Madras High Court Stays Quashing Of Circular Regarding Exemption By RWA
The Court stayed the order noting that the government's circular about RWAs had wider ramifications
The Madras High Court has stayed an order of the single-judge court, which quashed the circular notification No.25/2012-ST with effect from 1 July 2012 regarding exemption by a Resident Welfare Association (RWA).
The matter titled Union of India & Ors v M/s TVH Lumbini Square Owners Association was placed before the Division Bench of the High Court of Madras, comprising Justices T.S. Sivagnanam and Sathi Kumar Sukumara Kurup.
The crux of the petition was the exemption to service by a Resident Welfare Association (RWA) to its own members by way of reimbursement of charges or share of contribution up to ₹5,000 per month per member for sourcing of goods or services from a third person for the common use of its members which was notified through the notification No.25/2012-ST with effect from 1 July 2012.
The Appellant – Authorities had challenged the single judge's order, which quashed the proceedings of the Tamil Nadu Authority for Advanced Ruling as well as the circular notification issued by the Department
The Court admitted the appeal as the quashing required verification. The Court clarified that the exemption was intended for the middle class and not for the owners of luxury apartments. It pointed out the legislative intention through the budget speech 2012-13 where the exemption for the monthly charges payable by a member to housing society was raised from ₹3,000 to ₹5,000 and therefore, no exemption would be applicable when the monthly contribution exceeds ₹7,500.
The Court noted that the circular had wider ramifications and therefore, decided to stay the order passed by the single-judge court.