Union of India & Ors. Vs Torrent Power Ltd. (Supreme Court of India)
In the matter concerning levy of GST on reimbursement of road repairing and restoration charges paid to Ahmedabad Municipal Corporation (AMC), the Supreme Court of India issued notice in the Special Leave Petition filed by the Union of India and condoned the delay. The Court recorded that notice was returnable in six weeks and noted appearance on behalf of the respondent.
The Gujarat High Court judgment arose from a writ petition challenging a show-cause notice dated 30.11.2022 issued under Section 74 of the Central/Gujarat Goods and Services Tax Act, 2017 and a subsequent Order-in-Original dated 25.01.2025. The petitioner, engaged in transmission and distribution of electricity in Gujarat, Maharashtra and Uttar Pradesh, contended that reimbursement of road repairing and restoration charges paid to AMC for roads dug up during laying and maintenance of electricity distribution lines was not liable to GST under reverse charge mechanism.
The petitioner argued that under Sections 42 and 67 of the Electricity Act, 2003, it was statutorily authorized and obligated to dig roads for laying and maintaining distribution lines and was also required to compensate for damages caused. According to the petitioner, the payments made to AMC were compensation or reimbursement for road restoration and not consideration for any “supply of service” under Section 7 of the GST Act.
