LATEST GST CASE LAWS: 01.04.2026
🔥📛 GST on FSI premium & redevelopment payments under Bombay HC scanner; Grants interim-relief, considering monetary jurisdiction
➡️ The Bombay High Court granted interim protection to the petitioner by directing that no coercive recovery action be taken in respect of a GST demand of approximately ₹122 crore raised under Section 73, pending adjudication of both jurisdictional and substantive challenges.
➡️ The petitioner strongly contested jurisdiction, arguing that the order was passed by a Deputy Commissioner (Audit) acting beyond authority, since audit officers are not competent adjudicating authorities for such proceedings, especially for high-value demands.
➡️ It was further argued that as per Circular No. 31/05/2018-GST, adjudication powers are distributed based on monetary limits, and demands exceeding ₹100 crore must be handled by higher-ranking officers; hence, an order passed by an audit officer in this case is without jurisdiction and legally unsustainable.
➡️ On merits, the petitioner contended that payments towards FSI premium, fungible FSI, and planning charges are statutory levies under municipal/regulatory frameworks and do not qualify as “consideration” for a taxable supply under Section 7 of the CGST Act.
➡️ The petitioner also argued that compensation paid to tenants or society members for surrender of occupancy/rehabilitation rights does not involve transfer of development rights or FSI, as such rights are not legally owned by tenants; therefore, invoking reverse charge under Entry 5 and 5B of Notification No. 13/2017-CT (Rate) is erroneous in the absence of any identifiable taxable supply.
✔️ Bombay HC – Prestige BKC Realtors Private Limited vs State of Maharashtra and others [WRIT PETITION (L) NO. 7706 OF 2026]
🔥📛 Bombay HC continues interim relief against Rule 31 SCN on corporate guarantee valuation
➡️ The Bombay High Court (Nagpur Bench) has continued interim relief against a show cause notice issued under Rule 31 of the CGST Rules, after considering the assessee’s argument that valuation of corporate guarantee services should not fall under the residual valuation method.
➡️ The assessee contended that, prior to the insertion of sub-rule (2) to Rule 28 (via Notification No. 52/2023 dated October 26, 2023), such transactions were specifically governed by Rule 28 dealing with related party transactions, and not by Rule 31.
➡️ It was further argued that CBIC Circular No. 225/19/2024-GST (dated July 11, 2024) clarifies that valuation of corporate guarantees between related parties must be determined under Rule 28, reinforcing that resort to Rule 31 is inappropriate.
➡️ The assessee highlighted that even the Revenue acknowledged that CBIC circulars are binding on departmental officers, a position supported by judicial precedent relied upon by the Revenue itself, thereby strengthening the assessee’s challenge to the notice.
➡️ Taking note of these submissions and granting time to the Revenue to examine the issue further, the Court has adjourned the matter for detailed hearing on April 17, 2026, while maintaining interim protection for the assessee.
✔️ Bombay HC – D. P. Jain & Co. Infrastructure Pvt. Ltd. Vs. Union of India and Ors. [WRIT PETITION NO. 2087/2025]
🔥📛 Bombay HC to examine recovery proceedings ignoring credit note-driven negative liability statements
➡️ The Bombay High Court (Nagpur Bench) has issued notice in petitions challenging recovery proceedings initiated under Section 79 of the MGST Act, 2017, where the alleged tax demand arose from adjustment of output tax liability through credit notes.
➡️ The assessee argued that credit notes were validly issued under Section 34 and properly disclosed on the GST portal, resulting in corresponding reduction of input tax credit (ITC) for recipients and correct reflection of negative liability carried forward, thereby negating any short payment of tax.
➡️ It was further contended that detailed representations, including tax liability reconciliations and negative liability statements, were submitted to the department, but were not considered before initiating coercive recovery actions such as garnishee proceedings against bank accounts.
➡️ The Court declined to grant interim relief, observing that prior intimation had been given by the Revenue under Rule 142(1)(b) regarding possible recovery action, and that the assessee failed to approach the Court in a timely manner despite being aware of the proceedings.
➡️ Emphasizing the delay in filing the petition, the Court held that such unexplained delay disentitles the assessee from interim protection, while keeping the matter open for adjudication on merits and listing it for further hearing on April 10, 2026.
✔️ Bombay HC – Best Agrolife Limited vs. State of Maharashtra & Ors. [Writ Petition No. 2548 of 2026]
🔥📛 Bombay HC declines to vacate stay on adjudication citing Assessee’s compliance via bank guarantee
➡️ The Bombay High Court refused to vacate or modify its earlier ad-interim relief that stayed coercive action arising from a show cause notice issued under Section 74 of the GST law, subject to the assessee furnishing a bank guarantee of ₹40 lakhs, which condition had already been complied with.
➡️ The Revenue argued that the writ petition was premature since it was filed at the pre-adjudication stage without exhausting statutory remedies, and that continuation of the stay would बाधा (hinder) timely adjudication within the limitation period, thereby causing prejudice to revenue interests.
➡️ The assessee countered that it had fulfilled the court-imposed condition of furnishing the bank guarantee and emphasized that the Revenue had not yet filed any reply to the main writ petition, weakening its plea for vacating the interim relief.
➡️ The Court took note of the procedural status and competing concerns, and implicitly acknowledged that the continuation of interim protection would not unjustly prejudice the Revenue at this stage, particularly when the matter had not progressed due to lack of response from the Revenue.
➡️ Accordingly, the Court directed that the stay on the impugned show cause notice dated 29.09.2025 shall continue until further orders, and listed the matter for admission/hearing on June 11, 2026, thereby preserving the status quo pending further consideration.
✔️ Bombay HC – Union of India & Ors. vs. Shirdi Country Inns Private Limited [WP/12579/2025]
🔥📛 HC: Reiterates statutory 15-days reply timeline in refund proceedings; Quashes rejection order citing natural justice principle
➡️ Bombay HC held that issuing a show cause notice granting only 7 days to respond, instead of the mandatory 15 days prescribed under Rule 92(3) of the CGST Rules, is clearly illegal and contrary to statutory requirements, rendering the proceedings fundamentally flawed from inception.
➡️ It was emphasized that Rule 92(3) mandates a structured process: issuance of notice in FORM GST RFD-09, allowing 15 days for reply, followed by consideration of such reply and grant of personal hearing before passing any adverse refund order.
➡️ The Court found a violation of principles of natural justice where the refund was rejected without considering the assessee’s emailed reply and without granting a personal hearing, especially when such hearing was specifically requested.
➡️ The Revenue’s assumption that no reply was filed merely because it was not uploaded on the GST portal was held to be unjustified; procedural or portal-based requirements cannot override substantive rights or due process obligations.
➡️ The Court criticized the mechanical and hurried approach of the अधिकारी, holding that bypassing statutory timelines and hearing requirements is arbitrary and undermines rule of law, and accordingly set aside the order with directions for fresh adjudication after proper notice, adequate opportunity, and fair hearing.
✔️ Bombay HC – Golden Cryo Pvt. Ltd. v. Union of India & Ors. [WRIT PETITION NO. 1268 OF 2026]
