Challenge to Central Goods & Services Act 2017 Sections 17(5)(C) & (D) over double taxation and discrimination

The High Court issued notices to the parties in a case challenging Section 17(5)(C) and (D) of the Central Goods and Services Act 2017 on grounds of double taxation and discrimination. The petitioner argued for credit on input goods and services used in mall construction, citing a favorable interpretation in a prior case. The case is set for further proceedings following the waiver of notice service by the Additional Solicitor General for some respondents.

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Issues: Challenge to provision of Section 17(5)(C) and (D) of the Central Goods and Services Act 2017 on grounds of double taxation and discrimination.

Analysis:
1. The petitioner challenged Section 17(5)(C) and (D) of the Central Goods and Services Act 2017, alleging double taxation and discrimination. The petitioner argued that the denial of credit for input goods and services used in the construction of malls for rent is a violation of Article 14 of the Constitution of India. The petitioner contended that despite being similarly situated with other establishments, they were being unfairly treated.

2. The petitioner relied on a decision by the Division Bench of the Orissa High Court in the case of M/s Safari Retrearts Pvt. Ltd. & Ors. vs. Chief Commissioner of CGST and Ors., where the court interpreted the provision in a manner favorable to the petitioner. The Orissa High Court had read down the provision instead of striking it down entirely, allowing the petitioner in that case to claim credit for input goods and services used in the construction and letting out of malls.

3. The High Court issued notices to the Attorney General of India and the respondents, returnable on a specified date. The learned Additional Solicitor General of India waived the service of notice for respondent nos. 1 and 4. The case was scheduled for further proceedings on the specified date for a detailed hearing and examination of the legal arguments presented by both parties.

This analysis highlights the key arguments made by the petitioner challenging the provisions of the Central Goods and Services Act 2017, the reliance on a precedent set by the Orissa High Court, and the procedural steps taken by the High Court in response to the petition.

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