Reengus Sikar Expressway Limited. Vs Additional Director, DGGI
Date: March 16, 2025
Court: High Court
Bench: Rajasthan
Type: Writ Petition
Subject Matter
GST Recovery on Highway Annuities stayed
Summary
The Rajasthan High Court is reviewing the validity of Circular No. 150/2021, which introduces Goods and Services Tax (GST) on annuity payments linked to highway construction. Reengus Sikar Expressway Limited, a company engaged in constructing National Highways, argues that the annuity system should remain exempt from taxation, similar to the previous toll system prior to GST implementation. The petitioner asserts that this taxation was not anticipated in the original GST framework. The court has issued notices to the relevant respondents and has granted interim relief to the petitioner, prohibiting any coercive actions for GST recovery while the matter is being assessed. The case will be revisited in eight weeks, allowing the respondents to seek to vacate the interim order if necessary.
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
1. Learned counsel for the petitioner submits that the petitioner-company is involved in construction of National Highways.
2. Learned counsel for the petitioner demonstrated that after the implementation of GST, it remained under contemplation that the annuity system, which replaced the toll system, continued to be exempted at par with toll.
3. Learned counsel further submits that even during GST proceedings, there was contemplation regarding treating annuity at par with toll, and thus, taxing annuity was not part of the original framework that the respondents were working with. He thus submits that the circular dated 17.06.2021 (Annex.5)is the principal document under challenge, along with consequential proceedings where GST recovery might be impacted due to bringing annuity within the purview of GST.
4. Issue requires consideration.
5. Issue notice to the respondents 1 to 7.
6. Mr. Rajvendra Saraswat, learned counsel is directed to accept notice on behalf of respondents no.1 to 5; Mr. Rajendra Choudhary is directed to accept notice on behalf of the respondent no.6 and Mr. Mahaveer Bishnoi, learned AAG is directed to accept notice on behalf of respondent no.7, which they accept and seeks some time to complete their instruction.
7. It is clarified that, at this stage, this Court is not inclined to issue notice to respondent 8; however, this may be considered at a later stage, if deemed necessary.
8. Thus, service upon respondents 1 to 7 is complete.
9. List the matter after eight weeks.
10. In the meanwhile, no coercive steps shall be taken against the petitioner for recovery of GST pursuant to the order dated 09.01. 20 25 (Annex.12).
11. Learned counsel for the respondents shall be at liberty to file an application under Article 226(3) of the Constitution for vacation of interim order.