TaxTMI 
TaxTMI 
2026 (3) TMI 1135
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....r is taken up for hearing. 3. Rule returnable forthwith. Learned advocates waives service of notice of rule on behalf of the respective parties. 4. The present petition preferred under Articles 226 and 227 of the Constitution of India assails the correctness and validity of show cause notice dated 29.12.2023 rendered under Section 74 of the State Goods & Service Tax Act, 2017 (hereinafter referred to as 'the Act' for short), inter alia considering the assignment of lease hold rights by the petitioner in favour of M/s. Jal Aqua International as supply of service under Section 7(1)(a)of the Act and Order-in-Original dated 15.02.2024 passed by the respondent no. 4 under Section 74 (1) of the Act. 5. 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 years. GIDC issues an allotment letter to the industry desiring to take plots developed....
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....e pendency of the present petition, the petitioner was communicated with Order-in-Original dated 15.02.2024 passed by the respondent no. 4 making demand to the tune of Rs. 1,45,80,000/- as arrears of Goods and Service Tax under the provisions of Section 74 of the Act. Both the show cause notice and the Order-in- Original are impugned in the present writ petition. 6. Learned advocate Mr. Nisarg Desai appearing for the petitioner has submitted that the issue is no more res integra pursuant to the decision of this Court in the case of Gujarat Chamber of Commerce, Industries & Ors Vs. Union of India & Ors., rendered in Special Civil Application No. 11345 of 2023. 7. Ms. Tanushree Shrimal, learned Assistant Government Pleader as well as learned Senior Standing Counsel Mr. Utkarsh Sharma for respondents nos. 3 and 4 were unable to controvert the proposition that the issue is now covered by the decision of Gujarat Chamber of Commerce, Industries & Ors., (supra). 8. This Court, in the case of Gujarat Chamber of Commerce, Industries & Ors., (supra), held as under: "51. This submission seems to be very attractive at the first blush, however, there are two transactions, one ....
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....he legislative intention, section 7 of the GST Act which provides for the scope of supply of good or services or both for the purpose of the GST Act includes all forms of supply of goods or services or both by any 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. ....
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....66. As per the notification no. 11/2017, lease of property is included in Heading No. 9954 relating to construction services which provides rates of GST involving transfer of land or undivided share of land, as the case may be, and value of 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 sublease 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 lea....
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.... to the assignee along with rights and liability to sue and be sued upon the covenants in the original lease. XXX XXX XXX 73. Therefore, the scope of "supply of services" would not include transfer of leasehold rights as supply of service as it would 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 w....
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.... rights as the interest in immovable property being an intangible form would be covered by the scope of supply of service, is not tenable as transaction of assignment is nothing but absolute transfer of right and interest arising out of the land which would amount to transfer/sale of immovable property which 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 whatso....