LATEST GST CASE LAWS: 28.09.2026
🔥📛 Bombay HC restrains coercive action against Rs. 16.47 crore GST demand u/s 74
➡️ The Bombay High Court granted interim protection to Express Freight Railway Consortium against recovery of a GST demand of ₹16.47 crore arising from mobilization advances received before the introduction of GST.
➡️ The assessee contended that the advances were received during March–April 2017, when the underlying railway construction services were exempt from Service Tax, and their mere outstanding balance as on July 1, 2017 could not create a fresh GST liability.
➡️ The challenge also questions the validity of the Order-in-Original confirming demand under Section 74 read with Section 122(2)(b), including objections relating to jurisdiction, due process and compliance with principles of natural justice.
➡️ Relying on the Supreme Court decisions in G.R. Infra Projects Limited, Ratlam and Tata Steel Limited, the assessee argued that Section 74 can be invoked only when foundational facts establishing fraud, wilful misstatement or suppression with intent to evade tax are specifically present.
➡️ Considering the limited controversy, the High Court indicated that the writ petition may be finally decided at the admission stage, directed the Revenue to file its reply within two weeks, restrained coercive recovery in the meantime, and listed the matter for October 13, 2026.
✔️ Bombay HC – Express Freight Railway Consortium vs UOI
🔥📛 HC: Mckinsey’s SEZ unit eligible for refund of unutilized ITC; Rule 89 contains no ‘supplier-only ‘ restriction
➡️ The Madras High Court held that Rule 89(1) of the CGST Rules does not confine refund applications relating to SEZ supplies only to the suppliers making such supplies; an SEZ unit may also claim refund if otherwise eligible under the GST law.
➡️ The Court set aside the rejection of the SEZ unit’s refund claim of ₹8.67 crore of unutilised ITC, which had been denied solely on the ground that only suppliers to SEZ units were entitled to seek refund.
➡️ Relying on its earlier decisions in Platinum Holdings Pvt. Ltd. and Urjita Electronics Pvt. Ltd., the Court held that the reference to “supplier” in the second proviso to Rule 89(1) cannot be interpreted as excluding other persons who are independently eligible to claim refund.
➡️ The Revenue’s contention that Section 16 of the IGST Act, Section 54 of the CGST Act and Rule 89 permit refund claims only by suppliers making supplies to SEZ units was rejected, with the Court finding no reason to depart from the reasoning adopted in the earlier Madras High Court rulings.
➡️ The adjudication and appellate orders were consequently quashed, and the Revenue was directed to process the SEZ unit’s refund application in accordance with the applicable judgments and GST provisions within two months from receipt of the Court’s order.
✔️ Madras HC – McKinsey Global Services India Pvt. Ltd. (now known as M/s. McKinsey Global Capabilities and Services Pvt. Ltd.) vs Joint Commissioner (Appeals-II) & Anr. [WP No. 26469 of 2026 & WMP No. 28949 of 2026]
🔥📛 AAR: Renting godowns to warehouse raw agricultural produce taxable under GST
➡️ Gujarat AAR held that hiring of godowns on payment of rent and the subsequent provision of storage/warehousing services for agricultural produce are two distinct supplies that must be examined independently for GST purposes.
➡️ The exemption under Entry No. 54(e) of Notification No. 12/2017-Central Tax (Rate) applies to storage and warehousing services relating to agricultural produce, but does not extend to the separate service of renting or hiring the godown itself.
➡️ Accordingly, even where hired godowns are used exclusively for providing exempt warehousing services for raw agricultural produce to agencies such as NAFED and NCCF, the rent paid for such godowns remains independently taxable under GST.
➡️ Where godowns are hired from registered persons, the renting service is taxable at 18% under Sl. No. 16(iii) of Notification No. 11/2017-Central Tax (Rate), with the registered landlord liable to discharge GST under the forward charge mechanism.
➡️ From October 10, 2024, pursuant to Notification No. 09/2024-Central Tax (Rate) inserting Sr. No. 5AB in Notification No. 13/2017-Central Tax (Rate), rent paid by the registered applicant for godowns hired from unregistered persons is liable to GST at 18% under reverse charge.
✔️ Gujarat AAR – In the matter of Gujarat State Warehousing Corporation [ADVANCE RULING NO. GUJ/GAAR/R/2026/35]
🔥📛 AAR: Short-Term Permit holder paying minerals royalty to State constitutes consideration for service; 18% GST applicable
➡️ The Rajasthan AAR held that royalty paid or payable by a Short-Term Permit holder to the State Government for extraction of minerals is consideration for the service of granting the right to use mineral resources and therefore constitutes a taxable supply of services under Section 7 of the CGST Act.
➡️ The service is classifiable under SAC 997337 as “licensing services for the right to use minerals, including exploration and evaluation” and is taxable at 18% GST, consistent with the treatment applicable to quarry lease and mining lease holders.
➡️ GST on such royalty is payable by the recipient under reverse charge mechanism in terms of Sl. No. 5 of Notification No. 13/2017-Central Tax (Rate), since the service is supplied by the State Government to a business entity and does not fall within the specified exceptions.
➡️ Referring to the Supreme Court ruling in MADA, the AAR observed that royalty payable for mineral rights is not a tax; this supports its treatment as consideration paid to the Government for grant of the right to extract and use mineral resources.
