GST on transfer of leasehold rights stayed pending further consideration of suppression-based proceedings and interim protection

Transfer of leasehold rights in leased land was challenged as being amenable to GST under section 7(1)(a) of the CGST Act, 2017, and the sustainability of proceedings under section 74 on an allegation of suppression was also questioned. The HC treated the controversy as requiring consideration and noted that the transfer of leasehold rights was said to be distinguishable from a lease deed executed by an authority in favour of a lessee, with the issue appearing prima facie covered by the cited Gujarat High Court ruling. No final adjudication was made at this stage; notice was issued, a counter affidavit was directed, and recovery under the impugned order was stayed until further orders.

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Issues: Whether the transfer of rights in leased land by a lessee is amenable to GST under section 7(1)(a) of the Central Goods and Services Tax Act, 2017, and whether proceedings under section 74 of the Central Goods and Services Tax Act, 2017 could be sustained on the allegation of suppression; whether interim protection should be granted pending consideration.

Analysis: The challenge raised was treated as requiring consideration on the basis that the transfer of leasehold rights was stated to be distinguishable from a lease deed executed by an authority in favour of a lessee, and the controversy was considered covered prima facie by the cited Gujarat High Court ruling. The matter was not finally adjudicated at this stage.

Outcome: Notice issued, counter affidavit directed, and recovery pursuant to the impugned order stayed till further orders.

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