LATEST GST CASE LAWS: 29.01.2026
🔥📛 HC: ‘CA didn’t communicate SCN’ no excuse; Refuses equity, declines to quash demand order
➡️ The Delhi High Court refused to set aside ex-parte orders passed under Section 73, noting that the assessee had multiple opportunities to respond to show-cause notices but chose not to.
➡️ The Court held that the assessee cannot shift blame to the Chartered Accountant for non-communication of notices when the assessee was aware that the CA’s email was provided for GST registration and that registration had already been suspended.
➡️ The HC observed that it is “very easy to blame a professional” who is not present to defend themselves, and found no sufficient material to conclude that the CA was at fault for the assessee’s failure to respond.
➡️ The Court clarified that equitable relief granted in Walsons Services arose from a distinct factual matrix and could not be invoked to justify interference in the present case.
➡️ The assessee’s willingness to pay 50% of the tax demand did not persuade the Court to deviate from the statutory procedure, reiterating that statutory compliance cannot be bypassed through equitable considerations.
✔️ Delhi HC – Fone Zone NXT Vs. Commissioner of DGST & Anr. [W.P.(C) 888/2026]
🔥📛 HC: ASMT-12 acceptance bars Revenue from re-initiating fresh proceedings on same issue
➡️ The Madras High Court held that once the Proper Officer, after scrutiny under Section 61, accepts the taxpayer’s explanation and issues Form ASMT-12, the statute expressly prohibits initiation of fresh proceedings on the same issue; therefore, issuing DRC-01A / DRC-01 on the very same grounds is without jurisdiction.
➡️ The assessee had wrongly availed ITC under CGST/SGST instead of IGST for FY 2018-19 but disclosed the error in GSTR-9 and rectified it through GSTR-9C with CA certification—demonstrating transparency and accurate reconciliation.
➡️ Revenue had issued ASMT-10 during scrutiny, considered the assessee’s reply, and then formally dropped the matter through ASMT-12. This closure legally concluded the scrutiny for that issue under Section 61(2).
➡️ Since Section 61(2) prohibits further action after acceptance of the explanation, the subsequent issuance of DRC-01A/DRC-01 on identical grounds violated statutory limits and amounted to lack of jurisdiction.
➡️ The Court rejected Revenue’s claim of loss, noting that excess CGST/SGST ITC was already with the Government and equivalent to advance cash payment. Revenue loss could arise only if ITC was availed without availability, which was not the case here.
✔️ Madras HC – Periyasamy Karthikeyan v. State Tax Officer, Karur-4 Assessment Circle [W.P.(MD) No. 3049 of 2025]
🔥📛 GSTAT: Directs PAN Realtors to refund profiteered amount to homebuyers who bought units before OC issuance
➡️ GSTAT Delhi upholds DGAP findings confirming that PAN Realtors Pvt. Ltd. profiteered by not passing on Input Tax Credit (ITC) benefits through commensurate price reduction for its “PAN Oasis” project in Noida.
➡️ Reckitt Benckiser India (Delhi HC) principle applied: Units sold after the Occupancy Certificate (OC) fall outside the ambit of Section 171 (anti-profiteering), as no ITC benefit arises post-OC. DGAP’s investigation correctly included only pre-OC units.
➡️ Quantum of profiteering affirmed: DGAP determined that the respondent profiteered ₹35,800 plus GST of ₹4,296, totalling ₹40,096, based on ITC-to-turnover comparison for pre-OC supplies.
➡️ Respondent’s acceptance: PAN Realtors unconditionally accepted the DGAP findings and submitted the entire profiteered amount without contest.
➡️ Refund direction issued: GSTAT ordered the respondent to refund the profiteered sum to eligible homebuyers proportionate to unit area within 30 days, and to file a compliance report thereafter.
✔️ GSTAT Delhi – DGAP Vs. Pan Realtors Pvt. Ltd. [NAPA/125/PB/2025]
🔥📛 Proper officer can’t adopt best judgment assessment method u/Sec. 74 of CGST Act, 2017: HC
➡️ Authorities conducted search and seizure at the assessee’s premises, confiscating billing systems and sales-related data on suspicion that sales were substantially underreported in GST returns.
➡️ Based on the seized materials, the department issued show cause notices under Section 74 of the CGST Act, alleging fraud, suppression of turnover, and proposing tax, interest, and penalty.
➡️ Despite assessee’s replies and participation in enquiry, the final assessment orders heavily relied on sales data reconstructed by a private agency, rather than original records or statutory methods.
➡️ The department argued that since complete sales data was not furnished by the assessee, the Assessing Officer (AO) was justified in adopting a best judgment approach to quantify tax liability.
➡️ The court ruled that Section 74 does not confer any authority for best judgment assessment. In absence of explicit statutory power, such an approach is illegal; hence, the impugned assessment orders were quashed.
