LATEST GST CASE LAWS: 06.02.2026
🔥📛 Madras HC grants interim-stay against order invoking Section-74 sans ingredients; Remands matters challenging SCN
➡️ The Madras High Court granted an unconditional interim stay on recovery proceedings arising from the DRC-07 order for FY 2018-19, keeping the order in abeyance until the next hearing.
➡️ The Court refused to quash the Section 74 show cause notices for subsequent years, holding that writ jurisdiction should not pre-empt adjudication when replies have not yet been filed.
➡️ The Assessee argued that the foundational requirements for invoking Section 74—fraud, suppression, willful misstatement—were absent, and that the FY 2018-19 order went beyond the scope of the SCN, violating Section 75(7).
➡️ The Assessee further claimed that the same data and alleged defects had already been scrutinized in parallel proceedings, making the invocation of Section 74 impermissible.
➡️ While disposing of the writs against the SCNs, the Court directed the Assessee to submit detailed replies and instructed the adjudicating authority to specifically examine the applicability and ingredients of Section 74 before passing final orders.
✔️ Madras HC – Altek Beissel Needles Limited vs State Tax Officer and anr
🔥📛 Gujarat HC grants interim stay on Rs. 1800-cr GST demand against Ford India over return-EWB mismatches
➡️ The Gujarat High Court granted interim relief to Ford India, staying the recovery of a GST demand of ₹1,800 crore confirmed under Section 74 of the CGST Act.
➡️ The demand was based primarily on (i) alleged mismatch between tax liability shown in E-way bills and Form GSTR-3B, and (ii) input tax credit (ITC) mismatches between Forms GSTR-2A, GSTR-3B, and GSTR-9.
➡️ Ford India argued that despite furnishing replies and supporting documentary evidence during adjudication, the Department did not consider or examine them, rendering the order non-speaking and procedurally defective.
➡️ The assessee also contended that the Department failed to follow the mandatory scrutiny-of-returns procedure under Section 61, undermining the validity of the demand raised under Section 74.
➡️ Accepting these submissions at the interim stage, the High Court held that a prima facie case existed, stayed the operation of the demand order, and allowed six weeks for the Department to file its counter-affidavit.
✔️ Gujarat HC – Ford India Pvt. Ltd. vs UOI & anr.
🔥📛 SC hears State of West Bengal’s on police powers vis-à-vis GST-authorities for detaining goods-in-transit
➡️ The petitioners argue that the CGST Act, being a special law, overrides general penal statutes, contending that detention/seizure of goods-in-transit and related offences must be handled exclusively under GST mechanisms, not through parallel police FIRs under the BNS, 2023. The issue before the Supreme Court of India revolves around whether police can simultaneously investigate alleged offences tied to GST-related movement of goods.
➡️ The Court-appointed Senior Advocate (Amicus Curiae) cautioned that unrestricted police action in GST-linked goods movement—especially in cases alleging fake invoices—may fragment the GST framework, impede ease of doing business, and risk double jeopardy, prohibited under Section 6 of the CGST Act. Citing precedents such as Radhika Agarwal, the Amicus stressed that general criminal law applies only when not explicitly excluded by a special statute.
➡️ The West Bengal government countered that the facts reveal a broader criminal syndicate involving forged documents and large-scale illegal transport of areca/betel nuts—offences extending beyond mere tax evasion. Therefore, police intervention is justified for independent penal offences (forgery, cheating, stolen property), and both police and GST authorities are expected to coordinate without one automatically ousting the other.
➡️ The State argued that Sections 72, 130(6), and 131 of the CGST Act reflect legislative intent allowing GST enforcement and general criminal law to operate concurrently—each within its defined scope. Initiation of GST proceedings, by itself, does not bar police investigation where ingredients of separate criminal offences exist.
➡️ After hearing both sides, the Supreme Court found arguments inconclusive and listed the matter as part-heard for 17 February 2026. On the interim issue of truck custody, the Court recorded the Revenue’s statement that the vehicles are with the GST Department and will be released to owners upon submission of requisite documents, after unloading the goods.
