M/S Radiant Enterprises Private Limited And Another vs. Joint Commissioner, CGST And Cx And Others

Held

The Court held that the Appellate Authority's decision regarding the taxability of the building purchase was well-reasoned and based on cogent grounds. The Court noted that the Appellate Authority had extensively discussed the issue, particularly in paragraph 7 of its order. The Appellate Authority found that the petitioners had failed to submit essential documents, namely the sale agreement and the completion certificate, which were necessary to establish that the entire consideration for the commercial building was paid after the issuance of the completion certificate. Without these documents, the petitioners could not substantiate their claim that the transaction fell under the exclusion provided in Schedule III of the CGST Act. Furthermore, the invoice indicated the purchase of a 'Prefabricated Building' under HSN Code 9406, suggesting a supply of goods, which was not specified as an excluded activity under Section 7(2)(a) of the CGST Act. The Court found no jurisdictional error, violation of natural justice, or procedural irregularity in the impugned order, and therefore, declined to interfere. The writ petition was dismissed.

Facts

The petitioners, M/s. Radiant Enterprises Private Limited & Anr., challenged an order dated March 31, 2021, passed by the Joint Commissioner, CGST & CX (Appeal-I). The Appellate Authority had ruled against the petitioners on the issue of whether a building purchased by them from M/s. Eveready Industries Limited was taxable under the CGST Act. While the Appellate Authority ruled in favour of the petitioners on a separate issue concerning refund claims for excess tax payment, this writ petition focuses on the adverse finding regarding the building purchase. The petitioners argued that the purchase was neither a supply of goods nor services and thus outside GST ambit, citing Schedule III of the CGST Act. However, the Appellate Authority found that M/s. Eveready Industries Limited had charged and collected GST at 18% on the sale of the building, and the petitioners had not provided sufficient documentation, such as the sale agreement and completion certificate, to substantiate their claim that the transaction was outside the scope of supply.

Key Issues

1. Whether the purchase of a building by the petitioners from M/s. Eveready Industries Limited constitutes a supply of goods or services taxable under the CGST Act, 2017, in light of Schedule III and Section 7(2) of the Act? 2. Whether the Appellate Authority erred in holding that the transaction was taxable despite the petitioners' contention that it was outside the scope of supply as per Schedule III? Petitioner's Arguments: The petitioners contended that the building purchase was neither a supply of goods nor services and therefore should be outside the ambit of GST, citing Schedule III of the CGST Act. They argued that the transaction was covered by paragraph 5 of Schedule III, which excludes the sale of land and, subject to certain conditions, the sale of a building from the definition of supply. Revenue's Arguments: The revenue, represented by the CTST Authority and Respondent No. 3, argued that the definition of supply under Section 7 of the CGST/WBGST Act, 2017, is broad and includes all forms of supply for consideration. They relied on the Appellate Authority's finding that the petitioners failed to provide crucial documents like the sale agreement and completion certificate to prove that the building was sold after the issuance of the completion certificate, which would have brought it under the exclusion in Schedule III. The revenue also pointed out that the invoice indicated the purchase of a 'Prefabricated Building' classifiable under HSN Code 9406, suggesting it was a supply of goods.