LATEST GST CASE LAWS: 23.09.2026
🔥📛 Rajasthan HC to examine validity of fastening discontinued business liability on legal-representative qua deceased’s estate
➡️ The Rajasthan High Court has admitted a challenge to the constitutional validity of Section 93(1)(b) of the CGST Act, 2017, which makes the legal representative of a deceased person liable for GST dues in certain circumstances.
➡️ The challenge concerns the provision’s application where the deceased person’s business is discontinued, whether such discontinuance occurs before or after the person’s death.
➡️ The assessee argues that fastening tax liability on the legal representative, even though restricted to the extent of the deceased person’s estate, is constitutionally impermissible and contrary to the principles laid down by the Supreme Court in Shabina Abraham.
➡️ The High Court has issued notice to the Revenue and granted two weeks to file its reply, indicating that the constitutional validity and scope of Section 93(1)(b) require judicial examination.
➡️ The Court has directed that the assessee’s application for interim protection be considered on the next date of hearing and has listed the main matter after ten weeks, leaving the substantive constitutional issue open for adjudication.
✔️ Rajasthan HC – Asif Belum vs Union of India [D.B. Civil Writ Petition No. 9328/2026]
🔥📛 GSTAT to examine whether summary notice in DRC-01 can substitute show cause notice
➡️ GSTAT Coimbatore held that whether a summary in FORM GST DRC-01 issued under Rule 142(1) can substitute the independent show cause notice required under Section 74(1) of the CGST Act raises a question of law for the purposes of Section 109(8).
➡️ The Appellant argued that no statutory show cause notice under Section 74(1) had been served and that only FORM GST DRC-01 was issued; according to the Appellant, the statutory notice and its summary are separate and distinct legal requirements.
➡️ The Revenue objected to the maintainability of the appeal on the ground that the dispute involved only a question of fact and relied upon precedents dealing with the requirement of a “substantial question of law”.
➡️ Rejecting the Revenue’s objection, GSTAT relied on the Karnataka High Court’s decision in Atria Convergence Technologies Ltd. and observed that a controversy requiring interpretation of statutory provisions, including the interaction between Section 74(1) and Rule 142(1), constitutes a question of law.
➡️ GSTAT accordingly held that the issue—whether DRC-01 by itself amounts to compliance with the mandatory requirement of issuing a notice under Section 74(1)—requires authoritative legal determination and therefore referred the matter to the Division Bench.
✔️ GSTAT Coimbatore – Sri Kumaran Steels vs The Assistant Commissioner, State Taxes [Appeal No. APL/11/CMT/2026]
🔥📛 HC: Dharma Productions’ pre-Oct. 2021 theatrical rights licensing not classifiable as “IT Software”; attracts 12% GST
➡️ The Bombay High Court held that, for the period prior to October 1, 2021, licensing of copyright in cinematographic films by producers/original copyright holders to distributors for commercial exploitation could not be classified as licensing of Information Technology Software taxable at 18% GST under Entry 17(ii) of Notification No. 11/2017-CT (Rate); it was taxable at 12% under Entry 17(i) as licensing of intellectual property rights in goods other than IT software.
➡️ The Court relied on the distinct SAC classifications under Group 99733—SAC 997331 for licensing rights to use computer software and SAC 997332 for licensing rights relating to original films, broadcasts and similar content—and held that the existence of a specific SAC for cinematographic films prevents such licensing from being treated as software merely because the content is digital.
➡️ Referring to Circular No. 236/30/2024-GST, which recognised ambiguity in classification of theatrical rights and regularised GST paid at 12% for the period July 1, 2017 to September 30, 2021 on an “as is where is” basis, the Court held that the benefit could not be confined only to distributor-to-exhibitor transactions while denying it to producer/original copyright holder-to-distributor transactions involving the same theatrical rights.
➡️ The High Court found a jurisdictional and legal error in the adjudication order because it neither applied the statutory definition of “Information Technology Software” nor explained how cinematographic-film copyright satisfied that definition or why two distinct SAC entries could be treated as one; consequently, the demand of about ₹79.7 crore, along with interest and penalty, for FY 2017-18 to 2020-21 was set aside.
➡️ The Court clarified that the mode of delivery does not determine GST classification: whether a film is supplied through encrypted hard disks or electronically, classification must depend on the essential character and nature of the rights licensed. Treating all “digital content” as “software” has no statutory basis, and GST professionals should therefore identify the specific intellectual-property right and applicable SAC rather than classify the supply solely by its technological mode of transmission.
