LATEST GST CASE LAWS: 10.01.2026
🔥📛 SC seeks Revenue’s response on plea to relax security-deposit condition imposed while granting bail
➡️ The Punjab & Haryana High Court reiterated that GST arrests must strictly comply with Article 21 of the Constitution, emphasizing personal liberty, the necessity of “reasons to believe,” and adherence to due process before curtailing freedom.
➡️ In the alleged fake-ITC case involving approximately ₹30.21 crore, the High Court held that prolonged pre-trial detention of directors is impermissible, particularly when investigation can continue without custody.
➡️ While granting bail, the High Court imposed an onerous condition requiring the accused to furnish a security bond equivalent to the alleged tax and penalty amount (para 42(c)), creating tension between liberty and financial safeguards.
➡️ The Assessee approached the Supreme Court of India through an SLP, not contesting the grant of bail itself, but specifically seeking relaxation or modification of the excessive financial security condition imposed by the Punjab & Haryana High Court.
➡️ At the threshold hearing, the Supreme Court did not adjudicate the merits but directed the Revenue to file its reply, signaling judicial scrutiny over whether such stringent monetary conditions are compatible with bail jurisprudence under GST law.
✔️ SC – BALDEEP SINGH SAPRA Versus STATE (DIRECTORATE GENERAL OF GST INTELLIGENCE) CHANDIGARH [Petition(s) for Special Leave to Appeal (Crl.) No(s). 20952/2025]
🔥📛 Delhi HC to hear challenge on GST for medical supplies/consumables dispensed to in-patients
➡️ The Delhi High Court noted that the case raises an important legal question on whether medicines, medical devices, and consumables supplied to in-patients as part of healthcare services can be subjected to GST separately, despite healthcare services being generally exempt.
➡️ The Revenue justified the Show Cause Notice (SCN) by alleging that the hospital had collected GST on medicines and consumables supplied to in-patients but failed to deposit the same with the Government.
➡️ The hospital contended that healthcare services are fully exempt under GST law, and that medicines, medical devices, and consumables dispensed to in-patients are integral to such healthcare services; therefore, no GST is leviable and no tax is being collected in respect of these supplies.
➡️ The Assessee clarified that whenever medicines are sold through the hospital’s pharmacy (distinct from in-patient treatment), GST is duly collected and paid, indicating compliance where supplies are clearly taxable.
➡️ While issuing notice and allowing the Revenue to file a counter affidavit, the High Court permitted adjudication proceedings under the SCN to continue; however, it directed that any final order passed shall not be enforced during the pendency of the writ petition.
✔️ Delhi HC – Escorts Heart Institute and Research Centre Ltd vs Additional Commissioner, CGST [W.P.(C) 19355/2025]
🔥📛 Calcutta HC to consider challenge to dismissal of appeal for overlooking Section 75(7) violation
➡️ The writ petition before the Calcutta High Court challenges an appellate order under Section 107 of the CGST Act, which dismissed the assessee’s appeal against an adjudication order passed under Section 73.
➡️ The assessee argues that the original adjudication itself was invalid due to non-compliance with Section 75(7), which prohibits issuance of multiple notices on the same grounds for different periods once a notice has already been issued for a particular period.
➡️ It is contended that the Appellate Authority wrongly treated the breach of Section 75(7) as a mere technical lapse, overlooking the statutory embargo against repetitive proceedings based on identical grounds.
➡️ The Revenue opposes the writ petition and relies on the decision of the Allahabad High Court in Mayank Mineral, seeking time to obtain further instructions for detailed submissions.
➡️ Without expressing any opinion on the merits of the controversy, the Calcutta High Court has granted the Revenue’s request for time and directed that the matter be listed for further consideration on January 13, 2026.
