LATEST GST CASE LAWS: 09.12.2025
🔥📛 AP-HC to examine ‘Proper Officer’ issue arising from Enforcement-Wing audit and adjudication
➡️ The assessee argues that the Deputy Commissioner who conducted the audit under Section 65 cannot lawfully adjudicate the same matter, as issuing show cause notices under Section 73 after conducting the audit creates an apprehension of bias and violates the principle of natural justice.
➡️ It is contended that the concerned officer does not qualify as a “proper officer” under Sections 2(91) and 5 of the CGST Act. No notification assigns adjudication functions to the Audit/Enforcement wing, rendering the exercise of adjudication power without legal authority.
➡️ The assessee emphasizes that Sections 73 and 75 prescribe an independent adjudicating authority to ensure fair hearing and impartial determination, which becomes impossible when the audit/investigation officer assumes the role of adjudicator.
➡️ CBIC’s Circular No. 31/05/2018 and judgments such as Swastik Plastics (Delhi HC) and Mohammed Bilal (Kerala HC) underscore the requirement that investigation/audit and adjudication must be handled by different officers to protect procedural fairness.
➡️ The Revenue sought additional time to secure instructions regarding the applicability of the Circular and segregation of audit and adjudication functions; the High Court has listed the matter “For Orders,” indicating judicial determination on the proper-officer and bias issue is imminent.
✔️ Andhra Pradesh HC – Carbon Resources Private Limited vs The Deputy Commissioner and Ors [MAIN CASE No. W.P. No. 22512 of 2023]
🔥📛 AAR: Customs pre-consultation letter not a valid document to claim ITC of differential duty
➡️ The Gujarat AAR held that Input Tax Credit cannot be availed on the additional IGST paid pursuant to a pre-notice consultation letter issued under Section 28(1) of the Customs Act.
➡️ Referring to Section 16(2) of the CGST Act and Rule 36(1) of the CGST Rules, the AAR clarified that neither the pre-consultation letter nor TR-6 challan qualifies as a prescribed document for claiming ITC.
➡️ The AAR cited the circular (issued pursuant to the Supreme Court ruling in Cosmo Films) to reiterate that payment of differential duty through TR-6 challan after “Out of Charge” does not constitute an eligible document for ITC.
➡️ The taxpayer’s plea that the pre-consultation letter is a “similar document” under Rule 36(1)(d) was dismissed. The AAR clarified that the expression applies only to alternative Bill of Entry formats (e.g., courier B/E), not pre-SCN communications.
➡️ Since the primary requirement of having a valid document under Section 16(2) was not satisfied, the question of ITC time-limit under Section 16(4) became irrelevant.
✔️ Gujarat AAR – In the matter of Hansaben Jayantibhai Patel [ADVANCE RULING NO. GUJ/GAAR/R/2025/53]
🔥📛 Writ against show cause notice for ITC recovery held premature as statutory remedy available: HC
➡️ The Court held that filing a writ petition against a show cause notice (SCN) under GST before completion of adjudication is not maintainable, as the notice only initiates the adjudication process.
➡️ Since the GST enactments provide an effective statutory mechanism for adjudication and subsequent appeal, the writ jurisdiction should not be invoked unless exceptional circumstances exist (e.g., lack of jurisdiction, violation of natural justice).
➡️ The show cause notice merely proposes recovery of wrongly availed ITC of ₹0.11 lakhs with interest and penalty and calls upon the taxpayer to explain—therefore, no cause of action for writ arises at this preliminary stage.
➡️ The petitioner is allowed to file a reply to the SCN and can rely on relevant legal provisions and judicial precedents before the adjudicating authority without prejudice.
➡️ The writ petition was dismissed as premature, but the Court expressly refrained from commenting on the merits of the case and granted liberty to the petitioner to participate fully in the adjudication proceedings.
✔️ Madras HC – Antony Projects v. Superintendent of GST & Central Excise, Chennai [W.P. No. 42706 of 2025]
🔥📛 Adjudication set aside as order uploaded only on GST portal without personal hearing violated natural justice: HC
➡️ The show-cause notice and adjudication order were served only by uploading on the GST portal without using any additional statutory modes of communication, resulting in lack of actual knowledge to the taxpayers.
➡️ The adjudicating authority passed an adverse order without granting a mandatory opportunity of personal hearing, constituting a serious breach of natural justice.
➡️ Failure of proper service owing to portal upload issues was treated as a “portal service defect,” vitiating the adjudication proceedings.
➡️ The High Court held that the availability of an appellate remedy does not prevent writ intervention when the core grievance is denial of due process. Forcing the petitioner to appeal would mean losing the right to fair adjudication.
➡️ The order dated 06.03.2023 was quashed and the matter was restored to the stage of show-cause notice for fresh adjudication. The assessee was permitted to file a reply, and limitation objections were restricted to what existed on the date of the original SCN.
✔️ Calcutta HC – Birla Brothers (P) Ltd v. Deputy Commissioner of Revenue [WPA No. 26252 of 2025]
🔥📛 Penalty on directors under unsustainable as pre-SCN deposit not considered; company penalty to be re-examined: HC
➡️ The company’s GST registration, initially cancelled for alleged non-filing of returns, was restored by the Commissioner after the petitioner deposited approx. ₹2.01 crore and complied with filing requirements.
