Bai Mamubai Trust – 2019 (31) G.S.T.L. 193 (High Court – Mumbai)

Where in any case, the GST is payable by the Court receiver, then the agent of the Court Receiver shall be directed to discharge the GST liability on behalf of the Court Receiver.

Facts: In this case, the Plantiff trust filed the suit seeking to recover possession of property from where it was carrying on business (suit premises). The plaintiff filed Notice of Motion in the above Suit for interim reliefs pending the hearing and final disposal of the Suit. An Order came to be passed in the said Notice of Motion. By the said Order, the Court Receiver, Bombay High Court was appointed as receiver of the Suit Premises. The Court Receiver was directed to take formal possession of the Suit Premises and was directed not to disturb the physical possession of the defendant. The defendant was permitted to remain in possession of the Suit Premises as an agent of the Court Receiver under an agency agreement to be executed with the Court Receiver, on payment of monthly ad hoc royalty.

Issue: Where in any case, GST is payable or applicable to payments made to Court Receiver, how is that statutory liability to be discharged and further is it to be paid by Defendant / party in occupation directly, or by Court Receiver.

Held: According to the section 92 of the Act, the agent of the Court Receiver, wherever one is appointed, maybe directed to pay GST after obtaining registration on behalf of the Court Receiver or (if permissible) under a pre-existing registration. In such a situation, such payment will be made on behalf of the Receiver and would discharge the Receiver’s statutory obligations under section 92. 

Although in the instant case the Court Receiver is not the ‘supplier’, since under an order of the Court the payment towards ‘supply’ is being made to the Court Receiver, the person making payment maybe entitled or permitted to pay the component of CGST by the statutory authorities. The suggestion made on behalf of the Court Receiver is that the office of the Court Receiver maybe directed to include a clause in the standard form of the agency agreement to the effect that where any payment to be made under an order of the Court attracts GST, the agent appointed by the Court Receiver must have or must obtain CGST registration and make such payment on behalf of the Receiver and indemnify the Receiver for any liability that may fall upon the Receiver under section 92 of the concerned GST Act. Such a clause will ensure that the agent of the Court Receiver continues to discharge any GST liability which may arise. Where no agent is appointed, naturally the Court Receiver will have to obtain registration. In cases where GST has to be paid by the Court Receiver. 

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