LATEST GST CASE LAWS: 28.03.2026
🔥📛 Madras HC upholds denial of ITC where supplier failed to remit tax and report invoices in GSTR-1
➡️ The Madras High Court upheld denial of Input Tax Credit (ITC) where suppliers failed to remit tax and did not report invoices in GSTR-1, reinforcing that ITC entitlement is contingent on compliance by the supplier, not merely possession of valid invoices by the recipient.
➡️ The Court relied on its earlier Madurai Bench ruling in Global Offset Printers, affirming that the statutory framework requires actual tax payment to the Government as a precondition for availing ITC, thereby placing a degree of compliance risk on the recipient.
➡️ The judgment draws support from the Supreme Court’s ruling in E-Com Gill Coffee Trading Pvt. Ltd. and the amended Section 41, emphasizing that ITC is provisional and subject to verification of tax payment by the supplier, with an option to re-avail credit once the supplier fulfills the tax obligation.
➡️ The Court rejected the assessee’s reliance on interim relief granted in challenges to Section 16(2)(c), clarifying that such interim orders do not override the binding legal position established in substantive judgments.
➡️ It also dismissed the argument that the disputed ITC pertained to a period prior to October 1, 2022, holding that the principle requiring actual tax payment by the supplier applies irrespective of the amendment date, thereby limiting retrospective relief claims.
✔️ Madras HC – Garuda Steels vs The Assistant Commissioner of CGST and Central Excise
🔥📛 Composite SCN under distinct provisions with differing ingredients, and timelines, tenable? Telangana HC to examine
➡️ The Telangana High Court has stayed a composite show cause notice (SCN) covering tax periods from 2022–23 to 2025–26 issued under Sections 74, 74A, and 130 of the CGST Act, including proposals for confiscation of goods, indicating prima facie concerns over the legality of combining multiple provisions and periods into a single proceeding.
➡️ The assessee argued that Section 74 applies only in cases involving fraud, wilful misstatement, or suppression of facts, whereas Section 74A operates independently of such elements, making their simultaneous invocation legally inconsistent and conceptually incompatible.
➡️ It was further contended that each financial year constitutes a separate cause of action, with distinct statutory ingredients and different limitation periods for adjudication under Sections 74 and 74A, thereby rendering a unified SCN across multiple years procedurally flawed.
➡️ The assessee emphasized that clubbing proceedings for different tax periods under differing legal provisions with separate thresholds and consequences is not sustainable either in law or on facts, and such jurisdictional errors justify invoking writ jurisdiction even at the SCN stage.
➡️ While the Delhi High Court in Ambika Traders upheld consolidation of SCNs for multiple years in cases involving fraudulent ITC, the Telangana High Court noted that this principle is under reconsideration in light of Supreme Court observations in Aparna Collection, and accordingly granted interim stay, seeking a response from CBIC and listing the matter for further hearing.
✔️ Telangana HC – RR Metal Industries vs UOI & ors [W.P. No. 8787 of 2026]
🔥📛 HC: Physical notice necessary post-registration cancellation; Sets aside adjudication order citing natural justice violation
➡️ The Allahabad High Court held that once a GST registration is cancelled, any subsequent adjudication proceedings must involve service of notice through physical means, reaffirming that reliance solely on electronic communication via the common portal is inadequate in such circumstances.
➡️ The Court relied on its earlier ruling in M/s Bambino Agro Industries Ltd., emphasizing that taxpayers with cancelled registrations cannot be expected to access or monitor the GST portal, and therefore must be served notices physically in accordance with Section 169(1)(a) and (b) of the UPGST Act, 2017.
➡️ It was observed that departmental circulars mandating physical service of notices post-cancellation are aligned with practical realities and principles of fairness, as cancelled taxpayers are effectively disabled from participating in portal-based communications.
➡️ In the present case, the assessee’s registration had been cancelled in 2019, yet the show-cause notice issued in 2024 was uploaded only on the GST portal, resulting in the assessee being unaware of the proceedings and deprived of the opportunity to respond.
