Petitioner challenges a show cause notice levying GST on licence fees collected by the U.P. Electricity Regulatory Commission. Court advertises the petitioners to file a counter affidavit and adjourns for further hearing.
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Court No. - 3
Case :- WRIT TAX No. - 239 of 2024 Petitioner :- U.P. Electricity Regulatory Commission Thru. Secy. Lko.
Respondent :- Addl. Commissioner Office Of Prin. Commissioner Central G.S.T. And Central Excise Lko. And Another
Counsel for Petitioner :- Dwijendra Mishra Counsel for Respondent :- Dipak Seth,A.S.G.I.
Hon'ble Mrs. Sangeeta Chandra,J. Hon'ble Brij Raj Singh,J.
Heard Shri Manish Mishra, learned counsel along with Ankur Mittal and Shubh Dixit appearing for the petitioner, Shri Varun Pandey appearing on behalf of Union of India and Shri K.D. Nag, learned counsel appearing on behalf of respondent no.1.
This petition has been filed with the following main prayers :-
under the Central Goods and Services Tax Act, 2017.
It is the case of the petitioner that it is a regulatory body set up by the Government of U.P. under the U.P. Electricity Reforms Act, 1999 and is engaged in granting licences to various power corporations/ companies for distribution, transmission and trading of electricity and conducts quasi judicial proceedings on the basis thereof charges licence fees from the licencees as prescribed under the U.P. ERC (Fees and Fines) Regulations, 2010.
Prior to 01.7.2017 the petitioner was not registered under the service tax on the basis of activities of the electricity regulatory commissions all over the country. The petitioner sought a clarification on 28.7.2017 from the revenue authorities regarding applicability of GST on various activities performed by the petitioner.
It was informed by the revenue authorities after due investigation that it is not necessary for the petitioner to register under the GST regime as a tax payer. Although the petitioner is registered under the GST regime as a tax deductor.
On 09.7.2018 the Directorate General of GST Intelligence wrote a letter requesting the petitioner to provide details of licence fees charged and collected by the petitioner from different licencees and in the same letter the DGGI also mentioned that the petitioner was not required to get registered under the Service Tax regime, however, on 12.10.2021 the DGGI issued show cause notice seeking to level service tax on the lincence fee collected by the petitioner. The petitioner filed writ petition bearing Writ Tax no. 775 of 2022 [UPERC vs. Additional Director/ Deputy Director, Directorate General of Goods and Services Tax Intelligence] on 28.01.2022 which writ petition is pending.
Again on 18.03.2024 the respondent no.1 has issued a letter seeking details of licence fees
charged and collected by the petitioner from the licencees during the period of 2017-2018 up to 2023-2024. The petitioner submitted the details of the licencees as well as the financial yearwise amount received from such licencees.
On 01.5.2024 the respondent no.1 directed the petitioner to pay the GST amounting to Rs.48,57,83,833/- on the licence fee received by the petitioner during the financial years as aforesaid.
It has been submitted by the learned counsel for the petitioner that the petitioner is a statutory body and it performs the functions as are assigned under the Electricity Act, 2003 and, therefore, it falls out of the ambit of GST regime. However, despite the petitioner making repeated representations in this regard the petitioner has been held liable to pay GST on licence fee collected from licencees. The respondent no.1 has also issued summons on 22.7.2024. The petitioner has submitted its reply along with the requisite details on 25.7.2024.
Without considering the submissions of the petitioner the respondent no.1 has issued a show cause notice again under rule 142 (1) along with form GST DRC -01.
It has been submitted by the learned counsel for the petitioner that at least seven High Courts in the country are dealing with the similar issues with regard to the electricity regulatory commissions in the said respective States and interim orders have been granted. Copies of such interim orders granted by various High Courts have been collectively filed as Annexure – 15 to the petition.
Shri K.D. Nag, learned counsel appearing for the respondent has submitted that the petitioner has not deposited the tax which it has deducted from various entities and the notice has been issued for the said purpose only and it is only a show cause notice and the petitioner ought to reply to the
same instead of invoking the writ jurisdiction straightaway.
The Counsel for the petitioner submitted that the show cause notice is without jurisdiction as the GST regime is not applicable to the petitioner and, therefore, even such show cause notice can be challenged before this Court.
Let counter affidavit be filed by the respondents within a period of six weeks.
List this matter on 14.11.2024. In the meantime it is provided that the petitioner shall file his reply and participate in the proceedings pursuing to the impugned show cause notice, however, no final decision in the matter shall be taken by the respondents till the next date of listing.
Whenever the case is next listed name of Shri K.D. Nag shall be shown as counsel appearing for the respondent.
Order Date :- 19.9.2024 mks
Digitally signed by :- MANISH SAXENA High Court of Judicature at Allahabad, Lucknow Bench
U.P. Electricity Regulatory Commission
Addl. Commissioner Office Of Prin. Commissioner Central G.S.T. And Central Excise Lko.
Another
Sangeeta Chandra
Brij Raj Singh
As recorded by the court registry
3 orders share this CNR
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