LATEST GST CASE LAWS: 17.06.2026
🔥📛 Karnataka HC to examine 28% GST on carbonated fruit-drinks during Apr-Sep 2021; Grants interim-relief
➡️ The dispute concerns the GST rate applicable to carbonated fruit drinks for the period from April 2021 to September 2021, with the Revenue asserting that such products attracted GST at 28% during the relevant period and raising a differential tax demand accordingly.
➡️ The assessee argued that it had already started discharging GST at 28% after the issuance of the notification dated September 30, 2021, but maintained that the revised rate became effective only from October 1, 2021 and could not be applied retrospectively to transactions undertaken prior to that date.
➡️ It was further contended that, up to September 2021, GST had been correctly paid at 12% under the notification then in force, as the prevailing classification framework did not specifically distinguish carbonated fruit drinks from other fruit pulp or fruit-based beverages.
➡️ Taking note of these submissions, the Karnataka High Court granted interim protection to the assessee by staying further coercive measures, thereby preventing immediate recovery proceedings pending a detailed examination of the merits of the case.
➡️ The interim order underscores the principle that enhanced GST rates introduced through subsequent notifications ordinarily operate prospectively unless expressly stated otherwise, while also highlighting the importance of contemporaneous tariff entries and notifications in determining the correct tax treatment of products during disputed periods.
✔️ Karnataka HC – Trinity Beverages Private Limited vs State of Karnataka and Another [WP 17400/2026]
🔥📛 Validity of invoking Sec. 74 after remand of Sec. 73 proceedings before Karnataka HC; Grants interim-stay
➡️ The dispute concerns a GST demand of approximately Rs. 20.33 lakhs for FY 2019-20, where the Revenue originally issued a common show cause notice and passed a consolidated adjudication order under Section 73 covering FY 2019-20 to FY 2022-23. The Karnataka High Court had earlier set aside the consolidated order and directed the authorities to undertake fresh proceedings by issuing separate orders for each assessment year in accordance with law.
➡️ The Assessee contends that, following remand, the Revenue was restricted to continuing the proceedings on the same cause of action and within the statutory framework of the original Section 73 proceedings. According to the Assessee, the remand did not authorize the department to alter the nature of the proceedings or expand the scope of adjudication beyond what was originally initiated.
➡️ A key issue raised is the adjudicating authority’s decision to invoke Section 74 for FY 2019-20 instead of proceeding under Section 73. The Assessee argues that this shift was undertaken solely to overcome the limitation applicable to Section 73 and is legally unsustainable because the original notice and subsequent proceedings did not contain allegations of fraud, wilful misstatement, or suppression of facts, which are mandatory conditions for invoking Section 74.
➡️ The Assessee has further challenged the proceedings on multiple jurisdictional and procedural grounds, asserting that the show cause notice lacked specific allegations and proposals, the officer issuing the notice was not competent to do so, the proceedings were initiated without a valid audit under Section 65, and the final order was passed in breach of principles of natural justice by failing to properly consider the objections and written submissions filed.
➡️ Taking note of the contention that proceedings originally initiated under Section 73 had, after remand, been converted into proceedings under Section 74, the Karnataka High Court observed that the issue requires detailed examination. During the latest hearing, the Court directed that the interim protection granted earlier shall continue, ordered a stay on the impugned proceedings until the next date of hearing, and listed the matter for further consideration on July 29, 2026.
✔️ Karnataka HC – Bowring Service Station vs The Deputy Commissioner of Commercial Taxes and Others [WP 10613/2026]
🔥📛 HC: Directs Cognizant’s SEZ-unit to approach Appellate-Authority for matters of refund rejection on group health insurance
➡️ The Telangana High Court declined to entertain Cognizant Technology Solutions India Pvt. Ltd.’s writ petition challenging rejection of IGST refund of approximately Rs. 13.09 crore, holding that the existence of an effective statutory appellate remedy warranted relegation of the dispute to the appellate forum rather than invoking writ jurisdiction at the initial stage.
➡️ The Court observed that the central issues—whether the SEZ unit’s refund claim fell outside the ambit of zero-rated supplies and whether it constituted an independent refund claim in respect of taxes borne on services received—required detailed examination on facts and law, making the appellate authority the appropriate forum to adjudicate the matter on merits.
➡️ The assessee had argued that the refund sanctioning authority incorrectly characterised the claim as one relating to zero-rated supplies and ignored the framework of Section 16 of the IGST Act read with Section 54 of the CGST Act, under which refund could be claimed where the incidence of tax had effectively been borne by the recipient.
