The Madhya Pradesh High Court at Indore has taken up a significant legal issue concerning the levy of Central Goods and Services Tax (CGST) on the development and sale of land, while granting interim protection to the petitioner against coercive action pursuant to the disputed order.
The Bench of Justice Vijay Kumar Shukla and Justice Alok Awasthi has stated that due to paucity of time, the matter could not be heard on May 5, 2026 and directed the petition to be listed in the week commencing June 29, 2026.
The petitioner has raised a substantive legal challenge before the High Court questioning whether CGST can be levied on the development and sale of land. The issue has potentially wider implications for transactions involving land development where tax authorities seek to treat the activity as falling within the GST framework.
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The petitioner has disputed the tax treatment adopted by the authorities and has sought judicial consideration of the legality of the levy in the facts of the case.
During the hearing, counsel appearing for Respondent Nos. 1 and 3 submitted that the Telangana High Court had passed a judgment permitting the levy of CGST on development and sale of land.
The Revenue therefore sought to rely upon the Telangana High Court decision in support of its position that the impugned levy could be sustained.
However, the petitioner specifically contended that the Telangana High Court judgment would not apply to the facts and circumstances of the present case. This disagreement over the applicability of the precedent has placed the precise factual and legal character of the petitioner’s land-development transaction at the centre of the dispute.
By an order, the respondents had been granted time to place their response on record before the next date of hearing. However, the Court noted that the reply had not been filed.
The absence of the response meant that the Court did not proceed to finally adjudicate the substantive question at this stage.
Thus, the High Court has not, through the present order, finally determined whether CGST is legally leviable on the development and sale of land. The central issue remains pending for consideration.
Importantly, the High Court granted interim relief to the petitioner. The Bench directed that no coercive action be taken against the petitioner pursuant to the impugned order.
The protection prevents the respondents from taking coercive steps under the challenged order while the legal issue remains pending before the Court.
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