Kerala High Court
Lulu International Shopping Malls Pvt ... vs Joint Commissioner on 21 January, 2025
Author: Bechu Kurian Thomas
Bench: Bechu Kurian Thomas
W.P.(C) No.41483/24 1
2025:KER:4235
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS
TUESDAY, THE 21ST DAY OF JANUARY 2025 / 1ST MAGHA, 1946
WP(C) NO. 41483 OF 2024
PETITIONER:
LULU INTERNATIONAL SHOPPING MALLS PVT LTD,
NO.34/1000, LULU INTERNATIONAL SHOPPING MALL,
NH-47, EDAPALLY,
ERNAKULAM, PIN - 682024
REPRESENTED BY ITS DIRECTOR NISHAD.M.A.
BY ADVS.
SRI.RAJESH NAIR
SRI.JOSEPH PRABAKAR
RESPONDENT:
JOINT COMMISSIONER,
TAX PAYERS SERVICES,
STATE GOODS AND SERVICES TAX DEPARTMENT,
PERUMANOOR P.O,
ERNAKULAM, PIN - 682015
SMT. JASMIN M.M., GOVT. PLEADER
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
08.01.2025, THE COURT ON 21.01.2025 DELIVERED THE FOLLOWING:
W.P.(C) No.41483/24 2
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BECHU KURIAN THOMAS, J.
--------------------------------
W.P.(C) No.41483 of 2024
---------------------------------
Dated this the 21st day of January, 2025
JUDGMENT
The challenge raised in this writ petition is against the determination of
tax and other liabilities relating to the petitioner as per the provisions of
section 73 of the Central Goods and Services Tax Act, 2017 (for short 'CGST
Act').
2. Petitioner claims to be engaged in the business of retail trading,
leasing and wholesale trading. In order to carry on its business, petitioner
claims to have constructed shopping malls. After filings its returns under the
CGST Act for the year 2019-20, an audit was initiated by the respondent. After
scrutiny of the documents submitted, it was alleged that petitioner had availed
input tax credit on works contract services for the construction of an
immovable property and that it was ineligible to avail input tax credit since the
output supply was not works contract service. Thereafter a show cause notice
was issued on 29.05.2024 under section 73(1) of the CGST Act, requiring the
petitioner to explain why the input tax credit should not be disallowed. Though
a detailed reply was submitted by the petitioner, the respondent has, after
conducting a personal hearing, issued an order confirming the demand in the
show cause notice. Ext.P3 is the order issued by the respondent, which is
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assailed in this writ petition.
3. Sri. Joseph Prabakar, the learned counsel for the petitioner
vehemently contended that the impugned order is ex facie erroneous, since it
is contrary to the decision in Chief Commissioner of Central Goods and
Service Tax & Ors. v. M/s Safari Retreats Private Ltd. & Ors (2024 INSC
756). It was also submitted that the finding in the impugned order that the
taxpayer had never availed input tax credit in respect of 8 invoices which
corresponded to an input tax credit of Rs.52,66,89,389/- was also inconsistent
with the returns filed. It was also submitted that the finding in the order that
the taxpayer had wrongly availed input tax credit declared in Table 4D(1) of
Form GSTR-3B is contrary to the statute, and the specific instructions given by
the CBIC. The learned counsel submitted that the instructions in Form GSTR-9
indicate that any input tax credit reversed through Form ITC 03 should be
declared in 7H of Form GSTR-9 and if the amount stated in Table 4D of Form
GSTR-3B was not included in Table 4A of Form GSTR-3B, then no entry should
be made in Table 7E of Form GSTR-9. It was also submitted that if the amount
mentioned in Table 4D of Form GSTR-3B was included in Table 4A of Form
GSTR-3B, then the entry must come in 7E of Form GSTR-9. The learned
counsel submitted that these specific instructions were not borne in mind by
the State Tax Officer and on the contrary, in the impugned order, a finding
was entered contrary to the instructions to come to the conclusion that the
petitioner had wrongly availed ITC. The learned counsel further submitted that
the jurisdiction of this Court ought to be exercised since the impugned order is
perverse.
