In a recent case, the Orissa High Court has held that Goods and Service Tax ( GST ) is not applicable on electricity transmission and distribution charges. The writ petition is adjourned sine die awaiting adjudication by the Supreme Court on the Special Leave Petition pending in said Court, inter alia, against Torrent Power Limited.
Mr. Jena, advocate appeared on behalf of petitioner , Riverside Utilities Pvt. Ltd and submitted his client is a distribution company. Impugned is circular dated 1st March, 2018 issued by Government of India, Ministry of Finance (Department of Revenue), Central Board of Excise and Customs. Under challenge is clarification (1) against query (1) in serial no.4 in the circular.
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Further submitted that fees and charges mentioned in clauses (i) to (v) under clarification (1) are incidental to transmission, exempted as clarified by said clarification itself. Hence, the fees and charges under clauses (i) to (v) are also exempted. Pursuant to the clarification demands have been made. There be interference, interim at this stage. This is because the clarification has been struck down by, inter alia, the Gujarat High Court on judgment in Torrent Power Limited v. Union of India.
It was submitted that revenue preferred Special Leave Petition to the Supreme Court. There was direction for issuance of notice but no order of stay. Mr. Kedia, Standing Counsel appeared on behalf of revenue submitted that revenue has filed Special Leave Petition against striking down of the clarification by, inter alia, the Gujarat High Court. Petitioner has just been issued with a show cause notice.
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“We are inclined to pass interim order and adjourn the writ petition sine die awaiting adjudication of the question by the Supreme Court. This is because the Supreme Court did not stay the striking down of the clarification. The struck down clarification has given rise to issuance of show cause notice and acting further on basis of the clarification, there will be demand.”, the division bench of Justice Arindam Sinha and Justice M.S. Sahoo held.
Since the show cause notice was issued in respect of the clarification, struck down by the Gujarat High Court, relying on the judgement of the Supreme Court in Kusum Ingots and Alloys Ltd. v. Union of India, the bench interpreted the striking down to be applicable in this State.
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The court held that impugned show cause notice dated 25th September, 2023 and followed by demand order dated 13th June, 2024 will remain stayed. The writ petition is adjourned sine die awaiting adjudication by the Supreme Court on the Special Leave Petition pending in said Court, inter alia, against Torrent Power Limited.
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