Order Date – 04 July 2025

Parties: Dhiraj Can Co. Pvt. Ltd. Vs Union of India & Ors.

Facts –

• The Petitioner, Dhiraj Can Co. Pvt. Ltd., was allotted a GIDC industrial plot in 1982. In 2020, they transferred the plot to M/s Acquire Chemicals, through a deed of assignment and consideration was received. The petitioner did not collect or pay GST on this transaction.
• Later, petitioner received a show cause notice demanding GST, treating the assignment as a taxable supply of service.

Issue –

• Whether the transfer of leasehold rights amounts to "supply of service" under Section 7(1)(a) of the GST Act and is therefore taxable?

Order –

• The Division Bench of Hon’ble High Court observed that the Court has already decided in the case of Gujarat Chamber of Commerce that assignment by sale and transfer of lease hold right of the plot of land allotted by GIDC to the lessee in favour of third party – assignee for a consideration shall be assignment/sale/transfer of benefits arising out of “immovable property” by the lessee – assignor.
• In such circumstances, the provision of Sec.7(1)(a) of the Act providing for scope of supply read with Clause 5(b) of Schedule 2 and Clause 5 of Schedule 3 would not be applicable to such transaction of assignment of lease hold rights and the same would not be subject to levy of GST as provided under Sec.9 of the Act.
• In view of the same, the present petition succeeds.