LATEST GST CASE LAWS: 26-06-2026
🔥📛 SC issues notice in SLP challenging HC-judgment upholding GST demand on BOT (Toll) concessionaire
➡️ The Supreme Court has issued notice on CG Tollway Limited’s SLP challenging the Rajasthan High Court judgment that upheld GST demand of over ₹16.36 crore, interest and penalty on a BOT (Toll)/DBFOT concessionaire by treating its construction and maintenance obligations towards NHAI as a taxable works contract service supplied in exchange for toll collection rights. Notice has also been issued on the application seeking interim stay, with the matter listed for hearing on August 3, 2026.
➡️ The Assessee contends that no taxable supply is made to NHAI as no consideration flows from NHAI, while toll collected from road users remains exempt under Entry 23 of Notification No. 12/2017-CT (Rate). It further argues that the Rajasthan High Court failed to properly consider the CBIC clarification dated June 28, 2021 distinguishing BOT (Toll) projects from other concession models.
➡️ The Assessee has challenged the Rajasthan High Court’s reliance on the Telangana High Court ruling in GMR Pochanpalli Expressways, submitting that the Supreme Court subsequently clarified that the observations in that judgment would not be treated as final or binding findings on merits, thereby weakening its precedential value.
➡️ It is further argued that conflicting views have emerged from the Karnataka and Telangana High Courts on the GST treatment of BOT (Toll) projects, making the Rajasthan High Court’s reliance on the Telangana decision questionable and demonstrating that the issue requires authoritative resolution by the Supreme Court.
➡️ The Assessee also relies on the Supreme Court’s decision in State of Andhra Pradesh v. Larsen & Toubro Ltd. to contend that, since the EPC contractor/sub-contractor has already discharged GST on the construction activity, levying GST again on the concessionaire for the same transaction amounts to impermissible double taxation. The Supreme Court has confined itself, at this stage, to issuing notice on the appeal and the interim stay application without expressing any view on the merits.
✔️ SC – CG Tollway Limited vs Union of India & Ors. [Petition(s) for Special Leave to Appeal (C) No(s). 22162/2026]
🔥📛 Delhi HC refuses interim extension of GSTAT appeal filing deadline; Directs Centre to file reply
➡️ The GST Appellate Tribunal Bar Association filed a writ petition before the Delhi High Court seeking extension of the statutory deadline for filing GSTAT appeals relating to orders communicated before April 1, 2026, requesting that the last date be extended from June 30, 2026 to December 31, 2026.
➡️ The Petitioner argued that the newly launched GSTAT e-filing portal continues to suffer from technical glitches and procedural difficulties, preventing taxpayers from filing appeals efficiently despite the commencement of the appellate mechanism.
➡️ It was further submitted that the Goods and Services Tax Appellate Tribunal Delhi Bench became operational only from April 2, 2026 and is presently functioning from a temporary premises, while a substantial backlog of appeals has accumulated due to the delayed establishment of the Tribunal.
➡️ Taking note of the issues raised, the Delhi High Court did not grant interim relief by extending the statutory filing deadline at this stage, indicating that the request requires consideration after receiving the Respondents’ response.
➡️ The Court issued notice to the Respondents, directing them to file their reply within two weeks, permitted the Petitioner to file a rejoinder within one week thereafter, and ordered that the matter be listed before the regular roster for further consideration.
✔️ Delhi HC – GST Appellate Tribunal Bar Association vs UOI & ors [W.P.(C)8325/2026]
🔥📛 Bombay HC to hear arguments on constitutional validity of Section 122(1A) imposing personal penalty
➡️ The Bombay High Court will hear arguments on July 9, 2026 exclusively on the constitutional validity of Section 122(1A) of the CGST Act. Although the petitioner had originally challenged the show cause notice, the Court noted that the subsequent adjudication order is appealable under Section 107, limiting the writ proceedings solely to the vires challenge.
➡️ The constitutional challenge focuses on whether Section 122(1A), which imposes penalty on any person retaining the benefit of transactions covered under Section 122(1)(i), (ii), (vii) or (ix), is legally sustainable. The Bombay High Court has kept this issue open for independent examination despite the availability of the statutory appellate remedy against the adjudication order.
➡️ The Supreme Court has already stayed the Delhi High Court’s ruling that permitted retrospective penalty proceedings under Section 122(1A) in an ITC fraud matter while examining its applicability to persons who are not taxable persons. This indicates that the scope and retrospective operation of the provision remain under judicial scrutiny.
