2019 (4) TMI 846 - HC - GST

Permission for withdrawal of petition - Constitutional validity of Section 174 of the Central Goods and Service Tax Act, 2017 - Held that - Writ petition is dismissed as withdrawn, with liberty as prayed for. No Costs.

Summary

Issues:
Challenge to the validity of Section 174 of the Central Goods and Service Tax Act, 2017 based on constitutional grounds.

Analysis:
The petitioner sought a writ declaring Section 174 of the CGST Act as ultra vires to certain constitutional provisions, arguing that no action can be taken until one year from the commencement of the Constitution Amendment Act, 2016. The petitioner contended that investigations post this period are invalid due to inconsistency with the constitutional amendment. The court examined Section 19 of the Constitution Amendment Act, which provides for transitional provisions regarding tax laws. The court noted that the introduction of GST replaced the previous service tax regime, finding no inconsistency with the Constitution.

The court disagreed with the petitioner's argument, highlighting that Section 174 of the GST Law Manual allows for investigations to be instituted. The court emphasized that Section 174(e) permits the continuation of proceedings already initiated and the institution of new investigations. The petitioner, upon realizing the legal position, sought time to consider further action.

During subsequent hearings, the petitioner requested to withdraw the writ petition with liberty to challenge the order based on territorial jurisdiction. The court granted permission for withdrawal and dismissed the petition accordingly, with no costs imposed. The connected miscellaneous petition was closed as a result of this decision.