K N Murthy vs. Surender Bantia , Premraj Surender Bantia

Held

The Court held that the omission to include the rent for November 2018 in the order was a patent error on the part of the Court below and that the petitioners are indeed entitled to the rent for that month. Regarding the GST liability, the Court affirmed that the liability of tenants to pay GST on rents exceeding Rs. 20 Lakhs per annum is settled law. With the admitted monthly rent being Rs. 3,50,462/-, the annual rent exceeds the threshold, and the GST liability is fastened on the tenant under the GST Act, 2017. The Court directed the respondents/tenants to pay GST at 18% on the monthly rent of Rs. 3,50,462/- to the Competent Authority under the GST Act, 2017. Arrears of GST for the period from November 2018 till the date of the order were to be deposited within four weeks, along with the rent for November 2018. Failure to comply would result in the respondents' defence being struck off. The petitioners were directed to issue invoices for rents and GST, and the deposited amounts were permitted to be withdrawn by the petitioners for transmission to the competent authority.

Facts

The petitioners filed a Civil Revision Petition challenging an order dated 02.12.2019 passed by the IX Additional Chief Judge, City Civil Court, Hyderabad, in IA.No.451 of 2019 in OS.No.230 of 2019. The petitioners contended that the Court below, while directing the respondents/tenants to pay rents from December 2018, had inadvertently omitted to include rent for November 2018, despite acknowledging their entitlement to it in paragraph 5 of the order. Furthermore, the petitioners argued that the respondents, as tenants, had a liability to pay Goods and Services Tax (GST) on the rents, which the Court below failed to address.

Key Issues

1. Whether the Court below committed a patent error by omitting to direct the payment of rent for November 2018, despite acknowledging the petitioners' entitlement to it under Order 15A of the Civil Procedure Code? 2. Whether the respondents/tenants are liable to pay Goods and Services Tax (GST) on the monthly rent, and if so, to what extent and how should this liability be discharged? Petitioner's Arguments: The petitioners argued that the omission of rent for November 2018 was a patent error by the Court below. They further contended that the liability to pay GST on rents exceeding Rs. 20 Lakhs per annum rests with the tenant, citing settled law. Given the monthly rent of Rs. 3,50,462/-, the annual rent clearly exceeds the threshold, making the tenant liable for GST at 18%. Revenue/State's Arguments: The judgment does not record any specific arguments made by the revenue or state in opposition to the petitioners' contentions.