2019 (7) TMI 470 - HC - GST

Jurisdiction - exercise of power by the respondent no. 8 who is below the rank of the Joint Commissioner in the case of such seizure - Search and seizure - pure service - parking lots - HELD THAT - The exercise commenced by the respondent no.8 and his associates under the thin disguise of legality is prima facie without jurisdiction and violates the law as applicable in West Bengal as I have briefly summarized above. The dispute arises in respect of parking fees which are collected by Mr. Bhattacharya s client, members and employees in respect of the Municipal parking lots under the Kolkata Municipal Corporation and Mr. Bhattacharya is not at present challenging the payment of GST in respect of parking lots in the Railways, which he may have done in view of the same notification. There shall be an interim order staying all further proceedings in respect of annexure P/21 of the search and seizure conducted in the premises of the petitioners and its employees and directors shall not be subjected to any coercive process for realization of GST for municipal parking lots which, prima facie, is not payable. Petition disposed off.

Summary

Issues:
1. Jurisdictional errors in exercise of power by respondent no. 8
2. Violation of exemption under Article 3 of the Notification
3. Dispute regarding parking fees collected by the petitioners
4. Allegation of harassment by respondent no. 8

Analysis:
1. The petition before the Calcutta High Court raises concerns regarding two jurisdictional errors in the exercise of power by respondent no. 8. The learned Senior Advocate for the petitioners argues that the actions taken by respondent no. 8, who is below the rank of Joint Commissioner, in relation to seizure under Section 67(2) lack jurisdiction. Additionally, it is contended that the last paragraph of annexure P/21 violates the exemption granted under Article 3 of the Notification. The exemption pertains to services related to functions entrusted to a Municipality under Article 243W of the Constitution, which includes public amenities like street lighting, parking lots, and public conveniences. The petitioners assert that the Municipal Corporation falls within the ambit of this exemption, thus challenging the legality of respondent no. 8's actions.

2. The dispute further delves into the interpretation of the Notification and its application to the collection of parking fees by the petitioners in municipal parking lots under the Kolkata Municipal Corporation. The Senior Advocate does not contest the GST payment for parking lots under the Railways, indicating a selective challenge based on the specific notification. The Court acknowledges a strong prima facie case in favor of the petitioners, emphasizing the urgency due to repeated search and seizure activities conducted by an authority lacking jurisdiction. The petition hints at harassment by respondent no. 8, adding weight to the argument against the exercise of power in this context.

3. In response to the petitioners' contentions, the Court issues an interim order staying all further proceedings related to annexure P/21 of the search and seizure conducted at the petitioners' premises. The order protects the petitioners, employees, and directors from coercive measures for GST realization on municipal parking lots, which are deemed prima facie not payable. This interim relief is granted for a specified period and until further orders, ensuring a temporary halt to any enforcement actions against the petitioners.

4. The Court also directs the completion of service on non-appearing respondents, with a copy of the order to be served on them. An affidavit of service must be filed to demonstrate compliance with the service requirements. The matter is scheduled to appear before the Regular Bench after two weeks from reopening, maintaining the observation on the maintainability of the writ petition while keeping other grievances open for future consideration and adjudication.