LATEST GST CASE LAWS: 27.04.2026
🔥📛 Legislative fix in motion to address composite SCN issue, submits ASG before Gujarat HC
➡️ Multiple High Courts, including the Bombay High Court, have questioned the legality of issuing a single show cause notice (SCN) covering multiple tax periods under GST, with the issue now referred to a larger bench due to its recurring and significant legal implications.
➡️ In similar proceedings before the Gujarat High Court, the Revenue acknowledged the controversy and indicated that the government has initiated steps to amend the GST law, drawing a parallel to prior jurisdictional disputes such as JAO vs FAO under income tax.
➡️ The Additional Solicitor General (ASG) urged the court to defer hearing the batch of petitions until after the GST Council’s expected June meeting, emphasizing that ongoing discussions with the government aim to resolve the issue legislatively rather than through conflicting judicial rulings.
➡️ It was highlighted that SCNs dating back to 2017 are affected, and without a statutory amendment, the dispute could persist for years, creating uncertainty and prolonged litigation for taxpayers and authorities alike.
➡️ The ASG outlined the structured amendment process under GST—beginning with review by the Law Committee, followed by GST Council approval, and culminating in legislative changes—and the court, noting these submissions, adjourned the matter to July 1 after the vacation.
✔️ Gujarat HC – Jawandamal Dhanamal Vs Union of India & Ors. [R/SCA/2408/2026]
🔥📛 HC: Denies bail to Rs. 48 Crore GST fraud accused noting gravity of economic offence
➡️ The Rajasthan High Court denied bail in a ₹48 crore ITC fraud case, emphasizing that the right to bail under Article 21 is not absolute but subject to judicial discretion. The Court held that bail decisions must balance individual liberty with societal and economic interests, especially where serious allegations are involved.
➡️ The Court classified economic offences, particularly GST fraud, as a distinct and Serious category of crime requiring a stricter approach in bail matters, noting their direct impact on the public exchequer and financial system. It highlighted that offences under Section 132 of the CGST Act represent serious white-collar crimes.
➡️ Interpreting Section 480(6) of the BNSS, the Court clarified that it does not grant an indefeasible right to bail. Instead, it vests discretionary power in courts to deny bail where risks such as tampering with evidence, influencing witnesses, or absconding are present, even if investigation is complete.
➡️ The Court rejected the argument that prolonged custody alone justifies bail, particularly in complex economic offences. It observed that the gravity of the offence, scale of fraud, and nature of evidence outweigh considerations like duration of detention in such cases.
➡️ Based on prima facie evidence, including use of shell entities, fake invoices, and fictitious transport firms, the Court found the accused to be part of a structured conspiracy causing significant GST evasion. Given the magnitude, organized nature of the fraud, and supporting documentary and electronic evidence, the Court refused bail and declined to adopt a liberal approach.
✔️ Bombay HC – Hansraj Gurjar Vs. Union of India [S.B. Criminal Miscellaneous Bail Application No. 16428/2025]
🔥📛 HC: No strict time-bound obligation u/s 128A; Time-limit for filing interest waiver application ‘directory’
➡️ Karnataka High Court held that rejection of the assessee’s waiver application under Section 128A solely on the ground of delay was legally untenable, emphasizing that the prescribed three-month time limit is directory and not mandatory in nature.
➡️ The Court clarified that the use of the term “may” in the relevant provision indicates discretionary and enabling intent, not a strict obligation, and therefore the Revenue erred in treating the timeline as a rigid statutory deadline.
➡️ In the facts, the assessee (engaged in borewell drilling works contracts) had accepted audit findings for FY 2017–2020 and paid ITC liability via DRC-03 but did not pay interest, leading to an Order-in-Original under Section 73 confirming interest demand.
➡️ The assessee was unaware of the order due to non-uploading/non-service on the GST portal, and only after intimation post-introduction of Section 128A (waiver scheme effective November 1, 2024) did it file the waiver application, albeit beyond the three-month period from March 31, 2025.
