LATEST GST CASE LAWS: 28.10.2026
🔥📛 Bombay HC to examine territorial jurisdiction to entertain writ petition challenging SCN involving inter-State supply
➡️ The Bombay High Court granted interim protection against coercive recovery to an assessee challenging a Show Cause Notice (SCN), in a writ petition where the Revenue questioned the Court’s territorial jurisdiction to entertain the challenge.
➡️ The dispute concerned an inter-State supply of goods in which the recipient was located in Maharashtra. The Revenue raised a preliminary objection that the Bombay High Court lacked territorial jurisdiction over the matter.
➡️ The assessee countered that the goods were received and Input Tax Credit (ITC) was availed in Maharashtra, and that any recovery of the GST demand would have its effect within the State, which was sufficient to confer jurisdiction on the Court.
➡️ The Court deferred detailed consideration of the jurisdictional objection until the Revenue files its affidavit-in-reply, for which a further period of four weeks was granted. Since the issue of an SCN covering multiple financial years is already pending in a connected petition, the present petition was directed to be listed along with that matter.
➡️ Pending the next date of hearing, the Court directed that no coercive steps be taken against the assessee. The order indicates that where part of the cause of action, such as receipt of goods, availment of ITC or the effect of recovery, arises within a State, the High Court of that State may entertain the challenge, subject to final determination of the objection.
✔️ Bombay HC – Lavesh Agarwal Proprietor of Lavesh Steel Versus Union of India & Ors [WRIT PETITION (L) NO. 18241 OF 2026]
🔥📛 HC: Grants refund by reckoning limitation from APL-04 summary order upload, not physical communication of appellate order
➡️ The Gujarat High Court allowed the assessee’s writ petition against rejection of a refund of about ₹5.41 lakh deposited as tax and penalty under Section 129(3) of the CGST Act, holding that delayed uploading of the appellate order summary in Form GST APL-04 cannot defeat the refund relief granted by the Appellate Authority.
➡️ The assessee’s vehicle was intercepted on the allegation that the e-way bill had been rejected, and tax and penalty were demanded. The Appellate Authority set aside the demand by order dated February 28, 2022, finding that the e-way bill was active and there was no intention to evade tax.
➡️ Although the physical copy of the appellate order was communicated on March 8, 2022, its summary in Form GST APL-04 was uploaded on the portal only on June 3, 2024. The assessee filed its refund application the very next day, which was rejected as time-barred under Section 54(1).
➡️ Interpreting Section 54(1) read with Explanation 2(d), Rule 89 and Form GST RFD-01, the Court clarified that neither Rule 89 nor Form RFD-01 requires a taxpayer to await the APL-04 upload, and a taxpayer holding a physical copy of the appellate order may file the refund application without waiting. However, in the peculiar circumstances of delayed uploading and prompt filing, the Court treated June 3, 2024 as the relevant date for the limited purpose of this refund claim.
➡️ Emphasising that procedural requirements cannot frustrate substantive rights and that continued retention of an amount ordered to be refunded raises concerns under Articles 265 and 300A of the Constitution, the Court directed the Revenue to process the refund with interest at 6% per annum from August 15, 2024 within 12 weeks, failing which interest at 9% per annum would apply thereafter.
✔️ Gujarat HC – Panila Chem Limited & Anr. Versus State Of Gujarat & Ors [R/SPECIAL CIVIL APPLICATION NO. 4610 of 2025]
🔥📛 SC-judgment upholding textile cess exemption on bleaching, dyeing for powerloom-fabrics on job-work basis
➡️ The Supreme Court upheld the Allahabad High Court judgment quashing the levy of textile cess under Section 5A of the Textiles Committee (Cess) Act, 1963 on job workers undertaking bleaching, dyeing and other processing of fabrics received from the powerloom or handloom industry.
➡️ The Court noted that the 1963 Act levies cess on textiles and textile machinery ‘manufactured’ in India, whereas the dispute concerned processed textiles received from powerloom manufacturers who manufacture the fabric but do not themselves undertake processing. No ‘manufacture’ takes place at the job worker’s end, and the product leaving its premises cannot be treated as ‘textile manufactured’ there.
