Smt Lalitha S vs. The Deputy Commissioner

Held

The Court held that immovable property (land and structures) cannot be construed as 'goods' or 'services' under the Central Goods and Service Tax Act, 2017. The acquisition of property by the State through eminent domain is an expropriation, not a 'supply of goods or service', and therefore, GST is not applicable. The deduction was deemed an arbitrary and colourable exercise of power.

Facts

The petitioner's land, along with a structure, was acquired by the Union of India for widening a National Highway. The Special Land Acquisition Officer deducted 18% GST (Rs.1,14,815.29) from the compensation amount of Rs.8,89,035.20 payable to the petitioner. The petitioner challenged this deduction, contending that land acquisition does not constitute a sale of goods or provision of service under the GST Act.

Key Issues

Whether GST is leviable on compensation paid for the compulsory acquisition of land and structures by the State, and whether such acquisition constitutes a 'supply of goods or service' under the GST Act.