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SGST High Court Cases

GST - Entry 5(b) and 6(a) of Schedule II and Entry 5 of Schedule III of the CGST Act, 2017 - Sale of incomplete building on "as is where is" basis, Refund claim of GST paid, Works Contract, Construction Services - Rejection of refund claim on the ground that the transaction of purchase of a partly constructed commercial mall from the 4th respondent-Liquidator is covered under Entry 5(b) of Schedule II of the CGST Act and therefore, subject to GST - Whether the transaction of purchase of a partly constructed commercial building is liable to GST under Entry 5(b) of Schedule II or the transaction would fall under Entry 5 of Schedule III of the CGST Act – HELD - From analysis of provisions of the CGST Act and previous judicial precedents on the levy of tax on works contracts and construction services, it is observed that for Entry 5(b) of Schedule II to be applicable, there should be a contract for providing construction services between the parties. However, in the present case, the sale of the partly constructed mall by the Liquidator to the petitioner was on an "as is where is" basis without any further construction services to be provided by the Liquidator - the factum of supply under the GST law would be initiated only once an agreement is entered into between the supplier and the recipient and such agreement is for consideration. Since there was no such agreement for construction services in the present case, the transaction would fall under Entry 5 of Schedule III and would be neither a supply of goods nor a supply of services - if the contract is one for sale of land or sale of building without there being any construction services involved or works contract services being involved, the question of attracting GST will not apply - if the agreement or sale deed does not have a goods or service element, the question of the respondent authorities stating that service element of completion of a building should get taxed in the hands of the liquidator and be borne by the petitioner, is completely contrary to the scope of the tax entries. Insisting on taxation of a building on the grounds that completion certificate is yet to be received will not reflect the true nature of the transaction being undertaken. The Revenue authorities were clearly wrong in fastening the liability on the liquidator and the incidence on the petitioner as the said services were never rendered through the agreement nor it was in contemplation - the impugned order rejecting the refund claim of the petitioner is illegal, arbitrary and without jurisdiction or authority of law as the transaction in question is neither a supply of goods nor a supply of services under the GST law - the impugned order rejecting the refund claim of the petitioner is quashed and the respondents are directed to refund the GST amount along with applicable interest to the petitioner – The writ petition is allowed
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