The Bombay High Court has granted ad-interim relief to a real estate developer by restraining the Goods and Services Tax (GST) authorities from taking any coercive recovery action in a dispute involving the levy of GST on transfer of development rights (TDR) allegedly arising from transactions undertaken during the pre-GST regime.
The bench of Justice Suman Shyam and Justice Advait M. Sethna passed the order while hearing a writ petition filed by Vital Developers Private Limited challenging a recovery action initiated by the GST department.
The petitioner approached the High Court questioning the legality of an order dated March 30, 2026, through which GST authorities sought recovery of approximately ₹9.34 crore. According to the Court’s order, the petitioner assailed the recovery proceedings on multiple legal grounds and sought appropriate relief against the demand.
The dispute assumes significance because it concerns the contentious issue of whether GST can be imposed on transfer of development rights that were transferred prior to the introduction of GST on July 1, 2017. The taxability of development rights and related real estate transactions has been the subject of extensive litigation across various judicial forums.
When the matter came up for hearing, none of the respondents, including the Union of India and GST authorities, appeared before the Court despite having been duly served with copies of the writ petition. The petitioner’s counsel filed an affidavit of service, which was taken on record by the Bench.
Observing that the respondents had failed to appear despite valid service, the Court held that it had no option but to issue formal court notice for adjudication of the controversy involved in the petition. Notices were issued to Respondent Nos. 1 to 3, returnable on August 3, 2026.
During the hearing, counsel for the petitioner sought urgent ad-interim protection against recovery proceedings. Taking note of the facts and circumstances presented before it, the Division Bench granted interim protection and directed that no coercive action shall be taken against the petitioner until the next date of hearing.
The order effectively stays any immediate recovery measures by the GST department, providing temporary relief to the developer while the legality of the demand is examined by the Court.
The Bombay High Court has listed the matter for further hearing on August 3, 2026. Until then, the GST authorities have been restrained from taking coercive recovery measures against the petitioner.
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