JUDGMENT :

(Bhargav D. Karia, J.)

1. Heard learned Senior Advocate Mr. Mihir Joshi with learned advocate Mr. Kuntal Parikh for the petitioners and learned A.G.P. Mr. Raj Tanna for the respondents.

2. Rule returnable forthwith. Learned A.G.P. Mr. Raj Tanna waives service of notice of Rule for the respondents. Having regard to the controversy in narrow compass with the consent of the learned advocates, the matter was taken for final hearing.

3. The petitioners have challenged the order dated 17th February 2021 in the proceedings before the Advance Ruling Authority in Appeal No.GUJ/GAAR/Appeal/2021/05 only to the extent to the limited findings of the respondent No.2 – Appellate Authority for Advance Ruling Gujarat, whereby it is held that the Notified Area Authority, Vapi is neither a “local authority” nor “governmental authority” and therefore, the petitioners are not entitled to exemption under the Notification No.12/2017-Central Tax (Rate) dated 28th June 2017 and the Notification No.12/2017-State Tax (Rate) dated 30th June 2017.

4. The petitioner No.1 is engaged in the business of Solid Waste Management and recycling services. The Notified Area Authority, Vapi floated a Tender inviting applications for a Request for Proposal for providing services of collection, sorting and recovery of waste and set up material recovery facility and in accordance with the Rules, Norms and Regulations of Standard of Weights and Measures Rules, 2016, Plastic Waste Management Rules, 2016, the Ministry of Environment, Forest and Climate Change, Central Pollution Control Board, Gujarat Pollution Control Board, etc. at the notified area, GIDC, Vapi.

5. The Notified Area Authority, Vapi is constituted by the State of Gujarat by virtue of Notification No.GHU 75/45/GID 1974/4084(x)-Ch dated 6th May 1975 issued under Section 16 of the Gujarat Industrial Development Act, 1962 (for short ‘GIDA’), whereby it was declared that the provisions related to the notified area contained in Chapter III of the said Act shall extend to and brought into force in the Notified Area Authority, Vapi.

6. Under the Gujarat Industrial Development (Notified Areas) Rules, 2007 (for short, “the Notified Areas Rules”), the Notified Area Authority, Vapi has constituted the Board of Management and appointed the Chief Officer with certain functions as otherwise entrusted to the municipality under Schedule XII of the Constitution for any area in which the municipality is established under Article 243Q of the Constitution. They are also entrusted with the responsibility to recover taxes and allocate it in a way to ensure the notified area is managed and maintained in similar way as the municipality does it in any other area in its jurisdiction. Under the Notified Areas Rules, the Board of Management and Chief Officer of the Notified Area Authority, Vapi has to carry out functions as mentioned in Clause 5 of Chapter II and Chapter III of the said Rules.

7. The petitioner No.1 participated in the bidding process for the said Tender and was granted the Tender vide letter dated 22nd January 2019 for providing services to the Notified Area Authority, Vapi for an amount of Rs.1,71,10,000/- for a period of 5 years. An agreement was executed on 4th February 2019 between the petitioner No.1 and the Notified Area Authority, Vapi. Under the said agreement, the petitioner No.1 has to provide services for collection, sorting, recovery of solid waste management and establish and set up material recovery facility for sustainable waste management in the notified area, Vapi on Design, Build, Finance, Own, Operate and Maintain (DBFOOM) for 5 years.

8. According to the petitioners, waste management services provided by the petitioner No.1 to the Notified Area Authority, Vapi under the said agreement is covered under the Service Accounting Code (SAC) 9994 as ‘Sewage and waste collection, treatment and disposal and other environmental protection services’ under the Notification No.11/2017-Central Tax (Rate) da