M/S Adityapur Municipal Corporation Through Its Additional Municipal Commissioner Ravi Prakash vs. Union Of INDIA

Held

The High Court held that the writ petitions were not fit to be entertained under Article 226 of the Constitution due to the availability of an alternative and efficacious remedy 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 liability involved factual aspects of the transactions. The Court referred to *Whirlpool Corporation* and *Godrej Sara Lee Ltd.* to reiterate that the "wholly without jurisdiction" test requires more than a mere assertion of illegality. The Court noted that the issues raised involved factual determination, which is better suited for the appellate authority rather than the extraordinary and summary jurisdiction of the High Court. The Court also referenced *Oberoi Constructions Limited* to emphasize that exceptional circumstances are required to bypass an alternative remedy. Consequently, the Court declined to entertain the writ petitions but granted the petitioners liberty to file appeals within four weeks, directing the appellate authority to consider them on merits without being influenced by the issue of limitation.

Facts

The petitioners, consisting of various Municipal Corporations and Nagar Parishads, filed writ petitions challenging orders passed by adjudicating authorities concerning GST demands. The petitioners contended that the GST demand 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 argued that the petitioners had an alternative and efficacious remedy of appeal under Section 107 of the CGST Act, 2017, and that the blanket exemption claimed by the petitioners was misconceived. The adjudicating authorities had considered factual aspects before confirming the demands, and the issues involved factual determination, making writ jurisdiction inappropriate.

Key Issues

1. Whether the writ petitions are maintainable despite the availability of an alternative appellate remedy under Section 107 of the CGST Act, 2017, considering the petitioners' claim that the GST demand is wholly without jurisdiction? Petitioners' arguments: The petitioners argued that the demand for GST upon Municipal Corporations and Nagar Parishads is patently illegal and without jurisdiction. 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 the plea of alternative remedy cannot bar a writ petition 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 the immunity of local self-government authorities from GST. Respondents' arguments: The respondents contended that the petitioners' claim of a blanket exemption is misconceived. They argued that the adjudicating authority considered factual aspects and concluded that only core activities might be exempt, not routine sales of goods or services. They asserted that there was no constitutional or statutory bar to imposing GST on such transactions and that the petitioners had an appropriate alternative remedy before the appellate authority.