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2025 DIGILAW 1564 (TS)

GMR Hospitality and Retail Ltd. v. Union of India

2025-11-19

P.SAM KOSHY, SUDDALA CHALAPATHI RAO

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ORDER : P. SAM KOSHY, J. The instant Writ Petition is filed by the petitioner under Article 226 of the Constitution of India praying the Court to issue a Writ, Order or Direction more particularly one in the nature of a Writ of Certiorari calling for the records and to quash the show-cause notice No.V/ST/18/30/2018-Refunds, dated 03.11.2022, issued by respondent No.3 as being wholly without jurisdiction, contrary to the statutory provisions and binding precedents, and also arbitrary, illegal, unjust, contrary to law and without authority of law (for short, ‘the impugned order’). 2. Heard Mr.S. Niranjan Reddy, learned Senior Counsel appearing on behalf of Ms.Rubaina S. Khatoon; and Mr. Bommineni Vivekananda, learned Junior Standing Counsel appearing on behalf of Ms.K. Rajitha, learned Standing Counsel for Union of India, for respondent Nos.1 to 3. 3. The matter revolves around refund of service tax claimed by petitioner in respect of rental income generated by leasing out space for duty-free shops and warehouses at the Rajiv Gandhi International Airport, at Hyderabad. 4. The claim for refund was originally rejected by the adjudicating authority, i.e., the Deputy Commissioner Central Tax, Shamshabad Division, Hyderabad, vide order dated 08.05.2020 in Order-in-Original No.58/ST/2019-20/Adj-(DC), which was subjected to challenge before the Office of the Commissioner of Customs and Central Tax (Appeals-I). Vide Order-in-Appeal No.09.2019-RR(ST), dated 30.11.2021, the Commissioner of Appeals set aside the impugned order and allowed the appeal by holding that the petitioner is entitled for refund of service tax paid earlier. The said order dated 30.11.2021 of the Appellate Authority was reviewed by a High-Power Committee of the respondents in terms of the powers conferred under the said Committee under Section 86(2a) of the FINANCE ACT , 1994 read with Section 174 of the G.S.T. Act, 2017. The said Committee, on reviewing the order of the Appellate Authority, vide Recommendation dated 09.03.2022 recommended that the findings arrived at by the Appellate Authority seems to be erroneous and contrary to the judicial precedents of the recent past. Therefore, the said Committee accordingly instructed the respondent-Department to go in for an appeal. Thereafter, respondent No.3 preferred an appeal before the Customs, Excise & Service Tax Appellate Tribunal, Regional bench, Hyderabad, (for short, ‘CESTAT’) where a case had been registered as Appeal No.ST/30043/2022-ST (DB). Though the said appeal had been filed as early as in 2022, till date the said appeal is pending consideration by the Tribunal. Thereafter, respondent No.3 preferred an appeal before the Customs, Excise & Service Tax Appellate Tribunal, Regional bench, Hyderabad, (for short, ‘CESTAT’) where a case had been registered as Appeal No.ST/30043/2022-ST (DB). Though the said appeal had been filed as early as in 2022, till date the said appeal is pending consideration by the Tribunal. It is also pertinent to mention that the Tribunal till date had not granted any stay of effect and operation of the order passed by the Commissioner of Appeals vide Order-in-Appeal No.09.2019-RR(ST), dated 30.11.2021. 5. Meanwhile, pursuant to the order passed by the Appellate Authority, the respondent-Department had also refunded the service tax collected for the area which was rented for warehouses and duty-free shops. 6. The grievance of petitioner is that, pending the appeal for consideration by the Tribunal, and without an interim order granted therein by the Tribunal so far as effect and operation of the order passed by the Appellate Authority is concerned, the impugned show- cause notice No.V/ST/18/30/2018-Refunds, dated 03.11.2022, had been issued by respondent No.3 to the petitioner seeking for an explanation as to why an amount of Rs.9,71,04,995/- be not recovered from petitioner and also why interest should not be charged on the said amount for the period the amount stood in the account of petitioner. 7. Aggrieved, the instant Writ Petition had been filed by the petitioner. 8. Learned Senior Counsel, appearing on behalf of Ms.Rubaina S. Khatoon, learned counsel for the petitioner, contended that that once when there is a statutory authority empowered to decide an appeal and the said appeal stands decided in favour of petitioner and the order if it gets executed in between, the execution of the said order cannot be said to be in any manner erroneous until and unless the said order is reversed by a higher forum. 9. 