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In the instant case, in its earlier order this court held that If the principal supply of transmission and distribution of electricity is exempt from levy of service tax, the tax liability of the related services shall have to be determined accordingly. Since the judgment delivered by this High Court is now a subject matter of challenge before the Supreme Court and the Supreme Court has granted leave to appeal, the writ applicant as of abundant caution started obtaining undertaking from the consumers as regards the service tax and GST. The writ applicant is of the view that in the event, if the Union succeeds before the Supreme Court then it will have to deduct service tax and/or GST and pay the same to the Government. The Ombudsman is of the view that the writ applicant as a generation, transmission and distribution of electricity company cannot compel the consumers to furnish such undertaking. Notice issued to respondent.

GST on Electricity charges —–— The applicant prayed for striking down and declaring the clarification issued in para 4 (1) of the impugned Circular No.34/8/2018-GST dated 1.3.2018 as ultra vires the provisions of the Act and to declare that charges such as application fee, meter rent, testing fee, etc collected by the Petitioners towards activities directly and closely connected with the transmission or distribution for electricity are exempt from tax under Entry 25 of Notification No.12/2017 dated 28.6.2017. The court observed that the applicant in first round of litigation was successful to get a declaration that the services provided by it, are in the nature of composite supply and therefore, in view of the provisions of clause (a) of Section 8 of the Act, the tax liability thereof has to be determined by treating such composite supply as a supply of the principal supply of transmission and distribution of electricity. If the principal supply of transmission and distribution of electricity is exempt from levy of service tax, the tax liability of the related services shall have to be determined accordingly. The department appealed against the same, which is pending before the Supreme Court. The applicant as of abundant caution started obtaining undertaking from the consumers as regards the service tax and GST. One of the consumers objected to this action on the part of the writ applicant in obtaining such undertaking. The matter was carried before the Consumer Grievance Redressal Forum, Ahmedabad. The Consumer Grievance Redressal Forum passed an order dated 30.04.2021 holding that it is permissible for the writ applicant to obtain such undertaking from its consumers. The Ombudsman in its order held that the writ applicant as a generation, transmission and distribution of electricity company cannot compel the consumers to furnish such undertaking. A review application was also filed, which came to be rejected by the Ombudsman. These orders are subject matter of challenge in this writ application.

Held that:- The Hon’ble High Court issued Notice returnable on 06.07.2022.