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2020 (10) TMI 371 - HC - GSTInput Tax Credit (ITC) - Validity of inquiry letter - legality of Explanation to Section 17(5)(d) of the Central Goods and Services Tax Act, 2017 - exclusion of 'telecommunication towers' from the meaning of the term 'Plant and Machinery'- Input Tax Credit on construction of Immovable Property. HELD THAT - This Court is not inclined to interfere with the inquiry letter dated 29th July, 2019 as well as the proceedings initiated under the said letter. However, this Court shall examine the legality and validity of Explanation to Section 17(5)(d) of the CGST Act along with similar writ petitions, i.e. BAMBOO HOTEL AND GLOBAL CENTRE (DELHI) PVT LTD VERSUS UNION OF INDIA AND ORS 2019 (5) TMI 1805 - DELHI HIGH COURT and DELHI INTERNATIONAL AIRPORT LTD. VERSUS UNION OF INDIA ORS. 2020 (7) TMI 696 - DELHI HIGH COURT . It is clarified that there is no stay of the letter dated 29th July, 2019.
Issues: Challenge to inquiry letter, legality of Explanation to Section 17(5)(d) of CGST Act, debarring Input Tax Credit on construction of Immovable Property.
Challenge to Inquiry Letter: The petitioner filed a writ petition challenging the inquiry letter dated 29th July, 2019 issued by respondent no.3 and subsequent proceedings. After extensive hearing, the Court decided not to interfere with the inquiry letter and the proceedings initiated under it. However, the Court agreed to examine the legality and validity of the Explanation to Section 17(5)(d) of the CGST Act in conjunction with similar writ petitions. It was clarified that there is no stay on the letter dated 29th July, 2019. The respondents were served notice and given four weeks to file their counter-affidavits. Legality of Explanation to Section 17(5)(d) of CGST Act: The petitioner sought to challenge the Explanation to Section 17(5)(d) of the CGST Act to the extent it excludes 'telecommunication towers' from the meaning of 'Plant and Machinery'. The Court decided to examine this issue along with other similar writ petitions. The matter was listed for further hearing on a specified date. The respondents were directed to file their counter-affidavits within four weeks. Debarring Input Tax Credit on Construction of Immovable Property: The petitioner also sought to challenge Section 17(5)(d) of the CGST Act, which debars Input Tax Credit on the construction of Immovable Property. This aspect was included in the broader challenge to the legality of the Explanation to Section 17(5)(d) of the CGST Act. The Court decided to review this issue along with the other related petitions and directed the respondents to file their counter-affidavits within the stipulated time frame. In conclusion, the High Court of Delhi decided not to interfere with the inquiry letter dated 29th July, 2019 but agreed to examine the legality of the Explanation to Section 17(5)(d) of the CGST Act in conjunction with similar writ petitions. The Court allowed the respondents to file their counter-affidavits within four weeks and listed the matter for further hearing on a specified date.
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