9. Learned Senior Counsel further submitted that, in the instant case, the Appellate Authority vide order dated 30.11.2021 had allowed the appeal; thereafter the respondents have preferred an appeal against the said order before the CESTAT; however, there is no stay granted by the CESTAT so far as the effect and operation of the order passed by the Appellate Authority dated 30.11.2021; and therefore contended that until and unless the CESTAT reverses the order passed by the Appellate Authority dated 30.11.2021, the impugned show-cause notice issued by respondent No.3 is per se bad in law and is therefore liable to be reversed / quashed. 10. Per contra, learned Standing Counsel appearing on behalf of the respondent-Department, referring to the impugned show-cause notice and also referring to the decision of the High-Power Committee which had reviewed the order passed by the Appellate Authority, contended that the statute provides for a Committee of Commissioners to be appointed to examine an order passed by the adjudicating authority or the appellate authority which in the instant case also had been constituted and a report was also submitted by the said committee. In the said report, the High-Power Committee held that the findings arrived at by the Appellate Authority holding it to be not in accordance with law. Therefore, it was contended that the impugned show-cause notice under challenge is one which is an outcome of the report of the said Committee and cannot be found fault with. 11. Learned Standing Counsel for the respondents further contended that the impugned show-cause notice had been issued only to ensure that the amount that was erroneously paid is recovered subject to outcome of the appeal that is pending consideration before the CESTAT, and therefore, the impugned show-cause notice does not warrant any interference. He further contended that it is only issuance of show-cause notice to petitioner who can still enter appearance before the authorities and submit a detailed response to the impugned show-cause notice which would be looked into by the concerned authority which had issued the impugned show-cause notice; and therefore prayed that, on this ground and also on the ground that there being no merits in the case, the writ petition may be dismissed. 12. 12. Having heard the contentions put forth on either side and on a perusal of the records, apparently there was a claim for refund made by petitioner in respect of premises which was let out on rent for duty- free shops and warehouses which, according to petitioner, was not exigible to service tax but was wrongly paid by the petitioner. The adjudicating authority at the first instance, vide order dated 08.05.2020, had disallowed the claim of petitioner. However, the Appellate Authority vide order dated 30.11.2021 had allowed the same holding that the claim for refund to be proper and justifiable. Once when the order had been passed by the statutory Appellate Authority until and unless it is reversed, it cannot be said to be either bad in law or without jurisdiction. 13. Further, the respondents have preferred an appeal before the CESTAT, and there does not seem to be any interim order granted in favour of respondents by the CESTAT. In the absence of an order of reversal by a higher forum or in the absence of any interim order in favour of respondents against the operation of order passed by the Appellate Authority, this Bench is of the considered opinion that the impugned show-cause notice at this juncture is totally uncalled for, as rightly or wrongly, there is an order in favour of petitioner passed by the Appellate Authority dated 30.11.2021. Until and unless the order passed by the Appellate Authority dated 30.11.2021 is reversed by a competent forum, the impugned show-cause notice cannot be said to be one with which the finding of the Appellate Authority can be reversed only on the opinion of the High-Power Committee that was constituted to examine the findings recorded by the Appellate Authority. Further, the said Committee had only recommended for preferring an appeal which the respondents had done by filing an appeal before the CESTAT. Therefore, in all fairness the respondents ought to have waited till the outcome of appeal so as to take appropriate steps in terms of the order that would be passed by the CESTAT. 14. For all the aforesaid reasons, we do not find any good ground to sustain the impugned show-cause notice No.V/ST/18/30/2018- Refunds, dated 03.11.2022, issued by respondent No.3, and the same accordingly stands quashed. The Writ Petition stands allowed. 14. For all the aforesaid reasons, we do not find any good ground to sustain the impugned show-cause notice No.V/ST/18/30/2018- Refunds, dated 03.11.2022, issued by respondent No.3, and the same accordingly stands quashed. The Writ Petition stands allowed. However, the right of respondents would stand protected subject to outcome of the appeal which is pending consideration before the CESTAT. No costs. 15. Miscellaneous petitions, pending if any, shall stand closed.