2021 (1) TMI 1252 - HC - GST

Constitutional validity of Section 174 Central Goods and Services Tax Act, 2017 - HELD THAT - The petitioner has been made out ground for granting of interim order. It is ordered that until further orders, payment of service tax for grant of Mining Lease/Royalty shall remain stayed subject to petitioner filing of the undertaking before this Court that in case, if the petitioner did not succeed in the petition, the petitioner would discharge the obligation for payment of service tax on the royalty. The petitioner has filed seeking dispensation of production of certified copy of Annexure-A, C, D and E - Application disposed off.

Summary

Issues:
Challenge to the constitutional validity of Section 174 of the Central Goods and Services Tax Act, 2017; Quashing of show cause notice dated 09.07.2020.

Analysis:
The petitioner, Shashank S. Hegde, has challenged the constitutional validity of Section 174 of the Central Goods and Services Tax Act, 2017, alleging it to be ultra vires the constitutional (101st) Amendment Act 2016 and violative of Article 14, 19, and 265 of the Constitution of India. The petitioner also sought the quashing of a show cause notice dated 09.07.2020. The learned counsel for the petitioner pointed out that a similar issue is pending before the Hon'ble Apex Court in SLP No. (C) 37236/2017, where an interim order has been granted for the payment of service tax related to the grant of Mining lease/Royalty by the petitioner.

In light of the interim order passed by the Hon'ble Apex Court and the subsequent interim order by the Gujarat High Court on the same matter, the petitioner's counsel argued that grounds exist for the granting of an interim order in this case as well. Consequently, the court ordered that the payment of service tax for the grant of Mining Lease/Royalty shall remain stayed until further orders, subject to the petitioner filing an undertaking before the court. The undertaking required the petitioner to discharge the obligation for payment of service tax on the royalty in case the petitioner did not succeed in the petition.

Additionally, the petitioner filed I.A.No.1/2020 seeking dispensation of the production of certified copies of Annexure-A, C, D, and E. The court accepted the reasons provided in the application and dispensed with the production of certified copies of the mentioned annexures for a period of 8 weeks. This decision aimed to facilitate the proceedings and alleviate any unnecessary procedural burdens on the petitioner during the legal process.