Meghalaya HC Declines Writ Relief In ₹112 Crore BOT Annuity GST Case, Holds Appeal Is Proper Remedy

The Meghalaya High Court has held that disputes involving GST classification, interpretation of exemption notifications and taxability of transactions should ordinarily be decided through the statutory appellate mechanism under the Central Goods and Services Tax Act, 2017, and not through writ proceedings.

A Division Bench of Justices H.S. Thangkhiew and B. Bhattacharjee dismissed a writ petition filed by Jorabat Shillong Expressway Limited, holding that the company had failed to establish any exceptional circumstance warranting interference under Article 226 of the Constitution. The Court observed:

“No violation of principles of natural justice has been demonstrated. No patent lack of jurisdiction has been established.”

The company had challenged an Order in Original dated 18 April 2024, through which the GST authorities confirmed a demand of Rs. 112.39 crore, along with interest and penalty, on annuity payments received from the National Highways Authority of India between July 2017 and December 2022.

It contended that annuity payments received under the Build Operate Transfer (BOT) model were exempt from GST under Entry 23A of the relevant exemption notification, which covers services by way of access to a road or bridge on payment of annuity.

It further argued that the GST authorities had wrongly classified the services as works contract services instead of exempt road access services. It also challenged the reliance placed on a Central Board of Indirect Taxes and Customs (CBIC) circular dated 17 June 2021 and questioned the jurisdiction of the officers who issued the show cause notice and passed the adjudication order.

Rejecting the challenge, the Bench held that the issues raised by the company required examination of the classification of services, applicability of exemption notifications and the terms of the concession agreement. These questions, it held, were matters for consideration by the statutory appellate authority.

Accordingly, the High Court granted the company four weeks to file an appeal before the appropriate authority and directed that the appeal be decided independently on its own merits.