Reengus Sikar Expressway Limited. Vs Additional Director (Rajasthan High Court)
The Rajasthan High Court is currently examining the validity of Circular No. 150/2021, which brings annuity payments related to highway construction under the purview of the Goods and Services Tax (GST). The case, Reengus Sikar Expressway Limited Vs Additional Director, involves a challenge by a company engaged in the construction of National Highways. The petitioner’s counsel argued that there was an initial understanding and contemplation, even during the GST implementation process, that the annuity system, which replaced the toll system for highway projects, would continue to be exempt from taxation, similar to tolls. The counsel further asserted that the taxation of annuity was not part of the original GST framework envisioned by the respondents. Consequently, the primary challenge is directed at the circular dated June 17, 2021, and any subsequent proceedings that might lead to GST recovery on these annuity payments.
Considering the arguments presented, the Rajasthan High Court issued a notice to respondents 1 through 7, with their respective counsels accepting the notice and requesting time for further instructions. The court clarified that it would not issue a notice to respondent 8 at this stage but might consider it later if deemed necessary. Importantly, while the matter is pending consideration, the court has granted interim relief to the petitioner by ordering that no coercive steps shall be taken against them for the recovery of GST based on the order dated January 9, 2025. The respondents have been granted the liberty to file an application under Article 226(3) of the Constitution of India to seek a vacation of this interim order. The case is scheduled to be listed again after eight weeks for further proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
