BackgroundPrahitha Construction Pvt. Ltd., a commercial real estate developer, entered into a JDA dated 28.12.2017 with two landowners — M/s. Jitvan Land Limited and M/s. Janina Marine Properties Pvt. Ltd. — for development of land admeasuring 8.30 acres and 1.82 acres at Hyderabad Knowledge City, Raidurg Village, Serilingampally Mandal, Ranga Reddy District, Telangana into an IT/ITES and commercial office project. Under the JDA, the landowners granted permissive possession to the developer, who agreed to construct three towers. The developer was to receive the Developer's Undivided Share (UDS) of land and the built-up area as consideration, but only after handing over the Landowner's Share upon project completion. The JDA expressly stated that permissive possession shall not be construed as delivery of possession in part performance under Section 53-A of the Transfer of Property Act, 1882. The petitioner challenged Notification No. 4/2018 as amended by Notification No. 23/2019-CT(Rate) dated 30.09.2019, which imposed GST on transfer of development rights under a JDA, seeking its declaration as ultra vires Articles 14, 246A and 265 of the Constitution and the CGST/TGST Act, 2017.Court Observations (Verbatim)"Reading of the aforesaid clause further gives a clear picture of the fact that mere execution of JDA by itself would not mean that the right, title and ownership of the property or a portion of that property stands transferred in the name of the petitioner/developer. There are certain conditions/milestones/stages which have to be crossed before which the petitioner would be entitled to have a certain element of right over the completed constructed area which has been agreed to be left at the disposal of the petitioner. But that does not mean that mere execution of the JDA would amount to transfer of right to the petitioner.""The transfer of development rights is hence a service under GST Law which the landowner is offering to the developer and that too for a consideration. Thus, the transfer of development rights is a service and not an outright sale of an immovable property.""From plain reading of the JDA that was entered into between the two parties, what is apparently visible is that, there was no outright sale of land being effectuated and the JDA per se cannot be considered merely as a medium adopted by the landowner selling his land and the JDA does not lead to sale of land by itself.""The transfer of ownership from the landowner goes directly to the purchaser of the constructed property and not in favour of the petitioner unless and until the land stands transferred in the name of the petitioner. The same cannot be brought within the ambit of sale. Transferring of the development rights does not result in transfer of ownership rights. That the sale of land/transfer of land or undivided share of land would get executed only after issuance of completion certificate of the project. This itself would give a clear indication that the services rendered by the petitioner in execution of JDA was supplied prior to the issuance of completion certificate and would thus be amenable to GST.""On conjoint reading of the clauses under JDA, clause d of the JDA along with clause 2.2, 2.3, 2.4, 6.1, 6.7 and 23.4...it will clearly indicate that there is no automatic transfer of ownership given to the petitioner at the time of execution of the JDA...In the absence of any cogent and substantial material to establish right, title and ownership being created in favour of the petitioner/developer, the transfer of development rights as it stands is amenable to GST and cannot be brought within the purview of Entry 5 of Schedule-III of the GST Act.""The Notification No. 4 of 2018 dated 25.01.2018 as amended by Notification No. 23/2019-Central Tax (Rate), dated 30.09.2019, on its plain reading would reveal that it is not with which there is a charge created on the transfer of development rights, but in fact only provide for the time when the tax need to be paid.""Taking into consideration the provisions of Article 246A of the Constitution of India and also considering the extraordinary powers which have been conferred upon the GST Council and upon whose recommendation the Government has issued the notification clarifying the aspect of transfer of development rights being attracted to GST/TGST, the challenge to the notification issued by the Government of India can be safely held to be devoid of merits."Final VerdictThe Writ Petition was dismissed. The Court held that transfer of development rights under a JDA is a taxable supply of service under GST and does not amount to sale of land under Entry 5 of Schedule III of the CGST Act. The impugned Notification No. 23/2019-CT(Rate) dated 30.09.2019 was upheld as valid. 

