IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN JAIPUR BENCH, JAIPUR D.B. CIVIL WRITPETITION NO. ________/2017 REVERENCE
INFRASTRUCTURE
(INDIA)
LLP,
HAVING
ITS
REGISTERED OFFICE AT A-28,ANITA COLONY,BAJAJ NAGAR, JAIPUR(RAJASTHAN) THROUGH ITS AUTHORIZED SIGNATORY DEEPAK GUPTA ...Petitioner VERSUS
1.
UNION OF INDIA, MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) ROOM NO. 46, NORTH BLOCK, NEW DELHI 110 001
2.
STATE
OF
DIVISION)
RAJASTHAN, 1ST
FLOOR,
FINANCE MAIN
DEPARTMENT BUILDING,
(TAX
GATE
2,
GOVERNMENT SECRETARIAT, JAIPUR, RAJASTHAN 302005
...Respondents
WRIT PETITION UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA AND IN THE MATTER OF ARTICLE 14 AND 265 OF THE CONSTITUTION OF INDIA
AND IN THE MATTER OF IMPUGNED NOTIFICATIONNO. 11/2017 DATED 28TH JUNE
2017
UNDER
CGST
ACT,
2017,
IMPUGNED
NOTIFICATION NO. 8/2017 DATED 28TH JUNE, 2017 UNDER
IGST
ACT,
2017
AND
IMPUGNED
NOTIFICATION DATED 29TH JUNE 2017 UNDER SGST ACT, 2017 AND IN THE MATTER OF EXEMPTION OF CONSTRUCTION SERVICES UNDER THE SCHEME OF AFFORDABLE HOUSING/ HOUSING FOR ALL (URBAN) MISSION OR PRADHAN MANTRI AWAS YOJNA etc. AND IN THE MATTER OF SECTION 174 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017
To The Hon’ble Chief Justice and his other Hon’ble companion Judges of this Hon’ble High Court of Judicature for Rajasthan at Jaipur. MAY IT PLEASE YOUR LORDSHIPS: RESPECTFULLY SHOWETH: 1.
That the Petitioner is a limited liability partnership (LLP) registered
under
the
provisions
of
the
Limited
Liability
Partnership Act, 2008 and having its registered office at A-28,
Anita Colony, Bajaj Nagar, Jaipur(Rajasthan). The Petitioner is engaged in the business of construction of houses/Flats/Villas and
undertaken
township
projects
across
the
State
of
Rajasthan. The Petitioner is engaged in construction of a project with name ‘ShubGraha’ at Neemrana, (hereinafter referred as ‘Specified Services’). The said project complies with
the
parameters
of
affordable
housing
scheme
as
mentioned in Chief Minister Jan AwasYojna.
2.
That the Respondent No. 1 is the Union of India which has issued the notification number 11/2017 dated 28th June 2017 pertaining to Central Goods and Services Tax (hereinafter referred as “CGST”) and notification number 8/2017 dated 28th June, 2017 pertaining to Integrated Goods and Services Tax (hereinafter referred as “IGST”). Respondent No. 2 is State of Rajasthan which has issued the notification dated 29th June 2017 for prescribing rates of State Goods and Services Tax (hereinafter referred as “SGST”)
3.
That at the very outset, it is submitted that the impugned notifications created levy of _________________________ through impugned n___________________ in so far as not excluding supply of services of construction of from levy of tax are ultra vires to the provisions of section 174 of the CGST Act which provides that. Further, the impugned notifications are also in violation of the doctrine of promissory estoppel.
4.
That the circumstances which forced the Petitioner to approach this
Hon’ble
Court
are
that
Respondent
No.
1
vide
its____________________ exempted certain taxable services leviable under section 66B of the said Finance Act, 1994.
5.
That as per Entry 14 of sub clause (c) of the said notification, the Petitioner is exempted to pay Service Tax on Specified Services. The reason of exempting the Specified Services was to provide benefit to economically weaker sections and low income groups and to provide them with affordable houses at least possible cost. For the sake of convenience, Entry 14 is reproduced herein: 14. Services by way of construction, erection, commissioning, or installation of original works pertaining to,(a) an airport, port or railways, including monorail or metro; (b) a single residential unit otherwise than as a part of a residential complex; (c) low- cost houses up to a carpet area of 60 square metres per house in a housing project approved by competent authority empowered under the 'Scheme of Affordable Housing in Partnership' framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India;
A copy of the said Notification No. 25/2012-Service Tax dated 20th June, 2012 is annexed herewith and marked asAnnexure 1.
