Case Law Details
Joint Commissioner & Anr. Vs Goverdhandham Estate Private Limited & Anr. (Supreme Court of India)
The Supreme Court of India, on October 14, 2024, dismissed the Special Leave Petition (SLP) filed by Goverdhandham Estate (P.) Ltd. against the State of Rajasthan in a GST-related dispute. The bench, comprising Justices B.V. Nagarathna and Nongmeikapam Kotiswar Singh, found no reason to interfere with the Rajasthan High Court’s decision. The SLP was dismissed with pending applications disposed of.
The dispute originated from a notice issued to Goverdhandham Estate under Section 61 of the CGST Act, 2017, concerning discrepancies in their GST returns for the financial year 2017-18. The primary issue revolved around the denial of Input Tax Credit (ITC) on payments for elevators and air conditioners, categorized as “blocked credits” under Section 17(5) of the Act. The petitioner argued that these items qualify as “plant and machinery” essential for providing outward services in their hotel business and thus should be eligible for ITC.
Despite the petitioner’s explanation being deemed satisfactory under Section 61, the authorities proceeded with a show cause notice under Section 73, alleging tax liabilities of ₹18.44 lakh, including interest. This led to the petitioner filing a writ in the Rajasthan High Court, challenging the invocation of Section 73 after acceptance of their explanation under Section 61. The High Court dismissed the petition, citing the independent and separate powers of Sections 61 and 73, as upheld in Nagarjuna Agro Chemicals Pvt. Ltd. v. State of U.P.
The Rajasthan High Court emphasized that the GST Act permits simultaneous or subsequent actions under different sections if discrepancies remain unaddressed or liabilities persist. The court noted that the explanation offered in reply to the Section 61 notice did not preclude the authorities from invoking Section 73 for tax recovery based on unresolved issues.
The Supreme Court’s refusal to intervene signifies its agreement with the High Court’s interpretation of the interplay between Sections 61 and 73.
Read High Court Judgment in above case: Jurisdiction under Section 73 CGST requires compliance with Section 61 CGST: Rajasthan HC
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
In the facts and circumstances of the case, we are not inclined to interfere in the matter. The Special Leave Petition is hence dismissed.
Pending application(s) shall stand disposed of.