➡️ Judicial decisions have reflected differing approaches to Section 122(1A). The Bombay High Court in Shantanu Sanjay Hundekari quashed a ₹3,731 crore demand and penalty against Maersk officials under Sections 122(1A) and 137, a decision affirmed by the Supreme Court, whereas the Delhi High Court in Bhupender Kumar upheld a penalty of about ₹285 crore against a GST consultant after finding prima facie evidence of fraudulent ITC through 63 fake firms and held that retrospective application would be governed by the date of the show cause notice.
➡️ The Gauhati High Court in Mayank Bansal held that partners can be subjected to personal penalty proceedings under Section 122(1A) even for transactions undertaken before the provision’s introduction in 2021. Collectively, these rulings highlight continuing judicial debate on the provision’s constitutional validity, retrospective application, and the extent of personal liability for individuals connected with alleged GST fraud.
✔️ Bombay HC – Ashok Kumar Madaan Vs Union of India and others [WRIT PETITION NO. 4783 OF 2026]
🔥📛 Bombay HC to examine validity of Section-16(2)(c ) denying ITC on account of supplier’s non-compliance
➡️ The Bombay High Court has issued notice in a petition challenging the constitutional validity of Section 16(2)(c) of the CGST Act, which allows Input Tax Credit (ITC) only if the supplier has paid the corresponding GST to the Government. The petitioner contends that denying ITC to a genuine purchaser due to the supplier’s default is arbitrary and unconstitutional.
➡️ The petitioner argued that the obligation to pay GST or utilise admissible ITC rests solely with the supplier, and a bona fide recipient who has fulfilled all statutory requirements should not be penalised for the supplier’s failure to discharge tax liability.
➡️ Prima facie, the High Court observed that the statutory scheme places the liability to pay GST on the supplier. However, it also noted that whether such liability or its consequences can extend to the recipient is a significant issue that purchasers must consider while procuring goods, leaving the legal question open for detailed examination.
➡️ The Court took note of the petitioner’s submission that different High Courts have expressed divergent views on the constitutional validity and interpretation of Section 16(2)(c), highlighting the need for a comprehensive consideration of the issue.
➡️ To facilitate adjudication, the High Court directed the petitioner to provide copies of the relevant judicial precedents to both the Revenue and the Bench. The matter has been listed for further hearing on July 16, 2026.
✔️ Bombay HC – Riddhi Siddhi Aluminium Pvt. Ltd. And Anr. vs Union of India Through The Secretary And Anr [WRIT PETITION NO. 13593 OF 2023]
🔥📛 Bombay HC to examine validity of Notification extending time-limit for completion of adjudication
➡️ The Bombay High Court issued notice in a writ petition challenging the constitutional validity of Notification No. 56/2023-Central Tax and the consequential Order-in-Original passed on its basis, observing that if the notification is ultimately declared unconstitutional, the consequences could be irreversible.
➡️ The assessee contended that the adjudication order derives entirely from the impugned notification and, since the notification’s constitutional validity is already under consideration before the Supreme Court of India, the order cannot be viewed independently.
➡️ Taking note of the pending proceedings before the Supreme Court, the High Court considered it appropriate to examine the matter while keeping in view the larger constitutional challenge already awaiting determination.
➡️ The High Court also relied on its earlier interim orders in similar cases, including the matter involving Glider Buildcon Realtors Pvt. Ltd., reflecting a consistent judicial approach in dealing with challenges arising from the same notification.
➡️ The Court granted the assessee liberty to amend the writ petition and seek ad-interim relief, while indicating that the protective interim approach adopted in analogous pending matters would continue until further consideration.
✔️ Bombay HC – New Gen Crop Solutions Private Limited v. Assistant Commissioner, CGST Division-VI (Hadapsar), Pune & Ors. [WRIT PETITION NO. 4589 OF 2026]
🔥📛 SC: Upholds HC’s non-interference with SCN proposing demand on BOT annuity payments; Dismisses GMR’s SLP
➡️ The Telangana High Court declined to quash the GST show cause notice issued to the concessionaire on annuity received from NHAI under the BOT (Annuity) model, holding that exemption under Entries 23 and 23A of Notification No. 12/2017 applies only to services of providing access to a road or bridge under SAC 9967 and does not automatically extend to construction services classified under SAC 9954.
