LATEST GST CASE LAWS: 26.08.2025
🔥📛 Delhi HC grants interim-stay to Rotary’s subsidiary on taxability of club-membership-fees under RCM
➡️ The Delhi High Court stayed the show cause notice (SCN) issued to Rotary International South Asia Office (subsidiary of Rotary International, USA), after noting that the SCN itself admits ₹96 crores GST has already been paid and declared in monthly GSTR-3B returns.
➡️ The SCN sought recovery of GST on membership fees collected by Rotary Clubs/associations, though the Petitioner highlighted that taxes were already discharged on such collections.
➡️ The Petitioner argued that Rotary International, USA does not receive any consideration from its Indian subsidiary, hence liability under the reverse charge mechanism (RCM) does not arise.
➡️ The High Court recorded that the adjudicating authority in this matter is the CGST (South) Delhi Commissionerate.
➡️ The Bench specifically questioned the applicability of RCM when GST has already been fully paid, and listed the matter for detailed hearing on December 10, 2025.
✔️ Delhi HC – Rotary International South Asia Office vs. Joint Commissioner, CGST, South Delhi & Ors. [W.P.(C) 12539/2025]
🔥📛 HC: Penalty for ‘Transporter’ invokable against ‘Owner’ basis failure to produce documents at detention/seizure time
➡️ The HC held that since no specified documents were produced at the time of detention/seizure, proceedings were rightly initiated under Section 129(1)(b). The assessee’s later claim of ownership before the appellate authority could not be accepted, as ownership must be established at the initial stage.
➡️ The justification that documents were available but not produced due to the driver’s inadvertence was raised only in appeal, not before the detaining authority. HC emphasized that such afterthought explanations cannot alter the legal position under Section 129.
➡️ The Court relied on the CBIC circular clarifying that when documents are absent at the time of detention, penalty under Section 129(1)(b) applies, and not under 129(1)(a). Hence, the assessee’s plea for owner’s treatment under 129(1)(a) was rejected.
➡️ HC clarified that State GST officers are proper officers under IGST/CGST laws and can exercise powers of detention and seizure without a separate notification, unless expressly excluded. Reliance placed on rulings of MP HC (Advantage India Logistics) and P&H HC (Bright Road Logistics).
➡️ As the findings of bogus/fictitious transactions were unchallenged and the assessee failed to establish ownership or jurisdictional defect, the HC refused to interfere and dismissed the writ petition.
✔️ Allahabad HC – Shree Maa Trading Company And 2 Others vs State of U.P and 3 Ors [WRIT TAX No. – 3171 of 2025]
🔥📛 HC rightly dismissed writ petition against rejection of rectification application without availing appeal remedy: SC
➡️ An audit was conducted for FY 2019–20 under Section 65, revealing discrepancies. A show cause notice was issued, and though a personal hearing was granted, the assessee did not avail it.
➡️ Based on non-response, the adjudicating authority passed an order determining tax, interest, and penalty against the assessee.
➡️ The assessee sought rectification of the order under Section 161. This application was rejected by the authority.
➡️ The assessee filed a writ petition challenging the rejection, which was dismissed by the High Court with direction to avail appellate remedy. The writ appeal was also dismissed, upholding the same view.
➡️ The Court held that the assessee had a statutory remedy of appeal against rejection of the rectification application under Section 161. Hence, no interference was warranted, and the SLP was dismissed.
✔️ SC – Eminent Textiles Mills (P.) Ltd. v. State Tax Officer [SLP Appeal (C) No. 21711 of 2025]
🔥📛 SLP dismissed against HC ruling that persons liable under RCM can also seek advance ruling u/s 95(a) CGST
➡️ The definition of “advance ruling” under section 95(a) of the CGST Act does not restrict who can apply. Even a person liable to pay tax under the reverse charge mechanism is entitled to seek an advance ruling.
➡️ The High Court clarified that there is no embargo in law preventing reverse charge taxpayers from filing applications before the Authority for Advance Ruling (AAR).
➡️ The Supreme Court upheld the High Court’s decision, noting no reason to interfere, and therefore dismissed the SLP on this issue.
➡️ Where an AAR rejects an application at the admission stage under section 98(2), such rejection is not appealable before the Appellate Authority for Advance Ruling (AAAR), as the statute provides no remedy of appeal in such cases.
➡️ The Supreme Court again agreed with the High Court’s interpretation, held that the rejection order under section 98(2) is not appealable, and accordingly dismissed the SLP, confirming the legal position.
✔️ SC – Commercial Tax Department, Rajasthan v. Power Grid Corporation Of India Ltd. [SLP (CIVIL) Diary No(s). 17421 of 2025]
🔥📛 HC dismissed writ as it involved allegation of fraudulent availment of ITC by several parties
➡️ The assessee filed writ petitions against demand orders for FY 2017-18, alleging that its replies to show-cause notices (SCNs) and its participation in personal hearings were ignored in the impugned orders.
➡️ The proceedings concerned fraudulent availment of Input Tax Credit (ITC) through invoices issued by non-existent firms. The assessee was one among 176 noticees implicated in the alleged racket.
➡️ Given the large-scale nature of the fraud and the involvement of multiple parties, the Court emphasized that such matters require detailed fact-finding, which cannot be properly adjudicated in writ jurisdiction.
➡️ The Court noted that an appellate remedy was available to the assessee under the GST law. This statutory mechanism must ordinarily be availed before invoking writ jurisdiction.
➡️ The writ petitions were dismissed as not maintainable. The assessee was relegated to pursue the appellate remedy provided under the law against the demand orders.
✔️ Delhi HC – Sugan Traders v. Commissioner of Central Goods and Services Tax [W.P.(C) No. 11091 of 2025]
🔥📛 No retrospective cancellation of GST registration unless SCN contemplates such an action: HC
➡️ The Show Cause Notice (SCN) issued to the assessee only alleged non-availability at the principal place of business during a field visit; it did not propose cancellation of GST registration with retrospective effect.
➡️ Since the SCN did not mention retrospective cancellation, the assessee was not put on notice about such an action, violating principles of natural justice.
➡️ The cancellation order assigned no reasons justifying why the registration should be cancelled from an earlier date.
➡️ The court held that retrospective cancellation of GST registration in such circumstances was impermissible.
➡️ The cancellation of registration was directed to take effect only from the date of the SCN, not retrospectively.
✔️ Delhi HC – V R Impex v. Commissioner of Delhi Goods and Services Tax [W.P.(C) No. 5264 of 2025]
