Jorabat Shillong Expressway Limited Vs Union of India (Meghalaya High Court)
Conclusion: The Court addressed the issue of jurisdiction concerning the issuance of GST notices and proceedings related to a highway project under the BOT (Build-Operate-Transfer) model. It upheld the jurisdiction of the tax authorities, dismissed the writ petition, and granted assessee liberty to file an appeal within four weeks, ensuring that the matter could be examined on its merits by the appellate authorities.
Held: Assessee-company had challenged an Order-in-Original passed under the CGST Act by filing a writ petition under Article 226 of the Constitution. It was contended that the proceedings were without jurisdiction as the officers of the Directorate General of GST Intelligence (DGGI) lacked proper authority under the CGST Act. The petitioner also questioned the validity of notifications and circulars empowering such officers and raised disputes regarding classification of services, applicability of exemption under Entry 23A of Notification No. 12/2017-Central Tax (Rate), taxability of annuity receipts under BOT projects, and characterization of supplies under the GST framework. The petitioner further argued that the statutory appellate remedy was inefficacious since departmental authorities were bound by Board circulars. Assessee submitted that the impugned proceedings suffered from lack of jurisdiction as the concerned officers were not validly empowered under the CGST Act; notifications conferring powers upon DGGI officers were ultra vires the statute; the dispute involved constitutional challenges and jurisdictional defects warranting exercise of writ jurisdiction notwithstanding availability of an alternate remedy; the appellate remedy under section 107 was ineffective because authorities functioning under the Act were bound by circulars issued under section 168. Revenue contended that Officers concerned were duly appointed and empowered under sections 3 and 5 of the CGST Act through valid notifications and circulars, the controversy essentially involved adjudication of classification, exemption, and taxability issues requiring examination of facts and contractual terms; assessee had participated in the adjudication proceedings and no violation of natural justice or inherent lack of jurisdiction was established. It was held that sections 3 and 5 of the CGST Act empower the Board and the Government to appoint and confer functions upon officers, and notifications issued in exercise of such powers validly authorized DGGI officers and other GST authorities to initiate and adjudicate proceedings under the Act. Mere technical objections regarding the source or manner of conferment of powers could not invalidate proceedings when the authority to act was traceable to a statutory source. The Court observed that the dispute primarily related to classification of services, applicability of exemption notifications, taxability of annuity receipts, characterization of supplies, and interpretation of contractual arrangements. Such issues involved mixed questions of fact and law and were appropriately examinable within the statutory appellate framework rather than in writ jurisdiction. The Court further held that merely styling the challenge as constitutional or jurisdictional would not justify bypassing the statutory remedy when the real controversy concerned tax adjudication on merits. No violation of principles of natural justice, patent lack of jurisdiction, or other exceptional circumstance recognized in judicial precedents was established. Rejecting the argument that the appellate remedy was inefficacious because authorities are bound by departmental circulars, the Court held that circulars may bind departmental officers but do not bind appellate or judicial authorities. Acceptance of such a contention would defeat the legislative scheme of appeals under tax statutes.
