LATEST GST CASE LAWS: 04.12.2025
🔥📛 Delhi HC quashes refund rejection premised on excess ITC without adjudication; Directs refund
➡️ The Delhi High Court held that rejection of IGST refund under Rule 92 (GST-RFD-08) on the ground of excess ITC availed is illegal when no recovery proceedings under Section 73 or 74 have been initiated. Rule 92(3) cannot substitute adjudication mandated under the Act.
➡️ The alleged GSTR-2A vs. GSTR-3B mismatch pertained to FY 2019-20, while the refund claim pertained to a different period. Therefore, refund cannot be withheld based on issues outside the refund period.
➡️ Although the assessee replied to RFD-08 and attended the scheduled personal hearing, the officer was unavailable (due to election duty), yet refund rejection orders were passed without actual hearing, making the order unsustainable.
➡️ The department’s audit report (for FY 2020-21, 2022-23 and 2023-24) recorded ITC demands that were paid, but there was no reference to wrongful ITC availment for FY 2019-20, disproving the basis for rejection of refund.
➡️ The Court found “no justifiable cause” for withholding IGST refund and directed the department to sanction and release approx. ₹37 lakhs along with applicable interest under Rule 92 within two months, and listed the matter for compliance.
✔️ Delhi HC – STANLEE (INDIA) ENTERPRISES PVT. LTD vs THE COMMISSIONER OF CGST, DELHI NORTH [W.P.(C) 5370/2025]
🔥📛 Bombay HC to decide if Revenue can stall appellate-ordered refund basis contemplated appeal
➡️ The assessee challenged the Revenue’s prolonged non-compliance with the appellate order directing refund of approx. ₹7.27 crores along with statutory interest under Section 56 of the CGST Act.
➡️ The assessee argued that the only reason for non-release is the Department’s intention to file an appeal, which is legally untenable and cannot obstruct refund execution.
➡️ The assessee cited this ruling to assert that GST refunds cannot be stalled merely because the Department proposes to challenge the appellate order, unless there is a stay on the order.
➡️ It was emphasized that once refund is ordered, the statute mandates prompt release along with interest, and the Department’s stand for non-payment is contrary to the legal framework.
➡️ The High Court granted time to the Revenue to obtain instructions on the refund delay and status of any intended appeal, and listed the matter for further hearing on December 9, 2025.
✔️ Bombay HC – Ma Agro Proprietor Mr. Ashfak Jafar Shekhani vs. Dy. Commissioner of State Tax, Sanpada [WRIT PETITION NO. 15764 OF 2025]
🔥📛 Delhi HC grants Revenue 2-day extension to complete copying post-parsing data at Advocate’s office
➡️ The Delhi High Court allowed two additional days to the Revenue to complete copying of digital data seized during a search at the petitioner-advocate’s office, noting that the data-parsing stage had already been completed.
➡️ The Court expressed serious concern that summons were issued to the advocate who merely represented his client and filed an application during the search proceedings. This raised apprehensions of possible interference with the right to legal representation.
➡️ The Court granted the petitioner liberty to file a detailed affidavit in response to the Revenue’s successive applications seeking extensions of time to process the seized material.
➡️ The Commissioner was directed to submit a detailed report regarding the status and conduct of the investigation and to furnish a copy of the report to the petitioner to ensure procedural transparency.
➡️ The matter has been scheduled for further hearing on 29 January 2025, keeping the proceedings open pending compliance with the above directions.
✔️ Delhi HC – Puneet Batra V/S UOI & ors [W.P.(C) 11021/2025]
🔥📛 HC: Absent saving clause, Rule 96(10) omission obliterates pending IGST refund proceedings
➡️ The Delhi High Court held that since Rule 96(10) of the CGST Rules was omitted w.e.f. 8 October 2024 without a saving clause, all refund-related proceedings initiated under this rule automatically stand extinguished.
➡️ The Court reiterated that, unlike a repealed statute protected under Section 6 of the General Clauses Act, an omitted rule does not continue to apply to pending matters unless explicitly preserved— which did not happen here.
➡️ The order relied on observations of the 54th GST Council Meeting, which recognized that Rule 96(10) created unnecessary complications and did not serve its intended objective, leading to its recommended deletion.
➡️ The Court declined the Revenue’s contention that omission applies only prospectively and that refund claims prior to 08-10-2024 should still be governed by Rule 96(10). Since proceedings were not “past and closed”, they cannot continue under a non-existent rule.
➡️ Summons, SCNs and adjudication issued relying on Rule 96(10) are unsustainable post-omission. No IGST refund proceedings can now be continued or initiated based on Rule 96(10) by any authority.
