LATEST GST CASE LAWS: 13.11.2026
🔥📛 HC: Quashes SCN issued in RedBus’s name after its merger with MakeMyTrip
➡️ The Allahabad High Court quashed a show cause notice issued in Form GST DRC-01 in the name of RedBus India Pvt. Ltd. after its merger with MakeMyTrip (India) Pvt. Ltd., holding that once the merger had taken place the notice should have been issued in the name of the amalgamated company.
➡️ RedBus merged with MakeMyTrip (India) with effect from February 1, 2026. Despite this, a fresh SCN dated August 3, 2026 was issued in RedBus’s name, with an accompanying communication titled ‘Notice for framing order in remanded cases’.
➡️ MakeMyTrip, as the amalgamated company, contended that a notice issued to an entity that had ceased to exist on merger could not be sustained and that the proceedings ought to have been initiated against it.
➡️ Accepting the contention, the Court recorded that it was in agreement with the petitioner and quashed the SCN issued in the name of the non-existent amalgamating company.
➡️ The ruling is consistent with the Karnataka High Court’s decision in Trelleborg, which set aside SCNs issued to an amalgamating company that had ceased to exist. The Bombay High Court in IDFC, Kanakia Spaces and Vodafone Idea has held that the existing tax liabilities, claims and rights of the non-existent entity devolve on the amalgamated company, so the Revenue’s remedy is to proceed against the successor in its own name.
✔️ Allahabad HC – Makemytrip India Private Limited Thru. Auth. Sign. Pradeep Mittal vs State Of U.P. Thru. Prin. Secy. Deptt. Of State Tax Lko And Another [WRIT TAX No. – 1353 of 2026]
🔥📛 AAR: Rooftop solar power system generating electricity for business qualifies as plant and machinery, eligible for ITC
➡️ The Karnataka AAR ruled that a solar power generation system installed on the rooftop of business premises to generate electricity for captive consumption in business operations at the same premises qualifies as ‘plant and machinery’ under the Explanation to Section 17 of the CGST Act, being apparatus or equipment used for generation of electricity in the course or furtherance of business and not covered by the exclusions.
➡️ ITC on inputs, input services and capital goods used in the erection, installation and commissioning of the system is therefore admissible, subject to fulfilment of the conditions under Section 16 and other applicable provisions.
➡️ The AAR observed that the mere fact that the electricity generated is not consumed entirely by the applicant in every billing period cannot by itself result in denial of ITC. Occasional surplus generation injected into the grid under the net-metering arrangement with BESCOM does not alter the system’s nexus with the applicant’s business.
➡️ Examining the Explanation, which covers apparatus, equipment and machinery fixed to earth by foundation or structural support while excluding land, buildings and other civil structures, the AAR noted that the system is fixed with bolts, screws and structural supports and can be dismantled and relocated without becoming a permanent part of the building. ‘Fixed to earth’ does not require permanent embedding, so the restriction under Section 17(5)(d) does not apply merely because the system sits on the rooftop, and the structural supports do not by themselves attract it.
➡️ The AAR clarified that qualifying as plant and machinery does not confer unconditional ITC, which remains subject to possession of tax documents, receipt of goods or services, payment of tax, furnishing of returns and the depreciation restriction under Section 16(3). The ruling is confined to erection, installation and commissioning, with no finding on routine repair or maintenance expenditure.
✔️ Karnataka AAR – In the matter of MBT Traders [F. No . KAR . AAR/49/2026]
🔥📛 HC: Portal service valid despite revised address in cancellation application; Dismisses P&G writ
➡️ The Telangana High Court dismissed Procter & Gamble Health Ltd.’s writ petition challenging an Order-in-Original for FY 2019-20 and the resulting DRC-07, holding that uploading notices and orders on the GST portal is valid service under Section 169(1)(d) of the CGST Act and that the assessee had not explained its delay in approaching the Court after learning of the order.
