Section 17(5) of the CGST Act, 2017  — ITC on Immovable property  –-- The petitioner challenged the legality and validity of the Appeal order dated 01.02.2022. The respondent raised the demand on the ground that ITC availed on works contract service for supply of construction of an immoveable property was in violation of Section 17(5) of Act. The court observed that the petitioner has fulfilled all the conditions of work contracts as he is providing work contract services under a contract for construction of building of a Hotel wherein transfer of property in goods is involved. The Hotel is immoveable property. So, the petitioner has been providing work contract services to the owner of the hotel and in providing taxable work contract services, he is entitled to take ITC being utilized for providing the taxable work contract services. The petitioner do not fall within the definition of Section 17(5)(c). The demand raised on 30.09.2019 and the penalty imposed under Section 74(1) is ultra vires, contrary to law.

Held that:- The Hon’ble High Court set aside the impugned order dated 01.02.2022.