2018 (4) TMI 269 - HC - GST

High Court Invalidates Tax Notice Due to Jurisdictional Defect Under Central GST Act, 2017 and Constitutional Amendment

HC determined that the show cause notice issued on 23.10.2017 lacks jurisdictional validity following the enactment of Central GST Act, 2017 and omission ... Jurisdiction to initiate proceedings after enactment of the Central Goods and Services Tax Act, 2017 - omission of Entry 92C from List I of the Seventh Schedule - validity of a show cause notice - interim stay of proceedingsJurisdiction to initiate proceedings after enactment of the Central Goods and Services Tax Act, 2017 - omission of Entry 92C from List I of the Seventh Schedule - validity of a show cause notice - Impugned show cause notice dated 23.10.2017 is prima facie without jurisdiction in view of the enactment of the Central Goods and Services Tax Act, 2017 and the omission of Entry 92C from List I of the Seventh Schedule. - HELD THAT: - The petitioner challenged the show cause notice on the ground that subsequent constitutional and legislative changes - namely the enactment of the Central Goods and Services Tax Act, 2017 and the omission of Entry 92C from List I of the Seventh Schedule - removed the respondent's jurisdiction to proceed on the subject matter of the notice. Having considered the pleadings, the Court formed a prima facie view that the notice lacked jurisdiction. On that basis the Court entertained the petition and addressed the interim relief sought by the petitioner.Prima facie finding that the impugned notice is without jurisdiction and further proceedings under the notice are stayed until the returnable date.Final Conclusion: The writ petition was admitted for hearing; the High Court recorded a prima facie view that the show cause notice dated 23.10.2017 was without jurisdiction in light of the CGST Act and omission of Entry 92C, and directed that further proceedings under the notice be stayed until the returnable date. Issues: Challenge to show cause notice jurisdiction post enactment of Central Goods and Services Tax Act, 2017 and omission of Entry 92C from List-I of Seventh Schedule of Constitution.Analysis:The writ petition challenges a show cause notice dated 23.10.2017 issued by respondent No.3, arguing that after the enactment of the Central Goods and Services Tax Act, 2017, and the omission of Entry 92C from List-I of the Seventh Schedule of the Constitution, the respondent lacks jurisdiction over the subject matter. The petitioner seeks an order suspending further proceedings pursuant to the notice.The learned Central Govt. Counsel representing the respondents requests time to obtain instructions in the matter. The Court issues notice of motion returnable on 05.02.2018. Since the Central Govt. Counsel has accepted notice on behalf of all respondents, no formal notice is required. However, extra copies of the writ petition are to be provided to enable the counsel to obtain instructions.The Court considers the pleadings in the writ petition and opines that the impugned notice dated 23.10.2017 lacks jurisdiction. Consequently, further proceedings under the notice are stayed until the returnable date. This decision is made based on the prima facie opinion regarding the jurisdictional issue raised in the petition.