Dra Recycling Systems Pvt. Ltd v. Union Of India

[Cites 0, Cited by 0] Gujarat High Court Dra Recycling Systems Pvt. Ltd vs Union Of India on 17 August, 2026 Author: A.S. Supehia Bench: A.S. Supehia, Vaibhavi D. Nanavati NEUTRAL CITATION C/SCA/4905/2026 ORDER DATED: 17/08/2026 undefined IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 4905 of 2026 ============================================================== DRA RECYCLING SYSTEMS PVT. LTD. Versus UNION OF INDIA & ORS. ============================================================== Appearance: MR HARSHESH R KAKKAD(7813) for the Petitioner(s) No. 1 MS TANUSHREE SHRIMAL, AGP for the Respondent(s) No. 2,3 MS NIDHI T VYAS(7772) for the Respondent(s) No. 1 ============================================================== CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA and HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI Date : 17/08/2026 ORAL ORDER (PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA) 1. Heard learned advocate Mr. Harshesh R. Kakkad for the petitioner and learned AGP Ms. Tanushree Shrimal for the respondent nos. 2 and 3. 2. In the present petition, petitioner has challenged the action of the respondents of charging the tax under Goods and Service Tax (for short 'GST') on the transaction of assignment of long-term leasehold rights. 3. At the outset, learned advocate Mr. Kakkad appearing for the petitioner has submitted that now the issue raised in the present petition is no more res integra as the Special Leave Petition (Civil) Diary No. 33270 of 2025 filed by the Union of India challenging the judgment and order dated 03.01.2025 in a group of petitions being NEUTRAL CITATION C/SCA/4905/2026 ORDER DATED: 17/08/2026 undefined Special Civil Application No.11345 of 2023 and allied matters have been dismissed vide order dated 21.07.2026. Thus, it is urged that the impugned action of the respondents dated 30.08.2024 passed under Section 73 of the Goods and Service Tax Act, 2017 may be quashed and set aside. 4. Learned AGP Ms. Tanushree Shrimal has submitted that by communication dated 20.12.2025 written by the State Tax Officer to the Government Pleader's office, it was conveyed that recovery will be subjected to the outcome of the Special Leave Petition (for short 'SLP') before the Hon'ble Supreme Court. Thereafter, during the pendency of the writ petition, the State Tax Officer vide communication dated 16.04.2026 has stayed the recovery proceedings. 5. The learned advocates appearing for the respective respondents are unable to controvert that the issue is now covered by the decision of this Court dated 03.10.2025 passed in a group of petitions being Special Civil Application No. 11345 of 2023 and allied matters against which the SLP is dismissed. 6. The Coordinate Bench of this Court in a group of petitions being Special Civil Application No. 11345 of 2023 and allied matters, after extensive scrutiny of the provision of the GST as well as the array of judgments has ultimately declared as under: "83. In view of foregoing reasons, assignment by sale and transfer of leasehold rights 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 favour of third party-assignee who would become lessee of GIDC in place of original allottee-lessee. In such circumstances, provisions of section 7(1)(a) of the GST 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 transaction of assignment of leasehold rights of land and building and same would not be subject to levy NEUTRAL CITATION C/SCA/4905/2026 ORDER DATED: 17/08/2026 undefined of GST as provided under section 9 of the GST Act. 84. In view of above, question of utilisation of input tax credit to discharge the liability of GST on such transaction of assignment would not arise. 85. The petitions accordingly succeed and impugned show cause notices and orders in original or appeal as the case may be, are hereby quashed and set aside. Rule is made absolute to the aforesaid extent. No order as to costs." 7. Thus, the present writ petition is allowed. The impugned order dated 20.12.2025 is hereby quashed and set aside. (A. S. SUPEHIA, J) (VAIBHAVI D. NANAVATI,J) KUMKUM/20