Madras High Court
M/S.Noble Logistics Pvt. Ltd vs The Union Of India on 30 October, 2024
Author: R.Suresh Kumar
Bench: R.Suresh Kumar, C.Saravanan
W.P.Nos.15932 and 23572 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 30.10.2024
CORAM
THE HONOURABLE MR.JUSTICE R.SURESH KUMAR
and
THE HONOURABLE MR.JUSTICE C.SARAVANAN
W.P.Nos.15932 and 23572 of 2022
and
W.M.P.Nos.15234 of 2022
M/s.Noble Logistics Pvt. Ltd.,
(Represented by its Managing Director Chockalingam),
No.712, 2nd Floor, Harikrupa Complex,
McNicholas Road, Chetpet,
Chennai - 600 031. ... Petitioner
in both W.Ps
-Vs-
1. The Union of India,
Represented by its Secretary
Ministry of Finance,
Government of India,
North Block,
New Delhi.
2. The Assistant Commissioner of Central Service Taxes
Circle-I,
Audit I Commissionerate,
1775 Jawaharlal Nehru Inner Ring Road,
Anna Nagar Western Extension,
Chennai - 600 101.
3. The Deputy / Assistant Commissioner of Central Taxes,
https://www.mhc.tn.gov.in/judis
1/8
W.P.Nos.15932 and 23572 of 2022
Purasawalkam Division,
North Commissionerate,
Newry Towers,
2054-I Block, 2nd Avenue,
Anna Nagar West,
Chennai - 600 040. ... Respondents
in both W.Ps
PRAYER in W.P.No.15932 of 2022 : Petition under Article 226 of the
Constitution of India, praying for issuance of writ of certiorari, calling for
records of the impugned Show Cause Notice No.159/2022 dated 11.05.2022
issued by the second respondent and quash the same.
PRAYER in W.P.No.23572 of 2022 : Petition under Article 226 of the
Constitution of India, praying for issuance of writ of declaration, declaring that
the restriction on availment of Input Tax Credit imposed vide Section 17(5)(d)
of the CGST Act, 2017 and Section 17(5)(d) of the TNGST Act, 2017 are ultra
vires of Article 14 and Article 19(1)(g) of the Constitution of India; or in the
alternative read down the said provisions to the effect that the term "own use"
referred to therein would only refer to those cases, where the immovable
property is used otherwise than by way of making any outward taxable supply.
For Petitioner
in both W.Ps : Mr.G.Natarajan
For Respondents : Mr.A.P.Srinivas
in both W.Ps Senior Standing Counsel
COMMON ORDER
https://www.mhc.tn.gov.in/judis
W.P.Nos.15932 and 23572 of 2022
(Order of the Court was made by R.SURESH KUMAR, J.)
In W.P.No.15932 of 2022, a show cause notice issued against the
petitioner has been under challenge.
2. In W.P.No.23572 of 2022, the provisions, namely, Section17(5)(d) of
the CGST Act, 2017 and Section 17(5)(d) of the TNGST Act, 2017 are under
challenge.
3. Insofar as the prayer sought for in W.P.No.23572 of 2022, i.e., the
validity of the said provisions of both CGST and TNGST Act is concerned, it is
brought to our notice by the learned counsel appearing for both sides that, by the
recent decision of the Hon'ble Supreme Court dated 03.10.2024, in the matter of
Chief Commissioner of Central Goods and Service Tax and Others Vs.
M/s.Safari Retreats Private Limited and Others in Civil Appeal No.2948 of
2023 etc., batch, the Hon'ble Supreme Court has upheld the validity of the said
provisions. The conclusion by the Hon'ble Supreme Court in the said decision,
reads thus:
"64. As we are upholding the constitutional validity
https://www.mhc.tn.gov.in/judis
W.P.Nos.15932 and 23572 of 2022
of clauses (c) and (d) of Section 17(5), and as held earlier,
its plain interpretation does not lead to any ambiguity, the
question of reading down the provisions does not arise.
