TaxTMI 
TaxTMI 
2023 (4) TMI 300
X X X X Extracts X X X X
X X X X Extracts X X X X
....ession agreement. Out of the development rights for the total area of land, Hubtown executed a deed of assignment dated 3.3.2021 with the applicant, who acquired development rights for development of commercial units on plot of land admeasuring 1670 sq. mtrs. through the said deed of assignment dated 3.3.2021. 5. The applicant has undertaken development of the project as per the approved plans and has developed commercial unit. Upon duly completing the construction and development of the project the Ahmedabad Municipal Corporation has issued the BU permission on 25.5.2022. 6. The applicant wishes to allot developed units to prospective buyers on a long term lease basis for a period of 90 years. The applicant in fact has received booking for the certain units before getting BU permission and he has charged the GST at the applicable rate on the entire amount of the consideration received for the booking done before BU permission. 7. The lease deed shall be executed by and between the following parties viz Sr. No. Name Description to the party of lease deed 1 Gujarat State Road Transport Corporation [GSRTC] Lessor 2 Prospective buyer Lessee 3 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... • that the transaction between the applicant and the Hubtown is relating to transfer of development rights and not relating to works contract services; • that according to them the most appropriate classification is consideration is sale of building and in terms of entry number 5 of schedule III of the CGST Act, 2017, it will be treated neither as a supply of goods nor a supply of services. 13. Personal hearing was granted on 09.2.2023 and 28.2.2023 wherein CA Nirav Malkan and CA Akhil Shah appeared on behalf of the applicant and reiterated the facts as stated in the application. During the course of personal hearing it was further stated • that the applicant does not pay anything to GSRTC; • that there was sale of commercial units and hence the transaction was not leviable to GST. Discussion and findings 14. At the outset, we would like to state that the provisions of both the CGST Act and the GGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the GGST Act. 15....
X X X X Extracts X X X X
X X X X Extracts X X X X
....be treated neither as a supply of goods nor a supply of services. (3) Subject to the provisions of sub-sections (1), (1A) and (2), the Government may, on the recommendations of the Council, specify, by notification, the transactions that are to be treated as - (a) a supply of goods and not as a supply of services; or (b) a supply of services and not as a supply of goods. • SCHEDULE II. Activities ^1[or transactions] to be treated as supply of goods or supply of services 2. Land and Building (a) any lease, tenancy, easement, licence to occupy land is a supply of services; (b) any lease or letting out of the building including a commercial, industrial or residential complex for business or commerce, either wholly or partly, is a supply of services. • SCHEDULE III Activities or transactions which shall he treated neither as a supply of goods nor a supple of services 5. Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building. 17. At the outset, we find that the applicant in the application has enclosed the deed of assignment entered on 9.3.2021 between Hubto....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ant on the commercial build, operate and transfer basis...... * GSRTC conferred upon the Concessionaire the rights to develop the project on a commercial build operate and transfer basis 'BOT' inter alia the rights to build, develop, construct, finance, design operate and maintain the (i) Bus Terminal Facilities (the 'BTF') and (ii) the commercial facility to he developed on the said land in accordance with the terms and conditions set out in the said concession agreement. * 2.1 In consideration of the premium of Rs. 13 lacs paid by the lessee to the confirming party no. 2 in the manner set out & the payment of the rent hereby reserved to be made by the lessee to the lessor as set out hereinafter and subject to the terms covenants and agreements on the part of the lessee as contained herein the lessor hereby grants the lease unto the lessee... .... ..... ..... .... * 2.3 The lessee represents, undertakes and warrants that he/she/it expressly understand and agrees that i...... ii. upon expiry of the lease period as set out herein the lease hold rights in the leased premises shall expire and the entitlement, right and interest in leased pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....naries/confirming party no. 2 &/or the management body & all the prevailing laws of the land affecting the holding of the leased premises as well as the development of said CF in the said project. * 10v The lessee shall use the leased premises or any part thereof or permit the same to be used only for commercial office purpose as per the approvals as well as the concession agreement, deed of assignment & the lease deed shall not use it for any other purpose(s) & the lessee shall be solely responsible & liable to bear the consequences arising from such negligence & the lessor/concessionaire/confirming party no. 2 shall be in no manner be held responsible or liable for the same. * 14.2 ... ... ....The Lessee (without prejudice to any other rights of the Lessor under this lease deed) or in case of any other events or defaults as set out herein below shall be liable for termination of this Lease deed i. Failure on the part of the lessee to pay the lessor the rent in accordance with the