✔️ Calcutta HC – Vedant Road Carriers Pvt Ltd Vs. The Assistant Commissioner of West Bengal State Tax & Ors. [W. P. A. 12654 of 2025]
🔥📛 Calcutta HC to examine Section 73 adjudication challenged for portal-only service
➡️ The writ petition challenges an adjudication order passed under Section 73 on the ground that the show cause notice and subsequent communications were uploaded only under the “Additional Notices and Orders” tab on the GST portal. The Assessee contends that this mode of service effectively evaded notice, resulting in denial of a meaningful opportunity to file a reply or participate in the adjudication process.
➡️ The Assessee submits that it became aware of the adjudication order only upon receipt of a demand notice issued to its bank under Section 79(1). This contention reinforces the plea that the Assessee was kept completely unaware of the proceedings, thereby aggravating the alleged breach of procedural fairness.
➡️ Reliance is placed on an earlier notice issued under Section 70 for the same tax period on account of an alleged mismatch between GSTR-1 and GSTR-3B. In those proceedings, the Joint Commissioner had expressly recorded that there was no mismatch and that no tax was payable for the said period.
➡️ On the basis of the earlier Section 70 proceedings, the Assessee argues that initiation of fresh proceedings under Section 73 for the same period and transaction is impermissible, as the issue had already been examined and concluded by the department.
➡️ The Calcutta High Court, finding that the Assessee’s contentions merit examination, has directed the GST authorities to file a detailed affidavit addressing the pleadings within two weeks. The matter has been listed for further consideration on January 20, 2026.
✔️ Calcutta HC – Ghosh Brothers & Ors. Vs. Assistant Commissioner of Revenue & Ors. [WPA 28992 of 2025]
🔥📛 HC: State liable to compensate for negligent loss of seized/confiscated goods/cash ; Rejects sovereign immunity
➡️ The Andhra Pradesh High Court held that when goods or cash seized under statutory powers are lost due to negligence while in State custody, the State is constitutionally liable to compensate the affected person; sovereign immunity cannot protect negligent acts that infringe fundamental rights.
➡️ In this case, 105 kg of pure silver and ₹2.05 lakh cash were seized during transit and later confiscated with an option of redemption, which the assessee exercised by paying tax, penalty, and fine; however, due to theft by police personnel while in custody, only 81.567 kg of silver was returned, resulting in an undisputed shortfall of 23.44 kg.
➡️ The Court found that the loss of confiscated silver directly impaired the assessee’s right to carry on trade or business under Article 19(1)(g), as failure to safeguard seized goods amounted to State negligence affecting economic liberty.
➡️ The State’s reliance on the Supreme Court’s earlier ruling in Kasturi Lal was rejected, with the High Court observing that sovereign immunity has been substantially diluted and cannot override claims based on constitutional tort arising from negligent acts of State officials.
➡️ The Court directed the Revenue to return the missing 23.44 kg of pure silver or pay its market value, allowing adjustment of excess cash already returned (₹10 lakh recovered from the accused), and ordered valuation at prevailing market rates, with higher valuation applicable if compliance is delayed beyond three weeks.
✔️ Andhra Pradesh HC – G R M Jewellers Vs. The Assistant Commissioner of State Tax & Ors. [WRIT PETITION NO: 9513/2024]
🔥📛 HC: Affirms jurisdiction to issue multiple SCNs for same period on distinct issues
➡️ The Court held that Section 73 of the CGST Act does not prohibit issuance of multiple show cause notices for the same tax period, provided each SCN is based on distinct discrepancies or subject matters. Merely because earlier proceedings were initiated and later quashed does not strip the Proper Officer of jurisdiction to issue a fresh SCN.
➡️ Principles such as res judicata, estoppel, or Order II Rule 2 of the CPC do not strictly apply to GST proceedings, as they are not statutorily incorporated into the GST framework. GST adjudication is governed by the Act and Rules, not by general civil procedural doctrines.
➡️ The Court clarified that quashing of an earlier DRC-01A or DRC-01 on limited or technical grounds does not invalidate subsequent proceedings. A fresh DRC-01 can be issued if it is founded on new or different discrepancies, even for the same tax period.
