The case involved leasehold land acquired from the Maharashtra Industrial Development Corporation (MIDC), which was later transferred, along with the building, to a third party. The assessee argued that the transaction should be classified under Item No. 5 of Schedule III of the GST Act, which exempts the sale of land and buildings, rather than under Item No. 2 of Schedule II, which treats it as a supply of lease services.
The Revenue authorities failed to consider the assessee’s reply to the show cause notice, mistakenly recording it as not submitted in the original order. This procedural lapse became a critical issue in the case.
The High Court directed the Adjudicating Authority to pass a fresh order, taking into account the Gujarat High Court’s judgment, which held that such assignments constitute a transfer of immovable property.
By quashing the GST demand, the Court clarified the scope of taxation for similar transactions, providing relief to the assessee.
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