V Krishnakumar vs. The Commissioner

Facts

The petitioner, V. Krishnakumar, challenged a circular dated 14/05/2025 issued by the Commissioner, Hindu Religious Charitable and Endowments Department (1st respondent). This circular directed all temples to include Goods and Services Tax (GST) components in tenders for various licensed rights. The petitioner also challenged a letter dated 22/05/2025 from the 5th respondent (Assistant Commissioner, CGST and Central Excise) to the 4th respondent (Commissioner, CGST and Central Excise). The petitioner argued that the issue concerning the collection of GST on the sale of Prasadams inside temples was covered by a previous High Court decision. The counter-affidavit filed by the respondents indicated that the inclusion of tax elements in bids led to a lack of competition in tenders.

Held

The Court quashed the impugned circular issued by the 1st respondent, Commissioner, Hindu Religious Charitable and Endowments Department, to the extent it directed temples to insist on licensees including GST components for the sale of Prasadam. The Court relied on its previous decision in V.S. Raghavan Vs. Joint Commissioner/Executive Officer, Arulmighu Mariamman Temple, Samayapuram, Trichy District and others (WP(MD)No.17590 of 2025, dated 31/07/2025). The reasoning was based on the fact that the collection of GST on the sale of Prasadams inside the temple premises is exempted under Serial No. 98 of Notification No. 2/2017-Central Tax (Rate), dated 28/06/2017, and this notification had not been amended or rescinded. The Court granted liberty to the respondents to collect any tax that may be levied on the temple itself. No costs were awarded. The operative direction was to quash the circular in part.

Key Issues

1. Whether the impugned circular directing temples to include GST components in tenders for licensed rights, specifically for the sale of Prasadams, is liable to be quashed, considering the exemption available under Notification No. 2/2017-Central Tax (Rate)? (Question of law turning on Notification No. 2/2017-Central Tax (Rate), Serial No. 98). Petitioner's contention: The petitioner argued that the issue is squarely covered by the High Court's decision in V.S. Raghavan Vs. Joint Commissioner/Executive Officer, Arulmighu Mariamman Temple, Samayapuram, Trichy District, dated 31/07/2025 in WP(MD)No.17590 of 2025. They also highlighted that Serial No. 98 of Notification No. 2/2017-Central Tax (Rate) exempts the collection of GST on the sale of Prasadams inside temples, and this notification has not been amended or rescinded. Revenue/State's contention: The judgment notes that the counter-affidavit filed by the respondents stated there was no competition in tenders floated due to the inclusion of the tax element in the bid. No specific arguments were recorded for the revenue or state regarding the legal validity of the circular or the exemption notification.