Jamshedpur Notified Area Committee Through Its Special Officer Arvind Tirkey vs. Union Of INDIA

Held

The Court held that the writ petitions were not fit cases to be entertained by exercising its extraordinary jurisdiction under Article 226 of the Constitution, as the petitioners had an alternative and efficacious remedy available to them. Prima facie, the Court did not believe that Municipal Corporations or other local self-government authorities are exempt or immune from taxation under the CGST Act, 2017, regarding all transactions or activities they carry out. Therefore, the impugned orders passed by the adjudicating authorities could not be considered "wholly without jurisdiction," which is the test for bypassing the alternative remedy. The adjudication of the issues raised would involve a serious factual element that could not be appropriately undertaken in the extraordinary and summary jurisdiction of a writ petition. The Court noted that if the levy of GST was indeed contrary to law or constitutional provisions, such issues could be raised before the appellate authority. The Court declined to entertain the writ petitions but granted liberty to the petitioners to avail the alternative statutory remedy of preferring appeals within four weeks, directing the appellate authority to hear such appeals on merits without adverting to the issue of limitation, given the petitioners' bona fide pursuit of the writ petitions. All contentions of the parties were explicitly left open.

Facts

These writ petitions were filed by various Municipal Corporations and Nagar Parishads, including M/s Jugsalai Nagar Parishad, M/s Chakardharpur Nagar Parishad, M/s Chaibasa Nagar Parishad, M/s Adityapur Municipal Corporation, Jamshedpur Notified Area Committee, and M/s Mango Municipal Corporation. The petitioners challenged orders passed by adjudicating authorities under the CGST Act, 2017, which imposed GST on their activities. The petitioners argued that the demand for GST was illegal and without jurisdiction, as local self-government bodies should be immune from such taxation. They contended that the orders were wholly without jurisdiction, citing Supreme Court judgments that allow writ petitions in such cases. The respondents argued that the petitioners had an alternative and efficacious remedy of appeal under Section 107 of the CGST Act, 2017, and that the blanket proposition of exemption was misconceived, as GST could be imposed on routine sales of goods or services.

Key Issues

1. Whether the writ petitions are maintainable before the High Court, despite the existence of an alternative and efficacious remedy of appeal under Section 107 of the CGST Act, 2017? (Question of law) 2. Whether the demand of GST upon Municipal Corporations and Nagar Parishads is patently illegal and without jurisdiction, rendering the impugned orders wholly without jurisdiction? (Question of mixed law and fact) Petitioner's arguments: - The demand of GST is illegal and without jurisdiction, as local self-government authorities are immune from taxation under the CGST Act, 2017, relying on Articles 243W & 243X and Entry-V in List-2 of Schedule-VII of the Constitution. - Where an order is wholly without jurisdiction, the plea of alternative remedy cannot be a bar to the entertainability of a writ petition, citing *Godrej Sara Lee Ltd. v. Excise and Taxation Officer-cum-Assessing Authority* and *Whirlpool Corporation v. Registrar of Trade Marks, Mumbai*. - GST cannot be demanded from Municipal Corporations or local self-government authorities under any circumstances, citing *Cuddalore Municipality v. Joint Commissioner of GST and Central Excise, Tiruchirappalli*. Respondents' arguments: - The petitioners have an alternative and efficacious remedy of appeal under Section 107 of the CGST Act, 2017. - The contention of blanket exemption is misconceived; only core activities might claim exemption, and GST was imposed on routine sales of goods or services transactions, for which there is no constitutional or statutory bar. - No case is made out for entertaining the writ petitions.