TaxTMI 
TaxTMI 
2026 (1) TMI 1607
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 3. The present petition has been filed seeking following substantive reliefs:- "(i) Issue directions or a writ especially in the nature of certiorari for quashing the show cause notice No. 156/2024 dated 02.07.2024, whereby the Respondent No.3 has levied GST on the amount received by the Petitioner as Licensee fee, Petition Fee and Misc. Supply without considering that the said amount is received for discharging functions under section 86 of the Electricity Act, which are judicial and quasi-judicial in nature, and hence, the same is not considered a supply as per Entry No.2 of Schedule-lIl of the CGST Act, 2017. (ii) Issue a writ of Mandamus directing the Respondents not to take any coercive action against the Petitioner in consequence to the illegal show cause notice No. 156/2024 dated 02.07.2024, during the pendency of present petition. iii) Issue a writ of Mandamus directing Respondent No. 2 to issue clarification regarding the 47" meeting of the Goods and Service Tax Council held on 28th/29th June, 2022 in which it was held that "Like other entities, Regulators should pay GST on their supplies" without considering that the amount received by SERC....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... serial 5. Undisputedly, the regulatory function discharged by Commissions can neither be said to be akin to renting of immovable property, construction of a complex or building, temporary transfer or permissive use or enjoyment of an intellectual property right, development, design of software, transfer of the right to use goods and which are subjects enumerated in serial 5 of Schedule II. The regulatory power which is wielded by Commissions under the provisions of the Electricity Act would also not fall within the ambit of clause (e) of serial 5 and which speaks of an obligation to refrain from doing an act or toleration of an act or situation. 25. Of equal significance is the definition of "business" and "consideration" as it appears in the statute. Section 2(17) defines "business" as follows: - "2. Definitions. -In this Act, unless the context otherwise requires- xxxx xxxx xxxx (17) "business" includes- (a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit; (b) any activity or transaction in connection with or incidental or anc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r consideration being in the course or furtherance of business. When we revert to Section 2(17), we find that the statute defines the said expression to mean any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity irrespective of whether it be for a pecuniary benefit or not. Clauses (b) and (c) of Section 2(17) are again coupled to clause (a). Clause (d) of Section 2(17) is concerned with the supply or acquisition of goods, while clauses (e), (f), (g) and (h) would also have no application whatsoever considering the nature of activities which are contemplated therein. 28. That thus leaves us to consider whether the power to regulate, as exercised, could be said to be an activity akin to trade, commerce, manufacture, profession, vocation, adventure, voyager and which are activities enumerated in Section 2(17)(a). We find ourselves unable to fathom how a power of regulation which stands statutorily vested in a Commission could be countenanced to fall within the ambit of any of those activities. It becomes pertinent to note that while Section 2(17)(i) also encompasses activities or transactions undertaken by the Central or State ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssibly be interpreted or stretched so as to hold that the fees received by Commissions could have been subjected to tax. The assumption of jurisdiction in terms of the notices impugned before us is thus found to be ex facie wholly untenable. 32. Of significance is the respondent observing "Therefore, anything other than goods, money and securities will also include the activities of "regulating the tariff of generating companies owned or controlled by the Central Government, regulating the inter-State transmission of electricity, to issue licenses to persons to function as transmission licensee and electricity trader with respect to their inter-State operations; to levy fees for the purposes of this Act" falls under the scope of "Supply of Services" in para 6.1 of the impugned SCN. 33. We find ourselves unable to accept, affirm or even fathom the conclusion that regulation of tariff, inter-State transmission of electricity or the issuance of license would be liable to be construed as activities undertaken or functions discharged in the furtherance of business. The respondents have clearly failed to bear in consideration the indubitable fact that even if these be f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dule III of the CGST Act would continue to govern and be applicable. The mere mention of support services in that notification thus would not detract from the exemption which otherwise operates and stands accorded with respect to "services by any court or Tribunal.....". What we seek to emphasise is that a notification would neither expand the scope of the parent entry nor can it be construed as taking away an exemption which stands granted under the CGST Act. There cannot possibly be even a cavil of doubt that a Schedule constitutes an integral part and component of the principal legislation. 37. Accordingly, and for all the aforesaid reasons, we allow the present writ petitions and quash the impugned SCNs dated 29 May 2024 [W.P.(C) 10680/2024] and 23 July 2024 [W.P.(C) 14723/2024]. 38. We further observe that the Order-in-Original dated 30 August 2024 in W.P.(C) 10680/2024, was, in terms of our initial interim order made subject to the outcome of the present petition. Since we have come to hold that the SCN themselves are invalid, the said order dated 30 August 2024 also cannot sustain. It too, shall consequently, stand set aside." 8. Similar view has also be....