LATEST GST CASE LAWS: 20.05.2026
🔥📛 SC to examine Alstom’s challenge to HC judgment denying partial ITC refund post-amalgamation
➡️ The dispute concerns refund eligibility of unutilized Input Tax Credit (ITC) retained by the amalgamating entity after an NCLT-approved merger between erstwhile Alstom Rail Transportation India Pvt. Ltd. and Alstom Transport India Limited. The controversy arose because only part of the accumulated ITC was transferred to the transferee company through FORM GST ITC-02, while the remaining credit was retained for claiming refund under Section 54(3) on account of zero-rated exports made before amalgamation.
➡️ The Gujarat High Court held that the statutory framework governing amalgamation, GST registration, cancellation, and transfer of ITC requires complete compliance, and that partial transfer of ITC while simultaneously seeking refund of retained credit was inconsistent with the GST scheme. The Court viewed the arrangement as contrary to the procedural and substantive requirements applicable to transferor and transferee entities.
➡️ The High Court further ruled that the transferee company could not independently claim refund of ITC relating to exports undertaken by the erstwhile transferor entity unless the entire eligible credit had been lawfully transferred in accordance with Section 18(3) and Rule 41. The judgment emphasized that refund entitlement must remain aligned with the entity legally holding the corresponding ITC balance.
➡️ The Court also criticized the manner in which GST registrations were handled during the amalgamation process, observing that the transferee had obtained retrospective registration while the transferor delayed cancellation of its GST registration. According to the Court, these actions created inconsistencies in the tax records and undermined the statutory mechanism intended to ensure seamless and transparent transfer of tax credits in merger situations.
➡️ Aggrieved by the Gujarat High Court ruling, Alstom Transport India Limited filed Special Leave Petitions before the Supreme Court challenging the denial of refund and the interpretation adopted by the High Court. The Supreme Court has now issued notice in the batch of SLPs, with the matter listed for further consideration after the court vacation on August 3, 2026.
✔️ SC – Alstom Transport India Limited v. Additional Commissioner, CGST and Central Excise (Appeals) & Ors. [Petition(s) for Special Leave to Appeal (C) No(s). 16124- 16130/2026]
🔥📛 SC: Grants bail to GST Superintendent in bribery case; Continued incarceration unwarranted after charge-sheet filed
➡️ The Supreme Court granted bail to a GST Superintendent arrested by the CBI in a corruption case involving an alleged demand of Rs. 34 lakh for settling GST liabilities in Raipur, holding that continued custody was unnecessary since the appellant had already spent over one year in jail and both the charge sheet and supplementary charge sheet had been filed.
➡️ The case arose from an FIR registered by the CBI Anti-Corruption Branch, Raipur, for offences under Section 61(2) of the Bharatiya Nyaya Sanhita, 2023, and Sections 7 and 7A of the Prevention of Corruption Act, 1988, relating to alleged bribery demands made during GST proceedings and tax liability settlement discussions.
➡️ The prosecution alleged that the appellant initially demanded Rs. 34 lakh as illegal gratification and later sought Rs. 10 lakh, following which a complaint was lodged before the CBI; during the trap proceedings conducted by the agency, one co-accused was allegedly caught red-handed while accepting the bribe amount.
➡️ Although the Chhattisgarh High Court had earlier rejected the appellant’s bail plea and the CBI argued that the appellant stood on a different footing from the co-accused who had already secured bail, the Supreme Court considered the prolonged incarceration and progress of investigation as significant factors favouring release on bail.
➡️ While allowing the appeal, the Supreme Court clarified that the bail order was based solely on the stage of investigation, filing of charge sheets, and period of custody, and that no observations made in the order should influence the merits of the trial or the determination of guilt in the corruption proceedings.
✔️ SC – Bharat Singh vs Union of India [Arising out of SLP (Crl.) No. 4543 of 2026]
🔥📛 HC: Penalty confirmed far beyond SCN proposal ex facie without jurisdiction, contrary to Section 75(7)
➡️ The Allahabad High Court held that an adjudication order imposing penalty beyond the amount proposed in the show cause notice is ex facie without jurisdiction and violative of Section 75(7) of the CGST/UPGST Acts. The Court clarified that while the adjudicating authority may reduce the proposed demand based on the assessee’s reply, it cannot confirm tax or penalty exceeding the amount specified in the notice.
➡️ In the present case, the show cause notice for FY 2022-23 proposed only Rs. 50,000 as aggregate penalty under the CGST and UPGST Acts, whereas the final adjudication order imposed penalties exceeding Rs. 12.50 crore across multiple financial years. The Court held such enhancement to be wholly impermissible and contrary to the statutory scheme governing adjudication proceedings.
➡️ The High Court also noted defects in issuance of a composite notice invoking both Sections 73 and 74 for different financial years in a single proceeding. Although the Court did not conclusively decide the broader legality of such composite notices, it observed that combining proceedings involving distinct statutory ingredients raises serious legal concerns.
