M/S Mamtha Enterprises vs. The Telangana State Road Transport Corporation

Facts

The petitioner, M/s Mamtha Enterprises, sought a Writ of Mandamus against the Telangana State Road Transport Corporation (TSRTC) and its Regional Manager. The petitioner was demanding payment of GST at 18% for the maintenance of toilets in specific blocks at MGBS Bus Station, Hyderabad, despite the petitioner claiming an exemption. The petitioner sought a declaration that the respondents were not competent to collect GST and requested a refund of GST collected since the commencement of the license period. The respondents, represented by their counsel, relied on an allotment order dated 29.09.2019, specifically Clause 12, which stipulated that the petitioner had to pay GST at applicable rates on the monthly license fee. They also referred to a Division Bench judgment of the same High Court in W.P.No.20885 of 2018, which held that a petitioner agreeing to pay service tax was liable to pay GST in its place.

Held

The Court dismissed the Writ Petition. The Court found that the petitioner had not challenged the allotment letter or the stipulation within it to pay GST. The petitioner had signed the allotment letter with full knowledge of its terms. Following the Division Bench judgment in W.P.No.20885 of 2018, the Court held that the petitioner is bound by the contract of allotment and must pay GST as stipulated in the allotment letter. The Court did not delve into the applicability of the exemption claimed by the petitioner under Clause 33 of the List of Exempted Services under GST, as the primary basis for dismissal was the contractual obligation arising from the signed allotment letter. The interim order passed in IA No. 1 of 2019 was also dismissed.

Key Issues

1. Whether the petitioner is liable to pay GST at 18% on the maintenance of toilets in blocks 1, 2, 3, and 4 at MGBS Bus Station, Hyderabad, as demanded by the respondents, despite claiming an exemption under GST provisions? (Question of law) Petitioner's contention: The petitioner argued that services by way of public conveniences, such as toilets, are exempted from GST under Clause 33 of the List of Exempted Services under GST. Therefore, the demand and collection of GST by the respondents were illegal and without jurisdiction. Respondents' contention: The respondents argued that the petitioner had agreed to pay GST as per Clause 12 of the allotment order dated 29.09.2019, which stipulated payment of GST at applicable rates. They further relied on a Division Bench judgment in W.P.No.20885 of 2018, stating that GST is a levy introduced in place of service tax, and the petitioner cannot absolve themselves of the liability to pay GST, especially when they agreed to pay service tax previously. The respondents also pointed out that the petitioner had not challenged the allotment letter or its stipulations.