Manohar Khetwani & Ors. Vs Union of India & Ors. (Bombay High Court)
Bombay High Court has issued an interim stay on an order imposing Goods and Services Tax (GST) on the transfer of development rights under a “revenue sharing” agreement. The decision came in the case of Manohar Khetwani & Ors. Vs. Union of India & Ors., where the petitioners challenged notifications from January and February 2018, along with an order dated January 27, 2025.
The core legal question before the court is whether such transfers constitute a “supply of services” liable to GST under Section 7 read with Section 9 of the CGST Act, or if they qualify as a “sale of land,” which falls outside the GST tax framework as per constitutional provisions (Articles 246 and 246A) and Schedule III of the CGST Act.
The High Court acknowledged that the petition raised “arguable questions.” Citing a similar pending case, Nirmal Lifestyle Developers Pvt. Ltd. Vs. Union of India & Ors. (Writ Petition (L) No. 11011 of 2025), where interim relief was previously granted, the court decided to extend similar protection to the current petitioners. Consequently, the respondents are restrained from acting on the impugned order dated January 27, 2025. The case will be heard alongside the linked petition.
