LATEST GST CASE LAWS: 07.06.2025
🔥📛 HC: Directs IGST levy re-examination on expenses not cross-charged considering Circular, Metal-One ruling
➡️ The Delhi High Court has overturned an order by the Adjudicating Authority that had imposed IGST on expenses incurred by Kei Industries, stating that these expenses were not cross-charged to related entities.
➡️ The Court noted that the Adjudicating Authority failed to consider important legal references, specifically Circular No. 199/11/2023-GST and the Metal One judgment, before making its decision.
➡️ It emphasized that the second proviso to Rule 28 of the CGST Rules was incorrectly applied without giving due regard to the clarifications provided in the cited Circular.
➡️ Referring to the Metal One case, the Court highlighted that when the value of a supply is NIL, no tax can be demanded.
➡️ Consequently, the matter has been sent back to the Adjudicating Authority to re-examine the case and issue a fresh order in accordance with the Circular and the Metal One ruling.
✔️ Delhi HC – Kei Industries Limited vs UOI & ors [W.P.(C) 6919/2025]
🔥📛 HC: Send notices via RPAD or other modes where taxpayer unresponsive to portal notice
➡️ The Madras High Court criticized the GST department for passing ex parte assessment orders solely based on notices uploaded on the GST portal, without using other valid modes of service when no response was received from the taxpayer.
➡️ Although uploading notices on the portal is a legally sufficient method of service, the Court emphasized that officers must explore other prescribed methods under Section 169(1) of the GST Act, such as sending notices via RPAD, especially when reminders go unanswered.
➡️ The Court stated that simply completing procedural formalities without ensuring effective communication defeats the purpose of the GST law and leads to avoidable litigation.
➡️ It noted that such mechanical actions not only waste departmental resources but also burden appellate authorities and the judiciary.
➡️ As a result, the Court set aside the ex parte assessment order and remanded the case back to the original authority, instructing them to consider the taxpayer’s response after a 25% deposit of the disputed tax, and pass a fresh order.
✔️ Madras HC – Namasivaya Auto Parts vs The Deputy State Tax Officer I [WP No. 19315 of 2025]
🔥📛 Assessee not liable to pre-deposit amount duplicated in second GST order; earlier payment to be adjusted: HC
➡️ The assessee received two show cause notices demanding recovery of ITC amounting to ₹2.83 crore and ₹60.73 lakh.
➡️ The assessee claimed the ₹60.73 lakh ITC from Fortune Graphics was wrongly duplicated in both notices.
➡️ The assessee had already deposited ₹1.16 crore during the investigation and sought to adjust it towards the mandatory pre-deposit for appeal under Section 107.
➡️ The authority found that the ₹60.73 lakh ITC was indeed duplicated in the impugned orders.
➡️ As a result, the assessee was allowed to file appeals against both orders, with a pre-deposit only required for the ₹2.83 crore order, and the ₹1.16 crore deposited earlier could be adjusted towards this pre-deposit.
✔️ Delhi HC – Rajesh Tanwar v. Commissioner, CGST, Delhi West [W.P.(C) No. 7220 OF 2025]
🔥📛 Refund with 6% interest ordered for ITC misallocation in 2018; 18% interest if delayed further: HC
➡️ The assessee mistakenly deposited ₹3.39 crore in the Electronic Cash Ledger (ECL) between August 2017 and January 2018, thinking that only Input Tax Credit (ITC) could be distributed via the ISD account, and cash couldn’t be used.
➡️ A refund application was filed on 12 April 2018, but the refund wasn’t credited despite the amount being debited from the ECL, and a deficiency memo was later issued on 3 March 2020.
➡️ Believing the refund would be processed, the assessee withdrew the application on 16 March 2020, but the refund still wasn’t received, and no response came even after follow-ups in August 2023.
➡️ Following a High Court hearing, the department asked the assessee on 16 May 2025 to file a fresh refund application, acknowledging the delay.
➡️ The Court held that the assessee was entitled to a refund with 6% interest for two specific periods of delay and ordered 18% interest if the refund wasn’t credited by 30 May 2025.
✔️ Delhi HC – Matrix Cellular (International) Services (P.) Ltd. v. Principal Commissioner State Tax [W.P. (C) No. 5088 of 2024]
🔥📛 Department must frame SOP to address recurring GST lapses since no SCN or pre-consultation uploaded on portal: HC
➡️ The assessee challenged a GST demand order claiming that neither a pre-show cause notice consultation nor a proper show cause notice was uploaded on the GST portal before the order was passed.
➡️ It was argued that the demand order was issued on 5-5-2024, which was beyond the limitation period prescribed by Notification No. 56/2023-CT dated 28-12-2023.
➡️ On examining the case, it was found that although the impugned order was signed on 30-4-2024, the final demand in Form DRC-07 was only uploaded on the portal on 5-5-2024.
➡️ The court noted procedural lapses in GST matters and highlighted the lack of a uniform approach in issuing and uploading notices and orders.
➡️ The court directed the GST department to create a standard operating procedure (SOP) for consistency, required an affidavit from the department, and ordered that no coercive action be taken against the assessee in the meantime.
✔️ Delhi HC – Khaleeque Ahmed v. Superintendent CGST [W.P. (C) No. 6488 of 2025]
