LATEST GST CASE LAWS: 13.08.2025
🔥📛 Madras HC to examine ITC denial to Apollo-Tyres despite differential tax-payment on composite supplies
➡️ Apollo Tyres supplied tyres, tubes, and flaps at 28% GST. Post rate reductions (tubes at 18% from 15-Nov-2017, flaps at 18% from 1-Jan-2019), it voluntarily paid differential GST of ₹144.24 crore (10%) before any investigation/SCN, via debit notes to customers and reporting in GSTR-1/GSTR-3B.
➡️ Department held that since the payment related to an investigation scenario, it should have been made through DRC-03 as per CGST Rules, not via returns; issued SCN proposing disallowance of ITC passed to customers (and own GSTINs) on the differential GST, with interest and penalty under section 74, also invoking ITC restriction under section 17(5)(i).
➡️ Section 74(5)/(6) bars issuance of SCN once tax is paid before notice; ITC restriction under section 17(5)(i) inapplicable as no proceedings were pending at payment time; relied on Bharti Airtel (SC), Uniflex Cables (HC), Hyundai Motor India (HC) to argue voluntary payment, revenue neutrality, and non-levy of penalty in interpretational disputes.
➡️ Orders confirmed demand and first appeal was rejected without properly addressing jurisdiction, procedural compliance, and principles of natural justice, despite petitioner’s demonstrated industry-aligned compliance.
➡️ Madras HC earlier granted interim stay noting compliance with CGST provisions, industry practice, and prima facie lack of jurisdiction; after hearing both parties, the matter is now listed for final arguments.
✔️ Madras HC – Apollo Tyres Limited vs Union of India & Ors.
🔥📛 Delhi HC seeks Revenue’s stand on withholding exporter’s refund due to disputed ITC
➡️ The core question is whether export refund claims under Rule 96 of the CGST Rules can be withheld solely due to alleged excess or wrongful ITC availment, even when tax has been paid on exports and shipping bills via ICEGATE act as refund applications.
➡️ The sole proprietor exporter argued that all exports were duly tax-paid and filed through ICEGATE, triggering automatic refund claims; denial of refunds on the basis of unrelated ITC disputes and supplier GST cancellations was unjustified.
➡️ Citing Rule 96(4)(c), the Revenue maintained that once an exporter is flagged as “risky,” all transactions—including ITC claims—must undergo re-verification before refund processing, linking such verification to alleged excess ITC and supplier registration cancellations.
➡️ The High Court identified the legal issue as whether disputes over ITC can lawfully serve as grounds to withhold export refunds under the CGST framework, particularly in the context of Rule 96(4)(c).
➡️ Revenue must file an affidavit within two weeks clarifying the statutory position on Rule 96(4)(c) and refund withholding; a senior GST official (minimum Joint Commissioner) familiar with the statutory scheme must be present at the next hearing on 22nd September 2025.
✔️ Delhi HC – Shalender Kumar Proprietor Shahji Enterprises Vs. Commissioner of CGST & Anr. [W.P.(C) 16028/2024]
🔥📛 HC: Principles of Natural Justice sine qua non when rectification-petition is decided adversely against Assessee
➡️ Delhi HC reaffirmed that if a rectification application is decided adversely against the assessee, the third proviso to Section 161 requires a personal hearing if sought, irrespective of general natural justice principles.
➡️ Relying on HVR Solar Pvt. Ltd., the court clarified that a hearing may be dispensed with only when the rectification is allowed fully in favour of the assessee.
➡️ Citing Madras HC’s Suriya Cement Agency judgment, the court noted that even rejection of an assessee-initiated rectification mandates prior notice and hearing.
➡️ The rectification plea was rejected without giving the assessee an opportunity for a personal hearing, which the court held to be contrary to the statutory mandate under the third proviso.
➡️ The impugned order was quashed and the case remitted to the adjudicating authority to re-decide the rectification after granting a personal hearing.
✔️ Delhi HC – Mark Agencies vs Department of Trade and Taxes and anr [W.P.(C) 9700/2025 & CM APPL. 40678/2025]
🔥📛 No Sec. 73/74 proceedings for mismatch of E-way bill & GSTR-9 data without fraud or willful misstatement allegations: HC
➡️ The Revenue issued Form DRC-01A proposing tax demand for 2018-19, partly based on a mismatch between turnover reported in E-way bills and in Form GSTR-9. The assessee explained the difference as arising from E-way bill generation errors, with no short payment of tax.