6.
That the Respondent No. 1 vide its Notification No. 9/2016Service Tax dated 1st March, 2016 amended the Notification dated 20th June, 2012 interalia added item (ca) under Entry 14. For the sake of convenience item (ca) is reproduced hereinbelow:-
(ca) low cost houses up to a carpet area of 60 square metres per house in a housing project approved by the competent authority under: (i) the “Affordable Housing in Partnership” component of the Housing for All (Urban) Mission/Pradhan MantriAwasYojana;
(ii) any housing scheme of a State Government.”.
A copy of the said Notification No. 9/2016-Service Tax dated 1st March, 2016 is annexed herewith and marked as Annexure 2.
7.
That w.e.f. 1st July, 2017 there has been a significant difference in the manner of levy of indirect taxes in the country by Central and State Government on supply of goods or services or both. That as per Section 173 of the CGST Act, chapter V of the Finance Act, creating levy of service tax has been omitted.
That with effect from 1st July, 2017 CGST,
SGST and IGST has been introduced in lieu of Service Tax. The respective acts also came into force with effect from 1st July 2017.
8.
That as per Section 9 of Central Goods and Services Tax Act, 2017 and Rajasthan Goods and Services Tax Act, 2017, bothRespondent No. 1 and Respondent No. 2are entitled to levy CGST and RGST respectively on all intra-state supplies of goods or services or both. Further, by virtue of Section 11 of the CGST Act, 2017, Central Government may exempt the goods or services of any specified description from the levy of tax with effect from date as specified in such notification.
9.
That the Respondent No. 1 vide its Notification No. 11/2017Central Tax (Rate), dated 28th June, 2017 specified the rate of CGST as 9% on two-third of the value of the intra-state services involving construction of complex building or civil structure. That the Respondent No. 1 vide its Notification No.
8/2017- Integrated Tax (Rate), dated 28th June,2017 also levied IGST at the rate of 18% on two-third of the value of inter-state services of construction of building or sale of its units thereof. Lastly, Respondent No. 2 vide its Notification dated 29th June, 2017 also levied the SGST at the rate of 9% on two-third of the value intra-state services of construction of building or sale of its units thereof. All the 3 Notifications are collectively
referred
hereinafter
as
“Impugned
Notifications”. A copy of the said Notifications dated 28th June, 2017 and Notification dated 29th June, 2017 is annexed herewith and marked as Annexure 3 Colly.
10.
That it is evident from the aforesaid notifications that the same provides for levy of tax on entire construction services without excluding from its ambit the construction services under Housing for All (Urban) Mission/Pradhan MantriAwasYojana or housing scheme of a State Government and further the exemption notification from CGST dated____________ issued in exercise of powers u/s 11 (1) of the CGST Act also doesn’t provide for any exemption from levy of tax in this regard.
11.
That it appears that with the repeal of Finance Act, 1994 (Service Tax Law) the privilege of exemption from tax conferred by the Notification dated 20th June, 2012 in relation to
construction
Mission/Pradhan
services
under
MantriAwasYojana
or
Housing housing
for
scheme
All of
(Urban) a
State
Government has been omitted/revoked. As a result thereof under
the
Impugned Notifications, Petitioner has been made liable to pay CGST (9%) along with SGST (9%) on two-third value of intrastate supply of Specified Services which isunjust, arbitrary and unreasonable. Moreover, Petitioner is also liable to pay 18% IGST on two-third value of the supply of specified services in
the event of inter-state supply of services which is also arbitrary in nature. Such notifications are thus arbitrary being contrary to the assurance provided for exemption of tax by Respondent No. 1 under the Notification dated 20th June, 2012.
12.
That it is pertinent to mention here that in the budget speech of the financial year 2012 – 2013, the then Finance Minister Mr. Pranab Mukherjee promised for exemption of tax, on construction services relating to residential dwelling , low cost mass housing upto an area of 60 sq. Mtr. Under the Scheme of Affordable Housing in Partnership. A copy of the relevant Extracts of Budget Speech (2012-2013) of the then Finance Minister is annexed herewith and marked as Annexure 4.Further, in the budget speech of the financial year 2016 – 2017, the then Finance Minister Mr. Arun Jaitely proposed for exemption of Service Tax on construction of affordable houses upto 60 square metre. A copy of the relevant Extracts of Budget Speech (2016-2017) of the then Finance Minister is annexed herewith and marked as Annexure 5.
13.
