GST on transfer of Leasehold rights of GIDC Land – Gujarat High Court Stays the Proceedings
A number of notices had been issued by the State GST Offices across Gujarat in the controversial matter of applying GST on transfer of Leasehold rights of GIDC Land by private parties. A large number of MSMEs across Gujarat operate from GIDC and till date have benefited from the infrastructural platform provided by GIDC in the form of concessional rate land on a 99 years lease.
The State GST Officials are keen on issuing summons, notices and advisories to cover such long term lease transfers between private parties under the purview of GST. Many unscrupulous officials have even resorted to threating, pressurizing and making illegal use of summons as a tool to collect GST on transfer of leasehold rights in GIDC. In most cases, taxing such transaction have resulted into unsettling of already closed accounts with the purchaser even after a lapse of 5 to 6 years. This is a genuine hardship on the part of MSME who may have invested the proceeds of the transfer and moved on.
A group of private parties from Ankleshwar, Panoli, Jhagadia, Dahej and Saykha Industrial estate have filed writ petitions before the Hon’ble Gujarat High Court, in which the Hon’ble Court on 18th October 2023, was pleased to pass an interim injunction in 2 such cases till the disposal of the matter. Many more injunctions are awaited.
Matter was argued by Dr. Avinash Poddar, Advocate. After hearing the matter for some time Hon’ble Gujarat High Court deemed appropriate to grant Interim Relief to the petitioners by Staying the proceedings.
The copy of the order is as under: