Sri Venkataswamy Reddy vs. State Of Karnataka

Facts

The petitioner, represented by their General Power of Attorney holder, M/s. Keerthi Estates Pvt. Ltd., filed a writ petition challenging a demand notice dated November 29, 2019, issued by the Joint Director, Town Planning (North), Bruhat Bangalore Mahanagara Palike (BBMP). The demand notice included Rs. 59,09,249/- towards ground rent, Rs. 10,63,665/- as GST at 18% on the ground rent, and Rs. 2,07,992/- towards scrutiny fee. The petitioner sought to quash this demand notice, specifically the components related to ground rent and GST. The State of Karnataka and the BBMP were the respondents. The petitioner's counsel argued the case, and the respondents' counsel were also heard.

Held

The Court noted that the present writ petition raised identical issues to those considered in W.P.No.4601/2020 and connected cases, which were disposed of by an order dated August 4, 2021. Consequently, the Court decided to dispose of this writ petition by following the order passed in the aforementioned batch of cases. The specific findings, reasoning, and ratio decidendi from the August 4, 2021 order, which would have addressed the legality of the GST demand on ground rent and other charges, are not detailed in this judgment. The operative directions would have been those prescribed in the earlier order, likely involving a remand or specific relief granted to the petitioner based on the findings in the batch cases.

Key Issues

1. Whether the demand for Goods and Services Tax (GST) at 18% on the ground rent is legally sustainable, considering the nature of the transaction and the relevant GST provisions. The petitioner argued that the demand for GST on ground rent is impermissible as it is not a supply of goods or services that attracts GST. They contended that ground rent is a statutory charge or fee, not a consideration for a taxable supply. The petitioner likely relied on principles of taxation and the definition of 'supply' under the GST Act. The respondents, represented by the BBMP, likely argued that the ground rent, when collected, constitutes a taxable supply, and therefore, GST is leviable. They may have contended that the BBMP is providing a service by allotting or permitting the use of land, for which ground rent is charged, and GST is applicable on such consideration.