✔️ Bombay HC – Dharma Productions Pvt. Ltd. & Anr. vs The State of Maharashtra & Ors. [WRIT PETITION NO. 2029 OF 2025]
🔥📛 GSTAT: Upholds inverted-tax refund where inputs and output goods are distinct; CBIC circular non-binding on Tribunal
➡️ GSTAT Kolkata dismissed the Revenue’s appeal and upheld refund of ₹4 lakh of accumulated ITC under Section 54(3)(ii) arising from an inverted duty structure, where the assessee paid GST at 12%–18% on inputs used for manufacturing Agarbati taxable at 5%.
➡️ The Tribunal rejected Revenue’s reliance on Para 3.2 of CBIC Circular No. 135/05/2020-GST, as amended by Circular No. 173/05/2022-GST, holding that the restriction concerning identical input and output supplies did not apply because perfumes, fragrances, chemicals and packaging materials were commercially distinct from the finished Agarbati.
➡️ GSTAT noted that the accumulation of ITC was admittedly caused by the higher GST rate on inputs compared with the lower rate on outward supplies, thereby satisfying the statutory condition for refund under Section 54(3)(ii) of the CGST Act.
➡️ Relying on the Supreme Court ruling in VKC Footsteps, the Tribunal held that refund is permissible where unutilised ITC accumulates because the tax rate on inputs exceeds the tax rate on output supplies, subject to the statutory exclusions prescribed under Section 54(3).
➡️ GSTAT reiterated that CBIC circulars are administrative instructions binding on departmental officers but not on the Tribunal; therefore, where the statutory provision and Supreme Court interpretation are clear, a circular cannot restrict or override the refund entitlement available under the CGST Act.
✔️ GSTAT Kolkata – Santosh Fragrance / Siddharth Agarwala vs Commissioner CGST & CX, Siliguri Commissionerate [APL/22/KLK/2026]
🔥📛 GSTAT: Suspected e-way bill reuse cannot sustain detention absent independent evidence; Sets aside penalty
➡️ GSTAT Lucknow held that detention and penalty under Section 129 cannot be sustained merely on suspicion or inference that the same goods were transported again using previously used invoices and e-way bills; Revenue must establish such reuse through clear and reliable evidence.
➡️ The detained Pan Masala and Tobacco goods were accompanied by valid tax invoices and e-way bills, and Revenue could not point out any discrepancy in the description, quantity, value, ownership, or accompanying statutory documents of the goods.
➡️ Revenue’s allegation of re-transportation was primarily based on toll-plaza vehicle movement records and photographs showing multiple movements of the vehicle; however, the assessee explained the earlier trip as transportation of cotton cut pieces/cotton waste and supported this explanation with the driver’s affidavit, invoices, and transportation records.
➡️ GSTAT found that the photographic and toll-plaza evidence did not prove that the goods carried during the earlier trip were the same goods subsequently detained, and therefore the theory of reuse of the e-way bill remained an unproven presumption rather than legally established fact.
➡️ Relying on Satyam Shivam Papers, Shri Surya Traders, Anandeshwar Traders and B.L. Agro Oils, GSTAT reiterated that strong suspicion cannot substitute legal proof, set aside the original and appellate penalty orders, and directed refund of any amount deposited pursuant to the detention proceedings.
✔️ GSTAT Lucknow – Jai Enterprises vs Dr Anupama Goyal, Commissioner/Assistant Commissioner, State Tax, Kanpur & Ors. [APL/82/LCK/2026]
🔥📛 HC: Common factual background alone won’t attract bar u/s 6(2)(b) where proceedings arise from distinct infractions
➡️ Delhi High Court held that the bar under Section 6(2)(b) of the CGST Act applies only when the State and Central GST authorities initiate proceedings concerning the same liability, deficiency, or contravention; a common factual or transactional background alone does not make the proceedings identical.
➡️ The earlier State GST proceedings were initiated under Section 73 for FY 2017-18 and included ITC claimed from M/s M.R. Enterprises, whereas the subsequent CGST proceedings under Section 74 alleged fraudulent availment of ITC through invoices without actual supply of goods, involving materially different allegations.
➡️ The Court noted that the CGST proceedings also involved different GSTINs of entities named M.R. Enterprises. Though different GSTINs are not conclusive by themselves, they are relevant in determining whether both proceedings concern the same supplier, transaction, and subject matter.
➡️ Relying on the Supreme Court’s decision in Armour Security, the High Court clarified that “same subject matter” must be examined with reference to the specific statutory liability or contravention being adjudicated; separate infractions do not become the same merely because they involve the same assessee, tax period, ITC issue, or similar tax liability.
➡️ Since the assessee failed to establish that the Section 74 proceedings were barred by Section 6(2)(b), and no exceptional circumstance justified interference at the show-cause notice stage, the writ petition was dismissed, with liberty to pursue the statutory appellate remedy under Section 107 of the CGST Act.
