🔥📛 SC dismisses Revenue’s SLP against HC ruling setting aside GST-levy on transfer of leasehold rights
➡️ The Supreme Court dismissed the Revenue’s SLP against the Bombay High Court ruling that assignment of leasehold rights in industrial land does not attract GST, affirming that transfer of such rights amounts to transfer of immovable property and falls outside the scope of “supply” under Section 7 of the CGST Act.
➡️ The Court accepted the view that where the original lessee transfers entire leasehold rights to a third party with prior approval of MIDC and upon payment of premium, the transaction is a transfer of property rights rather than a taxable commercial activity liable to GST.
➡️ A key factor considered by the Supreme Court was that the assignment was not undertaken “in the course or furtherance of business,” which is an essential condition for treating a transaction as a supply under GST law; absent this element, GST liability could not arise.
➡️ The Revenue’s reliance on the pendency of challenge against the Gujarat High Court ruling in Gujarat Chamber of Commerce was rejected, with the Supreme Court clarifying that each GST dispute must be examined on its own factual matrix and legal context.
➡️ During the hearing, the Supreme Court specifically asked the Revenue to establish how the assignment of leasehold rights constituted furtherance of business, and upon finding no such nexus, categorically held that the transaction could not qualify as “supply,” thereby reinforcing judicial support for non-taxability of outright assignment of leasehold rights in similar cases.
✔️ SC – ASSISTANT COMMISSIONER (ANTI EVASION) AND ANR. Versus AEROCOM CUSHIONS PRIVATE LIMITED [Diary No. 26041-2026] [Copy of order is awaited]