65. Some of our conclusions can be summarised as
under:
a. The challenge to the constitutional validity of
clauses (c) and (d) of Section 17(5) and Section
16(4) of the CGST Act is not established;
b. The expression “plant or machinery” used in
Section 17(5)(d) cannot be given the same
meaning as the expression “plant and
machinery” defined by the explanation to Section
17;
c. The question whether a mall, warehouse or any
building other than a hotel or a cinema theatre
can be classified as a plant within the meaning of
the expression “plant or machinery” used in
Section 17(5)(d) is a factual question which has
to be determined keeping in mind the business of
the registered person and the role that building
plays in the said business. If the construction of a
building was essential for carrying out the activity
of supplying services, such as renting or giving on
lease or other transactions in respect of the
building or a part thereof, which are covered by
clauses (2) and (5) of Schedule II of the CGST
Act, the building could be held to be a plant.
https://www.mhc.tn.gov.in/judis
W.P.Nos.15932 and 23572 of 2022
Then, it is taken out of the exception carved out
by clause (d) of Section 17(5) to sub-section (1) of
Section 16. Functionality test will have to be
applied to decide whether a building is a plant.
Therefore, by using the functionality test, in each
case, on facts, in the light of what we have held
earlier, it will have to be decided whether the
construction of an immovable property is a
“plant” for the purposes of clause (d) of Section
17(5).
66. In the light of what we have held above, by
setting aside the impugned judgment in Civil Appeal Nos.
2948 and 2949 of 2023, the writ petitions are remanded to
the High Court of Orissa for limited purposes of deciding
whether, in the facts of the case, the shopping mall is a
“plant” in terms of clause (d) of Section 17(5). Appeals
are partly allowed in above terms.
67. While deciding these cases, we cannot make any
final adjudication on the question of whether the
construction of immovable property carried out by the
petitioners in Writ Petitions amounts to plant, and each
case will have to be decided on its merit by applying the
functionality test in terms of this judgment. The issue must
be decided in appropriate proceedings in which
adjudication can be made on facts. The petitioners are
free to adopt appropriate proceedings or raise the issue in
appropriate proceedings.
https://www.mhc.tn.gov.in/judis
W.P.Nos.15932 and 23572 of 2022
68. The writ petitions are rejected subject to the
interpretation of clause (d) of sub-section (5) of Section 17
of the CGST Act made by us."
4. In view of the said decision where the law has been declared, the
challenge that has been made against the said provisions in W.P.No.23572 of
2022 has to be rejected, hence, W.P.No.23572 of 2022 is dismissed.
5. In view of the said decision having been made while dismissing the
said W.P.No.23572 of 2022, now naturally the petitioner has to face the show
cause notice which is impugned in W.P.No.15932 of 2022, in accordance with
law.
6. In that view of the matter, W.P.No.15932 of 2022 also is liable to be
dismissed, accordingly, it is dismissed.
7. Hence, both the Writ Petitions are dismissed. However, there shall be
no order as to costs. Consequently, connected miscellaneous petition is closed.
https://www.mhc.tn.gov.in/judis
W.P.Nos.15932 and 23572 of 2022
(R.S.K., J.) (C.S.N., J.)
30.10.2024
NCC : Yes / No
Index : Yes / No
Speaking Order : Yes / No
vji
To
1. The Secretary,
The Union of India,
Ministry of Finance,
Government of India,
North Block,
New Delhi.
2. The Assistant Commissioner of Central Service Taxes
Circle-I,
Audit I Commissionerate,
1775 Jawaharlal Nehru Inner Ring Road,
Anna Nagar Western Extension,
Chennai - 600 101.
3. The Deputy / Assistant Commissioner of Central Taxes,
Purasawalkam Division,
North Commissionerate,
Newry Towers,
2054-I Block, 2nd Avenue,
Anna Nagar West,
Chennai - 600 040.
https://www.mhc.tn.gov.in/judis
W.P.Nos.15932 and 23572 of 2022
R.SURESH KUMAR, J.
and
C.SARAVANAN, J.
vji
W.P.Nos.15932 and 23572 of 2022
and
30.10.2024
https://www.mhc.tn.gov.in/judis
