LATEST GST CASE LAWS: 01.08.2025
🔥📛 Delhi HC to examine validity of upward revision of pre-GST credit; Tags matter
➡️ The case centers on whether Section 142(9)(b) permits upward revision of CENVAT credit in transition from the pre-GST to GST regime, a matter requiring judicial interpretation.
➡️ The petitioner’s challenge aligns with issues raised in the Fragrance Dreams Homes case, where a coordinate bench had admitted a similar writ to examine if enhancement of transitional CENVAT credit is legally tenable.
➡️ The High Court acknowledges the lack of a functioning GST Appellate Tribunal, justifying its intervention in matters typically reserved for appellate authorities.
➡️ The Court has issued notice to the Revenue Department and directed them to file a counter affidavit within four weeks, allowing judicial scrutiny of the petitioner’s claim.
➡️ The present matter has been tagged with the Fragrance Dreams Homes case and listed for further hearing on August 22, 2025, to ensure consistent judicial treatment of similar issues.
✔️ Delhi HC – Bird Flight Services (India) Pvt Ltd vs Commissioner of CGST, South Commissionerate and anr [W.P.(C) 10822/2025]
🔥📛 HC: Adjudicating Authority to suo motu apply Notification extending limitation, before rejecting refund as time-barred
➡️ The Bombay High Court held that the refund application falls within the scope of Notification No. 13/2022-CT, which excludes the period from March 1, 2020, to February 28, 2022, from the limitation period under Sections 54 and 55 of the CGST Act.
➡️ The Court emphasized that the lower authorities erred by dismissing the refund solely on limitation grounds, without considering the applicability of the Notification—even if it was not expressly cited by the Assessee.
➡️ Although the Assessee initially filed the refund application on time in March 2020 for the period July 2018–March 2019, it was returned seven times for rectification of deficiencies, and ultimately rejected for being time-barred—a process the Court found flawed.
➡️ The High Court did not rule on whether the date of the initial filing should be treated as the official filing date, as the benefit of Notification 13/2022-CT alone was sufficient to resolve the limitation issue in the Assessee’s favour.
➡️ The Court directed the Adjudicating Authority to reconsider the refund application on merits within 60 days. If rejection is warranted, a show-cause notice must be issued, allowing the Assessee an opportunity to respond.
✔️ Bombay HC – Kavita Incorporation Vs. Additional Commissioner CGST And CX, Appeals III, Mumbai and Anr. [WRIT PETITION NO. 3815 OF 2024]
🔥📛 HC: Separate notices under sections 73 and 74 for same period valid, as grounds vary
➡️ The Court upheld that issuance of two separate Show Cause Notices (SCNs) under Sections 73 and 74 for the same tax period is valid, as long as the grounds differ—Section 74 addresses fraud, suppression, or wilful misstatement, while Section 73 covers other non-fraudulent issues.
➡️ The Court rejected the assessee’s claim of vagueness in the SCN, noting that all relevant details under Rule 142 were properly uploaded in Form DRC-01. The assessee’s failure to appear for a hearing, despite filing a reply, did not justify the vagueness claim.
➡️ Once a demand related to a particular issue (e.g., ITC on B2B supplies) has been adjudicated under Section 74 and attained finality, the same issue cannot be reopened under Section 73 merely due to non-disclosure or absence of supporting documents.
➡️ The Court emphasized that failure by the assessee to furnish documents does not absolve the department from its responsibility to scrutinize records. Demand cannot be sustained on matters already concluded, irrespective of such non-disclosure.
➡️ The demand related to ITC on B2B inward supplies was set aside due to it being previously adjudicated. However, for the remaining valid issues, the Court allowed the department to issue a fresh demand in Form DRC-07, thereby partially allowing the assessee’s petition.
✔️ Calcutta HC – Sayan Biswas vs. Deputy Commissioner of Revenue [WPA 4237 of 2025]
🔥📛 HC: No vested rights on parties to challenge demand on JDA’s; Dismisses writ on maintainability
➡️ The Court emphasized that the substantive terms of a Joint Development Agreement—not its title or nomenclature—determine whether a taxable “supply” exists under GST. Factual analysis is essential to evaluate elements like ownership transfer, development rights, and consideration.
➡️ The High Court held that assessing GST liability in JDAs involves factual scrutiny and contract interpretation, which cannot be done under writ jurisdiction (Article 226). Such issues fall squarely within the scope of statutory appellate forums.
➡️ The Court reaffirmed that disputes relating to GST assessments must be resolved through the Appellate Authority under Section 107 of the CGST Act, unless there is a violation of natural justice, which was not evident in this case.
