A Bench including Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe heard the case on July 21, 2026. The SLPs challenged the consolidated judgment of the Gujarat HC dated January 3, 2025, passed in nearly 50 connected petitions led by the Gujarat Chamber of Commerce and Industry.
The issue emerged from SCNs and summons issued by GST authorities concerning the transfer of leasehold rights in industrial plots allotted by the Gujarat Industrial Development Corporation (GIDC). The applicants claimed that the assignment of 99-year leasehold rights for lump-sum consideration directed to a transfer of immovable property instead of a supply of service under GST law.
The industrialists said that once leasehold rights were granted to another party, there is no legal relationship between the original allottee and the lessor. Thus, the transaction could not be considered as a service u/s 2(102) of the CGST Act.
They said that leasehold rights are an interest in land and their transfer is considered a conveyance of immovable property under property statutes. The applicants, such one-time transfers of capital assets do not come within the scope of supply u/s 7(1)(a) of the GST Act.
The applicants put reliance on Entry 5 of Schedule III of the CGST Act, which provides that the sale of land and buildings shall be considered neither as supply of goods nor supply of services. They claimed that the term land must include rights in or over land and taxing such transfers under GST shall result in double taxation since stamp duty is already applicable.
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The Union government contested the decision of the Gujarat High Court before the Supreme Court. However, the Apex Court observed that a similar SLP emerging from the same HC ruling had earlier been dismissed on May 22, 2026.
The bench had followed the principle of consistency and said that the current petitions do not have merit and dismissed the SLPs submitted by the Union of India.
As a result of this decision, the Gujarat High Court’s ruling that GST cannot be imposed on the assignment of long-term leasehold rights in industrial plots remains unchanged. Additionally, all pending applications related to the dismissed petitions were disposed of.
Supreme Court Order
| Case Title | The Union of India & ANR. vs Gujarat Chamber of Commerce and Industry & ORS |
| For Petitioner | Ms. Deepanwita Priyanka, AOR |
| For Respondent | Mr. Shyam Divan, Sr. Adv. |
| Supreme Court | Read Order |
Gujarat High Court
| Case Title | Gujarat Chamber of Commerce and Industry & ORS vs Union of India & ANR. |
| For Petitioner | Mr.S.N.Soparkar |
| For Respondent | Advocate General Mr Kamal Trivedi with Assistant Government Pleader |
| Gujarat High Court | Read Order |
