LATEST GST CASE LAWS: 05.03.2026
🔥📛 Delhi HC to examine taxability of Hero-Solar’s corporate-guarantee to sister-concern; Seeks clarity
➡️ The Delhi High Court, while hearing writ petitions filed by Hero Future Energies Pvt Ltd and Hero Solar Energy Private Limited, sought an affidavit to clarify the factual position regarding corporate guarantees issued in favour of group entities, particularly whether any mortgage, hypothecation, pledge of movable assets, or beneficial interest in immovable property was created as part of the guarantee arrangement.
➡️ The Court indicated that the existence of such security interests is crucial to determine whether the guarantees could fall outside the scope of an “actionable claim,” which would affect their GST treatment under the statutory framework governing taxable supplies.
➡️ Pending clarification of these facts, the Court deferred coercive recovery actions initiated by the tax authorities, thereby granting interim protection to the assessees until the legal character of the guarantees and their tax implications are examined.
➡️ The assessees argued that joint corporate guarantees amounting to approximately ₹285 crore and ₹365 crore, issued to support borrowings of subsidiary companies, do not constitute a “service” under Section 2(102) of the Central Goods and Services Tax Act, 2017, as such guarantees fall within exclusions applicable to “securities” or qualify as actionable claims.
➡️ They further relied on the definition of actionable claim under Section 3 of the Transfer of Property Act, 1882 read with Schedule III of the CGST Act, asserting that transactions involving actionable claims are neither treated as supply of goods nor services; the Court has listed the matter for further hearing on 19 March 2026 to examine these issues.
✔️ Delhi HC – HERO FUTURE ENERGIES PVT LTD V. UOI [W.P.(C) 280/2026]
🔥📛 HC: Tainted ITC-chain renders EWB & weighment-slips inadequate for proving goods movement; Sustains Sec. 74 notice
➡️ The Calcutta High Court refused to quash a show cause notice (SCN) issued under Section 74 of the WBGST Act where ITC was allegedly fraudulently availed through a chain of suppliers whose GST registrations were retrospectively cancelled. Relying on ECom Gill Coffee Trading, the Court held that when the genuineness of transactions is questioned based on an ITC chain analysis, it is inappropriate for a writ court to interfere at the SCN stage, as the proper officer is empowered to issue notices based on “reason to believe” to check possible tax evasion.
➡️ The Court observed that documents such as e-way bills and weighbridge slips cannot conclusively establish actual movement of goods in all cases. It noted that e-way bills are generated before transportation begins and weighbridge slips are also self-generated documents; therefore, their evidentiary value depends on the facts of each case and they may not, by themselves, prove the authenticity of the underlying transaction.
➡️ The assessee, a crude tar trader, argued that ITC should not be denied merely because suppliers’ registrations were retrospectively cancelled, especially when invoices, e-way bills, weighbridge slips, bank statements and GSTR-2A reflections were produced, and relied on precedents protecting bona fide purchasers. However, the Court held that since the GST authorities had raised a prima facie doubt regarding the genuineness of the transactions and possible collusion, issuance of the SCN could not be considered arbitrary or without basis.
➡️ Clarifying the scope of judicial interference with show cause notices, the Court reiterated that an SCN does not itself affect legal rights and therefore ordinarily does not give rise to a cause of action. Writ courts will interfere only in exceptional cases such as complete lack of jurisdiction or patent illegality. It also rejected the assessee’s claim that the SCN reflected a pre-determined mindset, stating that explaining reasons in the notice cannot be treated as bias and that penalising the authority for addressing the taxpayer’s earlier reply would create a “heads I win, tails you lose” situation.
➡️ While upholding the validity of the SCN, the Court distinguished earlier judgments relied upon by the assessee on the ground that those cases did not involve specific allegations regarding transaction genuineness or collusion. It further emphasized that under Section 155 of the GST Act, the burden of proving eligibility for ITC lies on the claimant and mere production of standard documents may not suffice where the transaction itself is questioned. However, the Court set aside the adjudication order for violating Section 75(4) and principles of natural justice due to absence of personal hearing, and remanded the matter allowing the assessee 30 days to file a reply.
✔️ Calcutta HC – Jyoti Tar Products Private Limited & Anr. vs. The Deputy Commissioner, State Tax, Shibpur Charge, WBGST & Ors. [WPA 20118 of 2025]
🔥📛 HC: GST cannot be deducted from retiral dues; Slams Employees Welfare Corporation officer
➡️ The Allahabad High Court criticized the Executive Director of the U.P. State Employees Welfare Corporation for unlawfully deducting amounts under “Prostsahan Agrim,” “Tyohar Agrim,” GST recovery, and audit recovery from an employee’s retiral dues, observing that there is no legal provision permitting such deductions from retirement benefits of the Corporation’s employees.
➡️ The Court expressed shock at the deductions made from the retiral dues, noting that out of the total payable amount of ₹15,71,604, a sum of ₹4,55,100.38 was deducted under various heads, resulting in only ₹11,16,504 being paid to the applicant, which raised serious concerns about the legality and transparency of the deductions.
