2024 (1) TMI 620 - HC - GST

Tax Dispute Resolved: Petitioner Granted Four-Week Window to Appeal Service Exemption Claim Without Coercive Recovery Actions

HC analyzed a tax dispute involving service exemption claims. The court found an alternative remedy of appeal exists and disposed of the writ petition, ... Maintainability of petition - availability of alternative remedy - exemption on supplies made to the Government or Government Authority - supplies like loading, unloading, storage or warehousing including those of renting and leasing - HELD THAT:- Admittedly, the petitioner has an efficacious and alternative remedy to file appeal. The said fact is also mentioned in the impugned order to the effect that an appeal lies against the impugned order before the Appellate Joint Commissioner (ST), Tirupathi. In that view of the matter and also in view of the decision in Assistant Commissioner (CT), Kakinada vs. Glaxo Smith Kline Consumer Health Care Ltd’s case (Supra 1) [2020 (5) TMI 149 - SUPREME COURT] wherein the Hon’ble Apex Court held that the High Court ought not to have entertained the writ petition when an efficacious and alternative remedy of appeal is available to the petitioner, without expressing any opinion on the merits of the petitioner’s case, it is deemed apposite to give liberty to the petitioner to file an appeal against the impugned order. The writ petition is disposed of giving liberty to the petitioner to file an appeal against the impugned order dated 10.07.2023 passed by the 2nd respondent before the concerned Appellate Authority within four (4) weeks from the date of receipt of a copy of this order, in which case, the Appellate Authority shall admit the appeal and after affording an opportunity of hearing to both parties, pass an appropriate order on merits in accordance with governing law and rules expeditiously. Issues: The issues involved in the judgment are the arbitrary passing of an order by the 2nd Respondent directing payment of tax, penalty, and interest, the contention of the petitioner regarding exemption from tax under Notification No. 12/2017, and the maintainability of the writ petition due to the availability of an alternative remedy of appeal.Arbitrary Passing of Order: The petitioner sought relief through a Writ Petition, challenging the action of the 2nd Respondent in passing an order directing payment of tax, penalty, and interest totaling to Rs. 1,76,30,572 for the tax period 2017-18 to 2020-21 under the CGST/SGST Acts, 2017. The petitioner contended that the services provided were exempted from tax as per Notification No. 12/2017. The 2nd Respondent held that the activity attracted tax under SGST & CGST, disagreeing with the petitioner's contention of exemption. The petitioner argued that the services were provided to a Government Authority and hence exempted from tax under the said notification.Contention of Exemption: The petitioner claimed that all services related to supplies like loading, unloading, storage, or warehousing, including renting and leasing, were exempted from tax under Notification No. 12/2017 if supplied to the Government or Government Authority. The petitioner argued that the APSCSCL, to whom the services were provided, was a Government Authority due to the Government holding more than 90% equity shares, making the transaction exempt from tax.Maintainability of Writ Petition: The Government Pleader raised an objection to the maintainability of the writ petition, citing the availability of an alternative remedy of appeal. Referring to a Supreme Court decision, it was argued that since the petitioner had an efficacious remedy of appeal, the writ petition should not be entertained. The Court, after considering the submissions, acknowledged the alternative remedy of appeal available to the petitioner and disposed of the writ petition, granting liberty to the petitioner to file an appeal against the impugned order within four weeks. The respondent authorities were restrained from taking coercive action for recovery of the demanded tax until the appeal process was completed.