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2020 Supreme(AP) 451
ANDHRA PRADESH HIGH COURT AT AMARAVATI
M. Ganga Rao, J.
Dhanoosh Economically - Appellant
Versus
Apsrtc - Respondent
Writ Petition No. 3470 of 2019
Decided On : 29-05-2020
S.M. Subhan, Advocate, P. Durga Prasad, Advocate
Notifications and G.O. issued by the competent authority granting exemptions from payment of GST prevail over the terms and conditions of a license deed.
Headnote:
GST - Maintenance of Toilets - Exemption - Notification and G.O. Prevail Over Licence Deed - Impugned Proceedings Set Aside - Refund of GST Amount Collected Permitted:
Fact of the Case:
Petitioner, a firm maintaining toilets in a bus station, challenged the demand for GST on the monthly license fee by the respondent corporation. The petitioner argued that the services provided by them were exempted from GST as per notifications issued by the Central and State Governments. The respondent corporation, however, relied on a clause in the license deed requiring the petitioner to pay GST.
Finding of the Court:
The court found that the petitioner's work contract for maintenance of toilets came within the purview of the exemption granted by the Central and State Governments. The court held that the notifications and G.O. prevailed over the terms and conditions of the license deed and that the respondent corporation's action in insisting on GST payment was illegal and arbitrary.
Issues: Whether the petitioner was liable to pay GST on the monthly license fee for maintaining toilets in the bus station.
Ratio Decidendi: The court held that the notifications issued by the Central and State Governments exempting certain services from GST, including the maintenance of toilets, prevailed over the terms and conditions of the license deed. The court also held that the respondent corporation's action in insisting on GST payment was illegal and arbitrary.
Final Decision: The court allowed the writ petition, set aside the impugned proceedings demanding GST payment, and directed the respondent corporation to refund the GST amount collected from the petitioner.
JUDGMENT
M. Ganga Rao, J. - The petitioner, M/s. Dhanoosh Economically Poor People Seva Samithi, represented by its Executive Member, filed this writ petition seeking to issue writ of mandamus to declare the action of the respondents in demanding the petitioner to pay Goods and Service Tax (GST) vide letter dated 19-01-2019 issued by the respondent Corporation whereby and whereunder the respondent Corporation demanding the petitioner for payment of GST in respect of its business for the work of contract of maintenance of toilets in the Bus Station, Guntur, including all offices of the Bus Station on a monthly licence fee of Rs.2,76,666/-.
2. The case of the petitioner is that the petitioner's firm was maintaining Toilets in the Bus Station, Guntur, including all offices of the Bus Station, on a monthly licence fee of Rs.2,76,666/- and the period of contract is for two years commencing from 19-02-2017 to 18-02-2019, which is extendable for a further period of two years subject to enhancement of licence fee by 10% over previous year's licence fee and the said contract period was extended for a period of one year. The 2nd respondent has been collecting GST from the petitioner on its licence fee from the date of commencement of its work. About three months back, when the petitioner wanted to pay licence fee in respect of its work, the 2nd respondent refused to receive licence fee without GST and insisted to pay GST along with monthly licence fee vide letter dated 19-01-2019. The petitioner's firm is not registered dealer under the GST Act and is not liable to 3pay GST on the amount of licence fee. However, the Commercial Tax Authorities never issued any notice to pay GST. If at all, the petitioner is liable to pay GST, it is only the Commercial Department to demand to pay GST, but not the respondent authorities. The petitioner further stated that in a batch of similar writ petitions i.e. W.P.No.16565 of 2018, 14614 of 2018, 19581 of 2018 and 20057 of 2018, this court issued interim direction directing the respondents to collect the licence fee from the licence holders of the stalls without insisting payment of GST. Aggrieved by the action of the respondent Corporation in insisting payment of GST in addition to licence fee, the present writ petition came to be filed.
3. The Law Officer of the respondent Corporation filed counter on behalf of the respondent Corporation stating that the petitioner was allotted outsourcing contract for maintenance of entire Toilet block (Contract for Sanitary) at NTR Bus Station, Guntur, on payment of monthly licence fee of Rs.2,76,666/- (excluding water and electrical charges) for a period of two years from the date of agreement vide Allotment Order No.M1/122(1)/2016-GNT.2, dated 04.02.2017 subject to the terms and conditions stipulated in the agreement. From the inception of allotment of work, no amount of GST was collected from the petitioner. The aforesaid agreement was expired on 18-02-2019 as per the allotment order and agreement between the petitioner and the respondent Management. The petitioner's firm has agreed to pay enhanced licence fee (duly enhanced from Rs.2,76,666/- to Rs.3,04,333/- (by increasing 10% on the old licence fee) + GST 18% amount of Rs.54,778/-, thus amounting to a total of Rs.3,59,111/- in writing vide letter dated 19.02.2019. As such, the amount of Rs.1,28,254/- (Licence Fee of Rs.1,08,690/- + Rs.19,564/- GST amount) was paid towards Licence fee during the period from 19.02.2019 to 28.02.2019 including GST vide M.R.No.18/118284, dated 14.03.2019. The respondent Corporation further stated that as per Clause 43 of the Deed of Licence i.e., outsourcing contract on nomination basis between APSRTC and the petitioner vide letter dated 19.02.2019, the service tax/GST applicable, if any, shall be borne only by the licencee at the rate as communicated by the Government from time to time, and hence, it is mandatory on the part of the licensor to collect GST with licence fee from the
