M/S Jugsalai Nagar Parishad Through Its Executive Officer Namely Sandip Paswan 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 possessed an alternative and efficacious remedy of appeal under Section 107 of the CGST Act, 2017. The Court found that the petitioners' claim of the impugned orders being "wholly without jurisdiction" was not established prima facie, as the determination of GST levy involved factual aspects of the transactions. The Court noted that the Madras High Court's decision cited by the petitioners did not support a blanket exemption for all transactions of local self-government bodies. It reasoned that exceptional circumstances, as outlined in *Whirlpool Corporation* and *Godrej Sara Lee Ltd.*, were not met, and the adjudication required a detailed factual determination not suitable for summary writ jurisdiction. The Court declined to entertain the petitions but granted liberty to the petitioners to file appeals within four weeks, directing the appellate authority to consider them on merits without being influenced by the issue of limitation or the observations made in the order. All contentions of the parties were left open.

Facts

These writ petitions were filed by various Municipal Corporations and Nagar Parishads challenging orders passed by GST adjudicating authorities. The petitioners contended that the demand for GST on their activities was illegal and without jurisdiction, citing constitutional provisions and Supreme Court judgments. They argued that local self-government bodies are immune from such taxation. The respondents, represented by the Union of India and GST authorities, argued that the petitioners had an alternative and efficacious remedy of appeal under the CGST Act, 2017. They contended that the blanket exemption claimed by the petitioners was misconceived, as GST could be imposed on routine sale of goods or services transactions, and that 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, particularly when the petitioners claim the impugned orders are wholly without jurisdiction? Petitioner's Arguments: The petitioners argued that the demand for GST was 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 support the contention 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* for the proposition that GST cannot be demanded from Municipal Corporations, and invoked Articles 243W, 243X, and Entry-V in List-2 of Schedule-VII of the Constitution to argue for immunity from taxation. Respondents' Arguments: The respondents contended that the petitioners' assertion of a blanket exemption was misconceived. They argued that the adjudicating authority had considered factual aspects and concluded that only core activities might be exempt, but routine transactions were taxable. They maintained that there was no constitutional or statutory bar to imposing GST on such transactions and that the appellate authority was the appropriate forum to raise these issues. They also referred to the Bombay High Court's decision in *Oberoi Constructions Limited vs. The Union of India & Others* regarding the circumstances for bypassing alternative remedies.