2026-VIL-243-BOM
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SGST High Court Cases

GST - Leasehold Rights Assignment – Petitioners are lessees who have assigned/transferred their leasehold rights in land and building to third parties/assignees. Revenue authorities regarded such assignment/transfer as taxable under Section 7(1)(a) read with Schedule II(2) of the CGST Act, as a "supply of service" - Petitioners contend that the assignment/transfer of leasehold rights is not a "supply" under the CGST Act, but rather a transfer of immovable property which is not liable to GST – HELD - The High Court of Gujarat in the case of Gujarat Chamber of Commerce and Industry v. Union of India has held that the assignment/transfer of leasehold rights in land and building by a lessee to a third party would not constitute a "supply" liable to GST, as it is a transfer of immovable property. This decision has been followed by a coordinate Bench of the Bombay High Court in several cases. Though the revenue has appealed the Gujarat High Court decision before the Supreme Court, the Supreme Court is yet to stay the said decision - In view of the consistent position taken by the High Courts that such assignment/transfer of leasehold rights is not a "supply" under the CGST Act, the Court has granted interim protection to the petitioners, restraining the revenue from taking any coercive action against them based on the show cause notices issued or orders passed - The matter is to be heard further after awaiting the decision of the Supreme Court on the issue. The Court granted interim protection to the petitioners by restraining the revenue from taking any coercive action, pending further hearing and final disposal of the petitions – Ordered accordingly
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