GST on Court Receiver payments turns on taxable supply; compensation for unauthorised occupation was not chargeable.

The Bombay HC addressed GST treatment of services and payments connected with a Court Receiver under Order XL CPC. It held that services performed by the Court Receiver in that capacity fall within Schedule III of the CGST Act as services of a court or tribunal, so no GST is leviable on the Receiver's services or fees. It further held that royalty-like sums for alleged illegal occupation were compensation or damages, not consideration for a taxable supply, because GST requires reciprocal enforceable obligations and a consensual supply. GST may arise only where the payment is referable to a taxable supply, and any such liability may be discharged through the Receiver's agent or separate registration if required.

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Issues: (i) Whether GST is leviable on the services rendered by the Court Receiver appointed under Order XL of the Code of Civil Procedure, 1908; (ii) Whether GST is leviable on royalty or similar payments made to the Court Receiver in respect of property under receivership, including in a case of alleged illegal occupation; (iii) How any GST liability, if otherwise attracted, is to be discharged.

Issue: (i) Whether GST is leviable on the services rendered by the Court Receiver appointed under Order XL of the Code of Civil Procedure, 1908

Analysis: The Court Receiver functions as an establishment and permanent department of the High Court, acting under its supervision and control. Services rendered in that capacity fall within the exclusion for services by a court or tribunal under Schedule III of the Central Goods and Services Tax Act, 2017, and are not treated as a supply. The distinction between the Receiver's own fees and amounts paid in litigation pursuant to court directions was emphasised.

Conclusion: GST is not leviable on the Court Receiver's services or fees.

Issue: (ii) Whether GST is leviable on royalty or similar payments made to the Court Receiver in respect of property under receivership, including in a case of alleged illegal occupation

Analysis: Section 92 of the Central Goods and Services Tax Act, 2017 permits recovery from a receiver where the estate under control is engaged in a taxable business and a taxable event of supply has occurred. However, in the present facts, the payment termed royalty was found to be compensation or damages for alleged trespass and unauthorised occupation, not consideration for a consensual supply. The Court held that a supply requires reciprocal enforceable obligations, and a wrongful occupation compensated by mesne profits does not answer that description. The payment therefore did not fall within renting of immovable property or any other taxable supply.

Conclusion: GST may be recoverable from a receiver only where the payment is referable to a taxable supply, but on the facts of this case the royalty was not chargeable to GST.

Issue: (iii) How any GST liability, if otherwise attracted, is to be discharged

Analysis: Where GST is otherwise attracted on a payment received by the Receiver in discharge of an order of court, the liability may be worked out through the Receiver's agent or, where necessary, by separate registration of the Receiver. A standard agency-clause requiring the agent to obtain registration and discharge the tax was approved as an administrative mechanism.

Conclusion: Any attracted GST may be discharged through the Receiver's agent, or by the Receiver obtaining separate registration if required.

Final Conclusion: The Court held that the impugned royalty in the present suit was not consideration for a taxable supply and no GST was payable on it, while also clarifying that GST may be recovered from a receiver in appropriate cases where a taxable supply exists.

Ratio Decidendi: GST is attracted only where there is a taxable supply supported by reciprocal enforceable obligations; payments compensating for unauthorised occupation or damages do not constitute consideration for supply.

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