LATEST GST CASE LAWS: 04.09.2026
🔥📛 Bombay HC to examine effect of Rule 164 timeline for deciding Section 128A waiver application; Grants interim relief
➡️ The Bombay High Court found a prima facie case in favour of the assessee in a challenge concerning closure of GST proceedings under Section 128A of the CGST Act read with Rule 164 of the CGST Rules, which governs closure of demands issued under Section 73.
➡️ The assessee contended that the proper officer failed to pass the order required under Rule 164(14) within the time limit prescribed under Rule 164(13), and therefore the proceedings should be treated as having been automatically concluded.
➡️ On a preliminary examination, the Bombay High Court found substance in this contention, indicating that compliance with the prescribed statutory timeline may be significant in determining whether proceedings validly continue.
➡️ Pending further hearing, the Court directed the department not to take coercive action against the assessee and also permitted the assessee to operate its bank account; notice was issued returnable on October 14, 2026.
➡️ The issue gains further significance from the Madras High Court ruling in Incompressible Fluid Control System, where, in a batch of writ petitions, the Court held that the timeline prescribed under Rule 164(3) is mandatory and not merely directory, supporting strict adherence to procedural deadlines under Rule 164.
✔️ Bombay HC – Sanjay Frederick Rodrigues Versus The State of Maharashtra & Ors [WRIT PETITION NO. 11135 OF 2026]
🔥📛 Allahabad HC to examine pre-deposit for appeals against penalty orders based on pre-October 1, 2025 SCNs
➡️ The Allahabad High Court entertained a writ petition challenging the requirement of a 10% pre-deposit of the disputed penalty for filing an appeal under Section 107 of the UPGST Act, 2017.
➡️ The assessee argued that the right of appeal had vested when the show-cause notice was issued on 30 June 2025, and therefore the 10% pre-deposit requirement introduced from 1 October 2025 could not retrospectively impose a more onerous condition on that vested right.
➡️ The Revenue relied on the Supreme Court decision in Chandra Sekhar Jha and the coordinate Bench ruling in M/s Ganesh Yadav to contend that the assessee must comply with the statutory pre-deposit requirement before the appeal can be maintained.
➡️ The High Court observed that the assessee’s plea regarding protection of an existing right of appeal may be covered by the Supreme Court ruling in Hoosein Kasam Dada, while Chandra Sekhar Jha may be more relevant to the appellate authority’s power concerning grant of stay; accordingly, the issue requires detailed consideration.
➡️ As interim relief, noting that M/s Ganesh Yadav also recognises the High Court’s power to grant waiver in appropriate cases, the Court directed that if the assessee files the appeal within two weeks, it must be entertained without insisting on the 10% pre-deposit; the Revenue was granted four weeks to file its counter-affidavit and the assessee two further weeks for rejoinder.
✔️ Allahabad HC – Shri Rathi Steel Limited v/s State of U.P. & 2 Others
🔥📛 Delhi HC records Sr. Adv. 10-suggestions against fraudulent registrations; Gives authorities last chance
➡️ The Delhi High Court expressed serious concern over rampant fraudulent GST registrations obtained by misusing the PAN and Aadhaar details of innocent persons, noting that the problem has persisted since implementation of the CGST Act, 2017 despite the authorities having had nearly nine years to address it.
➡️ To strengthen identity verification, the Court recorded suggestions for mandatory facial recognition against Aadhaar records, short video-based PAN/Aadhaar verification using original documents and system-generated prompts, real-time confirmation from Aadhaar holders, DigiLocker alerts seeking consent, and nomination of identifiable persons who can corroborate the applicant’s identity and proposed business.
➡️ For better traceability and prevention, the suggested safeguards include recording and preserving IP addresses and device-location data used for registration applications, conducting physical verification of the principal place of business or risk-based periodic inspections, and creating automated alerts where newly registered taxpayers show sudden or significant increases in turnover.
➡️ The Court also recorded proposals for stronger inter-departmental data checks, including real-time sharing of GST registration information with the Income Tax Department, immediate alerts to PAN holders when their PAN is used for GST registration, validation against available tax records, and DGARM risk parameters targeting PAN-Aadhaar mismatches and first-time use of PAN/Aadhaar for GST registration.
