M/S Chaibasa Nagar Parishad Through Its Executive Officer Namely Santoshini Mumru vs. Union Of INDIA

Held

The High Court held that the writ petitions were not fit to be entertained under its extraordinary jurisdiction, as the petitioners possess an alternative and efficacious remedy of appeal under Section 107 of the CGST Act, 2017. The Court found that the petitioners' claim that the impugned orders were "wholly without jurisdiction" was not established, as the determination of the jurisdictional issue would involve a factual analysis of the transactions in question, which is best undertaken by the appellate authority. The Court noted that the Madras High Court decision cited by the petitioners did not support a blanket exemption for all transactions of local self-government bodies. It reiterated the principle from *Whirlpool Corporation* and *Godrej Sara Lee Ltd.* that extraordinary jurisdiction is exercised only in exceptional circumstances, such as when an order is wholly without jurisdiction. Since the adjudication involved factual determination, the Court declined to exercise its summary jurisdiction. However, recognizing the petitioners' bona fide pursuit of writ petitions, the Court granted liberty to file appeals within four weeks, directing the appellate authority to decide them on merits without considering the limitation period.

Facts

The petitioners, M/s Jugsalai Nagar Parishad and other Municipal Corporations/Nagar Parishads, filed writ petitions challenging orders passed by adjudicating authorities under the CGST Act, 2017. The petitioners contended that the demand of GST on their activities was illegal and without jurisdiction, citing constitutional provisions and Supreme Court judgments. They argued that local self-government authorities are immune from such taxation. The respondents, represented by the Union of India and tax authorities, argued that the petitioners had an alternative and efficacious remedy of appeal under Section 107 of the CGST Act. They contended that the blanket exemption claimed by the petitioners was misconceived, as GST could be imposed on routine sales of goods or services transactions, and the adjudicating authority had considered factual aspects before confirming the demand.

Key Issues

1. Whether the writ petitions are maintainable despite the existence of an alternative and efficacious remedy of appeal under Section 107 of the CGST Act, 2017, when the petitioners claim the impugned orders are wholly without jurisdiction? Petitioner's Arguments: The petitioners argued that the demand of GST is patently illegal and without jurisdiction, making the alternative remedy unavailable. They relied on Supreme Court judgments in *Godrej Sara Lee Ltd. v. Excise and Taxation Officer-cum-Assessing Authority* and *Whirlpool Corporation v. Registrar of Trade Marks, Mumbai* to assert that writ petitions can be entertained when an order is wholly without jurisdiction. They also cited a Madras High Court decision in *Cuddalore Municipality v. Joint Commissioner of GST and Central Excise* and constitutional provisions (Article 243W & 243X, Entry-V in List-2 of Schedule-VII) to argue for immunity from GST. Respondents' Arguments: The respondents contended that the petitioners' claim of blanket exemption is misconceived. They argued that the adjudicating authority considered factual aspects and concluded that only core activities might be exempt, not routine transactions. They asserted that there is no constitutional or statutory bar to imposing GST on such transactions and that the appellate authority is the appropriate forum to raise these issues. They emphasized that no case is made out for entertaining writ petitions.