LATEST GST CASE LAWS: 23.01.2026
🔥📛 HC: Section 74 does not permit best-judgment assessment or extrapolation; Upholds rejection of cross-examination opportunity
➡️ The High Court held that Section 74 of the CGST/SGST Act does not confer any authority to make best-judgment assessments. The omission is deliberate, and courts cannot supply what the legislature consciously left out. Therefore, extrapolation-based assessments made under Section 74 are without jurisdiction.
➡️ The Court emphasized that assessment types are statutorily distinct, and an officer cannot borrow powers from one provision to justify actions under another. Best-judgment assessment is specifically authorized only under Sections 62 and 63, not under Section 74. Tax authorities must act strictly within statutory limits; tax law does not permit “what is not prohibited is allowed.”
➡️ Because the officer lacked statutory authority for best-judgment assessment under Section 74, extrapolating retrieved data to the entire assessment period and raising tax, interest, and penalty demands was held unsustainable.
➡️ The Court held that cross-examination requests can be raised in challenge to the final order, even if earlier writs were disposed of without merits. However, cross-examination is not automatic—a party must offer specific reasons. In this case, denial was upheld because the data retrieval was done in the presence of the assessees, certified, and admitted in Section 70 statements.
➡️ The Court found no material prejudice from the refusal of cross-examination. The forensic expert’s testimony would not alter the evidentiary landscape because the assessees had acknowledged the retrieved data as their own. Therefore, the challenge on natural-justice grounds failed, while the challenge on jurisdiction to adopt best-judgment assessment succeeded.
✔️ Madras HC – Amritha Marketing Vs The Joint Commissioner of CGST & Central Excise [W.P(MD) Nos. 13354, 13396, 13829 & 13830 of 2025]
🔥📛 Supplier paid no tax, demand was raised on assessee; on subsequent payment of tax with interest, re-adjudication ordered: HC
➡️ The assessee’s Input Tax Credit (ITC) was denied on the ground that the supplier had not paid GST for the period February–March 2020. A demand was raised under Section 74 against the assessee.
➡️ During the writ proceedings, the department informed the Court that the supplier had subsequently filed the pending GST returns and paid the applicable interest.
➡️ Since the supplier’s tax compliance was restored, the GST liability stood discharged, and ITC became validly available to the recipient/assessee.
➡️ The Court held that, given the updated information confirming the supplier’s tax payment, the earlier order denying ITC could not be sustained.
➡️ The impugned order was set aside, and the Assistant Commissioner was directed to reopen and re-adjudicate the matter in light of the supplier’s compliance.
✔️ Himachal Pradesh HC – Shivalik Containers (P.) Ltd. v. Assistant Commissioner [CWP No. 20174 of 2025]
🔥📛 Adjudication order passed on a ground different from one that was raised in show cause notice is not sustainable: HC
➡️ The notice alleged only that the taxpayer’s GSTR-3B declared turnover was lower than the actual outward supplies based on GST Back Office portal data. No other basis for demand was stated.
➡️ The adjudicating authority later confirmed tax liability on an entirely different premise—i.e., that by issuing a forward-charge tax invoice on 10-04-2018, the taxpayer became liable to pay GST @ 6% on all supplies earlier treated as reverse-charge supplies. This violates Section 75(7) since the taxpayer must be confronted only with the grounds actually included in the show-cause notice.
➡️ Although the taxpayer appeared and requested time to file a detailed written reply, the officer did not grant such time. Proceeding to decide the matter two months later without allowing a fair opportunity further vitiated the order.
➡️ Since the notice was based on “data available in the GST B.O. portal,” which falls within the exclusive knowledge of the department, the taxpayer could not meaningfully rebut the allegation without access to the same—a breach of natural justice.
➡️ Both the adjudication order and the appellate order were quashed as they were founded on grounds beyond the notice and issued without affording adequate opportunity to the taxpayer, rendering them invalid.
✔️ Calcutta HC – Vedant Road Carriers (P.) Ltd. v. Assistant Commissioner of West Bengal State Tax [WPA No. 12654 of 2025]
🔥📛 Common director not ground to lift veil; SCN & demand raised against company X only, recovery from company Y illegal: HC
➡️ The Court reiterated that the petitioner-company and XRMPL are distinct juristic entities; therefore, liabilities determined against XRMPL cannot automatically be imposed on the petitioner.
➡️ The show-cause notice under Section 73 and the subsequent adjudication order confirming demand were issued exclusively to XRMPL, not to the petitioner-company.
➡️ Despite having an enforceable adjudication order against XRMPL, the authorities did not take recovery steps against XRMPL. Instead, they wrongly invoked Form GST DRC-13 to debit the petitioner’s bank account.
➡️ The petitioner-company was neither a debtor nor a garnishee of XRMPL. Hence, recovery through the petitioner’s bank account had no legal foundation.
➡️ The mere fact that both companies shared a common director does not justify lifting the corporate veil for GST recovery. Such an approach was held to be legally impermissible.
✔️ Karnataka HC – Ramms India (P.) Ltd. v. Deputy Commissioner of Commercial Taxes (AUDIT)-3.1 [WRIT PETITION NO. 34270 OF 2025 (T-RES)]
🔥📛 HC: Stays Central’s parallel SCN till disposal of appeal before State’s Appellate Authority
➡️ The Telangana High Court held that Central tax authorities may proceed with their show cause notice (SCN) only after the State appellate proceedings—based on the same allegations—are concluded, to avoid overlapping jurisdiction.
➡️ The assessee argued that the issues raised in the Central SCN (excess ITC, ITC from retrospectively cancelled registrations, blocked credits, fake invoices) were already adjudicated by State GST authorities, who imposed a penalty under Section 122, and an appeal on that order is still pending.
