GST can’t be Levied on Services Provided by Court Receiver: Bombay High Court [Read Judgment]

GST - Court Receiver - Taxscan

The Bombay High Court held that Goods and Service Tax (GST) can not be Levied on Services Provided by Court Receiver.

The Plaintiff, Bai Mumbai Trust filed the Suit seeking to recover possession of three shops, which together constitute a restaurant, where the Plaintiff trust is carrying on business in the name and style of “Manranjana Hotel” i.e. “Suit Premises”. The Suit proceeds on the cause of action of trespass or unauthorized occupation.

A preliminary issue of limitation was framed and pending determination thereof, the Court Receiver, High Court, Bombay was appointed as receiver of the Suit Premises since the Court arrived at a prima facie finding that the Defendant had no semblance of right to the Suit Premises.

The Court Receiver was directed to take formal possession of the Suit Premises and was directed not to disturb the physical possession of the Defendant. The Defendant was permitted to remain in possession of the Suit Premises as an agent of the Court Receiver under an agency agreement to be executed with the Court Receiver, on payment of monthly ad-hoc royalty of Rs. 45,000. The amount deposited by the Defendant with the Court Receiver was directed to be invested by the Court Receiver in fixed deposits of Nationalised Banks.

The Plaintiff raised certain concerns regarding the applicability of GST and the mode of discharge of this statutory liability (where it arises) in matters where the Court Receiver is appointed by the Bombay High Court under Order XL of the Code of Civil Procedure, 1908 (CPC).

The Single Judge bench of Justice S.J.Kathawalla observed that schedule III provides that services provided by any court or tribunal established under any law is neither a supply of goods nor supply of services. Court Receivers should implement orders of the court and function under the supervision and direction of the Court. Hence, the office of the Court Receiver is an establishment of the High Court through which the orders issued by the Court are given effect to.

Therefore, the court held that the services of the Court Receiver are to be considered as services provided by any Court. Accordingly, the fees or charges paid to the Court Receiver are not liable to GST. The High Court held that GST cannot be levied or recovered on services provided by the Court Receiver.

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