➡️ The assessee, a recipient of supplies, had paid the tax shown on the invoices and cancelled its GST registration in 2022, giving a revised Hyderabad address in Form REG-16 for all notices and communications. It contended that it was not monitoring the portal after filing GSTR-9C in December 2023, that it learnt of the order only in September 2025, and that physical notice had been sent to its old, closed address instead of the revised one, in breach of natural justice.
➡️ On merits, the assessee argued that the order was without jurisdiction because the mismatch procedure under Sections 42(3) and 42(5), requiring notice to both supplier and recipient, was not followed, and that the Revenue must first proceed against the suppliers before invoking Section 16(2)(c) against the recipient, relying on Suncraft Energy and D.Y. Beathel Enterprises.
➡️ The Court held that service through the web portal is a permissible mode under Section 169(1)(d), so once the orders were made available on the portal the assessee could not contend that there was no service at all. Reiterating the Supreme Court’s ruling in Glaxo Smith Kline Consumer Healthcare Ltd., it held that the availability of an alternative statutory remedy and delay are relevant considerations even where lack of jurisdiction or breach of natural justice is alleged, and that no sufficient reason was given for the delay after September 2025.
➡️ Entertaining the writ at a belated stage, when the orders were passed in 2024 and a statutory remedy was available, was held to be unjustified. High Courts remain divided on the point: the Orissa High Court in Jindal Steel, the Punjab and Haryana High Court in Luxmi Traders and the Madras High Court in Sahulhameed and Balaji Traders have doubted portal-only service, while the Madras High Court in Poomika Infra Developers and Axiom Gen Nxt India has upheld it, so taxpayers should monitor the portal even after cancellation and act promptly on learning of an order.
✔️ Telangana HC – Procter & Gamble Health Ltd. vs Union of India and others [WRIT PETITION No.35587 of 2026]
🔥📛 HC: Distinguishes ‘intent to evade’ for State authorities; Mere short-payment insufficient to invoke Sec.74
➡️ The Rajasthan High Court quashed a Section 74 show cause notice issued to the Jaipur Development Authority for want of foundational grounds, and explained the distinction in attributing ‘intent to evade tax’ to a statutory authority of the State as against a private company.
➡️ The assessee, a statutory local authority under the JDA Act, 1982, was audited under Section 65 for FY 2019-20 to 2023-24. The Additional Commissioner then issued the impugned SCN alleging short payment of GST on road cutting charges, FAR charges, betterment levy and sale of Master Plan booklets and application forms. The assessee challenged it as vague and unsupported by any allegation of fraud or suppression, since all receipts were disclosed in its returns.
➡️ The Court observed that in a private company such intent can be traced to an identifiable person who stands to be enriched at the cost of the exchequer, whereas officers of a State authority derive no gain, as tax paid out of public funds merely moves from one public purse to another. It held that mere failure to pay tax does not establish intent to evade, otherwise every short payment would become evasion and Section 73 would have no field left, and that the SCN reflected only a disagreement on law about the scope of the levy.
➡️ The Court stressed that even assuming fraud, wilful misstatement or suppression, the absence of intent to evade tax is fatal to the invocation of Section 74. It clarified, however, that a public authority is not immune from Section 74, which may be invoked in cases of deliberate falsification of records or where officers in charge act for a collateral purpose.
➡️ Referring to the Office Memorandum dated May 22, 2018 of the Ministry of Heavy Industries and Public Enterprises on resolution of commercial disputes between public bodies, the Court noted that although it may not apply to tax disputes its underlying policy is sound, since disputes between arms of the State are better settled across the table than through coercive proceedings. It observed that the parties ought to approach the Secretary of the relevant Ministry and explore a resolution.
✔️ Rajasthan HC – Jaipur Development Authority vs The Additional Commissioner, CGST Audit, Jaipur and others [D.B. Civil Writ Petition No. 18970/2025]
🔥📛 GSTAT: Limitation u/s 54 inapplicable to refund of pre-deposit paid under mistake of law
➡️ GSTAT Kolkata ruled that the time limit under Section 54 of the CGST Act does not apply to a claim for refund of a pre-deposit paid under a mistake of law, since such a claim lies outside the CGST Act and is governed by the general provisions of the Limitation Act. It upheld the First Appellate Authority’s order allowing the refund and rejected the Revenue’s appeal.
