TaxTMI 
TaxTMI 
2025 (4) TMI 1047
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....nt to HMI in terms of the Asset Purchase Agreement qualifies as 'neither a supply of goods nor a supply of services' under Section 7 read with entry 5 of Schedule III of the GST Laws? c) Whether the sale of items of plant and machinery in terms of the Asset Purchase Agreement qualifies as taxable supply of individual goods under GST Laws? If yes, whether GST would apply on the price agreed between the parties for the sale of each such items under the Asset Purchase Agreement, as per classification and rate applicable to each item? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 1. FACTS AND CONTENTION - AS PER THE APPLICANT: 1.1. General Motors India Private Limited, having its manufacturing facility at Plot No. A-16, MIDC Phase expansion II, Talegaon, Pune 41....
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....term sheet dated March 13, 2023. 1.6. Appendix A, B and C of the Term Sheet captured the details of individual asset prices (in US $) at which each such asset is planned to be transferred to HMI by the Applicant. An aggregation or a summary of these individual asset prices was contained in Schedule 1 of the Term Sheet. 1.7. Further, the items of plant and machinery proposed to be sold were mentioned in Appendix-A (9765 items) of the Term sheet along with the price of each of the assets. The buildings proposed to be sold by the Applicant, were mentioned in Appendix-B (41 buildings in total) of the Term sheet with the construction date, area, and value of each of the buildings. Agreement entered into with HMI for the sale of assets. 1.8. Pursuant to the Term Sheet, the parties executed an Asset Purchase Agreement dated August 16, 2023 together with four subsequent amendments dated October 17, 2023, October 31, 2023, December 05, 2023 and December 18, 2023 (collectively referred to as the 'the APA') to give effect to the sale of the assets covered by the Term Sheet. The relevant principles of the said Term Sheet were incorporated into the APA for the planned sale of the id....
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....ed for each asset being transferred. 1.11. Given that the transaction is in the nature of an asset sale, following process was followed to negotiate the price for each asset: a. The Applicant undertook an assessment of the market values of each of the asset items and provided that assessment to HMI. b. HMI independently reviewed the assessment undertaken by the Applicant and undertook their own independent assessment of the prices for each asset item under discussion. The assets were also inspected during physical verification, based on fixed assets register of GMI. c. Based on the independent assessment undertaken by HMI, a price proposal was made by HMI at an asset item level, which was accepted by GMI. Certain fully depreciated assets that were at the end of their useful life were valued at INR 1. 1.12. The following clauses from the APA are relevant in the context of the questions at hand: WHEREAS: A. GM INDIA has agreed to sell, transfer and assign to HMI, and HMI has agreed to purchase and accept the transfer and assignment of (each subject to the terms and conditions and in the manner set forth herein) the Transferred Assets....
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....terest in the GM Names to HMI or any of its Affiliates. As per Schedule 2 "Transferred Assets" read along with Annexures of Schedule-2 to the APA, the Applicant has agreed to transfer the following assets to HMI, which Applicant has been given to understand is for undertaking business operations, at the value agreed with regard each of the assets. Individual prices were agreed for each asset being transferred in the APA and is documented in Schedule 2(to the APA read along with relevant annexures. Hence, the total consideration mentioned in the APA is an aggregation of the individual prices determined for each of the assts under respective category: Sr. No. Transferred Asset Purchase price (In INR as per the APA) 1. Land lease rights with respect to GM India's Talegaon manufacturing facility 529,29,18,180 2. Plant & Machinery 43,52,52,372 3. Buildings 214,36,36,237 4. Total 787,18,06,789 The sale of assets is subject to fulfilment or waiver of the conditions stipulated in the Paragraph-5 of the APA ("Conditions Precedent"). Further, the APA was amended through Amendment No 1 & 2 that are attached with this application. Thereupon, A....
