LATEST GST CASE LAWS: 07.05.2025
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🔥📛 Karnataka HC stays demand against United Breweries on employee secondment from group entity ➡️ The Karnataka High Court (HC) has stayed an order related to United Breweries (Petitioner) concerning the secondment of employees from its overseas group entity, Heineken BV. The HC construed the secondment as an import of services by the Petitioner. ➡️ Following the Supreme Court’s judgment in Northern Operating Systems, a demand was issued on the Petitioner. The Petitioner argued that the judgment is inapplicable because the transaction pattern and contracting structure in their case are entirely different. ➡️ The Petitioner further contended that the seconded employees are actually their own employees. They argued before the court that the transaction, being an employer-employee relationship, falls outside the scope of Goods and Services Tax (GST). ➡️ The HC found a prima facie case in favor of the Petitioner and granted interim relief. The court directed the Revenue not to take any coercive or precipitative measures against the Petitioner. ➡️ The HC tagged this case along with a similar matter for further proceedings. ✔️ Karnataka HC – United Breweries Limited vs Deputy Commissioner of Commercial Taxes (Audit) [WP 6595 of 2024] |
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🔥📛 Delhi HC to consider exemption on sale of duty-credit scrips; Stays order ➡️ The Delhi High Court has stayed the demand against an assessee who sold duty credit scrips issued by the Directorate General of Foreign Trade (DGFT) as incentives to exporters. The court issued a notice limited to this specific issue among various others raised in the proceedings. ➡️ The petitioner agreed that if they fail in this writ petition before the High Court, they would be liable to pay the entire demand as per the order. ➡️ The petitioner argued that duty credit scrips are not goods and cited Notification No-14/2022 dated 5th July 2022, claiming it was merely a clarification to support their stance. ➡️ The revenue, however, contended that the Notification is prospective in nature. ➡️ Taking into account the arguments from both parties, the High Court issued a notice in the writ petition, restricted to the issue of the sale of duty credit scrips. It stayed the demand on the condition that the petitioner deposits Rs. 50,000 and listed the matter for further hearing on August 19, 2025. ✔️ Delhi HC – Afflatus International. vs Commissioner of CGST & Ors [W.P.(C) 4850/2025] |
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🔥📛 Order to be set aside as appellate authority failed to exclude time spent before High Court and Supreme Court for limitation period: HC ➡️ The respondent passed an ex-parte order under Section 74, and the assessee filed an appeal against it, which was dismissed due to being beyond the limitation period. ➡️ The assessee argued that no hearing opportunity was provided before the order, and the documents relied upon by the respondent were not given to the assessee. ➡️ The assessee also claimed that they were genuinely pursuing remedies against the assessment order in the High Court and Supreme Court, and thus should benefit from Section 14 of the Limitation Act. ➡️ It was noted that the assessee filed the appeal just two days after the order was passed, and the time spent before the High Court and Supreme Court should have been considered. ➡️ The impugned orders were quashed, and the matter was remanded to pass orders afresh. ✔️ Allahabad HC – Simla Gomti Pan Products (P.) Ltd. v. Commissioner of State Tax U.P. Lko. [WRIT TAX No. – 330 of 2024] |
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🔥📛 Amended Rule 89(5) of CGST Rules, 2017 is clarificatory and applicable to all refund claims: HC ➡️ The assessee, involved in manufacturing and supplying yarns, faced an inverted duty structure from February 2021 to February 2022. Inputs and raw materials were taxed at 18%, while the final product was taxed at 12%, leading to unutilized ITC. ➡️ The assessee filed refund claims under Rule 89(5) due to the inverted duty structure, but the claims were only partially sanctioned. The tax paid on input services was excluded from the Net ITC computation, limiting the refund amount. ➡️ The assessee argued that the GST Council recommended changes to Rule 89(5), which were implemented by the Central Government through Notification No.14/2022 dated 05-07-2022. This notification applied to all refund claims, regardless of when they were filed. ➡️ The case Tirth Agro Technology (P.) Ltd. v. Union of India clarified that the amended Rule 89(5) applies to all refund claims filed before or after 05-07-2022. Therefore, the Authority cannot exclude input services from the Net ITC computation. ➡️ The matter needs to be re-adjudicated according to the amended Rule 89(5) to ensure the assessee receives the appropriate refund. ✔️ Gujarat HC – Filatex India Ltd. v. Union of India [R/SPECIAL CIVIL APPLICATION NO. 3301 of 2025] |
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🔥📛 Assessee’s partial compliance in filing of returns found insufficient to prevent GST registration cancellation: HC ➡️ The assessee failed to file GST returns for six consecutive months from August 2023 to January 2024, leading to a show cause notice being issued on 12 March 2024. ➡️ After the notice, the assessee filed returns for only two months (August and September 2023), which was deemed insufficient. ➡️ The registration was cancelled by an order dated 17 April 2024, as the assessee did not comply with the proviso to Rule 22(4) of the CGST Rules. ➡️ The proviso requires filing all pending returns with applicable tax, interest, and late fees after a show cause notice to avoid cancellation; piecemeal filing does not break the continuity of default. ➡️ The earlier contrary judgment in Phoenix Rubbers M/s. v. The Commercial Tax Officer was held per incuriam as it did not consider the proviso to Rule 22(4), and the writ petition was dismissed. ✔️ Kerala HC – Aisha Padmini v. Superintendent of Central Tax & Central Excise Taxpayer Service Circle [WP(C) NO. 9056 OF 2025] |
