LATEST GST CASE LAWS: 04.08.2025
🔥📛 Officer must try other modes of service of notice if no reply was filed to portal notice: HC
➡️ Merely uploading notices or communications under the “View Additional Notices” tab on the GST portal is considered valid service under the law. However, this form of service may not be effective if the taxpayer remains unaware of the uploaded notice.
➡️ In this case, the impugned order was passed without granting the petitioner a personal hearing, thereby violating principles of natural justice. Effective communication of the notice is necessary to enable the taxpayer to respond or appear.
➡️ If a taxpayer fails to respond to repeated notices via a particular mode (e.g., portal upload), the Proper Officer must exercise due diligence and not merely repeat the same method without reassessment.
➡️ Section 169(1) of the CGST Act provides for various valid methods of service (e.g., email, RPAD). If there is no acknowledgment or response through one method, other prescribed modes—especially RPAD—should be explored to ensure actual receipt and effective service.
➡️ Since there was no effective service or opportunity to be heard, the impugned order was set aside. The matter was remanded, reinforcing the requirement for authorities to follow proper and practical service procedures in line with the intent of the GST Act.
✔️ Madras HC – Insoorya Express Cargo v. Union of India [W.P. No. 22035 of 2025]
🔥📛 Fresh water storage & Effluent storage tank being part of ‘plant and machinery’ of manufacturing, eligible for ITC: AAR
➡️ The Fresh Water Storage Tank and Effluent (Guard) Pond are integral to the applicant’s core manufacturing operations and are not merely ancillary or administrative structures.
➡️ Despite being constructed with civil materials, the tanks serve process-specific roles—fluid storage and effluent treatment—making them functionally equivalent to equipment or apparatus, and thus qualify as plant and machinery under GST law.
➡️ The applicant’s classification of these assets as ‘plant and machinery’ in their books is not decisive, but it supports the functional assessment necessary for GST input tax credit (ITC) eligibility.
➡️ Since the tanks are established as part of the production infrastructure and not immovable property of an administrative or non-operational nature, the restrictions under Section 17(5)(c) and (d) of the CGST Act do not apply.
➡️ Provided the structures are used in the course or furtherance of taxable business and capitalized as plant and machinery, the applicant is entitled to claim ITC on the GST paid for goods and services used in their construction.
✔️ AAR Kerala – Nitta Gelatin India Ltd., In re [KER/19/2025]
🔥📛 Initiation of proceedings u/s 74 valid even if proceedings u/s 61 were dropped on basis of response filed by assessee: HC
➡️ Dropping of scrutiny proceedings under Section 61(3) does not prevent initiation of proceedings under Section 74, especially in cases involving fraud, willful misstatement, or suppression of facts.
➡️ The scope of Section 74 is broader and specifically addresses fraudulent conduct, which may not be evident during return scrutiny under Section 61. Fraud can be unearthed later through detailed investigations.
➡️ The law allows for subsequent proceedings under Section 74 even after scrutiny under Section 61 is concluded, recognizing that fraud may only come to light at a later stage.
➡️ Where investigation reveals fraudulent activities, issuance of show cause notice under Section 74 is valid and justified, irrespective of whether earlier scrutiny was dropped.
➡️ The High Court upheld the validity of the Section 74 proceedings, emphasizing that the petitioner’s challenge was unsustainable due to the clear allegations of fraud; thus, the writ petition was dismissed.
✔️ Calcutta HC – Amit Agarwal v. Assistant Commissioner, CGST & CX [WPA 7788 of 2025]
🔥📛 HC dismissed writ petition as order passed by Superintendent was appealable before appellate authority
➡️ The petitioner challenged a GST demand and penalty order issued by the Superintendent (CGST) on grounds including violation of natural justice and that the order was contrary to law, facts, and circumstances.
➡️ The GST department argued that the order was appealable under statutory provisions, making the writ petition under Article 226 of the Constitution non-maintainable.
➡️ The Court held that where no complex constitutional or legal issue is raised, the proper course is to exhaust statutory appellate remedies rather than invoke writ jurisdiction directly.
➡️ Questions about factual errors, procedural irregularities, or misapplication of law are within the jurisdiction of the appellate authority, and need not be addressed at the writ stage.
➡️ The writ petition was dismissed on grounds of availability of an adequate alternative remedy, reinforcing the principle that writ jurisdiction is not a substitute for statutory appeals in tax matters.
