Calcutta High Court keeps open maintainability of writ on Real Estate Projects opting for Concessional Rate of GST

Calcutta High Court keeps open maintainability of writ on Real Estate Projects opting for Concessional Rate of GST

The High Court of Calcutta (HC) heard the petition regarding requirements related to reverse accumulated credit by on-going real estate projects opting for concessional rate of Goods and Service Tax (GST)

A writ petition was filed by a petitioner who was aggrieved by Rule 42(4)(c) that was issued under Notification No. 16/2019 Central Tax on 29 March 2019 and also the second proviso of Column 5 and Paras 1(a) and 1(e) of Annexures I and II of Notification No.3/2019 – it issued on the same date.

The Petitioner averred that directions regarding reversal of accumulated credit were almost similar to the directions for payment of tax. It was contended that a person to whom the powers were delegated cannot give directions to pay tax as it is a substantive aspect and is not delegable in nature.

The petitioner countered the revenue department's objection regarding the maintainability of the said petition. The petitioner pleaded that a writ petition under Article 226 of the Constitution of India has maintainability even without a show-cause notice issuance. It was reasoned that there is a likelihood of an illegal tax assessment due to the exercise of the legislative power beyond its competence would give rise to a cause of action.

The matter was listed before the HC in front of the single-judge bench of Justice Shekhar B Saraf. Justice permitted both parties to file affidavits. He said that the issue of maintainability of the writ petition would remain open.

Interim relief was also granted by the HC with the liberty to file an application with the petition before the HC if any forced step is taken against the Petitioner. The HC presided over the requirement to reverse accumulated credit by on-going real estate projects opting for a concessional rate of GST. The next hearing is in March 2021.