That even the then Urban Development Minister Mr. M Venkaiah Naidu while addressing to realtors body CREDAI, felt the need for exemption of tax under GST regime. Furthermore, Press release of CREDAI dated 6th March, 2017 also stated that Urban Development Ministry has promised that GST will not increase the prices, especially not for affordable housing and the issue had already been escalated to the Ministry of Finance. A copy of Extract of press release of assurance given by Mr. Venakaiah Naidu and Press release of CREDAI is annexed and marked herewith as Annexure 6Colly.
14.
That it is imperative to put forth that Petitioner had already invested Rs. 6.24 Cr.(approx) based on the assurance of the Respondent No.1 vide its Notification dated 20th June, 2012. Further, Petitioner had already got 58 % bookings of its units in the project and allotment subsequently has been made by the Petitioner. Petitioner had acted in line with the assurance made by the Respondent No. 1 in the Notification dated 20th June 2012 and acted in furtherance of the same for the construction of township projects.
15.
That
the
purported
implementation
of
the
Impugned
Notifications will increase the financial burden on the Petitioner and will adversely impact the already meagre margins of the Petitioner in the project.
16.
That the impugned notifications besides being violative of doctrine of promissory estoppel are also ultravires to section ____
of
the
__________
which
provides
that
_________________ .
17.
That the Petitioner has no other equally efficacious alternative remedy in the matter except to approach this Hon’ble Court under Article 226 of the Constitution of India by filing the present writ petition.
18.
That the Petitioner has not filed any such other writ petition previously in this matter either before this Hon’ble Court or before the Hon’ble Supreme Court of India.
19.
Because the humble Petitioner company craves leave to add or alter or amend any of the aforesaid ground or grounds, if necessary.
20.
That the Petitioner on basis of the aforesaid facts and circumstances
submits
that
it
has
no
other
alternative
efficacious remedy except to approach this Hon’ble High Court by way of the present writ petition under Article 226 of the Constitution of India for seeking quashing of the Impugned Notifications to the extent of levying CGST and SGST or IGST on specified services on the following amongst other grounds set out herein below without prejudice to each other: GROUNDS
A.
Because on the basis of principles of equity, justice and fairness and also as per the rule of promissory estoppel, levy of CGST, SGST and IGST on the services supplied under Affordable Housing Scheme is ex-facie arbitrary, whimsical and legally unsustainable.
B.
Because the rationale behind exempting the Specified Services in 2012 was to provide benefit to the economically weaker sections and the low income groupsand to provide them with affordable houses at minimum cost.
C.
Because the Impugned Notification to the extent of levying taxes on specified services/not excluding levy of taxes on specified services is ultravires to the provision of the relevant Acts in as much as Section 174(2)(c) of the CGST Act, 2017 and SGST Act, 2017 respectively under repeal and saving clause, specifically
saves the effect of any right, privilege acquired or accrued under the repealed Acts which in the present case is Chapter V of the Finance Act read with Notification Number 25/2012 wherein specifically the specified services were directed to be exempted from the levy of Service Tax. D.
Because the services_______________________________ have already acquired the privilege under chapter V of the Finance Act read with notification number 25/2012 from levy of service tax which privilege has been specifically saved and therefore the same cannot be revoked/nullified by way of a notification.
E.
Because the Respondents are State within the meaning of Article 12 of the Constitution of India and are required to act in a just, fair and reasonable manner. Every action on the part of the Respondents must be just and reasonable failing which it is liable to be treated as being contrary to the mandate of Article 14 of the Constitution.
F.
Because
Hon’ble
Ministers
had
promised
in
the
past
for
exemption of Service Tax/GST on the services offered under Affordable Housing Scheme in furtherance of which Petitioner had
acted
and
made
the
investments
and
have
propagated/advertised the same to the buyers as well.
G.
Because the Impugned Notification issued by the Respondents are highly arbitrary, discriminative and irrational.
H.
Because Article 265 of the Constitution of India states that no tax shall be levied or collected except by authority of law.
I.
Because the Impugned Notification is devoid of any public interest, let alone any overwhelming public interest justifying levy of CGST, IGST or SGST.
J.
Because the Petitioner herein have set up their projects at a huge investment of approximately Rs. 6.24Cr. by borrowing funds and availing of finance facilities through Banks and Financial Institutions. They are yet to recover the cost of setting up the projects and if at this stage the Respondents burden the Petitioner with unaccounted / unreasonable CGST,SGST and IGST, it would not be economic viable for Petitioner to continue its Business.
K.
Because it is a settled position of law that a person who has promised/represented to another and another person acted on the said representation is required to be bound by the said Representation.
L.