➡️ On facts, the Court found that the impugned SCN raised three discrepancies largely different from the earlier proceedings, with only a minor overlap relating to exempt supplies (₹19,001). Since the issues in earlier proceedings had not attained finality, the subsequent SCN was held to be valid.
➡️ The Court ruled that scrutiny proceedings under Section 61 do not amount to assessment or adjudication and therefore do not preclude initiation of proceedings under Section 73. The assessee was directed to submit a reply to the SCN, with the Proper Officer mandated to adjudicate independently on merits, uninfluenced by earlier proceedings.
✔️ Madras HC – Radiant Cash Management Services Ltd. Vs. The Commercial Tax Officer [WP No. 49092 of 2025]
🔥📛 HC: Quashes GST proceedings initiated against deceased proprietor
➡️ A show cause notice (SCN) issued in the name of a deceased person is legally untenable, and any determination based on such notice cannot be sustained in law.
➡️ Upon the death of a sole proprietor, issuance of an SCN to the legal representative is a sine qua non. Liability can be determined only after affording the legal representative an opportunity to respond.
➡️ Where the Department is aware of the proprietor’s death and consequent cancellation of GST registration, continuation of proceedings in the deceased’s name reflects a fundamental procedural lapse.
➡️ Section 93 deals only with the liability of legal representatives where the business is continued or discontinued after death; it does not authorize determination of tax liability against a deceased person.
➡️ Recovery from legal representatives cannot be justified on the basis of a determination made after the proprietor’s death without notice to them; such proceedings are invalid and liable to be set aside.
✔️ Allahabad HC – Sambul Shahid Vs State of U.P. [WRIT TAX No. – 1428 of 2025]
🔥📛 HC: Assessment against deceased GST registrant invalid; Fresh assessment to involve legal representative u/s 93
➡️ The Andhra Pradesh High Court held that assessment and adjudication proceedings can only be initiated against a living person. Any assessment framed in the name of a deceased assessee, even if addressed to a legal representative, is legally unsustainable.
➡️ The Court clarified that Section 93 merely provides a mechanism for recovery of tax dues of a deceased person. It does not authorise initiation or completion of assessment proceedings against a non-existent (deceased) person.
➡️ In this case, the assessee had died, the business was subsequently discontinued, and the GST registration was cancelled about two years later. The show cause notice proposing GST with interest was issued after such cancellation, further weakening the validity of the proceedings.
➡️ Acknowledging the absence of a specific statutory mechanism for post-death assessment, the Court held that the only practicable and lawful course is to conduct assessment proceedings by issuing notice to and involving the legal representative of the deceased assessee.
➡️ While remanding the matter for fresh assessment, the Court expressly clarified that any recovery pursuant to such assessment can be made only from the estate of the deceased and strictly to the extent the estate is capable of meeting the tax liability, with no personal liability of the legal representative.
✔️ Andhra Pradesh HC – Baratam Satish Vs. The Joint Commissioner of Central Tax [WRIT PETITION NO: 6029/2025]
🔥📛 SCN for GSTR-1 rectification quashed as bona fide error correction allowed, no loss to revenue: HC
➡️ The case concerned bona fide and inadvertent errors during the initial GST implementation phase, where B2C supplies were mistakenly reported as B2B in GSTR-1 for the period July 2017 to March 2018. The taxpayer voluntarily corrected these errors in 2019 upon discovery.
➡️ The Court reiterated that taxpayers have a substantive right to rectify clerical or arithmetical mistakes in GST returns. This right flows from the constitutional right to carry on business and cannot be curtailed merely due to technical or software limitations of the GST portal.
➡️ It was specifically noted that the corrections made by the petitioner did not result in any loss of revenue to the exchequer nor did they disrupt the input tax credit chain. Hence, the rectification caused no prejudice to the tax administration.
➡️ The sole basis of the SCN issued under Section 73(1) was that post-filing corrections in GSTR-1 were impermissible. The Court held that this premise was legally unsustainable, especially in light of earlier judicial precedents allowing such corrections.
