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TMI Blog2025 (2) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uare feet, in the residential cum commercial building complex known as TVS Emerald "Green Enclave" project was originally booked by the father of the first respondent for a base price of Rs. 1,03,74,276/- i.e. Rs. 17,98,485/- being the land cost and Rs. 85,75,791/- being the civil construction cost. Pursuant to the same, construction agreements and sale agreements were entered into by and between the parties on 10.02.2020 and the expected delivery of the apartment was fixed during the month of October 2023. 2.2. Subsequently, the father of the first respondent has paid a sum of Rs. 47,08,604/- to the appellant/Promoter towards the amount payable for the purchase of the flat. All of a sudden, the first respondent's father died on 05.09.2020, due to illness which ultimately resulted in huge medical expenses on the side of the first respondent. After the sudden demise of the first respondent's father, his mother decided to settle in Kerala itself and owing to reduction of 50% of salary of the first respondent due to COVID pandemic, the first respondent decided not to purchase the subject flat. Therefore, the first respondent sent an email dated 24.11.2020 to the appellant/Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... medy provided from the side of the appellant/ Promoter to address the grievance of the first respondent. Again on 27.04.2021, the first respondent had sent an email to the appellant/ Promoter stating that he is not satisfied with the appellant/ Promoter's service and therefore, he is not interested in purchasing the 2 BHK flat and further requested for immediate return of his money paid in respect of Flat B 102. 2.6. In reply to the aforesaid email of the first respondent, the appellant/ Promoter sent an email dated 30.04.2021 stating that the first respondent shall have the choice of either swapping the flats (4BHk with 2BHK) and choose from the available units in 2 or 2.5 BHK or if not, he can continue with Flat No.B 102 or if he still prefers to withdraw from Flat No.B 102, then there will be 10% deduction charges as per the Agreement Clause. Again, the first respondent, vide email dated 01.05.2021 informed the appellant/ Promoter that the options given by the appellant/ Promoter are totally unacceptable. Despite covered car parking facilities being provided for certain 2 BHK flats, the appellant/ Promoter has deliberately misinterpreted that there were no covered car parki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first respondent received the above said amount, which is part payment of his claim amount. The Tamil Nadu Real Estate Regulatory Authority, Chennai, vide order dated 26.04.2023 partly allowed the complaint filed by the first respondent, by awarding refund of an amount of Rs. 11,40,376/- with interest pertaining to GST and in so far as 10% cancellation charges are concerned, the TNRERA held the same in favour of the appellant / Promoter by stating that the first respondent was terminating the Agreement and cancelling the allotment for personal reasons. 2.9. In this regard, both the appellant/Promoter as well as the first respondent filed separate appeal petitions against the order of the Tamil Nadu Real Estate Regulatory Authority, Chennai. The first respondent filed an appeal in Appeal No.63 of 2023 challenging the cancellation charges, which came to be dismissed at the admission stage itself. Whereas, the appellant / Promoter filed Appeal No.18 of 2024, challenged the order with regard to the refund granted towards GST to the first respondent. The Appellate Tribunal vide impugned order dated 07.08.2024 permitted the first respondent to withdraw the entire pre-deposit amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GST is concerned, the GST is computed and payable by the developer on demands raised by the developer on the customer and not based on the receipt of payments from customers. As on the date of the Agreement, the milestone completed was with respect to the "completion of the fourthfloor slab" and the appellant is required to raise such demand on the customer up to the milestone completed by the appellant/ Promoter and the same to be reflected in the GSTR returns of the appellant/ Promoter for the said month. In accordance with the said requirement, the appellant/ Promoter raised demands upto the amounts in respect of the said milestone as per the schedule to the construction agreement between the parties and the same has also been disclosed in the GSTR-1 returns of the Appellant. 