The Bombay High Court has granted the interim relief on the Goods and Service Tax (GST) demand for development rights as the revenue sharing agreement is under judicial scrutiny.
The bench of Justice B. P. Colabawalla and Justice Firdosh P. Pooniwalla has stated that there will be interim relief by restraining the department from acting in furtherance of the order.
The petitioner has challenged the notification no. 4/2018- Central Tax (Rate) dated 25th January, 2018 and notification no. 4/2018 – State Tax (Rate) dated 28th February, 2018 as being ultravires Articles 14, 19 (1) (g), 246 A and 265 of the Constitution of India as well as ultravires Section 7, Section 148 and Schedule III of the CGST Act, 2017/ MGST Act, 2017. Additionally, the Petitioner also challenges the order.
The issue raised was whether development rights under a “revenue sharing” agreement is a “supply” of services, leviable to GST under Section 7 read with Section 9 of the CGST Act and whether the transfer of development rights is a “sale of land” and therefore beyond the scheme of taxation under the GST Laws in terms of Articles 246 and 246 A of the Constitution of India, and also under Section 7 read with Section 9 and Schedule III of the CGST Act.
The bench directed the department to file their Affidavit-in-Reply within a period of 4 weeks and serve a copy on the Advocates for the Petitioner.
Case Details
Case Title: Manohar Khetwani Versus Union Of India
Case No.: Writ Petition (L) No. 10271 Of 2025
Date: April 29, 2025
Counsel For Petitioner: Adv. Abhishek Rastogi A/W Adv. Pooja M. Rastogi A/W Adv. Meenal Songire A/W Adv. Aarya More
Counsel For Respondent: Adv. Vijay H. Kantharia A/W Adv. Sangeeta Yadav
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