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4. Smt. Jasmin M.M., the learned Government Pleader on the other
hand, opposed the submissions and stated that the statutory remedy of an
appeal is available to the petitioner and it must be relegated to pursue such
remedies. It was also submitted that all contentions now raised before this
Court are matters which can be considered by the Appellate Authority and
therefore this is not a fit case where the jurisdiction under Article 226 of the
Constitution India must be exercised.
5. I have considered the rival submissions.
6. Petitioner is engaged in the business of trading, leasing apart from
construction of shopping malls. In the decision in Chief Commissioner of
Central Goods and Service Tax & Ors. v. M/s Safari Retreats Private
Ltd. & Ors (2024 INSC 756), the Supreme Court had considered the scope
and purport of section 17(5) of the CGST Act and held that the expression
'plant or machinery' used in section 17(5)(d) of the CGST Act cannot be given
the same meaning as the expression 'plant and machinery' as defined in the
explanation to section 17. It was further observed that the question whether a
mall, warehouse or any building other than a hotel or a cinema theatre can be
classified as a plant within the meaning of the expression 'plant or machinery'
used in section 17(5)(d) is a factual question which has to be determined
keeping in mind the business of the registered person and the role that
building has in the said business. It was further observed that if the
construction of a building was essential for carrying out the activity of
supplying services, renting or giving on lease or other transactions in respect
of the building or a part thereof, which are carved out by clauses (2) and (5)
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of Schedule II of the CGST Act, then such a building could be held to be a plant
and will be taken out of the exception carved out by clause (d) of section 17(5)
and the functionality test will have to be applied to decide whether a building is
a plant. The Court went on to hold that the question of applying the
functionality test depends on the facts of each case and the tax officer must
decide whether the construction of immovable property is plant for the purpose
of clause (d) of sub section 17(5).
7. The above observations have great significance in the instant case
since the petitioner's contention is that it is eligible to avail the input tax credit
in view of the nature of business being carried on. Though the decision in
Safari Retreat's case (supra) was rendered subsequent to the order of
assessment, the said judgment is declaratory in nature. The impugned order
having not considered the impact of the said proposition of law as declared in
Safari Retreat's case (supra), renders it perverse warranting an interference
by this Court.
8. As the impugned order has not taken into consideration the impact of
the principles of law laid down in Safari Retreat's case (supra), this Court is
of the view that the impugned order is liable to be set aside and a de novo
reconsideration should be directed. The question relating to the 8 invoices and
the inconsistency in the ITC reported in Table 4D(1) of Form GSTR-3B and
Table 7E of Form GSTR-9 and all other contentions raised by the petitioner are
left open for consideration again.
9. Hence Ext.P3 order dated 30.08.2024 is hereby set aside and the
respondent is directed to reconsider the matter afresh, bearing in mind the
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principles of law laid down in Safari Retreat's case (supra). It is clarified that
all issues raised by the petitioner are left open and the respondents shall
reconsider the matter in its entirety. Sufficient opportunity of hearing shall also
be granted to the petitioner before passing final orders. The decision as
directed above shall be taken as expeditiously as possible, at any rate, within
an outer period of three months from the date of receipt of a copy of this
judgment.
Writ petition is allowed as above.
Sd/-
BECHU KURIAN THOMAS
JUDGE
vps
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APPENDIX OF WP(C) 41483/2024
PETITIONER'S/S' EXHIBITS
Exhibit P1 A COPY OF THE SHOW CAUSE NOTICE DATED
29.05.2024 ISSUED BY THE RESPONDENT TO THE
PETITIONER
Exhibit P2 A COPY OF THE REPLY DATED 29.06.2024
FURNISHED BY THE PETITIONER TO THE RESPONDENT
Exhibit P3 A COPY OF THE ORDER DATED 30.08.2024 OF THE
RESPONDENT
Exhibit P4 A COPY OF THE JUDGMENT DATED 04.11.2024 IN
CIVIL WRIT PETITION NO 7525 OF 2021
