Regulatory fees of an electricity commission are not taxable supplies; GST show cause notice quashed under the CGST framework.

Statutory regulatory and quasi-judicial functions performed by an electricity regulatory commission were not supplies made in the course or furtherance of business under the CGST Act, so fees received for those functions were not taxable. The court treated the commission's licensing, tariff regulation and revenue-related functions as regulatory in nature, and held that the Schedule III exclusion for services rendered by a court or tribunal applied because the body had the trappings of a tribunal. The statutory notification or classification entry could not override that exclusion, and the show cause notice seeking GST was quashed.

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Issues: Whether the show cause notice seeking to levy GST on fees received by the Electricity Regulatory Commission for performing statutory regulatory functions was sustainable, and whether such functions amounted to a taxable supply under the CGST Act.

Analysis: The Commission's statutory role in issuing licences, regulating tariff and processing revenue-related matters was held to be regulatory and quasi-judicial in character. The reasoning followed the view that a supply under Section 7 of the CGST Act requires goods or services supplied for consideration in the course or furtherance of business, while Section 2(17) confines business to activities of a trade, commerce, profession or similar nature. The Court accepted that the Commission's statutory functions do not answer that description. It also relied on the exclusion in Schedule III for services rendered by a court or tribunal, holding that the regulatory body had the trappings of a tribunal and that the statutory notification or classification entry could not override that exemption. The issue was treated as covered by the earlier Delhi High Court decision, affirmed by the Supreme Court, and by the Karnataka High Court's similar view.

Conclusion: The impugned show cause notice was unsustainable and was quashed. GST could not be levied on the Commission's statutory fees for discharge of its regulatory and quasi-judicial functions.

Final Conclusion: The writ petition succeeded, and the challenged GST demand proceedings against the Commission were set aside on the basis that its statutory regulatory functions were not taxable supplies under the CGST framework.

Ratio Decidendi: Statutory regulatory and quasi-judicial functions performed by an electricity regulatory commission are not supplies made in the course or furtherance of business, and the fees received for those functions are protected by the Schedule III exclusion for services rendered by a court or tribunal.

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