Case Details: Bansal Steel Rolling Mills Versus Union of India (2025) 30 Centax 143 (Bom.)
Judiciary and Counsel Details
- B.P. Colabawalla & Firdosh P. Pooniwalla, JJ.
- S/Shri Arun Jain, Kartik Vig, Advs. for the Petitioner.
- Ms S.D. Vyas, Addl. G.P., S/Shri Ram Ochani, Suman Kumar Das, Advs. for the Respondent.
Facts of the Case
The petitioner is engaged in assigning leasehold rights of a plot of land allotted on lease by Maharashtra Industrial Development Corporation (MIDC), along with buildings constructed thereon, to a third party for a lump-sum consideration. The GST authorities treated this transaction as a supply of service under the CGST Act and issued show cause notices and adjudication orders accordingly.
The petitioner submitted that such assignment is not a supply within the meaning of Section 7(1)(a) of CGST, read with Clause 5(b) of Schedule II and Clause 5 of Schedule III, relying on the judgment of the Gujarat High Court in Gujarat Chambers of Commerce and Industry v. Union of India, 2025 (94) G.S.T.L. 113/(2025) 26 Centax 150 (Guj.), where it was held that assignment of leasehold rights of land allotted by government authority is not covered under GST supply. Challenging the adjudication and rectification orders, the petitioner placed the matter before the Hon’ble High Court of Bombay.
High Court Held
The Hon’ble Bombay High Court held that the assignment of leasehold rights with buildings constructed thereon does not amount to a supply of service under CGST and Maharashtra GST Acts. The Court noted the decision in Gujarat Chambers of Commerce and Industry v. Union of India, 2025 (94) G.S.T.L. 113/(2025) 26 Centax 150 (Guj.), where the Gujarat High Court held that assignment or transfer of leasehold rights of land allotted by a government authority along with buildings constructed thereon is not covered within the scope of ‘supply’ under Section 7(1)(a) of CGST read with Clause 5(b) of Schedule II and Clause 5 of Schedule III.
The Court also took note of other writ petitions, including writ Petition wherein interim relief was granted by staying adjudication proceedings. Observing that the impugned orders passed by the jurisdictional officer under CGST and Maharashtra GST lacked legal basis, the Court granted ad-interim relief by staying the adjudication and rectification orders against the petitioner.
List of Cases Cited
- Gujarat Chambers of Commerce and Industry v. Union of India — (2025) (1) TMI 516 (Gujarat) — Relied on [Para 2]
- Siemens Ltd. v. Union of India — Writ Petition No. 14434 of 2023 — Relied on [Para 3]