✔️ Delhi HC – Vinayak International Housewares Pvt. Ltd. v. Union of India & Ors [W.P.(C) 3154/2023]
🔥📛 HC: Rent from leasing residential premises to students, exempt; Directs Revenue to reconsider refund
➡️ The Karnataka High Court reiterated that such rental income is not liable to GST under Entry 13 of Notification No. 9/2017, aligning with the ruling in Taghar Vasudeva Ambrish.
➡️ The Assistant Commissioner corrected the original audit report after verifying a Gram Panchayat certificate, acknowledging that the rented premises qualified as residential.
➡️ The Assistant Commissioner dismissed the assessee’s refund claim and the Joint Commissioner upheld the denial, contrary to prevailing judicial interpretation.
➡️ The High Court highlighted that the authorities ignored binding precedent and the admitted residential nature of the premises.
➡️ The Court directed the Revenue to re-examine the refund application and issue a fresh, lawful order within six weeks, explicitly keeping in mind the Taghar Vasudeva Ambrish judgment.
✔️ Karnataka HC – Bhandary Gas Agency vs Joint Commissioner of Commercial Taxes & Anr [WRIT PETITION NO. 9950 OF 2024]
🔥📛 Cross-LoC Barter trade in J&K is taxable intra-State supply as area under de facto control of Pakistan is part of J&K: HC
➡️ Post-GST, Cross-LoC barter trade—though conducted without monetary consideration under MHA-SOP—constituted intra-State supplies, since both supplier location and place of supply fell within the territories of the erstwhile State of J&K. These transactions were not “imports” or “exports”, and therefore liable to GST.
➡️ Petitioners continued treating Cross-LoC supplies as zero-rated after GST introduction (as was the case under pre-GST J&K VAT regime) and did not report them or pay tax in GST returns.
➡️ SCNs invoking Section 74(1) were upheld because allegations indicated suppression and non-disclosure despite awareness that no exemption existed. The non-reporting of bartered supplies and withholding of records showed prima facie intention to evade tax, placing the matter under Section 74 instead of Section 73.
➡️ SCNs issued in August 2024 for FY 2017-18 and 2018-19 were within limitation, as Section 74 allows five years from the due date of the annual return, and Section 74(2) requires notice six months prior to expiry—both satisfied. A single composite SCN for multiple financial years is valid when the period is specified, allegations are clear, and year-wise quantification is provided.
➡️ High Court declined to quash SCNs through writ petitions since assessees had adequate statutory remedies—filing reply to SCN, followed by appeal under Section 107 if the demand is confirmed. Writ petitions against SCNs simpliciter were premature and not maintainable.
✔️ J&K and Ladakh HC – New Gee Enn & Sons v. Union of India [WP (C) Nos. 1938, 1959, 1961, 1962, 2003, 2008, 2009, 2010, 2011, 2071, 2072, 2073, 2074, 2075, 2076, 2077, 2149, 2150, 2151, 2152, 2156, 2157, 2165 and 2166 of 2024 & WP(C) Nos. 475, 531, 532, 533, 617, 2087, 2089, 2477, 2478, 2479 and 2480 of 2025]
🔥📛 SC rejects review; failure to file GST returns and pay tax despite capacity treated as willful suppression, Sec.74 penalty sustained
➡️ The assessee raised invoices totalling ₹20.92 crore (including ₹3.19 crore GST) for FY 2017-18 but did not file monthly GSTR-3B returns nor pay the corresponding GST.
➡️ The assessee deposited GST and filed pending returns only after departmental inspection, which led authorities and the High Court to treat the conduct as willful suppression.
➡️ The assessee claimed relief under Section 74(5) of the CGST Act, but the High Court held it inapplicable because:
–> Interest was paid after issuance of notice, not prior, and
–> 15% penalty (mandatory for invoking escape clause) was not paid.
➡️ The Supreme Court had earlier declined to interfere with the High Court’s conclusion that the assessee’s conduct amounted to willful suppression, making Section 74(5) relief unavailable.
➡️ On review, the Supreme Court reiterated that there was no merit warranting reconsideration, and the petition was dismissed.
✔️ SC – Sriba Nirman Company v. Commissioner (Appeals), Guntur, Central Tax and Customs [SLP (C) NO. 14270 OF 2025 – REVIEW PETITION (CIVIL) Diary No. 38833 of 2025]
🔥📛 Writ allowed as one day notice for personal hearing violated natural justice; delay condoned on costs:HC
➡️ The taxpayer filed the statutory appeal along with an application for condonation of delay due to counsel’s illness, but the Appellate Authority rejected the appeal as time-barred without accommodating the explanation.
➡️ The Appellate Authority issued a personal hearing notice with only one day’s lead time. The Court held that such short notice deprived the petitioner of a real opportunity to be heard.