➡️ The authority passed an order demanding tax, interest, and penalty under Section 73(9) solely on the turnover mismatch, without alleging fraud, willful misstatement, or suppression.
➡️ Section 73 can be invoked only for tax not paid or short paid without involving fraud, willful misstatement, or suppression; the mere existence of an E-way bill mismatch does not establish such liability.
➡️ Proceedings under Section 74 require a prima facie finding of fraud, willful misstatement, or suppression, supported by preliminary investigation. No such allegations or findings were present in this case.
➡️ In absence of any evidence or allegation of fraud, willful misstatement, or suppression, the Revenue had no jurisdiction to demand tax under Section 73 based merely on E-way bill and GSTR-9 turnover differences.
✔️ Gujarat HC – MC Bauchemie India Pvt Ltd v. Union of India [R/SPECIAL CIVIL APPLICATION NO. 5830 of 2025]
🔥📛 HC remanded matter as SCN wasn’t properly uploaded on GST portal and was missed by assessee and its consultant
➡️ The Show Cause Notice (SCN) for FY 2017-18 to 2019-20 was uploaded on the GST portal under the “Additional Notices Tab” instead of the designated tab, resulting in the assessee being unaware of its issuance.
➡️ The impugned demand order was passed without a reply from the assessee and without granting a personal hearing, violating principles of natural justice.
➡️ Although GST portal changes have since made SCNs more visible, in this case the incorrect tab upload deprived the assessee of a proper chance to respond.
➡️ The Court allowed the assessee to file a reply and directed re-adjudication, subject to the outcome of the Supreme Court’s pending decision on limitation extension notifications.
➡️ The assessee also challenged CBIC Notifications No. 9/2023-CT and 56/2023-CT (and parallel State notification) extending adjudication limitation; the Court held this challenge will be governed by the Supreme Court’s verdict in the ongoing case.
✔️ Delhi HC – Dharmshilla Cancer Foundation and Research Centre v. Assistant Commissioner of Sales Tax [W.P.(C) No. 7229, 7232 & 7233 of 2025]
🔥📛 Writ challenging penalty on alleged ITC fraud via 2nd GSTIN dismissed as petitioner was negligent & issues were factual: HC
➡️ During the GST transition, the petitioner received two GST registrations; the tax department alleged fraudulent availment and passing of ITC under the second GSTIN, leading to a substantial penalty.
➡️ The assessee contended that the second GSTIN was misused by another person, and an FIR was lodged on 30-09-2019 to block the registration; he claimed illiteracy and reliance on an accountant for compliance.
➡️ The court observed that the assessee did not timely challenge the order-in-original or take adequate steps to verify the fake GST activity or identify the actual culprits, showing a casual approach.
➡️ It was held that the primary responsibility lies with the assessee to prevent misuse of his GST identity and monitor his registrations, regardless of his literacy level or reliance on agents.
➡️ The court refused to interfere under writ jurisdiction since the matter required factual inquiry; the assessee could instead pursue statutory remedies through appeal.
✔️ Delhi HC – Laxmi Collection v. Additional Commissioner Delhi – West, Central Goods and Services Tax Department [W.P.(C) 11092 of 2025]
🔥📛 HC extends limitation period for filing appeal against order as no opportunity was granted to file reply by assessee
➡️ The department alleged incorrect tax liability declaration in GSTR-9 and excess Input Tax Credit (ITC) claim for FY 2019-20, initiating proceedings under provisions where fraud or wilful misstatement was not involved.
➡️ A show cause notice was issued to the assessee, followed by a reminder notice from the department.
➡️ Despite these notices, no opportunity was given to the assessee to file a reply or attend a personal hearing before finalising the demand.
➡️ The adjudication without hearing was held to be contrary to principles of natural justice, warranting procedural correction.
➡️ Time for filing an appeal was extended, with directions that the assessee present its case before the Appellate Authority for fresh consideration.
✔️ Delhi HC – DHRL India Services (P.) Ltd. v. Sales Tax Officer Class II/ AVATO [W.P.(C) No. 11102 of 2025]
