Facts of the Case

The petitioner participated in a tender-cum-auction, dated 25.01.2018, conducted by the 4th respondent, Arulmigu Kottai Mariamman Thirukovil, Dindigul, for allotment of a stall to sell "Delhi Appalam" during the temple's Masi Perunthiruvizha festival held between 15.02.2018 and 06.03.2018. He emerged as the highest bidder at Rs.4,05,100 and, in terms of the tender condition, also paid Rs.80,000 towards GST, though he contended he was not liable to bear this tax. The petitioner challenged the tender-cum-auction notice insofar as it imposed a condition requiring bidders to bear the GST liability, arguing that under the CGST Act, 2017, it was the temple (respondent no.4), as the supplier of the service, that was obliged to pay the tax, not the bidder. The GST so collected had already been remitted to the Government by 10.01.2019.

Issues Involved

  1. Whether the tender condition requiring the successful bidder to bear the GST on the temporary lease of stall space was contrary to the CGST Act, 2017.
  2. Whether the supply of stall space by the temple for a commercial festival activity qualified for exemption under Notification No.12/2017-Central Tax (Rate) as a charitable activity.
  3. Whether such a dispute could be adjudicated in writ jurisdiction or required determination by the GST authorities.

Petitioner's Arguments

  • Under the CGST Act, 2017, the supplier (the temple) was statutorily obliged to pay GST on the supply, and it was impermissible for the temple to instead pass on and recover this liability from the bidder through a tender condition.
  • The demand of Rs.80,000 towards GST from the petitioner, as a condition of the tender, was contrary to the provisions of the GST Act.

Respondent's Arguments

  • Respondents 3 and 4 (the temple and its Executive Officer) contended that leasing stall space for commercial use during the festival was a taxable supply, and since GST is an indirect tax, its incidence was rightly passed on to the petitioner through the tender condition; the amount collected had been remitted to the Government.
  • Reliance was placed on Notification No.12/2017-Central Tax (Rate), exempting only services by an entity registered under Section 12AA of the Income Tax Act, 1961 by way of charitable activities — a condition not met by a commercial stall-lease during a festival.
  • Having voluntarily participated in the tender knowing the condition and paid the amount, the petitioner could not now resist it; the writ was not maintainable, and the only remedy, if any, was a refund claim under Section 54.

Court Order / Findings

  • The Court held that whether the temple was exempt under Notification No.12/2017-Central Tax (Rate), or was itself liable to pay the tax, could not be decided in writ proceedings and required proper adjudication by the GST authorities.
  • Applying State of Punjab vs. Devan Modern Brewaries Limited, (2004) 11 SCC 26, the Court held that having participated in the tender with knowledge of its conditions, the petitioner could not now contend that the tax condition could not be imposed.
  • The Court found no merit in the writ petition, holding that the petitioner's only remedy, if not liable to bear the tax, was to apply for refund of the tax incidence under Section 54 of the GST enactments.
  • The writ petition was dismissed, with liberty to approach the GST authorities under Section 54; the connected miscellaneous petition was closed.

Important Clarification

  • A bidder who voluntarily participates in a tender knowing the conditions require him to bear GST cannot later resist that condition in writ proceedings merely by asserting the supplier was statutorily liable to pay the tax.
  • Disputes on whether a supply qualifies for exemption under Notification No.12/2017-Central Tax (Rate) require adjudication by the GST authorities, not writ jurisdiction; the appropriate route is a refund application under Section 54.

Sections Involved

  • Section 54, Central Goods and Services Tax Act, 2017 — provides the mechanism for claiming refund of tax, including tax paid where later found not to be leviable.
  • Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 — exempts services by an entity registered under Section 12AA of the Income Tax Act, 1961 by way of charitable activities from GST.

Decision – In Favour of

Decided in favour of the Department; the writ petition challenging the GST condition was dismissed, with the petitioner left only to pursue a Section 54 refund claim before the GST authorities if he believed the tax was not leviable on him.

Related Case Laws

The Court applied the Supreme Court's ruling in State of Punjab vs. Devan Modern Brewaries Limited, (2004) 11 SCC 26, that a tender participant cannot later challenge the conditions of the tender he accepted. Readers may also see other GST-exemption posts on this site dealing with Notification No.12/2017-Central Tax (Rate).

Case Details

  • Court: Madurai Bench of the Madras High Court
  • Case No.: W.P.(MD) No.3128 of 2018 and W.M.P.(MD) No.3282 of 2018
  • Coram: Hon'ble Mr. Justice C. Saravanan
  • Date: 23.02.2022
  • Petitioner: K.Veerapathiran
  • Respondents: The Commissioner, HR&CE; The Joint Commissioner, HR&CE; Arulmigu Kottai Mariamman Thirukovil; The Managing Trustee, Arulmigu Kottai Mariamman Devasthanam

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