➡️ The original order had confirmed tax, interest and penalty solely based on GSTR-3B vs. GSTR-2A mismatch and differences between GSTR-1 and GSTR-3B, but the appeal was not evaluated on merits due to the delay-based dismissal.
➡️ Although the Appellate Authority lacked power to condone delay beyond the prescribed statutory period, the High Court exercised writ jurisdiction under Article 226 because the case involved a clear infraction of natural justice.
➡️ The High Court set aside the Order-in-Appeal and directed fresh hearing on merits, subject to the taxpayer depositing ₹20,000 as costs within two weeks, and mandated that the Appellate Authority issue a fresh hearing notice providing at least one week’s time.
✔️ Delhi HC – Arjun Engineering Co. v. Additional Commissioner of Goods and Service Tax, North Delhi [W.P. (C) No. 17680 of 2025]
🔥📛 CGST SCN issued based on income-tax search material admissible if independently scrutinized and remains rebuttable: HC
➡️ Materials seized during an Income-tax search — including servers, audit records, digital devices, and employee statements — can validly be shared with GST authorities and relied upon for issuing a Show Cause Notice (SCN). Such evidence may be used for provisional assessment and raising presumptions, but it remains rebuttable by the taxpayer.
➡️ While IT-based evidence can trigger investigation and issuance of an SCN, it cannot be the sole basis for final assessment under GST law. The assessee retains the right to rebut the material during adjudication.
➡️ Since the SCN listed and annexed Relied Upon Documents (RUDs), summarized special audit findings, referenced statements, and clearly explained the alleged concealed commission value, it was held not vague or baseless. The taxpayer was already aware of the evidence from the search and investigation.
➡️ The Court held that challenging the SCN at this preliminary stage was premature. The proper course is to respond to the SCN, raise factual and legal objections in adjudication, and avail personal hearing before considering any writ remedy.
➡️ While most case law citations in the SCN were correct, some were inaccurate or irrelevant. The Court directed that departments must verify legal citations and avoid reliance on AI-generated references (“AI hallucinations”) when issuing SCNs or final orders.
✔️ Delhi HC – J M Jain v. Union of India [W. P. (C) No. 16754 of 2025]
🔥📛 SC upholds HC judgment that exempted rent from leasing residential premises to students/working professionals
➡️ The SC dismissed the Revenue’s appeal and affirmed that lease of residential premises used as hostels for students, teachers and staff qualifies for GST exemption; no interference with the High Court judgment was warranted.
➡️ The High Court held that “residential dwelling” under Entry 13 of Notification No. 09/2017 must be understood in normal trade parlance as long-term residential accommodation and not restricted by technical distinctions; absence of definition in GST law requires purposive interpretation.
➡️ The AAAR’s reasoning that a hostel is only “social accommodation” and not a “residential dwelling” was overturned; hostels were held to be residential premises and therefore eligible for exemption.
➡️ Revenue argued that the exemption should apply only if both the lessor and lessee use the premises as residence; the Court held that the relevant test is the nature and use of the premises as residential accommodation, and not how the lessee classifies its business.
➡️ The judgment clarifies that residential hostels (for long-term stay) are distinct from hotels/guest houses for temporary lodging; running a leasing business or holding a commercial trade licence does not negate the availability of exemption when the leased property is used as residential accommodation.
✔️ SC – The State Of Karnataka & Anr Vs Taghar Vasudeva Ambrish & Anr. [CIVIL APPEAL NO. 7846 OF 2023]
🔥📛 Delhi HC permits pre-GST distribution of credit transitioned by ISD-registrant; Directs GSTN for facilitation
➡️ The Delhi High Court held that the absence of prescribed procedural modalities cannot extinguish the statutory right of an Input Service Distributor (ISD) to transition pre-GST CENVAT credit under Section 140(7) of the CGST Act.
➡️ The Court noted that the Revenue’s counter-affidavit did not cite any statutory prohibition on ISD credit transition, reinforcing that eligible credit must be allowed.
➡️ Since the GSTN portal did not initially permit TRAN-1 filing for ISD registrants, the assessee’s delayed filing could not be treated as a lapse; system constraints cannot prejudice the taxpayer.
➡️ The Court observed that the GST law (Sections 2(61), 20–25 and Rule 39(1)(a)) expressly recognises ISDs and specifies only the month-of-invoice condition for credit distribution—no additional limitation on transitioned credit exists.
➡️ Relying on the Bombay HC judgment in Siemens India, the Court directed GSTN to give effect to the TRAN-1 submission and reflect the admitted ITC in the Electronic Credit Ledger, enabling lawful distribution of credit to the assessee’s units.
✔️ Delhi HC – CLYDE PUMPS PRIVATE LIMITED v/s UNION OF INDIA & ORS [W.P.(C) 4400/2022]
