Tax Rule Challenge: Constitutional Validity Questioned, Hearing Set, Respondents Ordered to File Detailed Affidavits Within Four Weeks

HC ruled on a tax-related dispute involving constitutional challenges to CGST Rules and a show-cause notice. The court directed respondents to file affidavits within four weeks, allowed petitioner two weeks for reply, and extended time for responding to the show-cause notice. The constitutional validity challenge was deferred pending further submissions, with a final hearing scheduled for September 2023. Petitioner was granted liberty to implead the CGST Commissioner.

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Petitioner challenges Rule 42(3) of the CGST Rules, 2017 (inserted by Notification No. 16/2019-Central Tax dated 29-03-2019) as "ultra vires" of the Constitution and other provisions under the WBGST Act, and impugns a show-cause notice dated 10-05-2023 issued under Section 73, WBGST Act. Court declined to quash or stay the show-cause notice but granted the petitioner an extension of two weeks to file a reply; any such reply "shall be considered in accordance with law and by passing a reasoned and speaking order" and after an opportunity of hearing within four weeks from receipt of the reply. Constitutional validity of the central and state rules will be decided after affidavits are filed. Respondents to file affidavit-in-opposition within four weeks; petitioner to file reply within two weeks thereafter. Petitioner must serve copies on the Advocate General and the Additional Solicitor General within one week. Any final order on the show-cause notice shall "abide by the result of the writ petition." Liberty to implead the Commissioner of CGST (Kolkata North). Case listed for final hearing in September 2023.

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