Sanchayita Lahkar

The High Court of Judicature at Allahabad, Single Bench of Justice Piyush Agrawal, has directed the New Okhla Industrial Development Authority (NOIDA) to compensate a petitioner with Rs. 19,22,778 following a misclassification in Goods and Services Tax (GST) deposit. The directive came as the Court observed that the petitioner had duly paid the GST amount to NOIDA, which was incorrectly deposited under the wrong accounting head.

The petitioner, Surender Gupta, acting as the head (karta) of a Hindu Undivided Family, is the owner of a commercial four-storey building located at F-16, Sector-18, Noida, Gautam Buddha Nagar. He leases out this property and pays GST on the rental income, as required under the Goods and Services Tax Act, 2017.

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In 2017, the petitioner paid a lump sum lease rent of Rs. 97,18,500 to NOIDA along with GST @ 18%, amounting to Rs. 17,49,330. NOIDA issued a tax invoice for this payment. The petitioner duly filed returns under Section 39 of the CGST/UPGST Act. However, due to an error on NOIDA’s part, this GST payment did not reflect in the petitioner’s GSTR-3B form.

Subsequently, proceedings were initiated under Section 61 of the CGST Act, followed by Section 73(1) for the alleged non-payment of GST. The petitioner responded to both proceedings, providing documentary proof including the GST payment and acknowledgments from NOIDA. Despite this, orders were passed against the petitioner, and an appeal challenging these orders was dismissed without considering the submitted documents.

In their counter affidavit, NOIDA acknowledged receipt of GST payment from the petitioner and admitted the amount was deposited under the wrong head due to a lack of clarity post the GST Act's enactment and incorrect advice from their tax consultant. Specifically, it was recorded:

"That on 21.09.2017 the petitioner had deposited Rs. 97,18,500/- towards lump sum/one time lease rent amount of the plot situated at F-16, Sector 18, Noida. The Petitioner also paid Rs. 17,49,330/- towards 18% GST for the aforesaid plot with the respondent authority."

Furthermore: "That on 18.10.2017, the Respondent Noida Authority deposited the aforesaid payment of GST at 18% amounting to Rs. 17,49,330/- with the State GST Authorities and as such filed its return in Form GSTR-3B dated 18.10.2017 for the Month of September F.Y. 2017-18."

"This amount included the amount of Rs. 8,74,665/- paid by the Petitioner towards CGST and Rs. 8,74,665/- towards SGST. Therefore, as such the tax collected by the Respondent Noida Authority from the Petitioner had been deposited by the Respondent Noida Authority on 18.10.2017 itself with the GST Authorities."

The petitioner contended that the penalty and demand imposed subsequently, amounting to Rs. 19,22,778, was unjust since the GST had already been paid to NOIDA.

The Court took a firm view of the factual matrix, recording the petitioner’s compliance and the misclassification by NOIDA:

"The record shows that the petitioner has paid the amount of GST to the NOIDA, which was required to be deposited with the GST Department. The said fact has not been disputed by either of the authorities."

Justice Piyush Agrawal observed:

"In view of the above categorical statement of admission made in the counter affidavit filed by the NOIDA/respondent no.4, the impugned orders cannot be said to be arbitrary or call for any interference by this Court."

"The petitioner paid the legitimate tax to NOIDA, which was not deposited under the proper head and therefore, on account of that the petitioner has to face not only the proceedings of GST, but also imposition of penalty."

Regarding compensation, the Court cited the Supreme Court's guidance in Batliboi Environmental Engineers Limited Vs. Hindustan Petroleum Corporation Limited and Another (2024) 2 SCC 375:

"Computation of compensation should not be whimsical and absurd resulting in a windfall and bounty for one party at the expense of the other and the damages should be commensurate with the loss sustained by the party."

Based on the findings, the Court issued the following directions:

"A Writ of Mandamus under Article 226 of the Constitution of India is issued to the respondent no.4 i.e. NOIDA to pay/compensate the amount of Rs.19,22,778/- to the petitioner within 15 days from today."

"After making the said payment to the petitioner, the NOIDA shall intimate about the same to the District Magistrate, Gautam Buddh Nagar within the said period."

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"The NOIDA is at liberty to recover the said amount from the erring officer of its department."

"In the event of failure of payment of compensation to the petitioner by the NOIDA as mentioned here-in-above, the District Magistrate, Gautam Buddh Nagar is directed to recover the said amount from NOIDA and pay the same to the petitioner within 15 days thereafter."

The Court also ordered NOIDA to file an affidavit of compliance within one month. In case of failure, the District Magistrate was directed to file it.

Advocates Representing the Parties

For the Petitioner: Nikhil Kumar, Vagish Yadav

For the Respondents: Kaushalendra Nath Singh, Ankur Agarwal, C.S.C., Gopal Verma

Case Title: Surender Gupta vs. Appellate Authority State GST / Additional Commissioner Grade-II and 2 Others

Neutral Citation: 2025: AHC:44039

Case Number: Writ Tax No. 1892 of 2024

Bench: Justice Piyush Agrawal

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