Central Electricity Regulatory Commission Vs Additional Director Directorate General of GST Intelligence (DGGI) & Anr. (Delhi High Court)
Delhi High Court held that amounts received by Electricity Regulatory Commissions as tariff and license fee is not leviable under Goods and Services Tax. Accordingly, petition allowed and show cause notice quashed.
Facts- The Central Electricity Regulatory Commission as well as the Delhi Electricity Regulatory Commission have petitioned this Court assailing the validity of Show Cause Notices pursuant to which the respondents have sought to call upon them to discharge liabilities emanating from the Central Goods and Services Tax Act, 2017 and the Integrated Goods and Services Tax Act, 2017 in respect of the fee received by them in the course of discharge of their regulatory functions under the Electricity Act, 2003. The respondents have sought to draw a dichotomy between the “adjudicatory” and “regulatory” functions which these two statutory bodies discharge to essentially hold that the revenue earned from the latter would be subject to tax under the CGST and IGST Acts.
Conclusion- Held that the regulatory function discharged by Commissions would clearly not fall within the scope of the word “business‖ as defined by Section 2(17). Thus, even if the fee so received by such Commissions were to be assumed as being consideration received, it was clearly not one obtained in the course or furtherance of business. We are thus of the considered opinion that the view as expressed by the respondents in the SCNs‘ impugned before us are rendered wholly arbitrary and unsustainable.
