Page No.# 1/17

GAHC010166382021

THE GAUHATI HIGH COURT

(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

Case No. : WP(C)/5398/2021

GNRC LIMITED

A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE

COMPANIES ACT 1956 HAVING ITS REGISTERED OFFICE AT GNRC

COMPLEX, DISPUR, GUWAHATI 781006 AND IN THE PRESENT

PROCEEDINGS REPRESENTED BY MR. MADHURJYA BORAH, ONE OF THE

DIRECTORS OF THE PETITIONER COMPANY

VERSUS

THE UNION OF INDIA AND 4 ORS

REPRESENTED BY THE SECY. TO THE GOVT. OF INDIA, MINISTRY OF

FINANCE, DEPTT. OF REVENUE, NEW DELHI.

2:THE COMMISSIONER

CENTRAL GOODS AND SERVICE TAX

GUWAHATI

CENTRAL GST HQRS

GUWAHATI

GST BHAWAN

KEDAR ROAD

MACKHOWA

GUWAHATI 781001

3:THE ASSTT. COMMISSIONER

GST AND CENTRAL EXCISE

GUWAHATI DIVISION-II

2ND FLOOR

GST BHAWAN

KEDAR ROAD

FANCY BAZAR Page No.# 1/17

GAHC010166382021

THE GAUHATI HIGH COURT

(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

Case No. : WP(C)/5398/2021

GNRC LIMITED

A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE

COMPANIES ACT 1956 HAVING ITS REGISTERED OFFICE AT GNRC

COMPLEX, DISPUR, GUWAHATI 781006 AND IN THE PRESENT

PROCEEDINGS REPRESENTED BY MR. MADHURJYA BORAH, ONE OF THE

DIRECTORS OF THE PETITIONER COMPANY

VERSUS

THE UNION OF INDIA AND 4 ORS

REPRESENTED BY THE SECY. TO THE GOVT. OF INDIA, MINISTRY OF

FINANCE, DEPTT. OF REVENUE, NEW DELHI.

2:THE COMMISSIONER

CENTRAL GOODS AND SERVICE TAX

GUWAHATI

CENTRAL GST HQRS

GUWAHATI

GST BHAWAN

KEDAR ROAD

MACKHOWA

GUWAHATI 781001

3:THE ASSTT. COMMISSIONER

GST AND CENTRAL EXCISE

GUWAHATI DIVISION-II

2ND FLOOR

GST BHAWAN

KEDAR ROAD

FANCY BAZAR

Page No.# 2/17

GUWAHATI 781001

4:THE SUPERINTENDENT

CENTRAL GOODS AND SERVICE TAX

RANGE II D

2ND FLOOR

GST BHAWAN

KEDAR ROAD

FANCY BAZAR

GUWAHATI 781001

5:GST COUNCIL

5TH FLOOR

TOWER-II

JEEVAN BHARTI BUILDING

JANPATH ROAD

CONNAUGHT PLACE

NEW DELHI 11000

Advocate for the Petitioner : DR. A SARAF

Advocate for the Respondent : SC, GST

Linked Case : WP(C)/7336/2021

GNRC LIMITED

A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE

COMPANIES ACT

1956 HAVING ITS REGISTERED OFFICE AT GNRC COMPLEX

DISPUR

GUWAHATI-781006 AND IN THE PRESENT PROCEEDINGS REP. BY MR.

MADHURJYA BORAH

ONE OF THE DIRECTORS OF THE PETITIONER COMPANY.

VERSUS

THE UNION OF INDIA AND 4 ORS

REP. BY THE SECRETARY TO THE GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

NEW DELHI.

2:THE COMMISSIONER

Page No.# 3/17

CENTRAL GOODS AND SERVICE TAX

GUWAHATI

CENTRAL GST HQRS

GUWAHATI

GST BHAWAN

KEDAR ROAD

MACKHOWA

GUWAHATI-781001.

3:THE ASSISTANT COMMISSIONER

GST AND CENTRAL EXCISE

GUWAHATI DIVISION-II

2ND FLOOR

GST BHAWAN

KEDAR ROAD

FANCY BAZAR

GUWAHATI-781001.

4:THE SUPERINTENDENT

CENTRAL GOODS AND SERVICE TAX

RANGE II D

2ND FLOOR

GST BHAWAN

KEDAR ROAD

FANCY BAZAR

GUWAHATI-781001.

5:GST COUNCIL

5TH FLOOR

TOWER-II

JEEVAN BHARTI BUILDING

JANPATH ROAD

CONNAUGHT PLACE

NEW DELHI- 110001.

