LATEST GST CASE LAWS: 01.07.2025
🔥📛 Limitation-period u/s 73 expires on matching calendar-date or 3 months? Gujarat HC to examine
➡️ IndusInd Bank has approached the Gujarat High Court challenging a show-cause notice (SCN) issued on November 30, 2024 under Section 75(10) of the CGST Act, 2017. The bank argues that the SCN is time-barred for FY 2020–21 and should be quashed for being issued beyond the legally permissible period.
➡️ The Petitioner contends that since the due date for filing annual returns for FY 2020–21 was extended to February 28, 2022, the three-month period for issuing SCN should be calculated from this date, making the last permissible date November 28, 2024.
➡️ IndusInd Bank relies on the Andhra Pradesh High Court’s decision in The Cotton Corporation of India, where the Court held that ‘three months’ must be interpreted by matching the corresponding calendar date, not by counting 90 days. This supports the argument that the SCN dated November 30 is beyond the limitation period.
➡️ The Petitioner further cites the Supreme Court ruling in Himachal Techno Engineers & Anr, where it was clarified that “three months” is distinct from “90 days” and should end on the same date in the third month as the date from which the period begins. This bolsters the contention that the SCN should have been issued on or before November 28, 2024.
➡️ Recognizing the substantive legal issue, the Gujarat High Court has issued notice in the matter and has scheduled it for further hearing on July 17, 2025, indicating judicial scrutiny over the limitation framework for SCNs under Section 75(10).
✔️ Gujarat HC – IndusInd Bank vs State of Gujarat & Ors [R/SPECIAL CIVIL APPLICATION NO. 7764 of 2025]
🔥📛 Delhi HC stays parallel proceedings initiated by Central GST authorities w.r.t. excess ITC availment
➡️ The Central GST authorities initiated proceedings against the taxpayer alleging excess input tax credit (ITC) for FY 2017–18 to 2023–24, despite the fact that the State GST department had already assessed the same issue for most of the relevant period.
➡️ The core issue arises from discrepancies between ITC claimed in GSTR-3B (filed by the taxpayer) and data auto-populated in GSTR-2A (based on supplier filings), leading to a show cause notice (SCN) by the Central authorities.
➡️ The Petitioner argued that the Central proceedings are barred under Section 6(2)(b) of the CGST Act, which prohibits initiation of proceedings by one tax authority if the other (State or Centre) has already undertaken action on the same matter.
➡️ Taking note of the overlapping jurisdiction and prior State assessment, the Delhi High Court stayed the proceedings initiated by the Central authorities, thereby providing interim relief to the taxpayer.
➡️ The Court has issued notice to the Revenue and granted it four weeks to file a counter affidavit, signaling that the legal determination on concurrent jurisdiction and ITC adjudication is under active judicial scrutiny.
✔️ Delhi HC – Applied Communication and Control vs The Assistant Commissioner of CGST & Anr [W.P.(C) 6836/2025]
🔥📛 Exemption denial on supply of ‘electrical energy’ generated through windmills before Karnataka HC
➡️ The Karnataka High Court has issued notice and granted an interim stay on the recovery of a GST demand of approximately ₹9.44 crore, raised on the supply of electricity from windmills owned by the petitioner.
➡️ The petitioner contends that the supply of electrical energy is fully exempt under Entry No. 104 of Notification No. 2/2017 – Central Tax (Rate), challenging the department’s classification of the supply as transmission or distribution of electricity.
➡️ It is argued that, as a private wind energy generator, the petitioner cannot legally undertake transmission or distribution of electricity, which are functions reserved for licensed authorities like KPTCL/ESCOMs.
➡️ The petitioner claims that the Show Cause Notice (SCN) is time-barred, issued without jurisdiction, violates natural justice, and is based on erroneous assumptions regarding the nature of the supply.
➡️ Since the case lacks any elements of fraud, wilful misstatement, or suppression, the petitioner asserts that invoking Section 74—and its associated penalties—is legally unsustainable and improper.
✔️ Karnataka HC – Vena Energy KN Wind Power Private Limited vs The Assistant Commissioner of Commercial Tax (Audit) & Ors. [WP/103534/2025]
🔥📛 HC: Quashes notice directly served to Bank-Manager; Allows taxpayer to prove no-dues payable vis-a- vis defaulter
➡️ The Court quashed the recovery notice served directly on the Branch Manager of the bank, holding that such service was not in accordance with the CGST Act’s prescribed procedure under Section 79(1)(c).
➡️ The petitioner successfully contested the notice by asserting: (i) the assessee did not maintain a bank account with the Gurugram branch specified in the notice, and (ii) no dues were actually payable to the alleged defaulting party.
➡️ The Court emphasized that any person receiving a notice under Section 79(1)(c) has the statutory right to demonstrate that they do not owe, and are not likely to owe, any amount to the defaulting party at the time of service.
➡️ Referring to the S.J.R. Prime Corporation case, the Bombay HC reiterated that bypassing the mandated procedure by directly notifying banks violates the legal safeguards provided under the CGST Act.
➡️ While the original notice was quashed, the Court left the door open for the Revenue to issue a fresh notice following proper legal procedure, ensuring due process is upheld.
✔️ Bombay HC – Galaxy International vs. UOI & Ors. [WRIT PETITION NO. 11399 OF 2024]
🔥📛 HC: Service of notice for detention / confiscation via WhatsApp invalid; Remands matter
➡️ The Court held that service of notices via WhatsApp is not a valid method under Section 169 of the CGST Act, 2017. While temporarily accepted during the COVID-19 pandemic, this mode no longer holds legal validity for initiating or concluding proceedings.
➡️ The Court ruled that detention proceedings against the assessee were without jurisdiction as no valid notice was issued prior to the confiscation under Section 130. The absence of a proper notice undermined the legality of the action.
➡️ It was reiterated that under Section 130(1)(v), the vehicle owner must be given a chance to prove lack of knowledge or involvement in the alleged offense. Serving notice directly on the owner is a mandatory procedural safeguard.
➡️ The Court noted serious procedural deficiencies, including the unclear and incomplete record of actions taken under Section 130. The counter affidavit failed to explain how and when the confiscation order was served, highlighting non-compliance with due process.
➡️ Referring to precedent, including Lakshay Logistics (Gujarat HC), the Kerala HC quashed the Single Judge’s order, set aside the confiscation and detention orders, and remanded the matter with directions for fresh issuance of valid notice and proper opportunity of hearing.
✔️ Kerala HC – Mathai M.V. vs. The Senior Enforcement Officer [WA NO. 973 OF 2025]
