Statutory Advance Ruling Mechanism Precludes Writ Jurisdiction for Classification and Tax Liability Disputes

The Petitioner, a provider of diagnostic services, filed writ petitions challenging a communication dated 25.03.2025 issued by Respondent No. 3, which opined that the Petitioner’s services are subject to GST at the rate of 18%

The Petitioner claimed these services should be exempt under the CGST Act

Concurrently, the Petitioner had filed applications for an Advance Ruling under Section 97 of the CGST Act on 28.08.2025 and 09.09.2025

However, the Authority for Advance Ruling (AAR) was unable to hear the matter due to an incomplete quorum caused by the non-availability of a central government member

During the proceedings, the Respondents informed the Court that a new member had been appointed, restoring the AAR’s functional quorum

1. Whether the High Court should exercise its extraordinary writ jurisdiction under Article 226 to determine taxability and exemptions when a specialized statutory body (AAR) is seized of the matter

2. Whether the diagnostic services rendered by the Petitioner are exigible to GST or entitled to exemptions under the CGST Act

Section 95 defines "advance ruling"

Sections 96 and 97 empower the AAR to determine questions regarding the classification of goods/services and the applicability of exemption notifications

Section 98 prescribes the adjudicatory procedure, including the requirement for a written ruling and a specific timeframe

Principle of exhaustion of alternative remedies, noting that where Parliament has created a specialized adjudicatory mechanism with requisite expertise, the High Court should be slow to intervene under Article 226 of the Constitution of India

The Court reasoned that since the Petitioner had already invoked the statutory mechanism under Section 97 of the CGST Act for the same issues raised in the writ petitions, the primary grievance was essentially the administrative delay caused by the lack of quorum

The Court observed that once the vacancy in the AAR was filled—as confirmed by the Respondents during the hearing—the impediment to the statutory remedy ceased to exist

The Court declined to examine the merits of the diagnostic services' taxability or the jurisdictional validity of the communication dated 25.03.2025, stating that doing so might prejudice the pending proceedings before the specialized statutory forum

It held that the AAR is the appropriate body with the requisite expertise to evaluate the factual and legal nuances of GST classification

The Court disposed of the writ petitions by directing the Petitioner to pursue its pending applications before the now-functional Authority for Advance Ruling. It ordered the AAR to consider the applications independently, strictly in accordance with the law, and without being influenced by the impugned communication dated 25.03.2025