➡️ Since the proviso to Section 5A excludes textiles manufactured by the handloom and powerloom industries from the cess, the Court held that the job workers’ processing is an extension of those manufacturers’ activity, being supplementary and ancillary to the manufacture of textiles, and merely upgrades the textile without constituting ‘manufacture’ under the 1963 Act.
➡️ The Court rejected the Textile Committee’s contention that the job work amounted to ‘manufacture’ under the Central Excise Act. It endorsed the High Court’s view that a definition from the Central Excise Act cannot be imported into the 1963 Act unless the latter expressly incorporates or refers to it, and held that it is neither safe nor legally permissible to adopt the meaning of an undefined term from another statute.
➡️ Holding that ‘manufactured’ must be understood in its common parlance meaning, the Court dismissed the Revenue’s appeal as meritless. The ruling reinforces the principle, equally relevant under GST, that charging provisions and exemptions must be construed within the framework of the specific enactment, without borrowing definitions from other tax laws.
✔️ SC – The Assessing Officer, Textiles Committee vs M/s. Premium Suiting Pvt. Ltd. & Another [CIVIL APPEAL NO. 785 OF 2016]
🔥📛 GSTAT: Members differ on validity of adjudication orders passed after hearing date without notice; Refers to Larger Bench
➡️ GSTAT Prayagraj referred to a Larger Bench the question whether adjudication and appellate orders passed on dates not fixed for hearing or pronouncement, without notice to the taxpayer, violate the principles of natural justice, as the Judicial Member and the Technical Member differed on the point.
➡️ The matter concerned a demand of about ₹9.05 lakh for alleged wrongful availment of ITC on purchases from a non-existent supplier. Relying on the Allahabad High Court rulings in Prayaas Trading Corporation and Subham Steel Traders, the Judicial Member held both orders unsustainable because they were passed after the scheduled hearing dates without fixing or communicating a fresh date, and directed a fresh personal hearing followed by a reasoned order.
➡️ The Judicial Member rejected the Revenue’s plea that passing orders on a later date is common practice, reasoning that when a matter is fixed for a later date for orders, a party proceeded against ex parte retains the opportunity to approach the forum and seek a fresh hearing, a safeguard that is lost when the order is passed on an unnotified later date. The appellate order was also held to violate Section 107(12), as the appeal was dismissed merely for the assessee’s absence without examining the grounds or recording reasons.
➡️ The Technical Member agreed on all other issues but disagreed that the orders were vitiated merely because they were passed after the hearing dates. Distinguishing the Allahabad High Court decisions, the Member held that where a taxpayer files a comprehensive written reply and waives oral hearing, signing the order three days later is a routine reservation of judgment to examine the records, fundamentally different from an unnotified ex parte order that deprives a taxpayer of its defence.
➡️ The Technical Member further observed that quasi-judicial authorities across indirect tax departments almost never pass orders on the hearing date, that no provision of any indirect tax law requires it, and that treating a later date as fatal irrespective of prejudice would place almost all pending appeals in the same position regardless of merits. The Larger Bench will settle whether delayed pronouncement by itself invalidates an order or whether actual prejudice must be shown.
✔️ GSTAT Prayagraj – Sahu Building Material Versus Assistant Commissioner State Tax [APL/7/ALB/2026]
🔥📛 GSTAT: Principal Bench consolidates Reliance Jio’s telecom-tower ITC appeals from State benches for common adjudication
➡️ The GSTAT Principal Bench transferred to itself 22 appeals filed by Reliance Jio Infocomm Limited against orders of various State Appellate Authorities denying refunds of ITC reversed under protest, holding that all the matters involve an identical question of law on ITC eligibility for telecom towers.
➡️ The assessee sought the transfer under Sections 109(5) and 109(6) of the CGST Act, contending that a common legal issue pending before several State Benches warrants adjudication by the Principal Bench to ensure uniformity and avoid conflicting decisions.
