Tecnimont Spa INDIA Project Office vs. State Of Punjab And Another

Held

The High Court held that the challenge to Section 174(2) of the GST Act, 2017, and its incorporation into the respective State GST Acts, was subject to the final outcome of the appeal pending before the Supreme Court in the case of T.S. Belaraman (supra). The Court noted that the Supreme Court had granted leave to appeal in that matter and had passed interim orders restraining coercive steps. Therefore, the High Court decided to dispose of the present writ petitions by directing that the challenge to Section 174(2) would be subject to the final decision of the Supreme Court in T.S. Belaraman. The interim orders passed by the High Court were directed to continue to operate until the disposal of the SLP by the Supreme Court. The Court explicitly stated that the final adjudication would have to be done by the Supreme Court.

Facts

This judgment consolidates numerous writ petitions filed by various entities, including TECNIMONT SPA INDIA PROJECT OFFICE, M/S SADHIL ENTERPRISES PVT. LTD., and others, against the State of Punjab and the State of Haryana, and in some cases, the Union of India. The petitioners challenged the vires of Section 174(2) of the GST Act, 2017, which was incorporated into the Punjab State Goods and Services Tax Act, 2017, and Haryana State Goods and Services Tax Act, 2017. The core of the challenge stemmed from a Supreme Court decision in T.S. Belaraman vs. The Commercial Tax Officer and others, where similar provisions were upheld. The Revenue contended that the impugned section was within the constitutional competence of the legislature. The procedural history indicates that the High Court had previously passed interim orders restraining the Revenue from taking coercive steps.

Key Issues

1. Whether Section 174(2) of the GST Act, 2017, as incorporated into the respective State GST Acts, is ultra vires the Constitution of India, particularly concerning its retrospective application or the competence of the legislature to enact such a provision? The petitioners argued that the challenge to Section 174(2) of the GST Act, 2017, was based on the Supreme Court's decision in T.S. Belaraman vs. The Commercial Tax Officer and others, which had already dealt with similar provisions. They contended that the Supreme Court had upheld the validity of such provisions, finding them to be within the legislative competence and framework of the Constitution, and that the Revenue was restrained from taking coercive steps by the Supreme Court while granting leave to appeal. The respondents (Revenue) argued that Section 174(2) of the GST Act, 2017, was validly enacted and within the legislative competence of the respective states. They relied on the Supreme Court's pronouncements in similar cases, asserting that the provision was constitutional.