Panacea Biotec Limited Vs Union of India & Ors. (Bombay High Court)
In Panacea Biotec Limited Vs Union of India & Ors., the Bombay High Court addressed the issue of whether GST can be levied on a Deed of Assignment, involving the transfer of land and a building constructed thereon by a lessee to a third party. The petitioner contended that the transaction in question should fall under Item 5 of Schedule III of the Central Goods and Services Tax Act, 2017, which does not attract GST, rather than under Item 2 of Schedule II. Despite submitting a detailed reply to the show cause notice on July 22, 2024, the impugned order issued on August 19, 2024, incorrectly stated that no submissions were made. Given this factual inaccuracy, the court quashed the impugned order and remanded the matter to the authorities for fresh adjudication.
The Bombay High Court directed the third respondent (GST authorities) to reconsider the show cause notice after allowing the petitioner to file a detailed response within two weeks. The authorities were instructed to conduct a personal hearing before passing any further order. The court also referred to a recent judgment by the Gujarat High Court, which held that similar transactions are not subject to GST. While the Bombay High Court did not directly examine the Gujarat ruling, it emphasized that the authorities must consider it during their reevaluation. The writ petition was disposed of without any order regarding costs.