➡️ Rejecting the Revenue’s objection regarding availability of alternate appellate remedy, the Court reiterated that writ jurisdiction can be exercised where jurisdictional errors are apparent on the face of the record. It held that blatant violation of Section 75(7) constituted a clear jurisdictional defect warranting interference under Article 226 despite the existence of statutory appeal provisions.
➡️ The impugned adjudication order was accordingly set aside and the matter remanded for fresh adjudication. The Court directed the authorities to provide the assessee adequate opportunity to file a final reply and grant personal hearing with prior notice, while leaving open larger legal questions relating to composite notices under Sections 73 and 74.
✔️ Allahabad HC – Ganpati Infrastructure Development Company Limited Vs Joint Commissioner, Central Goods And Services Tax And Central Excise And Another [WRIT TAX No. – 2015 of 2026]
🔥📛 HC: Permits adjudication on SCN resurrecting settled ITC reversal issue; Flags inconsistency in Revenue’s approach
➡️ The Calcutta High Court entertained a writ petition challenging a show cause notice issued under Section 74 for FY 2021-22 relating to alleged ITC reversal on exempt supplies, where the dispute concerned reimbursement of electricity and municipal charges.
➡️ The Court noted that the same issue had already been adjudicated in favour of the assessee for FY 2017-18, and observed that reopening the identical issue for another assessment period reflected inconsistency in the Revenue’s approach, thereby justifying judicial scrutiny in writ proceedings.
➡️ The assessee argued that reopening proceedings on identical facts and grounds for a different financial year was legally unsustainable and that invocation of Section 74, which applies to cases involving fraud or suppression, was unjustified in the present circumstances.
➡️ Despite acknowledging the assessee’s objections, the High Court declined to quash the show cause notice at the preliminary stage and held that, since the notice had already been issued, the assessee should be allowed to submit a detailed reply before the Proper Officer.
➡️ The Court permitted the assessee to file its response within ten days and directed the Proper Officer to grant a hearing and pass a reasoned order within four weeks; it further ordered that the adjudication would remain subject to the final outcome of the writ petition and could not be enforced without prior leave of the Court, while granting liberty to relist the matter after twelve weeks.
✔️ Calcutta HC – Middleton Leaseholders Private Limited & Anr. Vs. The Deputy Commissioner of Revenue & Ors. [WPA 7963 of 2026]
🔥📛 HC: Relegates Assessee to GSTAT citing extended time limit for filing appeal and reduced pre-deposit
➡️ Calcutta High Court declined to entertain the writ petition challenging the appellate order passed under Sections 73 and 107 of the CGST/WBGST Act, holding that the Assessee should pursue the statutory appellate remedy before the GST Appellate Tribunal instead of invoking writ jurisdiction at this stage.
➡️ The Assessee argued that the adjudication order travelled beyond the scope of the show cause notice and therefore suffered from a jurisdictional defect warranting interference under Article 226; however, the Court held that such issues should first be examined within the statutory appellate framework.
➡️ The High Court emphasized that the Assessee had already exhausted the first appellate remedy under Section 107 and that an effective alternate remedy before the GSTAT remained available, even though the Tribunal has not yet started functioning fully or commenced hearings.
➡️ The Court also took note of the Government Notification dated September 17, 2025 extending the time limit for filing appeals against orders communicated before April 1, 2026 up to June 30, 2026, and observed that the legislative reduction of pre-deposit from 20% to 10% was intended to reduce hardship for taxpayers approaching the Tribunal.
➡️ While relegating the Assessee to the GSTAT remedy, the High Court clarified that recovery proceedings cannot ordinarily be initiated until expiry of the statutory period contemplated under Section 78, unless the Revenue records reasons showing that immediate recovery is necessary in the interest of protecting government revenue.
✔️ Calcutta HC – RSH Amit Realty Development LLP & Anr Vs The Deputy Commissioner of Revenue & Ors [WPA 29673 of 2025]
🔥📛 HC: Substitutes token fine for 200% penalty on e-way bill lapse noting absence of intent and minor delay
➡️ The Calcutta High Court held that mere expiry of an e-way bill during transit does not automatically justify penalty under Section 129 of the CGST Act, particularly when there is no evidence of tax evasion or fraudulent intent by the assessee.
➡️ The Court noted that the assessee had originally generated a valid e-way bill and the goods were intercepted only around 10 kilometres before the destination, with the delay being approximately 50 minutes beyond the permissible extension period under Rule 138(10).
➡️ It accepted the assessee’s explanation that the delay occurred due to a technical snag and emphasized that all accompanying documents were otherwise proper and consistent, indicating genuine movement of goods without any discrepancy.
➡️ The High Court observed that the statutory framework governing e-way bills requires authorities to consider the conduct, intention, and surrounding circumstances of the transaction, and that minor procedural lapses without mens rea should not attract harsh penal consequences.
➡️ Relying on earlier judicial precedents, the Court ruled that imposition of a 200% penalty was disproportionate in the absence of intent to evade tax, quashed the penalty orders of the Proper Officer and Appellate Authority, reduced the levy to a token fine of Rs. 10,000, and directed refund of the balance amount deposited by the assessee.
