Case Law Details
BKP Media Vision Private Limited Vs Union of India and 5 others (Allahabad High Court)
Allahabad High Court has ordered an interim stay on the recovery of Goods and Services Tax (GST) demanded from BKP Media Vision Private Limited concerning the transfer of leasehold rights in land. The court’s decision relies on a precedent set by the Gujarat High Court, which held that such transactions are not subject to GST.
BKP Media Vision Private Limited had been granted a 99-year lease by NOIDA. Following permission from NOIDA, the company transferred all its rights in the leased land to a purchaser. The petitioner paid the required stamp duty based on the sale consideration. However, the respondents initiated proceedings under Section 74 of the Goods and Services Tax Act, 2017, alleging suppression of facts by the petitioner for not paying GST on this transfer.
The petitioner’s counsel argued that the levy of GST on this transaction was contrary to established legal precedent.
Judicial Precedents:
The primary judicial precedent cited by the petitioner was the Gujarat High Court’s ruling in Gujarat Chamber of Commerce and Industries vs. Union of India and others (2025:GUJHC:1117-DB). In this case, the Gujarat High Court concluded that transactions involving the transfer of leasehold rights of the nature in question would not be covered under Section 7(1)(a) of the GST Act.
The petitioner further submitted that invoking Section 74 of the Act, which pertains to cases of suppression, was unwarranted as there was no evidence of suppression. It was also noted that the Bombay High Court had entertained similar petitions and granted interim orders, following the Gujarat High Court’s stance.
Conversely, the counsel for the respondents opposed these submissions, citing a seemingly contrary view taken by the Bombay High Court in Builders Association of Navi Mumbai vs. Union of India (2018 (12) G.S.T.L. 232 (Bom.)), a view which they claimed was upheld by the Supreme Court in Builders Association of Navi Mumbai vs. Union of India (2024 (84) G.S.T.L. 417 (S.C.)).
However, the Allahabad High Court, upon initial consideration, found the issue raised by the petitioner to be “squarely covered” by the Gujarat High Court judgment. The court observed that the respondent’s reliance on the Builders Association of Navi Mumbai case appeared to be “misplaced.” The court clarified that the Builders Association of Navi Mumbai case pertained to lease deeds executed by an authority in favor of a lessee, not the subsequent transfer of rights once a lease has already been executed.
Given these considerations, the Allahabad High Court deemed the matter worthy of further consideration. The court issued notice to the respondents, directing them to file a counter affidavit within six weeks. In the interim, and until further orders, the recovery of the GST demand stemming from the order dated January 31, 2025, passed by respondent No. 3, has been stayed.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. It is, inter alia, submitted by counsel for the petitioner that the petitioner was granted a lease by NOIDA for a period of 99 years. After seeking permission from NOIDA, the petitioner has transferred all his rights in the said leased land to the purchaser.
2. Submissions have been made that the petitioner paid the requisite stamp duty etc. based on the sale considerations and the respondents initiated proceedings under Section 74 of the Goods and Services Tax Act, 2017 (for short ‘the Act’) inter alia alleging suppression on part of the petitioner in not making payment of GST in the said transfer by the petitioner. Submissions have been made that on the transaction made by the petitioner, the levy of GST by the respondents, is contrary to the law as laid down by the Gujarat High Court in Gujarat Chamber of Commerce and Industries vs. Union of India and others : 2025:GUJHC:1117-DB, wherein the Court came to the conclusion that the transaction of the present nature, would not be covered under Section 7(1)(a) of the Act. Further submissions have been made that invoking provisions of Section 74 of the Act in the present circumstances of the case, cannot be countenanced, inasmuch as, there has been no case of suppression as alleged. Further submissions have been made that following the order passed by the Gujarat High Court, Bombay High Court has also entertained petition of similar nature and has granted interim order.
3. Learned counsel for the respondents vehemently opposed the submissions. Submissions have been made that a contrary view has been taken by the Bombay High Court in Builders Association of Navi Mumbai vs. Union of India : 2018 (12) G.S.T.L. 232 (Bom.) and the said view has been upheld by Hon’ble Supreme Court in Builders Association of Navi Mumbai vs. Union of India : 2024 (84) G.S.T.L. 417 (S.C.).
4. Apparently, the issue as raised by the petitioner is squarely covered by the judgement in the case of Gujarat Chamber of Commerce and Industries (supra). The reliance placed by the respondents on order in the case of Builders Association of Navi Mumbai (supra) appears to be misplaced as the same pertains to the lease deed executed by the Authority in favour of the lessee and not a case of transfer of the rights once lease has been executed by the authority in favour of the lessee.
5. Matter requires consideration.
6. Issue notice.
7. Counter affidavit be filed within a period of six weeks.
8. In the meanwhile and till further orders, recovery pursuant to the order dated 31.01.2025 in order-in-original passed by the respondent No.3 shall remain stayed.
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