➡️ The Court found this to be a violation of principles of natural justice and the statutory right to a hearing under Section 75(4), leading to the adjudication order being set aside and the matter remanded for fresh consideration after proper service of notice.
✔️ Allahabad HC – Steps Care India vs Commissioner of State Tax and Another [WRIT TAX No. – 1200 of 2026]
🔥📛 HC: Option of no personal hearing cannot override mandate u/s 75(4); Allows plea against Revenue
➡️ The Gujarat High Court held that under Section 75(4) of the GST law, tax authorities are obligated to provide adequate opportunities of personal hearing before passing any adverse order, reinforcing that this requirement is mandatory and not discretionary.
➡️ The Court noted that although the assessee had selected “No” for personal hearing while replying to the show cause notice (SCN) in Form GST DRC-01, such an option cannot override the statutory mandate requiring the authority to grant a fair hearing.
➡️ It was observed that the adjudicating authority acted improperly by passing the order immediately after issuing a single opportunity of hearing and without sufficiently considering the detailed reply filed by the assessee in Form GST DRC-06.
➡️ Emphasizing the principles of natural justice, the Court stated that authorities should not decide matters hastily on the first date of hearing, especially when substantive objections and explanations have been submitted by the taxpayer.
➡️ Relying on the precedent set in the Yadav Trailer Transport Co. case, the Court quashed the impugned order and remanded the matter back to the authorities, directing them to pass a fresh, reasoned order within 12 weeks after ensuring proper opportunity of hearing.
✔️ Gujarat HC – Gurukrupa Tradelink Private Limited vs State of Gujarat & Anr. [R/SPECIAL CIVIL APPLICATION NO. 6483 of 2024]
🔥📛 HC: Sets aside Appellate Order for procedural lapses, cites failure to upload notice and order
➡️ The Rajasthan High Court set aside an ex parte order passed by the Appellate Authority due to multiple procedural lapses, emphasizing that adherence to statutory requirements under GST law is mandatory for ensuring fairness in adjudication.
➡️ The Court noted that notices were not uploaded on the common portal as required under Section 169 of the CGST Act, and no proper communication of proceedings was made to the assessee, thereby violating principles of natural justice.
➡️ It was further observed that no notice of the appeal was served on the assessee, resulting in denial of an opportunity to participate in the appellate proceedings, rendering the order legally unsustainable.
➡️ The impugned appellate order had allowed the Department’s appeal and overturned an adjudication order that was originally in favour of the assessee; however, even the Revenue conceded that the matter could be remanded for fresh consideration.
➡️ Without examining the merits, the High Court remanded the case to the Appellate Authority with directions to pass a reasoned (speaking) order after providing the assessee a meaningful and effective opportunity of hearing, reinforcing due process under GST law.
✔️ Rajasthan HC – Acme Solar Holdings Limited vs Commissioner (Appeals) [D.B. Civil Writ Petition No. 6148/2026]
🔥📛 HC: Contractual tax liability crystallizes on auction date despite post-GST payment window
➡️ The Bombay High Court held that GST is not applicable to timber auction transactions finalized prior to 1 July 2017, even if the payment timeline extended into the GST regime, as the taxable event had already occurred under the pre-GST laws.
➡️ The Court emphasized that the tax liability was crystallized on the dates when the auction sales were confirmed (April–May 2017), and the assessee had contractually agreed to pay applicable pre-GST taxes along with interest for delayed payment.
➡️ It ruled that allowing the assessee to discharge tax under GST would override the agreed contractual terms, particularly the obligation to pay interest at 18% on delayed payments, which cannot be nullified by a subsequent change in tax regime.
➡️ The Court clarified that Section 142(10) of the GST transitional provisions applies only where the supply occurs after the appointed day; since the goods were available for delivery before GST implementation, the provision was held inapplicable.
➡️ The judgment reinforces that extensions granted for payment are merely contractual concessions and do not defer the taxable event, thereby binding the assessee to comply with pre-GST tax laws and contractual obligations, including interest on delayed payments.
✔️ Bombay HC (Nagpur Bench) – Purushottam Jairam & Company v. State of Maharashtra & Ors. [Writ Petition No. 5133 of 2017]
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