provision of this lease deed; ii. Any violation or non compliance by the lessee or its successor in title or the sub lessee of the terms and conditions of this lease d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erty is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms." As is already mentioned supra, the applicant has stated in the submissions that a lease of 90 years is as akin to sale but the above definition of lease clearly shows lease could be of perpetuity. Therefore, quantum of time has no relation in determination of lease or sale. 22. In terms of notification No. 12/2017-CT(Rate), dated 28.6.2017, Renting of immovable property is defined as follows: (zz) "renting in relation to immovable property" means allowing, permitting or granting access, entry, occupation, use or any such facility, wholly or partly, in an immovable property, with or without the transfer of possession or control of the said immovable property and includes letting, leasing, licensing or other similar arrangements in respect of immovable property. As is evident, from the lease deed we observe th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... with by the Hon'ble Bombay High Court in the case of Builders Association of Navi Mumbai [Writ Petition No. 12194 of 2017], wherein it was held as follows viz 2. By this writ petition under Article 226 of the Constitution of India, the petitioners are challenging an order levying/collecting the Goods and Service Tax (GST) on the one-time lease premium charged by respondent no. 4 while letting plots of land on lease basis... ... .... 12. A perusal of sections 7, 8, 9, 10 and 11 falling in this Chapter leaves us in no manner of doubt that the expression "supply" includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. By sub-section (2) and which opens with a non-obstante clause, such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council, shall be treated neither as a supply of goods nor a supply of services. Equally....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sed and recovered. We cannot then probe into the legislation any further. 21. We are, therefore, of the clear view that the demand for payment of GST is in accordance with law. The said demand cannot be said to be vitiated by any error of law apparent on the face of the record. In these circumstances, we do not find any merit in the writ petition. It is accordingly dismissed. Rule is discharged. There would be no order as to costs. 25. We find that in the additional submission, the applicant has claimed that at best their services would fall within the ambit of item (1) clause (if) of SI. No. 3, of notification No. 11/2017-Central Tax (Rate) dated 28.6.2017 as amended vide notification No. 3/2019-Central Tax (Rate) dated 29.3.2019. On going through the same we find that it relates to (if) Construction of a complex, building, civil structure or a part thereof including,-(i) commercial apartments (shops, offices, godowns etc.) by a promoter in a REP other than RREP, Consequently, the applicant further argues that this transaction would not fall within the ambit of supply of services in view of the fact that the entire consideration has been received after issu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r the GST Acts cannot be imposed on consideration expressly receivable/payable towards sale/purchase of land; E. This Hon'ble Court may be pleased to issue writ of mandamus or writ in the nature of mandamus or any other appropriate writ or order directing the 4th Respondent not to collect tax under the GST Acts on consideration fixed for sale of land; F. Pending notice, admission and final hearing of this petition, this Hon'ble Court may be pleased to allow the Petitioner to deposit the tax amount under the GST Acts qua purchase of land under protest with the 4th Respondent and such deposit may please be treated as refundable to the Petitioner subject to the outcome of the present Petition; G. Ex parte ad interim relief in terms of prayer F may kindly be granted; H. Such further relief(s) as deemed fit in the facts and circumstances of the case may kindly be granted in the interest of justice for which act of kindness your petitioner shall forever pray. CONCLUSION 122. In the result, the impugned Paragpragh 2 of the Notification No. 11/2017-Central Tax (Rate) dated 28.6.2017 and identical notification under the Gujarat Goods and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....will be deducted from the total tax charged from the writ applicant and paid into the Government treasury. Refund is to be granted along with the statutory interest at the rate of 6% per annum which is to be calculated from the date of excess payment of tax till the date of refund. The entire exercise of calculation of refund and disbursement of the same with interest shall be completed within 12 weeks from the date of receipt of this order. 126. We are conscious of the fact the writ applicant of the Special Civil Application No.1350 of 2021 is the recipient of service and not the supplier and that the tax has been collected by the supplier from the writ applicant and deposited with the Government treasury. However since the writ applicant has actually borne the burden of tax and such tax was paid under protest by virtue of interim order of this Court, we are directing refund of such tax directly to the writ applicant. It will not be out of place to mention that in fact Section 54 of the CGST Act also envisages claim of refund directly by the recipient if he has borne the burden of tax. It has been so held by the Supreme Court in the case of Mafatlal Industries Ltd. v/s Un....