The Supreme Court has dismissed special leave petitions challenging the Delhi High Court’s decision to leave the dispute over the GST liability of a private laboratory’s diagnostic services to the Authority for Advance Ruling (AAR).

The bench of Justice Anil Kshetarpal and Justice Amit Mahajan observed that Chapter XVII of the CGST Act establishes a statutory framework for advance rulings.

“We do not find any good ground to entertain these petitions,” the Supreme Court stated, dismissing the special leave petitions and disposing of any pending applications. 

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The dismissal leaves undisturbed the High Court’s decision requiring the company to pursue the statutory advance ruling process. The Supreme Court’s order does not determine whether the diagnostic services are taxable at 18% GST or eligible for exemption.

The dispute arose from a communication dated March 25, 2025, issued by the Delhi GST authorities, expressing the view that the diagnostic services provided by Hemogenomics were taxable at 18% GST.

The company challenged the communication before the Delhi High Court, contending that it adversely affected its tax position. It also argued that the communication lacked jurisdiction and had no statutory basis under either the Central Goods and Services Tax Act or the Delhi Goods and Services Tax Act.

Alongside its challenge, the company sought directions for the disposal of its applications filed under Section 97 of the CGST Act, through which it had requested an advance ruling on the taxability of its services.

The central issue was whether the services attracted GST or qualified for exemption. However, the High Court first considered whether that question should be decided through writ proceedings when the legislation provided a specific forum for obtaining an advance ruling.

The company’s pending advance ruling applications could not be decided because the Delhi AAR lacked the required quorum.

This institutional vacancy left the taxpayer unable to obtain a determination from the statutory forum. During an earlier hearing, the High Court sought instructions from the Government regarding the vacancy and the steps necessary to restore the Authority’s functioning.

At the final hearing, counsel for the Union informed the Court that the appointment of the Union Government’s member to the Delhi AAR would be issued that day.

The Court was informed that Vivek Gupta, Additional Commissioner (Legal), CGST Delhi North Commissionerate, had been appointed as a member of the Delhi AAR. The appointment removed the quorum-related obstacle to the consideration of pending applications.

The Court noted that Sections 95 to 98 provide the mechanism for determining questions concerning the classification of goods or services, the applicability of exemption notifications and liability to pay GST.

Since the company’s questions fell within that framework, the High Court declined to adjudicate the substantive tax dispute in its extraordinary writ jurisdiction once the statutory forum became functional.

The High Court also declined to examine the company’s objection to the legality of the March 25, 2025 communication. It considered that findings on the communication’s legality or correctness could prejudice the proceedings pending before the AAR.

Accordingly, all questions of fact and law were left open for consideration by the statutory authority.

The High Court directed the AAR to consider the company’s pending applications independently, in accordance with law and without being influenced by the departmental communication declaring the services taxable at 18%.

The Court also expressed the expectation that the applications would be decided expeditiously following restoration of the required quorum.

It clarified that a party aggrieved by the eventual advance ruling could pursue the statutory appellate remedies available under the CGST Act.

The Supreme Court’s brief order records no substantive finding on the classification of the diagnostic services or the applicability of a GST exemption. Its decision was confined to declining to entertain the challenge to the High Court judgment.

The distinction matters: dismissal of the special leave petitions cannot be reported as a ruling that the company’s diagnostic services necessarily attract 18% GST. The High Court had expressly left that question open for independent determination by the AAR.

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