Madras High Court
M/S.Kulithalai Municipality vs The Superintendent Of Central Gst on 2 September, 2024
Author: Mohammed Shaffiq
Bench: Mohammed Shaffiq
W.P(MD)No.20856 of 2024
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 02.09.2024
CORAM
THE HONOURABLE MR.JUSTICE MOHAMMED SHAFFIQ
W.P(MD)No.20856 of 2024
M/s.Kulithalai Municipality,
Represented by its Commissioner,
Old Hospital Road,
Kulithalai Taluk,
Karur District-639 104. ... Petitioner
Vs.
The Superintendent of Central GST
and C.Excise,
Kulithalai,
Karur V Range,
15, Gowripuram Extension,
Anna Nagar,
Karur-639 002. ... Respondent
Prayer : Writ Petition filed under Article 226 of the Constitution of India,
praying this Court to issue a Writ of Certiorarified Mandamus, to call for the
records on the file of the respondent in Ref.No.ZA3310220328980, dated
12.10.2022 and to quash the same as illegal, arbitrary and direct the respondent
to revoke the cancellation of petitioner's GSTN Registration No.
33AAALK1863D1ZH within such time as may be directed by this Court and or
pass such further or other orders as the Court.
https://www.mhc.tn.gov.in/judis
1/7
W.P(MD)No.20856 of 2024
For Petitioner : Mr.S.Karunakar
For Respondent : Mr.R.Nandhakumar
Central Government Standing Counsel
ORDER
The present writ petition has been filed challenging the order of the
respondent, dated 12.10.2022 which was passed on the premise that the
petitioner has not filed return for a continuous period of six months.
2. It is submitted by the learned Counsel for the petitioner that the
petitioner is a Local Authority created by the Tamil Nadu Government and
squarely falls under the definition of "Local Authority" in terms of Clause 69 of
Section 2 of Central Goods and Service Tax Act, 2017. The services rendered
by the petitioner were non taxable, as it was in discharge of its constitutional
responsibility / obligation in terms of Article 243G / 243W of the Constitution
of India. Under the GST Act vide Notification No.12/2017-CT(R), dated
28.06.2017, services rendered by the Local Authorities were exempted from
GST. The petitioner was under the bona fide belief that none of their activities
were taxable and hence, they had not filed their returns.
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3. It is further submitted by the learned Counsel for the petitioner that the
only activity that may attract GST is possibly renting of immovable property
and under reverse charge mechanism. It is submitted that the appeal was not
filed under bona fide belief that even renting of immovable property, there may
not be any liability. However, there is some element of uncertainty over its
claim of exemption / non liability in respect of renting of immovable property.
In view thereof, the petitioner is advised to challenge the order cancelling its
GST Registration.
4. It is submitted by both the learned Counsel for the petitioner as well as
the learned Senior Standing Counsel for the respondent that the issue stands
covered by a series of judgments, commencing with the Tvl.Suguna Cutpiece
Center Vs. Appellate Deputy Commissioner (ST) (GST) and others, wherein,
under identical circumstances, this Court has directed the revocation of
registration subject to conditions.
5. This Court has been consistently following the directions issued in
Tvl.Suguna Cutpiece Center's case. The relevant portion of the order is
extracted hereunder:
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"229. In the light of the above discussion, these Writ
Petitions are allowed subject to the following conditions:
i. The petitioners are directed to file their returns for the
period prior to the cancellation of registration, if such returns
have not been already filed, together with tax defaulted which has
not been paid prior to cancellation along with interest for such
belated payment of tax and fine and fee fixed for belated filing of
returns for the defaulted period under the provisions of the Act,
within a period of forty five (45) days from the date of receipt of a
copy of this order, if it has not been already paid.
ii. It is made clear that such payment of Tax, Interest, fine /
fee and etc. shall not be allowed to be made or adjusted from and
out of any Input Tax Credit which may be lying unutilized or
unclaimed in the hands of these petitioners.
iii. If any Input Tax Credit has remained utilized, it shall
not be utilised until it is scrutinized and approved by an
appropriate or a competent officer of the Department.
iv. Only such approved Input Tax Credit shall be allowed
for being utilized thereafter for discharging future tax liability
under the Act and Rule.
v. The petitioners shall also pay GST and file the returns
for the period subsequent to the cancellation of the registration
by declaring the correct value of supplies and payment of GST
shall also be in cash.
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vi. If any Input Tax Credit was earned, it shall be allowed
to be utilised only after scrutinising and approving by the
respondents or any other competent authority.
vii.The respondents may also impose such restrictions /
limitation on petitioners as may be warranted to ensure that there
is no undue passing of Input Tax Credit pending such exercise
and to ensure that there is no violation or an attempt to do bill
trading by taking advantage of this order. viii.On payment of tax,
penalty and uploading of returns, the registration shall stand
revived forthwith.
viii. On payment of tax, penalty and uploading of returns,
the registration shall stand revived forthwith.
ix. The respondents shall take suitable steps by instructing
GST Network, New Delhi to make suitable changes in the
architecture of the GST Web portal to allow these petitioners to
file their returns and to pay the tax/penalty/fine.
x. The above exercise shall be carried out by the
respondents within a period of thirty (30) days from the date of
receipt of a copy of this order.
xi. No cost.
xii.Consequently, connected Miscellaneous Petitions are
closed. "
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6. The writ petition stands disposed of on the above terms. There shall be
no order as to costs. Consequently, connected Miscellaneous Petition stands
closed.
02.09.2024
NCC : Yes / No
Index : Yes / No
Internet : Yes
BTR
To
The Superintendent of Central GST
and C.Excise,
Kulithalai,
Karur V Range,
15, Gowripuram Extension,
Anna Nagar,
Karur-639 002.
https://www.mhc.tn.gov.in/judis
MOHAMMED SHAFFIQ, J.
BTR
02.09.2024
https://www.mhc.tn.gov.in/judis
