A bench of Chief Justice G Rohini and Justice Jayant Nath said the Centre has to take many "administrative decisions and the court cannot always interfere" in it.
"So many issues will be going on, we cannot interfere in all. It appears (Centre's order with regard to transfer) to be an administrative decision...
"We have already safeguarded both parties (Centre and AAP governments) vide an interim order that no coercive steps will be taken against each other," the bench said.
The AAP government has moved an application in the main plea seeking stay on October 12 notification regarding transfer of five IAS officers from Delhi to other union territories and the Centre.
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Transfer has been ordered by the LG on a direction issued by the central government.
Senior advocate Dayan Krishnan, appearing for AAP government, said that these transfers are "unilateral" and have been made without consultation with the democratically-elected government and strikes at the root of the concept of cooperative federalism which was the promise held out by the central government.
At present, a total of seven cases arising out of the standoff between the LG and Delhi government, are being heard together by the bench headed by the Chief Justice.
Delhi government had on May 28 approached the high court challenging the Centre's May 21 notification giving the LG absolute powers in appointing bureaucrats in the city.
Along with the May 21 notification, Delhi government has also challenged the July 23, 2014 notification of the Centre which limited ACB's jurisdiction to Delhi government officials only.