Riveria Commercial Developers Limited. Vs Union of India & Ors. (Delhi High Court)
The Delhi High Court disposed of two connected writ petitions challenging Clauses (c) and (d) of Section 17(5) of the CGST Act, 2017, with one petitioner also challenging Circular No.28 (Flyer No.) dated 01.01.2018. The constitutional validity of the impugned provisions had already been settled by the Supreme Court in Chief Commissioner of Central Goods and Service Tax v. M/s Safari Retreats Private Ltd. , wherein the provisions were held constitutionally valid and the functionality test was recognised for determining whether a proposed structure is a plant on a case-by-case basis.
In one petition, the Court permitted the petitioner to approach the Adjudicating Authority with an appropriate application, with reference to Section 14 of the Limitation Act, 1963. In the other, the Court held that the impugned Circular had to be read in accordance with the Supreme Court’s judgment, with factual appreciation to be undertaken by the Adjudicating Authority. Both petitions were disposed of with liberty to approach the Adjudicating Authority in accordance with law.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. This order shall dispose of two (02) connected Writ Petitions.
2. In essence, the principal relief being sought in both the Petitions is to strike down Clauses (c) and (d) of Section 17(5) (to be read as Impugned Provisions/IPs) of the Central Goods and Services Tax Act, 2017 [hereinafter referred to as ‘CGST’], with the Petitioner in W.P.(C) 4683/2020, raising an additional challenge against the validity of Circular No.28 (Flyer No.) dated 01.01.2018 (to be read as Impugned Circular/IC) issued by the Respondent No.4.
3. Notably, the challenge to the constitutional validity of the IPs has already been put to quietus by the Hon’ble Supreme Court in Chief Commissioner of Central Goods and Service Tax v. M/s Safari Retreats Private Ltd.1, wherein the IPs were held to be constitutionally valid. However, the Court while emphasizing upon the applicability of functionality test, observed that whether or not the proposed structure is a plant, would require appreciation of facts and shall differ on case-to-case basis.
4. In this regard, learned senior counsel representing the Petitioners submit that retrospective amendment carried out by the Government does not affect certain observations made by the Supreme Court.
W.P.(C) 11633/2019
5. Learned senior counsel representing the Petitioner submits that, on account of delay occasioned in pursuing the present proceedings, the Petitioner will not be permitted to claim benefits otherwise available to it.
6. Section 14 of the Limitation Act, 1963, inter alia, provides for exclusion of time spent in bona fide proceedings before a Court.
7. Accordingly, in this regard, the Petitioner, if so advised, will be at liberty to file an appropriate application before the Adjudicating Authority, which will be considered pragmatically in accordance with law.
W.P.(C) 4683/2020
8. As noticed hereinabove, the present Petition raises an additional challenge against the IC, which came to be issued prior to the judgment of the Hon’ble Supreme Court in Safari Retreats (Supra).
9. In view of the judgment passed by the Hon’ble Supreme Court, the IC has to be read in accordance therewith. However, such an exercise can only be carried out by the Adjudicating Authority upon appreciating of facts and circumstances of the present case.
10. Learned counsel representing the Respondents does not dispute that the judgment passed by the Supreme Court is to be applied and the IC has to be read accordingly.
11. In view of the aforesaid observations, both the Petitions, along with pending applications, are disposed of, while granting liberty to the Petitioners to approach the Adjudicating Authority in accordance with law.
12. A photocopy of the order passed today be kept in the connected matters.
Note:
1 2024 INSC 756