➡️ Most Revenue representatives did not object to the transfer. Karnataka Commercial Taxes initially objected that the Karnataka State Bench alone had jurisdiction but later withdrew its objection, while Chhattisgarh Revenue opposed the transfer, arguing that the legal position on ITC for telephone towers is settled and that no identical question of law survives for adjudication.
➡️ The Tribunal observed that the rulings cited by Chhattisgarh did not pertain to the GST regime. It held that Notification No. S.O. 4219(E) dated September 17, 2025, issued under the third proviso to Section 109(5), confers exclusive jurisdiction on the Principal Bench over cases pending before two or more State Benches involving an identical question of law, and that a State Bench deciding such a case would act without jurisdiction.
➡️ Exercising its powers under Section 109(6), the Tribunal directed transfer of all 22 appeals to the Principal Bench for listing as per the directions of the President, GSTAT. The ruling establishes the Principal Bench as the forum for multi-State disputes on common legal questions, which taxpayers with pan-India litigation can use to secure consistent adjudication.
✔️ GSTAT Principal Bench – Reliance Jio Infocomm Limited vs Various State and Central Tax Authorities [TRNS.OF.APPL/10/P B/2026]
🔥📛 GSTAT: Following Bhandari Scraps, declines to read down Section 16(2)(c) where tax payment, goods movement remained unproved
➡️ GSTAT Bengaluru dismissed the assessee’s appeal against denial of ITC for FY 2018-19, holding that the assessee failed to establish actual payment of tax by its suppliers as required under Section 16(2)(c) of the CGST Act, read with the burden of proof placed on the claimant by Section 155.
➡️ Following the Supreme Court’s ruling in Bhandari Scrap Traders, the Tribunal held that Section 16(2)(c) cannot be read down to protect bona fide purchasers from supplier default, and that the Supreme Court’s decision binds it under Article 141 of the Constitution. Suncraft Energy and Instakart Services were distinguished as decisions rendered without the benefit of that ruling and irreconcilable with the statutory scheme it affirmed.
➡️ The dispute arose from scrutiny showing ITC claimed in GSTR-3B exceeding the credit reflected in GSTR-2A, leading to confirmation of IGST of ₹1,32,655 and CGST and SGST of ₹1,288 each, with interest and penalty of ₹33,266. The Tribunal accepted that a GSTR-2A mismatch alone does not prove non-payment of tax for FY 2018-19, but noted that Circular No. 183/15/2022-GST requires the recipient to establish supplier tax payment, including through a supplier certificate where the difference is below ₹5 lakh.
➡️ The assessee claimed payment through banking channels and subsequent export of the goods, but produced no supplier certificate, supplier GSTR-3B returns, e-way bill, lorry receipt, goods receipt note or stock register to prove movement of the fire pump from Chennai to Dabaspet, and did not attend any of the three personal hearings. The Tribunal held that the adjudicating authority cannot be faulted for not calling for documents at hearings the appellant chose not to attend.
➡️ While upholding tax of ₹1,35,231 and penalty of ₹33,266, the Tribunal directed that interest be computed under Rule 88B(3) with the working communicated before recovery, and clarified that the assessee may re-avail the ITC if the suppliers subsequently pay the tax, subject to applicable conditions and time limits. It also observed that good administration requires the proper officer to examine the supplier’s data before confirming a demand against the purchaser and to pursue the defaulting supplier with equal diligence.
✔️ GSTAT Bengaluru – Vintek Control Systems Vs The Commissioner of Central Tax, Bengaluru [Appeal No APL/31BUR/2026]
🔥📛 GSTAT: Supplier’s retrospective registration cancellation cannot justify ITC denial without independent verification; Remands for de-novo adjudication
➡️ GSTAT Thane set aside the orders denying ITC to the assessee on the ground of retrospective cancellation of its suppliers’ GST registrations and remanded the matter, finding a glaring lack of substantive reasoning in the Show Cause Notices issued in Form GST DRC-01 under Section 73 and violations of the principles of natural justice.