➡️ Reliance on the dismissal of an SLP by the Supreme Court and interim relief in other High Court matters (like Nirmal Lifestyle Developers) was found inadequate. The Court clarified that such actions do not establish binding legal precedent for determining taxability.
➡️ Although dismissing the writ petitions, the Court allowed the assessees to file appeals within four weeks and directed that these be heard on merits without any limitation bar, ensuring the matter is substantively adjudicated.
✔️ Bombay HC – Nirmite Buildtech. Versus The Union of India & Ors [WRIT PETITION NO. 8649 OF 2025]
🔥📛 Revisional authority was not authorised on date of suo motu revision; revisional order is not sustainable: HC
➡️ The officer who issued the impugned suo motu revision order lacked statutory authority on the date of issuance, as the official notification conferring such power was issued only later on 07.08.2020.
➡️ A notification issued under Section 2(99) read with Section 5 of the CGST Act, 2017, cannot operate retrospectively to validate actions taken before its effective date.
➡️ Section 108 mandates that any suo motu revision must be supported by recorded reasons and a clear prima facie satisfaction by the Revisional Authority. The absence of such reasoning renders the order invalid.
➡️ The authority incorrectly assumed jurisdiction under Section 108 without demonstrating that any issue had remained undecided in the appellate process—an essential precondition for invoking suo motu revision.
➡️ Due to both the lack of jurisdiction and absence of cogent reasoning, the impugned revision order was held unsustainable in law and was accordingly set aside. The authority was directed to drop further revision proceedings.
✔️ Chhattisgarh HC – Agrawal Agro Centre v. State of Chhattisgarh [WPT No. 101 of 2019]
🔥📛 Refund order passed beyond 60-day limit u/s 54(7) is invalid; refund to be granted with applicable interest: HC
➡️ Section 54(7) of the CGST Act mandates that the Proper Officer must issue a refund order within 60 days from the date of receipt of a complete refund application. This time limit is mandatory, and any refund order passed beyond this period is legally invalid.
➡️ A two-day delay by the department in issuing acknowledgment under Rule 90(2) was held to invalidate the Officer’s authority to point out deficiencies in the refund claim. This underscores the importance of strict compliance with procedural timelines.
➡️ The Show Cause Notice (SCN) was issued more than 15 days after acknowledgment, and the reply date was set beyond the 60-day limit. This timeline left the Proper Officer no lawful window to pass an order, making the rejection order procedurally flawed.
➡️ The adjudicating authority strictly enforced Rule 92 (denying extension for reply) but ignored the mandatory 60-day limit under Section 54(7) for passing the refund order. This double standard was criticized and held unjustified.
➡️ As the refund rejection order was passed beyond the statutory time limit, it was declared void ab initio. The court directed the department to refund the amount claimed by the applicant with applicable interest, recognizing a clear violation of legal procedure.
✔️ Calcutta HC – Suraj Mangar v. Assistant Commissioner of West Bengal State Tax [M.A.T. No. 104 of 2024]
🔥📛 SLP dismissed; no grounds for interfering with interim order based on K.J. International ruling: SC
➡️ There is a judicial split among High Courts: Delhi, Gujarat, and Telangana have held that Rule 86A of the CGST Rules does not empower authorities to block ITC negatively (i.e., showing a negative balance in the ledger), whereas Allahabad and Calcutta High Courts have upheld such powers.
➡️ In K.J. International v. State of Punjab, the Punjab and Haryana High Court ruled that blocking of ITC beyond 10% of the tax demand is unjustified, aligning this cap with the pre-deposit requirement for appeal under Sections 73 and 74 of the CGST Act.
➡️ In the current case, the High Court allowed the department to provisionally block only 10% of the tentatively assessed tax liability, while directing that the remaining ITC balance be unblocked, noting that the matter required further legal scrutiny.
➡️ The Supreme Court refused to interfere with the High Court’s interim order, observing that the main writ petition is still pending, and that the challenge was premature at this stage. The Special Leave Petition (SLP) was dismissed.
➡️ Until the matter is conclusively decided, ITC blocking under Rule 86A must be applied cautiously, particularly regarding the extent of blocking. Tax authorities should avoid blocking ITC beyond the permissible limits recognized in appellate procedures, especially when the liability is provisional.
✔️ SC – Deputy Director v. Ramesh Kumar Yadav [SPECIAL LEAVE PETITION (CIVIL) Diary No(s). 31866 of 2025]