➡️ After restoration, a fresh SCN was issued alleging fraudulent ITC availment. Despite filing replies and attending hearings, the authorities imposed penalties on both the company and its directors.
➡️ Both the adjudicating authority and appellate authority failed to acknowledge the substantial pre-SCN deposit disclosed in the reply—indicating a significant lapse in the decision-making process.
➡️ Since the GST Appellate Tribunal is now functional, writ relief was not granted; instead, the assessee was directed to file a statutory appeal. The Tribunal was instructed to consider evidence of the ₹2.01 crore deposit during adjudication.
➡️ Under the statutory framework for pre-notice payments, penalties on directors may not be legally justified, and even penalties on the company require fresh examination based on the nexus with the alleged ITC fraud. Considering the substantial payment already made, the assessee was allowed to file the appeal without any additional pre-deposit, and the appeal must be heard on merits.
✔️ Delhi HC – A and T Security Services (P.) Ltd. v. Additional Commissioner of CGST Delhi West [W.P.(C) Nos. 16792, 16798, 16906 and 16909 of 2025]
🔥📛 Petition challenging GST registration cancellation on fraud grounds dismissed as petitioner failed to prove breach of natural justice: HC
➡️ GST authorities inspected the registered premises where the 75-year-old petitioner admitted that no business of M/s Digital Storm operated there and that a relative might have misused his Aadhaar and photo for GST registration. This admission was formally recorded with his endorsement.
➡️ The registration was cancelled on allegations of fraud, suppression and misrepresentation. The Court noted that the petitioner offered contradictory statements later and failed to produce credible evidence to rebut the recorded visit findings.
➡️ The plea of improper service, vagueness of SCN, and violation of natural justice was rejected because the SCN clearly alleged fraud and provided supporting material. The petitioner also failed to show any prejudice caused by the proceedings.
➡️ Considering the petitioner’s inconsistent stance and lack of bona fides, the Court held that he was not entitled to equitable relief in writ jurisdiction. The petition against registration cancellation was dismissed with costs.
➡️ The affidavit seeking condonation of delay contained contradictory claims (unstable mind vs. regular GST return filing and cooperation during investigation). Since no “sufficient cause” was established within statutory limits, the Appellate Authority’s refusal to condone delay was upheld—though the writ was dismissed with only nominal costs due to the petitioner’s age and apparent misuse of the premises by others for fake invoicing.
✔️ Bombay HC – Digital Storm (Prop: Lokhamsi Popat Darji) v. Superintendent of CGST [WRIT PETITION NO. 748 OF 2025]
🔥📛 HC directs GST authorities to permit GSTR-1 rectification for wrong GSTIN entry, including manual amendment if portal unavailable
➡️ The petitioner, a registered taxpayer, mistakenly reported the GSTIN of the Kerala branch (Respondent 5) instead of the intended Tamil Nadu branch (Chennai) while filing GSTR-1 for June–September 2022.
➡️ Due to the incorrect reporting, the intended recipient (Respondent 4) was unable to avail Input Tax Credit (ITC) and withheld dues payable to the petitioner, resulting in commercial disputes between the parties.
➡️ The petitioner approached the tax authorities (Respondents 1–3) seeking rectification in GSTR-1, including manual correction if the GST portal was not functional, but no action was taken.
➡️ The High Court observed that although the commercial dispute between the parties was not adjudicated, the petitioner should not be denied the opportunity to rectify the GSTR-1 to reflect the correct GSTIN.
➡️ The Court ordered Respondents 2 and 3 to permit amendment of the GSTR-1 within four weeks; if the GST portal did not allow the correction, manual rectification must be accepted and processed. The writ petition was partly allowed.
✔️ Karnataka HC – H. R. Carriers v. State of Karnataka [WRIT PETITION NO. 22477 OF 2024]
🔥📛 ITC in Electronic Credit Ledger valid for paying mandatory pre-deposit under sec. 107; appeal wrongly dismissed: HC
➡️ The taxpayer filed the statutory appeal against the order-in-original within the prescribed time and complied with the requirement of 10% pre-deposit.
➡️ Although the assessee debited the Electronic Credit Ledger (ECL) using available ITC to make the mandatory pre-deposit, the Appellate Authority rejected the appeal solely on the ground that such deposit could not be made through ITC.
➡️ The petitioner highlighted that the CBIC’s Circular 171/03/2022, explicitly recognizes the permissibility of utilizing ITC in the ECL for payment of the mandatory pre-deposit for filing an appeal.
➡️ The Court noted that both the Circular and settled judicial precedent allow mandatory pre-deposit to be paid through the Electronic Credit Ledger; therefore, the authority erred in treating the payment as invalid.
➡️ The impugned dismissal order was quashed, and the matter was remanded to the Appellate Authority to hear the appeal on merits after treating the ITC debit as a valid pre-deposit.
✔️ Karnataka HC – Lenovo India (P.) Ltd. v. Commissioner of Central Tax [WRIT PETITION NO. 22168 OF 2023 (T-RES)]
