Allowed¶46

Mr.R. Ashok Kumar v. the Assistant Commissioner of

Karnataka HC4 Apr 2025WP/8195/2025

Case brief

AI extract

What is this about?

GST on solatium; solatium not exigible to GST; compulsory acquisition of land compensation; KIADB acquisition; KIAD Act Section 29(2); Section 7(2) read with Schedule III CGST/KGST Acts 2017; DRC-7 order; show cause notice quashed; writ of certiorari; Articles 226 and 227; Karnataka High Court 2025; follows Smt. Asha R. W.P.No.2552/2024 dated 10.09.2024; T-RES.

What did the court decide?

Petition allowed; impugned show cause notice Annexure-E dated 11.01.2024 and all consequential proceedings pursuant thereto quashed. ¶46

Mr.R. Ashok Kumar Vs the Assistant Commissioner of — GST and Indirect Tax | Karnataka HC (2025)

What the court decided

AI extract

Outcome

Petition allowed; impugned show cause notice Annexure-E dated 11.01.2024 and all consequential proceedings pursuant thereto quashed.

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Issue for consideration

Whether solatium received by the petitioner for compulsory acquisition of his lands by the State/KIADB under the KIAD Act is exigible/amenable to levy of GST under Section 7(2) read with Schedule III of the CGST/KGST Acts, 2017.

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Court's answer

The question whether solatium received by the petitioner for compulsory acquisition of land is exigible/amenable to GST is directly and squarely covered by this Court's order dated 10.09.2024 in Smt. Asha R. (W.P.No.2552/2024 and connected matters), whereby such solatium was declared not exigible to GST under the CGST/KGST Act, 2017; accordingly, solatium received by the petitioner is not liable to GST.

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Ratio / Principle

In view of the facts and circumstances and the judgment of this Court referred to supra, the present petition deserves to be allowed, and the impugned show cause notice at Annexure-E dated 11.01.2024 and all consequential proceedings pursuant thereto deserve to be and are quashed.

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Detailed headnote1 paragraphs

Writ Petition (T-RES) under Articles 226 and 227 of the Constitution of India: the petitioner, whose lands were acquired by the State/KIADB under the KIAD Act and who received compensation including solatium under Section 29(2) of the KIAD Act, challenged the demand for GST on the solatium component (show cause notice Annexure-E dated 11.01.2024; DRC-7 order dated 31.08.2024 sought to be quashed). Holding that the issue is directly and squarely covered by the coordinate-bench order dated 10.09.2024 in Smt. Asha R. v. Assistant Commissioner of Commercial Taxes (W.P.No.2552/2024 and connected matters), which declared that solatium paid towards acquisition of lands by the State/KIADB is not exigible/amenable to GST under the CGST/KGST Act, 2017, the Court (S.R. Krishna Kumar, J.) allowed the petition and quashed the show cause notice at Annexure-E dated 11.01.2024 and all consequential proceedings pursuant thereto.

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NC: 2025:KHC:14620 WP No. 8195 of 2025

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 4^TH DAY OF APRIL, 2025

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BEFORE

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THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 8195 OF 2025 (T-RES)

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BETWEEN:

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MR.R. ASHOK KUMAR AGED ABOUT 50 YEARS, SON OF MR. RAMACHANDRA, NO. 109/2, 2^ND MAIN, 2^ND CROSS, TATA SILK FARM, BASAVANAGUDI, BENGALURU - 560 004.

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…PETITIONER

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(BY SRI. GIRIDHAR S V., ADVOCATE)

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AND:

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Digitally signed by KORLAHALLI BHARATHIDEVIKRISHNACHARYA Location: HIGH COURT OF KARNATAKA

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THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (ENFORCEMENT) OFFICE OF THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES (ENFORCEMENT) SOUTH ZONE 'A' BLOCK, FOURTH FLOOR, VTK-2 BUILDING, RAJENDRANAGARA KORAMANGALA BENGALURU - 560 047.

