A Joint Development Agreement, although unregistered, can preclude double taxation liability when earlier liabilities have been accepted and paid by a registered developer under GST provisions.

Headnote:(A) Constitution of India - Article 226 - Goods and Services Tax Act, 2017 - Section 73(1) - Writ petition challenging adjudication order demanding GST liability based on an unregistered Joint Development Agreement. Court found that prior acknowledgment and acceptance of liability rightly attributed to developer, and petitioner is not liable for double taxation due to earlier payment by developer. (Paras 7-10)

(B) Legal principles discussed include the distinction between registered and unregistered documents in terms of liabilities under GST and the interpretation of agreements on construction services. (Paras 7 and 9)

Facts of the case:
Petitioner, a construction company, disputes an adjudication order demanding it pay GST despite the developer having already discharged this liability based on a Joint Development Agreement deemed unregistered. (Paras 1-4)

Findings of Court:
The adjudication order was quashed as it unjustly demanded payment from the petitioner, who had already complied with GST liabilities through the developer. (Paras 8-9)

Issues: Whether the petitioner was liable for GST on the grounds stated and if the prior payment by the developer negated additional liabilities on the petitioner. (Paras 6-7)

Ratio Decidendi: The court ruled that the petitioner should not be subject to double taxation due to prior liabilities being accepted and settled against a registered developer. (Paras 8-9)

Result: Petition allowed; the impugned adjudication order was quashed. (Para 10)

ORAL ORDER

In this petition, the petitioner seeks the following reliefs:

"WHEREFORE, the Petitioner prays that this Hon'ble Court may be pleased to: (i). issue appropriate writ, order or direction quashing the impugned Adjudication Order dated 30/12/2023 and summary of Order in GST DRC-07 passed by the 1^st Respondent in Order bearing No.DCCT/AUDIT-1.7/GST(ADT)-02/ADJ./T.NO.- 794/2023-24 under Section 73(1) of the CGST/KGST ACT, 2017 in the interest of justice and equity.(ii).

Pass such other order as this Hon'ble Court deems fit under the circumstances of the case in the interest of justice and equity."

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

3. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner invited my attention to the impugned order dated 30.12.2023 passed by the respondent No.1, in order to point out that the respondent No.1 has come to the erroneous conclusion that the petitioner was liable to pay Goods and Service Tax (GST) towards 100% of the property on the ground that the Joint Development Agreement dated 06.02.2017 entered into between the petitioner and M/s. DivyaSree R.O.W. Projects Private Limited (for short, ‘M/s. DivyaSree Projects') was an unregistered document which did not have the effect of creating / transferring / assigning any rights by the petitioner / land owner in favour of the aforesaid M/s. DivyaSree Projects, who is a Developer of the property. In this context, it is submitted that prior to the impugned order dated 30.12.2023 i.e., on 28.12.2023, two days prior to the impugned order, the Deputy Commissioner of Commercial Taxes, (Audit)-4.1, DGSTO-4, Bengaluru passed an order in relation to M/s. DivyaSree Projects, who was registered person by coming to the conclusion that the GST liability in relation to the entire property was to be fastened and discharged by the aforesaid M/s. DivyaSree Projects pursuant to which the aforesaid M/s. DivyaSree Projects, Developer had discharged the entire liability as can be seen from the documents produced along with the memo dated 15.07.2025 filed by the petitioner. It is submitted that notwithstanding the fact that the Joint Development Agreement dated 06.02.2017 between the petitioner, the land owner and M/s. DivyaSree Projects - Developer being unregistered one, Deputy Commissioner of Commercial Taxes (Audit)-4.1, DGSTO-4, Bengaluru, has rendered a categorical finding that the aforesaid registered person, the Developer was liable to pay the entire GST liability which was discharged by him and consequently, the question of there being double taxation by calling upon the petitioner to pay tax once again would not arise and the impugned order and show cause notice etc, deserve to be quashed.

4. Per contra, the learned Additional Government Advocate would support the impugned order and submit that there is no merit in the petition and the same is liable to be dismissed. He, however, does not dispute that there was an order dated 28.12.2023 passed in relation to M/s. DivyaSree Projects pursuant to which the said M/s. DivyaSree Projects has discharged the liability as indicated in the said order. 5. As rightly contended by the learned counsel for the petitioner, the respondent No.1 has passed the impugned Adjudication Order against the petitioner by coming to the conclusion that the Joint Development Agreement dated 06.02.2017 between the petitioner and M/s. DivyaSree Projects was an unregistered document. While arriving at the said conclusion, the respondent No.1 holds as follows:

"Conclusion: The reply filed by you is considered, examined and found to be not acceptable, as discussed hereunder:

1. The Original Joint Development Agreements, of the lands is between land owners and Shyamaraju and Company India Pvt. Ltd. i.e You. Against the said development constructions being pu

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2025 Supreme(Online)(Kar) 18401

A Joint Development Agreement, although unregistered, can preclude double taxation liability when earlier liabilities have been accepted and paid by a registered developer under GST provisions.

Cases Referred (1)