Absolute assignment of long-term leasehold rights is a transfer of immovable property, not a taxable supply of service under GST.

Absolute assignment of long-term leasehold rights in industrial land allotted by GIDC was treated as a transfer of immovable property rather than a mere right to use property. Applying the GST framework, the Court distinguished allotment-stage 99-year leasing, which may amount to a supply of service, from a later assignment by the lessee-assignor that divests all rights in favour of an assignee. On that basis, the transaction fell outside section 7(1)(a) read with Schedule II and Schedule III, and was excluded from levy under section 9. The GST demand based on the show-cause notice therefore could not survive.

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Issues: Whether assignment and transfer of long-term leasehold rights in industrial land allotted by GIDC to a third-party assignee for consideration constitutes supply of service exigible to GST under the Central Goods and Services Tax Act, 2017.

Analysis: The transfer of leasehold rights was treated as a transfer of benefits arising from immovable property rather than a mere grant of a right to use property. The Court applied the earlier reasoning that a 99-year lease granted by GIDC may fall within supply of service at the allotment stage, but an absolute assignment by the lessee-assignor in favour of an assignee divests the assignor of all rights and is legally closer to transfer of immovable property. On that basis, the transaction was held to fall outside the scope of supply under Section 7(1)(a), read with Schedule II and Schedule III, and to be excluded from levy under Section 9.

Conclusion: The transfer of leasehold rights was not taxable as supply of service, and the GST demand founded on the show-cause notice could not survive.

Ratio Decidendi: Absolute assignment of long-term leasehold rights in immovable property for consideration is a transfer of immovable property, not a taxable supply of service under the GST framework.

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