Pioneer Co Operative Car Parking Servicing And Constructions Society Limited vs. Assistant Commissioner Of State Tax Mr And Ns Road Charge

WPA/8980/2025HC CalcuttaGSTCNR WBCHCA018299202524 February 2026Bench: HON'BLE JUSTICE OM NARAYAN RAI9 pages

AI SummaryRemanded

Facts

The petitioner, Pioneer Co-operative Car Parking Servicing and Constructions Society Ltd., filed a writ petition challenging an order dated January 21, 2025, passed by the Assistant Commissioner of State Tax under Section 73 of the WBGST Act, 2017/CGST Act, 2017. The order held the petitioner liable to pay GST on parking services rendered to the Kolkata Municipal Corporation (KMC). The petitioner contended that it collected parking charges on behalf of KMC, which performs functions under Article 243W of the Constitution, and that services by local authorities are exempted from GST. The petitioner also argued that parking services do not fall under the definition of 'supply' under Section 7 of the Act. Crucially, the petitioner admitted that not all supporting documents were presented to the adjudicating authority.

Held

The Court acknowledged that while a letter from KMC suggested a possible exemption, it was not conclusive proof that the petitioner was rendering services on behalf of KMC. The "Possession Certificate for Realization of Parking Fees" was also admitted to have not been part of the record before the proper officer. Therefore, the Court found no fault with the impugned order rejecting the petitioner's claim due to a lack of documentary evidence, specifically an agreement with KMC. However, recognizing that the petitioner had demonstrated a "semblance of a case" that it was acting on behalf of KMC, the Court granted the petitioner an opportunity to approach the proper officer with all supporting documents within two weeks. If such a representation is made, the adjudicating authority must grant a post-decisional hearing and pass appropriate orders within two weeks thereafter. The Court clarified that the adjudicating authority is free to reach the same conclusion if the submitted documents and submissions are not legally or factually acceptable. The impugned order was directed to remain in abeyance for four weeks to allow for this process. Garnishee proceedings initiated based on the impugned order were stayed for eight weeks, conditional on the petitioner filing the representation.

Key Issues

1. Whether the petitioner, by rendering parking services and collecting charges on behalf of the Kolkata Municipal Corporation, is exempt from paying GST on such services, considering the functions entrusted to a Municipality under Article 243W of the Constitution and the relevant GST exemptions? 2. Whether parking services, as rendered by the petitioner, constitute a 'supply' under Section 7 of the CGST Act, 2017, making it taxable? Petitioner's Arguments: - The petitioner argued that since KMC is performing functions under Article 243W, and the petitioner is authorized by KMC, the services are exempt from GST, citing a letter from KMC clarifying exemptions for services related to functions entrusted to a Municipality. They also submitted a "Possession Certificate of Realization of Parking Fees" indicating collection of charges without GST. The petitioner claimed that if forced to pay GST without collecting it from end-users, it would face financial hardship. Revenue's Arguments: - The respondent argued that the impugned order is appealable under Section 107 of the Act and that the petitioner failed to produce any supporting documents before the adjudicating authority to substantiate its claim of acting on behalf of KMC.