------------

Advocate for : DR. A SARAF

Advocate for : SC

GST appearing for THE UNION OF INDIA AND 4 ORS

Linked Case : WP(C)/5358/2022

GNRC LIMITED

A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE

COMPANIES ACT

1956 HAVING ITS REGISTERED OFFICE AT GNRC COMPLEX

DISPUR

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GUWAHATI 781006 AND IN THE PRESENT PROCEEDINGS REPRESENTED

BY MR. MADHURJYA BORAH

ONE OF THE DIRECTORS OF THE PETITIONER COMPANY

VERSUS

THE UNION OF INDIA AND 4 ORS

REPRESENTED BY THE SECRETARY TO THE GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

NEW DELHI

2:THE COMMISSIONER

CENTRAL GOODS AND SERVICE TAX

GUWAHATI

CENTRAL GST HQRS

GUWAHATI

GST BHAWAN

KEDAR ROAD

MACKHOWA

GUWAHATI-781001

3:THE ASSISTANT COMMISSIONER

GST AND CENTRAL EXCISE

GUWAHATI DIVISION-II

2ND FLOOR

GST BHAWAN

KEDAR ROAD

FANCY BAZAR

GUWAHATI-781001

4:THE SUPERINTENDENT

CENTRAL GOODS AND SERVICE TAX

RANGE II D

2ND FLOOR

GST BHAWAN

KEDAR ROAD

FANCY BAZAR

GUWAHATI-781001

5:GST COUNCIL

5TH FLOOR

TOWER-II

JEEVAN BHARTI BUILDING

JANPATH ROAD

CONNAUGHT PLACE

NEW DELHI-110001

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------------

Advocate for : DR. A SARAF

Advocate for : SC

GST appearing for THE UNION OF INDIA AND 4 ORS

Linked Case : WP(C)/780/2022

GNRC LIMITED

A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE

COMPANIES ACT

1956 HAVING ITS REGISTERED OFFICE AT GNRC COMPLEX

DISPUR

GUWAHATI-781006 AND IN THE PRESENT PROCEEDINGS REP. BY MR.

MADHURJYA BORAH

ONE OF THE DIRECTORS OF THE PETITIONER COMPANY.

VERSUS

THE UNION OF INDIA AND 4 ORS

REP. BY THE SECRETARY TO THE GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

NEW DELHI.

2:THE COMMISSIONER

CENTRAL GOODS AND SERVICE TAX

GUWAHATI

CENTRAL GST HQRS

GUWAHATI

GST BHAWAN

KEDAR ROAD

MACHKHOWA

GUWAHATI-781001.

3:THE ASSISTANT COMMISSIONER

GST AND CENTRAL EXCISE

GUWAHATI DIVISION-II

2ND FLOOR

GST BHAWAN

KEDAR ROAD

FANCY BAZAR

GUWAHATI-781001.

4:THE SUPERINTENDENT

CENTRAL GOODS AND SERVICE TAX

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RANGE-II D

2ND FLOOR

GST BHAWAN

KEDAR ROAD

FANCY BAZAR

GUWAHATI-781001.

5:GST COUNCIL

5TH FLOOR

TOWER-II

JEEVAN BHARTI BUILDING

JANPATH ROAD

CONNAUGHT PLACE

NEW DELHI-110001.

------------

Advocate for : DR. A SARAF

Advocate for : SC

GST appearing for THE UNION OF INDIA AND 4 ORS

BEFORE

HONOURABLE MR. JUSTICE ARUN DEV CHOUDHURY

JUDGMENT

Date : 19-06-2024

1. Heard Dr. A Saraf, learned Senior counsel assisted by Mr. P

Baruah, learned counsel for the petitioners. Also heard Mr. SC Keyal,

learned standing counsel for the GST.

2. These three writ petitions are proposed to be disposed of by

this common judgment and order, as the controversy is identical in nature

and between the same parties.

3. The challenge made in these proceedings are show cause

notices issued to the petitioners. Such show cause notices were issued

directing the petitioners to show cause as to why the claim of refund made

by the petitioners on the ground of exemption of GST available relating to

health care services, shall not be rejected. The further challenges are the

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orders of rejection of claim of refund on the ground that even without

charging the GST on the medicines and the consumable bills by the

petitioners, the rate of medicines supplied to the in-house-patients was at

the market price and therefore GST was included and the burden of tax has

been shifted to the consumer. The impugned show cause notices and the

impugned orders relatable to each of the writ petitions are recorded in a

tabular form below.

