TaxTMI 
TaxTMI 
High Court granted interim stay on adjudication order involving levy of GST on transfer of leasehold rights
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....igh Court granted interim stay on adjudication order involving levy of GST on transfer of leasehold rights<br>By: - Bimal jain<br>Goods and Services Tax - GST<br>Dated:- 19-6-2025<br>The Hon'ble High Court of Bombay in the case of TOKHEIM INDIA PVT. LTD. VERSUS UNION OF INDIA THR. THE MINISTRY OF FINANCE & ORS. - 2025 (4) TMI 496 - BOMBAY HIGH COURT wherein the Assessee had challenged the adjudica....
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....tion on the ground that GST was not leviable on the assignment of leasehold rights and buildings to a third party. It was further submitted that the identical issue was already under consideration in multiple cases, wherein adjudication of similar Show Cause Notices ("SCN") had been stayed pending for final determination. Accordingly, following the Order was also stayed, and the matter was directe....
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....d to be listed for hearing. Facts: M/s Tokheim India Private Limited ("the Petitioner") was served a SCN dated August 02, 2024, by the Revenue Department alleging that the GST is leviable on the assignment of leasehold rights of a plot of land and buildings to a third party. An Order dated January 06, 2025 ("the Impugned Order") was passed, confirming tax liability considering the transaction a....
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....s supply of service. The Petitioner challenged the Impugned Order contending that the assignment of leasehold rights of a plot of land allotted by the Maharashtra Industrial Development Corporation ("the MIDC"), and structures built thereon, constitutes a transaction in immovable property. Hence, GST will not be leviable. Hence, aggrieved by the Impugned Order, the Petitioner filed the present w....
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....rit petition. Issue: Whether the GST is leviable on the assignment of leasehold rights of industrial plots and buildings by a lessee to a third party? Held: The Hon'ble High Court of Bombay in TOKHEIM INDIA PVT. LTD. VERSUS UNION OF INDIA THR. THE MINISTRY OF FINANCE & ORS. - 2025 (4) TMI 496 - BOMBAY HIGH COURT held as under: * Relied on, the Division Bench of the Hon'ble Gujarat High Court....
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.... in the case of GUJARAT CHAMBER OF COMMERCE AND INDUSTRY & ORS., M/S. MULTI THREAD FASTNERS, M/S. IMPERIAL ENGINEERS, LUCID COLLOIDS LTD., M/S. METAL PLAST ENGINEERS VERSUS UNION OF INDIA & ORS., CHIEF COMMISSIONER OF CENTRAL TAX, STATE OF GUJARAT, SPECIAL COMMISSIONER OF STATE TAX, STATE TAX OFFICER (1), ASSISTANT COMMISSIONER OF STATE TAX (2), STATE TAX OFFICER (EOW) - 2025 (1) TMI 516 - GUJARAT....
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.... HIGH COURT held that the assignment by sale or transfer of leasehold rights of the plot of land allotted by 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 ....
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....the original allottee-lessee. In such circumstances, the Gujarat High Court held that the provisions of Section 7 (1) (a) of the CGST 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. * Relied on, CHAMBERS OF....
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.... SMALL INDUSTRIES ASSOCIATION & ANOTHER VERSUS THE STATE OF MAHARASHTRA THROUGH COMMISSIONER OF STATE TAX & OTHERS - 2025 (3) TMI 548 - BOMBAY HIGH COURT as well as on Siemens Ltd. v. Union of India in [Writ Petition No. 14434 of 2023] wherein the Court had stayed adjudication of SCN. * Held that, the effect and implementation of the Impugned Order shall remain stayed until further orders.....
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.... The matter was listed along with other connected writ petitions for final hearing. Our Comments: Section 7 of the CGST Act prescribes that "Scope of Supply". Further, Section 7(1)(a) provides that all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or....
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.... furtherance of business. In the case of TIME TECHNOPLAST LIMITED VERSUS UNION OF INDIA & ORS. - 2025 (5) TMI 539 - GUJARAT HIGH COURT it was held that deed of assignment was a complete transfer of entire leasehold rights in favour of assignee by assessee for valuable consideration, according to the provisions of Section 7(1)(a) of the CGST Act, providing for scope of supply read with clause 5(b)....
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.... of Schedule II and Clause 5 of Schedule III would not be applicable to such transaction of assignment of leasehold rights of land and building and would not be subject to levy of GST as provided under Section 9 of the CGST Act. Therefore, the Impugned SCN was to be set aside. In the case of M/S. ELITE CLOTHING COMPANY PVT LTD VERSUS UNION OF INDIA & ORS. - 2025 (4) TMI 1377 - BOMBAY HIGH COURT w....
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....herein it was held that the Court had stayed the adjudication of the SCN issued. In the instant writ petition, assessee had challenged the adjudication and rectification Order Considering that in other writ petitions, ad interim relief was to be granted to assessee also by staying the Impugned Orders. (Author can be reached at [email protected])<br> Scholarly articles for knowledge ....
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