Raghavan .Vs vs. Joint Commissioner / Executive Officer

Facts

The petitioner, V.S. Raghavan, filed a writ petition seeking to quash a portion of a tender notification issued by the Joint Commissioner/Executive Officer of Arulmighu Mariamman Temple, Samayapuram. The tender, dated 07.05.2025, was for the period 01.07.2025 to 30.06.2026. Specifically, the petitioner challenged Clause 14 of the tender, which proposed to collect 18% GST on the fees paid by the petitioner for operating a Prasadam Stall within the temple premises. The first respondent, in its counter affidavit, acknowledged that the activity of granting licenses for selling prasadams does not attract GST under the Revenue Charge Mechanism of the CGST Act, 2017, and that a previous order in 2023 had also noted this. The respondent stated that the inclusion of GST in the tender led to a lack of competition and proposed issuing a fresh tender for the sale of Prasadams alone, excluding the GST burden.

Held

The Court partly allowed the Writ Petition. The Court accepted the averments made in Paragraph 3 of the counter affidavit filed by the first respondent. This paragraph stated that the activity of giving a license for selling prasadams does not attract GST under the Revenue Charge Mechanism of the CGST Act, 2017, and that the sale of Prasadams inside the temple is exempt under Notification No.2/2017 – Central Tax (Rate), Serial No.98, and the corresponding State Government notification. Therefore, the portion of the tender demanding 18% GST on the fees paid by the petitioner for the Prasadam Stall was quashed. However, liberty was granted to the temple to recover the tax in case any taxes were imposed on the temple in the future. The Court did not expressly leave any issue undecided.

Key Issues

1. Whether the imposition of 18% GST on the fees paid by the petitioner for operating a Prasadam Stall within the temple premises, as stipulated in Clause 14 of the tender notification dated 07.05.2025, is legally sustainable under the provisions of the CGST Act, 2017? Petitioner's Contention: The petitioner sought to quash the impugned tender notification, specifically Clause 14, which proposed to collect 18% GST on the fees for running the Prasadam Stall. Revenue/State's Contention: The first respondent, through its counter affidavit, submitted that the activity of granting a license for selling prasadams does not attract GST under the Revenue Charge Mechanism of the CGST Act, 2017. It was further stated that a previous order in 2023 had already established this, and the inclusion of GST in the tender had reduced competition. The respondent proposed issuing a fresh tender for the sale of Prasadams alone, excluding the GST burden, to encourage competition.