✔️ Delhi HC – Shri Krishna Industries vs Commissioner of Central Goods and Services Tax and Ors. [W.P.(C) 4897/2025 and CM APPL. 22525/2025]
🔥📛 GSTAT: Outsourced caterer’s food supply to hospital in-patients not ‘composite supply’; Denies Circular No. 32/06/2018-GST benefit
➡️ GSTAT Hyderabad held that an outsourced caterer supplying food to in-patients of a hospital cannot treat such supply as a composite supply of healthcare services. The caterer independently supplies only food and does not provide healthcare services.
➡️ The benefit of Circular No. 32/06/2018-GST is available where a healthcare service provider itself supplies food to in-patients as an ancillary part of healthcare services. It does not extend to an outside caterer merely because the food is ultimately consumed by hospital in-patients.
➡️ For a transaction to qualify as a “composite supply” under Section 2(30), there must be two or more taxable supplies naturally bundled together, with one being the principal supply. Since the assessee made only a single supply of food to in-patients, outpatients, staff and doctors under its hospital contract, the essential condition for composite supply was absent.
➡️ GSTAT rejected invocation of Section 74, observing that the assessee’s incorrect tax treatment arose from a genuine misunderstanding of the law and Board clarification, without evidence of fraud, wilful misstatement or mala fide intent. Exercising Section 75(2), it directed that the SCN be treated as issued under Section 73(1), with tax and consequential penalty to be determined accordingly.
➡️ While partly allowing Revenue’s appeal and setting aside the FAA order, GSTAT held that the assessee was entitled to the benefit of Rule 35 even though it had not specifically claimed it. The declared consideration must therefore be treated as cum-tax value and the differential GST liability recomputed using the prescribed Rule 35 formula.
✔️ GSTAT Hyderabad – Boilla Venkataramana Reddy Vs M/s Shivenari Canteen Services [APL/149/HYD/2026]
🔥📛 GSTAT: Nine-day transit, unexplained breakdown and fresh E-way Bill establish tax-evasion intent; Upholds penalty
➡️ GSTAT Varanasi held that penalty under Section 129 is sustainable where the surrounding facts establish an intention to evade tax, even though mere expiry of an E-way Bill or a genuine delay beyond the taxpayer’s control may not, by itself, justify penal action.
➡️ The assessee generated a second E-way Bill three days after expiry of the original E-way Bill for the 1,727-km Manjusar, Gujarat–Bihta, Bihar route, instead of extending the original E-way Bill within the prescribed eight-hour period, while the goods had already remained in transit for more than nine days.
➡️ The Tribunal rejected the claimed vehicle breakdown at Orai because there was no credible supporting evidence such as the precise breakdown location, driver’s statement or repair records; the subsequent movement pattern, including travel of about 500 km from Kachora Ghat to Ballia within 24 hours, also weakened the explanation for the earlier prolonged delay.
➡️ GSTAT treated the second E-way Bill as a significant adverse circumstance because it showed Kachora Ghat, Etawah as the loading place and could be generated only after inserting “0” before invoice number “1147”, thereby avoiding the system restriction against generating another E-way Bill against the same invoice.
➡️ Considering the unexplained movement from Orai to Kachora Ghat, changed loading location, absence of breakdown evidence and alteration of the invoice number, GSTAT found the conduct indicative of fraud and intent to evade tax, rejected the plea of a mere typographical or technical error, and upheld the Section 129 penalty of ₹5,53,446.
✔️ GSTAT Varanasi – Reliable Paints Vs Pankaj Kumar Kharwar, Assistant Commissioner & Ors [APL/6/VRN/2026]
🔥📛 GSTAT: Upholds inverted-duty refund; Rules credit-note deduction valid, rejects Circular 135/05/2020-GST applicability
➡️ GSTAT Kolkata upheld the First Appellate Authority’s order allowing refund of accumulated ITC under the inverted duty structure where inputs such as chemicals, dyes and consumables were taxed at 18%/12%, while the processed fabric supplied outward attracted GST at 5%.
➡️ The Tribunal held that the value of credit notes relating to returned or rejected goods can validly be deducted from outward taxable supplies while computing turnover for refund under Rule 89(5), since Section 34(1) of the CGST Act specifically recognises issuance of credit notes in such situations.
➡️ Correspondingly, the ITC attributable to the supplies covered by such credit notes could also be adjusted while determining the relevant ITC for refund computation; therefore, the methodology adopted by the First Appellate Authority was held to be proper and without irregularity.
