TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 562
X X X X Extracts X X X X
X X X X Extracts X X X X
....e hold rights by the petitioner in favour of M/s. Bansi Industries as supply of service under Section 7(1)(a) of the Act and, therefore, classified under Heading 9972 of classification scheme for services under the Act. 4. 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 years. 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. 4.1 It is the case of the petitioner that the petitioner was allotted Industrial Plot No. 227 at Panoli Industrial Estate admeasuring 3596.74 sq.mtrs vide order dated 10.08.2018, which initially consisted of partners namely Bipinbhai Pravinbhai Kakadiya, Dineshbhai Muljibhai Kakadiya, and Hiteshbhai Natvarbhai ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tition challenging the Order-in- Original dated 31.12.2024. 5. Mr. Hardik Vora, learned advocate for the petitioner has submitted that the issue is no more res integra pursuant to the decision of the Hon'ble Supreme Court in the case of Gujarat Chamber of Commerce and Industry & Ors Vs. Union of India & Ors., rendered in Special Civil Application No. 11345 of 2023. Learned advocate Mr. Hardik Vora has further submitted that when the show cause notice itself was quashed by this Court in Special Civil Application No. 12828 of 2024, the subsequent Order-in-Original is required to be quashed and set aside. 6. Ms. Shrunjal Shah, learned Assistant Government Pleader was unable to controvert the proposition that the issue is now covered by the decision of Gujarat Chamber of Commerce (supra). 7. This Court, in the case of Gujarat Chamber of Commerce and Industry (supra), held as under: "51. This submission seems to be very attractive at the first blush, however, there are two transactions, one when the GIDC allots plot of land along with right to occupy, right to construct, right to possess on long term lease basis, it is nothing but supply of service as right of ownership of plot in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....form such as transfer, sale, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. Therefore, considering the settled legal position as held by the Hon'ble Supreme Court and other High Courts from time to time, it is true that any lease or letting out of a building including commercial, industrial, residential complex for business either wholly or partly would be "supply of service". Therefore, reading the provisions of the Act together and harmoniously to understand the nature of levy and the object and purpose of its imposition, no activity of the nature mentioned in the inclusive provision of section 7 of the GST Act can be left out of the net of tax. Simultaneously, the provisions of section 7 has to be read in terms of substantive provision and Schedules which treats the activity as supply of service, particularly, in relation to land and building and includes a lease. The consideration, therefore, as premium/one time premium is a measure on which tax is to be levied, assessed and recovered. Therefore, when the GIDC allots the plot of land on lease of 99 years and charges premium....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... such supply shall be equivalent to the total amount charged for such supply less the value of transfer of land or undivided share of land, as the case may be, and value of such transfer of land or undivided share of land shall be deemed to be 1/3rd of the total amount charged for such supply and total amount means sum total of consideration charged for the aforesaid service and amount charged for transfer of land or undivided share of land, as the case may be, including by way of lease or sublease. Therefore, levy of GST on construction services are exclusive of 1/3rd of total amount charged for such supply which includes transfer by way of lease or sub-lease meaning thereby even for levy of GST on construction services, value of the land by way of lease is to be excluded considering such value being the value of immovable property which is transferred. 67. In such circumstances, the contention raised on behalf of the petitioner that leasehold rights are nothing but interest in immovable property as per the provision of section 105 read with section 108(j) of the Transfer of Property Act constituting absolute transfer of right in such property because transfer of such leasehold....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ould be transfer of "immovable property" being a benefit arising out of immovable property consisting of land and building. 74. Clause 5 of Schedule III of the GST Act clearly provides that sale of land cannot to be treated as supply of goods or services. Therefore, leasehold rights which are to be considered as sale of land would be out of purview of the provisions of scope of supply as per section 7 of the GST Act. 75. As the GST Act is nothing but a levy of tax upon all the indirect taxes which were levied under different legislation, it would be germane to refer to definition of "service" as provided in section 2(102) of the GST Act to mean as anything other than goods, money and securities. Considering such definition in juxtaposition to provisions of section 65B(44) of the Finance Act, 1944, there was specific exclusion of transfer of title in immovable property from definition of 'service' itself which clearly shows that there was no intention of the legislature to impose tax on transfer of immovable property. Under the Service Tax Act, even the development rights which are the benefits arising from land were not liable to tax. Leasehold right is in fact a greater righ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ich cannot be said to be "service" as contemplated under the provisions of GST Act. Moreover, assignment/transfer of rights would be out of scope of supply of service. 82. In view of above discussion and analysis of the provisions of section 7 read in context of the facts of the case, the decisions relied upon on behalf of the respondent are required to be dealt in support of the proposition that interest in immovable property cannot be considered as an immovable property as it is not envisaged as such in the GST Act, as immovable property is nothing but bundle of rights and right to give such property on lease is one of such rights and further transfer of the right to occupy or possess will continue to remain as supply of service which character will not change merely because lessee of GIDC affects absolute transfer thereof in favor of the assignee leaving no right whatsoever in respect of such leasehold land and building. XXX XXX XXX 83. In view of foregoing reasons, assignment by sale and transfer of leasehold rights of the plot of land allotted by GIDC to the lessee in favour of third party-assignee for a consideration shall be assignment/sale/ transfer of benefits ari....