Vechicle Factory Jabalpur vs. Commissioner

Held

The Court held that it would be appropriate for the adjudicating authority (respondent No.1) to first decide the issue of jurisdiction. The Court directed respondent No.1 to consider all objections raised by the petitioner, including those orally or in writing within 15 days, and thereafter pass a speaking order on the question of jurisdiction within 60 days of receiving the information. The Revenue assured that no coercive steps would be taken against the petitioner until the adjudication is complete, provided the petitioner complies with the Court's directions. The petitioner was granted liberty to approach the Court again on well-recognized grounds for judicial review. The Court explicitly did not comment on the merits of the case.

Facts

The petitioner, Vehicle Factory Jabalpur, a unit of the Government of India, Ministry of Defence, filed a writ petition challenging a show-cause notice dated April 27, 2018, issued by the Commissioner, Central GST, Jabalpur. The notice sought to levy tax on various taxable services availed by the petitioner during the period July 2012 to March 2016. The petitioner contended that as a government entity, it was not exigible to tax under a notification dated June 20, 2012. The Revenue did not file a reply but orally submitted that the competent authority would decide the jurisdictional objection dispassionately. The High Court directed the adjudicating authority to decide the petitioner's objections, including the jurisdictional issue, by passing a speaking order.

Key Issues

1. Whether respondent No.1 has the jurisdiction to issue the show-cause notice dated 27.04.2018 to the petitioner, considering the petitioner's status as a Government of India undertaking under the Ministry of Defence, and the applicability of the notification dated 20.06.2012? The petitioner argued that as a unit of the Government of India, Ministry of Defence, it is not exigible to tax on the services availed, relying on the Government of India, Ministry of Finance, Department of Revenue notification dated 20.06.2012. The Revenue, without filing a formal reply, orally submitted that if the competent authority is permitted to decide the objection, it would be done without bias.