Fact of the Case:  The petitioner challenged the assessment order dated 25 July 2022 passed under Section 73 of the CGST/OGST Act, 2017 for the tax period April 2019 to March 2020. The said order was confirmed by the First Appellate Authority on 27 March 2023. Aggrieved by the appellate order, the petitioner approached the Orissa High Court by filing a writ petition. The primary contention of the petitioner was that although Section 112 of the GST Act provides for a further appeal before the GST Appellate Tribunal (GSTAT), such remedy was illusory since the Tribunal was not constituted and functional at the relevant time, thereby rendering the petitioner remediless.

Held by court : The High Court observed that the GST Appellate Tribunal has now been made functional and the Government has notified extended timelines for filing appeals before GSTAT. Therefore, continuation of writ proceedings was not justified. The Court held that while writ jurisdiction can be invoked when statutory appellate forums are non-functional, once the forum becomes operational, the assessee must strictly comply with pre-deposit conditions under Section 112(8) and pursue the statutory remedy. The writ petition was disposed of with liberty to file appeal before GSTAT.

Fact of the Case: The petitioner, an NRI, acquired leasehold rights over a GIDC plot and carried out sub-plotting before transferring leasehold rights to purchasers. He obtained GST registration solely for discharging GST liability on such transfers. During FY 2022-23, he sold two sub-plots and discharged GST liability in cash. He availed ITC on charges levied by GIDC such as sub-division fees, transfer fees, and other statutory charges, which were directly linked to his business. The department alleged that such ITC was blocked under Section 17(5)(d) and issued intimation and show cause notice under Section 74(1), demanding ₹98,11,678 along with interest and penalty. The petitioner contended that he had not undertaken any construction activity and that there was no fraud, suppression, or wilful misstatement to invoke Section 74, leading to filing of the writ petition.

Held by court : The Court held that Section 17(5)(d) restricts ITC only in respect of goods or services used for construction of immovable property. Since the petitioner was merely transferring leasehold rights and had not undertaken any construction activity, the provision was wrongly invoked. The department failed to establish any nexus between the ITC availed and construction activity. The Court held that Section 17(5)(d) restricts ITC only in respect of goods or services used for construction of immovable property. Since the petitioner was merely transferring leasehold rights and had not undertaken any construction activity, the provision was wrongly invoked. The department failed to establish any nexus between the ITC availed and construction activity.