Order Date – 16 February 2023

Parties: Torrent Power Ltd Vs Union of India

Facts – 

• The Petitioner, Torrent Power Ltd, is engaged in the business of transmission/distribution of electricity in the State of Gujarat, Maharashtra and Uttar Pradesh. 
• During the course of routine maintenance and network enhancement, the petitioner digs out tranches on public roads maintained by Municipal Corporations, which includes Ahmedabad Municipal Corporation (AMC). The same was restored by AMC and recovered reimbursement of road reinstatement charges from the petitioner.
• A show cause notice dated 30.11.2022 was issued under section 74 of the GST Act proposing to demand the tax under reverse charge with interest and penalty on the payments made to the AMC since road restoration work by the AMC was not a part of its sovereign function.

Issue –

• Whether the show cause notice is issued without jurisdiction, arbitrary and illegal?

Order –

• The Divisional Bench of Hon’ble High Court observed that mere ground of alternative remedy being available will not be the reason for this Court to not entertain this petition. The decision of Malladi Drugs and Pharma Limited makes it quite clear that the aspect of non-maintainability is on account of self-imposed limitations and the restraints on exercise of powers to issue a writ. The entertainability and maintainability of the writ being a distinct aspect, this Court issues the Rule.
• In wake of the fact that to the final show cause notice, no reply has been given and the investigating wing is different than the one which has presently issued the notice, it is not appropriate to grant any kind of stay at this stage. At the same time, if there is any adjudication, which may affect the right of the petitioner, it may always approach this Court for this purpose.