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 GST amounting to Rs. 9,56,448/- 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 is filed under Article 226 of the Constitution of India. The amount in dispute is Rs. 9,56,448/-. The procedural history involves the issuance of a demand letter by CIDCO, which the petitioner is challenging.
Held
The Court held that the assignment by sale and transfer of leasehold rights of a plot of land allotted by a corporation like GIDC or MIDC to the lessee in favor of a third party-assignee for a consideration constitutes an assignment/sale/transfer of benefits arising out of immovable property by the lessee-assignor to the third party. Consequently, such a transaction would not be subject to the levy of GST in terms of the GST Act. The Court found that the issue was squarely covered by its own earlier decision in Aerocom Cushions Private Limited Vs. Assistant Commissioner (Anti-Evasion), CGST & CX, Nagpur-1, which relied on the Gujarat High Court's judgment in Gujarat Chamber of Commerce and Industry Vs. Union of India. The Court directed that the impugned communication dated 30.12.2021, demanding Rs. 9,56,448/- from the petitioner, be quashed and set aside. The ratio is that the transfer of leasehold rights for consideration is not a taxable supply under GST.
Key Issues
1. Whether the assignment by sale and transfer of leasehold rights of a plot of land allotted by a corporation (like CIDCO) to a third party for consideration is subject to GST levy under the GST Act. The petitioner argues that the transaction is not subject to GST. The judgment relies on the decision in Aerocom Cushions Private Limited Vs. Assistant Commissioner (Anti-Evasion), CGST & CX, Nagpur-1, which in turn relied on the Gujarat High Court's decision in Gujarat Chamber of Commerce and Industry Vs. Union of India. The petitioner's contention, as supported by these precedents, is that the assignment/sale/transfer of benefits arising out of immovable property by the lessee-assignor in favor of a third party is not leviable to GST. The revenue or State's arguments are not explicitly recorded in the provided text.
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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:10695-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.