LATEST GST CASE LAWS: 03.07.2025
🔥📛 Delay in filing appeal against ex-parte order condoned as SCN issued to assessee’s outdated email ID: HC
➡️ Merely sending notices to an outdated or inactive email address does not constitute effective service under Section 169(1) of the CGST Act. Authorities are required to explore alternative valid modes of service if there is no response from the taxpayer.
➡️ When an ex-parte assessment order is passed without ensuring proper service of notice, it undermines the principles of natural justice and may be open to challenge.
➡️ If the assessee provides a bona fide explanation for delayed filing—such as unawareness of notices sent to an old email—such reasons should be given due consideration.
➡️ Although appeals filed beyond the prescribed six-month period are generally barred, courts may condone such delays where genuine service defects and reasonable causes are demonstrated.
➡️ The ruling underscores that procedural compliance by tax authorities must be substantive and meaningful. Failure to ensure proper notice invalidates the expectation of timely appeal, and fairness dictates that delay be condoned in such cases.
✔️ Madras HC – Lakshmanan Murugaraj v. Commissioner of Income-tax (Appeals) [W.P. No. 5101 of 2025]
🔥📛 Order to be quashed as credit ledger was blocked without hearing and based solely on enforcement reports: HC
➡️ The electronic credit ledger was blocked without providing the petitioner a chance to be heard. This violated the principle of natural justice, as no prior notice or hearing was granted before invoking Rule 86A.
➡️ The impugned order lacked independent or cogent reasoning. It merely echoed enforcement reports without applying the authority’s own mind, thereby constituting a “borrowed satisfaction,” which is not permissible under law.
➡️ The order only stated that the supplier was involved in fake invoicing and that the business premises were non-existent. These generalized claims were not backed by specific evidence or individualized findings against the petitioner.
➡️ Reliance on third-party investigation reports without due verification or correlation to the petitioner’s conduct was found legally unsustainable. The order failed to establish a direct link between the petitioner and the alleged fraudulent activity.
➡️ Due to procedural impropriety and lack of substantive justification, the court quashed the blocking of the electronic credit ledger. It reaffirmed that such drastic measures under Rule 86A must be exercised with strict adherence to legal safeguards and reasoned decision-making.
✔️ Karnataka HC – Lead Factory v. Assistant Commissioner of Commercial Taxes [WRIT PETITION NO. 7474 OF 2025 (T-RES)]
🔥📛 SCN served via GST portal is valid but on non-response by assessee requires officer to try alternate prescribed modes like RPAD: HC
➡️ The court upheld that uploading a show cause notice on the GST common portal constitutes valid service under Section 169 of the GST Act.
➡️ When an assessee does not respond to portal-based notices, authorities should consider other statutory modes of service (e.g., RPAD) to ensure actual receipt and compliance, aligning with the principles of natural justice.
➡️ The assessment order was set aside because the assessee was not afforded a personal hearing, which is a mandatory requirement before passing an adverse order.
➡️ The court emphasized that mere procedural compliance, such as uploading notices without ensuring actual communication, undermines the objectives of fair adjudication under the GST law.
➡️ The matter was remanded back for de novo adjudication, with the assessee expressing willingness to deposit 25% of the disputed tax, demonstrating bona fide intent and facilitating fair reassessment.
✔️ Madras HC – TVL. Seema Leather Exports v. Commercial Tax Officer [WP No. 19810 of 2025]
🔥📛 Ex-parte order to be set aside as notice served only through portal and officer failed to attempt other service modes: HC
➡️ Uploading a show cause notice (SCN) on the GST portal under the “View Additional Notices and Orders” section qualifies as a valid mode of service under Section 169 of the GST Act, but it does not constitute effective service in ensuring actual receipt and awareness by the assessee.
➡️ The assessee contended they were unaware of the uploaded SCN, leading to their failure to respond. Proceeding with the assessment without giving them a real opportunity to be heard breached principles of natural justice.
➡️ Authorities are expected to use other prescribed methods of service under Section 169 (like email, registered post, or personal delivery) to ensure the assessee receives actual notice, especially when the portal upload alone may not ensure communication.
➡️ Passing an ex parte assessment order solely on the ground that portal-based service was fulfilled is inadequate if it results in denial of a fair hearing. Procedural compliance should not override substantive justice.
➡️ Given the lack of effective service and denial of hearing, the impugned assessment order was set aside. The matter was remanded for fresh adjudication after providing the assessee a proper opportunity to respond.
✔️ Madras HC – Vels Constructions v. State Tax Officer [W.P. No. 20374 of 2025]
🔥📛 Amount deposited ‘under protest’ can not be treated as admission of liability enabling department to impose interest and penalty: HC
➡️ Reversing input tax credit (ITC) under protest, particularly under departmental pressure, does not amount to admitting tax liability. Such reversals cannot be interpreted as voluntary compliance.
➡️ ITC cannot be reversed merely based on suspicion. The department must conduct a proper investigation and establish wrongdoing with evidence before proceeding with any demand.
➡️ For any payment to be considered voluntary, it must be made with free will and without coercion. Payments made under protest do not fulfill this criterion and cannot justify imposition of penalties or interest.
➡️ Section 74, which involves fraud or willful misstatement, cannot be invoked without concrete evidence. Mere reversal of ITC under protest is not sufficient ground to trigger this provision.
➡️ The order imposing penalty and interest was quashed by the court as it was based on a flawed assumption of admitted liability. The department cannot treat a protest deposit as conclusive proof of tax evasion.
✔️ Himachal Pradesh HC – Shyama Power India Ltd. v. State of H. P. [CWP No. 6990 of 2025]
