2017 (8) TMI 44 - HC - GST

Clarification sought on tax benefits post-repeal.

The Allahabad High Court directed the respondents to clarify the status of the scheme granting tax benefits to the petitioner under the U.P. ... Summary order. Petition listed for admission/final disposal on 18.09.2017; respondents directed to file counter-affidavit within one month and the petitioner granted two weeks thereafter to file rejoinder; respondents to specifically state whether the scheme granting tax benefit to the petitioner continues or has been revoked; petitioner permitted to amend the petition if advised. Issues:1. Interpretation of Section 174 of U.P.G.S.T. Act regarding the continuation of benefits under the repealed U.P. Entertainments and Betting Tax Act, 1979.2. Entitlement of the petitioner to collect entertainment tax and retain specified percentages under the scheme formulated under the repealed Act.Analysis:The judgment by the Allahabad High Court involved the interpretation of Section 174 of the U.P.G.S.T. Act in relation to the benefits granted under the U.P. Entertainments and Betting Tax Act, 1979. The petitioner, a partnership firm engaged in constructing Multiplex theatres, was permitted to retain a percentage of entertainment tax under a scheme valid until 31st March, 2020. The implementation of the C.G.S.T. and U.P.G.S.T. Acts from 1st July 2017 led to the repeal of the previous Act, with a saving clause preserving existing rights and benefits unless specifically rescinded. The petitioner argued that without a notification revoking their entitlement, they should continue to collect and retain entertainment tax as per the previous scheme until the specified date.The Court directed the respondents to file a counter affidavit to clarify if the scheme granting tax benefits to the petitioner was still in force or had been revoked, either automatically or through a fresh notification. The petitioner was given the opportunity to amend the petition if necessary. The case was listed for admission/final disposal on 18th September 2017. The outcome of the judgment would depend on whether the benefits under the previous scheme were deemed to continue under the new tax regime or if any specific action had been taken to revoke them. The interpretation of the saving clause in Section 174 of the U.P.G.S.T. Act would be crucial in determining the petitioner's entitlement to collect and retain entertainment tax as per the earlier scheme.