Writ

petitions

Show cause

notice &

date

Impugned orders

WP(C)

5398/2021

Show cause

notice dated

29.07.2021.

Order dated

21.08.2021 passed by

the Assistant

Commissioner, GST &

Central Excise,

Guwahati Division II.

WP(C)

7336/2021

Show cause

notice dated

29.07.2021

Deficiency memos

dated 20.10.2021.

WP(C)

780/2020

Show cause

notice dated

29.07.2021

Order dated

10.01.2022 passed by

the Assistant

Commissioner, GST &

Central Excise,

Guwahati.

WP(C) Show cause Order dated

Page No.# 8/17

5358/2022 notice dated

13.05.2022

01.07.2022 passed by

the Assistant

Commissioner, GST &

Central Excise,

Guwahati Division II.

4. The petitioner company own a hospital, which is engaged in

treatment of various illness and ailment. According to the petitioner, it

offers health care services.

5. The brief facts leading to issuance of show cause notice can be

recorded as follows:

I. It is the case of the petitioner that in course of

treatment, after admission in the hospital, the in-house-patient are

provided a comprehensive treatment, which includes rooms,

nursing care, medicines, consumable, implants etc.

II. The pharmacy department of the petitioners’ company

treated this transferred as taxable supply of goods to the in-house-

patients department and calculated output tax on transaction value

of the transfers of the inputs, namely, medicines and consumable

and such other items to the in-house-patients department without

issuance of any tax invoice of the said goods. According to the

petitioners, the said output tax so calculated was paid by declaring

this transaction in the same way as pharmacy sales.

III. It is further claim of the petitioners that the said goods

were not supplied to the recipients i.e. the patients but were rather

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used for providing treatment to the patients for which,

consideration from patients is received is in nature of health care

services and therefore, such health care service is exempted in

terms of entry SL No. 74(a) of the Notification No. 12/2017 Central

Tax (Rate) dated 28.06.2017.

IV. It is the further claim of the petitioners that the petitioners

do not charged any GST to the in-house-patients/ recipients. The

tax paid on such internal transfer to the in-house-patients

department was not liable to be paid but was paid in excess by

mistake due to ignorance, lack of clarity of provision of law.

However, on proper legal advice, the petitioners could know that

the services provided by the petitioners’ hospital to the in-house

patients was a composite supply of health services and was

exempted from payment of GST. Accordingly, the petitioners took

steps for filing of application for refund of the said taxes paid by

the petitioners under Section 54 of the CGST Act/ SGST Act read

with Rule 89 of the CGST Rules.

V. According to the petitioners, though GST was not billed

and charged to the recipients/ in-house-patients or recovered from

them, GST was calculated on open market value of goods as done

by the petitioners at the time of internal transfer to the in-house-

patients department. Accordingly, refund applications were filed.

However, after submission of refund applications, the petitioners’

received a deficiency memo seeking further documents in respect

of certain period. Subsequently, the petitioners through e-mail

submitted supporting documents required for further verification of

claim relating to tax payment and requested to process the refund

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application at an early date.

VI. According to the petitioners, such invoices and vouchers

could not be uploaded due to limited size of uploads allowed by

portal. According to the petitioners, the respondent No. 5

subsequently verbally directed the petitioners to give supporting

documents so as to verify the claim of the petitioners for refund of

excess tax paid.

VII. It is the case of the petitioners that said documents were

submitted by the petitioners and same were verified and no

infirmity whatsoever found.

VIII. Thereafter, impugned show cause notices were issued

directing the petitioners to show cause as to why the refund claim

should not be rejected on the ground that the exemption was given

only for services provided (health care services) and not for goods

or other items supplied and hence, the taxes paid for supplying the

medicines, consumable and other items to their in-house-patients

by the tax payer during the said period as per law and there was

no excess payment of tax.

IX. Another reason for refund was that even without charging

GST on the medicines and consumable bills by the petitioners, the

rate of medicines consumable supplied to the in-house-patient was

at the market price, hence, GST was included and burden of tax

has been passed to the consumers.

X. After receipt of the aforesaid show cause notices, by an

e-mail the petitioners prayed for two weeks time to reply to the

show cause notices.

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XI. It is the further case of the petitioners that as the

common portal was not allowed to make a request for extension of

time and therefore, the petitioners requested the authorities to

grant time till 03.09.2021 for filing detailed reply. However,

according to the petitioners, without considering the prayer of the

petitioners for grant of time for submitting reply to the show cause

notices, the petitioners were served with the impugned orders

rejecting the claim of refund of the petitioners with effect from.

