Case Details: NBCC (India) Ltd. vs. Additional Commissioner CGST Delhi South - [2025] 181 taxmann.com 604 (Delhi)
Judiciary and Counsel Details
- Prathiba M. Singh & Shail Jain, JJ.
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Bhuvnesh Satija, Ms Vibhooti Malhotra, Udit Sharma & Aniket Khanduri, Advs. for the Petitioner.
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Ms Samiksha Godiyal, SSC, Tenzing N. Bhutia & B.D. Rao Kundan, Advs. for the Respondent.
Facts of the Case
The petitioner, a government enterprise, undertook the redevelopment and executed a memorandum of understanding (MOU) with the Ministry of Urban Development. An escrow agreement appointed the petitioner as the agency to manage lease proceeds, which were credited to escrow for onward transfer to the Ministry or the Consolidated Fund. The receipts originated from Government Departments, autonomous bodies, PSUs, and others. The Directorate General of GST Intelligence investigated the project and the escrow collections, confirming a GST demand on the escrow receipts. It was contended that the GST demand was unsustainable. The matter was accordingly placed before the High Court.
High Court Held
The High Court held that the GST demand raised lacked merit in view of the Ministry of Finance’s office memorandum. The Court observed that the memorandum clarified the treatment of escrow receipts from redevelopment projects and addressed the applicability of exemption and reverse charge mechanisms under Section 9 of the CGST Act. It was concluded that the petitioner’s claims were consistent with the memorandum and that the GST demand could not be sustained. Consequently, the Court set aside the impugned order.
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