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....r computation of GST would be the value agreed for each of the assets individually at which GST would be levied at the rate of GST applicable to the respective assets prescribed under the GST Law. As per Section 97 of the GST Laws, the question of whether a particular sale transaction would qualify as supply or not, the classification of goods and services under GST and the value of goods and services for the purpose of payment of GST is within the domain of this Hon'ble Advance Ruling Authority in terms of Section 97 of the CGST Act. Hence, the present application is maintainable as per the provisions of the GST Laws before this Hon'ble Advance Ruling Authority. 1.16. That in the present case, the ruling is being sought on the transaction under the APA, and thus, the application is maintainable. In this regard, reliance is placed on the decision of the Maharashtra Authority for Advance Ruling In Re. Municipal Corporation of Greater Mumbai 2020 (34) G.S.T.L. 371 (A.A.R. - GST - Mah.), wherein it was held that as per Section 95, the term 'advance ruling' means a decision provided by the authority to the applicant on matters or questions specified in Section 97 (2), in relation to....
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.... liquor for human consumption. Thus, as per the Constitution, GST is a tax levied only on supply of goods or services or both. 2.3 In terms of Section 9 of the CGST Act, the taxable event under GST is the "supply" of goods and services. The meaning of the term "supply" is envisaged under Section 7 of the CGST Act, to include all kinds of supply of goods and services made by one person to another for consideration such as sale, barter, lease, exchange, etc. The said Section 7 of the CGST Act is extracted below: "(1) For the purposes of this Act, the expression "supply" includes- (a) 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; (aa) the activities or transactions, by a person, other than an individual, to its members or constituents or vice versa, for cash, deferred payment or other valuable consideration. Explanation. For the purposes of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in force or any judgment, d....
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....chedule III; and • Activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities. Valuation provisions under GST Laws 2.7 Under the CGST Act, the levy of tax is on the event of "supply", which is defined under Section 7 of the CGST Act. That the value of such supply is to be determined as per Section 15 of the CGST Act, which provides that value shall be the transaction value, which is the 'price actually paid or payable' for the supply of goods or services or both, where the supplier and the recipient of the supply are not related, and the price is the sole consideration for the supply. The provision further deals with inclusions and exclusions from the value of supply. The said Section 15 of the CGST Act reads as follows: "15. Value of taxable supply. (1) The value of a supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply. ....
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.... plant and machinery purchased by them during the tenure of their business and assign leasehold rights in land leased from MIDC, on an itemized sale basis to HMI. We have been given to understand that HMI shall inter alia use these assets for carrying out manufacturing and assembling automotive vehicles and parts distribution. 2.10 In the humble submission of the Applicant the transaction of assignment of rights in the leasehold land and the sale of plant and machinery are taxable under the CGST Act. Further, every plant and machinery being transferred by way of sale to HMI shall be taxable at the individual values agreed in the APA, at the rate prescribed as per their individual HSN classification. Further, sale of buildings is not liable to GST. The submissions in support of this legal position proposed to be adopted by the Applicant are as follows: A. Assignment of land lease rights qualifies as supply of service under GST A.1. The Applicant in terms of the APA would assign the leasehold rights of the land leased to them by the MIDC to HMI. That vide Lease Deed dated July 03, 2010, MIDC leased Plot No. A-16 in the Talegaon Industrial Area, admeasuring about 300 ac....
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....of furtherance of business and thus, the same is taxable under the CGST Act. In this regard, it is submitted that, the term "goods" and "services" are defined in the CGST Act as follows: "2 (52) goods means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply 2 (102) services means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged. [Explanation. For the removal of doubts, it is hereby clarified that the expression "services" includes facilitating or arranging transactions in securities;];" A.7. That as per the CGST Act, while goods mean every kind of movable property, services encompass anything that is not goods under the CGST ACT. Therefore, the term 'service' has been given a very wide amplitude under the GST Laws. A.8. In the....
