmental Departments while the present petition remains pending before the High Court.
The matter was posted to be heard at a later time alongside the similar matters.
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