2025 (3) TMI 1237 - HC - GST

Levy of GST - assignment of leasehold rights to a third party of a plot of land allotted by the Maharashtra Industrial Development Corporation (MIDC) to the original lessee (i.e. the assignor) along with the buildings constructed thereon on payment of a lump sum consideration by the assignee to the assignor - HELD THAT - The Division Bench of the Gujarat High Court in Gujarat Chambers of Commerce and Industry Others V/S Union of India Others 2025 (1) TMI 516 - GUJARAT HIGH COURT has taken a view that the assignment by sale or transfer of leasehold rights of the plot of land allotted by the Gujarat Industrial Development Corporation (GIDC) to the lessee or its successor (assignor) in favour of a 3rd party (assignee) for consideration shall be an assignment/ sale/ transfer of benefits arising out of immovable property by the lessee-assignor in favour of a 3rd party who would then become a lessee of GIDC in place of the original allottee-lessee. In such circumstances the Gujarat High Court held that the provisions of Section 7 (1) (a) of the GST Act providing for scope of supply read with clause 5 (b) of Schedule II and clause 5 of Schedule III would not be applicable to such a transaction and the same would not be subject to levy of GST as provided under Section 9 of the GST Act. In this Petition also the adjudication of the Show Cause Notice dated 13th November 2024 shall remain stayed.

Summary

**Summary of High Court Judgment: Bombay High Court****Case Overview:**The central issue in this Writ Petition is whether Goods and Services Tax (GST) can be imposed on the assignment of leasehold rights to a third party for a plot of land allotted by the Maharashtra Industrial Development Corporation (MIDC). The GST Authorities classify this as a supply of service under the Central/State Goods and Services Tax Act, 2017.**Precedent:**The Petitioner cites a Division Bench decision from the Gujarat High Court in "Gujarat Chambers of Commerce and Industry & Others V/S Union of India & Others" [(2025) (1) TMI 516 Gujarat High Court], which held that such transactions are an assignment/sale/transfer of benefits from "immovable property" and thus not subject to GST under Section 9 of the GST Act.**Court's Consideration:**Given the Gujarat High Court's decision and the absence of a contrary view, the Bombay High Court recognizes the importance of addressing this issue. Similar cases, such as "Siemens Limited V/S Union of India & Others" and "Chambers of Small Industries Association & Another V/S The State of Maharashtra & Others," have resulted in the stay of adjudication of Show Cause Notices.**Current Order:**The adjudication of the Show Cause Notice dated 13th November 2024, in this Petition, is stayed. The matter is scheduled for a hearing on 15th April 2025, alongside related petitions.**Administrative Note:**This order will be digitally signed and can be acted upon with a fax or email copy of the digitally signed document.