Page 91 - GSTL_23rd April 2020_Vol 35_Part 4

2020 ] IN RE : NEWTOWN KOLKATA DEVELOPMENT AUTHORITY 417
2. Submission of the Applicant :
2.1 The Applicant is a statutory authority constituted under the New
Town Kolkata Development Authority Act, 2007 (hereinafter the NKDA Act) for
providing various civic services and amenities within the local area of New
Town, Kolkata. It provides civic facilities to the area like water supply, drainage,
sewage, collection, removal and disposal of solid waste etc.
2.2 The Applicant argues that it is a local authority within the meaning
of Section 2(69)(c) of the GST Act. It discharges all functions assigned to a Munic-
ipality under Article 243W of the Constitution of India. The Applicant has the
power to collect various taxes, fees, charges etc. All such taxes, fees and charges
are credited to the ‘Development Fund’ constituted under Section 19 of the
NKDA Act. Said ‘Development Fund’ is a Local Fund, as defined under Section 2
of the Local Authorities Loans Act, 1914 and Rule 6.29 of West Bengal Treasury
Rules, 2005 (hereinafter WBTR). The Applicant also submits a copy of Letter No.
4866, dated 8-11-2012 from the Urban Development Department, Government of
West Bengal, informing the Principal AG (A&E), West Bengal that NKDA has
come under the control of the said department of the State Government and the
department would bear all its liabilities for salary and other grants and that
NKDA has no Local Fund of its own. The Government, therefore, has requested
the AG to open a Local Fund for NKDA. The Applicant submits letter dated 28-4-
2014 from Principal AG (A&E), West Bengal, to the PAO, Kolkata Pay & Ac-
counts Office-III, informing the latter that it has given approval to NKDA to op-
erate a Local Fund. All these, according to the Applicant, establishes that NKDA
is a statutory authority legally entitled to and entrusted by the State Government
with the control and management of a local fund. It is, therefore, a local authority
as defined under Section 2(69)(c) of the GST Act.
2.3 The Applicant, therefore, claims that the exemptions available to a
local authority under the various entries of the Exemption Notification should
apply to its services also.
2.4 Although it has raised in its application the question of liability for
registration, the Applicant’s written submission remains silent on that matter.
3. Submissions of the Revenue
3.1 The concerned officer from the Revenue submits that NKDA, ac-
cording to its official website, is a transitional arrangement in the way of creation
of an Urban Local Body. He refers to the case Agarwal v. Hindusthan Steel [(1970)
AIR 1150 (SC)] to establish that the manpower of statutory authorities or bodies
do not become officers subordinate to the President of India under Art. 53(1) of
the Constitution and similarly to the Governor under Art. 154(1). Therefore, such
a statutory body, corporate or an authority as judicial entity is separate from the
State. The officer also reflects upon R.C. Jain & Ors, [(1981) 2 SCC 308] to point
out the distinctive characteristic of a local authority. He is skeptical whether in-
terpretation of local fund in WBTR is applicable to the GST Act. In his opinion,
regulatory bodies and other autonomous entities may not be regarded as local
authorities for the purpose of the GST Act.
4. Observations & Findings of the Authority :
4.1 Section 2(69) of the GST Act defines a local authority as below.
“Local authority” means -
(a) Panchayat as defined in clause (d) of article 243 of the Consti-
tution;
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