➡️ The Court also found that the Executive Director’s personal affidavit failed to disclose accurate figures, including the correct amount of outstanding salary arrears and the full details of the retiral dues payable, indicating that the authority had not placed complete and truthful information before the Court.
➡️ Observing that the State Government had already provided funds through a soft loan for payment of retiral dues, the Court held that the Corporation had not properly disbursed the funds to employees and remarked that the Executive Director appeared to be misleading the Court and deliberately delaying payment of legitimate employee dues.
➡️ As a final opportunity, the Court directed the Corporation to clear the entire retiral dues and salary arrears of the employee within one month without making any deductions, warning that the matter would be reviewed again when the case is listed along with connected matters on March 19, 2026.
✔️ Allahabad HC – Satish Kumar Verma vs Shri Kamta Prasad, Executive Director, U.P. State Employees Welfare Corporation [CONTEMPT APPLICATION (CIVIL) No. – 2193 of 2025]
🔥📛 HC: Refund accrued to Adani-Wilmar under IDS cannot be denied by retrospectively applying clarificatory-circular
➡️ The Calcutta High Court held in favour of Adani Wilmar, setting aside orders that rejected refund of accumulated unutilised ITC under the inverted duty structure (IDS) for edible oil. The rejection was based solely on Circular No. 181/13/2022-GST and State Circular No. 13/2022, which stated that refund restrictions introduced through a 23 August 2022 notification would apply to refund applications filed on or after 18 July 2022.
➡️ The assessee, engaged in supply of edible oil, filed a refund claim on 16 June 2023 for May 2021 within the statutory two-year limitation under Section 54(1) of the CGST Act. The Court observed that the relevant date under Explanation 2(e) to Section 54(1) is the due date for filing the return under Section 39, which in this case was 20 June 2021, making the refund application well within the permissible time limit.
➡️ The Government had exercised powers under the proviso to Section 54(3) through the 23 August 2022 notification to exclude certain goods, including edible oils, from refund of unutilised ITC under IDS despite higher input tax rates. The authorities relied on this notification and subsequent circulars to deny the refund, asserting that the restriction applied to all refund applications filed after 18 July 2022.
➡️ The High Court held that the right to claim refund crystallises when the return is filed and the cause of action arises, and such a vested statutory right continues until expiry of the limitation period under Section 54(1). An executive circular cannot retrospectively curtail or extinguish this accrued right, especially when the claim is filed within the statutory limitation.
➡️ The Court also noted that several High Courts have consistently held that refund claims otherwise admissible under Section 54 cannot be denied merely because the application was filed after issuance of a restrictive circular, if the right to claim refund had already accrued earlier. Following this settled judicial view, the Court directed the proper officer to reconsider the refund application on merits without being influenced by the impugned circulars.
✔️ Calcutta HC – Adani Wilmar Limited & Anr. v. Assistant Commissioner of State Tax & Ors. [WPA 27066 of 2024]
🔥📛 HC dismissed writ as it cannot extend GST appeal limitation; plea of portal glitch rejected
➡️ The petitioner failed to file returns under section 39 from the first quarter of FY 2024–25. Consequently, the department issued a show-cause notice in Form GST REG-17 proposing cancellation of registration. As the petitioner neither submitted a reply nor appeared for the personal hearing, the authorities passed an ex-parte order in Form GST REG-19 cancelling the GST registration.
➡️ After cancellation, the petitioner attempted to restore the registration but claimed that technical glitches on the GST portal prevented successful action. Eventually, the petitioner filed an appeal under section 107 in Form GST APL-01 after a delay of about six months from the date of the cancellation order.
➡️ The Appellate Authority rejected the appeal solely on the ground of limitation, noting that the appeal was filed well beyond the statutory time period prescribed under section 107 of the CGST Act, which allows a limited extension period for condonation of delay.
➡️ The High Court reiterated the settled legal position that courts cannot condone delay beyond the maximum limitation period prescribed for filing GST appeals. Once the statutory outer limit (including the permissible condonable period) expires, neither the Appellate Authority nor the High Court can grant further extension.
➡️ The petitioner’s explanation that he lacked access to the GST portal due to login credentials being linked to the accountant’s mobile number and email was considered an insufficient justification. Even if the delay had a reasonable explanation, the court held that delay beyond the statutory limit of 120 days cannot be condoned, and therefore the writ petition was dismissed.
✔️ Gujarat HC – Ravi Plumbing and Construction v. Union of India [R/SPECIAL CIVIL APPLICATION NO. 844 of 2026]
🔥📛 Ex parte appellate order set aside as notice uploaded on GST portal did not prove communication: HC
➡️ The petitioner transported groundnuts from Uttar Pradesh to West Bengal after charging IGST at 5%. During transit, the Mobile Squad intercepted the consignment and issued detention documents along with a show cause notice, subsequently passing an order under section 129(3) of the GST law imposing a penalty.
➡️ The petitioner filed an appeal before the Additional Commissioner (Appeals)-III challenging the detention and penalty, arguing that there was no deficiency or irregularity in the goods or accompanying documents and that the detention order was passed illegally.