Facts :The petitioner challenged penalty order dated 20.12.2020 and appellate order dated 17.09.2021 arising from detention of goods in transit. The goods were detained solely on the allegation of undervaluation despite accompanying invoice, e-way bill, and proper documents. The appellate authority affirmed the penalty on the same ground of undervaluation. The petitioner relied on departmental circular stating that goods should not be detained merely on valuation disputes.Court Decision:The Court held that undervaluation is not a valid ground for detention of goods under Section 129 of the Act. Where all documents are proper and there is no discrepancy, detention cannot be justified on valuation issues. Issues of undervaluation must be examined through proceedings under Sections 73 or 74 of the GST Act and not through detention proceedings. Penalty imposed under Section 129 on mere suspicion of undervaluation was held unsustainable and set aside. The impugned orders were quashed and consequential relief including refund was directed.Cases Referred:Hindustan Coca Cola Pvt. Ltd. vs Assistant State Tax OfficerN.V.K. Mohammed Sulthan Rawther’s caseJ.K. Synthetics Ltd. vs Commercial Taxes Officer

Facts :Petitioner wrongly transitioned balance from Personal Ledger Account as input tax credit under Section 140 of CGST Act.Refund was sanctioned, but ₹9,25,366 was adjusted towards interest on such utilization.Petitioner contended that sufficient Input Tax Credit was available and there was no loss to revenue.Dispute arose on legality of interest adjustment while granting refund.Court Decision:Petitioner ought to have claimed refund under Section 11B of Central Excise Act read with Section 142(3) of CGST Act.Wrong transition of credit was acknowledged, but tax liability was subsequently squared up using available Input Tax Credit.There was no loss to revenue, as sufficient credit existed.Directions:Deduction of ₹9,25,366 towards interest held unsustainable.Impugned order modified to that extent.Respondent directed to refund ₹9,25,366 to petitioner.Refund to be made within 8 weeks.

BackgroundThe dispute arose from denial of ITC claimed on purchases made against tax invoices. The purchasing dealer contended that the purchases were genuine, payments for the goods and tax were made through bank accounts, invoices were available, and movement of goods was established. However, the selling dealer, after collecting the tax component from the purchaser, did not deposit the corresponding tax with the Government. The petitioner argued that recovery should instead be made from the defaulting selling dealer and that denying ITC would result in double taxation.The State opposed the claim by relying upon Section 16 of the BGST Act, submitting that ITC is subject to the statutory conditions prescribed therein. The Court also noted that the assessment order had not been challenged through the statutory appeal under Section 107 within the prescribed period, but proceeded to examine the substantive ITC issue because it involved interpretation of the statutory provision.Court ObservationThe Court held that the conditions prescribed under Section 16(2)(a), (b) and (c) are cumulative and must be satisfied together. Possession of a tax invoice and proof of receipt/payment of goods are not, by themselves, sufficient for availing ITC. Section 16(2)(c) specifically requires that the tax charged on the supply must have been actually paid to the Government, either in cash or through admissible ITC.The Court relied upon the Supreme Court's decision in State of Karnataka v. Ecom Gill Coffee Trading Private Limited, observing that the claimant of ITC bears the statutory burden of establishing the conditions necessary for the credit. It further held that production of invoices, proof of movement of goods and payment through banking channels does not overcome the requirement under Section 16(2)(c) that the tax must actually reach the Government.The Court rejected the contention that denial of ITC amounted to double taxation. It observed that merely because the purchaser paid the tax component to the supplier, the tax liability to the Government cannot be treated as satisfied unless the supplier actually deposits the tax with the Government. The statutory mechanism available to recover the unpaid tax from the selling dealer does not absolve the purchasing dealer from satisfying the conditions for ITC.Final VerdictThe Court concluded that the purchasing dealer cannot claim ITC unless the tax collected by the supplier has actually been paid to the Government. Even where the purchaser possesses tax invoices, establishes movement and receipt of goods, and proves payment to the supplier through bank accounts, ITC cannot be allowed in the absence of the supplier's payment of the tax to the Government.Accordingly, the writ petition was dismissed, with the parties directed to bear their respective costs.Cases Referred by CourtSri Vinayaga Agencies v. The Assistant Commissioner (CT) & Anr. — Madras High Court — 29.01.2013.D.Y. Beathel Enterprises v. The State Tax Officer (Data Cell) — Madras High Court — 24.02.2021.ALD. Automotive Pvt. Ltd. v. The Commercial Tax Officer & Ors. — Supreme Court — Civil Appeal Nos. 10412–10413 of 2018.Godrej & Boyce Mfg. Co. Pvt. Ltd. & Others v. Commissioner of Sales Tax & Others — Supreme Court — 1992 (3) SCC 624.The State of Karnataka v.  Ecom Gill Coffee Trading Private Limited — Supreme Court — Civil Appeal No. 230 of 2023.

