Case Note & Summary
The petitioner, M/s Nagaur Mukundgarh Highways Pvt. Ltd., filed a batch of writ petitions before the Rajasthan High Court challenging the validity of Circular No.150/6/2021 dated 17.06.2021 issued by the Central Board of Indirect Taxes and Customs, a show cause notice dated 09.12.2022, and a recovery order dated 07.07.2023 concerning GST on annuity payments for road access. The petitioner claimed that the circular was not binding and could not override the statutory exemption granted under Notification No.12/2017-Central Tax (Rate) issued under Section 11 of the CGST Act, particularly Entry 23A which exempted service by way of access to a road or bridge on payment of annuity falling under Heading 9967. The petitioner also relied on an advance ruling dated 12.02.2019 which had held Entry 23A exempt, and argued that under Chapter XVII of the CGST/RGST Act, the ruling was binding on the authorities. The court noticed that Notification No.12/2017 exempted such services with nil rate and nil condition. The impugned circular, however, distinguished services under Heading 9967 from construction of road services under Heading 9954, clarifying that annuity payments for construction of road would not be exempt under Entry 23A. The provided judgment text does not include the parties' full arguments, the court's complete analysis, or the final decision, as the excerpt ends mid-sentence in paragraph 4. Therefore, the final outcome and ratio decidendi are not available from the extracted text.
Headnote
A) Goods and Services Tax - Exemption Notification - Circular Cannot Override Statutory Exemption - Central Goods and Services Tax Act, 2017, Section 11; Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 Entry 23A - Petitioner challenged Circular No.150/6/2021 dated 17.06.2021 as non-binding and contended it sought to dilute the exemption for service by way of access to a road or bridge on payment of annuity under Heading 9967 - Court noted the statutory framework and the issue of whether a circular could override a notification issued under Section 11 (Paras 2-4).
B) Goods and Services Tax - Advance Ruling - Binding Effect - Central Goods and Services Tax Act, 2017, Chapter XVII; Rajasthan Goods and Services Tax Act, 2017, Chapter XVII - Petitioner relied on advance ruling dated 12.02.2019 holding Entry 23A exempt and argued authorities were bound by the ruling - Recovery order dated 07.07.2023 passed contrary to the ruling and statutory exemption was challenged (Paras 2-2.1).
C) Tax Law - Writ Petition - Challenge to Show Cause Notice and Recovery Order - Petitioner sought quashing of show cause notice dated 09.12.2022 and recovery order dated 07.07.2023 with consequential refund of amount recovered - Court was to examine whether impugned actions were legally sustainable in light of exemption and advance ruling (Paras 2-2.1).
Issue of Consideration
Whether Circular No.150/6/2021 dated 17.06.2021 could override the statutory exemption granted under Notification No.12/2017-Central Tax (Rate) Entry 23A; whether the advance ruling dated 12.02.2019 was binding on the authorities under Chapter XVII of the CGST/RGST Act; and whether the show cause notice dated 09.12.2022 and recovery order dated 07.07.2023 were legally valid.
Final Decision
Not mentioned in extracted text
Law Points
- Circular cannot override statutory exemption notification
- advance ruling binding under Chapter XVII
- exemption under Entry 23A for access to road or bridge on annuity
- service classification under Heading 9967
- circular distinguishes construction services under Heading 9954
Case Details
2026 LawText (RAJ) (08) 22
D.B. Civil Writ Petition No. 10055/2024 and connected matters (D.B. Civil Writ Petition Nos. 10057/2024, 10058/2024, 10062/2024, 10067/2024)
Justice Pushpendra Singh Bhati, Justice Praveer Bhatnagar
Mr. Jatin Harjai (Petitioner); Mr. Mahaveer Bishnoi, AAG, Mr. Harshwardhan Singh, Mr. Rajat Arora (Respondents)
M/s Nagaur Mukundgarh Highways Pvt. Ltd. through Authorised Person Mr. Sharad Pancholy
Central Board of Indirect Taxes and Customs; State of Rajasthan; Chief Commissioner of State Tax, Rajasthan; The Joint Commissioner State Tax, Rajasthan; Shri Tara Chand Megwal, Joint Commissioner State Tax; Union of India
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Nature of Litigation
Writ petitions challenging validity of Circular No.150/6/2021, show cause notice dated 09.12.2022, and recovery order dated 07.07.2023 concerning GST on annuity payments for road access.
Remedy Sought
Petitioner sought quashing of impugned circular, show cause notice, and recovery order; and consequential refund of amount recovered.
Filing Reason
Authorities disregarded statutory exemption under Entry 23A of Notification No.12/2017 and binding advance ruling dated 12.02.2019 by issuing show cause notice and recovery order.
Previous Decisions
Advance ruling dated 12.02.2019 held service by way of access to road or bridge on payment of annuity (Entry 23A) exempt from GST; show cause notice dated 09.12.2022 and recovery order dated 07.07.2023 followed.
Issues
Whether Circular No.150/6/2021 dated 17.06.2021 can override or dilute the statutory exemption granted under Notification No.12/2017-Central Tax (Rate) Entry 23A issued under Section 11 of CGST Act.
Whether the advance ruling dated 12.02.2019 is binding on the authorities under Chapter XVII of CGST/RGST Act.
Whether the show cause notice dated 09.12.2022 and recovery order dated 07.07.2023 are legally valid in light of the exemption and advance ruling.
Submissions/Arguments
Petitioner argued that Circular No.150/6/2021 cannot override or dilute statutory exemption granted under Notification No.12/2017 issued under Section 11 of CGST Act.
Petitioner argued that advance ruling dated 12.02.2019 is binding on authorities under Chapter XVII of CGST/RGST Act and recovery order is contrary to it.
Ratio Decidendi
Not mentioned in extracted text
Judgment Excerpts
the petitioner has assailed the validity and applicability of Circular No. 150/6/2021 dated 17.06.2021 ... on the ground that the said circular is not binding upon the petitioner and cannot override or dilute the statutory exemption granted under the notification issued in exercise of powers conferred by Section 11 of the CGST Act, particularly Notification No.12/2017.
Entry 23A of the said Notification, as relevant for the present controversy, specifically provides for exemption in respect of “Service by way of access to a road or a bridge on payment of annuity”, falling under Heading 9967, with the applicable rate of tax being “Nil” and the corresponding condition being “Nil”.
However, the circular proceeds to draw a distinction between services falling under Heading 9967 and services relating to construction of roads falling under Heading 9954. It accordingly clarifies that, where the underlying service is construction of a road falling under Heading 9954 and the consideration for such construction is paid partly upfront and partly through deferred annual payments described as annuities, Entry 23A would not be applicable and such annuity payments would not be exempt from GST.
Procedural History
Writ petitions filed before Rajasthan High Court; heard together with D.B. Civil Writ Petition No. 10055/2024 as lead matter; arguments concluded and judgment reserved on 06.08.2026; judgment pronounced on 17.08.2026.
Acts & Sections
- Central Goods and Services Tax Act, 2017 (CGST Act): Section 9, Section 11, Section 15, Section 148, Section 164, Chapter XVII
- Rajasthan Goods and Services Tax Act, 2017 (RGST Act): Chapter XVII
