M/S. Indus Towers Limited, Through Its Authorised Signatory, Ravi Ranjan Kumar vs. Union Of INDIA Represented Through The Secretary, Ministry Of Finance, Department Of Revenue

Held

The Court allowed the writ petition, setting aside the impugned adjudication order dated August 30, 2024. The Court remitted the matter back to the 5th respondent (Deputy Commissioner of State Tax) for fresh consideration. The reasoning was based on the petitioner's submission that the denial of input tax credit was contrary to the Supreme Court's decision in M/s. Bharti Airtel Ltd. vs. The Commissioner of Central Excise, Pune and the Delhi High Court's decision in Indus Towers Limited vs. Union of India & Ors. These judgments held that mobile towers are not immovable properties, can be treated as 'goods' and 'inputs' for telecommunication services, and do not fall under the exclusion in Section 17(5)(d) of the CGST Act, thus making input tax credit admissible. The Court noted that the adjudicating authority did not have the benefit of these judgments when passing the original order. The 5th respondent is directed to reconsider the issue after hearing both parties and pass a fresh order within three months from the receipt of this order.

Facts

M/s Indus Tower Limited (the petitioner) filed a writ petition challenging an adjudication order dated August 30, 2024, issued by the Deputy Commissioner of State Tax (the 5th respondent) under Section 73 of the CGST Act, 2017, read with the Jharkhand GST Act, 2017, for the financial year 2019-2020. The impugned order denied the petitioner the benefit of input tax credit. The petitioner argued that this denial was contrary to Supreme Court and Delhi High Court judgments concerning mobile towers not being immovable property and thus eligible for input tax credit. The petitioner acknowledged that these judgments were not available to the adjudicating authority at the time of passing the order and requested a remand for reconsideration.

Key Issues

1. Whether the denial of input tax credit for mobile towers, which are treated as 'goods' and 'inputs' for telecommunication services, is contrary to established judicial precedent, specifically the Supreme Court's decision in M/s. Bharti Airtel Ltd. vs. The Commissioner of Central Excise, Pune and the Delhi High Court's decision in Indus Towers Limited vs. Union of India & Ors.? (Question of law) Petitioner's contention: The petitioner argued that mobile towers are not 'immovable properties' but 'goods' and 'inputs' for providing output services. They contended that such towers do not fall under the exclusion provided in Section 17(5)(d) of the CGST Act, and therefore, input tax credit should not be denied. They relied on the aforementioned Supreme Court and Delhi High Court judgments. Revenue's contention: The respondents stated they had no objection to the impugned order being set aside and the matter being remitted back for fresh consideration in light of the cited judgments.