HC ordered buyer to prove that they bought the property in good faith from GST defaulting seller.

A recent court order concerning a dispute between a land buyer and the Goods and Services Tax (GST) authorities.A land buyer purchased property from a firm with outstanding GST dues. The government attached the land to recover the tax. The buyer challenged the attachment, claiming to be a bona fide purchaser. The court upheld the attachment but allowed the buyer to file a separate lawsuit to prove their status.

The Case:

• A buyer purchased two parcels of land for a total of Rs. 3,96,600 from a partnership firm.
• The partnership firm owed Rs. 9,81,867 in GST dues.
• The GST authorities attached the land under Section 81 of the GST Act, 2017, to recover the outstanding tax.

Buyer's Argument:

• The buyer challenged the attachment as a violation of natural justice due to lack of prior notice.
• They claimed to be a bona fide purchaser (someone who bought the land in good faith without knowledge of any outstanding dues).

Government's Argument:

• The government argued that the sale is void under Section 81 unless the buyer proves bona fide purchase.
• They claimed the low sale price raised suspicion about the buyer's good faith.

Court's Decision:

• The court did not quash the attachment order in this writ petition (a legal action challenging government decisions).
• The court acknowledged the buyer's right to prove bona fide purchase but stated it couldn't be decided in this summary proceeding.
• The court directed the buyer to file a separate lawsuit within 30 days to establish their bona fide status.

GST Case Law S Geetha Versus The State Tax Officer

Citation-2024 TAXONATION 1840 (MADRAS)

CLICK HERE TO READ FULL CASE LAW/DOWNLOAD FROM ABOVE GIVEN PDF OPTION

OR 

SUBSCRIBE GST E-LIBRARY (INDIA'S HIGHEST GST CASE LAW DATA)

FOR MORE UPDATE ON GST/ IT JOIN OUR FREE WHATSAPP GROUP BY CLICKING ON THIS LINK https://chat.whatsapp.com/C8VB6F6VHme3A061UDQKhj