Smt. Asha R Vs Assistant Commissioner of Commercial Taxes (Enforcement-17) (Karnataka High Court)
Facts of the case:
1. The petitioners received compensation in respect of the land acquired for construction of metro rail project in accordance with the provisions of Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 and Karnataka Industrial Area Development Act, 1966.
2. The respondent Department issued Show Cause Notice and thereafter passed the impugned orders alleging the same to be consideration for “an obligation to do an act, or an obligation to tolerate an act or an obligation to refrain from an act” and hence a declared service as per entry 5(e) of Schedule – II to the Central Goods and Services Tax (‘CGST’) Act.
3. The Hon’ble Court discussed the relevant provision of the CGST Act in detail along with discussions of the GST Council at the time of implementation of law along with jurisprudence settled by Hon’ble Apex court in various cases and held that Solatium is part and parcel of the compensation payable for the acquisition of land and hence the same falls within the ambit of entry 5 of Schedule III of CGST Act and hence don’t fall within the ambit of supply as per the provisions of CGST Act.
