Smt Lalitha S Vs Deputy Commissioner (Karnataka High Court)
Summary: The petitioner, Smt. Lalitha S, approached the Karnataka High Court seeking a writ of mandamus directing the respondents to reimburse Goods and Services Tax (GST) of Rs.1,14,815.29 deducted from compensation payable for acquisition of 10.08 guntas of land in Sy.No.219/2 of B. Agrahara Village, Belagola Hobli, Srirangapatna Taluk, Mandya District, and seeking interest on the deducted GST from the date of the award till payment.
The petitioner’s land was acquired by the Union of India for widening the Mysuru–Madikeri Highway. An award determined compensation at Rs.8,89,035.20, from which respondent No.2 deducted Rs.1,14,815.29 towards 18% GST. The petitioner contended that acquisition of land could not be treated as sale of goods or provision of service and therefore the GST Act was not applicable. She also contended that the Income Tax Act, 1961 was not applicable whenever agricultural land was acquired and compensation paid, and relied upon W.P.No.35685/2025 and connected cases concerning deduction of tax from compensation.
The respondents contended that the GST Act mandated GST on works contract/structure valuation and that the same approach had been applied uniformly to landlosers. They submitted that the petitioner’s contention regarding tax exemption of compensation under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 misconstrued the statutory framework. According to the respondents, while compensation for acquired land might not attract GST, the structural component assessed under the award was liable to GST.
