Gulab Dattu Nage vs. The City And Industrial Development Corporation LTD Cidco Through Its Administrator And Others
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The petitioner, Gulab Dattu Nage, filed a writ petition seeking a direction for Respondent No. 1 (CIDCO) to deposit Rs. 9,56,448/- towards GST out of Rs. 55,13,600/- collected from the petitioner. The petitioner also sought to quash an impugned letter dated 30.12.2021 issued by Respondent No. 1. The petition was filed under Article 226 of the Constitution of India. The core of the dispute revolves around the levy of GST on a transaction involving the assignment and transfer of leasehold rights of a plot of land allotted by CIDCO.
Held
The Court held that the assignment by sale and a transfer of leasehold rights of a plot of land allotted by a corporation like CIDCO to a third party for a consideration constitutes the assignment/sale/transfer of benefits arising out of immovable property by the lessee-assignor in favour of the third party. Following the Gujarat High Court's decision in Gujarat Chamber of Commerce and Industry Vs. Union of India, which was deemed binding on the authorities in terms of this Court's decision in Commercial of Income-Tax, Vidarbha v. Smt. Godavari Devi Saraf, the Court found that such transactions are not subject to the levy of GST under the GST Act. The impugned communication dated 30.12.2021, demanding Rs. 9,56,448/- from the petitioner, was quashed and set aside. The Writ Petition was allowed, and Civil Application No. 10683 of 2024 was also allowed in terms of the prayers.
Key Issues
1. Whether the assignment and transfer of leasehold rights of a plot of land allotted by a corporation like CIDCO, for a consideration, constitutes a transaction subject to the levy of GST under the GST Act? Petitioner's contention: The petitioner argued that such a transaction, involving the transfer of benefits arising out of immovable property by the lessee-assignor to a third party, is not leviable to GST. The petitioner relied on the ratio of the Gujarat High Court in Gujarat Chamber of Commerce and Industry Vs. Union of India. Revenue/State's contention: The judgment does not record any specific arguments made by the respondents (State and CIDCO). However, the impugned letter dated 30.12.2021 indicates a demand for GST, implying the revenue's stance that the transaction is taxable.
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Cause title — parties, addresses and appearances
ORDER : . By this petition filed under Article 226 of the Constitution of India, the petitioner seeks following reliefs :- "B. Rule may be made absolute and by issue of writ of mandamus or any other writ or order in the like nature, the respondent No.1 may be directed to deposit the amount of tax (GST) of Rs.9,56,448/- to the credit of government out of the total amount of Rs.55,13,600/- collected from the petitioner towards Central Goods and Services Tax and Maharashtra Goods and Services Tax. C. Rule may be made absolute and by issue of writ of certiorari or any other order in the like nature, the impugned 2026:BHC-AUG:10696-DB
2 1506.2024WP.odt letter dated 30.12.2021 issued by the respondent No.1, may be quashed and set aside."
The issue involved in the present Writ Petition is squarely covered by the decision of this Court at Nagpur Bench in the case of Aerocom Cushions Private Limited Vs. Assistant Commissioner (Anti- Evasion), CGST & CX, Nagpur-1, Superintendent, CGST & Central Excise, Anti - Evasion, Nagpur, (2026) Tax Corp(GST) 67069 (HC- India, it is held that :- "
Further, the law laid down by Gujarat High Court is binding on the authorities i.e. the respondents in terms of the judgment of this Court in the case of Commercial of Income-Tax, Vidarbha v. Smt. Godavari Devi Saraf, (1978) 113 ITR 589, wherein the Court held that until a contrary decision is given by any other competent High Court, it is binding on a Tribunal in the State of Bombay, it has to proceed on the footing that the law declared by the High Court, though of another State, is the final law of land. In that sense, the decision of Gujarat High Court is binding on the authorities below. Further we subscribe to the finding of Gujarat High Court that the assignment by sale and a transfer of leasehold rights of the plot of land allotted by the Corporation like GIDC or MIDC to the lessee in favour of third party-assignee for a consideration shall be assignment/sale/transfer of benefits arising out of immovable property by the lessee-assignor in favour of third party and in such circumstances, the transaction would not be subject to levy of GST in terms of the GST Act."
Prayers made in the present petition are squarely covered
3 1506.2024WP.odt by the aforesaid ratio.
In the result, Writ Petition is allowed. The impugned communication dated 30.12.2021 thereby demanding an amount of Rs.9,56,448/- from the petitioner is hereby quashed and set aside.
In view of the order allowing Writ Petition, Civil Application No.10683/2024 is allowed in terms of prayer clauses "B" and "C". (VAISHALI PATIL-JADHAV,J.) (NITIN B. SURYAWANSHI,J.) sga
Reproduced from the public record of the Bombay High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.