✔️ Madhya Pradesh HC – Khalghat Sendhwa Tollways (P.) Ltd. v. Union of India [WRIT PETITION No. 25098 of 2025]
🔥📛 SC directed to consider review application raising contention that 100% penalty couldn’t have been imposed on assessee
➡️ The assessee, a registered dealer, opted to pay GST under the composition scheme at 1% on turnover. However, revenue authorities rejected the assessee’s eligibility on the ground that their turnover under the prior VAT regime exceeded the prescribed limit for the composition scheme.
➡️ On this basis, the department imposed a GST liability at the standard rate of 28%, along with interest and a 100% penalty, treating the assessee’s declaration as a case of wilful non-disclosure, though not involving fraud.
➡️ The assessee challenged the penalty and interest via writ petition, but the High Court dismissed it, not specifically addressing the issue of whether the 100% penalty under Section 122 was appropriately applied in a non-fraudulent case.
➡️ The assessee filed a review application, stating that although the penalty issue was included in the original writ petition, it was not argued clearly during the hearing. The Supreme Court found merit in this procedural lapse, noting that the plea regarding penalty deserved consideration.
➡️ The Supreme Court held that the assessee had the right to raise the issue of 100% penalty in the review petition. It therefore set aside the High Court’s dismissal of the review and directed that the matter be restored for proper adjudication on the penalty aspect.
✔️ SC – Godway Funicrafts v. State of Andhra Pradesh [CIVIL APPEAL NO(S). 9490-9491 OF 2025]
🔥📛 SC: Dismisses Revenue’s plea challenging return of cash seized during search proceedings
➡️ The SC dismissed the Revenue’s Special Leave Petition (SLP) against the Delhi HC order on grounds of latches, i.e., undue delay in filing the appeal, signaling the importance of procedural discipline in revenue litigation.
➡️ The Delhi HC had earlier directed the release of approximately ₹35.28 lakhs seized during a search under Section 67 of the CGST Act, relying on its precedent in Deepak Khandelwal, which allowed such relief in similar circumstances.
➡️ On SC’s query, Revenue admitted the seized cash had already been returned to the assessee, indicating no ongoing prejudice or recoverability concerns, which further weakened the basis for the Revenue’s appeal.
➡️ The SC strongly criticized the Revenue for delays in completing the adjudication proceedings, highlighting inefficiency in enforcement under the CGST framework and emphasizing the need for timely conclusion of proceedings post-search.
➡️ Although the SC declined to tag this matter with similar pending cases, it left the larger question of law regarding the legality of cash seizure under the CGST Act open for future consideration, preserving scope for jurisprudential development.
✔️ SC – Commissioner of CGST, Delhi West and Ors. Versus Rohit Gupta and Ors [Diary No. 31801-2025]
🔥📛 S.74 CGST Act: Consolidated SCN For Multiple Financial Years Necessary To Establish Wrongful Availment Of ITC: Delhi High Court
➡️ The Delhi High Court held that a single, consolidated show cause notice covering multiple financial years is valid under Section 74 of the CGST Act, especially where fraud is involved. This departs from earlier case law that required segregation by financial year.
➡️ The Court emphasized that fraudulent availment or utilization of Input Tax Credit (ITC) often spans multiple years. Since fraudulent patterns may only become evident when transactions across several years are examined together, a consolidated approach is both necessary and appropriate.
➡️ The Court distinguished between Sections 73 and 74: while Section 73(10) and 74(10) refer to “financial year,” Sections 74(3) and 74(4) use broader terms like “for any period” or “for such periods.” This statutory distinction indicates the Legislature’s intent to allow notices covering more than one year in fraud-related cases.
➡️ The Court clarified that its decision is not inconsistent with the Supreme Court’s view in Caltex (India) Ltd (1966), which related to assessments under the Sales Tax Act. The CGST context, particularly involving fraud, justifies a different interpretative approach.
➡️ Given the serious allegations involving over Rs. 83 crores of wrongful ITC, the Court ruled that a consolidated notice was not just lawful but essential. The petitioner’s challenge was rejected, and a cost of Rs. 25,000/- was imposed for raising an unsustainable objection.
✔️ Delhi HC – Ambika Traders v. Additional Commissioner, Adjudication DGGSTI, CGST Delhi North [W.P.(C) 4853/2025]
