Functionality test under GST input credit law applied to determine whether a building qualifies as plant on remand

The impugned order was set aside because it failed to apply the Supreme Court's interpretation of clause (d) of section 17(5) of the CGST Act. The Court noted that the meaning of "plant or machinery" and the functionality test are material to deciding whether a building qualifies as a plant, and that this legal position had not been considered. The matter was remitted for fresh decision in accordance with law after giving the petitioner an opportunity to be heard.

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Issues: Whether the impugned order rejecting the petitioner's claim required to be set aside and the matter remitted for fresh consideration in the light of the Supreme Court's interpretation of clause (d) of sub-section (5) of Section 17 of the CGST Act.

Analysis: The impugned order did not consider the Supreme Court's ruling on the meaning of "plant or machinery" and the necessity of applying the functionality test to determine whether a building qualifies as a plant. Since the claim turned on that legal position, reconsideration was necessary after applying the binding interpretation laid down by the Supreme Court. The petition was therefore disposed of by remitting the matter for fresh decision in accordance with law and after affording opportunity to the petitioner.

Conclusion: The petitioner succeeded, and the impugned order was set aside with a direction for fresh consideration on remand.

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