Andhra Pradesh High Court - Amravati
Gr Gundugolanu Devarapalli ... vs Central Board Of Indirect Taxes ... on 5 May, 2022
Bench: A V Sai, Ravi Nath Tilhari
HIGH COURT OF ANDHRA PRADESH
MAIN CASE: W.P No. 23994 of 2021
PROCEEDING SHEET
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07. 05.05.2022 AVSS, J & RNT, J
I.A.No. 2 of 2022
Heard Sri V. Raghu Raman, learned senior
counsel, representing Sri S. Dheera Kanishka,
learned counsel for the petitioner on record, Sri
Y. N. Vivekananda, learned Govt.Pleader,
appearing for respondents No.2 & 3, and learned
Asst. Solicitor General, appearing for respondent
No.1.
In the main writ petition, challenge is to
the Circular bearing No.150/06/2021-GST, dated
17.06.2021, issued by the 1st respondent, and
show cause notices, dated 16.03.2021 and
29.07.2021, issued by the 3rd respondent-the
Deputy Commissioner State Tax, Eluru Division.
According to the petitioner, which is a
Company and a Special Purpose Vehicle, the
National Highways Authorities awarded a
concession in its favour for development of
'Gundugolanu - Devarapalli - Kovvuru Section of
National Highway-16' under Public Private
Partnership on 26.04.2018 on Hybrid Annuity
Model.
The Government of India issued
Notification No.12/2017 - Central Tax (Rate),
dated 28.06.2017, in exercise of the powers
conferred by Sub-Sec.(1) of Section 11 of the
Central Goods and Services Tax Act, 2017,
exempting the intra-State supply of services of
description as specified in column (3) of the Table
shown in the said notification. In the said
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notification, service by way of access to a road or
a bridge on payment of toll charges, is shown a
Item No.23. Subsequently, pursuant to the
meeting of GST Council, dated 06.10.2017, the
Union of India issued another Notification bearing
No.32/2017 - Central Tax (Rate), dated
13.10.2017 and Item No.23A, which deals with
the service by way of access to a road or a bridge
on payment of annuity, came to be inserted. In
the GST Council meeting, held on 28.05.2021,
vide Paragraph-15.33., the GST Council issued
clarification to the effect that the annuity paid as
deferred payment for construction of
roads/highways is not exempted from GST as the
tolls or annuity in lieu of tolls are.
By way of the impugned Circular, dated
17.06.2021, the Central Board of Indirect Taxes
and Customs, 1st respondent herein, while
referring to the GST Council meeting, held on
28.05.2021, issued a clarification to the effect
that Item-23A of the Notification No.12/2017 -
Central Tax (Rate), dated 28.06.2017, does not
exempt GST on the annuity (deferred payment)
paid for construction of roads. The respondent
authorities issued show cause notice dated
16.03.2021, and also a further show cause notice
dated 29.07.2021.
As mentioned supra, questioning the
Circular dated 17.06.2021 and the show cause
notices, dated 16.03.2021 and 29.07.2021, the
petitioner has come up before this Court with the
present writ petition.
According to Sri V. Raghu Raman, learned
senior counsel, representing the learned counsel
on record for the petitioner, the Circular dated
17.06.2021 and the show cause notices, which
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are impugned in the present writ petition suffer
from inherent lack of jurisdiction. It is further
submitted by the learned senior counsel that in
the absence of any notification under Sub-Sec.(1)
of Section 11 of the Central GST Act, the action
impugned cannot be sustained in the eye of law.
In support of his submissions and contentions,
the learned senior counsel places reliance on the
judgment of the composite High Court of Andhra
Pradesh in W.P.No. 15312 of 2003 and W.P.No.
3051 of 2004, dated 22.09.2004 and the
judgment of the Hon'ble Supreme Court in the
case of TATA Teleservices Ltd. Vs. Commissioner
of Customs {reported in 2006 (194) E.L.T.11
(S.C)}. The learned senior counsel also has
invited the attention of this Court to the interim
order passed by the High Court of Karnataka in
W.P.No. 7233 of 2022, wherein the same
impugned Circular dated 17.07.2021 is under
challenge. In the said W.P.No. 7233 of 2022, the
High Court of Karnataka, by way of an order
dated 08.04.2022, stayed the operation of the
Circular dated 17.06.2021 and the consequential
proceedings. It is also brought to the notice of
this Court by the learned senior counsel that
despite the pendency of the present writ petition
before this Court, wherein the very jurisdiction of
the respondents is under challenge, the
Adjudicating Authority passed an order on
23.03.2022. It is further submitted by the
learned senior counsel that the demand made by
the respondents herein is also barred by
limitation.
On the contrary, Sri Y. N. Vivekananda,
learned Govt. Pleader, appearing for respondents
No.2 and 3, strongly resisting the very
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maintainability of the writ petition against the
show cause notices, contends that there is
absolutely no illegality nor there is any procedural
infirmity in the impugned action and in the
absence of the same, the very writ petition filed
by the petitioner herein is liable to be rejected. It
is further contended by the learned Govt. Pleader
that Section 107 of the Act provides for effective
alternative remedy to the petitioner herein, as the
final orders have already been passed in the
instant case.
In I.A.No.2 of 2022, the petitioner herein,
while enclosing a copy of the Adjudication Order
dated 23.03.2022, is seeking stay of all further
proceedings pursuant to the said adjudication
order.
In the considered opinion of this Court,
various issues brought to the notice of this Court,
as referred to supra, which obviously touches the
root of the matter, including the aspect of
jurisdiction, are to be examined at the time of
hearing the main writ petition. Therefore,
pending further orders, there shall be stay of all
further proceedings pursuant to the impugned
Adjudication Order dated 23.03.2022, passed by
the 3rd respondent, vide Form DRC-07 for the
period 2018-19, 2019-20 and 2020-21, subject to
the petitioner paying a sum of 5% of the amount
covered by the Adjudication Order, dated
23.03.2022, and to furnish Bank Guarantee for
another sum of 5% of the amount covered by the
Adjudication Order, dated 23.03.2022, within a
period of 10 (ten) weeks from today. It is also
made clear that in the event of the failure on the
part of the petitioner to comply with the said
condition within the time stipulated, this order
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will not enure to the benefit of the petitioner, and
it is open for the respondents to take action, in
accordance with law.
I.A.No. 2 of 2022 is accordingly disposed
of.
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AVSS, J
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RNT, J
Dsr
