Estate Investment Company Pvt. Ltd. Vs Union of India (Bombay High Court)
In Estate Investment Company Pvt. Ltd. Vs Union of India, the Bombay High Court heard petitions concerning the levy of Goods and Services Tax (GST) on the assignment of leasehold rights of land allotted by a State Industrial Development Corporation along with buildings constructed on such land. Counsel for the petitioners relied on a decision of the Gujarat High Court in Gujarat Chamber of Commerce and Industry vs Union of India, which held that GST would not be leviable on assignment of leasehold rights of a plot allotted on lease by an industrial development corporation together with the building constructed on it when transferred by the lessee or its successor to a third party for a lump sum consideration. According to that decision, such a transaction amounts to assignment or transfer of benefits arising from immovable property and therefore falls outside the scope of “supply” under the GST framework.
Counsel for the revenue submitted that the Gujarat High Court judgment has been appealed and the Supreme Court of India has issued notice in the matter. The petitioners argued that issuance of notice by the Supreme Court should not prevent the Bombay High Court from following the Gujarat High Court decision, which they contended was directly applicable.