➡️ Finding the existing response inadequate, and noting concern over the Delhi Police representative’s lack of awareness of the issue, the Court granted the Commissioners of CGST, DGST and Delhi Police a last opportunity to devise an effective solution; failing this, the Court indicated that it may issue appropriate binding directions, with the matter listed for September 8, 2026.
✔️ Delhi HC – Neha vs UOI & ors [W.P.(C) 12210/2026]
🔥📛 Allahabad HC stays demand against Samsung Display, questioning Sec. 74 invocation over Plant & Machinery ITC
➡️ Allahabad High Court granted interim relief to Samsung Display Noida and stayed proceedings arising from the May 12, 2026 Section 74 show-cause notice, observing prima facie that the Revenue must establish a valid material basis for alleging fraud, wilful misstatement or suppression merely because the assessee claimed ITC on plant and machinery and did not disclose reversal of ITC.
➡️ The Court found prima facie support in the Supreme Court’s Reliance Industries ruling for the principle that suppression can arise only where an assessee fails to disclose a fact that the law requires to be disclosed. Non-disclosure of information not required by the GST law or prescribed return forms cannot, by itself, amount to suppression or misstatement.
➡️ The assessee argued that the disputed ITC had been disclosed in GSTR-3B and GSTR-9, while the suppliers’ GSTR-1 details were already available to the Department on the GST portal. It further relied on professional opinions obtained in 2019 and 2020 to show that its ITC claim reflected a bona fide interpretation of law rather than any deliberate concealment or intent to evade tax.
➡️ On limitation, the assessee contended that if the conditions for Section 74 were not satisfied, the matter could only have been pursued under Section 73. Since the three-year limitation under Section 73 had already expired for FY 2020-21 and FY 2021-22 before issuance of DRC-01A and the show-cause notice in 2026, Section 74 could not be used merely to obtain the benefit of an extended limitation period.
➡️ The Court also indicated that documents found during investigation cannot justify Section 74 where they merely formed the basis of disclosures already made by the assessee and did not reveal any undisclosed fact establishing reversal liability. It observed that matters which could ordinarily have been examined during assessment or proceedings under Section 73 cannot later be pursued through Section 74 solely by alleging suppression; the case is listed for further hearing in the week commencing November 16, 2026.
✔️ Allahabad HC – Samsung Display Noida Private Limited vs UOI & ors [WRIT TAX No. – 3609 of 2026]
🔥📛 GSTAT: Fake invoices from non-existent suppliers justify Section 74 invocation; Consolidated SCN permissible
➡️ GSTAT Kolkata partly allowed the Revenue’s appeal by restoring the Section 74 demand relating to ITC availed on invoices issued by non-existent suppliers during 2017–2023. Relying on the Delhi High Court’s decision in Ambika Traders, it also held that a consolidated notice covering multiple financial years for proceedings under Section 74 is not, by itself, impermissible.
➡️ On ITC claimed from allegedly fictitious suppliers, the Tribunal held that invoices and banking records showing payment were insufficient to discharge the taxpayer’s burden under Section 155, as they did not establish actual physical movement of goods, which is essential for ITC eligibility. Referring to Ecom Gill Coffee Trading, it found that the absence of evidence of movement of goods supported the Revenue’s allegation that the suppliers were non-existent and the transactions were not genuine.
➡️ Referring to the Supreme Court’s ruling in Tata Steel Ltd., GSTAT reiterated that the foundational facts necessary for invoking Section 74 must be evident from the notice itself. In this case, the taxpayer was found to have been aware that the suppliers were non-existent and to have made wilful misstatements in GSTR-3B, demonstrating deliberate availment of ineligible ITC and justifying invocation of Section 74 for that issue.
➡️ For the GSTR-3B/GSTR-2A ITC mismatch for 2018–2023, GSTAT upheld the First Appellate Authority’s relief because the liability had been properly recomputed after considering GSTR-2A, GSTR-3B and DRC-03 records, including substantial reversals already made by the taxpayer. It also rejected the Revenue’s objection to modification of the tax demand, holding that Section 75 permits an Appellate Authority, Tribunal or Court to modify the amount of tax determined by the proper officer.
➡️ GSTAT also upheld reduction of the reverse-charge demand, finding that local conveyance expenses, freight already taxed under forward charge, pre-GST freight, Chartered Accountant fees and travel expenses were not liable to RCM, while sustaining only ₹10,236 each under CGST and SGST under Section 73. Applying the strict meaning of “suppression of facts” laid down in Pushpam Pharmaceuticals, it held that no deliberate withholding of material information with intent to evade tax was proved, and therefore Section 74 could not be invoked for the ITC-mismatch and RCM issues.
