SLP Dismissed, Electricity Regulatory Commission Held as Tribunal | SC

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Electricity Regulatory Commission Tribunal SC

Case Details: Additional Director Directorate General of GST Intelligence (DGGI) vs. Central Electricity Regulatory Commission - [2025] 176 taxmann.com 960 (SC)

Judiciary and Counsel Details

  • J.B. Pardiwala & R. Mahadevan, JJ.
  • Rupesh Kumar, Sr Adv., Piyush Beriwal, Ms. Agrima Singh, Rajat Vaishnaw, S. Vijay Adithya, Mudit B., Abhyudey, Mukesh Verma – A, Advs., Gurmeet Singh Makker, AOR & S. Dwarakanath, A.S.G. for the Petitioner
  • Ajay Vohra, Sr Adv., Shammi Kapoor, Vishal Kumar, Advs.& Anant Mann, AOR for the Respondent

Facts of the Case

The petitioners, namely the Central Electricity Regulatory Commission (CERC) and the Delhi Electricity Regulatory Commission (DERC), received show-cause notices from the jurisdictional officer under GST, seeking to levy CGST and IGST on fees collected in the discharge of their regulatory functions. The revenue authorities contended that while no GST is leviable on transmission or distribution of electricity, the functions performed by CERC and DERC were distinct from such transmission or distribution and fell under the category of ‘support services’ provided to electricity transmission and distribution service providers. The petitioners submitted that both CERC and DERC act as a ‘Tribunal’ with all trappings of a court and perform statutory regulatory functions rather than engaging in trade or commerce. They contended that functions such as regulating tariffs, interstate transmission of electricity, and issuing licenses could not be construed as activities undertaken in furtherance of business. The High Court upheld these contentions, holding that the Commissions act as a ‘Tribunal’ and that the show cause notices issued to them for the levy of tax on fees collected in discharge of regulatory functions were unsustainable. The matter was accordingly placed before the Supreme Court on a Special Leave Petition (SLP) against the High Court’s order.

Supreme Court Held

The Hon’ble Supreme Court held that the High Court correctly concluded that an electricity regulatory commission acts as a ‘Tribunal’ and that regulation of tariff, inter-State transmission of electricity, or issuance of licenses cannot be considered activities undertaken in furtherance of business. The Court affirmed that the show cause notices issued to CERC and DERC for the levy of tax on fees received in discharge of their regulatory functions were not sustainable. The SLP filed against the High Court order was dismissed, as no valid ground existed to interfere with the impugned decision.

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied