2021(10)LCX0196

Union of India

Versus

Greenwood Owners Association

WA.No. 2592 of 2021 decided on 07-10-2021

IN THE HIGH COURT OF JUDICATURE AT MADRAS

( Civil Appellate Jurisdiction )

Thursday, the Seventh day of October Two Thousand Twenty One

PRESENT

THE HON`BLE MR.JUSTICE T.S.SIVAGNANAM

AND

THE HON`BLE MR.JUSTICE SATHI KUMAR SUKUMARA KURUP

WA.No.2592 of 2021

and CMP.No.16886 of 2021

1 UNION OF INDIA                                                 [ APPELLANTS/PETITIONERS ]
REP BY SECRETARY TO GOVERNMENT,
DEPARTMENT OF REVENUE,
MINISTRY OF FINANCE,
NORTH BLOCK, NEW DELHI.

2 PRINCIPAL CHIEF COMMISSIONER OF GST,
AND CENTRAL EXCISE,
26/1, UTHAMAR GANDHI ROAD,
THOUSAND LIGHTS WEST,
NUNGAMBAKKAM, CHENNAI 600 034.

Vs

GREENWOOD OWNERS ASSOCIATION             [ RESPONDENT/RESPONDENT ]
REP.BY ITS PRESIDENT,
MR. THILAK K NATH,
BUCKINGHAM STREET,
HOUSE OF HIRANANDANI,
5/63, RAJIV GANDHI SALAI, EGATTUR,
THALAMBUR POST, CHENNAI 600 130

Appeal under Clause 15 of the letters Patent against the order of THE HON`BLE DR.JUSTICE ANITA SUMANTH dated 01.07.2021 and made in the exercise of the Special Original Jurisdiction of the High Court in the Writ Petition No.5518/2020 (in WA.No.2592/2021);

2.To grant Interim Stay of operation of the order passed by this Honble Court made in WP No.5518 of 2020 dated 01.07.2021 [IN CMP.No.16886 of 2021] pending disposal of the Writ Appeal. No.2592/2021.

Order : These Appeals coming on for hearing on this day upon perusing the Grounds of appeal, the order of THE HON`BLE DR.JUSTICE ANITA SUMANTH dated 01.07.2021 and made in the exercise of the Special Original Jurisdiction of the High Court in the Writ Petition No.5518/2020 (in WA.No.2592/2021) and all other papers material to this case and upon hearing the arguments of M/S.R.HEMALATHA, SENIOR STANDING COUNSEL for the APPELLANTS/ PETITIONERS, the court made the following order:-

(Order of the Court was made by T.S.Sivagnanam, J.)

This appeal by the Union is directed against the order dated 1-7-2021 in W.P. No. 5518 of 2020.

2. A batch of writ petitions were allowed filed by various Residents’ Welfare Associations. Two appeals were filed by the Union in W.A. Nos. 2318 and 2321 of 2021, wherein the respondents were the Residents’ Welfare Associations who were the writ petitioners in the batch and on 9-9-2021, the writ appeals were admitted and noting that the circular which was the subject matter of challenge has wider ramification, that portion of the order in the writ petitions was stayed until further orders. The order admitting the appeals and granting interim order is quoted herein below :

“Heard Mrs. R. Hemalatha, Learned Senior Standing Counsel appearing for the appellants. The following four propositions of law are raised by the appellants in these appeals.

“1. As per Section 15, it is the transaction value that is subjected to GST and transaction value would be the entire amount contributed towards the maintenance charges. The transaction value cannot be bifurcated. Since no exemption is granted when the amount exceeds Rs. 7500/- the entire transaction value would be subjected to tax.

2. The word ‘upto’ can be interpreted in both ways. It could either mean exemption is granted only when the transaction value is less than Rs. 7500/- or exemption is granted only for Rs. 7500/- when the transaction value is more than 7500/-.

3. Under the negative list approach, with effect from 1 July, 2012, Notification No. 25/2012-S.T. [Sl. No. 28(c)] provides for exemption to service by a RWA to its own members by way of reimbursement of charges or share of contribution up to five thousand rupees per month per member for sourcing of goods or services from a third person for the common use of its members.

3.1 Clarification was issued through the Circular No. 175/01/2014-S.T., dated 10-1-2014 saying if the contribution per member exceeds Rupees Five thousand, the entire contribution of such members whose contribution exceeds five thousand rupees would be ineligible for exemption under the said notification.

3.2 Exemption granted under GST is merely the adoption of the above mentioned exemption under Service Tax.

4. The exemption is intended for middle class and not for the owners of luxury apartments. The legislative intention could be seen in the Budget speech 2012-13 where the exemption for the monthly charges payable by a member to housing society was raised from Rs. 3000 to Rs. 5000. While discussing about Affordable Housing Scheme, it was said that the said proposal is to make the life of those who own an apartment a little easier. Therefore, no exemption is applicable when the monthly contribution exceeds Rs. 7500.”

2. On elaborately hearing the Learned Senior Standing Counsel for the appellants, we are of the view that the legal issue has to be decided as because the Learned Single Bench not only quashed the proceedings of the Tamil Nadu Authority for Advanced Ruling, but also the Circular issued by the Department, which needs verification. Therefore, we entertain these appeals, accordingly, both the appeals are admitted.

3. Notice to the respondents is accepted by Mr. G. Natarajan, Learned Standing Counsel. The Learned Senior Standing Counsel is directed to serve one set of appeal papers to the Learned Standing Counsel who is accepted notice for the respondents.

4. Post these appeals on 9-12-2021.

Interim Order

Since the circular has wider ramification, that portion of the order passed in the writ petitions, shall remain stayed until further orders.”

3. Following the above order, the writ appeal is admitted and there will be an order of stay of that portion of the order passed in the writ petition which deals with the circular in question.

4. List the writ appeal along with the batch on 9-12-2021.

(T.S.S., J.) (S.S.K., J.)
07.10.2021 

TO

1 THE SECRETARY TO GOVERNMENT,
UNION OF INDIA,
DEPARTMENT OF REVENUE,
MINISTRY OF FINANCE,
NORTH BLOCK, NEW DELHI.       

2 PRINCIPAL CHIEF COMMISSIONER OF GST,
AND CENTRAL EXCISE,
26/1, UTHAMAR GANDHI ROAD,
THOUSAND LIGHTS WEST,
NUNGAMBAKKAM, CHENNAI 600 034.     

T.S.Sivagnanam, J.
and
Sathi Kumar Sukumara Kurup, J.

W.A.No.2592 of 2021

07.10.2021