✔️ GSTAT Kolkata – Atanu Mondal For the Commissioner CGST & CX vs Partner Jay Technical Services [Appeal No. APL/19/KLK/2026]
🔥📛 GSTAT: Issuing unconditional, non-expiring Electronic Gift Vouchers a valid compliance u/s 171 for passing profiteered amount
➡️ GSTAT Delhi held that issuing Electronic Gift Vouchers (EGVs) equivalent to the profiteered amount can validly pass on the benefit of a GST rate reduction under Section 171, provided the vouchers give identified customers unconditional, unrestricted and non-expiring monetary credit.
➡️ Rejecting DGAP’s view that the benefit must necessarily be passed through a commensurate reduction in the sale price, GSTAT held that Section 171 is intended to prevent unjust enrichment by ensuring that the tax benefit reaches the consumer, and does not prescribe any exclusive form or mechanism for transferring such benefit.
➡️ GSTAT accepted the retailer’s EGV mechanism because the credits were directly traceable to specific customers and invoices and represented the monetary value of the GST rate reduction. It further held that the system description “Offers and cashback” was immaterial, emphasizing substance over form where substantive compliance with anti-profiteering requirements was established.
➡️ Of the recomputed profiteering amount of Rs 5,58,891, GSTAT accepted that Rs 5,48,650 had been passed on through EGVs; 291 of 488 customers had used their balances, while Rs 2,30,685 remained available without expiry. However, the retailer failed to link the residual Rs 10,241 to any identifiable customer or invoice.
➡️ GSTAT directed the retailer to deposit the unexplained Rs 10,241 in the Central Consumer Welfare Fund with 18% interest under Rule 133(3)(c). It also held that no penalty under Section 171(3A) could be imposed because the alleged contravention occurred before that penalty provision came into force.
✔️ GSTAT Delhi – DGAP, DG Anti Profiteering, Director General of Anti-Profiteering Vs Sane Retails Pvt Ltd [NAPA/37/PB/2025]
🔥📛 HC: Permits manual SPL-01 filing for section 128A waiver despite Circular bar, citing portal glitches
➡️ The Calcutta High Court directed the Revenue authorities to accept the assessee’s Form SPL-01 manually for claiming waiver of interest and penalty under Section 128A of the CGST Act and to decide the application through a reasoned order after giving the assessee an opportunity of hearing.
➡️ The Court noted that the assessee had already discharged the entire tax liability before issuance of any notice and, in any event, before the prescribed cut-off date of March 30, 2025, thereby satisfying the substantive tax-payment requirement for seeking relief under Section 128A.
➡️ The assessee was unable to upload Form SPL-01 electronically within the prescribed period because of repeated and inadvertent system errors; the Court treated such technical difficulties as a valid circumstance warranting consideration of the manually filed application.
➡️ Although Circular No. 238/32/2024-GST dated October 15, 2024 provides that applications for waiver under Section 128A are not to be processed manually, the High Court directed the authorities to treat the assessee’s manually submitted application as valid in the specific facts of the case.
➡️ Section 128A read with Rule 164 of the CGST Rules provides for waiver of interest, penalty, or both in respect of eligible demands under Section 73 for FYs 2017-18, 2018-19 and 2019-20, subject to prescribed conditions; the ruling indicates that genuine technical inability to use the electronic filing mechanism should not defeat an otherwise eligible substantive claim.
✔️ Calcutta HC – Kuddus Ali vs UOI & anr [WPA 4011 of 2026]
🔥📛 HC: Disposes Rule 96(10) challenges following SC’s Goodluck India ruling; Directs refund of duty deposited
➡️ The Madras High Court disposed of a batch of writ petitions challenging the validity of Rule 96(10) of the CGST Rules in light of the Supreme Court’s decision in Goodluck India Limited.
➡️ Rule 96(10) was omitted by Notification No. 20/2024 with effect from October 8, 2024, and the Supreme Court held that this deletion applies to all proceedings that were pending on that date.
➡️ Consequently, challenges relating to Rule 96(10), including connected show-cause notices and orders-in-original, are to be dealt with in accordance with the Gujarat High Court ruling as affirmed by the Supreme Court.
➡️ The High Court directed the GST authorities to process pending show-cause notices, adjudication orders and refund claims consistently with the above judicial decisions, giving taxpayers the benefit of the omission of Rule 96(10) in pending matters.
➡️ Taxpayers who had deposited 10% of the disputed demand pursuant to the High Court’s interim order dated June 14, 2022 may apply for refund, and the authorities must, after verifying the payment, refund the amount in accordance with law.
✔️ Madras HC – Global Calcium Private Limited vs Union of India & Ors [W.P. Nos. 33675 and 24377 of 2026]
🔥📛 Madras HC order quashing construction-cum-leasing ITC denial for non-consideration of Safari Retreats ratio
➡️ The Madras High Court set aside the GST assessment orders denying ITC on construction-cum-leasing activities, holding that the issue had to be reconsidered in light of the Supreme Court’s ruling in Safari Retreats.
➡️ Referring to Safari Retreats, the High Court noted that ITC on construction is ineligible where the construction is for the taxable person’s personal use or serves as the premises from which its own business is carried on; however, construction intended for sale, lease or licence cannot automatically be treated as being made “on own account”.
➡️ The original authority had interpreted Section 17(5)(d) to mean that construction for ownership, control and capitalisation constituted construction “on own account”, irrespective of later commercial use, and further held that leasing of the completed property did not create any exception to the ITC restriction.
➡️ The High Court found that these conclusions were reached without applying the legal principles laid down by the Supreme Court in Safari Retreats and therefore remanded the matter for fresh consideration in accordance with that judgment.
➡️ The Court also held that recovery by debiting the assessee’s electronic cash and credit ledgers within three days was contrary to Rule 142B, which requires prescribed notice and a seven-day payment period before recovery; accordingly, the assessment orders supporting such recovery were set aside and the Revenue was directed to re-credit or refund the amounts within two weeks.
✔️ Madras HC – ESNP Property Builder and Developers Private Limited Vs State Tax Officer [WP Nos. 21432, 21433 & 22392 of 2026]
🔥📛 SC: Relaxes bail condition in Rs. 30.21 cr GST offence case; Accepts family assets for security bond
➡️ The Supreme Court held that an accused in a case under Section 132(1)(b) and (c) could continue on bail without furnishing a security bond equal to the alleged tax and penalty liability of about ₹30.21 crore.
➡️ The Court allowed the criminal appeal against the Punjab and Haryana High Court’s refusal to modify the bail condition requiring security equivalent to the disputed tax and penalty amount.
➡️ The Supreme Court noted that an identical condition imposed on the appellant’s son, who was a co-accused, had already been modified because such a requirement was considered onerous, vague and incapable of being effectively enforced.
➡️ The Court also took into account the affidavit filed by the appellant’s wife disclosing the family’s assets, along with the fact that the appellant was already on bail.
➡️ Accordingly, the State was directed not to insist on compliance with the disputed security-bond condition, while the assets disclosed by the appellant’s wife were treated as security for the alleged amount due.
✔️ SC – Manmohan Singh vs State of Jharkhand [SLP (CRL.) NOS. 10840-10841/2026]
🔥📛 SC: Entrusts GSTAT President with concerns over negligible listing and disposal of appeals
➡️ The Supreme Court considered a writ petition seeking Court-monitored institutional reforms over the alleged negligible listing and disposal of appeals before the GST Appellate Tribunal (GSTAT).
➡️ The Court noted that the petitioner had already raised the same grievance through a representation dated July 22, 2026, addressed to the President of GSTAT.
➡️ Instead of issuing directions for judicial supervision of GSTAT’s functioning, the Supreme Court held that the petitioner should first pursue the pending representation before the GSTAT President.
➡️ The Court granted liberty to the petitioner to pursue the representation, while expressly refraining from expressing any opinion on the merits of the allegations concerning listing and disposal of GSTAT appeals.
➡️ The Supreme Court recorded its confidence that the President of GSTAT would examine the grievance and identify an appropriate solution, indicating preference for institutional resolution before further judicial intervention.
✔️ SC – Society for Protection of Culture, Heritage, Environment, Traditions and Promotion of National Awareness (Also known as SPCHETNA) vs Union of India & Ors. [Writ Petition(s)(Civil) No(s). 1073/2026]
