Saurashtra Tin And Metal Industries Vs Union of India & Ors. (Gujarat High Court)
Gujarat High Court today quashed an order by tax authorities demanding Goods and Services Tax (GST) on the transfer of leasehold rights for an industrial plot. The court reiterated its consistent stance that such assignments do not fall under the purview of “supply of service” and are therefore not subject to GST.
The ruling came in the case of Saurashtra Tin And Metal Industries versus the Union of India and others, where the petitioner challenged a show-cause notice and a subsequent order confirming a GST demand of Rs. 2,46,53,700/-.
Background of the Dispute
Saurashtra Tin And Metal Industries had been allotted an industrial plot (No. G-613, measuring 26210.43 square meters) at the GIDC Industrial Estate in Metoda, Taluka Lodhika, by GIDC Rajkot in 1994. In February 2021, the petitioner applied to GIDC for the transfer of these leasehold rights to M/s Janani Incast. GIDC granted approval, and a deed of assignment was executed on February 24, 2021. Saurashtra Tin And Metal Industries received Rs. 13,69,65,000/- as consideration for this transfer during the financial year 2020-21, but did not charge or recover any GST on this amount.
