LATEST GST CASE LAWS: 02.12.2025
🔥📛 Delhi-HC to examine RCM liability on courier-services received by Indian subsidiary from foreign principal
➡️ The Assessee, an Indian subsidiary and registered courier agent, challenged the DGGI’s show cause notice questioning the taxability of services received from its foreign principal, asserting that the demand under reverse charge mechanism (RCM) is legally unsustainable.
➡️ The Assessee argued that the underlying activity constitutes performance-based services, for which the place of supply is determined under Section 13 of the IGST Act, leading to the conclusion that GST is not payable in India under RCM.
➡️ The Assessee contended that the activity cannot be treated as “postal or courier services” liable to 18% IGST, relying on the court’s ruling in Metal One to reinforce that the nature of service does not fall under that taxable category.
➡️ The Department maintained that the Assessee must participate in ongoing proceedings and justify its position before the adjudicating authorities instead of seeking complete interdiction through the writ petition.
➡️ The High Court permitted the DGGI to continue the proceedings, but directed that any consequential action will remain subject to the final outcome of the writ petition, noting that the issue involves a substantial question of law requiring judicial determination.
✔️ Delhi HC – Overseas Courier Services India Private Limited vs Union of India and Ors [W.P.(C) 18169/2025]
🔥📛 HC: Quashes Appellate order for overlooking ITC disclosed in GSTR-9 but not claimed in GSTR-3B
➡️ High Court set aside the Appellate Authority’s order, as it failed to justify why the assessee’s IGST ITC claimed in Form GSTR-9 could not be considered when the corresponding claim was missed in GSTR-3B (May–July 2018) due to a bona fide mistake.
➡️ The Court noted that the Appellate Authority did not explain why ITC disclosed in GSTR-9 cannot benefit the assessee or why it could not be adjusted against CGST/SGST liability raised by the department.
➡️ The Appellate findings were termed erroneous and unreasoned, as it merely concluded that the assessee’s plea lacked logic and documentation without specifying which documents were missing.
➡️ The Court highlighted that the assessee had already responded to the Section 73 SCN, explaining the inadvertent error, and held that the Appellate Authority failed to consider this defence properly; reliance was also placed on the DB ruling in Pioneer Co-operative Car Parking Services & Constructions Society Ltd.
➡️ The matter was remanded for fresh adjudication, directing the Appellate Authority to pass a reasoned and speaking order within two weeks, and specifically to consider the assessee’s subsequent payment of ₹83.60 lakh after disposal of the appeal.
✔️ Calcutta HC – Laxmi Ghosh vs. State of West Bengal & Ors. [W.P.A. No 20364 of 2025]
🔥📛 Single ITC transaction can’t give rise to multiple demands across different FYs: HC
➡️ The assessee was denied input tax credit (ITC) on the allegation that invoices were issued without actual supply of goods by the vendor-company, despite the assessee having availed ITC based on valid invoices.
➡️ A show-cause notice was issued for three financial years (2017-18, 2018-19 and 2019-20). The assessee submitted a reply, but the adjudicating authority confirmed the demand and issued DRC-07 orders.
➡️ The assessee pointed out that DRC-07 issued for 2017-18 and 2019-20 were identical to the 2018-19 demand — even though only one transaction occurred between the parties during 2018-19 — making the other two demands duplicate and non-existent in fact.
➡️ Since no transactions attracting ITC existed in 2017-18 and 2019-20, issuing DRC-07 for those years was legally untenable. Multiple notices based on the same transaction were held to be unjustified.
➡️ DRC-07 for FY 2017-18 and 2019-20 were quashed, while the demand for FY 2018-19 was upheld, being the only period linked to an actual transaction between the assessee and the supplier.
✔️ Delhi HC – Devi Industrial Engineers v. Commissioner of CGST [W.P.(C) No. 15874 OF 2025]
🔥📛 Goods cannot be detained if e-way bill was produced before passing of seizure order: HC
➡️ The taxpayer had all genuine documents for purchase and movement of goods (including invoice and seller-generated e-way bill), and there was no dispute regarding authenticity of the transaction.
