Kanpur Electricity Supply Company Limited Vs Union of India and 4 others (Allahabad High Court)
The Allahabad High Court heard a petition filed by Kanpur Electricity Supply Company Limited challenging a notice issued under Section 74 of the Goods and Services Tax (GST) Act and a subsequent order determining tax liability. The petitioner’s counsel argued that the entire basis for the notice and liability determination was Circular No. 34/8/2018-GST dated March 1, 2018. This circular, concerning the levy of GST on ancillary services provided by power companies, has already been quashed by the Gujarat High Court in the case of Torrent Power Limited Vs. Union of India, a judgment that has been followed by the Delhi High Court in BSES Rajdhani Power Limited Vs. Union of India and the Rajasthan High Court in Jodhpur Vidyut Vitran Nigam Limited Vs. Union of India.
Furthermore, the petitioner’s counsel brought to the court’s attention a subsequent clarification issued by the GST Council in a circular dated October 11, 2024. Clause 9 of this circular specifically recommends that the GST on services provided by electricity transmission or distribution utilities be regularized on an ‘as is where is’ basis for the period from July 1, 2017, to October 9, 2024. The counsel clarified that the ‘as is where is’ basis, as intended by the GST Council, meant regularizing payments at a lower rate, including a nil rate, based on the tax position adopted by the taxable person, as a full discharge of their tax liability. Therefore, the petitioner argued that the respondents should not have raised any demand against them.