➡️ The High Court quashed the rejection order and directed the department to reconsider the waiver application on merits, holding all consequential proceedings (SCN, DRC-01, and Order-in-Original) in abeyance until such reconsideration is completed.
✔️ Karnataka HC – Sri Laxmi Borewell Agencies v. Assistant Commissioner of Central Tax & Anr. [WRIT PETITION NO. 102773 OF 2026]
🔥📛 HC: Absent same period assessment/similar issue, embargo for parallel-proceedings inapplicable
➡️ The Delhi High Court upheld the validity of proceedings under Section 74 for FY 2018–19, clarifying that Section 6(2)(b) of the CGST Act only bars parallel proceedings when they relate to the same subject matter, meaning identical tax liability, facts, contravention, and time period; the restriction is therefore limited and not absolute.
➡️ The Court rejected the assessee’s argument that earlier proceedings under Section 73 for FY 2019–20 precluded subsequent action under Section 74, emphasizing that mere existence of prior proceedings does not trigger the bar unless there is complete overlap in issues and factual matrix.
➡️ On facts, the Court found clear distinction between the two proceedings: Section 73 proceedings involved discrepancies in GSTR-9 declarations for FY 2019–20 (non-fraud cases), whereas Section 74 proceedings for FY 2018–19 were based on alleged fraudulent availment of ITC through goods-less invoices from a non-existent supplier.
➡️ The judgment underscores that differences in assessment year, nature of default (error vs fraud), and underlying transactions are sufficient to treat proceedings as separate causes of action, thereby permitting independent initiation under different provisions of the CGST Act.
➡️ The Court also dismissed the plea of violation of natural justice under Section 75(4), noting that the assessee’s reply was duly considered, and declined to entertain the writ petition due to availability of an effective alternate remedy under Section 107, while granting liberty for exclusion of limitation for filing an appeal.
✔️ Delhi HC – Ramada Engineering Industry v. Addl. Commissioner (Adjudication), CGST Delhi North & Ors. [W.P.(C) 1036/2026 & CM APPL. 5022/2026]
🔥📛 Bombay HC holding revised Rule-89(5) applies retrospectively to pre-July 2022 IDS-refund claims
➡️ The Bombay High Court held that the amended Rule 89(5) of the CGST Rules, introduced via Notification No. 14/2022–Central Tax dated July 5, 2022, is retrospective in nature and applies to refund applications filed prior to the amendment date, thereby expanding the scope of refund eligibility under the inverted duty structure (IDS).
➡️ The Court allowed seven refund claims totaling ₹12.4 crore filed in June 2021 by the assessee (CHEC-TPL), who had paid GST at 12% on output works contract services for metro rail construction, while inputs and input services attracted higher GST rates of 18% to 28%, resulting in accumulated input tax credit.
➡️ It was held that the assessee is entitled to refund under Section 54(3)(ii) of the CGST Act, as the amended formula under Rule 89(5) must be applied retrospectively, consistent with the Gujarat High Court ruling in Ascent Meditech Ltd., which has attained finality after dismissal of the Revenue’s appeal by the Supreme Court.
➡️ The Court found the Appellate Authority’s rejection of refund claims to be invalid, as it failed to consider the retrospective applicability of Notification No. 14/2022 and the clarificatory Circular No. 181/13/2022-GST, both of which support the assessee’s eligibility for refund.
➡️ Emphasizing that the amendment to Rule 89(5) is curative in nature, the Court ruled that such beneficial changes must apply to pending and prior claims (filed within the statutory limitation period), thereby ensuring that taxpayers are not denied legitimate refunds due to earlier interpretational constraints.
✔️ Bombay HC – CHEC-TPL Line 4 Joint Venture vs Union of India & ors [WRIT PETITION NO. 2583 OF 2025]