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....2 (17) (d) of the CGST Act. Thus, the same qualifies as a transaction in the course or furtherance of business. A.13. Accordingly, in view of the above, the assignment of leasehold rights to HMI is a taxable supply of service under the CGST Act. A.14. That in this regard, reliance is placed on the advance ruling passed in the case of In re India Pistons Limited (GST AAR Tamil Nadu) Order No. 26/AAR/2021, wherein the issues were whether transfer of SIPCOTs allotted land from the Applicant to M/s. Inox Air Products Private Limited would fall within the ambit of Supply' and whether GST was payable on the transfer of leasehold rights in respect of the consideration received by the Applicant from M/s. INOX Air Products Private Limited for the land allotted by SIPCOT. The Advance Ruling Authority in this case held that the activity of agreeing to part with the leasehold interests held by the applicant in favour of M/s. INOX Air Products Private Limited is 'Supply' as defined under Section 7 of the CGST Act. The relevant extract of the ruling is as follows: "7.1 From the facts of the case as available before us, it is seen that IPL was allotted and were holding ....
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....interests in the land leased to them only with the approval of SIPCOT, IPL has sought the approval of SIPCOT. If the approval had been denied by SIPCOT, then IPL would not be able to part with their interests and the MOU entered into with INOX specifies that in such a condition, the advance extended by INOX to IPL against a bank guarantee of IPL will be returned to INOX. In the subject MOU, the conditions of supply are made exclusively only by IPL and INOX. As IPL can part with their interests only with the approval of SIPCOT, the same is mentioned in the MOU and this in no way can be construed that the conditions of the supply stands dictated by a third party. Therefore, there is no merit in the contention of the applicant that there is no agreement/contract wherein conditions of supply are made by the supplier/recipient but by the third party, i.e., SIPCOT. Further, from the MOU which is the agreement entered into between IPL and INOX for the activity of agreeing to part with the leasehold rights held by IPL in favour of INOX, it is seen that IPL assures to undertake certain activities and INOX acknowledges the same which clearly exhibits the relationship between IPL and INOX as ....
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....ing the course of its business at the Talegaon facility. The description of each of the buildings and the value of the same have been captured in Annexure-B of Schedule 2 to the APA. The 3rd and 4th Amendment of the APA is enclosed with this application. In terms of the APA, the total value of the 42 buildings proposed to be OR transferred is INR 214,36,36,237/ -. B.2. That as regards the taxability of the sale of the buildings is concerned, the Applicant submits that the sale of the buildings is not covered under the scope of 'supply' by virtue of Section 7 (2) (a) read with Entry 5 of Schedule III of the CGST Act. B.3. It is submitted that as per Section 7 (2) (a) of the CGST Act, activities or transactions specified in Schedule III shall neither be considered as a supply of goods nor as a supply of services and thus, the supplies covered under Schedule III of the CGST Act shall not be liable to tax under the CGST Act. B.4. It is pertinent to note that Entry 5 of Schedule III reads as follows: "Schedule III - Activities or Transactions which shall be treated neither as a supply of Goods nor a supply of Services B.5. In terms o....
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.... where sale takes place after issue of completion certificate by the competent authority. GST is applicable on sale of under construction property or ready to move-in flats where completion certificate has not been issued at the time of sale. That thus, applying the principle that only under construction building or ready to move in before completion certificate are taxable, there is no question of applicability of GST on sale of constructed buildings, as in the instant case. B.10. In view of the above, the sale of buildings by the Applicant to HMI does not qualify as 'Supply' under the GST Laws. Thus, no GST is payable on such transfer/sale of building by the Applicant. C. The sale of each identified item of plant and machinery under the APA amounts to individual taxable supply of goods and GST would be applicable on each of the assets as per their individual classification and rate, on prices negotiated and specified in the APA for each asset C.1. The Applicant, as per the APA dated August 16, 2023, has decided to sell various machinery and equipment outlined therein to HMI. Further, the price of each of these plant and machinery has been specifically agreed and stand....
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....CGST Act to mean every kind of movable property other than money and securities, but includes actionable claim, growing crops, grass and things attached to BRITO or forming part of the land which are agreed to be severed before supply or under a contract of supply. • Further, 'capital goods' is defined in Section 2 (19) of the CGST Act as goods, the value of which is capitalised in the books of account of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business. • In the instant case, the Applicant would be selling to HMI the plant and 33 machinery, which are undisputedly goods. These goods were capitalised in GMI books. Thus, the plant and machinery, to be sold in the present case qualify as a supply of goods in the present case. • Further, to constitute a supply under GST, one of the main requirements is the presence of consideration. That the term 'consideration' is defined in Section 2 (31) of the CGST Act and as per the said provision, consideration means any payment or monetary value of an act of supply of goods or service. Thus, there has to be a reciprocal payment or an....
