LATEST GST CASE LAWS: 05.05.2025
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🔥📛 GST is gross consideration law, argues ASG Venkataraman in high stakes gaming batch before SC ➡️ The Supreme Court (SC) is hearing a case related to online gaming and its taxation under the Goods and Services Tax (GST). The case involves three segments: online gaming (including rummy and fantasy games), casinos, and turf clubs. The High Court’s (HC) previous decision in the Gameskraft case, which treated the transactions as a “Game of Skill” (GoS), is being challenged. ➡️ The Revenue’s side, represented by Additional Solicitor General (ASG) Venkataraman, argues that the distinction between GoS and “Game of Chance” (GoC) is irrelevant for GST purposes. They pose seven questions, three of which pertain to the constitutionality of the matter. ➡️ ASG Venkataraman emphasizes that once stakes are involved, the activity constitutes gambling and should be taxed on a gross basis. He explains that if the gaming companies’ plea is accepted, GST collections would significantly decrease to 10% of Rs. 2 lakh crore. He also highlights that the consideration for taxation includes the entire amount of money involved, not just the commission. ➡️ The ASG rebuts the gaming companies’ argument that they are merely facilitators. He asserts that without an operator, the games cannot function, and thus the platforms are integral to the gaming process. Regarding fantasy games, he submits that they are essentially “blind shots” and should be considered GoC. ➡️ ASG Venkataraman contends that even if a transaction is deemed illegal or res extra commercium (outside the realm of commerce), the state’s power to tax remains valid if the activity falls within the scope of taxation. The Revenue’s arguments are expected to conclude the following day. ✔️ SC – DGGI vs. Gameskraft Technologies Pvt. Ltd.[ SLP(C) No.19366-19369/2023] |
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🔥📛 HC: State cannot promise to hand out Centre’s share under Tax Reimbursement Scheme ➡️ The Gauhati High Court dismissed a challenge to the Assam Industries (Tax Reimbursement for eligible Units) Scheme 2020, rejecting arguments based on the doctrine of promissory estoppel and legitimate expectation. The court held that the state cannot reimburse the central share of GST paid by industries, as that share does not go to the state exchequer. ➡️ The court cited legislative changes and the introduction of the GST regime as reasons for the government’s withdrawal of certain benefits and incentives. It relied on previous decisions, including the landmark Supreme Court case in VVF, which dealt with the withdrawal of benefits post-GST introduction. ➡️ The case involved an assessee engaged in manufacturing PP woven bags and sacks, which had previously availed VAT exemption under the Assam Industries (Tax Exemption) Scheme, 2009. The introduction of GST led to the cessation of this scheme and the issuance of eligibility and entitlement certificates specifying the period for VAT exemptions. ➡️ The High Court ruled that the withdrawal of the VAT exemption scheme due to the introduction of GST was a policy decision by the government. It clarified that no mandamus could be issued to the state government to reimburse the central share of GST collected, despite the earlier assurance of 100% VAT exemption. ➡️ However, the court partly allowed the writ petitions, directing the state to consider the assessee’s application for an extension of the period of eligibility within 60 days. It found that non-consideration of the assessee’s application, while similar extensions were granted to other industries, violated Article 14, but clarified that classification must be based on intelligible differentia and reasonable basis. ✔️ Gauhati HC – Lalit Poly Weave LLP vs. The State of Assam and Ors [W.P(C) NO. 2068/2021] |
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🔥📛 No power to condone delay by Appellate Authority after expiry of one month beyond limitation period: HC ➡️ The assessee filed an appeal against assessment orders dated 13.06.2023 and 19.05.2023 on 26.10.2023, which was beyond the prescribed limitation period under the GST Act. ➡️ The assessee claimed that GSTR-1 and GSTR-3B for the period of March and April 2023 could not be filed on time due to medical reasons and were submitted late. ➡️ The appeal was dismissed as time-barred because the assessee did not request condonation of delay in the memo of petition. ➡️ The Appellate Authority had no power to condone the delay after the expiry of one month beyond the prescribed limitation period. ➡️ Therefore, the Appellate Authority correctly rejected the appeal filed by the assessee after the expiry of the limitation period prescribed under the GST Act. ✔️ Rajasthan HC – Akshansh Consultancy Services (P.) Ltd. v. Deputy Commissioner [D. B. Civil Writ Petition No. 2957 of 2024] |
