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2024 (1) TMI 429 - HC - GSTReimbursement of GST - HELD THAT - The action of the respondents, in not reimbursing the tax paid to the concerned statutory authorities is unlawful. Therefore, the MCD is directed to reimburse the tax paid by the petitioners along with interest at the rate of nine (9) percent, with effect from 01.07.2017. Needless to add, since there has been a long gap concerning reimbursement of tax paid by the petitioners, the MCD will reimburse the amount at the earliest, though not later than eight (08) weeks from the date of receipt of a copy of the judgment. Petition disposed off.
Issues Involved:
1. Whether the Municipal Corporation of Delhi (MCD) should reimburse the Goods and Services Tax (GST) paid by the petitioners u/s the Central Goods and Services Tax Act, 2017 and Delhi Goods and Services Tax Act, 2017. Summary: Issue 1: Reimbursement of GST by MCD The primary issue for consideration was whether the MCD should reimburse the GST paid by the petitioners u/s the Central Goods and Services Tax Act, 2017 and Delhi Goods and Services Tax Act, 2017. The petitioners argued that the services they rendered were composite in nature, involving both maintenance services and the supply of goods, and thus they were rightfully paying GST. The MCD contended that the petitioners were rendering "pure services" and thus were taxable at a "nil" rate as per the notification dated 28.06.2017. Issue 2: Nature of Services Rendered The petitioners maintained that the services provided were composite, involving the maintenance of street lights and the supply of components like cables. They argued that the value of goods supplied often exceeded 25% of the invoice value, making the notification dated 28.06.2017 inapplicable. The MCD, however, relied on the same notification to argue that the services were purely service-oriented and thus exempt from GST. Issue 3: Notifications and Correspondence The petitioners and MCD exchanged multiple correspondences since 2017 regarding the applicability of GST. The petitioners cited FAQ 25 by the Central Board of Excise and Customs (CBEC) to support their claim that their services were composite and not purely service-oriented. Issue 4: Affidavit by Tax Authorities The court directed respondents no. 4 to 6 to file an affidavit addressing whether the tax was payable and whether the MCD's stand on "pure services" was correct. The affidavit filed by respondent no. 4 stated that the services provided by the petitioners were not "pure services" and thus were not exempt from GST. Issue 5: Precedent Case The court noted that a coordinate bench had already settled a similar issue in the case of BSES Rajdhani Power Ltd. & Anr. vs Municipal Corporation of Delhi & Ors., where it was held that the petitioners rightly paid the service tax and MCD, as the recipient of the service, had to reimburse the same. This judgment was affirmed by the Supreme Court. Issue 6: Alternative Remedy The MCD argued that the petitioners had an alternate remedy available and thus the writ petition should not be entertained. However, the court held that the doctrine of alternative remedy is a self-imposed restraint and does not prevent the court from entertaining a maintainable writ petition. Conclusion: The court concluded that the petitioners were entitled to reimbursement of the GST paid along with interest at the rate of 9% from 01.07.2017. The MCD was directed to reimburse the amount within eight weeks from the date of receipt of the judgment. The writ petition was disposed of accordingly.
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