GST on Transfer of Land and Building by Lessee , Matter Remanded for Proper Consideration of Assessee’s Contentions
Summary in Key Points:
- Issue: Whether the transfer of land and building by a lessee to a third party falls under Schedule III (exempt from GST) or Schedule II (liable to GST) of the Central Goods and Services Tax Act, 2017.
- Facts: The GST authorities sought to levy GST on a transaction where the assessee, a lessee, transferred land and building to a third party. The assessee contended that this transaction should be exempt from GST as it falls under Schedule III, Item 5 (sale of land), rather than Schedule II, Item 2 (supply of services). However, the impugned order did not address this contention.
- Decision: The High Court set aside the impugned order and remanded the matter back to the GST authorities for fresh consideration, emphasizing the need to address the assessee’s contention regarding the applicability of Schedule III.
ANALYSIS:
The High Court ruled in favor of the assessee, setting aside the impugned order and remanding the matter for fresh adjudication. The court highlighted the following:
- Assessee’s Contention: The assessee raised a valid contention that the transaction falls under Schedule III, Item 5, which exempts the sale of land from GST.
- Non-Consideration of Arguments: The impugned order failed to address or consider the assessee’s arguments regarding the applicability of Schedule III.
- Violation of Natural Justice: By not considering the assessee’s arguments, the GST authorities violated the principles of natural justice.
- Remand for Fresh Adjudication: The High Court remanded the matter back to the GST authorities to reconsider the case and pass a fresh order after duly considering the assessee’s contentions regarding the applicability of Schedule III.
Important Note: This case emphasizes the importance of considering and addressing the assessee’s arguments and contentions in GST proceedings. The GST authorities cannot simply ignore relevant arguments and pass orders without providing proper justification. This decision reinforces the principles of natural justice and ensures that taxpayers are given a fair opportunity to present their case and have their arguments considered before any decision is made.