Gramalaya vs. The Deputy/Assistant Commissiner Of GST And

Held

The Court noted the respondent's submission that the matter was a quasi-judicial proceeding initiated by a show cause notice. The respondent stated that the petitioner, having replied to the show cause notice, should have allowed those proceedings to reach their conclusion. The respondent assured that the petitioner's reply would be considered, a personal hearing would be provided for submissions and documents, and thereafter, the show cause notice would be adjudicated to its logical end. Recording these submissions, the Court disposed of the writ petition. The Court did not decide on the merits of the petitioner's claim for exemption but directed the respondent to follow the due process of adjudication. No specific issue regarding GST exemption was decided; the petition was disposed of based on the procedural assurances from the respondent.

Facts

The petitioner, Gramalaya, a non-governmental organization registered under Section 12AA of the Income Tax Act, 1961, provides charitable services, including the construction of household and smart toilets. The petitioner rendered Works Contract Services for constructing smart toilets to M/s. VST Industries, Azamabad, Hyderabad, for their Corporate Social Responsibility obligations. The petitioner had not obtained service tax registration and was not discharging applicable taxes on these services. Officers of GST and Central Excise discovered this discrepancy. The petitioner received a letter dated 19.02.2021 requesting various documents related to the services rendered and taxes paid. Despite submitting some documents, the response was deemed unsatisfactory, leading to a show cause notice. The petitioner replied on 12.11.2021 and subsequently filed this writ petition.

Key Issues

1. Whether the petitioner, as a non-governmental organization providing charitable activities (non-profit), is entitled to exemption from GST on the Works Contract Services rendered for constructing smart toilets, considering the explanation/representation dated 12.11.2021, under the relevant provisions of the GST Act and related notifications. Petitioner's contention: The petitioner argued that as a charitable organization providing non-profit services, it should be exempted from GST. They relied on their representation dated 12.11.2021, implicitly arguing for exemption based on their charitable nature and the specific activity undertaken. Respondent's contention: The respondent, represented by the Junior Standing Counsel, argued that the matter involves quasi-judicial proceedings initiated by a show cause notice. They contended that the petitioner, having replied to the show cause notice, should have pursued those proceedings to their logical conclusion rather than filing a writ petition. The respondent assured that the petitioner's reply would be considered, a personal hearing would be granted, and the show cause notice proceedings would be taken to their logical end.