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....assets, it has specifically been provided under Entry 4(a) of Schedule II of the CGST Act that the transfer/disposal of business assets qualifies as a supply of goods. Relevant entry of the Schedule is as follows: "Schedule II - Activities or transactions to be treated as supply of goods or supply of services (4) Transfer of business assets (a) where goods forming part of the assets of a business are transferred or disposed of by or under the directions of the person carrying on the business so as no longer to form part of those assets, such transfer or disposal is a supply of goods by the person;" C.5. Thus, in view of the above, the Applicant submits that the sale of individual assets by the Applicant qualifies as supply of goods under Section 7 of the CGST Act. C.6. Value of 'plant and machinery' to be sold by the Applicant Section 9 of the CGST Act, 2017 stipulates that there shall be levied a tax called CGST on all intra-state supplies of goods or services or both, on the value determined under Section 15 and at such rates as notified and the same shall be paid by the taxable person. Thus, the value of a supply has to be arrived at,....
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....plant and machinery by the liquidator amounts to supply of goods and/or services or both within the meaning of "supply" as defined under Section 7 of the GST Act and the rate of tax applicable on such supply. While holding that the sale of assets by the liquidator would amount to supply as per SI. No. 4(a) of Schedule-II of the CGST Act, the Authority also held that the goods sold are plant and machineries, office equipment and furniture classifiable under different HSN and taxable under appropriate entry under Notification No. 1/2017-C.T. (Rate) C.13. Thus, the Applicant submits that the rate of tax on the sale undertaken in the present matter will be determinable on the basis of tax rates prescribed for HSN classification of each of the goods being sold, as mentioned in Annexure-A of Schedule-2 to the APA. The list of individual assets being sold, the applicable HSN classification and the applicable rate of list is attached with this application. C.14. In view of the above, it is submitted that the activity of sale of each of the plant and machinery under the APA would be a taxable supply of individual goods identified in Annexure-A of Schedule-2 to the APA, as ....
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....ver letter by HMI to GM India confirming the delivery of all assets in accordance with the agreement. Acknowledgement of Excluded Assets by GM India to HMI regarding the physical verification of assets excluded from the transfer. - Acknowledgement of Physical Verification of Transferred Assets by HMI to GM India confirming the physical verification of the transferred assets. 3. They requested to take the aforesaid documents on record. 3. CONTENION - AS PER THE JURISDICTIONAL OFFICER DATED 22.01.2025. Q.A) Whether assignment of lease Hold Rights of land by the Applicant in terms of the Asset Purchase Agreement Qualifies as taxable supply of services under GST Laws? If yes, whether GST would apply on the price agreed for transfer of Lease Hold Rights under the Asset Purchase Agreement? Answer: A i) Yes. The entry 41-of notification no. 12/2017 C.T. (Rate) dated 28/06/2017 "Upfront amount (called as premium, salami, cost, price, development charges or by any other name) payable in respect of service by way of granting of long term lease of thirty years, or more) of industrial plots or plots for development of infrastructure for financial busin....
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....filed to AAR - 21/12/2023 3) Invoice issued date - 27/12/2023 4) GSTR-1 filed on - 10/01/2024 5) GSTR-3B filed on - 19/01/2024 First asset Purchase agreement (16/08/2023) Clause at 2.1: If the parties fails to reach a mutual agreement, then for the purpose of payment of GST on the transaction, the classification determined by GM India shall be adopted subject to decision of Authority for Advanced Ruling (AAR) or relevant Appellate authorities (Appellate Authority) under clause 3.8. Clause 3.8: Subject to HMI review and confirmation, GM India shall on or before September 15, 2023 for such other date as may mutually agreed by the parties (AAR filing date) apply with the AAR for the purposes of confirming the questions mutually agreed upon by the parties (AAR application) Though definition under section 95(a) (a) "advance ruling" means a decision provided by the Authority or the Appellate Authority 1[or the National Appellate Authority] to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100 [or of section 101C], in relation to the supply of goods or services or both b....
