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2021 (4) TMI 933 - AAAR - GSTLevy of GST - leasing of pathway to a person to her/his dwelling unit by CMRL - Challenge to AAR decision - Original Authority has ruled that leasing of pathway by the appellant to Dr. Prema (lessee) by way of shared access of the Non-residential property held by the appellant is taxable under GST. HELD THAT:- The appellant had initially acquired the property (including the land for which shared access is extended to the land owner) for public purpose from the land owner and paid the considerations. The land owner had disputed the settlement before Civil Court and thereupon the appellant had entered into an MOU for out-of-court settlement. One of the claims accepted by the appellant is to extend the shared access of the pathway to the land owner for a consideration for a specific period. The issue is on this activity of grant of shared access for a consideration by the appellant - easement is a right one possesses over certain other land for the beneficial enjoyment of his land, to do and continue to do something or to prevent and continue to prevent something being done on such land, on parting of the said other land. Thus ‘easement' is a right a person holds on the land which is not his but a necessity for enjoyment of his property and is not granted but acquired. In the case at hand the appellant had acquired the land of the landowner and compensated monetarily along with agreeing to grant the shared access to the pathway for a specific period on payment of lease rentals. In respect of right-to-way as easement, it is the right of the landowner, held with him on account of sale of the land appurtenant to the pathway and such right flows automatically on sale. In the case at hand, however based on the Memorandum of Understanding, the landowner is granted shared-access of the pathway from the acquired land for a specific period of 35 years on payment of lease rentals and is also termed as 'lease' in the said MOU. Therefore, the shared access granted by the appellant to the land owner against lease rentals is not 'easement' acquired/held by the landowner on account of the sale of land. Once it is held that the nature of shared access is not an easement held by the land owner, the contention of the appellant does not hold any merit. The land once acquired for business purposes becomes a non-residential property. The Landowner has been granted the right of shared access enabling the land owner access to the road. This right to use the pathway being common to both the appellant and the landowner, the pathway cannot be termed as land appurtenant to the residential dwelling as claimed by the appellant - Transfer of right to use the space without the transfer of space per-se also conveys the right to occupy. In the instant case, it is not a lease of the pathway but only rights are granted to the land owner by the appellant for the shared access. It is seen that the grant of access to the pathway is a right given by them to the landowner. This activity of agreeing to grant rights for shared access of the pathway is an “act of agreeing to tolerate an act” and is classifiable under SAC 999794 under “other miscellaneous services/Agreeing to tolerate an act' and is taxable to 9% CGST and 9% SGST as per SI.No.35 of Notification 11/2017 CT(Rate) dated 28.06.2017 as rightly held by the Lower Authority.
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