Case Details: Saurashtra Tin and Metal Industries vs. Union of India - [2025] 175 taxmann.com 943 (Gujarat)
Judiciary and Counsel Details
- Bhargav D. Karia & P. M. Raval, JJ.
- Dhaval Shah & Paresh V Sheth for the Petitioner.
- Pradip D Bhate for the Respondent.
Facts of the Case
The Petitioner was allotted an industrial plot by the Gujarat Industrial Development Corporation (GIDC), pursuant to which a lease deed, conveyance deed, and license agreement were executed. The Petitioner subsequently applied to GIDC for transfer of the said plot to a third party, which was duly approved by GIDC. A deed of assignment was executed between the Petitioner and the third party, whereby the Petitioner received a consideration for the same. No GST was charged or collected by the Petitioner on the said transaction. The jurisdictional officer under CGST issued a demand, asserting that the execution of the deed of assignment amounted to a supply of service and that the consideration received constituted the taxable value under Notification No. 11/2017-State Tax (Rate), dated 30-06-2017, specifically under Entry No. 16, Heading No. 9972 as ‘Real Estate Services’ taxable at 18%. The Petitioner contended that the transaction was a mere assignment or transfer of leasehold rights in immovable property, and did not amount to a taxable supply. The matter was accordingly placed before the Gujarat High Court.
High Court Held
The Gujarat High Court held that the assignment, sale, or transfer of benefits arising out of immovable property by the lessee-assignor in favour of a third party-assignee, who would thereafter become the lessee in place of the original allottee-lessee, did not fall within the scope of ‘supply’ under Section 7 of the CGST Act read with the Gujarat GST Act. The Court noted that the leasehold rights originally vested in the Petitioner were simply being transferred to the third party, with no additional elements involved. It further held that the transaction was not covered under Notification No. 11/2017-State Tax (Rate), dated 30-06-2017, and relied upon the precedent set in Gujarat Chamber of Commerce and Industries v. Union of India [2025] 94 GSTL 113 (Guj.). Consequently, the impugned order demanding GST was quashed.
List of Cases Reviewed
- Kabir Instrument and Technology v. Union of India [2025] 171 taxmann.com 107/108 GST 770/95 GSTL 369 (Gujarat) (para 8)
- Gujarat Chamber of Commerce and Industry v. Union of India [2025] 170 taxmann.com 251/94 GSTL 113 (Gujarat) (para 8)
- Alfa Tools (P.) Ltd. v. Union of India [2025] 172 taxmann.com 587/109 GST 403/97 GSTL 125 (Gujarat) (para 8), followed
List of Cases Referred to
- Kabir Instrument and Technology v. Union of India [2025] 171 taxmann.com 107/108 GST 770/95 GSTL 369 (Gujarat) (para 8)
- Gujarat Chamber of Commerce and Industry v. Union of India [2025] 170 taxmann.com 251/94 GSTL 113 (Gujarat) (para 8)
- Alfa Tools (P.) Ltd. v. Union of India [2025] 172 taxmann.com 587/109 GST 403/97 GSTL 125 (Gujarat) (para 8).
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