Nagaur Mukundgarh Highways Pvt. Ltd. Vs Central Board of Indirect Taxes And Customs (Rajasthan High Court)
Summary: The Rajasthan High Court considered a bunch of writ petitions led by D.B. Civil Writ Petition No. 10055/2024 filed by M/s Nagaur Mukundgarh Highways Pvt. Ltd. challenging the validity and applicability of Circular No.150/06/2021-GST dated 17.06.2021, a show cause notice dated 09.12.2022 and recovery order dated 07.07.2023 relating to levy of GST on annuity payments received under highway concession agreements. The petitioner contended that Entry 23A of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017, issued under Section 11 of the CGST Act, exempted “service by way of access to a road or a bridge on payment of annuity” under Heading 9967. It was further contended that an advance ruling dated 12.02.2019 had already held Entry 23A applicable and, having not been challenged by Revenue, continued to bind the applicant and departmental authorities under Section 103 of the CGST Act.
The petitioner argued that CBIC could not, through an administrative circular issued under Section 168, override, modify, dilute or retrospectively withdraw a statutory exemption. Reliance was placed upon DPJ Bidar-Chincholi (Annuity) Road Project Private Limited & Anr. Vs. Union of India & Ors., 2022 SCC OnLine Kar 1829. Revenue, on the other hand, maintained that Circular No.150/06/2021-GST merely clarified the statutory distinction between services by way of access to roads falling under Heading 9967 and construction services falling under Heading 9954. Revenue also relied upon CG Tollway Ltd. Vs. Union of India & Ors., Jorabat Shillong Expressway Ltd. Vs. Union of India and GMR Pochanpalli Expreessways Limited Vs. Additional Director, Directorate General of GST Intelligence & Ors. Revenue further invoked Section 103(2), arguing that an advance ruling remains binding only so long as the relevant law, facts and circumstances remain unchanged.
