"We are against the plea for the cancellation of the bail and the petition is dismissed," a bench comprising justices Aftab Alam and Ranjana Prakash Desai said.
"We, however, allow the transfer petition and agree to transfer the case to Mumbai," the bench said.
The court also permitted Shah to enter and travel in Gujarat in view of the upcoming assembly elections.
The CBI had approached the apex court against the bail granted to Shah by the Gujarat High Court in the case of fake encounter killing of gangster Sohrabuddin Sheikh and for shifting the trial of the case to a place outside Gujarat.
Sheikh and his wife Kauser Bi were allegedly abducted by Gujarat's Anti-Terrorist Squad (ATS) from Hyderabad and killed in a fake encounter near Gandhinagar in November 2005.
Shah, a close aide of Chief Minister Narendra Modi, was arrested by CBI on July 25, 2010 and had spent over three months in Sabarmati Jail in Ahmedabad.
Shah had to quit the Modi government in July last year after having been slapped with charges of kidnapping and murder in connection with the case. CBI has alleged that he was the "kingpin" of the conspiracy in the case.
The agency had earlier urged the apex court to transfer the trial outside Gujarat arguing that witnesses were being intimidated and the trial could not be held in a free and fair manner.
Delivering the judgment yesterday, the court slammed the Modi government, terming the 2002 communal conflagration as %u201Cnegligence of the state%u201D and censured it for %u201Cinaction%u201D, holding that it had resulted in an %u201Canarchic%u201D situation. %u201CEven if we, for the sake of argument, accept the defense of the state that the cause of riot was a general reaction to the Sabarmati Express incident, the failure on part of police to gather intelligence about such general reaction (after the Godhra train burning incident) in time and to take appropriate timely action definitely come within expression 'negligence of the state',%u201D the court said.
Chief minister Narendra Modi didn't spell out any apology for the 2002 riots, during his speech. But he gave indication that he wants this history to be buried. Addressing people before starting his fast on Saturday, Modi asked them to forget the past and be part of the development spree. His choice of words and tone of speech were aimed at conveying a sense of regret, especially to the Muslim community.
First Modi must answer where are the missing children of Gujarat...he must answer what happened in 2002, he must answer who killed Haren Pandya, he must answer that why no Lokayukta in Gujarat, he must answer what CAG report says about his corrupt...before the even think to be PM
modi gunegar che
Why do you peple speak to hang those who burnt people alive in train and who killed Hindu,s in Kashmir and rest of india. YOu paki,s
Why didn´t transfer direct to SC, otherwise, there are sequence in process at Mumbai to deal with the trial of the case of a state!
SC needs to be congratulated for transferring Amit Shah's case to Mumbai. This murderer, like Maya Kodnani and others, who butchered humans, should be given harshest punishment together with their Maut ka saudagar Boss Narendra Modi. At the same time, murderers of sikhs after India's assassination (like Tytler and others) should also be hanged.