Calcutta HC Stays GST Collection on Parking Lots, Grants Interim Relief to Petitioners

The Calcutta High Court granted interim relief to the petitioners by staying further proceedings related to a search and seizure conducted by respondent no. 8. The order protects the petitioners from coercive measures for GST realization on municipal parking lots, deeming them prima facie not payable. Service on non-appearing respondents was directed, with the matter scheduled to appear before the Regular Bench for further consideration after two weeks. The Court acknowledged jurisdictional errors by respondent no. 8 and highlighted concerns regarding harassment, providing temporary respite to the petitioners.

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Issues:
1. Jurisdictional errors in exercise of power by respondent no. 8
2. Violation of exemption under Article 3 of the Notification
3. Dispute regarding parking fees collected by the petitioners
4. Allegation of harassment by respondent no. 8

Analysis:
1. The petition before the Calcutta High Court raises concerns regarding two jurisdictional errors in the exercise of power by respondent no. 8. The learned Senior Advocate for the petitioners argues that the actions taken by respondent no. 8, who is below the rank of Joint Commissioner, in relation to seizure under Section 67(2) lack jurisdiction. Additionally, it is contended that the last paragraph of annexure P/21 violates the exemption granted under Article 3 of the Notification. The exemption pertains to services related to functions entrusted to a Municipality under Article 243W of the Constitution, which includes public amenities like street lighting, parking lots, and public conveniences. The petitioners assert that the Municipal Corporation falls within the ambit of this exemption, thus challenging the legality of respondent no. 8's actions.

2. The dispute further delves into the interpretation of the Notification and its application to the collection of parking fees by the petitioners in municipal parking lots under the Kolkata Municipal Corporation. The Senior Advocate does not contest the GST payment for parking lots under the Railways, indicating a selective challenge based on the specific notification. The Court acknowledges a strong prima facie case in favor of the petitioners, emphasizing the urgency due to repeated search and seizure activities conducted by an authority lacking jurisdiction. The petition hints at harassment by respondent no. 8, adding weight to the argument against the exercise of power in this context.

3. In response to the petitioners' contentions, the Court issues an interim order staying all further proceedings related to annexure P/21 of the search and seizure conducted at the petitioners' premises. The order protects the petitioners, employees, and directors from coercive measures for GST realization on municipal parking lots, which are deemed prima facie not payable. This interim relief is granted for a specified period and until further orders, ensuring a temporary halt to any enforcement actions against the petitioners.

4. The Court also directs the completion of service on non-appearing respondents, with a copy of the order to be served on them. An affidavit of service must be filed to demonstrate compliance with the service requirements. The matter is scheduled to appear before the Regular Bench after two weeks from reopening, maintaining the observation on the maintainability of the writ petition while keeping other grievances open for future consideration and adjudication.

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