➡️ The goods were redirected within the State (UP) to another consignee, and the failure to update/generate a fresh e-way bill was attributed to a server/technical glitch that remained uncontroverted by authorities.
➡️ The assessee furnished the e-way bill at the time of interception, demonstrating compliance intent rather than concealment.
➡️ The Court held that non-production of an updated e-way bill, in absence of evidence of tax evasion and supported by credible explanation, cannot be construed as intentional evasion.
➡️ Detention and levy of penalty were quashed as the authorities acted mechanically without establishing intent to evade tax; mere procedural lapse could not justify penal consequences.
✔️ Allahabad HC – Singhal Enterprises v. State of U.P. [WRIT TAX No. 120 of 2021]
🔥📛 Director or partner of fake firm is taxable person liable to penalty under section 122(1): HC
➡️ Investigation established that 41 firms were fraudulently created and used to avail ITC without actual movement or receipt of goods, with the petitioner and his son managing these paper entities.
➡️ Evidence showed that the petitioner orchestrated the formation and operation of bogus firms with the help of associates, resulting in wrongful availment of crores of rupees in ITC.
➡️ The petitioner’s argument that no penalty could be imposed on him personally because he was only a director/partner of firms was rejected by the Court.
➡️ For fake, non-existent and fraudulent firms with no legitimate partners/proprietors, the individual who creates and controls the entities to commit fraud is deemed the “taxable person” and becomes liable for penalty.
➡️ The Court found no infirmity in the penalty order passed after due hearing, clarified that wrongdoers cannot hide behind the façade of shell firms, and dismissed the writ petition.
✔️ Delhi HC – Devender Singh v. Additional Commissioner, Central Goods and Services Tax [W.P.(C) No. 16820 of 2025]
🔥📛 ITC refund cannot be denied to 100% EOU making zero-rated exports; withdrawal order set aside: HC
➡️ The petitioners were 100% Export Oriented Units (EOUs) engaged in manufacturing and exporting tissue paper. They purchased raw materials on payment of GST and filed refund claims on the basis that exports were made without payment of tax, making them eligible for refund of unutilized ITC under Section 54(3) of the CGST Act.
➡️ Though provisional refund was initially sanctioned, the authorities later issued a show cause notice and withdrew the refund citing CBIC Circular No. 172/04/2022-GST dated 06.07.2022.
➡️ The department treated the refund under the concept of deemed exports and applied the circular to deny ITC refund, contending that tax paid on deemed exports could not be treated as ITC for refund calculation.
➡️ The Court held that the petitioners’ supplies were zero-rated exports of finished goods, not deemed exports. Hence, the CBIC circular — applicable only to deemed exporters — was wrongly invoked and could not curtail their statutory entitlement to ITC refund.
➡️ The orders withdrawing the refund were quashed. The Court directed the authorities to grant the refund as originally claimed, reaffirming that EOUs exporting goods without payment of GST are entitled to refund of unutilized ITC under Section 54(3).
✔️ Gujarat HC – Shah Paperplast Industries Ltd. v. Union of India [R/SPECIAL CIVIL APPLICATION NO. 17246 of 2022, 17080 & 18892 of 2023, 96 & 8319 of 2025]
🔥📛 SCN under sec. 74 of UPGST Act quashed as it lacked allegations of fraud or intent to evade tax: HC
➡️ The petitioner filed a writ petition questioning the validity of the show cause notice (SCN) issued under Section 74 of the UPGST Act dated 20.06.2025.
➡️ The SCN did not contain any specific or foundational allegation of fraud, wilful misstatement, or suppression of facts with intent to evade tax—which are mandatory pre-conditions for invoking Section 74.
➡️ The notice merely mentioned Section 74 without disclosing material particulars or reasons showing intent to evade tax, indicating a jurisdictional defect and misuse of the provision.
➡️ Since statutory ingredients for invoking Section 74 were missing on the face of the notice, the Court held that the assumption of jurisdiction under Section 74 was unsustainable in law.
