Aquaeva Chemtech Private Limited Vs State of Gujarat & Ors. (Gujarat High Court)
The writ petition before the Gujarat High Court concerned the petitioner’s challenge to Deficiency Memos dated 10.03.2025 and 19.05.2025 issued by the GST authorities, by which a refund claim was not processed. The petitioner sought quashing of the deficiency memos and a direction to grant refund of GST paid on transfer of leasehold rights in land.
The petitioner relied on the binding judgment of the same Court in Gujarat Chamber of Commerce and Industry v. Union of India, wherein it was held that assignment or transfer of leasehold rights in land by a lessee to a third party is at par with sale of land and does not constitute a “supply” under Section 7 of the CGST Act. Consequently, such transactions are covered by Schedule III and are not exigible to GST under Section 9 of the Act. It was contended that the refund was denied mechanically without considering this settled legal position.
The factual background showed that M/s Dayaram Pharma Chem obtained a final transfer order from GIDC to sell the plot, which was thereafter transferred to the petitioner through an agreement dated 19.07.2024. The petitioner paid consideration in two instalments and, treating the transaction as taxable, paid GST. Subsequently, relying on the Gujarat Chamber of Commerce judgment, the petitioner applied for refund under Section 54 of the CGST Act. However, the refund applications were disposed of through Deficiency Memos in Form GST RFD-03, citing illegibility of documents and absence of any notification or circular permitting refund of GST paid on lease transactions.
