On July 21, 2026, the Supreme Court dismissed a batch of Special Leave Petitions filed by the Union of India against the Gujarat High Court’s judgment holding that no GST is applicable on assignment of leasehold rights. This follows a similar dismissal on May 22, 2026, of an SLP against a matching Bombay High Court ruling, where the Court found the department could not establish any real business nexus behind the transfer.
While the SC has dismissed the SLP of department, it leaves questions in the minds of taxpayers for the litigation that might arise on account of such decision.
Also Read: GSTAT Appeal Filing: 11 Practical Tips to Ensure a Smooth Filing Experience
Whether this dismissal sets a binding precedent?
A dismissal without reasons does not become a binding precedent under Article 141 of the Indian Constitution and it simply lets the judgment stand on its own. When an SLP is dismissed “in limine” at the threshold stage, the Court may simply be refusing to exercise its discretionary jurisdiction under Article 136. Therefore, an order such as: “We are not inclined to interfere” does not automatically mean that the Supreme Court has affirmed every proposition of law in the impugned judgment.
Whether another High Court could take a different view after the earlier dismissal lacked reasons? In practice, this is unlikely for similar cases, since two High Courts have now ruled the same way and the Supreme Court has twice declined to interfere. As things stand, outright assignment of leasehold rights is not liable to GST. Taxpayers with pending notices should still verify their facts against the actual order before assuming automatic relief.
Disclaimer: This article provides general information existing at the time of preparation and we take no responsibility to update it with the subsequent changes in the law. The article is intended as a news update and Affluence Advisory neither assumes nor accepts any responsibility for any loss arising to any person acting or refraining from acting as a result of any material contained in this article. It is recommended that professional advice be taken based on specific facts and circumstances. This article does not substitute the need to refer to the original pronouncement.