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.... 4. HEARING Preliminary e-hearing in the matter held on 27.11.2024. Mr. Saurabh Kanchan, Partner Deloitte requested for admission of the application. Jurisdictional Officer Mr. Jawahari Y Purkar, Deputy Commissioner of SGST, also appeared. The application was admitted and called for final hearing on 06.02.2025. Ms. Priyanka, Advocate and Authorized Representative of the applicant, appeared and made oral and written submissions. Jurisdictional Officer, Mr. Jawahari Y Purkar, Deputy Commissioner of SGST appeared. We heard both the sides. 5. OBSERVATIONS AND FINDINGS: 5.1 General Motors India Private Limited, having its manufacturing facility at Plot No. A-16, MIDC Phase expansion II, Talegaon, Pune 410504, Maharashtra (hereinafter 'referred to as "GMI"/"Applicant"), is a Company incorporated and registered under the Companies Act, 1956, and was engaged in the business of automobile manufacturing. The Applicant is registered under the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 (hereinafter collectively referred to as the 'GST Act'). 5.2 The Applicant has transferred to Hyundai Motor India Limited ("HMI"), having its off....
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.... Maharashtra Industrial Development Corporation ("MIDC"), in favour of HMI. • Applicant to sell plant and machinery at a price individually agreed for each of the 9,664 items of plant and machinery. The total aggregate value of the plant and machinery to be sold by the Applicant amounts to INR 43,52,52,372/ -. The transfer of Plant and Machinery is to be undertaken through issuance of separate invoices which would specify price for each item of plant and machinery, as individually agreed and transfer of title with regards plant and machinery will occur by delivery. • Applicant to sell 42 buildings, through a Deed of Conveyance, at a value individually agreed for each building. The total aggregate value of the buildings to be sold by the Applicant amounts to INR 214,36,36,237/ -. Further, Applicant has completion certificates with respect to each of the buildings intended to be transferred. The 42 buildings include buildings acquired by the Applicant from CSIPL (earlier covered under the Term Sheet between CSIPL and HMI). 5.8 As per Schedule 2 "Transferred Assets" read along with Annexures of Schedule-2 to the APA, the total consideration mentioned in th....
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....th December 2023. The Applicant has proceeded on the basis that such an assignment of leasehold rights constitutes a taxable supply of services as per Section 7 (1) of the CGST Act, 2017 and has discharged tax at 18% on the said transaction on the price agreed for transfer of leasehold rights under the Asset Purchase agreement. The reply filed by the jurisdictional officer, the Deputy Commissioner of State Tax, GST Bhavan (Pune) (the "Department") broadly endorses the position put forth by the Applicant. Thus, in view of the Applicant, tax has been correctly paid on transfer of leasehold rights to HMI. 5.10.2 We observe that the Applicant has assigned land lease rights for INR 529,29,18,180/- through a Deed of Assignment. Assignment of such leasehold rights in land owned by Maharashtra Industrial Development Corporation ("MIDC"), in favour of HMI is subject to approval by MIDC. 5.10.3 Section 3 (26) of the General Clauses Act, 1897 defines "immovable property" as to include land, benefits to arise out of the land, and things attached to the earth, or permanently fastened to anything attached to the earth. Applicability of the General Clauses Act, 1897 in the context of a Spec....
