The Hon’ble High Court of Madhya Pradesh in the case of M/s Study Metro Edu Consultant Pvt. Ltd. through its Authorised Signatory Abhishek Bajaj v. Joint Director and Others [Writ Petition No. 30467 of 2023, order dated August 5, 2025] held that the imprint of the Investigating Authority under Section 74(9) of the CGST Act does not bind the adjudicating authority; services rendered to foreign universities should be adjudicated independently under the proper classification and place of supply rules, and the petitioner’s writ petition is dismissed.
Facts:
M/s Study Metro Edu Consultant Pvt. Ltd., (“the Petitioner”) a company registered under Companies Act, based in Indore, providing student recruitment/student-advisory services to foreign universities via its Software-as-a-Service (SaaS) platform.
The Petitioner contended that its services rendered to foreign universities qualify as “export of services” under Section 2(6), the IGST Act, 2017 and thus are not liable to GST. They had discharged GST on consideration received from students and no GST liability arises on services to the universities.
The Respondents contend that, the Petitioner acted as an intermediary agent, not rendering direct export services and that place of supply lies in India and that the findings of Investigating Authority are prima facie only and adjudication must be independent under Section 74(9). They also rely on Circular No. 31/05/2018-GST which clarifies that investigatory and adjudicatory roles are distinct, and that adjudication must be by jurisdictional Executive Officer, but can be by higher rank upon request.
The Petitioner filed a writ petition in the High Court challenging the notice and seeking relief.
Issues:
- Whether the Petitioner’s services qualify as export of services or intermediary services under IGST Act?
- Whether findings recorded in the show-cause notice by the Investigating Authority are binding on the adjudicating authority?
Held:
The Hon’ble Madhya Pradesh High Court in Writ Petition No. 30467 of 2023 held as under:
- Observed that, classification of services as to export services or intermediary services, and place of supply are factual/ legal questions to be independently determined by the adjudicating authority and that the Court will not pre-determine these issues in a Writ Petition.
- Held that, Writ Petition against a valid show-cause notice under Section 74 CGST Act is not maintainable in absence of lack of jurisdiction or mala fide and the proper forum is adjudication, not writ jurisdiction.
- Observed that, findings by the Investigating Authority (Joint Director, DGGSTI) are only prima facie and they do not bind the adjudicating authority under Section 74(9).
- Held that, there is no basis for interference and dismissed the writ petition and ordered for adjudication to proceed independently and fairly.
Our Comments:
In the case of Siemens Limited v. State of Maharashtra & Others [(2006) 12 SCC 33], the Supreme Court entertained the writ petition since the show cause notice was found to be premeditated and jurisdictionally flawed, rendering any further adjudication an empty formality. The factual context there demonstrated that the authority had already predetermined the issue before issuing the notice.
In contrast, in the present case before the Madhya Pradesh High Court, the Petitioner challenged the initiation of proceedings at the stage of investigation and show cause, without demonstrating lack of jurisdiction or premeditation. The High Court therefore dismissed the writ petition, holding that the statutory scheme required the Petitioner to initiate proceedings and exhaust remedies within the GST framework.
Relevant Provisions:
Section 74(9) of the CGST Act, 2017:
74. Determination of tax pertaining to the period up to Financial Year 2023-24,not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willful- misstatement or suppression of facts.-
“(9) The proper officer shall, after considering the representation, if any, made by the person chargeable with tax, determine the amount of tax, interest and penalty due from such person and issue an order.”
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