M/S. Global Associates vs. Union Of INDIA

Learned AGA appearing for the revenue has raised the preliminary objection regarding the maintainability of the writ petition. It was contended that no cause of action has emerged to the petitioner to challenge the vires of the statutory provisions as well as the Notification and Circular issued by the competent authorities. This court cannot adjudicate upon the correctness and legality of the Notification and Circular as well as the provisions impugned, in vacuum.

Learned AGA placed reliance on the judgment of the Hon’ble Apex Court reported in (2004)6 SCC 254 in the case of Kusum Ingots & Alloys reliance on the judgments of the Hon’ble Apex Court as well as other High Courts, submitted that the petitioner is aggrieved by the Notification and Circular issued by the respondent-authorities pursuant to Entry 5(b) of Schedule II to the Central Goods and Services Tax Act, 2017 (‘Act’ for short) which envisages levy of tax on construction activities and deeming the value of the land at one-third of the total amount charged. Learned Counsel argued that irrespective of any action initiated or not by the respondent-authorities, the petitioner is entitled to challenge the same and hence the writ petition is maintainable. Host of cases are referred to, and the same are discussed infra.

I have carefully considered the rival submissions of the learned counsel appearing for the parties.

It is not in dispute that the provisions of the Act, and the Notification and Circular issued by the respondent authorities have been challenged without there being any cause of action.

To answer the preliminary objections raised, it is apt to collate the legal propositions holding the field with reference to the judgments cited by the learned counsel for the parties. The Hon’ble Apex Court in the case of Kusum Ingots (supra), has observed that passing of a legislation by itself does not confer any such right to file the writ petition unless a cause of action arises therefor. However, it is observed that a Hon’ble Apex Court considering the case of Nasiruddin (Nasiruddin Vs. State Transport Appellate Tribunal reported in 1975(2) SCC 671) and Kusum Ingots & Alloys Limited observed that, keeping in view the expression “cause of action” used in Clause (2) of Article 226 of the Constitution of India, indisputably even if a small fraction thereof accrues within the juri iction of the Court, the Court will have juri iction in the matter though the doctrine of forum conveniens may also have to be considered. The juri iction of the High Court based on the cause of action doctrine was the subject matter adjudicated upon.

India reported in (2013) 1 SCC 745 the Hon’ble Apex

India reported in 2019-TIOL-15-HC-AHM-GST on which much emphasis was placed by the learned counsel for the petitioner, the Hon’ble High Court of reported in 1985 (3) SCC 1, the Hon’ble Apex Court while examining the challenge made to the preliminary Notification issued under Section 4(1) of the Land Acquisition Act, 1894, held that a Notification under Section 4(1) initiates the proceedings for acquisition of land and uses the expression ‘shall’, the mandate of the - 12 - licensing terms and broadcast reproduction rights. In that context, the plea that the writ petitions have to be dismissed on the ground of lack of cause of action was over-ruled.

Hence, the judgments relied upon by the learned counsel for the petitioner are not applicable to the facts of the present case. Whereas the dictum laid down by the Hon’ble Apex Court in the case of Kusum Ingots and Alloys Ltd., has a bearing in the fact situation.

Enacting a legislation or issuing Notification/Circular could not confer a right to challenge unless the litigant is affected by the action initiated by the executive in furtherance of such legislation/administrative Circular/Notification more particularly, in taxing statutes. Cause of action is sine qua non for challenging such legislation/ Notification/Circular. The writ Court cannot adjudicate upon such matters in vacuum. Adjudication of such issues sans any cause of action would be merely academic, consuming public time de hors the litigants waiting in serpentine queue seeking justice before the courts for the relief/s sought for, arising out of the cause of action. The petitioner involved in construction activity or works contract would not be suffice to examine the constitutional vires of the Act and the related Notification/Circular unless the cause of action emerges.