✔️ Madras HC – Amritha Marketing v. Joint Commissioner of CGST & Central Excise [W.P (MD) Nos. 13354, 13396, 13829 & 13830 of 2025]
🔥📛 Composite GST notices for multiple years on different subject matters invalid; separate notices required: HC
➡️ The Court held that issuing a single pre-notice intimation or SCN covering several financial years—especially when the subject matters differ—is legally unsustainable under GST law.
➡️ The authority must issue separate DRC-01A intimations and, if necessary after considering replies, separate SCNs for each relevant financial year.
➡️ The petitioner’s reply to the DRC-01A was not examined before issuing the SCN, which further contributed to the procedural invalidity.
➡️ The Court set aside the composite DRC-01A, composite SCN, and all resulting orders without examining merits, solely on the ground of procedural infirmity.
➡️ Fresh action allowed with limitation protection: The department may initiate fresh proceedings in accordance with law, and the period during which the writ petition was pending—and the time not utilized for reply—will not count towards limitation, subject to an outer limit of 31.03.2026.
✔️ Himachal Pradesh HC – Ekta Enterprises v. State of Himachal Pradesh [CWP No. 21193 of 2025]
🔥📛 Assessment under sec. 74 set aside as post-01.04.2024 initiation required under sec. 74A; SCN treated under sec. 74A: HC
➡️ For FY 2024–25, proceedings for tax/ITC involving fraud must mandatorily be initiated under Section 74A, which came into force from 01.04.2024. However, the department incorrectly issued the SCN in Form GST DRC-01 under Section 74, rendering the initiation defective.
➡️ Multiple notices were uploaded on the GST portal, creating confusion. The assessee became aware of the proceedings only after receiving the assessment order, resulting in an ex parte order without effective opportunity of hearing.
➡️ Since the SCN and the resulting assessment order were issued under Section 74 instead of Section 74A, the Court held that both the initiation and the consequent assessment lacked legal authority.
➡️ The impugned ex parte assessment order for FY 2024–25 was quashed, given the statutory error in invoking the wrong provision.
➡️ To prevent unnecessary duplication, the Court directed that the SCN issued under Section 74 be treated as a notice under Section 74A. The assessee was permitted to file a reply within the prescribed period, and the department was directed to pass a fresh order on merits after granting personal hearing.
✔️ Madras HC – Tvl. Fancy Agency v. Deputy State Tax Officer-I [W.P. (MD) No. 35371 of 2025]
🔥📛 Importer claimed refund of IGST paid on ocean freight under RCM per Mohit Minerals case; refund allowed with 6% interest: HC
➡️ The petitioner imported fertilizers on a CIF basis, where freight was already included in the customs assessable value. Despite this, IGST on ocean freight was paid under RCM as per Notification 10/2017-IGST (Rate) and credit was duly availed in GSTR-3B.
➡️ Relying on the Gujarat High Court ruling in Mohit Minerals Pvt. Ltd., which held IGST on ocean freight under RCM to be unconstitutional, the petitioner filed a refund claim under Section 54 for the IGST wrongly paid.
➡️ The adjudicating authority initially issued SCNs proposing rejection. The appellate authority later remanded the matter, after which the adjudicating authority again rejected the refund, prompting the petitioner to file a writ petition.
➡️ The Court observed that the SCN did not specify any date for personal hearing, and the petitioner had no real opportunity to be heard, making the rejection order unsustainable. The Court emphasized that such procedural lapses violate natural justice.
➡️ The High Court held that the order must be quashed, especially since limitation could not be invoked in light of settled precedents. The Court directed authorities to process the refund in Form RFD-01 (July 2017) along with 6% interest.
✔️ Gujarat HC – Indian Potash Ltd. v. Union of India [R/SPECIAL CIVIL APPLICATION NO. 11004 of 2024]
🔥📛 Exemplary ₹25k cost for suppressing prior writ on same relief; fresh writ dismissed for abuse of process.: HC
➡️ The petitioner filed a writ petition challenging an appellate order despite having earlier filed—and withdrawn—an identical writ petition on the same issue.
➡️ In the previous proceedings, the petitioner had been permitted to withdraw the writ petition specifically to pursue a statutory remedy under Section 30 of the CGST Act (revocation of cancellation).
➡️ In the new writ petition, the petitioner suppressed the fact of having already challenged the appellate order earlier and attempted to present the earlier petition as only relating to filing a Section 30 application.
➡️ The Court held that the petitioner had misrepresented material facts and made a calculated attempt to mislead the bench by framing averments as though the appellate order had not been previously challenged.
➡️ Due to suppression of facts and abuse of writ jurisdiction, the Court dismissed the petition and imposed exemplary costs of ₹25,000 on the assessee.
✔️ Gujarat HC – Chandrakant Ramanlal Valand v. Deputy Commissioner of State Tax (Appeal) Division 2 [R/SPECIAL CIVIL APPLICATION NO. 560 of 2026]
