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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BHARGAV D.KARIA, PRANAV TRIVEDI
Quilon Real Industries Pvt. Ltd. – Appellant
Versus
Union Of India – Respondent
ORDER :
PRANAV TRIVEDI, J.
1 The present petition preferred under Articles 226 and 227 of the Constitution of India assails the correctness and validity of order dated 05.02.2024 rendered under Sec.74 of the State Goods & Service Tax Act, 2017 (hereinafter referred to as ‘the Act’ for short), with FORM GST DRC-07 inter alia considering the assignment of lease hold rights by the petitioner in favour of M/s.Jay Chemical Industries Limited as supply of service under Sec.7(1A)of the Act and classified under heading 9972.
2 The brief facts leading to filing of the present petition is that Gujarat Industrial Development Corporation (hereinafter referred to as ‘GIDC’), which is established under the Gujarat Industrial Development Act, 1962, acts as a nodal agency of Government of Gujarat for the purpose of development of industrial areas/estates. GIDC gives lands to industries on lease, generally for a period of 99 days. GIDC issues an allotment letter to the industry desiring to take plots developed by the GIDC. Allotment letter would set various terms and conditions on which the allotment is being made, including the method and manner in which premium is required to be paid.
2.1 The petitio
Transfer of leasehold rights constitutes transfer of immovable property and is not subject to GST, as clarified under the State Goods and Service Tax Act, 2017.
Transfer of leasehold rights constitutes a sale of immovable property and is not considered a supply of services under the GST Act.
The assignment and sale of leasehold rights are classified as transfer of immovable property, not taxable as supply of services under GST.
The assignment of leasehold rights under the GST regime is deemed a transfer of immovable property, exempt from GST, contradicting the previous classification as a supply of service.
The assignment of leasehold rights does not qualify as a supply of services under the Central Goods and Services Tax Act, 2017 and is thus not subject to GST.
The assignment of leasehold rights does not constitute a supply under GST, and any notice issued beyond the limitation period is illegal.
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