LATEST GST CASE LAWS: 04.11.2025
🔥📛 Madras HC reserves judgment in bar-licensee’s plea challenging GST on licenses issued by TASMAC
➡️ Retail bar operators filed writ petitions before the Madras High Court challenging the levy of GST under the Reverse Charge Mechanism (RCM) on licence fees paid to TASMAC under the Tamil Nadu Liquor (Retail Vending in Shops and Bars) Rules, 2003.
➡️ The petitioners contend that TASMAC, being a company incorporated under the Companies Act, functions as a commercial entity and not as a “State” under Article 12 of the Constitution. Consequently, Entry 5 of Notification No. 13/2017–CT (Rate), which covers services supplied by the Government or local authority, does not apply to licence fees paid to TASMAC.
➡️ Petitioners argue that TASMAC issues licences in its own capacity and merely retains an agency commission, implying that the licence fee is not consideration for a sovereign act. Therefore, GST under RCM is not legally sustainable as the transaction lacks the character of a service provided by the Government.
➡️ The Revenue contends that TASMAC operates as an agent of the State in granting liquor vending licences. The licence fee represents consideration for sovereign permission to trade in liquor, falling squarely within Entry 5 of Notification No. 13/2017–CT (Rate), thereby making the licensees liable under RCM.
➡️ TASMAC asserts that its operations are governed by statutory rules and tender conditions requiring GST registration and compliance. The High Court has reserved its judgment for pronouncement on 15 November 2025, leaving the key issue—whether TASMAC acts in a sovereign or commercial capacity—central to determining RCM applicability.
✔️ Madras HC – S.Krishnamurthy & ors and ors vs The Managing Director, Tamil Nadu State Marketing Corporation Ltd.
🔥📛 Telangana HC stays GST demand on mineral royalty, observing pendency before Supreme Court
➡️ The Telangana High Court granted an interim stay on the order confirming GST demand on amounts deducted towards royalty/seigniorage, District Mineral Foundation (DMF), and State Mineral Exploration Trust (SMET) contributions.
➡️ The assessee challenged Entry 17(viii) (SAC 9973) of Notification No. 11/2017–CT (Rate), arguing that levying GST on royalty/seigniorage is unconstitutional and violates Articles 14, 19(1)(g), and 265 of the Constitution, as it exceeds the Centre’s taxing competence.
➡️ Referring to the MADA case, the assessee argued that mineral rights taxation falls exclusively under Entry 50 of List II (State List), and that GST under Article 246A cannot override this constitutional allocation. The levy of GST on licensing services for mineral rights was therefore claimed to be beyond the Union’s authority.
➡️ The assessee contended that royalty is consideration for the enjoyment of mineral rights—not a tax—and that seigniorage, DMF, and SMET payments are not paid directly to the Government but only routed through the assessee as an intermediary, with no mineral extraction licence existing to justify such charges.
➡️ The assessee highlighted the pending Supreme Court proceedings in Udaipur Chambers of Commerce and Industry v. Union of India on the same issue and sought similar interim protection as previously granted by the Telangana HC in India Cements Ltd. (Aug 14, 2023) and MEIL–NCC (JV) (June 26, 2025).
✔️ Telangana HC – PLR-NCC-NECL (JV) vs The Joint Commissioner of Central Tax [W.P. No. 32901 of 2025]
🔥📛 Delhi HC to examine taxability of property conversion from leasehold-to-freehold; Restrains DDA’s recovery move
➡️ The Delhi High Court examined whether the conversion of leasehold property to freehold by DDA constitutes a “supply of goods or services” under the CGST Act, or whether it merely forms part of a sale of immovable property excluded from GST under Section 7(2) read with Schedule III (Entry 5).
➡️ DDA justified the GST levy (Rs. 30.26 lakhs on conversion charges) based on Note 5 of its SOP dated 28.03.2025, claiming that conversion amounts to foregoing the right to receive future rent, and hence is taxable as a supply of service under Para 5(e) of Schedule II (“agreeing to the obligation to refrain from an act or to tolerate an act”).
➡️ Petitioners argued that conversion merely perfects ownership rights and is part of the process of sale of the property by DDA. Citing the Supreme Court ruling in Charanjit Kaur, they contended that such transactions do not amount to a supply and thus fall outside the ambit of GST.
➡️ Relying on Charanjit Kaur, the Delhi HC took a prima facie view that conversion is part of the sale process of immovable property and hence not liable to GST under Section 7(2) of the CGST Act. The Court also noted that DDA’s 2016 Conversion Scheme and rate fixation of 23.06.2023 contained no reference to GST, even though issued after GST’s implementation.
➡️ The Court granted interim protection to the Petitioners by restraining DDA from any coercive recovery actions, and directed DDA and the GST Department to file short affidavits explaining the legal and policy basis of the levy. The matter thus remains under judicial scrutiny pending detailed examination.
✔️ Delhi HC – Mala Sahni Seth & Anr. v. Delhi Development Authority & ors. [W.P.(C) 16214/2025]
🔥📛 HC: Delay in issuing deficiency memos in refund adjudication attracts statutory interest; Reiterates settled law
➡️ The Delhi High Court reiterated that refund applications under Section 54(7) of the CGST Act must be adjudicated within 60 days from the date of receipt of a complete application, ensuring timely relief to taxpayers.
➡️ As per Rule 90(2) of the CGST Rules, any deficiency memo must be issued within 15 days of filing; delays beyond this period are not permissible and cannot be used to deny or delay refunds.
➡️ The Court relied on its earlier judgments holding that delayed issuance of deficiency memos cannot prejudice the taxpayer, and such administrative lapses do not reset the statutory timeline for refund processing.
➡️ The Court reaffirmed that interest under Section 56 accrues at 6% for delays beyond 60 days, and 9% where refunds arise pursuant to appellate orders, reinforcing accountability for administrative delays.
➡️ Acknowledging the adverse business impact of refund delays, the Court directed the Revenue to fix a hearing date and decide the refund claim within one month, while preserving the taxpayer’s rights and remedies under law.
✔️ Delhi HC – Gameloft Software Private Limited v. Assistant Commissioner of Central Tax & anr. [W.P.(C) 16315/2025]
🔥📛 HC: Multiple invoices under one e-way-bill, a technical error, not malafide intent; Quashes penalty
➡️ The Court held that imposition of penalty under Section 129 requires clear evidence of an intent to evade tax. Mere procedural or technical lapses in documentation do not justify penal action.
➡️ Although multiple invoices were issued on different dates, all goods were covered by valid tax invoices and a single, corresponding e-way bill showing the consolidated value—indicating transparency and compliance.
➡️ The Court viewed the use of one e-way bill for four invoices as a technical error without any mala fide intention, thereby not warranting penalty under Section 129.
➡️ Reaffirming its ruling in Vishnu Singh & Ors., the Court emphasized that non-cancellation of a valid e-way bill within its validity period establishes the bona fides of the taxpayer and negates any inference of evasion.
➡️ The Court quashed the penalty order and directed refund of the amount deposited, reiterating that proceedings under Section 129 must be founded on cogent material indicating intent to evade tax, not on procedural irregularities.
✔️ Allahabad HC – Kent Cables Pvt. Ltd. v. State of U.P. & Ors. [WRIT TAX No. – 1372 of 2019]
