2023 (12) TMI 1138 - HC - GST

Maintainability of petition - availability of efficacious and alternative remedy of appeal - Services of storage and warehousing of food grain - Exemption from levy of tax as per Notification No. 12/2017 Central Tax (Rate), dated 28.06.2017 - agreement with APSCSCL for providing storage, warehousing services involving loading, unloading, stacking, packing, care, custody and security etc., of food grains - HELD THAT - Admittedly, the petitioner has an efficacious and alternative remedy to file appeal. The said fact is also mentioned in the impugned order to the effect that an appeal lies against the impugned order before the Appellate Joint Commissioner (ST), Tirupathi. In view of the decision in ASSISTANT COMMISSIONER (CT) LTU, KAKINADA ORS. VERSUS M/S. GLAXO SMITH KLINE CONSUMER HEALTH CARE LIMITED 2020 (5) TMI 149 - SUPREME COURT wherein the Hon ble Apex Court held that the High Court ought not to have entertained the writ petition when an efficacious and alternative remedy of appeal is available to the petitioner, without expressing our opinion on the merits of the petitioner s case, it is deemed apposite to give liberty to the petitioner to file an appeal against the impugned order. The writ petition is disposed of giving liberty to the petitioner to file an appeal against the impugned order dated 10.07.2023 passed by the 2nd respondent before the concerned Appellate Authority within four (4) weeks from the date of receipt of a copy of this order, in which case, the Appellate Authority shall admit the appeal and after affording an opportunity of hearing to both parties, pass an appropriate order on merits in accordance with governing law and rules expeditiously.

Summary

Issues:
The issues involved in this case are the interpretation of tax laws regarding the services provided by the petitioner for storage and warehousing, the applicability of Notification No. 12/2017 - Central Tax (Rate), dated 28.06.2017, and the maintainability of the writ petition when an alternative remedy of appeal is available.

Interpretation of Tax Laws:
The petitioner owned godowns used for storage and warehousing services, including loading, unloading, stacking, packing, care, custody, and security of food grains for Andhra Pradesh State Civil Supplies Corporation Ltd (APSCSCL). The petitioner contended that these services were exempt from tax under Notification No. 12/2017 - Central Tax (Rate), dated 28.06.2017. However, the 2nd respondent held that the activity attracted tax at 9% under SGST & CGST, as the petitioner was deemed to have rented out space on a monthly basis. The petitioner argued that since the services were provided to a Government Authority (APSCSCL), they should be exempt from tax.

Applicability of Notification No. 12/2017:
The petitioner relied on Notification No. 12/2017, which exempts services related to supplies like loading, unloading, storage, or warehousing when provided to the Government or Government Authority. The petitioner claimed that APSCSCL qualified as a Government Authority due to the government holding more than 90% equity shares. Therefore, the petitioner argued that the transactions were exempt from tax under this notification.

Maintainability of Writ Petition:
The 2nd respondent contended that the writ petition was not maintainable as the petitioner had an alternative remedy of appeal. The respondent argued that the services provided were essentially renting of non-residential property and fell under GST taxation as per Section 7 (Schedule II) of the CGST Act, 2017. The respondent challenged the petitioner's reliance on Notification No. 12/2017, stating that it pertained to specific classifications with a "NIL" rate, whereas the rental income derived by the petitioner was for real estate services under a different notification.

Judgment:
The High Court, after considering the submissions, noted that the petitioner did have an alternative remedy to file an appeal against the impugned order. Citing a previous decision, the Court held that in such cases where an alternative remedy exists, the writ petition should not be entertained. Therefore, the Court disposed of the writ petition, granting the petitioner liberty to file an appeal within four weeks. The respondent authorities were directed not to take coercive action for recovery of demanded tax until the appeal process was completed. No costs were awarded, and any pending interlocutory applications were closed as a result of this judgment.