Shraddha Tiwari vs. Bhopal Development Authority,Bhopal
Held
The Court held that the sale of developed land is not taxable under GST. The reasoning was based on the clarification provided in Circular No. 187/3/2022-GST dated 03.08.2022, issued by the Government of India, Ministry of Finance, Department of Revenue. This circular, referencing Serial No. (5) of Schedule III of the Central Goods and Services Tax Act, 2017, clarified that the sale of land, whether as-is or after development such as levelling or laying drainage lines, is considered a sale of land and is neither a supply of goods nor a supply of services. Consequently, it does not attract GST. The Court directed the Bhopal Development Authority to reconsider the levy of GST on the sale of developed plots to the petitioners in light of this circular. The impugned orders dated 23.11.2021 and 09.12.2021 were to be disregarded during this reconsideration. The exercise was to be completed within 60 days.
Facts
The petitioners, purchasers of developed land from Bhopal Development Authority (BDA), challenged land allotment notices dated 23.11.2021 and 09.12.2021, which levied GST at 12% on the sale consideration. During the pendency of the writ petition, a circular dated 03.08.2022 from the Government of India, Ministry of Finance, Department of Revenue, was brought to the Court's attention. This circular clarified that the sale of land, even if developed (levelling, drainage lines, etc.), is covered by Schedule III of the CGST Act, 2017, and therefore does not attract GST. The circular also noted that services for development of land would attract GST, but not the sale of the developed land itself.
Key Issues
1. Whether the sale of developed land by the Bhopal Development Authority to the petitioners is taxable under GST, considering the provisions of Schedule III of the Central Goods and Services Tax Act, 2017. Petitioner's contention: The petitioners argued that the sale of developed land is essentially a sale of land, which is explicitly excluded from the definition of supply under Schedule III of the CGST Act, 2017, and thus not taxable. They relied on the principle that sale of land is not a taxable event under GST. Revenue/State's contention: The respondents, including the Bhopal Development Authority and the CGST Commissioner, did not explicitly argue against the petitioners' position but brought to the Court's notice the Government of India's circular dated 03.08.2022, which provided clarification on the matter.
Sections Cited
Schedule III, Central Goods and Services Tax Act, 2017
AI-generated summary — verify with the full judgment below
IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR BEFORE HON'BLE SHRI JUSTICE SHEEL NAGU & HON'BLE SHRI JUSTICE PRAKASH CHANDRA GUPTA ON THE 27th OF OCTOBER, 2022 WRIT PETITION No. 257 of 2022 BETWEEN:-
SHRADDHA TIWARI D/O SURESH KUMAR TIWARI OCCUPATION: HOMEMAKER AGE ADULT R/O H.85, NARMADA ROAD NEAR BADSHAH HALWAI MANDIR, TAGORE NAGAR, GWARIGHAT BHATAULI, GWARIGHAT JABALPUR
(MADHYA PRADESH)
SURENDRA KUMAR SHUKLA S/O R S SHUKLA OCCUPATION: RETIRED, AGE- ADULT R/O H. NO.48/3A, SAKET NAGAR BHOPAL (MADHYA PRADESH)
DEVSHREE SHUKLA W/O CHANDESH SHUKLA OCCUPATION: DOCTOR, AGE ADULT R/O H.NO. 48/3A, SAKET NAGAR BHOPAL (MADHYA PRADESH)
ARCHNA DIXIT W/O SHRI RACHIT DIXIT OCCUPATION: BUSINESS, AGE ADULT, R/O 659B, STATION ROAD MADAN MAHAL RANITAL JABALPUR (MADHYA PRADESH)
DEEPIKA SHUKLA W/O PRAVEEN KUMAR SHUKLA OCCUPATION: HOMEMAKER, AGE ADULT, ADDRESS R/O H.NO. 1132, NEAR HB COLLEGE, VIJAY NAGAR JABALPUR (MADHYA PRADESH) .....PETITIONERS (BY SHRI ATUL ANAND AWASTHY, SENIOR ADVOCATE WITH SHRI AMIT KHATRI & SHRI ABHAY TIWARI, ADVOCATES) AND 1 1. BHOPAL DEVELOPMENT
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