Because the Petitioner will suffer huge loss inasmuch as the Petitioner would be compelled to pay the purported Tax.
M.
Because the Petitioner has a strong prima-facie case on merits as the Respondents have arbitrarily, wrongfully and capriciously issued the Notifications to the extent not granting the exemption of CGST, IGST and SGST to the services under which Petitioner falls.
N.
Because other grounds that may be raised during the course of hearing.
PRAYER It is, therefore, very humbly prayed that this Hon’ble Court may kindly be pleased to: -
(a)
Issue appropriate writ, order or direction to the effect declaring the impugned Notifications dated 28th June, 2017, Notification dated 29th June, 2017 and ______________________ as ultravires to the provisions of Act and also violative of doctrine of promissory estoppel in so far as it provides for blanket levy of CGST, IGST and SGST on all kind of supply of services of construction, erection, commissioning or installation of original works without excluding from its ambit supply of such kind of services in case of low costs houses in a housing project approved by competent authority under “Affordable Housing in Partnership” component of the Housing for All (Urban) Mission/ Chief Minister Jan AwasYojna and any housing scheme of a State Government.
(b)
Issue writ in the nature of certiorari or any other appropriate writ, order or direction to the effect quashing Notifications dated 28th June, 2017 and Notification dated 29th June, 2017 to the extent it levies CGST, IGST and SGST on supply of services of construction, erection, commissioning or installation of original works of low costs houses in a housing project approved by competent authority under: a. “Affordable Housing in Partnership” component of the Housing
for
All
(Urban)
Mission/Chief
AwasYojna. b. Any housing scheme of a State Government.
Minister
Jan
(c)
Allow the present petition with costs.
(d)
Allow such further and other reliefs as the nature and circumstances of the Petitioner case may require.
HUMBLE PETITIONER Through Counsels [Shri Sanjay Jhanwar /Prakul Khurana /Atul Saxena/ Samay Maheshwari/ AbhinavMathur/ Ankit Sareen/ Rajat Sharma/ Shubham Goyal]Advocates Notes: 1.
Petitioner has not filed such similar writ petition before this Hon’ble Court or before Hon’ble Supreme Court of India.
2.
Notices, Extra Copies etc. shall be filed in accordance with rules after its admission.
3.
This writ petition, affidavit etc have not been typed by any staff member of this Hon’ble Court.
4.
Since pie papers are not readily available, it has been got typed on stout papers.
Counsel for Petitioner
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN JAIPUR BENCH, JAIPUR D.B. CIVIL WRIT PETITION NO. ________/2017 REVERENCE INFRASTRUCTURE(INDIA)LLP ...Petitioner
VERSUS UNION OF INDIA AND ANOTHER ...Respondents AFFIDAVIT IN SUPPORT OF WRIT PETITION I,Deepak Gupta S/o Ramavtar Gupta, Aged about 34 years, resident of, Plot No. 11,R S Shyam Nagar, Benad Road,Jaipur – 302012do hereby take oath and state as under:
[1]
That I am the authorized signatory of the Petitionerand I am therefore well conversant with the facts and circumstances of the present case and competent to swear this affidavit.
[2]
That the factual contents of writ petition are true and correct to my personal knowledge and the legal averments made therein are believed by me to be true and correct on the basis of legal advice tendered to me by my Counsel.
DEPONENT
VERIFICATION I, the above named deponent, do hereby verify that the contents of Paras No. 1
to 2 of my above affidavit are true and correct. Nothing
material has been concealed therein and no part of it is false. So help me God.
DEPONENT
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN JAIPUR BENCH, JAIPUR D.B CIVIL WRIT PETITION NO. ________/2017
REVERENCE INFRASTRUCTURE(INDIA)LLP ...Petitioner VERSUS
UNION OF INDIA AND ANOTHER ...Respondents AFFIDAVIT IN SUPPORT OF DOCUMENTS I,Deepak Gupta S/o Ramavtar Gupta, Aged about 34 years, resident of, Plot No. 11,R S Shyam Nagar, Benad Road,Jaipur – 302012 302017do hereby take oath and state as under: [1]
That I am the authorized signatory of the Petitionerand I am therefore well conversant with the facts and circumstances of the present case and competent to swear this affidavit.
[2]
That the Annexures 1 to6 are downloaded from Internet.
DEPONENT VERIFICATION
I, the above named deponent, do hereby verify that the contents of Paras No.
1 to 2 of my above affidavit are true and correct. Nothing
material has been concealed therein and no part of it is false. So help me God. DEPONENT