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....inition of Services' 2 (102) of the GST Act. 5.10.7 It is evident from the above discussion that the applicant, apart from the conditional possession of the Demised Premises enjoys no title or ownership, which is central to sale of any immovable property within the meaning of section 54 of the Transfer of Property Act, 1882. The applicant's interest in the benefits arising out of the Demised Premises is limited to sub-letting or assigning in terms of the Deed, and he is capable of transferring the benefits only to that extent. The assignment, therefore, does not amount to transfer of any benefit other than leasehold rights in terms of the Deed for the unexpired period of the lease and is no transfer of any immovable property in the context of the GST Act. 5.10.8 Exemption vide Entry No. 41 of Notification No. 12/2017-CT dt. 28th June 20-17 is also not applicable in the instant case. Entry No. 41 holds that one-time upfront amount (called as premium, salami, cost, price, development charges or by any other name) leviable in respect of the service, by way of granting long term (thirty years, or more) lease of industrial plots, provided by the State Government Industrial Develop....
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....ghts. The applicant can, therefore, transfer to the assignee only his right to receive the service of the lease for the unexpired period after obtaining prior approval of the MIDC on payment of the transfer fee. 3. From the facts of the case, it is evident that MIDC who owns the land has leased the allocated land to applicant for a period of 95 years, who, by virtue of the lease conditions, does not possess the right to sub-lease any part or whole of the property leased to them. However, the applicant may transfer the leasehold rights to any other person with the approval of MIDC. Thus, it is clear that the applicant holds the leasehold rights which he may agree to transfer to any other person but the applicant cannot transfer the leasehold rights to such person on his own. The only option that exists for the applicant is to request MIDC to approve such an agreement entered into by the applicant with the other person and request MIDC to approve and execute the modified deed of the lease for the remaining period. Accordingly, Applicant had agreed to transfer leasehold rights held by them in respect of the land to HMI, for Consideration and MIDC has approved the request. ....
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....der "Other miscellaneous service" (SAC 999792) and taxable @ 18% under SI No. 35 of Notification No. 11/2017-CTR dt 28/06/2017, as amended from time to time. 5.10.11 Further the decision of Hon. Bombay High Court in case of Builders Association of India (2018-VIL-166-BOM) is applicable to this case. In this case, CIDCO had given plots of land on long term lease of 60 years or more. The petitioner had argued that transfer of lease rights by the Lessor amounted to sale of immovable property. Relevant paras showing the argument of the Petitioner and the view of the Hon High Court are produced as below. "7. The argument of Mr. Nankani learned senior counsel is that such a tax, as is demanded, cannot be levied, assessed and recovered. A long-term lease of 60 years tantamounts to sale of the immovable property, since the lessor is deprived of, by the allotment the right to use, enjoy and possess the property. Our attention is invited to section 105 of the Transfer of Property Act, 1882. The one-time premium amount is the lumpsum consideration paid for entering into the lease. Our attention is also invited to the fact that the lease of 60 years and with a statutory authority i....
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....lause (a) of sub-section (1) of section 7 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. We referred to the definitions simply to reinforce our conclusion that the CIDCO is a person and in the course or in furtherance of its business, it disposes of lands by leasing them out for a consideration styled as one-time premium. Therefore, if one refers to Schedule II, section 7, then, Item No. 2 styled as land and building and any lease, tenancy, licence to occupy land is a supply of service. Any lease or letting out of a building, including commercial, industrial or residential complex for business, either wholly or partly is a supply of service. It is settled law that such provisions in a taxing statute would have to be read together and harmoniously in order to understand the nature of the levy, the object and purpose of its imposition. No activity of the nature mentioned in the inclusive provision can thus be left out of the net of the tax. Once this law, in terms of the substantive provisions and t....
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....er a supply of goods nor a supply of services' under Section 7 read with entry 5 of Schedule III of the GST Laws? 5.11.1 In the context of the issue relating to transfer of buildings, the Applicant submits that the said transaction amounts to sale of buildings and is outside the scope of GST in terms of Section 7 (2) (a) of the CGST Act, 2017 read with Entry 5 of Schedule III since it is neither supply of goods nor supply of services. The Applicant also submits that they have paid stamp duty on the value of the building wherein the title to the immovable property has been transferred to the buyer. On this basis, no GST has been paid by the Applicant. 5.11.2 The Department has however espoused a view in their reply that the transaction ought to be considered as a leasing service since ownership of the construction on the leased land is not established with the lessee, even though the possession of construction is accompanied by a completion certificate. The reply of the Department further avers that it is not possible to separate the two components viz. the leased land and the construction work on it. 5.11.3 The Applicant submits that the ownership of the buildings construc....
