2020 (7) TMI 696 - HC - GST

Constitutional validity and legality of Section 17(5)(c) and Section 17(5)(d) of the Central Goods and Services Tax Act, 2017 and the Delhi Goods and Services Tax Act, 2017 and the Circular No.28 dated 01st January, 2018 - denial of Input Tax Credit - Works Contract - HELD THAT - Issue Notice. List on 15th September, 2020.

Summary

Issues: Challenge to constitutional validity and legality of Section 17(5)(c) and Section 17(5)(d) of the Central Goods and Services Tax Act, 2017, and the Delhi Goods and Services Tax Act, 2017, along with Circular No.28 dated 01st January, 2018.

The petition before the Delhi High Court challenges the constitutional validity and legality of specific provisions in the Central Goods and Services Tax Act, 2017, and the Delhi Goods and Services Tax Act, 2017, as well as Circular No.28 dated 01st January, 2018. The petitioner alleges that these provisions and circular have resulted in the denial of Input Tax Credit for tax paid on works contract services and goods and services used in the construction of immovable property, despite being utilized for business purposes and providing taxable supplies liable to GST. The petitioner argues that these provisions and circular violate Article 14 of the Constitution and deviate from the intended purpose of GST, which was to prevent tax cascading and breaks in the tax chain.

The learned senior counsel for the petitioner highlights that previous cases, such as Bamboo Hotel and Global Centre (Delhi) Pvt. Ltd. v. UOI and Riveria Commercial Developers Limited V. Union of India, where similar issues were raised, have been acknowledged by the court. Consequently, the court issues notice to the respondents. Mr. Amit Bansal, Advocate, accepts notice on behalf of respondent nos.1, 3 & 4, while Ms. Bhawana Kataria, Advocate, accepts notice for respondent no.2. The court directs the respondents to file counter-affidavits within four weeks and allows for rejoinder-affidavits, if any, before the next hearing scheduled for 15th September, 2020, in conjunction with the aforementioned related cases.

In conclusion, the Delhi High Court acknowledges the urgency expressed in listing the petition and conducts the hearing via video conferencing. The court grants exemption subject to exceptions in one application and disposes of another application accordingly. The case is set for further proceedings, and the order is to be uploaded on the website promptly, with copies sent to the counsels via email.