XII. In the aforesaid impugned orders, it was recorded that the

petitioners neither replied to the show cause notice nor attended

the personal hearing fixed. It was a further ground stated in the

impugned order that the petitioners do not fall under SL No. 74(a)

of the Notification No. 12/2017 Central Tax (Rate) dated

28.06.2017 and therefore, there is no excess payment of tax.

XIII. In substance, it is the case of the petitioners that the

supply of medicines, consumable etc. as a composite supply of

heath care services and are exempted items in terms of notification

dated 28.06.2017.

6. Mr. Keyal, learned counsel for the respondent has raised an

objection as to the maintainability of the present writ petitions on the

ground of availability of on efficacious alternative remedy of appeal under

Section 107 of the Act, 2017.

7. Dr. Saraf learned counsel submits that the power of this Court

under Article 226 of the Constitution of India is plenary in nature and

cannot be limited by the provision of 107 of the CGST Act, 2017 inasmuch

as the exercise of power under Article 226 is a discretionary power.

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According to Dr. Saraf, serious question law is involved in this case as

argued by him and therefore, in such circumstances, the petitioner should

not be non-suited for having an alternative remedy. It is also his case that

this matter is pending since 2021 and therefore if the matter is relegated at

this stage to the appellate authority, same will be travesty of justice.

8. As a question of maintainability has been raised, let this court

first determine the maintainability issue.

9. Section 107 of the CGST Act, 2007 deals with appeals and

revisions. Section 107(1) is as follows:

“107. Appeals to Appellate Authority-(1) Any person aggrieved by any

decision or order passed under this Act or the State goods and Services Tax

Act or the Union Territory Goods and Services Tax Act by an adjudicating

authority may appeal to such appellate Authority as may be prescribed within

three months from the date on which the said decision or order is

communicated to such person.

10. Sub-section 1 of Section 107, thus makes it clear that an

appeal to the appellate authority is available against a decision/ order

passed under CGST Act by an adjudicating authority.

11. Sub-section 2 of Section 107 provides the following:

(2) The Commissioner may, on his own motion, or upon request from the

Commissioner of State tax or the Commissioner of Union Territory Tax, call

for and examine the record of any proceedings in which an adjudicating

authority has passed any decision or order under This Act or the State Goods

and Services Tax Act or the Union Territory Goods and Services Tax Act, for

the purpose of satisfying himself as to the legality or propriety of the said

decision or order and may, by order, direct any officer subordinate to him to

apply to the appellate authority within six months from the date of

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communication of the said decision or order for the determination of such

points arising out of the said decision or order as may be specified by the

Commissioner in his order.

12. Thus, Subsection 2 of Section 107 confers a revisional

power upon the commissioner in regard to legality and propriety of a

decision or an order passed by an adjudicating authority.

13. Section 2 (4) defines adjudicating authority, which is

quoted herein below:

“(4) “adjudicating authority” means any authority, appointed or authorised to

pass any order or decision under this Act, but does not include [Central

Board of Indirect Taxes and Customs], the Revisional Authority, the

Authority for Advance Ruling, the Appellate Authority “for Advance Ruling,

2

the Appellate Authority and the Authority referred to in sub-section (2)

of section 171”;

14. Section 103 of the Act deals with applicability of advance

ruling, which is quoted hereinbelow.

Section 103 – Applicability of advance ruling:

(1) The advance ruling pronounced by the Authority or the Appellate Authority

under this Chapter shall be binding only—

(a) on the applicant who had sought it in respect of any matter referred to in

sub-section (2) of section 97 for advance ruling;

(b) on the concerned officer or the jurisdictional officer in respect of the

applicant.

(1A) The advance ruling pronounced by the National Appellate Authority under

this Chapter shall be binding on—

(a) the applicants, being distinct persons, who had sought the ruling under

sub-section (1) of section 101B and all registered persons having the same

Permanent Account Number issued under the Income-tax Act, 1961; (43 of

1961.);

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(b) the concerned officers and the jurisdictional officers in respect of the

applicants referred to in clause (a) and the registered persons having the same

Permanent Account Number issued under the Income-tax Act, 1961. (43 of

1961).

(2) The advance ruling referred to in sub-section (1)

2

and sub-section (1A)

shall be binding unless the law, facts or circumstances supporting the original

advance ruling have changed.

15. That being so, an order passed by Assistant Commissioner,

GST & Central Excise, Guwahati shall be an appealable order under

Section 107 (1).