➡️ The assessee had appealed to the Commissioner of Central Tax against an Order-in-Original demanding service tax of ₹14,73,456 with interest and penalty for FY 2015-16, for which a mandatory 7.5% pre-deposit of ₹1,10,510 was required. Owing to issues with the ACES portal it paid the amount through Form GST DRC-03 on May 27, 2022, and on realising that this was not the prescribed mode, deposited the same amount again through the proper portal.
➡️ The Tribunal observed that Section 54 applies only to refund of tax paid under the CGST Act or the IGST Act, whereas the amount paid through DRC-03 under the CGST head was a pre-deposit for preferring an appeal against a service tax demand, and not a payment of GST.
➡️ Following the Bombay High Court’s decision in Suvidhe Ltd., which held that a deposit under Section 35F is not a payment of duty but only a pre-deposit for availing the right of appeal, so that Section 11B can never apply, the Tribunal held that the principle of unjust enrichment is not applicable to refund of such a pre-deposit.
➡️ The Tribunal noted that the Union of India’s SLP against Suvidhe Ltd. was rejected by the Supreme Court and that CBEC Circular No. 984/08/2014-CX reiterates that a pre-deposit is not payment of duty and its refund need not go through the process for refund of duty. Amounts deposited twice or through the wrong mode as appeal pre-deposits are refundable without the two-year bar of Section 54.
✔️ GSTAT Kolkata – Atanu Mondal vs Jhawar Suppliers [Appeal No. APL/122/KLK/2026]
🔥📛 HC: State Tax Inspector, a proper officer authorised to issue GST MOV- 01 and intercept conveyance
➡️ The Gujarat High Court dismissed the assessee’s writ petition challenging the detention order in Form GST MOV-06 and the confiscation order in Form GST MOV-10, rejecting the objection that the interception was carried out by an officer who lacked the power to do so.
➡️ The assessee contended that Form GST MOV-01, although bearing the name of the State Tax Officer, was signed by a State Tax Inspector who allegedly had no delegated power to intercept the conveyance.
➡️ The Court noted that the Chief Commissioner of State Tax, by order dated June 15, 2019, had designated Deputy Commissioners, Assistant Commissioners, State Tax Officers and State Tax Inspectors as proper officers to intercept conveyances and inspect documents, devices and goods under Section 68(3), rendering the objection untenable.
➡️ The Court further noted that the order dated June 23, 2017 designates State Tax Officers, among others, as proper officers for the functions under Sections 129 and 130, and that Forms GST MOV-06 and GST MOV-10 were in fact issued and signed by the State Tax Officer.
➡️ On the grievance of non-supply of the inspection and verification report, the Court recorded the Revenue’s statement that the report would be supplied in the manner prescribed under Section 169, and the assessee’s statement that it would then file its reply with the relevant documents, and directed both parties to abide by their statements. Finding no ground for interference on either count, the Court dismissed the petition.
✔️ Gujarat HC – Riddhi Siddhi Enterprises vs State of Gujarat [R/SPECIAL CIVIL APPLICATION NO. 16482 of 2026]
🔥📛 GSTAT: Show Cause Notice a mandatory procedure, cannot be substituted with Summary in DRC-01; Quashes demand
➡️ GSTAT Bengaluru allowed the assessee’s appeal and set aside a demand of CGST and SGST of about ₹2.19 lakh under reverse charge on office-meal expenses, with consequential interest and penalty, holding that a summary in Form GST DRC-01 cannot substitute a show cause notice under Section 73(1) of the CGST/KGST Act.
➡️ The dispute arose from an audit for FY 2017-18 in which the Revenue proposed tax under reverse charge on expense entries relating to hiring charges, loan documentation charges and office meals, and finally confirmed the demand on two office-meal entries. The assessee contended that only a DRC-01 summary was served, without a statutory notice setting out the factual and legal grounds, and that the order was passed without considering its reply or granting a personal hearing.