➡️ Revenue’s reliance on Para 3.2 of CBIC Circular No. 135/05/2020-GST was rejected because the restriction contemplated therein applies to cases where accumulation arises due to a subsequent reduction in the GST rate on the same goods, whereas the processed fabrics in the present case continued to attract the same applicable rate; relying on Vindhya Spinning Mills, the Tribunal held the Circular inapplicable.
➡️ The Tribunal further clarified that directing the Adjudicating Authority to re-quantify or re-calculate the refund after the substantive legal issue has already been decided does not amount to an impermissible remand under Section 107(11); it is merely a consequential exercise to give effect to the appellate decision.
✔️ GSTAT Kolkata – The Commissioner of CGST & Central Excise vs Amrit Crafts Private Limited [APL/38/KLK/2026]
🔥📛 GSTAT: Summarily dismisses Revenue’s appeal against First Appellate Authority’s order involving disputed amount below Rs 50,000
➡️ GSTAT Agra summarily dismissed the Revenue’s appeal under Section 112(2) of the CGST/UPGST Act, finding no sufficient ground to interfere with the order passed by the First Appellate Authority (FAA).
➡️ The dispute arose from the FAA’s decision allowing the assessee’s appeal and setting aside the penalty imposed by the Proper Officer, which was subsequently challenged by the Revenue before GSTAT.
➡️ The disputed amount involved in the Revenue’s appeal was only ₹36,607, which was below the prescribed monetary limit of ₹50,000 relevant for considering such appeals.
➡️ After examining the FAA’s findings and the grounds raised by the Revenue in Form GST APL-07, GSTAT held that no substantial ground had been shown to justify interference with the appellate order, particularly considering the low disputed amount.
➡️ Exercising its power under Section 112(2), GSTAT held that continuation of the appeal would serve no useful purpose or the ends of justice and accordingly summarily dismissed the Revenue’s appeal, thereby upholding the FAA’s order in favour of the assessee.
✔️ GSTAT Agra – Kalpana Yadav Vs Sarita Grah Udyog, Proprietor [APL/146/AGR/2026]
🔥📛 SC: Upholds HC order refusing writ against corrigendum enlarging Section 74 SCN scope
➡️ The Supreme Court declined to interfere with the Delhi High Court’s order concerning a corrigendum issued to a notice under Section 74 of the CGST Act.
➡️ The corrigendum expanded the period covered by the original show cause notice from FY 2018-19 alone to include FY 2019-20 as well, thereby enlarging the scope of the proceedings.
➡️ The Court observed that examining the validity of such corrigendum would require scrutiny of the nature of the correction and appreciation of the underlying factual material, which is ordinarily not undertaken in writ jurisdiction under Article 226.
➡️ The Supreme Court upheld the High Court’s approach of declining writ interference on the ground that an effective alternative statutory remedy was available to the assessee, leaving the merits of the corrigendum open for examination before the appropriate forum.
➡️ While disposing of the assessee’s SLP, the Supreme Court granted procedural relief by extending the limitation period up to 16 October 2026 for availing the alternative remedy, thereby protecting the assessee from being prejudiced by limitation.
✔️ SC – Manpar Icon Technologies vs Assistant Commissioner CGST Division & Ors. [SPECIAL LEAVE PETITION (CIVIL) DIARY NO(S). 51495/2026]
🔥📛 HC: Successive writ challenging same order impermissible after earlier withdrawal without liberty
➡️ The Odisha High Court held that once a writ petition challenging an Order-in-Original is withdrawn without seeking liberty to file a fresh petition, the taxpayer cannot subsequently re-agitate the same cause of action through another writ petition.
➡️ Relying on the Supreme Court decisions in Sarguja Transport Service and Ramesh Chandra Sankla, the Court observed that withdrawal of the earlier writ without liberty operates as a bar against filing a subsequent writ seeking substantially the same relief against the same order.
➡️ The Court emphasized that Section 107 of the GST Act provides a statutory appellate remedy against an Order-in-Original within three months, subject to limited condonation of delay, and taxpayers are ordinarily expected to pursue this remedy within the prescribed period.
➡️ Since the first writ petition was filed nearly one year after the impugned order without satisfactory explanation for bypassing the appellate remedy or for the delay, the Court held that writ jurisdiction could not be used to circumvent the statutory time limits under Section 107.
➡️ The Court rejected the argument that a fresh writ was maintainable merely because the earlier petitions had not been decided on merits, holding that even a change in grounds cannot justify successive writ petitions seeking identical relief against the same order; accordingly, the petition challenging the SCN, Order-in-Original and Notification No. 09/2023-Central Tax was dismissed.
✔️ Orissa HC – PSR Elecon Pvt. Ltd vs The Chief Commissioner of CGST and Central Excise and others [W.P.(C) No. 26417 of 2026]
