TaxTMI 
TaxTMI 
2025 (12) TMI 636
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....ral justice as also violative of Articles 14 and 265 of the Construction of India. b) Issue a writ of certiorari or writ in the nature of certiorari or any other appropriate writ, direction or order for quashing the show cause notice dated 02.08.2024 (Annexure A) bearing No. SGN No. 86/24-25 which was issued by the Office of the Commissioner of Central Tax, Bangalore North Commissionerate proposing to demand GST amounting to Rs. 13,42,66,423/- (CGST- Rs. 6,71,33,423/- and SGST - Rs. 6,71,33,423/-) as the same is illegal, without jurisdiction, violative of principles of natural justice as also violative of Articles 14 and 265 of the Constitution of India and/or pass such order/orders as this Court may deem fit and proper in the circumstances of the case; c) Issue any writ or order or direction which deemed which this Hon'ble Court deems fit in the circumstances of the case, in the interest of justice and equity." 2. Heard the learned counsel for the petitioner and learned counsel for respondents. 3. A perusal of the material on record will indicate that the petitioner herein is the Karnataka Electricity Regulatory Commission (KERC), who is aggrieved by th....
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....in relation to such supply of goods or services or both. (5) The Government may, on the recommendations of the Council, by notification, specify categories of services the tax on intra-State supplies of which shall be paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services: Provided that where an electronic commerce operator does not have a physical presence in the taxable territory, any person representing such electronic commerce operator for any purpose in the taxable territory shall be liable to pay tax: Provided further that where an electronic commerce operator does not have a physical presence in the taxable territory and also he does not have a representative in the said territory, such electronic commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax." 18. In terms of the charging section referred to above, the tax becomes leviable on a supply of goods, ....
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....as supply of goods and services are concerned, Section 7(1)(a) stipulates that it would include within its ambit all forms of supply of goods or services or both including such as sale, transfer, barter, exchange, licence, rental, lease or disposal otherwise made or agreed to be made for a consideration by a person in the course or furtherance of business. Section 7 also brings within its fold activities or transactions of a person, other than an individual, in relation with its members or constituents. The third limb of services which are included in the scope of supply is the import of services for a consideration whether or not in the course or furtherance of business as well as activities specified in Schedule I, even though the same may be made without a consideration. 20. Insofar as the facts of the present matters are concerned, it was not the case of the respondents that the regulatory function as discharged by the writ petitioners would fall within Schedule I. We are also not concerned with subjects which form part of clauses (aa) and (b) of Section 7(1). 21. In order to evaluate the correctness of the stands struck by the respondents it would thus be app....
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....ted as supply of services, namely:-- (a) renting of immovable property; (b) construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier. Explanation.--For the purposes of this clause-- (1) the expression "competent authority" means the Government or any authority authorised to issue completion certificate under any law for the time being in force and in case of non-requirement of such certificate from such authority, from any of the following, namely:-- (i) an architect registered with the Council of Architecture constituted under the Architects Act, 1972 (20 of 1972); or (ii) a chartered engineer registered with the Institution of Engineers (India); or (iii) a licensed surveyor of the respective local body of the city or town or village or development or planning authority; (2) the expression "construction" includes additions, alt....
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....oods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India. 8. (a) Supply of warehoused goods to any person before clearance for home consumption; (b) Supply of goods by the consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption.] [9. Activity of apportionment of co-insurance premium by the lead insurer to the co-insurer for the insurance services jointly supplied by the lead insurer and the co-insurer to the insured in co-insurance agreements, subject to the condition that the lead insurer pays the central tax, the State tax, the Union territory tax and the integrated tax on the entire amount of premium paid by the insured. 10. Services by insurer to the reinsurer for which ceding commission or the reinsurance commission is deducted from reinsurance premium paid by the insurer to the reinsurer, subject to the condition that the central tax, the State tax, the Union territory tax and the integrated tax is paid by the reinsure....
