TNERC Stands Firm: Challenges Rs. 6.9 Crore GST Demand In Landmark Legal Battle
(Judicial Quest News Network)
Chennai May,29,2024 In a bold move, the Tamil Nadu Electricity Regulatory Commission (TNERC), led by Secretary C. Veeramani, has taken a stand against a hefty GST demand totalling approximately Rs. 6.9 crores for its statutory functions spanning from 2017 to 2022. This significant development unfolded before the esteemed Madras High Court, where the case was presided over by the Hon’ble Mr. Justice Sathya Narayana Prasad.
Advocating on behalf of TNERC, Mr. P. Wilson, Senior Counsel, along with the legal team from Natarajan & Richardson Wilson Advocates, passionately defended the commission’s position. Mr. Wilson underscored TNERC’s unique status, highlighting its multifaceted role encompassing judicial and legislative functions akin to a court. He emphasized that TNERC operates on grants from the Tamil Nadu Government, with all fees, fines, and penalties flowing directly into the state’s coffers.
Drawing upon constitutional provisions, Mr. Wilson argued that TNERC’s income, derived from governmental grants and non-commercial activities, is exempt from Union taxation under Article 289. Additionally, he contended that the GST Act’s definition of “supply of service” necessitates activities to be conducted in the course of trade or business, a criterion unmet by TNERC’s functions.
Furthermore, Mr. Wilson invoked Schedule III of the GST Act, which exempts courts and tribunals from GST levies, further bolstering TNERC’s case. He vehemently opposed the show cause notice issued by the Additional Director of the DGGI Chennai Zonal Unit, asserting its lack of jurisdiction and merit.
In a decisive moment, Hon’ble Mr. Justice Sathyanarayana Prasad granted a stay on the show cause notice, acknowledging the gravity of the legal issues at hand. The matter has been adjourned to July 1, 2024, for the submission of counter arguments.
This legal battle not only marks a pivotal moment for TNERC but also sets a precedent for regulatory bodies nationwide. Stay tuned as TNERC continues to champion its cause in the pursuit of justice and fiscal integrity. The court has directed to file a counter affidavit