➡️ The Tribunal observed that Rule 142(1) requires Form DRC-01 to accompany the notice issued under Section 73, and that the summary cannot replace the statutory notice which is the foundation of adjudication. The absence of a statutory SCN is not a mere procedural defect curable under Section 160, and the order also violated Section 75(4), which mandates a hearing where an adverse decision is contemplated.
➡️ The Tribunal further held that the first appellate authority cannot sustain the demand on fresh grounds, such as services received from an unregistered outdoor caterer or alleged collection of meal charges from employees, when those grounds were never put to the assessee in the original proceedings.
➡️ On merits, the Tribunal noted that outdoor catering is not a service notified under Section 9(3), and that liability under Section 9(4) for the relevant period was confined to supplies received between July 1, 2017 and October 12, 2017, subject to the daily exemption of ₹5,000, which the Revenue did not examine. As the Revenue had not established the underlying supply, its value or the person liable, the orders and the demand were set aside and refund of any pre-deposit with interest was directed.
✔️ GSTAT Bengaluru – Fortinet Technologies India Private Limited Vs The Deputy Commissioner of Commercial Taxes (Audit) & Ors [APL/88/BUR/2026]
🔥📛 GSTAT: Sets aside demand arising from wrong-head GST payment as SCN fails to disclose transaction-specific particulars
➡️ GSTAT Ghaziabad allowed the assessee’s appeal and set aside CGST and SGST demands arising from payment of tax under the IGST head on supplies made to BSNL, holding that the show cause notice failed to disclose the transaction-specific particulars supporting the alleged short payment and wrongly availed ITC.
➡️ In FY 2018-19 the assessee amended invoices for supplies made to BSNL in FY 2017-18, originally treated as inter-State and taxed under IGST, to reflect CGST and SGST after identifying them as intra-State supplies. The Revenue treated the resulting difference between GSTR-1 and GSTR-3B as short payment of CGST and SGST, while the assessee contended that the tax had already been paid under IGST and sought its adjustment.
➡️ The Tribunal found that the SCN relied on aggregate return mismatches and a general reference to Section 16(2)(c), without identifying the disputed invoices, suppliers, recipients or transactions. While every mismatch notice need not reproduce every invoice, the discrepancy must be clearly explained and supported by accessible particulars, and a reference to a statutory provision cannot substitute the facts needed to answer the allegation. The defect is substantive and cannot be cured by the reply, the adjudication order or the appellate order.
➡️ Distinguishing Sections 77(1) and 77(2) of the CGST Act and Sections 19(1) and 19(2) of the IGST Act, the Tribunal directed the jurisdictional officer to appropriate the verified IGST payments towards the corresponding CGST and SGST liabilities through Centre-State reconciliation, without insisting on a second deposit, subject to verification of the supplies, the tax paid and the absence of any refund, re-credit or duplicate benefit.
➡️ The Tribunal emphasised that revenue neutrality must be established through such reconciliation and cannot be presumed. It maintained the relief from interest of ₹6,55,052 granted by the first appellate authority under Section 77(2) and the dropping of the separate ITC proposal of ₹3,00,911.
✔️ GSTAT Ghaziabad – Fiberhome India Private Limited Vs Lalit Mishra, Additional Commissioner & Ors [APL/D26/GZB/2026]
🔥📛 GSTAT: Original application date, not ‘consequential application’ date post appeal-order, relevant for calculating interest; Sanctions interest
➡️ GSTAT Vijayawada allowed Shapoorji Pallonji and Company’s appeals and set aside orders denying interest under Section 56 of the CGST Act on delayed refunds of accumulated ITC under the inverted duty structure for tax periods between December 2018 and March 2020, holding that where a refund claim rejected in adjudication is later allowed in appeal, interest runs from the expiry of 60 days from the original refund application.
