2023 (11) TMI 777 - HC - GST

Maintainability of writ petition - Scope of tender / auction notice - Levy of GST on Human Hairs - Action of Human Hairs by Devasthanam - Nature of transaction - Outright sale or contract for collection of hairs - Legality and constitutional validity of insisting to pay an amount of Rs. 25,23,638/- towards GST Payment @18% in favour of the 4th respondent for collection of human hair from the 3rd respondent - direction to 3rd respondent to handover the human hair collected by the petitioner - HELD THAT - Undisputedly there was an auction notification issued so far as collection of human hair from premises of the respondent No. 3 and the tender was finalized in the name of the petitioner herein. In terms of Annexure P1, tender condition No. 25, it was clear that the person in whose name the bid would be finalized would be liable to make payment of GST @ 18%. The petitioner quite aware of the said condition and with wide open eyes, participated in the tender process and quoted his price. The bid was finalized in favour of the petitioner as he was the highest bidder. In terms of the finalization of the bid, the petitioner started collecting human hair from the effective date i.e. 01.08.2021 and did collection for more than eleven (11) months. During the said period, the petitioner never objected the tender condition of requiring payment of 18% GST. It was only when the tender period was coming to a fag end, the petitioner raised an objection with the respondent No. 3 so far as their claim for 18% GST is concerned. There is sufficient force in the arguments of the learned counsel appearing for the respondent-Department so far as the objection on the maintainability of the writ petition of the petitioner is concerned. Now at this belated stage after having participated in the tender process, wherein the clause of payment of 18% GST was categorically envisaged, the petitioner having accepted, participated in the tender process, quoted his price, declared successful and having collected human hair from the premises of the respondent No. 3 in terms of finalized tender conditions, the petitioner now cannot be permitted to turn around and question the payment of GST or any of the tender conditions. What is also relevant at this juncture to take note of the fact is that the respondent No. 3 Devasthanam have filed their Counter and have not disputed the levy of GST on the human hair that was being collected from the temple premises. On the contrary, respondent No. 3 has categorically stated that in fact there is no outright sale which is being carried out by the respondent No. 3 - It is only a right to collect human hair has been offered in the tender and which has been accepted by the petitioner and thus the nature of function performed by the petitioner and the respondent No. 3 is not one which could be brought within the ambit of sale of goods, but is one within the ambit of petitioner providing services to the Devasthanam for collecting of human hair that falls in the temple premises. In the light of the stand of the respondent No. 3 also, the case of the petitioner gets weakened. There are no merits in the present writ petition - petition dismissed.

Summary

Issues Involved:
1. Challenge to GST payment demand by the respondent for collection of human hair.
2. Maintainability of the writ petition challenging the GST payment demand.

Summary:
Issue 1: The petitioner filed a writ petition challenging the demand by the respondent to pay GST for collecting human hair from a temple premises. The petitioner argued that human hair was exempted from GST as per a specific notification. The respondent contended that the petitioner had agreed to the GST payment clause in the tender and cannot challenge it now. The court noted that the petitioner participated in the tender process, accepted the conditions, and collected human hair without objection until the end of the contract period. The respondent clarified that it was not an outright sale but a service provided by the petitioner. The court found in favor of the respondent, stating that the writ petition lacked merit.

Issue 2: The respondent-Department raised objections regarding the maintainability of the writ petition, arguing that contractual disputes should not be challenged in a writ jurisdiction. The court agreed with the respondent, emphasizing that the petitioner had willingly participated in the tender process and accepted the conditions, including the GST payment clause. The court found that the petitioner could not question the payment of GST or any tender conditions after participating in the process and collecting human hair accordingly. The court rejected the writ petition, citing lack of merit and closed the case without costs.