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2023 (12) TMI 421 - HC - GSTValidity of SCN - levy 'tax on betting and gambling' - Valuation - Constitutional validity of Section 15(5) of the Central Goods and Services Tax Act, 2017 - Rule 31A(3) of the Central Goods and Services Tax Rules, 2017 - provisions of the CGST Act, the CGST Rules and Notifications thereunder along with corresponding provisions of the MGST Act, the MGST Rules and Notifications thereunder, to the extent they purport to levy 'tax on betting and gambling' in exercise of legislative power under Article 246A of the COI - restriction on Respondent No. 3 or its officers / sub-ordinates from taking any coercive action against the Petitioners - restricting the Respondent No. 4 and Respondent No. 5 from adjudicating the Impugned SCN pending final disposal of this writ petition. HELD THAT - This Court considering the challenge to the provisions of the Act and Rules has admitted the petitions. Insofar as the show cause notice was concerned, the Court recorded a statement on behalf of the department that the petitioners in such case without prejudice to the rights and contentions as raised in the petitions, may file response to the impugned show cause notices, and that, the Adjudicating Officer would not pass any final orders on the show cause notice without leave of the Court. Such statement as made on behalf of the department came to be accepted by the Court. The petitioners were accordingly directed to respond to the show cause notice - Petitioner submits that similar order can be passed on the present proceedings. Attention also drawn to the orders passed by the High Court of Sikkim in the case of Delta Corp Limited and Anr. vs. Union of India ors. 2023 (10) TMI 1205 - SIKKIM HIGH COURT , where the Court had directed that a status-quo be maintained on the show cause notices - attention also drawn to an order passed by Division Bench of the Gujarat High Court in the case of NXGN Sports Interactive Private Limited vs. Union of India ors 2023 (11) TMI 357 - GUJARAT HIGH COURT wherein ad-interim relief was granted restraining revenue from taking any further steps on the adjudication of the show cause notice while permitting the petitioners to file a response to the show cause notice. Issue notice to the Attorney General, returnable on 17th January, 2024, insofar as the challenge to the provisions of Section 15(5) of the CGST Act, 2017 being unconstitutional and violative of Articles 246A and 366(12) of the Constitution of India is prayed for - Let the pleadings of the proceedings be completed on or before the adjourned date of hearing.
Issues involved:
The petition seeks relief under Article 226 of the Constitution of India to quash a Show Cause Notice and challenge certain provisions of the Central Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Rules, 2017. The petition also requests a writ to restrict coercive action by the Respondent and to prohibit adjudication of the Show Cause Notice pending final disposal. Show Cause Notice Quashing: The petitioners sought a writ of Certiorari to quash the Show Cause Notice issued by Respondent No. 3. The Court noted similar issues in a Goa case and directed the petitioners to respond to the notice without final adjudication until further leave of the Court. Challenge to CGST Act Provisions: The petitioners challenged the constitutionality of Section 15(5) of the Central Goods and Services Tax Act, 2017, alleging violation of Articles 246A and 366(12) of the Constitution of India. The Court issued notice to the Attorney General for the challenge and allowed the petitioners to file a reply to the show cause notices. Ultra Vires Rule: The petition also sought to strike down Rule 31A(3) of the Central Goods and Services Tax Rules, 2017 as ultra vires Sections 2(31), 7, 9, and 15 of the CGST Act, 2017. The Court directed the Adjudicating Officer to hear the petitioners on the show cause notice but not to pass final orders without the Court's permission. Legislative Competence: The petition requested the quashing of provisions of the CGST Act, CGST Rules, and related notifications that levy tax on betting and gambling, citing lack of legislative competence under Article 246A of the Constitution of India. The Court granted liberty to the respondents to apply for clubbing all matters before an appropriate Division Bench.
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