The Rajasthan High Court has issued an interim stay on legal proceedings against OYO in connection with allegations of inflated earnings through fake hotel bookings. The ruling was passed by Justice Praveer Bhatnagar, providing temporary relief to the hospitality platform while seeking responses from other parties involved within two weeks.
The case stems from an FIR filed by Samskara Resort, Jaipur, which claims that OYO inflated booking data by showing fictitious reservations worth ₹22.5 crore, triggering a GST demand notice of ₹2.7 crore against the resort. The High Court’s stay temporarily halts further action until the matter is heard in greater detail.
Accusations of Fake Bookings to Inflate Earnings
The FIR lodged by Samskara Resort accuses OYO of manipulating booking records to project inflated earnings, thereby passing the tax liability to the partnered hotels and resorts. The complaint alleges this practice was not isolated and was repeated across multiple hospitality properties in Rajasthan, prompting tax collection notices to those entities.
OYO Denies Charges, Calls Allegations Baseless
In response, OYO’s legal team, represented by senior advocates R.B. Mathur and Shreepriya Garg, strongly denied the accusations. They argued that:
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The booking amounts are directly transferred to hotels and resorts, not OYO.
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OYO operates solely on a commission basis, providing a digital platform for bookings.
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The responsibility of tax payment lies with the hotel or resort, not the aggregator.
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The FIR was a retaliatory move after the High Court earlier dismissed a tax recovery appeal filed by Samskara Resort in March.
According to OYO’s counsel, the FIR was strategically filed on April 9 to evade tax obligations after exhausting judicial remedies.
Court Seeks Responses Within Two Weeks
Acknowledging the complexity of the dispute and the involvement of tax and criminal law, Justice Praveer Bhatnagar granted interim protection to OYO and called for responses from all involved parties within two weeks. The court emphasized the need to balance tax accountability with due process and legal safeguards.
Industry Implications
The case raises important questions about liability in platform-based hospitality services, particularly in relation to GST compliance and digital aggregator accountability. With OYO being one of India’s largest hotel booking platforms, the outcome of this case could set significant precedents for taxation in the digital economy.