Page 177 - GSTL_23rd April 2020_Vol 35_Part 4

2020 ] IN RE : KONKAN LNG PRIVATE LIMITED 503
From the above explanation it is clear that the dealer is covered under this sec-
tion. And the proposed ‘breakwater wall’ is a civil structure.
18.3 In the grounds of law at point No. 4 the applicant has further
quoted a High Court ruling in the case of Mazgaon Dock Limited - reported in 191
ITR 460, clarifying the term ‘Plant and Machinery’ as has not been defined in the
Section 17 of the GST Act. In the said judgment Hon’ble High Court has stated as
follows,
“In order for a building or concrete structure to qualify for inclusion
in the term ‘plant’, it must be established that it is impossible for the
equipment to function without the particular type of structure.”
18.4 At the point No. 5 the applicant has quoted a Supreme Court rul-
ing in the case of Dr. B. Venkata Rao Hospital as reported in 243 ITR 81 (SC). In this
case Hon’ble Supreme Court directed that
“In a case such as this the tribunal should proceed upon material placed by
assessee which establishes that the building is specially equipped as a plant
for the assessee’s business.”
18.5 At the point No. 6 the applicant has quoted a Supreme Court rul-
ing in the case of Karnataka Power Corporation as reported in (2001) 247 ITR 268
(SC). In this ruling Hon. Supreme Court has stated,
“In the instant case, there is a finding by the fact finding authority that
the assessee’s generating station building is so constructed as to be an inte-
gral part of its generating system, it must, therefore, be held that it is a
“plant” and entitled to investment allowance accordingly.”
If we look at the dictionary meaning of “integral Part”, as mentioned in the
above ruling, it means necessary to make a whole complete or fundamental or
without something functioning is impossible. And from rest of the rulings it is
crystal clear that any civil construction or building or both in order to treat as a
‘plant’ has to be an indispensable part of the concerned working unit, and with-
out them basic functioning of that unit is not possible.
In view of the above facts and the reasoning given by the applicant in his
application, applicant could not establish that it is impossible for him to function
without breakwater wall. Also the applicant has shown total outward supply of
Rs. 335,82,08,218/- in the GST return form GSTR-3B, filed for the period from
April, 2018 to January, 2019, which reveals that his activities are efficiently carry-
ing on.
Hence the activity of construction of ‘breakwater wall’ falls under the
Section 17(5)(d) of the GST Act, on account of being a civil structure and an im-
movable property. And under this section the applicant becomes ineligible to
avail input tax credit on the proposed construction of ‘breakwater wall’.
19. Submission before the Hon’ble Appellate Authority -
19.1 The applicant, M/s. Konkan LNG Pvt. Ltd., is planning to build a
breakwater wall beyond the existing operational “captive jetty”, which (the
breakwater) applicant says is a part of existing plant and wants to avail input tax
credit of it. In order to clear the doubts whether the breakwater wall will be
treated as plant & machinery or an immovable property (civil structure) an ad-
vance ruling had been sought.
19.2 As per the order passed by the Advance Ruling Authority, the
proposed breakwater wall is a civil structure and falls under the exclusion clause
of Section 17(5)(d).
GST LAW TIMES  23rd April 2020  297