2025 (1) TMI 1142 - HC - GST

Levy of GST on a Deed of Assignment under which the land and the building constructed thereon is transferred by a Lessee to a 3rd party - HELD THAT - Without going into the merits of the matter it would be in the fitness of things if the impugned order is set aside and the matter is remanded back to Respondent No.3 for a fresh adjudication on the show cause notice. This is because the impugned order also clearly records that no submissions have been made by the Petitioner against the show cause notice and which is factually incorrect. There was a reply to the show cause notice filed by the Petitioner dated 22nd July 2024 and which was received by the Assistant Commissioner of State Tax on the very same day. Despite this the impugned order records that no submissions were made in reply to the show cause notice. The impugned order dated 19th August 2024 is hereby quashed and set aside. The 3rd Respondent is now directed to once again adjudicate the show cause notice. The Petitioner is at liberty to file their detailed reply to the show cause notice within a period of 2 weeks from today. Once the aforesaid reply is filed Respondent No.3 shall give a personal hearing to the Petitioner and only thereafter pass any order on the show cause notice. Petition disposed off.

Summary

In the judgment delivered by the Bombay High Court, the primary focus was on the petitioner's request to quash a show cause notice dated 16th July 2024, and an impugned order dated 19th August 2024, both issued by Respondent No. 3 under the GST framework. The core legal issue was whether GST could be levied on a Deed of Assignment involving the transfer of land and a building by a lessee to a third party. The petitioner argued that this transaction should fall under Item 5 of Schedule III of the Central Goods and Services Tax Act, 2017, rather than Item 2 of Schedule II.

The court found procedural errors in the impugned order, noting that it incorrectly stated that no submissions had been made by the petitioner against the show cause notice, despite a reply being filed on 22nd July 2024. Consequently, the court quashed the impugned order and remanded the matter back to Respondent No. 3 for a fresh adjudication, instructing them to consider the petitioner's submissions and provide a personal hearing before passing a new order.

Additionally, the court acknowledged a recent Gujarat High Court decision, which found similar transactions not subject to GST, and directed Respondent No. 3 to consider this judgment in their reassessment. The writ petition was disposed of with no order as to costs, and the order was to be digitally signed and acted upon accordingly.