➡️ The High Court held that the 2021 CBIC Circular is consistent with the recommendations of the 43rd GST Council and merely clarifies that deferred or annuity payments received for road construction remain taxable, even though annuity received for providing access to roads or bridges may qualify for exemption. It therefore disagreed with the Karnataka High Court ruling in DPJ Bidar-Chincholi (Annuity) Road, which had held the Circular to be contrary to the exemption notification.
➡️ The Court observed that the concession agreement did not expressly establish that the annuity was paid in lieu of toll, and in fact vested the right to collect toll exclusively with NHAI. Accordingly, whether the annuity represents consideration for exempt access services under SAC 9967 or taxable construction and maintenance services under SAC 9954 requires examination of contractual terms and factual evidence.
➡️ Holding that the dispute involves determination of disputed facts and proper classification of services, the High Court ruled that such issues cannot be decided in writ proceedings. It therefore dismissed the writ petition while leaving all factual and legal contentions open for adjudication by the GST authorities in the proceedings arising from the show cause notice.
➡️ The Supreme Court dismissed the assessee’s Special Leave Petition, observing that the writ petition itself ought not to have been entertained at the show cause notice stage. At the same time, it clarified that the Telangana High Court’s observations on the merits of taxability are not final or binding, and directed that all issues, including classification, exemption and GST liability, may be fully raised before the adjudicating authority during the statutory proceedings.
✔️ SC – GMR Pochanpalli Expressways Limited Vs Additional Director, Directorate General of GST Intelligence & Ors [Petition(s) for Special Leave to Appeal (C) No. 2185/2025]
🔥📛 HC: Defective verification reports fail statutory ‘reasons to believe’ test required for registration cancellation
➡️ The Karnataka High Court held that proceedings for cancellation of GST registration must strictly comply with Rule 22, which requires issuance of a proper show cause notice based on recorded reasons to believe before any cancellation action is taken.
➡️ The Court found the cancellation proceedings to be legally unsustainable because the verification reports forming the basis of the show cause notices were fundamentally defective, with one report containing a photograph of an unrelated property and the other being blank.
➡️ The petitioners asserted that they were genuinely conducting business from their registered premises and were willing to produce documentary evidence to establish the correctness of their registrations during fresh proceedings.
➡️ Rejecting the Revenue’s request to confine the matter to consideration of pending revocation applications, the High Court held that when the very foundation of the cancellation proceedings is flawed, the appropriate remedy is to restore the matter to the stage of the show cause notice rather than proceed with revocation.
➡️ The High Court quashed the GST registration cancellation orders and the consequential suspension of registrations, restored the proceedings to the show cause notice stage, and permitted the petitioners to submit supporting documents for fresh adjudication by the competent GST authorities.
✔️ Karnataka HC – Flex Enterprises & anr. v. Superintendent of Central Tax [WRIT PETITION NO. 13708 OF 2026 (T-RES)]
🔥📛 HC: Excess ITC claimed over GSTR-3B/2A discrepancy constitutes ‘wrongful availment and utilisation of ITC’; Interest attracted
➡️ The Madras High Court held that interest under Section 50(3) of the GST Act is payable where excess Input Tax Credit (ITC) is availed and utilised due to a mismatch between ITC reported in GSTR-3B and the auto-populated GSTR-2A. Such excess credit constitutes wrongful availment and utilisation of ITC, attracting interest liability.
➡️ Rejecting the assessee’s contention that Section 50(3) applies only to fraudulent claims, fake invoices, or blocked credits under Section 17(5), the Court held that the GST law does not restrict the expression “wrongful availment and utilisation of ITC” to cases involving fraud or bad faith. Any ITC availed and utilised without legal entitlement falls within its scope.
➡️ The Court observed that cases involving fraud, wilful misstatement, or suppression are specifically covered under Section 74, which prescribes a higher penalty. Therefore, even where there is no allegation of fraud, wrongful availment and utilisation of ITC independently attracts interest under Section 50(3).
➡️ On the issue of utilisation through the electronic credit ledger, the Court held that Section 50(3), read with Rule 88B(3), specifically covers cases where wrongly availed ITC is utilised by debiting the electronic credit ledger. Accordingly, interest is not confined to tax paid through the electronic cash ledger.
➡️ Upholding the Revenue’s stand, the Madras High Court dismissed the writ petition and affirmed that interest under Section 50(3) is recoverable on wrongly availed and utilised ITC arising from GSTR-3B and GSTR-2A discrepancies, even in the absence of fraud or deliberate misconduct.
✔️ Madras HC – Jayashree Enterprises vs Assistant Commissioner (ST) [WP No. 19835 of 2026]
