Statutory regulatory commissions performing quasi-judicial functions are not liable for GST/Service Tax as their activities do not constitute 'business', fees collected are not 'consideration', and they fall under the Schedule III exclusion for services provided by courts and tribunals.

ORDER

Heard Ms. M L Gope, learned counsel appearing for the petitioner. Also heard Mr. S.C. Keyal, learned Senior Counsel/Standing Counsel assisted by Dr. B N Gogoi and Mr. K. Jain for the respondent Nos.2 to 6 (GST).

2. These writ petitions, namely W.P.(C) Nos. 4841/2022, 4842/2022, 4376/2023 and 3038/2024, involve a common issue and are, accordingly, taken up together for final disposal. The challenges raised in the respective writ petitions are as follows:

(i) In W.P.(C) No. 4841/2022, the petitioner challenges the Demand-cum-Show Cause Notice dated 28.04.2022 issued under the Finance Act, 1994 for the period 2016–2017, along with the adjudication order passed pursuant thereto;

(ii) In W.P.(C) No. 4842/2022, the petitioner challenges the Demand-cum-Show Cause Notice dated 28.04.2022 issued under the Finance Act, 1994 for the period 2017–2018, along with the adjudication order passed pursuant thereto;

(iii) In W.P.(C) No. 4376/2023, the petitioner challenges the Final Adjudication Order dated 27.02.2023 passed under the Central Goods and Services Tax Act, 2017 covering the periods July 2017–2018, 2018–2019, 2019–2020, 2020–2021, 2021–2022 and 2022–2023; and

(iv) In W.P.(C) No. 3038/2024, the petitioner challenges the appellate order dated 13.02.2024 passed by the Commissioner (Appeals), CGST, C.Ex. & Customs, Guwahati, affirming the levy under the Central Goods and Services Tax Act, 2017 for the aforesaid periods.

3. Since the issue arising in all the writ petitions is identical, they are being disposed of by this common judgment.

4. The impugned proceedings seek to subject the petitioner’s statutory regulatory commissions discharging quasi-judicial functions to levy of service tax/GST.

5. The core issue is whether the functions discharged by a statutory regulatory commission, being quasi-judicial in nature, are exigible to service tax/GST.

6. Learned counsel for the petitioners submits that the issue is no longer res integra and stands concluded by judicial pronouncements of various High Courts, affirmed by the Hon’ble Supreme Court.

7. The Delhi High Court, in Central Electricity Regulatory Commission v. Additional Director, Directorate General of GST Intelligence (DGGI) & Anr., in WP(C) No. 10680 of 2024 and C.M. Appl. No. 43919 of 2024 (Stay), by judgment dated 15.01.2025, held, allowing the writ petitions, that the regulatory functions discharged by the Electricity Regulatory Commissions, including tariff determination and licensing, are statutory in nature and cannot be construed as activities undertaken in the course or furtherance of ‘business’ within the meaning of section 2(17) read with section 7 of the Central Goods and Services Tax Act, 2017. The fees collected for such functions do not constitute consideration for a taxable supply. Further, having regard to the quasi-judicial character of the Commissions, their functions fall within the exclusion under Schedule III relating to services by courts and tribunals, and no artificial bifurcation between adjudicatory and regulatory functions is permissible. The attempt of the Department to classify such activities, as ‘support services’ cannot override the statutory exclusion. Consequently, the show-cause notices seeking to levy GST on regulatory fees having held unsustainable in law, the Delhi High Court set aside and quashed the same.

8. The aforesaid judgment has attained finality upon dismissal of SLP (Civil) Dia