LATEST GST CASE LAWS: 30.04.2025
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🔥📛 Notification artificially vivisecting solar-product supplies non-classifiable as EPC-contracts challenged before Karnataka HC ➡️ The Karnataka High Court has stayed an order imposing a demand of approximately Rs 11.62 Crores on a petitioner who supplies solar products like solar water heaters, solar education systems, and solar lighting systems to NGOs, trusts, and CSR companies. The petitioner is challenging the validity of Notifications Nos. 24/2018 and 27/2018, which introduced a deeming fiction apportioning the value of mixed supplies of goods and services with 70% towards goods and 30% towards services. ➡️ The petitioner argues that the Notifications were intended only for EPC (Engineering, Procurement, and Construction) contracts, as per the GST Council’s 31st meeting, and are ultra vires Section 15(5) of the CGST Act and Article 279A of the Constitution. The petitioner claims they were not involved in EPC contracts but were supplying goods, with installation services being a minor and nominal part of their overall business. The components of their supply are separately billed and their values are separately ascertained and accounted. ➡️ The petitioner argues that the Notifications are arbitrary, discriminatory, and violative of Articles 14, 19, and 265 of the Constitution. They question the homogeneity imposed by the Notifications, asserting that it is not applicable to their business model. ➡️ Among other grounds, the petitioner argues that the notice under Section 74 has unlawfully assessed multiple financial years via a common order and show cause notice, violating the statutory limitations prescribed therein. ➡️ The petitioner asserts that all necessary particulars of their functioning and tax structure have been disclosed while filing the refund application under Section 54. They argue that grounds for invoking suppression, wilful misstatement, and fraud have not been established. ✔️ Karnataka HC – SELCO Solar Light Private Limited v. The Joint Commissioner of Central Tax and Others [WP 12434 of 2025] |
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🔥📛 Calcutta HC stays order in writ challenging Notification extending time-limit for adjudication ➡️ The Calcutta High Court has stayed an order invoking Notification No. 56/2023 dated December 28, 2023. This notification extended the time limit for passing orders for Financial Years 2019-2020 to August 31, 2024, allowing the Revenue to pass orders under Section 73(9) until that time. ➡️ The petitioner argues that there were no force majeure conditions justifying the invocation of this provision. They claim that extending the period not only invalidates the orders passed under Section 73(9) but also makes the notifications extending the time unsustainable. ➡️ On the merits of the case, the petitioner contends that the reversal of Input Tax Credit (ITC) for a specific supplier, Shree Shyam Iron and Steel Trading Company, was done without assigning any reasons. This action undermines the jurisdictional basis of the matter. ➡️ The Revenue requested time to take instructions from the proper officer regarding the disallowance of the petitioner’s contention about that one supplier. The Calcutta High Court accommodated this request by staying the operation of the order. ➡️ The matter has been posted for further consideration by the Calcutta High Court. ✔️ Calcutta HC – Amar Nath Jaiswal Versus The Assistant Commissioner of State Tax, Howrah and Kadamtala Charge & Ors. [WPA 1860 of 2025] |
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🔥📛 ‘Outward-supply’ no prerequisite to avail ITC, argues ‘Baker Hughes Group Co.’; Karnataka HC stays demand ➡️ The Karnataka High Court has granted an interim stay on the operation of an order-in-original that raised a tax demand of Rs. 6.77 crore against Baker Hughes Group Co. The tax demand was based on the disallowance of Input Tax Credit (ITC) due to the absence of outward supply during the relevant financial year. ➡️ The assessee, Baker Hughes Group Co., argued that there is no legal restriction under Section 17 of the GST law that prevents them from availing ITC. They further stated that the issue of ITC availment was previously examined during a GST audit, and their explanation that outward supply is not a prerequisite for availing ITC was accepted by the audit team. ➡️ Despite the previous acceptance of their explanation during the audit, the assessee received a Show Cause Notice (SCN) after an inspection. This SCN rejected the assessee’s explanation, which had been previously accepted by the audit party. ➡️ The petitioner (Baker Hughes Group Co.) highlighted that the adjudication of the case was assigned to the same officer who had issued the audit report. This officer rejected the assessee’s explanation and raised the tax demand, despite having previously accepted it during the audit process. ➡️ The Karnataka High Court intervened by granting an interim stay, effectively halting the enforcement of the tax demand order. This action provides temporary relief to the assessee while the legal matter is being further examined. ✔️ Karnataka HC – GE Oil and Gas Indiva Pvt. Ltd. Vs. Deputy Commissioner of Commercial Taxes [WP 12209/2025] |
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🔥📛 HC: Directs Revenue to create mechanism enabling ‘non-taxable person’ to file appeal through portal ➡️ The Delhi High Court (HC) has directed the Revenue Department to create or make available a mechanism for non-taxable persons to file appeals through the portal. This is in response to a case where penalty orders were passed against non-taxable individuals (directors) under Section 107 of the CGST Act. ➡️ The HC opined that the exact roles, control, and management of the directors in the company, as well as the benefits they derived from inadmissible CENVAT credit, are factual questions that need to be closely scrutinized by the Appellate Authority. These questions are beyond the scope of a writ petition. ➡️ The HC emphasized that the term ‘any person’ under Section 2(84) includes individuals without any limitations. The distinction between a taxable person and any person is clear, and the responsibility for fraudulent activities in companies is fixed on individuals who retain the benefits of transactions under Section 122(1A). ➡️ The HC highlighted that directors and others who manage companies owe a responsibility to ensure that companies do not engage in fraudulent activities for the availment of ITC. Therefore, Section 122(1A) makes such persons liable under these circumstances. ➡️ The HC stated that the penalty orders against the directors can be appealed. It directed the Department to communicate the mechanism for the directors to avail of their appellate remedies. The directors were also granted the liberty to file a manual appeal if the communication is not received within 15 days. ✔️ Delhi HC – Gurudas Mallik Thakur v. Commissioner of Central Goods and Service Tax & anr. [W.P.(C) 5083/2025] |
