CHIEF COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX & ORS. versus M/S SAFARI RETREATS PRIVATE LTD. & ORS.

Citation: [2024] 10 S.C.R. 793 · Decided: 03-10-2024 · Supreme Court of India · Bench: ABHAY S. OKA · Disposal: Case Partly allowed

Cited by 2 judgment(s) · cites 25 · see the full citation network in Lexace

Judgment (excerpt)

[2024] 10 S.C.R. 793 : 2024 INSC 756
Chief Commissioner of Central Goods and  
Service Tax & Ors. 
v. 
M/s Safari Retreats Private Ltd. & Ors. 
(Civil Appeal No. 2948 of 2023)
03 October 2024
[Abhay S. Oka* and Sanjay Karol, JJ.]
Issue for Consideration
Whether the definition of “plant and machinery” in the explanation 
appended to Section 17 of the Central Goods and Services Tax 
Act, 2017 applies to the expression “plant or machinery” used 
in clause (d) of sub-section (5) of Section 17; if it is held that 
the explanation does not apply to “plant or machinery”, what 
is the meaning of the word “plant”; and whether clauses (c) 
and (d) of Section 17(5) and Section 16(4) of the CGST Act are 
unconstitutional.
Headnotes†
Central Goods and Services Tax Act, 2017 – s.17(5)(c), (d), 
s.16(4) – Constitutional validity – Challenge to – Eligibility and 
conditions for taking Input Tax Credit (ITC) – Apportionment of 
blocked credits – Whether the construction of an immovable 
property is a “plant” for the purposes of s.17(5)(d) – Shopping 
mall in question, if was a “plant” – Plea of the assessees inter 
alia that they were not able to avail the credit on GST paid 
on goods and services used in the construction of buildings 
etc. against the GST received for the renting/letting out etc. 
of the premises – High Court held that if the assessees were 
required to pay GST on the rental income from the mall, they 
were entitled to ITC on the GST paid on the construction of 
the mall – Correctness:
Held: Constitutional validity of clauses (c) and (d) of s.17(5)and 
s.16(4) is upheld – Since their plain interpretation does not lead 
to any ambiguity, they cannot be read down – The expression 
“plant or machinery” used in s.17(5)(d) cannot be given the same 
meaning as the expression “plant and machinery” defined by the 
explanation to s.17 – Whether a mall, warehouse or any building 
* Author
794
[2024] 10 S.C.R.
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other than a hotel or a cinema theatre can be classified as a plant 
within the meaning of the expression “plant or machinery” used in 
s.17(5)(d) is a factual question to be determined keeping in mind the 
business of the registered person and the role that building plays in 
the said business – If the construction of a building was essential 
for carrying out the activity of supplying services, such as renting 
or giving on lease or other transactions in respect of the building 
or a part thereof covered by clauses (2) and (5) of Schedule II of 
the CGST Act, the building could be held to be a plant – Then, it 
is taken out of the exception carved out by clause (d) of s.17(5) to 
sub-section (1) of s.16 – Functionality test to be applied to decide 
whether the construction of an immovable property is a “plant” 
for the purposes of clause (d) of s.17(5) – Impugned judgment in 
Civil Appeal Nos. 2948 and 2949 of 2023 set aside, writ petitions 
remanded to High Court for limited purposes of deciding whether, 
on facts, the shopping mall satisfies the functionality test and is 
a “plant” in terms of clause (d) of s.17(5) – Further, whether the 
construction of immovable property carried out by the petitioners 
in Writ Petitions amounted to “plant” to be decided on merit by 
applying the functionality test. [Paras 65-67]
Central Goods and Services Tax Act, 2017 – ss.17(5), 
16(1), 18(1) – Eligibility and conditions for taking Input Tax 
Credit(ITC) – Availability of ITC in special circumstances – 
Non-obstante clause – s.17(5) overrides sub-section (1) of 
s.16 and s.18:
Held: s.17(5) beginning with a non-obstante clause overrides both 
sub-section (1) of s.16 and sub-section (1) of s.18 – A non-obstante 
clause gives an overriding effect to certain provisions over contrary 
provisions found in the same or some other enactments – Said 
provision should prevail despite anything to the contrary in the 
provisions mentioned in the non-obstante clause – In the cases 
covered by s.17(5), ITC is not available – Thus, sub-section (5) of 
s.17 carves out an exception to sub-section (1) of ss.16 and 18, 
which confer the benefit of ITC. [Para 31]
Central Goods and Services Tax Act, 2017 – s.17(5) (c), (d) – 
Constitution of India – Article 14 – Challenge to constitutional 
validity on the ground that the test of reasonable classification 
under Article 14 is not met:
Held: Immovable property and immovable goods for the purpose 
of GST constitute a class by themselves – Clauses (c) and (d) 
[2024] 10 S.

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