HC | GST Demand on Landowner Unsustainable in JDA Cases

Case Details: Shyamaraju and Co (India) (P.) Ltd. vs. Deputy Commissioner of Commercial Taxes (Audit) Bangalore - [2025] 177 taxmann.com 128 (Karnataka)

Judiciary and Counsel Details

• S.R.Krishna Kumar, J.
• Jeevan J. Neeralagi and E.I. Sanmathi, Advs. for the Petitioner.
•  Hema Kumar, Addl. Govt. Adv. for the Respondent.

Facts of the Case

The petitioner, a landowner, had entered into a joint development agreement with a developer for construction of residential high-rise apartments. Construction services provided by the developer were subjected to GST, and pursuant to adjudication, the developer discharged the entire liability in respect of the entire property, which included the petitioner’s share under the agreement. Subsequently, the jurisdictional authority demanded GST from the petitioner, contending that since the joint development agreement was an unregistered document, it could not be made the basis to exempt the petitioner from liability and that the petitioner was independently liable to discharge GST on his share. The petitioner submitted that the entire tax had already been collected from the developer, including in respect of his share, and therefore a further demand against him would amount to double taxation. The matter was accordingly placed before the High Court of Karnataka.

HC Held

The High Court held that the demand of GST from the petitioner was unsustainable, as it would result in double taxation when the developer had already discharged the entire tax liability on the whole property, including the petitioner’s share. It observed that the Deputy Commissioner (Audit) had earlier recognized and acted upon the joint development agreement for the purpose of concluding that the developer was liable, and had accepted tax payment from the developer. In such circumstances, the jurisdictional authority was estopped from taking a contrary view that the unregistered nature of the agreement disentitled the petitioner from exemption. The Court quashed the impugned order, holding that once tax is collected from the developer on the entire property, a further demand from the landowner cannot be sustained.