16. It is by now well settled that the power to issue

prerogative writs under Article 226 of the Constitution of India is

plenary in nature and is not limited by any other provision of the

Constitution. It is equally well settled that under Article 226 of the

Constitution of India, the High Court, is having discretion to entertain

or not to entertain a writ petition, having regard to the facts and

circumstances of the case. The availability of alternative remedy is a

self imposed restriction and normally High Court should not exercise

its discretion under writ jurisdiction, when an effective and efficacious

remedy is available. However, such alternative remedy shall not

operate as a bar, where the writ petition has been filed for

enforcement of any of the fundamental right or where there has been

violation of the principle of natural justice or where the orders or

proceedings are wholly without jurisdiction or the vires of an Act is

challenged. It is also well settled that the power under Article 226 of

the Constitution of India to issue a writ can be exercised not only for

the enforcement of the fundamental right but also for any other

purpose as well.

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17. It is also by now well settled that when a right is created

by a statute, which itself prescribes the remedy or procedure for

enforcing the right or liability, resort must be had to that particular

statutory remedy before invoking the discretionary remedy under

Article 226 of the Constitution of India. This Rule of exercise of

statutory remedy is a rule of policy and convenience and it is

discretionary.

18. The said principle also emphasises that in cases where

there are disputed question of facts, the High Court may decide not to

exercise it writ jurisdiction.

19. In the case in hand, it is clear that under the scheme of

Act there is provision for appeal and revision under Section 107. Thus,

rights of appeal and revision have statutorily been created. Such

provision of appeal prescribes the remedy and procedure for enforcing

right of an aggrieved party, who is aggrieved by an order passed by

an adjudicating authority. In the case in hand, the impugned orders

have been passed by the Assistant Commissioner, GST & Central Excise,

who is an adjudicating authority. That being the position, it is clear

that the petitioners are having an alternative efficacious remedy which

is statutorily been created.

20. The petitioners have not been able to satisfy and establish that

any of the fundamental right protected by Part-III of the Constitution of

India has been violated and therefore, the writ, as prayed for, is required to

be issued for enforcement for such a fundamental right of the petitioners.

21. It is the petitioners, who initiated the claim of refund.

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Admittedly show cause notices were issued to the petitioners and

admittedly the petitioners sought for time. However, it did not file any reply

to such show cause. Therefore, it cannot also be said that while passing the

impugned order, there has been a violation of principles of natural justice.

Though it has been alleged that the petitioners could not upload entire

documents in the portal and therefore could not file the objection within

time and could not seek extension of time, the same cannot be said to be

violation of principles of natural justice inasmuch as it is the case of the

petitioners that they were allowed to submit their documents physically

even otherwise, the allegation made by the petitioners as regards

deficiency in portal etc. requires a factual adjudication, which can very well

be dealt by the appellate authority under Section 107 of the Act and

therefore the petitioners have also failed to demonstrate that there has

been a violation of principles of natural justice in the adjudicating

proceeding.

22. The petitioners have also not alleged that the orders are wholly

without jurisdiction inasmuch it is the petitioners, who have raised the claim

of refund before the adjudicating authority.

23. There is also no challenge to the vires of any legislation in the

present batch of writ petitions. Therefore, on this count also, this court is

not inclined to exercise its discretion under Article 226 of the Constitution of

India.

24. Another aspect of the matter is the controversy raised. It is the

case of the petitioners that they are providers of health care services and

therefore it is exempted from payment of GST, though by mistake of law

they had already paid such GST. On the other hand, it is the case of the

authority that the petitioners had sold the medicines/ consumable to the

Order downloaded on 04-08-2025 10:06:59 PMPage No.# 17/17

inpatient at market price and thus the burden of tax is transferred to such

consumers. The other aspect of the controversy is that according to the

authority at the relevant point of time, the pharmacy of the petitioners’

hospital was registered as GNRC Pharmacy and food & Beverage Division

for supplying of goods (medicines and consumable) but not for health care

services and therefore, they are not entitled for such benefits. On the other

hand, it is the case of the petitioners that they have subsequently amended

their registration and therefore they are entitled for benefits. All these

disputes are question of facts and such disputes can be resolved

efficaciously by the appellate authority under Section 107 of the Act and

accordingly this court is not inclined to exercise its writ jurisdiction more

particularly to issue a writ of certiorari for setting aside and quashing the

impugned show cause notices and the impugned orders.

25. Accordingly the present batch of writ petitions stand dismissed,

with liberty to approach the appellate authority. The period spent in this

court shall not be counted for the calculation of prescribed period of time.

JUDGE

Comparing Assistant