3.2. He further submitted that the GST amount in respect of the first respondent's apartment having already been disclosed and remitted/filed to the Authorities concerned by the Appellant/ Promoter in February 2020, a credit note pursuant to termination of the agreement with respect to the apartment booked in the Financial Year 2019-2020 could be issued by the Appellant/Promoter only till the month of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is open for the 1st respondent to approach the GST authorities for the refund of the said amounts, which option the 1st respondent has exercised during the pendency of the Appeal before the Tamil Nadu Real Estate Appellate Tribunal by filing an application dated 29.07.2024 for refund of GST. As this does not preclude the right of a recipient of service from filing an application for refund of tax amounts on a service that has been subsequently canceled, under Section 54 of the CGST Act, 2017, with specific reference to the same, Rule 89(2)(ka) of the CGST Rules, 2017 provides for a mechanism of refund of tax that a non-registered person can avail "in a case where the refund is claimed by an unregistered person, where the agreement or contract for supply of service has been cancelled or terminated and the time period of issuance of credit note by the concerned supplier is over." 3.6. The learned Senior Counsel further drew the attention of this Court to the Circular of the Central Board of Indirect Taxes and Customs, Ministry of Finance in Circular No.188/20/2022-GST dated 27.12.2022 which specifically deals with a case such as the present case. The relevant portion reads a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t respondent to withdraw the deposit made by the appellant/promoter even after the first respondent having filed the application for refund with the Authorities, during the pendency of the appeal before the Tribunal. Hence, the learned Senior Counsel summarized the facts that the first respondent is only eligible for making an application for refund of GST before the competent Authorities. 3.10. Furthermore, the learned Senior Counsel submitted that the appellant/ Promoter never gave any consent before the Appellate Tribunal to pay the refund amount back to the first respondent nor for the first respondent to withdraw the pre-deposit amount. He also filed an additional written submission on 16.12.2024 before this Court to substantiate the above said submission and vehemently, argued that the order passed by the Appellate Tribunal was not a consent order. Therefore, the learned Senior Counsel seeks the interference of this Court to the judgment of the Tamil Nadu Real Estate Appellate Tribunal ('Tribunal'), Chennai dated 07.08.2024 passed in Appeal No.18 of 2024, thereby setting aside the same and allow this appeal. 4. Mr.Devaraj, learned counsel appearing for the first res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the withdrawal of pre deposit made by the appellant/ Promoter before the Tribunal since it is the money of the first respondent lying with the appellant for more than 4 years. Considering the submission made by the learned counsel, the Appellate Tribunal ordered the first respondent to file an undertaking affidavit to that effect. 4.4. Thereafter, on 24.04.2023, the first respondent filed an Affidavit of undertaking dated 20.04.2024 stating that after the withdrawal of pre- deposit amount, he will apply for the refund of GST and will refund the said amount immediately to the appellant. By orders dated 12.04.2024 and 24.04.2024, it clearly shows that it was upon the clear consent of the learned counsel for the appellant that he will execute the Cancellation deed afresh for the purpose of applying refund of GST application, since the earlier executed cancellation deed, dated 19.01.2021 got expired as on 24.04.2024 to apply as for refund of GST. Therefore, for the said purpose, the Appellate Tribunal has directed the appellant to give all relevant documents regarding GST paid by them before the 2nd respondent and at that time, before the Appellate Tribunal, Mr. Vishnu Mohan, learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ody of appellant which is admitted by the appellant in the email communication and they have suppressed the real fact and giving false information before this Court to get a favourable order. 4.8. The learned counsel for the first respondent further submitted that as per the unregistered Construction Agreement, the appellant/Promoter is entitled to deduct 10% of total sale consideration, which is already deducted by them. Now the appellant/ Promoter has challenged the GST refund which is unsustainable in law and facts and hence, prayed for dismissing the appeal. 5. Heard the learned Senior counsel appearing for the appellant/ Promoter as well as the learned Counsel appearing for the first respondent and the second respondent and perused the materials placed before this Court. 6. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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. Furthermore, it is also to be taken into consideration that before the Appellate Court, the first respondent has filed an undertaking stating that on receipt of the GST amount received from the Department for the refund application submitted by him, he would pay the refunded amount to the appellant/ Promoter immediately. 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. 10. In the considered opinion of this Court, the Appellate Court has rightly dismissed the appeal filed by the appellant/ Promoter, thereby upholding the order passed by the learned member, TN RERA, which this Court finds no infirmity or reasons to interfere with the same. Accordingly, thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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