Ajmer Vidyut Vitran Nigam Limited vs. Joint Commisioner, Office Of The Commissiner

CW/19710/2023HC RajasthanGSTCNR RJHC02100422202324 April 2024Bench: AVNEESH JHINGAN,BHUWAN GOYAL5 pages

AI SummaryRemanded

Facts

The petitioner, Jaipur Vidyut Vitran Nigam Limited, a public undertaking engaged in electricity distribution and supply, challenged show cause notices issued by the Directorate General of Goods and Service Tax Intelligence. The notices proposed charging service tax on 'Wheeling Charges' and 'Cross Subsidy Surcharges'. A primary ground for challenge was that the respondents had wrongly invoked the extended period of limitation for issuing the show cause notices, as there was no allegation of fraud. Initially, the Court stayed the passing of final orders but permitted proceedings to continue. Subsequently, the interim protection was modified to allow respondents to decide the issue of limitation, with a condition not to proceed to frame assessment if the issue was decided against the petitioner.

Held

The Court disposed of the writ petitions at the current stage, acknowledging that the decision on the petitioner's objection regarding the limitation period would significantly impact the challenge to the show cause notices. The Court directed that the respondents must first decide the issue of limitation after providing the petitioner an opportunity of hearing. If the issue of limitation is decided against the petitioner, the respondents are prohibited from proceeding further to frame an assessment. The Court clarified that the respondents should not proceed with the impugned show cause notice without first communicating the order on the limitation issue. All other issues raised by the petitioners were expressly left open. The petitioners retain the liberty to avail further remedies as per law, including approaching the High Court again if aggrieved by the decision on limitation or for redressal of surviving grievances.

Key Issues

1. Whether the extended period of limitation under GST law can be invoked for issuing show cause notices concerning 'Wheeling Charges' and 'Cross Subsidy Surcharges' when the allegations do not involve fraud? (Question of law, concerning limitation provisions under GST law). Petitioner's arguments: The petitioner contended that the extended period of limitation could not be invoked as the show cause notices did not allege fraud. They argued that the respondents had failed to decide this specific objection regarding limitation despite it being raised in their reply. Respondents' arguments: The respondents stated that they were permitted to proceed with the matter, and the interim order allowed them to decide the issue of limitation. They submitted that the petitioner's objection regarding limitation was being considered and would be decided after providing an opportunity of hearing.

Sections Cited

Not specified in the judgment

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

[2024:RJ-JP:19208-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 9650/2019 Jaipur Vidyut Vitran Nigam Limited, Having Its Registered Office At Vidyut Bhawan, Jyoti Nagar, Jaipur Through Its Chief Accounts Officer Shri Yogendra Singh Rathore R/o 68, Bhartendu Nagar, Khatipura, Jaipur 302012 ----Petitioner Versus 1. Additional Director, Directorate General Of Gst Intelligence, Jaipur Zonal Unit, C-62, Sarogini Marg, C- Scheme, Jaipur-302001 2. Additional Director General (Adjudication), Directorate General Of Gst Intelligence, West Block Viii, Wing No. Vi, 2Nd Floor, R. K. Puram, New Delhi 3. Union Of India, Ministry Of Finance, Department Of Revenue (Tax Research Unit), Room No. 46, North Block, New Delhi - 110 001 Through Its Revenue Secretary 4. Rajasthan Electricity Regulatory Commission, Vidhyut Viniyamak Bhawan, Sahakar Marg, Near State Motor Garage, Jaipur, Rajasthan 302001 Through Its Chairman ----Respondents Connected With D.B. Civil Writ Petition No. 9908/2019 Ajmer Vidyut Vitran Nigam Limited, Vidyut Bhawan, Panchsheel Nagar, Makarwali Road, Ajmer- 305004 Through Assistant Accounts Officer (Taxation) Shri Ashok Gupta Being Duly Authorized. ----Petitioner Versus 1. Additional Director, Director General Of Gst Intelligence, Jaipur Zonal Unit, C-62, Sarogini Marg, C-Cheme, Jaipur- 302001. 2. Additional Director General (Adjudication), Directorate General Of Gst Intelligence, West Block Viii Wing No. Vi, 2Nd Floor, R.k. Puram, New Delhi. 3. Union Of India, Ministry Of Finance, Department Of Revenue (Tax Research Unit), Room No. 46, North Block, [2024:RJ-JP:19208-DB] (2 of 5) [CW-9650/2019] New Delhi- 110001 Through Revenue Secretary. 4. Rajasthan Electricity Regulation Commission, Vidhyut Viniyamak Bhawan, Sahkar Marg, Near State Motor Garage, Jaipur, Rajasthan - 302001 Through Chairman. ----Respondents D.B. Civil Writ Petition No. 19710/2023 Ajmer Vidyut Vitran Nigam Limited, Vidyut Bhawan, Panchsheel Nagar, Makarwali Road, Ajmer- 305004 Through Assistant Accounts Officer (Taxation) Shri Ashok Gupta Being Duly Authorized. ----Petitioner Versus 1. Joint Commissioner, Office Of The Commissioner, Central Goods And Service Tax Audit Commissionerate, Jaipur, N.c.r. Building, Statue Circle, C- Scheme, Jaipur- 302005 2. The Additional/joint Commissioner, Central Goods And Service Tax, Commissionerate, Jaipur, New Central Building, Statue Circle, C-Scheme, Jaipur-302005 For Adjudication. 3. The Deputy/assistant Commissioner, Central Goods And Service Tax Audit Circle-C, Ajmer, Cgst Audit Commissionerate Jaipur, N.c.r. Building, Statue Circle, C- Scheme, Jaipur- 302005 For Issuance Of Drc-01 Of Paras 1 Of Audit Report No. 132/2021-22 Dated 11.04.2023. 4. The Deputy/assistant Commissioner (Tech), Central Goods And Service Tax Audit Commissionerate Jaipur N.c.r. Building, Statue Circle, C-Scheme, Jaipur- 302005 For Information. 5. The Deputy/assistant Commissioner, Central Goods And Service Tax Division-J, Ajmer, Cgst Commissionerate Jaipur N.c.r. Building, Statue Circle, C- Scheme, Jaipur- 302005 6. The Superintendent, Central Goods And Service Tax Range- Xlvi, Division-J, Ajmer, Cgst Commissionerate Jaipur- N.c.r. Building, Statue Circle, C- Scheme, Jaipur- 302005. 7. Union Of India, Ministry Of Finance, Department Of Revenue (Tax Research Unit), Room No.46, North Block, [2024:RJ-JP:19208-DB] (3 of 5) [CW-9650/2019] New Delhi- 110001 Through Revenue Secretary. 8. Rajasthan Electricity Regulation Commission, Vidhyut Viniyamak Bhawan, Sahkar Marg, Near State Motor Garage, Jaipur, Rajasthan- 302001 Through Chairman. 9. State Of Rajasthan, Through The Secretary, Finance Department, Government Secretariat, Jaipur-302005 ----Respondents For Petitioner(s) : Mr.Sanjay Jhanwar, Sr. Counsel with Ms.Shreya Jhanwar & Mr.Wilson Joy Mr.Gunjan Pathak with Mr.Kanishk Singhal & Mr.Aditya Bohra For Respondent(s) : Mr.Anand Sharma, Mr.Ajay Shukla & Ms.Upasna Singh for Mr.Umang Gupta HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'BLE MR. JUSTICE BHUWAN GOYAL

