Taxability of leasehold assignment questioned; interim stay granted on recovery and adjudication pending final disposal.

Assignment or transfer of leasehold rights, including leasehold land with building, was examined against the GST charging provisions and prior High Court coordinate decisions; the court applied the principle that such assignments have been held not to constitute a taxable supply under the charging provision in earlier rulings and, given absence of a Supreme Court stay, granted interim protection to petitioners, staying recovery under impugned orders and the adjudication of outstanding show cause notices pending final disposal.

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Issues: Whether assignment/transfer of leasehold rights (including leasehold of land with building) constitutes a "supply" liable to GST under the charging provisions of the Central Goods and Services Tax Act; and whether interim protection should be granted to stay recovery and adjudication pending final disposal.

Analysis: The Court examined prior decisions, notably the Gujarat High Court's decision in Gujarat Chamber of Commerce and Industry and subsequent Gujarat rulings (including Life Sciences Chemicals), and noted that those decisions concluded that assignment of leasehold rights does not amount to a taxable supply under the charging provisions. The Supreme Court has been seised of related appeals but has not stayed the Gujarat decisions. In light of the existing High Court and coordinate bench decisions and the absence of a stay by the Supreme Court, the Court considered it appropriate to afford interim protection to petitioners who challenge show cause notices and orders concerning the levy of GST on assignments of leasehold rights.

Conclusion: Interim protection granted in favour of the assessee; pending final disposal no recovery shall be effected under impugned orders and adjudication of outstanding show cause notices shall remain stayed.

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