➡️ The original applications, filed between January and March 2023, were rejected on the ground that the claims were barred by Notification No. 15/2017-Central Tax (Rate) relating to specified construction services. The First Appellate Authority set aside the rejections on September 23, 2023, the assessee filed consequential applications on September 25 and 26, 2023, and the refunds were sanctioned in November 2023, but interest was denied because payment was made within 60 days of the consequential applications.
➡️ The Tribunal held that a consequential application filed pursuant to a favourable appellate order is only a procedural step for obtaining the refund already claimed and does not create a fresh starting point for interest. Payment within 60 days of the consequential application does not extinguish the ordinary interest at 6% that has accrued under the main provision. The proviso to Section 56 only provides an enhanced rate of 9% where the consequential refund is not paid within 60 days, so the enhanced rate was not payable here.
➡️ Reading the main provision, the proviso and the Explanation together, the Tribunal explained that the main provision fixes the commencement of interest by reference to the original application under Section 54(1), the proviso governs the enhanced rate, and the Explanation gives an appellate order the requisite legal character. It drew support from the Explanation to Rule 93, under which a refund is deemed rejected only when the appeal is finally rejected, and CBIC Circular No. 111/30/2019-GST, to hold that the original claim retains legal significance during the appellate process.
➡️ Relying on Ranbaxy Laboratories, Lupin Ltd., Altisource Business Solutions, Bansal International, SBI Cards & Payment Services and Qualcomm India, the Tribunal directed the proper officer to compute interest separately for each of the eight refund claims within eight weeks, subject to verifying that the original applications were complete in all respects under Section 54 read with Rule 89.
✔️ GSTAT Vijayawada – Shapoorji Pallonji and Company Private Limited vs Commissioner of State Tax, Andhra Pradesh & Ors [APL/7/VJY/2026]
🔥📛 HC: Dismisses PIL seeking to curb imports under DFIA scheme; Upholds CESTAT’s power to interpret FTP
➡️ The Madras High Court dismissed a Public Interest Litigation seeking orders to curb imports under the Duty Free Import Authorisation (DFIA) scheme, directions to the customs authorities to verify actual user conditions and value caps before granting duty-free clearances, a declaration that CESTAT rulings do not bind the DGFT on policy matters, and confirmation that the DGFT, rather than the RoDTEP Committee, has sole authority over exporter eligibility under the RoDTEP scheme.
➡️ The Court observed that a PIL is meant for those who cannot reach the Court themselves and is not a tool for settling policy or reopening decisions of other forums. The petitioner’s affidavit showed that he learnt of the alleged misuse from internet reports, named no importer, cited no bill of entry, stated no amount of loss, gave no instance of the alleged ‘regular imports’ at Chennai Port and admitted that he had made no representation to any respondent.
➡️ The Court held that a writ of mandamus requires a clear legal duty and it cannot direct officers to enforce a condition whose legal force is itself in serious doubt. If the Central Government or the DGFT considers such conditions necessary to protect revenue, they can issue the proper notification, which is a matter of policy that the Court cannot direct the executive to frame.
➡️ The prayers for an inquiry against unnamed officers and for show cause notices to ‘all importers’ were held unsustainable, since recovery of duty under the Customs Act, 1962 requires a notice to a particular person on particular facts by the proper officer, and a roving inquiry against unnamed persons cannot be ordered in a PIL.
➡️ On the CESTAT rulings, the Court noted that they are judicial orders passed in appeals under Section 129A where the Tribunal necessarily had to read the Foreign Trade Policy, that the Revenue was a party with an appellate remedy under Chapter XV, and that a stranger cannot do what the Union of India has not chosen to do. A declaration that CESTAT can never interpret the FTP was held far too wide, as Paragraph 2.58 of the FTP, which makes the DGFT’s interpretation final, is a policy provision that cannot take away a jurisdiction conferred by Parliament.
✔️ Madras HC – S. Santhosh Kumar vs The Union of India & Ors. [W.P. No. 45612 of 2026]
