LATEST GST CASE LAWS: 05.08.2025
🔥📛 HC: Gujarat HC to examine validity of proceedings initiated and concluded just to save Limitation
➡️ The Revenue was found to have issued initial notices, including Form DRC-01A, primarily to ensure that the limitation for FY 2017–18 did not expire, rather than with a genuine intent to initiate proceedings. This reflects a procedural misuse aimed at preserving limitation timelines.
➡️ Despite issuing Form DRC-01A on 31st July 2024, the Department served the SCN in Form DRC-01 just three days later, not allowing the Assessee reasonable time to respond. This contravenes the principles of natural justice.
➡️ The Assessee contended that the SCN and subsequent order were issued with a pre-determined mindset, effectively rendering the proceedings a mere formality. This assertion was supported by references to several judicial precedents questioning the fairness of such processes.
➡️ The final adjudication order was passed without granting the Assessee sufficient time to file a substantive reply or to be heard, violating procedural fairness mandated under GST law and administrative jurisprudence.
➡️ Recognizing the procedural lapses and arguable merits of the Assessee’s claims, the Gujarat High Court granted ad-interim relief, directing that no coercive recovery action be taken against the Petitioner until further orders.
✔️ Gujarat HC – Sai Consulting Engineers Private Limited vs Union of India and Others [R/SPECIAL CIVIL APPLICATION NO. 7865 of 2025]
🔥📛 SC to examine leviability of GST on transfer of lease-hold rights; Tags matter
➡️ The Supreme Court has admitted the Revenue’s Special Leave Petition (SLP) challenging the Gujarat High Court’s decision that quashed a GST show cause notice related to the assignment of leasehold rights.
➡️ The Gujarat High Court, after analyzing the Deed of Assignment, concluded that the transaction was a mere transfer of leasehold rights and did not qualify as a ‘supply’ under Section 7 of the CGST Act, thus falling outside the GST net.
➡️ The High Court relied on its earlier ruling in the Gujarat Chamber of Commerce and Industry case, which held that transferring leasehold rights for consideration is not a taxable supply under GST.
➡️ Arguing that the transaction involves a taxable transfer of rights for consideration, the Revenue contends that the Gujarat HC’s interpretation narrows the scope of ‘supply’ and undermines the intent of the CGST Act.
➡️ Given the overlap in legal issues, the Supreme Court has decided to hear the present case together with the pending challenge in the Gujarat Chamber of Commerce and Industry matter, consolidating both for a unified decision.
✔️ SC – UOI & Anr. vs. Alfa Tools Pvt. Ltd. [Petition for Special Leave to Appeal (C) No. 20007/2025]
🔥📛 Karnataka HC’s ad-interim relief to Toyota, stays interest demand on employee secondment services
➡️ The Karnataka High Court granted an interim stay on the recovery of interest and penalty imposed on Toyota Boshoku Automotive India for delayed tax payment on employee secondment services received in prior financial years.
➡️ The petitioner contended that since the secondment services qualified as input services and full input tax credit (ITC) was available, the delay in payment did not result in any revenue loss to the exchequer, thereby negating the basis for interest liability.
➡️ It was argued that interest under GST law is compensatory in nature, intended to offset revenue loss to the government. In cases where ITC is fully claimable and availed, no compensation is necessary, thus making the imposition of interest unwarranted.
➡️ The petitioner relied on CBIC Circular No. 210/4/2024-GST, which clarifies that in cases involving import of services eligible for full ITC, declaration of ‘nil’ value reinforces the point that no revenue leakage occurs—supporting the claim that penal consequences are avoidable.
➡️ Based on the above submissions, the High Court observed that the petitioner had established a prima facie case in its favor and granted a stay on the enforcement of interest and penalty demands pending further proceedings.
✔️ Karnataka HC – Toyota Boshoku Automotive India Private Limited vs State of Karnataka & ors [WP 14519/2025]
🔥📛 HC: Even belated replies to notices must be considered; Directs re-adjudication on merits
➡️ The Calcutta High Court quashed the adjudication order under Section 73(9) of the CGST Act, as the proper officer failed to consider the reply submitted by the assessee before passing the order.
➡️ Even though the assessee’s reply to the show cause notice was filed after the due date, the Court held that it was still valid since it was submitted before the final order was issued.
➡️ The Court rejected the Department’s contention that the assessee’s response was time-barred, emphasizing that procedural fairness requires consideration of any reply filed before the conclusion of proceedings.
➡️ As a result of the procedural violation, both the demand order (Form DRC-07) and the subsequent appellate order (Form APL-04) were quashed.
➡️ The High Court remanded the case back to the adjudicating authority with instructions to provide a fresh hearing and decide the matter afresh after duly considering the assessee’s reply.
✔️ Calcutta HC – Nanda Kishor Saha Vs. The Union of India & Ors. [W.P.A. 13982 of 2025]
🔥📛 HC: Quashes detention order premised solely on non-disclosure of purchase-document from unregistered dealer
➡️ The High Court held that the assessee met the legal requirement under Rule 138A by producing both the tax invoice and the E-way Bill during transit. These are the only documents mandated under the Rule for movement of goods.
➡️ The only reason cited for detention was the failure to produce the purchase invoice from an unregistered dealer. The Court clarified that the law does not require such a document to accompany goods in transit; hence, detention on this ground was not legally sustainable.
➡️ Since the vehicle was intercepted with valid accompanying documents (invoice and E-way Bill), the issuance of Form GST MOV-06 (detention order), and preceding MOV-01 and MOV-02, was held to be arbitrary and without authority of law.
➡️ The Court noted that any alleged discrepancies based on the driver’s statement were not substantiated in the official records or notices. Such unverified claims were considered disputed facts and could not justify detention.
➡️ In light of the above findings, the High Court ordered the immediate release of the detained vehicle and goods, and disposed of the writ petition in favor of the assessee.
✔️ Kerala HC – Ajith Gopi vs. State of Kerala [WP(C) NO. 27049 OF 2025]
🔥📛 SC: ‘GST on overseas OIDAR-services’, relegates Petitioner to GST-council to ventilate grievances
➡️ The Supreme Court disposed of the writ petition filed under Articles 32 and 142 of the Constitution, directing the petitioner to submit a detailed representation to the GST Council. The Council has been instructed to consider such representation promptly and in accordance with law.
➡️ The petitioner sought a system to monitor total GST paid under the reverse charge mechanism by Non-Taxable Online Recipients (Non-NTORs) who avail OIDAR (Online Information and Database Access or Retrieval) services, highlighting potential compliance gaps.
➡️ The petition proposed the introduction of a specific GST return form aimed at capturing revenue generated from OIDAR services provided to Indian Non-NTORs by overseas entities, to enhance transparency and reporting accuracy.
➡️ The petitioner urged the imposition of stricter compliance requirements on overseas OIDAR suppliers, including mandatory business presence in India, submission of periodic GST returns, independent GST audits, and application of machinery provisions similar to those applicable to domestic suppliers.
➡️ The petition included a demand for GST authorities to disclose data on non-resident suppliers providing OIDAR services in India and to implement a mechanism to verify total receipts from Indian customers, ensuring that appropriate GST is collected and remitted.
✔️ SC – Pradeep Goyal vs UOI & Ors [WRIT PETITION(S)(CIVIL) NO(S).258/2021]
