2025 (4) TMI 809 - HC - GST

Supply of services - revenue sharing arrangement under a development agreement entered into by the Petitioner with L T Asian Realty Project LLP - HELD THAT - In the present case in fact it is the case of the Petitioner that there is no transfer at all. Even if one would assume that there is a transfer the same would be of immovable property and not taxable under the GST Law. Thus a prima facie case for interim relief is made out. Respondent Nos. 1 to 4 are directed to file their Affidavit in Reply within a period of two weeks from today and serve a copy of the same on the Advocate for the Petitioner - petition disposed off.

Summary

In the Bombay High Court case, the petitioner sought a declaration that development rights under a revenue-sharing arrangement do not constitute a "supply" of services subject to GST under the CGST Act. The petitioner argued that these rights should be considered a "sale of land," which falls outside the GST taxation scheme per Articles 246 and 246A of the Constitution and relevant sections of the CGST Act. The petitioner also sought to quash an Order-in-Original dated January 2, 2025.The court considered whether the revenue-sharing arrangement with L & T Asian Realty Project LLP constituted a supply of service exigible to GST. The court noted that while the issue is similar to a case before the Gujarat High Court-where the assignment of a lease was deemed a transfer of immovable property and not taxable under GST-the current case involves no transfer, or if any, a transfer of immovable property, thus not taxable under GST. Consequently, the court found a prima facie case for interim relief.The court granted interim relief, restraining the respondents from acting on the contested Order-in-Original pending the petition's final resolution. Respondents were directed to file an Affidavit in Reply within two weeks, with the petitioner allowed to file a Rejoinder thereafter. The order will be digitally signed and can be acted upon via fax or email.