Transfer of Partly Constructed Property on ‘As Is Where Is’ Basis Without Construction Service Component Does Not Attract GST | HC

Case Details: Rohan Corporation India Pvt Ltd. vs. Union of India - [2025] 173 taxmann.com 480 (Karnataka)

Judiciary and Counsel Details

• S.R. Krishna Kumar, J.
• V. Raghuraman, Senior Counsel, Anil Kumar B., Cherian Punnose & Bhanumurthy J.S., Advs. for the Petitioner.
• Madanan R. Pillai, CGC, Akash B. Shetty, Advs. & K. Hemakumar, AGA for the Respondent.

Facts of the Case

The petitioner purchased a partly constructed commercial shopping mall from the liquidator on an ‘as is where is’ basis, without any construction service component being involved in the transaction. The petitioner paid substantial stamp duty and subsequently remitted GST under protest. The petitioner then filed a claim for a refund of the GST paid, contending that the transaction did not involve any construction services.

However, the Revenue rejected the refund claim, arguing that the transaction fell under Entry 5(b) of Schedule II of the Central Goods and Services Tax (CGST) Act, which deals with construction services. The Revenue asserted that the transaction should be classified under construction services, thus subjecting it to GST. The petitioner then filed writ petition to Karnataka High Court.

High Court Held

The Hon’ble Karnataka High Court held that the transaction constituted a pure sale of immovable property, devoid of any construction service element. The court emphasized that the agreement between the petitioner and the liquidator did not include any provision for construction services. It further clarified that Entry 5(b) of Schedule II applies only when there is a mutual agreement between the parties for the provision of construction services. Since no such agreement was present, the transaction fell under Entry 5 of Schedule III, which excludes it from being classified as a supply of goods or services, thereby not attracting GST. Consequently, the court directed the refund claim to be allowed with interest, ruling in favour of the petitioner.

List of Cases Reviewed

• Larsen & Toubro Ltd. v. State of Karnataka (2014) 1 SCC 708 – (para 5) followed
• Gannon Dunkerley & Co. v. State of Rajasthan (1993) 88 STC 204 (SC) – (para 11) followed
• Commissioner of Central Excise & Customs, Kerala v. Larsen & Toubro Ltd. (2016) 1 SCC 170 – (para 11) followed
• Union of India v. VKC Footsteps India Pvt. Ltd. (2021) 52 GSTL 513 (SC) – (para 5) followed
• Munjaal Manishbhai Bhat v. Union of India (2022) 62 GSTL 262 (GUJ) – (para 5) followed
• Commissioner of Central Excise, Kerala v. Larsen & Toubro Ltd. (2015) 39 STR 913 (SC) – (para 5) followed

List of Cases Referred to

• Munjaal Manishbhai Bhatt v. Union of India [2022] 138 taxmann.com 117/92 GST 327/62 GSTL 262 (Gujarat) (para 5)
• Union of India v. VKC Footsteps India (P.) Ltd. [2021] 130 taxmann.com 193/52 GSTL 513 (SC) (para 5).