➡️ The Tribunal held that retrospective cancellation of a supplier’s registration, by itself, cannot justify confirmation of ITC denial without independent verification of the transactions and a fair opportunity to the assessee to substantiate its claim.
➡️ The dispute concerned ITC of ₹4,89,456 for FY 2020-21 and ₹6,80,142 for FY 2021-22 on inward supplies from suppliers alleged to be fraudulent, non-functioning or non-existent. The demands were confirmed ex parte, and the First Appellate Authority upheld the disallowances on merits while also dismissing the appeals for non-prosecution, citing the assessee’s absence at hearings and incomplete transport documents.
➡️ The Tribunal noted that the SCNs merely stated “AS PER ATTACHMENT” under the brief facts and grounds, and the adjudication orders described the issue only as ineligible ITC claimed from a non-existent supplier, without independent analysis or transaction-specific findings. Relying on Kranti Associates Pvt Ltd, it reiterated that recording reasons is an essential facet of natural justice, and relying on Purushottam Stores, Nav Nirman Construction and Premkumar Arjundas Luthra (HUF), held that an appellate authority cannot dismiss a statutory appeal for non-prosecution without deciding the points for determination as required by Sections 107(11) and 107(12).
➡️ The Orders-in-Appeal and the underlying Orders-in-Original were set aside, with directions to communicate the specific grounds for disallowance, grant a reasonable opportunity of personal hearing, examine the corroborative evidence and pass detailed reasoned orders. The remand is open, with no opinion expressed on the ultimate eligibility of ITC, and the assessee was directed to cooperate and produce the requisite evidence.
✔️ GSTAT Thane – Trivesh Enterprises LLP Vs Vijay Eknath Kumbhar, Joint Commissioner of State Tax, Thane [APL/52/THN/2026]
🔥📛 GSTAT: Quashes Section 74 penalty for vague suppression allegations; Holds audit detection alone insufficient to establish wilful suppression
➡️ GSTAT Thiruvananthapuram set aside the Order-in-Appeal confirming a penalty of ₹7,66,446 under Section 74 of the CGST Act, holding that mere non-payment of the value and tax of inward supplies to suppliers within 180 days does not automatically establish wilful suppression or justify an equal penalty.
➡️ The case arose from an audit covering January 2019 to March 2021 which detected the non-payment, resulting in a demand of ₹7,66,446 with interest and an equal penalty. The Tribunal rejected the appellate authority’s inference that detection during audit itself proved wilful suppression, observing that such reasoning would expose every audit-detected contravention to Section 74 proceedings.
➡️ The Tribunal found that the SCN failed to specify the material facts allegedly suppressed and inconsistently invoked Sections 73 and 74 for similar contraventions of Section 16(2), rendering the penalty proceedings vague and unsustainable. Relying on the Supreme Court’s ruling in Brindavan Beverages, it reiterated that the SCN is the foundation of the Revenue’s case and must set out the allegations with sufficient clarity to enable the assessee to respond.
➡️ Criticising the appellate authority’s remark that there was no evidence to disprove the allegation of wilful contravention, the Tribunal held that, unless a clear statutory provision provides otherwise, the burden of proof always rests on the Revenue and cannot be shifted to the assessee. The authority had also failed to identify the specific non-declaration and the return, statement or document in which disclosure was required under Explanation 2 to Section 74.
➡️ Relying on the Supreme Court’s decision in G.R. Infra Projects Ltd., the Tribunal held that the Revenue cannot introduce fresh grounds at the appellate stage to cure deficiencies in the SCN or the adjudication order. The penalty under Section 74 was set aside, while the assessee was directed to pay the balance interest.
✔️ GSTAT Thiruvananthapuram – Pavithram Gold & Diamonds Vs The Commissioner of CGST &CE, Thiruvananthapuram [Appeal No: APL/38/TVP/2026]
🔥📛 GSTAT: Revenue cannot deny ITC merely due to supplier’s non-existence once dealer establishes genuineness of transaction
➡️ GSTAT Agra dismissed the Revenue’s appeal and upheld the First Appellate Authority’s order allowing ITC on GP sheets purchased from a supplier reported to be non-existent, holding that ITC cannot be denied merely on account of the supplier’s non-existence once the dealer establishes the genuineness of the transaction.