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....ff is done by the appropriate Commission under Section 62 whereas Section 61 is the enabling provision for framing of regulations containing generic propositions in accordance with which the appropriate Commission has to fix the tariff. This basic scheme equally applies to the subject-matter "trading margin" in a different statutory context as will be demonstrated by discussion hereinbelow. 51. In Narinder Chand Hem Raj v. Lt. Governor, H.P. [(1971) 2 SCC 747] this Court has held that power to tax is a legislative power which can be exercised by the legislature directly or subject to certain conditions. The legislature can delegate that power to some other authority. But the exercise of that power, whether by the legislature or by the delegate will be an exercise of legislative power. The fact that the power can be delegated will not make it an administrative power or adjudicatory power. In the said judgment, it has been further held that no court can direct a subordinate legislative body or the legislature to enact a law or to modify the existing law and if courts cannot so direct, much less the tribunal, unless power to annul or modify is expressly given to it. ....
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....e decision-making authority. Such decision-making under Section 79(1) is not dependent upon making of regulations under Section 178 by the Central Commission. Therefore, functions of the Central Commission enumerated in Section 79 are separate and distinct from functions of the Central Commission under Section 178. The former are administrative/adjudicatory functions whereas the latter are legislative." 23. The respondents, however, seek to discern a distinction between the adjudicatory function performed by a regulatory commission as distinguishable from what they assert to be the exercise of a power to regulate. According to the respondents, any income or receipts derived by those Commissions in the course of discharge of their regulatory function would be exigible to tax under the CGST Act. 24. It becomes pertinent to note that the CGST Act not only deals with the supply of goods or services per se, it also brings within its ambit composite and mixed supplies in terms of Section 8. Composite supplies are those which are spelt out and enumerated in serial 6 of Schedule II. The supply of services generically is dealt with in serial 5. Undisputedly, the regulatory....
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.... xxxx xxxx xxxx (31) "consideration" in relation to the supply of goods or services or both includes-- (a) any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government; (b) the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government: Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply;" 27. The definition clauses referred to above assume significance in light of the language employed in Section 7 and which speaks of the supply of goods, services or both provided by a person for consideration being in the course or furtheranc....
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....r consideration but more importantly in the course or furtherance of business. We have in the preceding parts of this decision clearly found that the regulatory function discharged by Commissions would clearly not fall within the scope of the word "business" as defined by Section 2(17). Thus, even if the fee so received by such Commissions were to be assumed as being consideration received, it was clearly not one obtained in the course or furtherance of business. We are thus of the considered opinion that the view as expressed by the respondents in the SCNs' impugned before us are rendered wholly arbitrary and unsustainable. 31. As was noted hereinbefore, Schedule III in express and unambiguous words excludes services rendered by a court or tribunal. Once that exclusion had come to be expressly incorporated, we fail to appreciate how the respondents could have undertaken an exercise to bifurcate or draw a wedge between the adjudicatory and regulatory role of Commissions. Mixed as well as composite supplies of services or goods are aspects which are duly and independently defined and explained. Even those provisions cannot possibly be interpreted or stretched so as to h....
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....ource which vests in the State. We have thus no hesitation in observing that the SCNs' infringe the borders of the incredible and inconceivable. 36. That only leaves us to examine the correctness of the stand of the respondent based on the Notification dated 28 June 2017 and their assertion that the functions discharged by these Commissions would be liable to be classified under the heading "Support services to electricity, gas and water distribution" which is placed under Group Heading 99863. Suffice it to note that the notification dated 28 June 2017 notifies the rates of integrated tax of various services as falling under various chapters, sections or headings of the scheme of classification of as specified in Column 2 thereof. The scheme of classification which is alluded to would necessarily compel us to revert to the Schedules of the CGST Act by virtue of their adoption for purposes of levy of integrated tax in terms of Section 20 of the IGST Act. Since those Schedules are to mutatis mutandi apply and the scope of supply as well as composite and mixed supplies being construed accordingly, the exemption incorporated in Schedule III of the CGST Act would continue t....