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2025 (2) TMI 174 - HC - GSTRefund of amounts paid towards GST from the Promoter when cancellation of apartment takes place after the cut-off date for issuance of a credit note under Section 34 of the Central Goods and Services Tax Act 2017 - option of applying for refund of GST/issuance of credit note after the cut-off date mentioned in Section 34(2) of the Central Goods and Services Tax Act 2017 - liability to apply for refund of GST is on the promoter or the allottee in case of cancellation of an apartment? - permission to withdraw the predeposit amount made by the Promoter before the Appellate Tribunal under the RERA Act 2016 - penalty for non-registration of a sale agreement/ construction agreement - case of no evidence. HELD THAT - Perusal of records would go to show that the father of the first respondent has initially booked the apartment under the appellant/Promoter s Project. Due to the sudden demise of his father the first respondent has decided to call off the proposal and also informed the appellant/ promoter explaining his situation through email. It was the appellant/ Promoter who has evinced interest in convincing the first respondent by stating that instead of wasting 10% of the sale consideration towards cancellation charges it would be an apt thought for the first respondent to invest in a smaller apartment that would cost Rs. 59, 50, 821/-. Since the first respondent has already paid Rs. 47, 08, 604/- towards the earlier booked apartment if he cancels the same then a cancellation charge of 10% which amounts to Rs. 10, 37, 427/- would be deducted from the total amount paid by the first respondent. Therefore the appellant/ Promoter has advised the first respondent to invest the remaining amount i.e. Rs. 12, 42, 217/- that shall be paid in order to complete the sale consideration of the newly alloted apartment. In the present case on hand the appellant / Promoter has been insisting the first respondent through email regarding the deduction of 10% cancellation charges only and did not spill the beans with regard to deduction of GST loss. It was only when the first respondent refused to purchase any other apartment under the appellant/ promoter s Project the appellant/ Promoter has revealed about the further deduction of GST Loss which amounts to Rs. 11, 40, 376/-. On a perusal of the Sale and Construction Agreements entered into between the appellant/ Promoter and the first respondent dated 10.02.2020 no where it has been specifically mentioned about the deduction of GST loss in case of cancellation of purchase made by the first respondent - The Appellate Court having been convinced by the said undertaking permitted the first respondent to withdraw the pre-deposit amount of Rs. 11, 40, 376/- deposited by the Appellant / Promoter together with accrued interest and also directed the first respondent to intimate the progress of the refund application to the appellant/ Promoter once in two weeks. Conclusion - i) The burden of proof lies on the appellant/promoter to demonstrate that GST was paid twice for the same apartment which they failed to do. ii) The appellant/promoter s failure to disclose the GST deduction at the time of advising the respondent/allottee on apartment swapping was a critical factor in the decision. iv) The Appellate Tribunal s decision to allow the respondent/allottee to withdraw the pre-deposit amount upheld as the appellant/promoter did not provide sufficient evidence to support their claims. Appeal dismissed.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this case include:
ISSUE-WISE DETAILED ANALYSIS Relevant legal framework and precedents: The case revolves around the application of the Real Estate (Regulation and Development) Act, 2016, and the Central Goods and Services Tax Act, 2017. Key provisions include Section 34 and Section 54 of the CGST Act, which address the issuance of credit notes and the refund of GST, respectively. Court's interpretation and reasoning: The Court examined whether the appellant/promoter had the right to deduct GST amounts from the refund due to the respondent/allottee, given that the cancellation of the apartment occurred after the statutory deadline for issuing a credit note. The Court noted that the appellant/promoter failed to provide evidence that GST was paid twice for the same apartment. Key evidence and findings: The Court found that the appellant/promoter did not disclose the deduction of GST loss at the time of advising the respondent/allottee to swap apartments. The appellant/promoter only revealed this deduction after the respondent/allottee refused to purchase another apartment. Application of law to facts: The Court applied Section 104 of the Bharatiya Sakshya Adhiniyam, which places the burden of proof on the party asserting a fact. The appellant/promoter was unable to prove that GST was paid twice for the same apartment, undermining their argument for deducting GST from the refund. Treatment of competing arguments: The appellant/promoter argued that they were entitled to deduct GST as they had paid it twice. However, the respondent/allottee contended that the appellant/promoter had not substantiated this claim with evidence. The Court sided with the respondent/allottee, emphasizing the lack of proof from the appellant/promoter. Conclusions: The Court concluded that the appellant/promoter was not entitled to deduct GST from the refund due to the lack of evidence supporting their claim of double payment. The Court upheld the decision of the Appellate Tribunal, allowing the respondent/allottee to withdraw the pre-deposit amount. SIGNIFICANT HOLDINGS The Court's significant holdings include:
The Court dismissed the appeal filed by the appellant/promoter, affirming the Appellate Tribunal's decision and directing the second respondent to process the respondent/allottee's application for a GST refund within two months.
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