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TMI Blog2021 (2) TMI 557X X X X Extracts X X X X X X X X Extracts X X X X ..... pping out some of the services, out of the complete package and treating them to be taxable is not only arbitrary and unreasonable but such exercise is also violative of provisions of Section 8 of the CGST Act - A circular cannot seek to clarify provisions of statutory notification dated 28.06.2017, which is otherwise unequivocal. There is no room for ambiguity or doubt, for which the GST Counsil was required to issue the circular. Respondents have as a matter of fact, levied tax on some of the services by carving them out that too by way of a circular under the cloak of a clarification. The writ petition succeeds - para 4(1) of the impugned Circular dated 01.03.2018 is hereby quashed - Application disposed off. - D. B. Civil Writ Petition No. 9397/2018 - - - Dated:- 5-2-2021 - HON'BLE THE CHIEF JUSTICE MR. INDRAJIT MAHANTY And HON'BLE MR. JUSTICE DINESH MEHTA For the Petitioner : Mr. Anjay Kothari For the Respondent : Mr. Rajvendra Saraswat JUDGMENT 1. The petitioner is a Public Sector Undertaking engaged in distribution and supply of electricity in various Districts of Rajasthan. 2. According to the petitioner, the services of distribution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification No.12/2017-CT (R) and ultra vires the provisions of Section 8 of the CGST Act. 7. Mr. Rajvendra Saraswat, learned counsel for the respondents, on the other hand, argued that the services mentioned in para No.4(1) of Circular dated 01.03.2018 cannot be said to be services relating to transmission or distribution of electricity and thus, the petitioner is liable to pay tax on such services. 8. He informed that against the judgment of Gujarat High Court in Torrent Power Ltd. (Supra), a SLP has been filed by the Union of India and leave has been granted by Hon ble the Supreme Court. 9. Heard. 10. A simple reading of Sl.No.25 of exemption Notification dated 28.06.2017 and the corresponding notification leaves no room for ambiguity that entire package of services namely transmission or distribution of electricity has been exempted. 11. Whereas a perusal of impugned Circular dated 01.03.2018, particularly para No.4(1) reveals that the CGST Council has sought to bring in tax-net five services enumerated therein, regardless of the fact that complete bundle or package of services namely transmission and distribution of electricity by an electricity transmission or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated the services related to transmission and distribution of electricity during the pre-negative list regime, the related/ancillary services would stand covered by the exemption granted to transmission and distribution of electricity by virtue of inclusion of such services in the list of negative services under section 66D (k) of the Finance Act as well as by virtue of exemption notification issued under the CGST Act. - Any line which is used for carrying electricity for any purpose as well as any apparatus connected to any such line for the purpose of carrying electricity is mandatorily required to be provided to the consumer by the licensee. The term electrical plant takes within its sweep any plant, equipment, apparatus or appliance or any part thereof used for, or connected with, the generation, transmission, distribution or supply of electricity, except for electric meter and any electrical equipment, apparatus or appliance under the control of a consumer. Sub-section (2) of section 43 of the Electricity Act casts a duty upon the licensee to provide, if required, electric plant or electric line for giving electric supply to the premises. Therefore, providing elect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d fall within the ambit of bundled services as contemplated under subsection (3) of section 66F of the Act, and would have to be treated in the same manner as the service which gives the bundle its essential character, namely, transmission and distribution of electricity and, would therefore, be exempt from payment of service tax. - The services provided by the petitioner are in the nature of composite supply and therefore, in view of the provisions of clause (a) of section 8 of the CGST Act, the tax liability thereof has to be determined by treating such composite same as a supply of the principal supply of transmission and distribution of electricity. Consequently, if the principal supply of transmission and distribution of electricity is exempt from levy of service tax, the tax liability of the related services shall be determined accordingly. 30. For the foregoing reasons, the petition succeeds and is, accordingly, allowed to the following extent: Paragraph 4 (1) of the impugned circular No. 34/8/2018-GST dated 1.3.2018 to the extent the same reads as under is hereby struck down as being ultra vires the provisions of section 8 of the Central Goods and Services ..... X X X X Extracts X X X X X X X X Extracts X X X X
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