Sections Cited

Section 73, Section 107, Section 7, Section 79

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

Item No. SL.970 SD 24.2.26 In the High Court at Calcutta Constitutional Writ Jurisdiction Appellate Side. WPA 8980 of 2025 Pioneer Co-operative Car Parking Servicing and Constructions Society Ltd. Vs. Assistant Commissioner of State Tax, MR and NS Road Charge. Mr. Vinay Kumar Shraff Mr. D. K. Agarwar Ms. R. Prasad Mr. P. Sharma .... For the Petitioner. Mr. Saptak Sanyal .... For the State. 1. This writ petition has been filed against an order dated 21st January 2025 passed by the proper officer under Section 73 of the WBGST Act, 2017/CGST Act, 2017 thereby holding the petitioner liable to pay tax on parking services. 2. It is the petitioner’s case that the petitioner has been rendering parking services to the Kolkata Municipal Corporation and collecting parking charges on its behalf. 3. Mr. Shraff, learned Advocate appearing for the petitioner submits that the petitioner has been rendering parking services and collecting parking charges upon being authorized by the Kolkata Municipal Corporation as the petitioner does not have any right of 2 ownership over the parking spaces. It is submitted that since the Kolkata Municipal Corporation is performing functions in terms of the provisions of Article 243W read with the Twelfth Schedule of the Constitution of India, therefore, the petitioner who has been realising parking charges upon being duly authorized by the Kolkata Municipal Corporation cannot be held liable to pay any amount as GST on such parking services. 4. Mr. Shraff invites the attention of this court to a letter dated March 7, 2019 issued by the Manager (Car Parking)/ Parking Department of Kolkata Municipal Corporation to the petitioner and submits that by the said letter the said authority of Kolkata Municipal Corporation had clarified that in terms of a notification dated June 28, 2017 services by government, a local authority or Governmental Authority or services in relation to any function entrusted to a Municipality under Article 243W of the Constitution of India are exempted from GST. 5. It is next submitted that if in such a situation, the petitioner is saddled with GST, the petitioner would have to pay something which 3 the petitioner is not liable to pay. 6. It is further submitted that in terms of Section 7 of the said Act, 2017 parking services does not fall within the definition of supply of service and is therefore for not taxable. 7. Mr. Shraff, further submits that the petitioner has in its possession documents to substantiate the petitioner’s contention that the petitioner is rendering parking services on behalf of the Kolkata Municipal Corporation. He produces a copy of a “Possession Certificate of Realization of Parking Fees” issued by the Chief Manager (Parking) Kolkata Municipal Corporation and submits by relying thereon that the petitioner has only been instructed to collect Rs.10/-per car parking and Rs.20/- for lorry parking without any GST component. A copy of the said certificate handed up to court is taken on record. A copy of the said certificate is also handed up to the learned Advocate for the respondent. 8. It is submitted that in absence of any instruction from the Kolkata Municipal Corporation, the petitioner has not been collecting any amount on account of GST from the recipients of parking services and as such 4 the petitioner cannot be asked to pay the same. Mr. Shraff further submits that the petitioner is a Co-operative Society of some 250 members and that if the petitioner is directed to pay GST, without the petitioner collecting the same from the end-users of the parking services, the petitioner will be unjustly saddled with financial burden. 9. He fairly submits that all the documents which ought to have been produced before the adjudicating authority were not there before the adjudicating authority and if an opportunity is given the same can be produced in support of the petitioner’s contention. 10. Mr. Sanyal, learned Advocate appearing for the respondent GST Authorities submits that the order is appealable in nature and the petitioner should approach the appellate authority under Section 107 of the said Act of 2017 if the petitioner is aggrieved thereby. It is further submitted that the petitioner did not produce anything before the adjudicating authority in support of the petitioner’s contention that the petitioner is rendering services on behalf of the Kolkata Municipal Corporation. 5 11. Heard learned Advocates for the respective parties and considered the material on record. 12. Although from the letter dated March, 7, 2019 annexed as Annexure P/9 at page 104 of the writ petition an inference can be drawn that the same had been written in relation to some permission for collecting GST charges over the scheduled rate of parking fees, the said document by itself may not be in the nature of a clinching evidence for the purpose of arriving at a firm conclusion that the petitioner had been rendering parking services to or on behalf of the Kolkata Municipal Corporation. A “Possession Certificate for Realization of Parking Fees” that was sought to be produced in court today also admittedly did not form part of the records before the proper officer. 13.

In such view of the matter, the order impugned dated January 24 of 2025 cannot be faulted. However, since the order impugned has rejected the petitioner’s contention on the ground that the petitioner has failed to “furnish any document (Agreement) with Kolkata Municipal Corporation in support of” its

6 claim that it had “collected parking charges on behalf of Kolkata Municipal Corporation” and since the petitioner has demonstrated a semblance of a case that the petitioner is acting on behalf of the Kolkata Municipal Corporation this Court is of the view that the petitioner should be granted an opportunity to approach the proper officer and demonstrate, on the basis of the documents which the petitioner has in its possession, that the petitioner is not liable to pay GST on parking services.

14.

Accordingly, the petitioner is granted liberty to approach the proper officer by way of an appropriate representation with all documents in support of the petitioner’s claim that the petitioner is rendering parking services on behalf of the Kolkata Municipal Corporation within a period of two weeks from date.

15.

If such representation is made within the period indicated herein, the adjudicating authority shall grant a post decisional hearing to the petitioner and pass appropriate orders within a period of two weeks thereafter.

16.

It is clarified that the adjudicating

7 Authority shall be free to stick to the same

conclusion that it has reached earlier if it finds that the documents that have been furnished by the petitioner and the submissions made by the petitioner are not acceptable in law or in fact.

17.

In case the adjudicating authority finds that the petitioner is not liable to pay GST in the light of the law governing the parties and the documents furnished by the petitioner, the proper officer shall not give effect to the order dated January 21, 2025 which has been impugned in the writ petition.

18.

The order impugned dated January 21, 2025 shall remain in abeyance and shall not be given effect to for a period of four weeks from date, within which time, the proper officer shall take a decision on the petitioner’s representation filed in terms of this order.

19.

If the adjudicating authority is not convinced with the petitioner’s submission it will record its findings on such aspect and the same would be treated as supplementary/additional reasons in support of the order dated January 21, 2025. 20. The course thereafter shall depend on

8 the ultimate decision taken by the adjudicating authority in terms of this order. The petitioner shall also be entitled to take steps against the impugned order together with its supplement in accordance with law, if the petitioner is aggrieved thereby. Re: CAN 1 of 2026

21.

CAN 1 of 2026 has been filed bringing on record an e-mail dated January 30, 2026 issued to the petitioner by the petitioner’s Banker indicating that garnishee proceedings under Section 79 of the said Act of 2017 have been initiated against the petitioner on the strength of the order dated January 21, 2025 impugned in the present writ petition.

22.

Since the order dated January 21, 2025 has been directed to be kept in abeyance for a period of four weeks from date, the garnishee proceedings shall also remain stayed for a period of eight weeks from date.

23.

However, it is clarified that if the petitioner does not file any representation in terms of this order within a period of two weeks as indicated hereinabove the order impugned and the garnishee proceeding shall continue to remain in force and this order

9 shall not enure to the benefit of the petitioner.

24.

With the aforesaid observations both WPA 8980 of 2025 and CAN 1 of 2026 stand disposed of. No costs.

(Om Narayan Rai, J.)

Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.