BackgroundThe petitioners challenged the detention of iron scrap and the vehicles transporting it while the goods were in transit from Vijayawada to Sankarampet, Telangana. The goods were accompanied by invoices, e-way bills and other documents. The Revenue detained the consignment on the ground that the seller shown in the documents did not have a place of business at Vijayawada and subsequently alleged that the seller was a fictitious/non-existing entity. The seller's GST registration was suspended and proceedings under Section 130 were initiated against him.The petitioners contended that they had purchased the goods for valuable consideration after verifying the seller's GST registration on the official portal and that, at the time of interception, the goods were accompanied by valid documents. They argued that if the Revenue had any doubt regarding the transaction or the petitioners' bona fides, proceedings under Section 129 ought to have been initiated against them, rather than applying the Section 130 proceedings against the seller to the petitioners' goods.Court ObservationThe Court examined Section 68 and Rule 138A concerning inspection of goods in movement and the documents required to accompany a consignment. It noted that the officer had the authority to intercept and verify the goods and documents. However, the principal issue was whether the petitioners' goods could be confiscated merely because proceedings had been initiated against the seller under Section 130.Relying upon the distinction between Sections 129 and 130, the Court held that detention proceedings under Section 129 and confiscation proceedings under Section 130 operate in different contexts. The Court observed that although proceedings could be initiated against the seller under Section 130 because of his doubtful existence and business credentials, the petitioners' goods could not be confiscated merely because they had purchased the goods from that seller.The Court further observed that the petitioners' responsibility was to establish their own bona fides—namely, that they had purchased the goods for valuable consideration after verifying the seller's GST registration and that the transaction, payment and receipt of goods were supported by authenticated documents. They could not, however, be expected to establish the seller's business activities or whether the seller had obtained registration through fabricated documents. The Revenue was therefore required to initiate independent proceedings under Section 129 against the petitioners if it intended to proceed against their goods.Final VerdictThe High Court disposed of the writ petitions and granted liberty to the first respondent to initiate proceedings against the petitioners under Section 129 of the CGST/APGST Act, 2017 within two weeks from receipt of the order. The petitioners were to be given an opportunity of hearing and the matter was to be decided in accordance with law.In the meantime, the detained goods were directed to be released in favour of the purchaser on deposit of 25% of their value and execution of a personal bond for the balance. The vehicles were also directed to be released upon execution of personal security bonds for their value as determined by the concerned Road Transport Authority. No costs were awarded.Cases Referred by the CourtRajeev Traders v. Union of India — High Court of Karnataka, Dharwad Bench — Order dated 16.08.2022, W.P. No. 100849/2022 (T-RES). The Court relied upon this decision for the distinction between the powers of detention under Section 129 and confiscation under Section 130.Synergy Fertichem Pvt. Ltd. v. State of Gujarat — High Court of Gujarat — 2020 (33) G.S.T.L. 513 (Guj.) / MANU/GJ/3200/2019. The Court referred to this decision for the proposition that Sections 129 and 130 are independent and mutually exclusive provisions dealing respectively with detention/seizure/release and confiscation.