➡️ Referring to Sections 16(1), 16(2), 74 and 155 of the CGST/UPGST Acts, the Tribunal held that the dealer discharged its burden by producing the tax invoice, e-way bill, consignment note (bilty), bank statements evidencing payment through verifiable banking channels before receipt of the SCN, and evidence of consumption of the GP sheets in manufacturing padlocks and other metal goods.
➡️ Once such evidence was produced, the burden shifted to the Department to rebut it by showing complicity or collusion between the purchasing dealer and the supplier, which it failed to do. To invoke Section 74, the onus is on the Department to establish deliberate fraud, misstatement or collusion, and the SCN contained no direct evidence, statement or material showing that the taxpayer was aware of any bogus invoice ring operated by the supplier.
➡️ The Tribunal held that the Revenue cannot make the purchasing dealer a guarantor for the supplier’s statutory compliance or post-transaction records. Since the Department never questioned the manufacture or sale of the finished goods, the Tribunal reasoned that such products could not have been made without the corresponding raw material, supporting actual physical receipt of the goods under Section 16(2)(b).
➡️ Having found that the dealer produced complete and verifiable evidence and discharged its burden under Section 155, the Tribunal upheld the order setting aside the ITC reversal. The ruling confirms that a documented, paid-for and consumed purchase remains eligible for ITC even where the supplier is later found non-existent, unless the Revenue proves the buyer’s collusion.
✔️ GSTAT Agra – Devendra Singh Vs Hema Industries [APL/23/AGR/2026]
🔥📛 HC: SCN uploaded beyond limitation due to portal glitch invalid; Prior internal generation cannot extend statutory timeline
➡️ The Delhi High Court set aside a Show Cause Notice and the consequential Order-in-Original as barred by limitation under Section 73(2) of the CGST Act read with Notification No. 56/2023-Central Tax, holding that an SCN generated on an internal system but not made available to the taxpayer is not ‘issued’ in the eyes of law.
➡️ The proceedings concerned alleged wrongful ITC of about ₹10.57 lakh from suppliers whose registrations were cancelled retrospectively, ITC of about ₹5.57 lakh from suppliers who had not filed GSTR-3B, late fee of about ₹1.03 lakh for delayed GSTR-1 and interest of about ₹3.39 lakh for delayed payment. The Revenue claimed the SCN was generated and uploaded on the AIO system on May 30, 2024, within time, but could not be integrated with the GST back-office portal due to a migration glitch and was re-uploaded on August 8, 2024.
➡️ Noting that the portal entry showed the SCN as ‘awaiting GSTN confirmation’ without a Common Reference Number (CRN), the Court held that issuance under Section 73(2) must be read with the modes of service under Section 169, and an internal generation or upload not made available to the noticee does not satisfy the statutory requirement. The re-upload itself acknowledged that the earlier notice had not become effective.
➡️ The Court held that neither the date of internal generation nor a remark appended to the re-uploaded notice could confer retrospective validity, since the only mechanism to extend the time limit under Section 73(2) is a notification under Section 168A and none beyond Notification 56/2023 was shown. Despite being aware of the glitch, the Revenue failed to serve the SCN by registered post, speed post or email, and administrative lapses cannot prejudice the taxpayer or enlarge a statutory limitation period.
➡️ Rejecting the Revenue’s reliance on earlier scrutiny in Form GST ASMT-10 and on personal hearing opportunities, the Court held that such preliminary steps cannot substitute for the foundational SCN or cure non-compliance with the mandatory limitation. As the notice due by May 31, 2024 was made available only on August 8, 2024, the SCN and the order were quashed, confirming that limitation is tested by when the notice actually reaches the taxpayer.