➡️ The assessee contended that the Central SCN violates Section 6(2)(b) of the CGST Act, which prohibits a second proceeding on the same subject matter once initiated by one authority, thereby causing jurisdictional overlap.
➡️ The Court acknowledged the concluded State penalty proceedings and the pending appeal, while Central proceedings are yet to be decided. It therefore directed that the Central authorities must await the outcome of the State appeal, after which the assessee may reply, raising all legal and factual objections, including reliance on the CBIC Circular dated 06-07-2022.
➡️ The Court instructed the State appellate authority to dispose of the pending appeal within a stipulated time, clarifying that all rights and contentions of both sides remain open.
✔️ Telangana HC – Aarush Enterprises Vs. The Assistant Commissioner of Central Tax [WRIT PETITION No. 32866 of 2025]
🔥📛 HC: Writ court cannot condone appeal filing delay over a period prescribed by section 107
➡️ Gujarat HC held that its extraordinary jurisdiction under Article 226 cannot be invoked to condone delays beyond the statutory limits prescribed under Section 107 of the CGST Act (90 days + 30 days).
➡️ HC reiterated the principles from ONGC v. GETCO and GlaxoSmithKline Consumer Health Care—courts cannot override legislated timelines for redressal by entertaining writ petitions when the statute sets a clear limitation framework.
➡️ The assessee’s reasons for the 6-day delay—illness of the accountant and business closure—were deemed unsatisfactory. Consequently, the HC refused to interfere with the Appellate Authority’s order dismissing the appeal as time-barred.
➡️ Since the assessee had already invoked the appellate remedy (even though the appeal was dismissed as time-barred), the HC held it cannot re-examine or “call back” the Order-in-Original in writ jurisdiction.
➡️ The judgment underscores the judiciary’s consistent approach that statutory timelines in GST appellate proceedings are to be strictly complied with, leaving little room for equitable considerations or condonation beyond the permitted period.
✔️ Gujarat HC – Harsh Deepk Shah vs UOI & ors [R/SPECIAL CIVIL APPLICATION NO. 17382 of 2025]
🔥📛 HC: Flags multiple lapses, directs accounts, seized cash/goods release; Directs inquiry into officer’s inaction
➡️ The HC noted multiple lapses by the tax authorities, including (i) not issuing a fresh provisional attachment order after the expiry of one year, (ii) not issuing a notice within six months of seizure as mandated under Section 67(7), and (iii) not providing a further notice to show “sufficient cause” as required by the proviso to Section 67(7).
➡️ Despite failing to complete mandatory steps under Section 67, the department proceeded to issue a confiscation notice under Section 130 while the writ petition was pending—an action the Court viewed as procedurally flawed.
➡️ Due to the Revenue’s statutory non-compliance, the HC ordered lifting of the provisional attachment on the bank account and directed the release of seized goods (gold/bullion) and cash.
➡️ The department’s explanation—lack of clarity, ongoing investigation, involvement of multiple firms, and shifting investigation to another officer—was found unconvincing. The HC emphasized that such reasons cannot override clear statutory mandates.
➡️ Observing that officers were aware of legal requirements yet “sat idle,” the HC found the conduct prima facie deliberate. It directed the Chief Commissioner of State Tax to initiate an appropriate inquiry against the officers involved.
✔️ Gujarat HC – Reevan Creation Vs State of Gujarat & Ors [R/SPECIAL CIVIL APPLICATION NO. 21039 of 2023]
🔥📛 HC: Quashes GST demand raised beyond SCN; Reiterates bar u/s 75(7) on travelling beyond notice
➡️ The High Court reaffirmed that an adjudication order must remain strictly within the grounds stated in the Show Cause Notice; any demand confirmed on new or unrelated grounds violates Section 75(7) of the CGST/WBGST Act.
➡️ The SCN alleged understatement of outward supplies in GSTR-3B based on back-office portal data, but the adjudication order shifted to treating reverse-charge supplies as forward-charge supplies relying on Notification 20/2017-CT (Rate)—a completely different footing.
➡️ The Court rejected the appellate authority’s view that the discrepancy was merely procedural, holding instead that it involved a substantive change in the basis of tax liability and therefore cannot be trivialised.
➡️ Since the department relied on GST back-office data without providing it to the assessee, the assessee was deprived of a meaningful opportunity to respond, further invalidating the proceedings.
➡️ Both the Section 73 adjudication order and the Section 107 appellate order were set aside, and the matter was remanded to the Proper Officer for fresh adjudication in accordance with law.
✔️ Calcutta HC – Vedant Road Carriers Pvt. Ltd. & Anr Vs The Assistant Commissioner of West Bengal State Tax, Jorasanko & Jorabagan Charge & Ors. [WPA 12654 of 2025]
🔥📛 HC: Refund filed under “Any Other” category cannot be denied due to portal lacuna
➡️ The Gujarat High Court ruled that when the GST portal itself prevents filing a refund under the correct category, the department cannot reject the claim merely because it was filed under the “any other” category.
➡️ The Court reaffirmed that technical or procedural impossibilities created by the system cannot defeat substantive refund rights.
➡️ The assessee’s first refund application for accumulated ITC on zero-rated supplies was rejected on alleged non-compliance with the Circular 125/44/2019-GST.
➡️ When the assessee attempted a fresh, correctly classified refund claim, the system disallowed it stating a prior application already existed—forcing the assessee to use the “any other” category.
➡️ Considering the assessee’s affidavit that the ITC had been reversed, the Court permitted a fresh refund application for verification purposes, directing that interest—if applicable—be computed from the date of this fresh filing.
✔️ Gujarat HC – Jyoti Agro Vs Deputy Commissioner Of State Tax & Anr [R/SPECIAL CIVIL APPLICATION NO. 5982 of 2023]
