Facts of the Case

The petitioner, Sri Durga Bhavani Enterprises, a partnership firm represented by its partner, approached the High Court for the State of Telangana under Article 226 of the Constitution against the State of Telangana, the Greater Hyderabad Municipal Corporation (GHMC) and its officers, and the Assistant Commissioner (State Tax). The grievance was that respondents No.2 to 4 were contemplating issuance of tender notices for providing manpower supply services without either including the GST component in the tender value or first obtaining an Advance Ruling on the applicability of GST to such manpower supply services under Section 97(2) of the CGST Act, 2017. The petitioner sought a writ of mandamus declaring this contemplated action illegal, arbitrary and violative of natural justice, and a consequential direction restraining the respondents from issuing such tenders. An interlocutory application under Section 151 CPC was also filed seeking an interim direction pending disposal.

Issues Involved

  1. Whether tender notices for manpower supply services could validly be issued by the municipal respondents without factoring in the GST component payable on the contract value.
  2. Whether the respondents were obliged to obtain an Advance Ruling under Section 97(2) of the CGST Act, 2017 on the applicability and rate of GST before floating such tenders.
  3. Whether the writ petition, once sought to be withdrawn, could be permitted to be withdrawn with liberty to file afresh in future.

Petitioner's Arguments

  • Contemplated tender notices omitting the GST component would leave successful bidders exposed to an unquantified tax burden not accounted for in the contract price.
  • The respondents ought to have obtained an Advance Ruling under Section 97(2) of the CGST Act, 2017 on the taxability of manpower supply services before finalising tender terms.
  • Issuing tenders without addressing the GST component was arbitrary, contrary to law, and violative of principles of natural justice.

Respondent's Arguments

  • Counsel appearing for respondent No.1 (Municipal Administration and Urban Development Department), respondents No.2 to 4 (GHMC and its engineers) and respondent No.5 (State Tax) were heard, though no separate contest on merits is recorded, as the matter did not proceed to a decision on those merits.

Court Order/Findings

  • Justice Lalitha Kanneganti recorded that learned counsel for the petitioner sought permission to withdraw the writ petition with liberty to file a fresh writ petition whenever tenders are issued without including the GST component.
  • Permission was accorded by the Court.
  • The writ petition was accordingly dismissed as withdrawn, granting the liberty as prayed for, with no order as to costs.
  • Any pending miscellaneous applications were closed as a consequence.

Important Clarification

  • A writ petition challenging a contemplated (rather than already-issued) tender action can be withdrawn with liberty reserved to re-agitate the very same GST grievance if the apprehended defect actually materialises in a future tender.
  • Such withdrawal-with-liberty orders are not adjudications on whether Advance Ruling under Section 97(2) is mandatory before floating tenders for manpower supply — that substantive question remains open for a future petition.

Sections Involved

  • Section 97(2) of the CGST Act, 2017 — specifies the questions on which an Advance Ruling may be sought, including applicability of the Act to a supply, and taxability of a transaction.
  • Article 226 of the Constitution of India — the writ jurisdiction invoked to challenge the contemplated tender action.
  • Section 151 of the Code of Civil Procedure, 1908 — invoked for the interlocutory application seeking interim protection pending disposal of the writ.

Decision – In Favour of

Disposed of on withdrawal with liberty reserved to the petitioner — a procedural outcome that is, in substance, in favour of the Assessee, since the underlying GST grievance was preserved for future litigation rather than being shut out.

Related Case Laws

No related case laws are available on this site at present for cross-reference on this specific point.

Case Details

  • Court: High Court for the State of Telangana at Hyderabad
  • Case No.: Writ Petition No.12984 of 2022
  • Coram: Justice Lalitha Kanneganti
  • Date of Order: 14 March 2022
  • Parties: Sri Durga Bhavani Enterprises vs State of Telangana and others

Link to Download the Order

Download the full order of the Telangana High Court in Writ Petition No.12984 of 2022

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