M/S Chirantan Enterprises LLP Through Partner Mr. Prem Sethia vs. Commissioner CGST And Central Excise

Held

The Court held that the petitioner was required to satisfy the adjudicating authority whether the building in question qualified for the definition of a 'plant' to be eligible for ITC. The Court noted that the petitioner, instead of submitting necessary documents and appearing for a personal hearing, directly approached the High Court. The Apex Court's decision in M/s Safari Retreats Private Ltd. was discussed, emphasizing that the determination of whether a building qualifies as a 'plant' requires a fact-finding inquiry on a case-to-case basis. Since a final order has been passed, the petitioner has the remedy to file an appeal before the appellate authority. The Court dismissed the writ petition with liberty to the petitioner to file an appeal, where they can submit all necessary documents and rely on the Apex Court's judgment.

Facts

The petitioner, M/s Chirantan Enterprises LLP, engaged in construction and leasing of non-residential property, challenged a show-cause notice dated July 11, 2023, issued by the Commissioner CGST and Central Excise. The petitioner availed Input Tax Credit (ITC) on goods purchased for constructing a school building to be leased to M/s Shishukunj Knowledge Society. Following summons, the petitioner reversed ITC amounting to Rs. 6,68,44,378/- for financial years 2019-20, 2020-21, and 2021-22 under protest. Subsequently, a letter was issued for penalty and interest. The petitioner's CEO's statement was recorded, and a reply was submitted to the show-cause notice. The petitioner filed a writ petition, contending entitlement to ITC under Section 17(5)(c) & (d) of the CGST Act. During the proceedings, an adjudication order dated September 30, 2024, was passed, and the respondent argued that the petitioner now has a remedy of appeal.

Key Issues

1. Whether the petitioner is entitled to avail Input Tax Credit (ITC) on goods and services used for the construction of a building intended for lease, in light of Section 17(5)(c) and (d) of the CGST Act? Petitioner's contention: The petitioner argued that they are entitled to ITC under Section 17(5)(c) & (d) of the CGST Act, relying on the Apex Court's decision in M/s Safari Retreats Private Ltd. They contended that the building constructed was for leasing out for running a school, thus qualifying for ITC. Respondent's contention: The respondent submitted that a final adjudication order had been passed, and the petitioner has a statutory remedy to file an appeal against it. They argued that the writ petition is therefore liable to be dismissed. The respondent also highlighted that the petitioner failed to appear for personal hearing before the adjudicating authority and did not provide necessary documents to establish the building's functionality as a 'plant'.