LATEST GST CASE LAWS: 02.06.2025
🔥📛 HC: Allahabad HC upholds Sec. 122 adjudication powers, rejects ‘Criminal Court’ trial plea
➡️ The Allahabad High Court dismissed a writ petition filed by Patanjali Ayurved challenging adjudication under Section 122 of the CGST Act, which deals with the imposition of penalties by a proper officer.
➡️ The Court clarified that Section 122 (penalties) is distinct from Sections 132 to 138 (prosecution), and does not require trial by criminal courts as argued by the petitioner.
➡️ It held that the conclusion of proceedings under Section 74 (related to tax determination) does not automatically cancel or stop penalty proceedings under Section 122.
➡️ The Court found the petitioner’s interpretation of the CGST Act to be legally incorrect, stating that accepting such a view would undermine the Act’s objectives.
➡️ Consequently, the Court allowed the GST authorities to proceed with the penalty proceedings based on the previously issued show cause notice.
✔️ Allahabad HC – Patanjali Ayurved Ltd v. Union of India & Ors [WRIT-TAX NO. 1603 OF 2024]
🔥📛 HC: Allows taxpayer to move application for regular registration under correct-form despite delay
➡️ The Rajasthan High Court heard a writ petition from an assessee who had received a provisional GST registration but, due to wrong legal advice, did not apply for regular registration under the correct rule (Rule 24(2)) and instead wrongly applied for a fresh registration under Rule 10.
➡️ Despite holding a valid provisional registration that was never cancelled, the assessee continuously followed up with the authorities for a regular registration but was misguided in the process.
➡️ The GST Department opposed the grant of regular registration, arguing that the assessee did not disclose its existing provisional registration and failed to use the prescribed Form GST REG-26 to convert it to regular registration.
➡️ The High Court acknowledged that the assessee was eligible for GST registration and found merit in the explanation that the delay was due to incorrect advice, thus allowing the assessee to file Form GST REG-26 along with a request to condone the delay.
➡️ On the issue of whether two GSTINs can exist under one PAN in the same State, the Court asked the GST authorities to examine the matter and disposed of the petition accordingly.
✔️ Rajasthan HC – Khusali Motors vs. The Chief Commissioner, CGST [D.B. Civil Writ Petition No. 6288/2023]
🔥📛 Applicant who was involved in fake GST invoices and ITC scam would be entitled to regular bail after year-long custody: HC
➡️ The accused applied for regular bail in a case under Sections 132(1)(b) and 132(1)(i) of the CGST Act, where he was alleged to have created fake invoices for 232 non-existent firms, enabling fraudulent Input Tax Credit (ITC).
➡️ The prosecution’s case was mainly based on documents and a confession made by the accused under Section 70 of the CGST Act, but no direct evidence linking him to the fake firms or verifying the associated bank accounts was presented.
➡️ The complaint did not contain details of the 4088 firms that allegedly received the fake invoices, nor was any documentary proof provided to show the accused operated or controlled the said firms.
➡️ The accused’s confession, obtained during custodial interrogation, is subject to verification during trial, which had not yet started, with no witnesses examined and charges yet to be framed.
➡️ Considering the nature of the offence (triable by a Magistrate with a maximum sentence of five years), the completion of the investigation, and the fact that the accused had already spent over a year and three months in custody, the court granted him regular bail during the trial’s pendency.
✔️ Allahabad HC – Praveen Kumar v. Directorate General of GST Intelligence [CRIMINAL MISC. BAIL APPLICATION No. – 23980 of 2024]
🔥📛 SC dismissed SLP against HC ruling that denial of request to cross-examine certain witnesses was justified
➡️ The assessee challenged a tax demand involving fraud and denial of cross-examination of witnesses, arguing it was unfair.
➡️ The adjudicating authority had issued a detailed order, using documentary evidence to show the assessee made undeclared sales to avoid GST.
➡️ The authority denied cross-examination of witnesses, stating their statements only supported already available documentary proof.
➡️ The High Court upheld this, saying rejection of cross-examination was not unjustified given the strong documentary evidence.
➡️ The Supreme Court dismissed the assessee’s Special Leave Petition (SLP) as not maintainable, but allowed them to pursue an appeal through proper legal remedy.
✔️ SC – Vallabh Textiles v. Additional Commissioner, Central Tax [SLP(C) No.-013670 – 2025]