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THE STATE OF KARNATAKA (THROUGH ITS PRINCIPAL SECRETARY) DEPARTMENT OF COMMERCIAL TAXES, VIDHANA SOUDHA, BENGALURU - 560 001. …RESPONDENTS

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(BY SRI.HEMAKUMAR K.AGA)

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2 - NC: 2025:KHC:14620 WP No. 8195 of 2025

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THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI OR ANY OTHER APPROPRIATE WRIT, ORDER, OR DIRECTION QUASHING THE IMPUGNED ORDER NO. ACCT/AUDIT35/DRC-7/AJD.35/2024-2025 DATED 31.08.2024 (ANNEXURE-A) PASSED BY THE RESPONDENT NO.1 AND DECLARE THAT SOLATIUM RECEIVED BY THE PETITIONER FOR COMPULSORY ACQUISITION OF LAND IS NOT LIABLE TO GST UNDER SECTION 7(2) READ WITH SCHEDULE III OF THE CGST/KGST ACTS, 2017 AND ETC.,

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THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR

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ORAL ORDER

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In this petition, petitioner seeks the following reliefs:

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" (a) Issue a writ of certiorari or any other appropriate writ, order, or direction quashing the impugned Order No. ACCT/Audit-3.5/DRC-7/AJD.35/2024-2025 dated 31.08.2024 (Annexure-A) passed by the Respondent No.1;

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(b) Declare that solatium received by the Petitioner for compulsory acquisition of land is not liable to GST under Section 7(2) read with Schedule III of the CGST/KGST Acts, 2017;

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Without prejudice to the above and in any event,

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(c) Condone the delay in filing an appeal, if any, and permit the Petitioner to approach the Joint Commissioner of Commercial Taxes (Appeals) without prejudice to the merits of the Petitioner's contentions, along with a direction that no coercive steps shall be taken during the pendency of the appellate proceedings; and

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(d) Pass such other or further orders as this Hon'ble Court may deem fit in the interest of justice and equity."

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3 - NC: 2025:KHC:14620 WP No. 8195 of 2025

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Heard learned counsel for the petitioner and learned Addl. Government Advocate for the respondents and perused the material on record.

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A perusal of the material on record will indicate that pursuant to the lands of the petitioner being acquired by the State / KIADB under the provisions of the KIAD Act, the petitioner received compensation under Section 29(2) of the KIAD Act in terms of Agreements, documents etc., executed between the petitioner and KIADB. Subsequently, the respondent issued the impugned show cause notice at Annexure-E, dated 11.01.2024, calling upon the petitioner to pay GST on the solatium component in the compensation received by the petitioner, who is before this Court by way of the present petition.

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The issue involved in the present petition as to whether solatium received by the petitioner is exigible / amenable to GST is directly and squarely covered by the order dated 10.09.2024 passed by this Court in ‘ Smt. Asha R., Vs. The Assistant Commissioner of Commercial Taxes and Anr’ passed in W.P.No.2552/2024 and connected matters, wherein it is held as

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under:-

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NC: 2025:KHC:14620 WP No. 8195 of 2025

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11. In the result, I pass the following:-

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ORDER

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(i) W.P.No.2552/2024, W.P.No.17524/2024, W.P.No.10838/2024, W.P.No.4571/2024 and W.P.No.5858/2024 are hereby allowed.

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(ii) It is hereby declared that the compensation paid in favour of the petitioners towards acquisition of their lands by the State/KIADB under the head ‘Solatium’ is not exigible/ amenable to levy of GST under the provisions of CGST/KGST Act, 2017.

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(iii) The impugned Notices at Annexures-A and A1 both dated 30.10.2023 issued in W.P.No.2552/2024 and all consequential proceedings are hereby quashed.

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(iv) The impugned Orders at Annexures-A and A1 both dated 20.03.2024 and impugned Notices at AnnexuresB and B1 both dated 09.10.2023 issued in W.P.No.17524/2024 and all consequential proceedings are hereby quashed. (v) The impugned Order at Annexure-A dated 30.12.2023 and Notice at Annexure-C dated 26.09.2023 issued in W.P.No.10838/2024 and all consequential proceedings are hereby quashed.

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(vi) The impugned Order at Annexure-A dated 04.12.2023 and Notice at Annexure-F dated 26.09.2023 issued in W.P.No.4571/2024 and all consequential proceedings are hereby quashed.

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5 - NC: 2025:KHC:14620 WP No. 8195 of 2025

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(vii) The impugned Order at Annexure-A dated 20.12.2023 and show cause Notice at Annexure-F dated 26.09.2023 issued in W.P.No.5858/2024 and all consequential proceedings are hereby quashed.

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In view of the aforesaid facts and circumstances and the

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judgment of this Court referred to supra, I am of the view that the present petition deserves to be allowed and the impugned show cause notice at Annexure-E, dated 11.01.2024 and all consequential proceedings deserve to be quashed.

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