Court Declines Jurisdiction Under Article 226, Urges Petitioner to Pursue Alternate Statutory Remedies
In a significant judgment, the Meghalaya High Court dismissed a writ petition filed by M/s Jorabat Shillong Expressway Limited challenging the imposition of Goods and Services Tax (GST) on annuity payments received under the Build-Operate-Transfer (BOT) Annuity model for a highway project. The court held that the writ petition was not maintainable due to the availability of an efficacious alternate statutory remedy under the Central Goods and Services Tax (CGST) Act, 2017.
The petitioner had sought to quash the Show Cause Notice and the subsequent Order-in-Original issued by GST authorities, which demanded GST on annuity payments, arguing that these payments were exempt under Entry 23A of Notification No. 12/2017. The petitioner also challenged the jurisdiction of the officers who issued the notices and questioned the validity of certain GST notifications and circulars.
The court, comprising Justices H.S. Thangkhiew and B. Bhattacharjee, observed that the petitioner had an alternative remedy under the CGST Act, which includes an appellate mechanism to address their grievances. The court emphasized that the power of judicial review under Article 226 is discretionary and should not be exercised when statutory remedies are available, unless there are exceptional circumstances such as a violation of natural justice or patent lack of jurisdiction.
In its detailed judgment, the court examined the petitioner’s claims of jurisdictional overreach by GST authorities and concluded that the officers were duly empowered under the CGST Act to issue the contested notices. The court also noted that the dispute primarily revolved around the classification of services and the applicability of GST exemptions, which are more appropriately addressed through the statutory appellate process.
The court further dismissed the petitioner’s reliance on a Karnataka High Court judgment, stating that the legal position on the matter had not attained finality, with appeals still pending. It also rejected the argument that the existence of binding circulars rendered the appellate process ineffective.
Ultimately, the court declined to intervene in the assessment and adjudication process, highlighting that tax statutes are comprehensive codes providing remedies through appeals and revisions. The court granted the petitioner liberty to file an appeal under Section 107 of the CGST Act within four weeks, assuring that the appellate authority would consider the appeal on its merits.
Bottom line:-
GST applicability - Challenge to Show Cause Notice and Order-in-Original issued under Section 74 of CGST Act on annuity received under BOT Annuity model - Held, writ petition not maintainable as efficacious alternate remedy of appeal available under CGST Act.
Statutory provision(s): Central Goods and Services Tax Act, 2017 Sections 74, 107, 168, Constitution of India Article 226, Notification No. 12/2017, Notification No. 14/2017, Circular No. 3/3/2017-GST, Circular No. 150/06/2021-GST
