M/S. Shankarampet Projects Private LTD. vs. The Appellate Joint Commissioner Of State Tax

The Court made the following: ORDER I .l q '* a * a* rs I

THE HON'BLE THE CIIIEF JUSTICE SRT APARESH KUMAR SINGH AND THE HON'BLE SRI JUSTICE G.M.MOHIUDDIN WRIT PETITION No.28654 of 2025 ORDER: Learned counsel Sri Karan Talwar appears for the petitioner. Sri Su,aroop Oorilla, learned Special Government Pleader for Statc Ta-x, appears for respondents No. I to 3. Learned counsel Sri Pulimamidi Shashidhar Reddv appears lor respondent No.4. 2. Impugned herein is the order-in-appeal dated 20.06.2025 passed by the Appellate Joint Commissioner (ST), H.yderabad Rural Division, Hyderabad (Annexure P1). The order-in-original (Annexure P3) concerning the financial year 2019-2020 passed under Section 73 of the Te langana Goods ald Services Tax Act, 2O 17 (hereinafter referred to as, "the Act"), imposed tax, interest and penalty under Section 73(9) of the Act and confirmed the demand.

2015, notilied under Section 133 of the Companies Act, 20 13, and other relevant provisions of the said Act. According to the petitioner, the GST obligations become due and payable for the year 2O|9-2O2O. However, the turnover reported in the monthly GST filings (GSTR-1 and GSTR-3B) n,as based on the amounts that u,ere due and receivable by the petitioner during the construction period in terms of the concession agreement. While submitting GSTR-9 and GSTR-9C lorms for financial year 2O|9-2O2O, the petitioner inadvertentlv classified the variation (difference in turnover according to Financial Statements versus GST returns) as exernpt turnover, rather than correctly reporting it as an adj ustment needed to reconcile the turnover figures bets,een the F inancial Statements ald the GST returns. This led to the issuance of show cause notice in Form DRC-01 from the Deputy Commissioner - Enforcement Wing, dated 23.O2.2024. The adjudicating authority proposed to disallow the turnover reported AS exempt in the GST returns liled by the petitioner for the financial year 2019-2020 and proposed to lery tax on the -+ exempted turnover reported by the petitioner. The petitioner i:r its response explained as to wh)' the differential a mount of turnor,'er (inadvertentlv reported as cxempted turnover) was not subject to taxation durir-rg the financial year 2O|9-2O2O. The petitioner zrlso got an opportunity to attend personal hearings. Tllc petitioner, inter alia, cc ntended that the adjudicating ar-rthorit-"' l-ras stated that tre petitioner is in receipt of annuiry amoullts against the annuity invoices raised post introduction of GST. Accorrling to the petitioner, for the fin ancial -1,ear 20 l9-2O2O, srpecifically relevant to the show ceruse notice, it was engaged in the construction phase of ttre contract and did not receive any annuity payments from NHA[. Thc: construction support received by the petitioncr rluring this phase shoulc not be classified as an annuit_r, under the Hybrid Annu:ty Model (HAM). The annuitl, rel'ers to the predeterminerl sum that is paid after the COD i.e., during the operation and maintenance period. According to the petitioner, the adjudicating authority erroneously arrived \ at the opinion that the exemption claimed by thr: company

) on the annuity income is irregular as the services provided by it do not fall under the Service Accounting Code (SAC) 9967 as the company is not providing anv service by way of access to a road or bridge on payment of annuity and provided onl-v construction at-td maintenance servlces which clearly lalls under SAC 9954. Hence, the exemption claimed under clause 23A of the Notification No.12/2017- CT(R) by classifying Build-Operate-Transfer (BOT) (Annuity) Model under Chapter Heading No.9967 and irregular in terms of the provisions of the Act and the Notifications issued thereunder. In its memo of appeal, the petitioner contended that the understalding of the adjudicating authority u/as incorrect, unfounded and without merit, since the petitioner had entered into a concession agrcement under the HAM ald not BOT annuity model. Moreover, the petitioner has not, at any point, either in its replies or otherwise, ciaimed GST exemption on annuity payments by categorizing the annuities under SAC 9967. The petitioner had neither 7 treating annuity at par with Toll collection appears to be 6 made such a submission nor had it classified annuity payments under SAC 9967. Th.e pre-comlnercial operation date was achieved in October, 202 1. Subseqr.rent to the COD, from the financial year 2021-2022 onq,ards, the petitioner has been receiving annuity payments from NHAI and has appropriately paid tax on these payments, classifying them under SAC 9954, which are veriliable through the r:opies of GSTR-1 and GSTR-3B post COD for the financiaL years 202l-2022 and 2022 2023. it, therefore, assailed the reasonings drawn in the order-in- original by the adjudicating authority that the documents submitted by the tax payer shor.t,s that the anntrity paid by the NHAI covers the entire cost of construction services provided by including the operation, rcutinc ar-rd periodic maintenance of the constructed roads during the operation a;'rd maintenance phase under the sarnc concession agreement dated 31.03.2006. It was also pleaded that the adjudicating authority had accepted that the services provided by tl.re petitioner constitute a continuous supply of services, but had incorrectly appiied Section 31(2)

