M/S Mangalmay Foundation Trust vs. State Of U.P. And 2 Others

Held

The Court held that the demand for GST is a statutory liability and the Greater NOIDA Authority is within its legal right to pass on this liability to the allottee. The Court found no legal infirmity in the demand. Regarding the petitioner's claims of no delay and exemption, the Court stated that these might involve disputed facts better adjudicated before an appropriate authority or court. The Court explicitly noted that there was no cause shown or basis disclosed in the present petition to enter into the issue of exemption. Consequently, the Court declined to interfere under its extraordinary jurisdiction. The petition was disposed of with a direction for the petitioner to deposit the defaulted amount with interest within one month, failing which no coercive measures would be adopted. The deposit would remain subject to any statutory proceedings initiated by the petitioner.

Facts

The petitioner, M/s Mangalmay Foundation Trust, a charitable trust, challenged a demand notice dated January 20, 2023, issued by the Greater NOIDA Authority. The notice demanded Rs. 15,58,337.40, representing GST on lease rental amounts, along with interest. The petitioner contended that they had paid the full lease rent for the allotted land and that no demand for GST or interest was raised previously, despite their repeated requests for a No Dues Certificate. They also argued that they had not caused any delay in GST payment and, alternatively, claimed exemption under a specific notification. The Greater NOIDA Authority submitted that GST is a statutory liability, and any initial delay in passing it on to the allottee was inadvertent. They asserted their right to recover this liability from the petitioner. The Standing Counsel for the State noted that the exemption claim was not properly raised in the petition.

Key Issues

1. Whether the Greater NOIDA Authority is legally entitled to pass on the statutory GST liability, including interest, to the petitioner for the lease rental amounts, and if so, under which provision of law? 2. Whether the petitioner is entitled to exemption from GST payment on the lease rental amounts under any applicable notification, and if so, what is the scope of such exemption? Petitioner's arguments: The petitioner argued that they are a charitable trust and had paid the full lease rent. They contended that no GST demand was raised at the time of payment or subsequently, despite their requests for a No Dues Certificate. They also claimed that they had not caused any delay in GST payment and feebly submitted that they might be exempted from GST under a notification. Respondent's arguments: The Greater NOIDA Authority argued that GST is a statutory liability and they are legally bound to pass it on to the allottee, even if there was an initial inadvertent delay. The Standing Counsel for the State argued that the petitioner had not made any specific prayer or ground for exemption in the present petition.