Order 24/04/2024

These petitions are being decided by this order as the facts and issues involved are common. For convenience, the facts are being taken from D.B. Civil Writ Petition No.9650/2019. 2. These petitions are filed challenging show cause notices issued by the Directorate General of Goods and Service Tax Intelligence, Jaipur Zonal Unit, Jaipur.

The petitioner is a public undertaking engaged in distribution and supply of electricity in Rajasthan. The respondents issued impugned notice dated 18.03.2019 to show cause as to why service tax should not be charged on ‘Wheeling Charges’ and ‘Cross Subsidy Surcharges’.

[2024:RJ-JP:19208-DB] (4 of 5) [CW-9650/2019]

The inter-alia ground for challenging the show cause notice is that it was not a case of fraud and extended period of limitation could not have been invoked by the respondents for issuance of show cause notice.

On 29.05.2019, while issuing notice of motion, proceedings pursuant to the impugned show cause notice were permitted to be continued, however passing of the final order was stayed.

On 12.03.2024, the interim protection was modified by passing following order:- “1. These petitions are filed challenging impugned show cause notice issued on the ground as to whether wheeling charges are to be subjected to service tax or not. One of the legal issues raised by the petitioners is that in the facts and circumstances of the case the extended period of limitation can be invoked?

Counsel for the petitioner submits that albeit the reply was filed to show cause notice raising the issue that extended period of limitation cannot be invoked but the respondents have chosen not to decide it.

Counsel for the respondent submits that vide order dated 29.05.2019 though the respondents were permitted to proceed with the matter but passing of the final order was stayed.

The interim order is modified to the extent that the respondents shall be at liberty to decide the issue of limitation for initiation of proceedings and if issue is decided against the petitioner shall not proceed further to frame assessment.

Put up on 23.04.2024.”

Learned counsel for the respondents submits that in pursuance to directions of this Court vide order dated 12.03.2024,

[2024:RJ-JP:19208-DB] (5 of 5) [CW-9650/2019] objection of the petitioner with regard to limitation is being considered and would be decided after providing an opportunity of hearing to the petitioner.

In view of the above, the writ petitions are disposed of at this stage as the decision on the objection of limitation would have ramification on the challenge to the show cause notice. The other issues raised in this petition are kept open.

The petitioners shall be at liberty to avail remedy in accordance with law including approaching this Court by way of writ petition (if maintainable) in case aggrieved of the decision and for redressal of surviving grievance.

10.

It is clarified that the respondents shall not proceed in pursuance to the impugned show cause notice without first communicating the order passed. (BHUWAN GOYAL),J (AVNEESH JHINGAN),J Monika/Sudeepak/47-49

Reproduced from the public record of the Rajasthan High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.