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🔥📛 No requirement of further deposit of penalty amount if only penalty was in issue before Tribunal: HC ➡️ Goods were seized and a penalty was imposed under Section 129(1)(a). ➡️ A first appeal was filed, and 25% of the penalty was paid as a pre-deposit. ➡️ Since the dispute was only about the penalty and not the tax amount, no additional pre-deposit was required under Section 112. ➡️ The penalty order was stayed, and the goods were to be released upon compliance with Rule 140. ➡️ The amount of penalty deposited during the first appeal was to be adjusted when determining the security in the form of bank guarantees and bonds under Rule 140. ✔️ Allahabad HC – Ms Santana Row Fashions LLP v. Additional Commissioner Grade-2 [WRIT TAX No. 71 of 2025] |
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🔥📛 Consolidated SCN issued for 5 AYs to be quashed; multiple years cannot be addressed in one notice: HC ➡️ The assessee received a consolidated show cause notice under Section 74 of the GST Act for multiple assessment years (2017-2018 to 2021-2022) due to incorrect HSN codes and tax rates applied, proposing reassessment. ➡️ The assessee challenged the notice based on the Bangalore Golf Club case, arguing that a composite show cause notice for different years was impermissible. However, the writ petition was dismissed, and the assessee was asked to reply to the notice. ➡️ The court held that Sections 74(1), (2), and (10) of the GST Act allow separate proceedings for each assessment year to determine wilful misstatements or suppression of facts. The time limit under Section 74(10) mandates that the order under Section 74(9) must be issued within five years from the due date of the annual return for the relevant financial year. ➡️ The court concluded that independent show cause notices should be issued for each assessment year under Section 74, and the single judge erred in dismissing the writ petition and relegating the assessee to reply to the notice before the adjudicating authority. ➡️ The maintainability of the writ petition was upheld, as it challenged the inherent jurisdiction of the proper officer in issuing the show cause notice under Section 74, which is an exception to the general rule that writ petitions against such notices are not entertained. ✔️ Kerala HC – Tharayil Medicals v. Deputy Commissioner, Audit Division-IV [WA NO. 627 OF 2025] |
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🔥📛 Madras HC upholds validity of GST notice and order served through GST portal as per Section 169 ➡️ The assessee challenged an assessment order, claiming that the service of notice/order was improper and invalid because the intimation in DRC-01A, show cause notice in DRC-01, and impugned order were uploaded in the GST Common Portal, and the assessee was unaware of them and unable to participate in the proceedings. ➡️ Section 169 of the GST Act is similar in structure to Rule 52 of the Tamil Nadu General Sales Tax Rules, with various modes of service listed as alternate options before resorting to affixture under clause (d) of Rule 52 or clause (f) of Section 169. ➡️ The construction of Rule 52 of the Tamil Nadu General Sales Tax Rules has a material bearing on the interpretation of Section 169 of the GST Act. ➡️ Applying the decision in A. Sanjeevi Naidu v. Deputy Commercial Tax Officer & Ors., the modes of service in clauses (a) to (f) of Section 169 of the GST Act are alternate to each other before resorting to clause (f). However, in other cases, the court found that sub-clauses (a) to (c) are alternate modes and sub-clauses (d) to (f) can only be used after (a) to (c) are exhausted, which contradicts the earlier decision. ➡️ The interpretation that sub-clauses (d) to (f) can only be used after (a) to (c) would render the phrase “shall be served by any one of the following modes” redundant. Therefore, service by making it available in the common portal is a valid mode of service under Section 169 of the GST Act, and the petition was dismissed. ✔️ Madras HC – Poomika Infra Developers v. State Tax Officer [W.P. Nos.33562, 33563, 33565, 33573, 33692, 33758 of 2024, 1842, and 1949 of 2025] |