➡️ Rule 51(5) of the Rajasthan Minor Mineral Concession Rules, 2017 prescribes royalty for Short-Term Permit holders at the same rate as quarry/mining lease holders; accordingly, the AAR applied its earlier ruling in Vinayak Stone Crusher and held that the same 18% GST liability under RCM applies equally to Short-Term Permit holders.
✔️ Rajasthan AAR – In the matter of Pinkcity Developers [ADVANCE RULING NO. RAJ/AAR/2026-27/14]
🔥📛 AAR: Rubberised Cork Sheets classifiable under HSN 45041010; Eligible for 5% GST despite not being Natural Cork
➡️ The Rajasthan AAR held that Rubberised Cork Sheets/Agglomerated Cork Sheets are classifiable under Tariff Item 45041010, which covers agglomerated cork and articles of agglomerated cork, whether or not a binding substance is used.
➡️ The AAR clarified that the benefit of Notification No. 09/2025-Central Tax (Rate) cannot be denied merely because the finished product is not natural cork in its original form or is not directly obtained from the bark of the Cork Oak Tree.
➡️ Although the product is manufactured from cork granules mixed with polymer/rubber, chemicals, processing oil, fillers and other additives, its classification must be determined with reference to the description, essential characteristics and commercial identity of the finished product.
➡️ The use of polymer or rubber as a binding material does not take the product outside Heading 4504, since the tariff heading expressly includes agglomerated cork “with or without a binding substance”; the HSN Explanatory Notes also recognise agglomerated cork products made with binding materials.
➡️ Accordingly, supplies of such Rubberised/Agglomerated Cork Sheets made on or after 22.09.2025 are covered by Sr. No. 310 of Schedule I to Notification No. 09/2025-CT (Rate) and attract 5% GST, i.e. 2.5% CGST plus 2.5% SGST; however, the AAR declined to examine eligibility for refund under the inverted duty structure as the issue falls outside the questions permitted under Section 97(2) of the CGST Act.
✔️ Rajasthan AAR – In the matter of Balasaria Agencies Pvt Ltd [ADVANCE RULING NO. RAJ/AAR/2026-27/16]
🔥📛 AAR: Rejects advance ruling application as Section 98(2) bar applies to cases pending adjudication or decided thereof
➡️ The Rajasthan AAR refused to admit the advance ruling application seeking GST exemption on transportation services supplied by the Applicant to another GTA, holding that the same issue was already covered by pending and concluded proceedings under the GST law.
➡️ An investigation under Section 67 of the RGST Act had already been initiated following a search conducted on 07.01.2026, covering issues such as ITC on vehicle-hiring services and the taxability of transportation vehicles made available by the Applicant to other GTAs.
➡️ For FY 2021-22, the Joint Commissioner had already confirmed a demand of ₹14,72,392, along with interest of ₹9,93,865 and penalty of ₹1,47,240, treating the Applicant’s outward supply as taxable “Goods Transport Services” classifiable under HSN 9965.
➡️ The AAR observed that the nature and taxability of the Applicant’s supply to M/s Mahesh Transport Gujarat had already been decided for FY 2021-22, while proceedings on the same issue for subsequent periods were continuing under Sections 67 and 70 of the GST law.
➡️ Invoking the first proviso to Section 98(2), the AAR held that both conditions—matter “already pending” and matter “decided”—were attracted; accordingly, the application was rejected as not maintainable without examining the merits of the exemption claim.
✔️ Rajasthan AAR – In the matter of Mahesh Transport Company [ADVANCE RULING NO. RAJ/AAR/2026-27/15]
🔥📛 HC: SCN during deceased’s lifetime not mandatory for proceedings against legal representative; Upholds Section-93(1)(b) validity
➡️ Delhi HC upheld the constitutional validity of Section 93(1)(b) of the CGST Act, holding that it validly enables tax, interest or penalty liabilities of a deceased taxpayer to be pursued through the legal representative, while restricting recovery to the deceased’s estate to the extent it can meet such liability.
➡️ The Court held that proceedings may be initiated against the legal representative even after the taxpayer’s death, and issuance of a show cause notice during the taxpayer’s lifetime is not a mandatory pre-condition. The expression “determined after his death” permits adjudication of liability attributable to the deceased through the legal representative.
➡️ The Revenue must independently establish all statutory conditions under Section 93, including the nature and basis of the deceased taxpayer’s liability. Where Section 93(1)(b) applies, recovery cannot extend beyond the property or estate inherited from the deceased and available for satisfying the demand.
➡️ Distinguishing Shabina Abraham and Late Dr. K.C.G. Verghese, the Court observed that the effect of death on tax or penalty proceedings depends upon the governing statute. Unlike the provisions considered in those cases, Section 93 expressly authorises post-death determination and specifically identifies the legal representative and the permissible source of recovery.
➡️ The legal representative must receive full adjudicatory safeguards, including relied-upon material and an effective opportunity of hearing under Section 126(3), and may challenge the alleged contravention, statutory basis and quantum of liability. The Court left factual issues, including SCN service, proof of contravention, applicability of Section 93 and computation of penalty, to the statutory appeal and granted four weeks to file the appeal under Section 107 without limitation objection.
✔️ Delhi HC – Jaiwanti vs Union of India & Ors [W.P.(C) 7254/2025 and CM APPL. 32667/2025]
