2026-VIL-753-KAR
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SGST High Court Cases

GST - Applicability of GST on compensation for land acquisition - Petitioner's land was acquired by Union of India for road widening and compensation paid. The respondent deducted 18% GST from the compensation amount. The petitioner challenged this deduction contending that acquisition of land cannot be construed as sale of goods or provision of services and therefore GST provisions are not applicable - Whether acquisition of land and structure by the State would fall within the definition of supply of goods or services under the GST Act - HELD - An immovable property cannot at any stretch of imagination be construed as goods. There is neither supply of goods nor services but an expropriation of property of a citizen using statutory power. The petitioner has neither sold any goods nor provided any service in surrendering property - Even if a wide latitude is given to the words supply of goods or service, the acquisition of property by the State in exercise of its power of eminent domain cannot fall within the definition of supply of goods or services. The respondents failed to explain under what provision of the GST Act the acquisition of land or structure would amount to supply of goods or provision of service - The High Court of Judicature at Madras has held in a similar matter that no levy of GST is applicable on compensation amount paid to the petitioner. The respondents have acted in excess of their power in deducting GST from compensation payable to the petitioner - The award deducting GST from compensation is quashed. Respondent is directed to refund the deducted GST with interest – The petition is allowed
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