➡️ It was further contended that Group Health Insurance services formed part of the approved default list of services available to SEZ units and were intrinsically linked to employee welfare requirements necessary for carrying out authorised IT/ITeS operations within the SEZ, thereby qualifying for the claimed refund benefit.
➡️ The assessee also alleged violation of principles of natural justice on the ground that the refund was rejected based on reasons not set out in the show cause notice; however, while refraining from examining these contentions in writ proceedings, the High Court directed that if an appeal is filed within two weeks, the appellate authority should consider condonation of delay after taking into account the period spent by the assessee in pursuing the writ petition before the Court.
✔️ Telangana HC – Cognizant Technology Solutions India Private Limited v. Assistant Commissioner of State Taxes & Ors. [WRIT PETITION No. 16589 of 2026]
🔥📛 GSTAT: Cinema hall liable for anti-profiteering despite State-regulated ticket pricing; Confirms profiteering on rate-cut benefit
➡️ GSTAT upheld the anti-profiteering findings against Vishwanath Cinema Hall 70MM, holding that the benefit arising from the reduction in GST rates on cinema tickets with effect from 1 January 2019 had to be passed on to consumers through a commensurate reduction in ticket prices. The Tribunal accepted the DGAP’s reports establishing that the theatre retained the pre-reduction ticket prices by increasing the base value component, thereby denying viewers the benefit of lower GST rates.
➡️ The Tribunal clarified that State-level regulation of cinema ticket prices does not override the obligation under Section 171 of the CGST Act. Telangana cinema laws merely prescribe the maximum permissible ticket price, while the actual pricing decision within that ceiling remains with the theatre operator. Consequently, suppliers cannot rely on local regulatory frameworks to avoid passing on tax benefits mandated under GST law.
➡️ Rejecting the respondent’s defence that ticket prices could be revised only with approval from the licensing authority, GSTAT noted the absence of any documentary evidence showing that such approval had been sought or denied. The Tribunal held that unsupported assertions regarding regulatory constraints cannot displace the statutory requirement to transfer the benefit of tax reductions to recipients of the supply.
➡️ Relying on its earlier decision in the Mallikarjuna Cinema Hall, 70MM Hyderabad matter, GSTAT reiterated that anti-profiteering provisions under Section 171 prevail notwithstanding State regulatory mechanisms governing pricing. The ruling reinforces the principle that any reduction in GST incidence—such as the reduction of GST from 18% to 12% for tickets up to Rs.100 and from 28% to 18% for tickets above Rs.100—must result in corresponding consumer benefit.
➡️ Since the individual recipients of the supplies could not be identified, GSTAT held that Rule 133(3)(c) of the CGST Rules required the profiteered amount to be deposited in the Consumer Welfare Funds, along with interest at 18% for the relevant period. The Tribunal also clarified that no penalty could be imposed because the transactions pertained to a period prior to the introduction of anti-profiteering penalty provisions with effect from 1 January 2020.
✔️ GSTAT Delhi – DG Anti Profiteering, DGAP v. Vishwanath Cinema Hall 70MM [NAPA/25/PB/2025]
🔥📛 Calcutta HC seeks Revenue’s response on service of SCN and hearing notices; Grants interim protection
➡️ The Calcutta High Court held that the writ petition could not be adjudicated without first verifying whether the show cause notice and personal hearing notices had been properly served on the assessee, making proof of service a critical factor in determining compliance with procedural requirements under GST law.
➡️ The assessee alleged violation of principles of natural justice by contending that its reply to the show cause notice had not been considered and that no effective opportunity for personal hearing was granted, contrary to the requirements of Section 73(9) of the CGST Act before passing an adverse adjudication order.
➡️ The assessee also raised a plea of double jeopardy, arguing that parallel proceedings had been initiated on the same cause of action despite earlier proceedings and payments made through DRC-03 under protest, thereby questioning the legitimacy of repeated demands arising from substantially identical facts.
➡️ The Revenue opposed the writ petition on the ground of availability of an alternate statutory remedy and maintained that the impugned order arose from a separate show cause notice to which no reply had been filed, while asserting that hearing notices had been issued on three occasions and that the assessee had failed to appear despite being afforded adequate opportunities.
➡️ Considering the conflicting factual assertions, the High Court directed the adjudicating authority to file a comprehensive affidavit supported by proof of service within the stipulated time and, pending such examination, granted interim protection by restraining the Department from taking coercive recovery measures or implementing the impugned order until the next date of hearing.
✔️ Calcutta HC – Sym Singhal Alloys Pvt. Ltd. & Anr. v. Central Board of Indirect Taxes and Customs [WPA 11258 of 2025]
