M/S Hotel Hajr Th.Its Proprietor vs. Union Territory Of J And K (Home) And Others

Facts

The petitioner, M/s Hotel Hajr, through its proprietor, filed a writ petition before the High Court of Jammu & Kashmir and Ladakh at Srinagar. The petition concerns the Goods and Services Tax (GST) liability on rental income received by the hotel from the Department of Home, Government of Jammu and Kashmir, for accommodation hired by the department. The respondent is the Union Territory of J&K and others. The matter was brought before the court on 16.09.2026. The learned Senior Additional Advocate General, representing the respondents, submitted that the issue is no longer res integra and is covered by a previous judgment in WP(C) No. 963/2023, titled Haji Khazir Mohd. Dar & Ors. v. U.T. of J&K & Ors., pronounced on 07.07.2025.

Held

The Court held that the petitioner is liable to pay GST on the rental income received from the Department of Home for hotel accommodation hired by the department. Consequently, the petitioner is legally bound to seek appropriate registration under the CGST/Jammu and Kashmir GST Act and deposit the service tax at the prescribed rate with the GST Authorities. The Department of Home is liable to pay the prescribed rate of GST in addition to the rent payable to the petitioner. The Court also directed the Department of Home to constitute a Rent Assessment Committee to revise rental rates for accommodation hired over the years. The Department of Home was directed to start paying GST from August 2025, and the petitioner was to complete their registration process by 31st July 2025 to enable them to collect and deposit GST. The petition was disposed of on these terms, following the precedent set in WP(C) No. 963/2023.

Key Issues

1. Whether the petitioner is liable to pay GST on the rental income received from the Department of Home for hotel accommodation hired by the department, and consequently, whether the petitioner is bound to seek registration under the CGST/Jammu and Kashmir GST Act and deposit the service tax. (This issue turns on the interpretation and applicability of the CGST/Jammu and Kashmir GST Act concerning rental income from government departments). Petitioner's contention: Not explicitly recorded, but the filing of the writ petition suggests a dispute regarding GST liability or the process of payment. Respondent's contention: The issue is squarely covered by the judgment in WP(C) No. 963/2023, which held that petitioners are liable to pay GST on rental income and must seek registration. The Department of Home is liable to pay the prescribed rate of GST in addition to the rent.