GST on assignment of leasehold rights in immovable property stayed, with interim protection continuing against the show cause notice.

Assignment of leasehold rights in a MIDC-allotted plot with buildings, for lump-sum consideration, was treated as an issue concerning whether such transfer amounts to assignment of benefits arising from immovable property and thus falls outside GST levy under Section 7(1)(a) read with Schedules II and III of the CGST Act. The Court noted that a Division Bench had already taken this view, no contrary authority was cited, and similar matters were under interim protection. Ad-interim relief was granted restraining further steps pursuant to the impugned show cause notice pending further hearing.

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Issues: Whether GST could be levied on the assignment of leasehold rights in a plot of land allotted by MIDC, together with buildings constructed thereon, to a third party for a lump-sum consideration; and whether interim protection should be granted against the impugned show cause notice.

Analysis: A Division Bench of the Gujarat High Court had already taken the view that assignment or transfer of leasehold rights in such circumstances amounts to assignment of benefits arising from immovable property, and that Section 7(1)(a) of the Central Goods and Services Tax Act, 2017, read with Schedule II and Schedule III, would not apply so as to attract levy under Section 9. In the present matter, no contrary view was placed before the Court, and the challenge was to a show cause notice on the same issue. The Court noted that similar petitions were already protected by interim orders.

Outcome: Ad-interim relief was granted in terms of the prayer restraining the respondents from taking further steps in pursuance of the impugned show cause notice, and the petition was directed to be listed with connected matters on the next date.

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