1 instead of Section 31(5) of the Act for imposing the demand t ithout providing al,y valid reasons lor this deviation. Therefore, the order in-original rvas assailed as suflering from non-application ol mir.rd passed premeditated lna manner The petitioner also relied upon the Ccntral Board of Indirect Taxes and Customs (CBIC) Circular No.22ll15/2024, dated 26.06.2024, lr,hich provides clarification on the determir-ration of the time of supply for GST purposes in relation to construction and maintenalce services of National Highri,ay Projects under the HAM b_v NHAI. However, the adjudicating authority did not adhere to the guidelines set forth in the circular and erroneously upheld the demand. The circular, according to the petitioner, clarifies that under HAM categorized asa 'continuous supply of services' as defined in Section 2(33) of the Act, the time of supply is determined by either the date of issuance of invoice or the receipt of payment, whichever is earlier, provided that the invoice is issued within the prescribed period or upon the completion of an event as specified in the contract. If the invoice is not 3 issued as required, the time of supply tl-ren detaults to the date on u,hir:h the service was provided or the yral,ment \\'as received, whichever is earlier. Therefore, according to the petitioner, the services in question fall under [he scopc of continuous supply ol service and that the invoicing and time of supply should be regulated by the stil;uiations in Sections i3 1 15) and 13(21 of the Act. Horvever, tl.re adjudicating authority held that the time of sup,ply should be deterrnined by the general rule set out in S,:ction 3l (2) ol the Act in disregard of the aforesaid circular. It is submitted that despite substantive grounds talccn ir-r the memo of appeal, the appellatc authority has, u,ithout :rn1 consideraiion. held that the appellant is not in a oosition ro provide any e',,'iclence of payment of GST on thc ,urnover of Rs.41 1,77,54,68l l- and on the difference turnover between GSTF:-1 and GSTR-3B payable under Si:ction 9(l) of the Act as l)er the provisions of the CBIC circtrlar dated 26.06.2024 belore the adjudicating authority or l;efore thc appellate authority. Therefore, the appeal is not proper and 9 correct as per law. The Iindings of the adjudicating authority do not require any interlerence. 4 . Learned counsel for the petitioner submits that the impugned appellate order at paragraph 10 thereol summarily rejects the memo o[ appeal without even referring to or discussing any of the grounds raised by the 5. Learned Government Pleader appearing for State Tax is not in a position to dispute that the grounds taken b,v the petitioner in its memo of appeal have not been dealt with by the appellate authority. He is also not in a position to dispute that the petitioner had taken categorical grounds that the payments under the HAM were rcceivablc upon annuity being released post COD, which have been treated by the adjudicating authoritv as received during thc financia-l year 2019-2020 to impose the penalty and interest thereupon. The adjudicating authority had also failed to consider that the nature ol services provided by petitioner. Therefore, the impugned orcler may be set aside.

l0 the petitioner \vere not under the BOT model. but rathe r under 1.he H,{M.

il urith law. The petitioner should appear before the appellate authority on 06. 10.2025. 9 The writ petition is accordingly disposed of. Hoi'r'ever, there shall be no order as to costs Misceilaneous applications pending, if any. shall stand closed. .G. JYOTHI S STANT REGISTR //i/ TION OFFICER

I* * * * HIGH COURT DATED:2310912025 ,.f.r ( c) I * , 4 t8 { 6 f I* 3 1 0[,] 2025 t)tspAt,ltr fr0 ORDER WP.No.2B654 of 2025 DISPOSING OF THE WRIT PETITION WITHOUT COSTS ,-z o :)r) t \L) lii &1 \