➡️ Since the initiation of proceedings lacked legal justification, the SCN and all consequential proceedings were quashed. The respondents were directed to accept the corrected GST returns and proceed further strictly in accordance with law.
✔️ Karnataka HC – Hindustan Construction Company Ltd. v. Union of India [WRIT PETITION NO. 22377 OF 2022 (T-RES)]
🔥📛 Order detaining goods and vehicle passed beyond 7 days from date of service of notice, quashed: HC
➡️ The detention was based solely on a mismatch in vehicle numbers across multiple E-way bills accompanying the consignment, which the department treated as a procedural violation during transit.
➡️ The petitioner, being only the transporter and not the owner of goods, explained that the mismatch occurred due to a clerical error, and a corrected consolidated E-way bill with the proper vehicle number was generated and produced immediately.
➡️ A notice under Section 129(3) of the CGST Act was issued, which statutorily mandates that the final order must be passed within seven days from the date of service of such notice.
➡️ Despite issuing the notice, the proper officer passed the detention order beyond the prescribed seven-day period, which constituted a clear procedural violation as per settled judicial precedents.
➡️ Due to non-compliance with the mandatory timeline under Section 129(3), the notice, detention, and consequential order were held invalid, and all were quashed and set aside, reinforcing that procedural safeguards under GST law are mandatory, not directory.
✔️ Gujarat HC – Allcargo Logistics Ltd. v. State of Gujarat [R/SPECIAL CIVIL APPLICATION NO. 16748 of 2025]
🔥📛 Superintendent can’t prepare & communicate audit report to assessee as he isn’t proper officer under GST: HC
➡️ The writ petition questioned the validity of GST audit proceedings where Form GST ADT-02 (audit findings) was issued by a Superintendent who was not notified as the “proper officer” under the applicable circulars.
➡️ The department accepted that ADT-02 was issued by an unauthorised Superintendent, but contended that this defect was cured since ADT-01 (audit notice) and the subsequent demand-cum-SCN were issued by a competent Assistant Commissioner.
➡️ The Court observed that communication of audit findings is a substantive statutory step, which must be undertaken only by an officer specifically authorised. Issuance by an unauthorised officer raises serious questions about the valid initiation of proceedings.
➡️ The Court found a prima facie case in favour of the taxpayer, noting that proceeding with adjudication based on invalid audit communication could cause serious prejudice, even if later steps were taken by a proper officer.
➡️ Balancing convenience, the Court restrained the tax authorities from proceeding further with the demand-cum-SCN until the matter is finally considered, recognising that procedural lapses at the audit stage warrant judicial scrutiny.
✔️ Orissa HC – Ayushi Galvano v. Commissioner (Audit), GST and Central Excise, Bhubaneswar Audit Commissionerate [W.P.(C) No. 30871 of 2025]
🔥📛 HC directs revenue to grant refund of accumulated ITC as assessee wasn’t an ‘intermediary’
➡️ The assessee provided research & development and business support services exclusively to its foreign parent company in Sweden. These services qualified as export of services, and invoices were correctly issued under Letter of Undertaking (LUT) without payment of IGST.
➡️ Due to zero-rated exports made without payment of IGST, the assessee accumulated unutilized input tax credit (ITC) in its electronic credit ledger and filed a refund application in accordance with GST provisions.
➡️ The tax department rejected the refund claim on the ground that the assessee was allegedly acting as an ‘intermediary’, which would disqualify the services from being treated as exports. This view was also upheld by the appellate authority.
➡️ The court, relying on settled judicial precedents, held that the assessee was not an intermediary, as it provided services on its own account and did not arrange or facilitate supplies between two parties. Hence, the services retained their status as export of services.
➡️ Consequently, the court quashed the impugned orders and directed the department to grant refund of unutilized ITC, along with applicable interest, within a stipulated timeframe, reaffirming the assessee’s entitlement under GST law.
✔️ Karnataka HC – Bluefish Pharmaceuticals (P.) Ltd. v. Union of India [WRIT PETITION NO. 19351 OF 2024 (T-RES)]