✔️ Calcutta HC – Industrial Pumps & Motors Agencies & Anr. Vs. The State of West Bengal & Ors. [WPA 28356 of 2024]
🔥📛 HC: Penalty cannot be confirmed if not specified in statutory DRC-01 form
➡️ The Allahabad High Court held that a penalty demand cannot be sustained if the statutory Form GST DRC-01 does not clearly specify the proposed penalty amount, even where such demand is mentioned separately in an annexed show cause notice.
➡️ The Court emphasized that the GST Rules require complete and unambiguous disclosure of proposed tax, interest, and penalty within DRC-01 itself, and reliance solely on annexures for material particulars would undermine the statutory scheme and procedural fairness.
➡️ The assessee successfully argued that the DRC-01 reflected ‘0’ in the penalty column, whereas the adjudication order later imposed a penalty of Rs. 4.36 crore, violating Section 75(7) which restricts confirmation of demands beyond what is specified in the notice.
➡️ Rejecting the Revenue’s defence that the penalty proposal was adequately disclosed in the detailed annexure, the Court observed that Section 74(8) grants taxpayers a valuable statutory right to settle proceedings by paying tax, interest, and 25% of the proposed penalty, making precise disclosure in DRC-01 mandatory.
➡️ The High Court consequently set aside the adjudication order and allowed the Revenue to rectify the defect by issuing a corrected DRC-01 within one week, clearly mentioning the exact tax, interest, and penalty proposed before undertaking fresh adjudication proceedings.
✔️ Allahabad HC – Comfort Battery vs Additional Commissioner Central Goods and Services Tax [WRIT TAX No. – 2097 of 2026]
🔥📛 HC: Sets aside rejection of revocation application over non-supply of field visit report
➡️ The Calcutta High Court held that although Section 29 of the CGST/WBGST Act empowers the Proper Officer to cancel GST registration, Section 30 equally grants the registered person a statutory right to seek revocation of such cancellation, which must be considered fairly and in accordance with principles of natural justice.
➡️ The Court noted that the Assessee’s GST registration was cancelled pursuant to a show cause notice dated September 13, 2024, and the subsequent application for revocation under Section 30 was rejected on February 21, 2025 on the ground that the Assessee failed to respond to a later show cause notice issued during revocation proceedings.
➡️ It was observed that the Revenue relied upon a field visit report while cancelling the registration, but failed to establish that a copy of such report had ever been furnished to the Assessee, thereby depriving the Assessee of an effective opportunity to rebut the allegations contained therein.
➡️ The High Court held that once the Assessee invoked the remedy of revocation of cancellation, the Proper Officer was required to provide all relied-upon materials, including the field visit report, and grant a meaningful opportunity of response before rejecting the revocation application.
➡️ Setting aside the rejection order, the Court directed the Revenue to furnish the field visit report to the Assessee and permitted the authorities, if necessary, to undertake a fresh field inspection before passing a fresh reasoned order on the revocation application within six weeks.
✔️ Calcutta HC – Scorp Industries & Anr Vs Assistant Commissioner, State Tax, Alipore Charge & Ors [WPA/7971/2026]
🔥📛 HC: Adjudication orders passed by successor officer despite hearing by predecessor Commissioner, violates natural justice principles
➡️ The Delhi High Court set aside the adjudication order after finding that the personal hearing was conducted by one Additional Commissioner, while the final order was passed by his successor after transfer of charge. The Court held that such action violated the principles of natural justice and offended the constitutional guarantee of fairness under Article 14, since the officer deciding the matter had not heard the assessee personally.
➡️ Relying on the Supreme Court rulings in Automotive Tyre Manufacturers Assn. and Whirlpool Corporation, the High Court reiterated that adjudication must be undertaken by the same authority that grants and hears the personal hearing. Any deviation from this requirement renders the adjudication process procedurally defective and legally unsustainable.
➡️ The dispute involved an ITC demand of about Rs. 10.9 crore, along with interest and penalty, against AC Goel Tradelinks Private Limited, while an equivalent penalty under Section 122(1A) of the CGST Act was imposed on the petitioner as majority shareholder for alleged wrongful availment and utilization of ITC. The petitioner challenged the validity of invoking Section 122(1A), arguing that he was neither a taxable person nor a beneficiary retaining gains from the alleged transaction.
➡️ The petitioner further contended that the adjudication order was non-speaking and passed without proper reasoning, that no opportunity for cross-examination of relied-upon witnesses was granted, and that critical documents seized by the Department were not returned or supplied despite repeated requests. These deficiencies, according to the Court, seriously prejudiced the defence of the assessee and undermined the fairness of the adjudication process.
➡️ The High Court held that despite the existence of an alternate statutory remedy, writ jurisdiction could be exercised because the impugned order was passed in clear breach of natural justice. On this basis, the Court entertained and allowed the writ petition, reinforcing that procedural fairness, reasoned orders, and effective opportunity of defence are indispensable requirements in GST adjudication proceedings.
✔️ Delhi HC – A.G. and Sons HUF Vs Union of India & Ors. [W.P.(C) 2628/2026 & CM APPL. 12778/2026]
