SLP Dismissed, Electricity Regulatory Commission Held as 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

• Central Electricity Regulatory Commission v. Additional Director Directorate General of GST Intelligence (DGGI) [2025] 170 taxmann.com 406/108 GST 625/ 95 GSTL 277 (Delhi) (Para 2) – SLP dismissed