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....hereto together with the buildings and erections now or at any time hereafter standing and being thereon AND TOGETHER WITH all rights, easements and appurtenances therein belonging EXCEPT AND RESERVING unto the Lessor all mines and minerals in and under the land or any part thereof TO HOLD the Demised P[remises unto the Lessee for the term of 95 (ninety five) years subject nevertheless to the provisions of the Maharashtra Land Revenue Code, 1966 and the rules there under PAYING THEREFORE yearly during the said term unto the Lessor at the Office of the chief Executive Officer of the Lessor (hereinafter referred to as "the Chief Executive Officer" which expression shall include any other Officer to whom the duties or function of the chief Executive Officer, Maharashtra Industrial Development Corporation, may be assigned) or as otherwise required the yearly rent of Re. 1/- (Rupee One). the said rent to be paid in advance without any deductions whatsoever on or before the 1st day of January in each and every year." 5.11.7 This clause of the Lease Deed clearly provides what is to be demised unto the Lessee. It provides that 'all that piece of land known as Plot No. A-16 in the Talega....
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....as below. SEC 108. Rights and liabilities of lessor and lessee. - Rights and Liabilities of the Lessee (d) If during the continuance of the lease any accession is made to the property, such accession (subject to the law relating to alluvion for the time being in force) shall be deemed to be comprised in the lease; This clause establishes the legal principle that any additions, improvements, or structures erected on the leased land become part of the leasehold property. Consequently, the lessee does not acquire independent ownership rights over any such buildings or constructions made during the subsistence of the lease. Rather, they remain subject to the lease terms and form an integral part of the property under lease. 5.11.9 Section 108 of the Transfer of Property Act, 1882, particularly clauses (a) to (p), stipulates that a lessee has only the right to use and enjoy the leased property in accordance with the lease conditions and does not acquire proprietary rights over structures erected on the land. Clause (h) of section 108 of Transfer of Property Act, 1882 and Section 54 of the Maharashtra Land Revenue Code, 1966, explicitly provides that upon....
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.... SHTRA STA P[remises unto the Lessee for the term of 95 (ninety five) years subject nevertheless to the provisions of the Maharashtra Land Revenue Code, 1966 and the rules there under PAYING THEREFORE yearly during the said term unto the Lessor at the Office of the chief Executive Officer of the Lessor (hereinafter referred to as "the Chief Executive Officer" which expression shall include any other Officer to whom the duties or function of the chief Executive Officer, Maharashtra Industrial Development Corporation, may be assigned) or as otherwise required the yearly rent of Re. 1/- (Rupee One) the said rent to be paid in advance without any deductions whatsoever on or before the 1st day of January in each and every year. 2. The Lessee with intent to bind all persons into whosoever hand the Demised Premises may come doth hereby covenant with the Lessor as follows: (e) Not to make any excavation upon any part of the Demised Premises nor remove any stone, sand, gravel clay or earth there from except for purpose of forming foundations of buildings and/or machinery or for the purpose of executing any work pursuant to the terms of this Lease Deed. (f) Not to erect any....
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....ubmission of all relevant documents. If within such 15 (fifteen) working days of the Executive Engineer fails to intimate in writing to Lessee his refusal or sanction with or without modifications or directions, the aforementioned specifications plans, elevations, sections and details thereof shall be deemed to have been approved and sanctioned. (p) Both in the construction of any building or erection on the Demised Premises and at all times during the continuance of the Lease Term to observed and to conform to the Building Regulations and to all by-laws, rules and regulations of the municipality/local authority or other body having authority in that behalf and any other statutory regulations as may be in force for the time being relating in any way to the Demised Premises and any building thereon. (t) To permit the lessor or the Chief Executive Officer or the Executive Engineer, and the Officers, Surveyors, Workmen or others employed by them from time to time and at all reasonable time of the day during the Lease Term hereby granted after twenty four hour's previous notice to enter into and upon the Demised Premises and to inspect the state of repairs thereof and....