➡️ The SCN dated 20.06.2025 was quashed; however, the Department was granted liberty to initiate proceedings under any other appropriate provision of the UPGST Act, in accordance with law.
✔️ Allahabad HC – Varanasi Sangam Expressway (P) Ltd v. Commissioner of State Tax [WRIT TAX No. 1028 of 2025]
🔥📛 Order set aside for lack of hearing and matter remanded for fresh decision subject to cost of Rs. 50000: HC
➡️ The assessee challenged the demand order on the ground that it was passed without granting an effective opportunity to present submissions on merits.
➡️ The Delhi High Court relied on its earlier ruling in Sugandha Enterprises v. Commissioner of DGST (W.P.(C) 4779/2025), where in similar circumstances the matter was remanded due to lack of adequate opportunity for hearing.
➡️ The impugned order was quashed on the condition that the assessee pays ₹50,000 as cost, acknowledging that no reply had been filed to the show cause notice.
➡️ The assessee was allowed to file a reply to the SCN within the prescribed period, and the authority was directed to pass a fresh order after granting proper hearing.
➡️ The assessee’s challenge to CBIC Notifications extending the limitation period under Section 73 for FY 2017–18 was not adjudicated because a similar issue is already pending before the Supreme Court in HCC-SEW-Meil-AAG JV v. ACST; hence, the outcome of present proceedings will depend on the Supreme Court’s final ruling.
✔️ Delhi HC – Bird Delhi General Aviation Services (P.) Ltd. v. Sales Tax Officer II Avato [W. P. (C) no. 17254 OF 2025]
🔥📛 Delhi HC declines to interfere with section-74 notice alleging suppression, despite monthly/annual return disclosures
➡️ The writ petition questioned the validity of a Section 74 notice issued toward the end of the fifth year for FY 2019-20, asserting that the extended period could not be invoked in the absence of suppression.
➡️ The Assessee argued that all monthly GSTR filings, annual return, and ITC reconciliation were duly furnished on time, and therefore there was no concealment or wilful misstatement capable of triggering Section 74.
➡️ It was emphasized that the department had complete documentation—including reconciliations and audit replies—well before issuance of the SCN, demonstrating transparency and disproving the allegation of intent to evade tax.
➡️ The Delhi High Court reiterated that writ jurisdiction is normally not exercised at the show-cause-notice stage, and SCNs must proceed to adjudication unless there is a jurisdictional error or violation of natural justice.
➡️ The Court refused to quash the SCN and directed the Assessee to file a detailed reply, with liberty to raise all grounds—specifically the absence of suppression and inapplicability of the extended limitation—before the adjudicating authority, which must deal with them in accordance with law.
✔️ Delhi HC – UPS SCS (INDIA) PVT. LTD. V/S UNION OF INDIA & ANR. [W.P.(C) 18100/2025]
🔥📛 SC restores excise demand on Cotton fabrics processed with ‘aid of power’; Allows Revenue’s appeal
➡️ The SC allowed the Revenue’s civil appeal and set aside the CESTAT Ahmedabad order that had quashed an excise duty demand of ₹5.4 crore (with interest and penalty) on Bhagyalakshmi Processor Industries.
➡️ The SC held that the benefit of the ‘nil duty’ exemption for cotton fabrics processed without the aid of power or steam was wrongly granted by CESTAT, as the assessee had in fact used electricity-powered equipment in the manufacturing process.
➡️ Relying on precedents such as Impression Prints and Rajasthan State Chemical Works, the Court reiterated that the correct test is whether power is used at any stage of production, and the assessee cannot claim exemption by artificially splitting the overall process into isolated stages.
➡️ Since grey fabric was processed into final cotton fabric using an electric motor right from the inception of operations, the SC concluded that excise duty was rightly leviable for the full period (October 1996 – December 2002).
➡️ With the CESTAT findings rejected, the original demand order of the Commissioner — including duty, interest, and penalty — has been reinstated in full.
✔️ SC – Commr. of Cus. Cen. Exc. Ser. Tax, Rajkot vs Narsibhai Karamsibhai and ors. [C.A. No. 3405-3407/2012]
