Facts of the Case

P. Kishore, licence holder of Stall No.66 (Cloak Room) at MGBS, Hyderabad, was granted a five-year licence (24.01.2019 to 23.01.2024) by the Telangana State Road Transport Corporation (TSRTC) at a monthly licence fee of Rs.40,202/-. In W.P. No.35683 of 2021, he challenged a notice dated 22.11.2021 terminating his licence, without a prior show-cause notice, for non-payment of GST on the licence fee from 24.01.2019 to November 2021. In W.P. No.5765 of 2022, he challenged TSRTC's proceedings dated 04.09.2021 refusing remission of licence fee for the second Covid-lockdown period (May-June 2021), and a further notice dated 31.12.2021 demanding GST dues and licence fee for the TSRTC employees' strike period (October-November 2019). As the petitioner and the issues were common, both petitions were heard and disposed of together.

Issues Involved

  1. Whether the licence fee of Rs.40,202/- per month was inclusive or exclusive of GST, and whether the termination notice demanding GST dues without a prior show-cause notice was valid.
  2. Whether TSRTC's refusal to waive licence fee for the Covid-lockdown period, in favour of a uniform instalment scheme, called for interference under Article 226.

Petitioner's Arguments

  • The bid, initially Rs.30,202/-, was enhanced to Rs.40,202/- inclusive of GST; the online tender form itself offered an option to quote inclusive of GST.
  • No show-cause notice preceded the termination notice dated 22.11.2021, issued more than three years after the licence commenced, demanding GST from 24.01.2019.
  • TSRTC's silence on GST for three years, followed by a sudden demand, could not be countenanced, and remission was warranted for the pandemic and strike periods.

Respondent's Arguments

  • Clause 7 of the e-Tender Notification, the General Terms and Conditions, the Allotment Order, and Clause 6 of the Deed of Licence all specify the licence fee as exclusive of GST, payable additionally by the licensee.
  • The inclusive-of-GST option on the bid form was a technical glitch; the petitioner, having signed the Deed of Licence, could not take advantage of it.
  • Termination followed non-payment despite a demand notice dated 12.10.2021; under Clause 28(a), default for three consecutive months justified termination on one month's notice, and the Corporation had already granted all licensees instalment relief for the lockdown period.

Court Order/Findings

  • On perusal of the e-Tender clauses, General Terms and Conditions, Allotment Order, and Deed of Licence, the Court found the licence fee was consistently and unambiguously exclusive of GST.
  • The bid form's inclusive-of-GST option was treated as a technical glitch; having signed the Deed, the petitioner could not rely on it, nor could three years of departmental inaction absolve him of the liability.
  • Relying on its earlier common order dated 09.04.2018 in W.P. Nos.31454 of 2011 and batch (following Joshi Technologies International Inc. v. Union of India), the Court directed the petitioner to pay the GST amount and other dues within one month, failing which the termination notice would stand good; W.P. No.35683 of 2021 was disposed of accordingly.
  • In W.P. No.5765 of 2022, since TSRTC had already permitted all licensees to pay the May-August 2021 fee in four instalments without penal interest, the Court held it could not sit over that policy decision, and dismissed the petition for want of merit.

Important Clarification

  • Where tender documents, the allotment order and the licence deed consistently state the fee as exclusive of GST, a licensee cannot rely on an inconsistent, software-generated bid-form entry to claim otherwise.
  • Delay by the licensor in demanding GST dues does not by itself extinguish the licensee's contractual liability to pay applicable GST.
  • Writ courts will not interfere with a reasoned policy decision on fee waiver or instalment relief already extended uniformly to similarly placed licensees.

Sections Involved

  • Goods and Services Tax leviable under the Central Goods and Services Tax Act, 2017 and corresponding State Goods and Services Tax Act, 2017 — the tax whose contractual incidence on the licence fee was disputed; no specific charging or procedural section was separately invoked.
  • Article 226 of the Constitution of India, 1950 — writ jurisdiction invoked against the termination and remission-refusal proceedings.

Decision – In Favour of

Decided against the petitioner/licensee and in favour of the Respondent Corporation. W.P. No.35683 of 2021 was disposed of directing payment of GST dues within one month, failing which the termination notice would stand good, upholding TSRTC's position that the fee was exclusive of GST. W.P. No.5765 of 2022, challenging the refusal to waive Covid-lockdown licence fee, was dismissed. No costs in either petition.

Related Case Laws

No related case laws on this specific issue are available on this site at present.

Case Details

  • Court: High Court for the State of Telangana at Hyderabad
  • Case No.: Writ Petition Nos.35683 of 2021 and 5765 of 2022
  • Coram: Hon'ble Sri Justice A. Abhishek Reddy
  • Date of Order: 18 April 2022

Link to Download the Order

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