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....t. It is discussed as below. 1. The Applicant contends that the Lease deed with MIDC dated 03.07.2010-Clause 2(v) stipulates that the Applicant was required to seek previous consent before parting with the Demised Premises. The Demised Premises refers to the premises described in the Lease Deed which is circumscribed as land only. This points out that building is not included under the scope of lease deed. The Applicant being lessee was granted permission to construct a factory and MIDC was not at all concerned with the buildings. The applicant's reliance on clause 2(v) to determine the scope of lease is misplaced as the clause 1 clearly states as to what is being leased. This clause clearly provides what is to be demised unto the Lessee. It provides that 'all that piece of land known as Plot No. A-16 in the Talegaon Industrial Area and outside the limits of Pune Municipal Council, within the Village limits of Navlakh Umbre in Maval Taluka and Registration Sub-District, Vadgaon Maval District and Registration District Pune in aggregate admeasuring 300.00 (three hundred) acres or thereabouts, as more particularly described in the First Schedule here under written a....
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....enant for conveyance which reflects that the Applicant has parted with the ownership of the Structures as well as handed over the title deeds and relevant approvals. Clause 4 Frames the liability of applicable Stamp Duty in respect of the Purchaser thereby indicating that there is a conveyance in immovable property. 5.11.17 While a conveyance deed is a crucial piece of evidence in establishing ownership, it is not the only document that may be required to prove ownership conclusively. Other documents may also be necessary to establish ownership such as Title deed which proves that the seller had the legal right to transfer the property, Mutation records in the Government records to reflect the new owner, encumbrance certificates and tax receipts also are necessary to establish ownership. A conveyance deed alone may not suffice if there are disputes or competing claims to the property. Courts may require additional evidence to establish ownership. It is necessary to supplement the conveyance deed with other legal documents and records to conclusively establish ownership. Mere registration of a conveyance deed will not suffice without additional evidence of a clear marketable titl....
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....tand. 1. Narayan Das v. Jatindranath [MANU/PR/0070/1927] 2. K.A. Dhairyawan (Dr) v. J.R. Thakur, [1958 SCC OnLine SC 39] 3. Citizen Credit Co op Bank vs. St. Sebastian Homes Co-op Society Limited [MANU/MH/7300/2024], 4. R.G. Hiremath v. T. Krishnappa [AIR 1978 Kar 13] Essence of all the above decisions is that the clauses of the lease deed are crucial in understanding the intention of the parties. In this case, MIDC clearly intends to lease not only plot of land but also the current buildings and the buildings that may be built at a later point of time during the period of lease. Thus the facts of the case are clearly different and the reliance placed on these judgements is misplaced. 5.11.20 Thus, there is no sale of building but transfer of leasehold rights from the Applicant to HMI. When the Lease is assigned to HMI, it means leasehold rights in the land and the building thereon gets assigned to HMI. The consideration may have been decided separately for each of these parts, but transfer of leasehold rights is for the entire 'Lease'. The 'Lease' includes land and buildings thereon, which is as per the terms of Lease Deed as well as pr....
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....ese plant and machinery has been specifically agreed and stands outlined in Annexure - A of Schedule 2 to the APA. 5.12.4 We observe that the APA also enlists the price of plant and machinery, equipment, etc, to be transferred to HMI in Schedule 2. It is relevant to note that under the APA, the plant and machinery to be sold are categorically listed with the intention to sell each of these items independently, as per the individual prices agreed that is the value taxable as per the applicable HSN rates on such prices. Hence, the 9,664 items to be sold to HMI would be sold for the consideration specific to each of the assets in the given list at the applicable GST rates. 5.12.5 Further, since the underlying transaction in the present case involves supply of goods, it is relevant to understand the meaning of the term "goods". The term goods' is defined in S. 2 (52) of the CGST Act to mean every kind of movable property other than money and securities, but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply. 5.12.6 Further, 'capital goods....