➡️ The Appellate Authority dismissed the appeal ex parte. The petitioner contended that the dismissal occurred without granting a proper opportunity of hearing and without ensuring that notices or communications related to the appeal proceedings had been duly served.
➡️ The court observed that the counter affidavit of the department only indicated that the order had been uploaded on the portal, but there was no evidence proving that the order or hearing notice had actually been communicated to the petitioner through proper electronic means such as email.
➡️ It was held that mere uploading of an order on the portal cannot be treated as valid communication when the taxpayer disputes receipt and no proof of email service exists; therefore, the ex parte dismissal was unsustainable, and the appellate order was set aside with the matter remitted for fresh adjudication after granting the petitioner an opportunity of hearing.
✔️ Allahabad HC – Shiv Traders v. State of U.P. [WRIT TAX No. 6830 of 2025]
🔥📛 ITC denial based on Sec 16(4) limitation set aside as claim fell within extended period as provided under Sec 16(5): HC
➡️ The petitioner, a registered dealer under GST, claimed Input Tax Credit (ITC), which the department rejected on the ground that it was time-barred under Section 16(4) of the GST Act, even though the claim had been made within the extended time period provided under Section 16(5).
➡️ Based on this finding, the department issued an assessment order reversing the ITC claim and directing the petitioner to pay tax, interest, and penalty, and also initiated coercive steps including freezing of the petitioner’s bank account for recovery.
➡️ During the proceedings, both parties acknowledged that the issue involved was already covered by the decision of the Madras High Court in Sri Ganapathi Pandi Industries v. Assistant Commissioner (State Tax) (FAC), Tondiarpet Assessment Circle, Chennai, which addressed the validity of ITC claims falling within the extended limitation under Section 16(5).
➡️ The High Court held that the impugned assessment order was liable to be quashed insofar as it denied ITC solely on the ground that the claim was barred under Section 16(4), despite the claim being filed within the extended period allowed under Section 16(5).
➡️ Consequently, the department was directed to refrain from initiating or continuing any recovery proceedings based on the impugned order, immediately de-freeze the petitioner’s bank account if frozen, drop any proposed recovery actions, and refund any tax amounts already collected pursuant to the impugned assessment order.
✔️ Madras HC – Rajagopal and Co. v. Assistant Commissioner and Central Excise GST and Central Excise [W.P.(MD) No. 2651 of 2026]
🔥📛 Absent reasons in SCN, HC set aside retro-cancellation of registration; no error being shown, dept review application dismissed: HC
➡️ The assessee’s GST registration had been cancelled with retrospective effect through an impugned order. The High Court had earlier set aside this retrospective cancellation because the original Show Cause Notice did not provide any reasons supporting retrospective cancellation and the assessee had not been given prior notice of the department’s intention to cancel the registration retrospectively.
➡️ The Revenue filed a review petition arguing that if the cancellation of registration was not upheld, it would disrupt the entire chain of transactions and adversely affect recovery proceedings against parties who had undertaken transactions with the assessee under the same registration.
➡️ The Court held that the department had the opportunity to present its position during the original proceedings. If it believed that further action was necessary, it could have sought liberty from the Court to issue a fresh order containing complete details and reasons.
➡️ Instead, the department chose to proceed based on the factual matrix and documents already placed before the Court and invited a final order. Through the review petition, the department was essentially attempting to reopen arguments that had already been considered and adjudicated.
➡️ The Court clarified that review jurisdiction cannot be treated as a rehearing of the original case. Since there was no manifest error on the face of the record or miscarriage of justice in the earlier judgment, the review petition lacked merit and was therefore rejected.
✔️ Delhi HC – Radha Rani Metal v. Principal Commissioner of Goods and Service Tax [W.P. (C) No. 1180 of 2025]
🔥📛 If no reply to portal notice is received, officer must try other Sec 169 modes preferably RPAD to ensure service: HC
➡️ A show cause notice issued by the Competent Authority was uploaded on the GST portal, but the petitioner-assessee claimed that it was unaware of the notice because the original copy was not otherwise served on it. Subsequently, an adjudication order was passed confirming the proposals contained in the notice without any response from the assessee.
➡️ The court observed that service of notice through uploading on the GST portal is recognized as a valid and sufficient mode of service under the GST law and cannot be rejected merely because the assessee claims lack of awareness of the uploaded notice.
➡️ However, the court emphasized that when repeated reminders are issued and there is still no response from the taxpayer, the proper officer must apply his mind and consider whether the notice has actually come to the taxpayer’s attention.
➡️ In such circumstances, the officer should explore alternative modes of service prescribed under Section 169(1) of the GST Act, such as sending the notice by Registered Post Acknowledgment Due (RPAD) or other permitted methods, to ensure effective communication rather than merely complying with procedural formalities.
➡️ Since the authority continued issuing notices only through the portal despite no response from the assessee, the court held that effective opportunity of hearing was not provided. Accordingly, the adjudication order was set aside and the matter was remanded to the Competent Authority for fresh consideration after ensuring proper service of notice.
✔️ Madras HC – Tvl. Rajathi Silks v. Commissioner of Commercial Taxes [W.P.(MD)No. 3576 of 2026]
