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2022 (7) TMI 1019 - HC - GSTLevy of GST - Long term lease of 99 years - Validity and legality of the recovery notice - whether long term lease of 99 years is nothing but sale of land and building in terms of Entry 5 of Schedule III to Section 7 of the CGST Act,2017 and that it would not attract the levy of GST? - HELD THAT - Stating the bare minimum facts, the petitioner purchased the Plot Nos. 2201 and 2202 in the Ankleshwar Industrial Area of Gujarat Industrial Development Corporation. Deed of Assignment-cum- Slup Deed dated 28.10.2010 was executed. Subsequently, the petitioner sold of the said property by sale deed dated 08.06.2018 transferring rights thereunder to one Siddharth Interchem Private Limited. It was stated that the said Siddharth Interchem Private Limited would be using the plot for manufacturing operations. It further appears that the petitioner received impugned recovery notice as is styled by the petitioner in relation to the said transaction - On bare reading of the said communication dated 28.05.2021, described by the petitioner as recovery notice , we find that it is a mere communication from respondent No.3. We are at a loss at to why such communicative exercise has been undertaken by the department. Be that as it may. It is clearly stated that the petitioner has misconstrued the simple communication letter as recovery notice and filed the present petition taking such an insignificant ground - thus, nothing further survives in the petition. There exists no cause of action whatsoever in the present set of facts. Petition dismissed.
Issues:
1. Validity and legality of recovery notice issued by respondent No.3. 2. Interpretation of long-term lease as a sale of land and building for GST levy. Analysis: 1. The petitioner invoked the writ jurisdiction of the court to challenge a recovery notice dated 28.05.2021 issued by respondent No.3, the Directorate General of GST Intelligence, Vadodara. The petitioner sought a review of the notice's validity and legality, arguing that a long-term lease of 99 years should not attract GST as it constitutes a sale of land and building under Entry 5 of Schedule III to Section 7 of the CGST Act, 2017. The petitioner also requested the court to prevent any recovery based on the notice. 2. The petitioner purchased Plot Nos. 2201 and 2202 in the Ankleshwar Industrial Area and subsequently sold the property to Siddharth Interchem Private Limited for manufacturing operations. The recovery notice claimed that the transfer of rights for consideration constituted a taxable service under "Other Miscellaneous Service (SAC 999792)" at 18% GST. However, the court noted that the communication from respondent No.3 was merely a request for information and voluntary payment, not a recovery notice. The respondent clarified that the petitioner misunderstood the communication as a recovery notice and emphasized the need for self-assessment and cooperation in determining GST liability. 3. The court reviewed an affidavit-in-reply from the Directorate General of GST Intelligence, Surat, which explained that the petitioner misinterpreted the communication as a recovery notice. The respondent highlighted that the correct course of action for taxpayers was to self-assess GST liability or engage with the department for a comprehensive investigation before any formal recovery action. Consequently, the court found no cause of action in the petition and dismissed it, emphasizing that the communication in question did not warrant a review of the case's merits as it was not a recovery notice but a simple communication. 4. In conclusion, the court dismissed the petition, emphasizing that the communication labeled as a recovery notice was a mere communication from respondent No.3. The court clarified that there was no need to delve into the case's merits since the communication did not constitute a formal recovery notice, as clarified by the respondent.
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