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Water Supply Board Wins Challenge Against GST Order, Secures Remand with Deposit Requirement and Fresh Adjudication The HC allowed a writ petition challenging a GST order against a water supply board. The court found flaws in the original order's tax assessment and ...
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Water Supply Board Wins Challenge Against GST Order, Secures Remand with Deposit Requirement and Fresh Adjudication
The HC allowed a writ petition challenging a GST order against a water supply board. The court found flaws in the original order's tax assessment and classification of water supply services. The case was remanded for reconsideration, with the petitioner required to deposit Rs. 3 crores and submit a reply within specified timelines. The impugned order was set aside, and the matter was directed for fresh adjudication.
Issues involved: Challenge to tax, interest, and penalty imposed on the Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB) u/s an Act of the Tamil Nadu Legislature for water supply and sewerage provision in Greater Chennai area.
Summary: The judgment addressed the challenge against an order imposing tax, interest, and penalty on the CMWSSB. The petitioner, CMWSSB, was inspected and issued summons in September 2021, followed by a show cause notice in September 2023, to which the petitioner replied. The impugned order was issued on 22.12.2023.
The petitioner argued for exemption u/s Notification No.12/2017 & Notification No.2/2017, stating that providing drinking water for public purposes is exempt from GST. The petitioner also offered to remit Rs. 3 Crore as a condition for remand.
The respondent contended that GST is leviable on distribution services, including water distribution, as the petitioner provides water supply through pipelines and tankers at commercial rates. The respondent maintained that the impugned order correctly identified the principal supply from the composite supply.
The impugned order was found to have flaws in determining that the petitioner was supplying purified water and in concluding that the supply through mobile units falls under taxable category. The order lacked details on the value of different water supplies, leading to an incorrect classification by the adjudicating authority.
The judgment set aside the impugned order and remanded the matter for reconsideration, with the condition that the petitioner remits Rs. 3 crores within six weeks. The petitioner was also allowed to submit a reply to the show cause notice within four weeks, and the respondent was directed to issue a fresh order within three months of receiving the remittance.
In conclusion, the writ petition was disposed of with no costs, and the connected miscellaneous petitions were closed accordingly.
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