✔️ Delhi HC – Sikka Motors Pvt Ltd vs Union of India & Ors [W.P.(C) 5076/2025]
🔥📛 GSTAT: Section 140 permits unavailed capital-goods credit, not excise duty credit on pre-GST goods exported post-GST
➡️ GSTAT Chandigarh partly allowed the assessee’s appeal, permitting transitional credit of CVD and additional duty of excise paid on capital goods imported before July 1, 2017 and received in its factory to be carried forward as CENVAT, while rejecting credit of Central Excise duty paid on goods cleared for export before July 2017 but actually exported after GST came into force.
➡️ Interpreting Section 140(2) of the CGST Act, the Tribunal held that it allows credit of the unavailed CENVAT credit on capital goods not carried forward in the return for the period ending June 30, 2017. Relying on the GST FAQs (3rd Edition dated December 15, 2018) and Circular No. 182/14/2022, it clarified that the provision creates no bar on unavailed credit for capital goods received after the GST rollout where the duty was admissible as CENVAT under the existing law and as ITC under GST.
➡️ On the export credit, the Tribunal noted that the assessee had claimed it under Table 7(a), which applies to transitional credit on inputs, and held that Section 140 contains no provision for credit of Central Excise duty paid on goods cleared for export before July 1, 2017. Section 140 cannot be used as a residuary provision to avail credit that is otherwise inadmissible in law.
➡️ The contention that recovery could only be made under the erstwhile law was rejected, as the credit was alleged to have been wrongly taken under the CGST Act, making GST recovery provisions applicable. The argument under Section 174(2) that an accrued right cannot be taken away was also rejected, since no right to transitional credit accrued under the existing law and the right arose only when GST came into effect.
➡️ On penalty, the Tribunal held that Section 73 applies precisely where ITC has been wrongly availed or utilised for reasons other than fraud, wilful misstatement or suppression of facts. It directed computation of interest on the wrongly availed credit and reduced the penalty, confirming that transitional credit is confined strictly to the categories enumerated in Section 140.
✔️ GSTAT Chandigarh – Deltron ( A Division Of Continental Device India Private Limited ) Vs Commissioner Central Goods and Service Tax Ludhiana [APL/28/CHD/2026]
🔥📛 GSTAT: Clerical errors in reporting export turnover cannot justify denial of refund of excess IGST paid
➡️ GSTAT Thiruvananthapuram allowed a refund of excess IGST of ₹19.79 lakh paid on exports of cashew kernels, holding that clerical errors in GSTR-3B cannot justify denial of refund where the same tax has been paid twice.
➡️ The assessee had wrongly reported its export turnover for November 2018, December 2018 and February 2019 in Table 3.1(a) instead of Table 3.1(b) for zero-rated supplies, which prevented the Customs system from processing the original refund. It then paid the same IGST again in August 2019 under the correct table and received that refund through the automated system.
➡️ The assessee’s claim for refund of the original payments was rejected on the ground that a refund had already been paid. The Tribunal found that neither the Assistant Commissioner nor the Joint Commissioner (Appeals) made any effort to understand which amount was claimed as refund and which amount had been refunded through the Customs system, even though GSTR-1 correctly reflected the exports.
➡️ The Tribunal held that the reconciliation statement explained the clerical error and that the Revenue failed to establish why the original payments could not be treated as excess tax. Relying on Rajendra Narayan Mohanty, Merck Life Science and its earlier ruling in Choice Cashew Traders, it reiterated that tax paid in excess cannot be retained without authority of law under Article 265 of the Constitution.
➡️ The common Order-in-Appeal was set aside and all three appeals were allowed with consequential relief. The ruling confirms that an exporter’s double payment caused by a reporting error in GSTR-3B must be refunded, and that authorities must reconcile the actual amounts paid and refunded rather than reject claims mechanically.
✔️ GSTAT Thiruvananthapuram – Associated Cashews Vs The Commissioner of CGST Thiruvananthapuram [APPEAL NOS: APL/52/TVP/2026, APL/53/TVP/2026, APL/54/TVP/2026]