✔️ SC – Abhishek Kumar Kashyap & Ors. vs. The State of West Bengal & Ors [Petition(s) for Special Leave to Appeal (Crl.) No(s). 8484-8486/2025]
🔥📛 HC: Mechanical intermediary classification to deny un-utilised ITC ‘cryptic’; Absence of third-party findings vitiates orders
➡️ The Telangana High Court set aside the appellate order denying refund of unutilised ITC, holding that authorities failed to record clear findings required to classify the taxpayer as an “intermediary” under Section 2(13) of the IGST Act.
➡️ The Court observed that neither the refund rejection order nor the appellate authority established the existence of a third party or demonstrated how the assessee facilitated a supply between others—an essential condition for intermediary classification.
➡️ The petitioner, an Indian IT/ITeS company, provided software/technology services to its U.S. affiliate on a principal-to-principal basis. Earlier refunds for similar periods were already sanctioned after verifying agreements, invoices, FIRCs/BRCs, and GST returns.
➡️ The appellate authority relied mainly on a clause permitting possible dealings with third-party customers, but the HC held that such speculative interpretation—without analyzing mandatory elements under Section 2(13) and CBIC Circular No. 159/15/2021-GST—amounts to non-application of mind.
➡️ Without ruling on merits, the HC remanded the case to the appropriate authority, emphasising that the statutory conditions for “export of services” under Section 2(6) and “intermediary” under Section 2(13) must be rigorously examined and factually established.
✔️ Telangana HC – Virtusa Systems (India) Private Limited v. Union of India & Ors. [WRIT PETITION Nos. 28201, 5621 and 5622 of 2024]
🔥📛 HC: Quashing inquiry-stage summons akin to seeking anticipatory bail; Not equitable with initiation of proceedings
➡️ The Court held that summons issued under Section 70 of the CGST Act are part of an inquiry, not the initiation of proceedings. The term “inquiry” in this context is not equivalent to “proceedings” under Section 6(2)(b).
➡️ Since the matter is still at the inquiry stage and the petitioner (a biri trader) is already on bail for an offence under Section 132, the Court found that seeking to set aside the summons is effectively a request for anticipatory protection, which is premature.
➡️ The petitioner argued that the summons lacked the DGGI seal and violated Circulars 122/41/2019-GST and 128/47/2019-GST. However, the Court held that the summons—issued for recording statements and seeking documents linked to goods seized during search—were neither illegal nor mechanically issued.
➡️ The Court clarified that while an arrest may occur later, Section 69 provides sufficient statutory safeguards governing arrest powers. It relied on precedents (Jatin Gupta and Radhika Agarwal) to reinforce that issuance of summons alone does not imply prejudgment or imminent arrest.
➡️ Referring to the statutory scope of Section 70, dictionary meaning of “summons,” and the Armour Security India ruling, the Court reiterated that the DGGI acted well within legal authority, and the summons were appropriately issued for evidence and information collection.
✔️ Delhi HC – Naveen & Anr. vs Directorate General of Goods and Services Tax Intelligence [W.P.(CRL) 1872/2024, CRL. M.A. 18198/2024]
🔥📛 HC: Composite notice cannot be issued u/s 74; Limitation period wholly mandatory
➡️ The Court held that while a composite notice for multiple financial years or multiple noticees is not per se invalid, such notices cannot violate the mandatory limitation periods under Sections 73(10) and 74(10), which are fixed, non-relaxable, and admit no discretion or extension.
➡️ Sections 73(2) and 74(2) are strict and mandatory, not directory. A composite notice cannot override the requirement that adjudication must be linked to specific taxable persons and specific tax periods.
➡️ The Court clarified that assessment (return-based) and adjudication (SCN-based under Sections 73/74) operate independently. Return-based concepts like “tax period not beyond the FY” cannot be read into Sections 73/74, which are concerned with disputes on tax, penalty, ITC, or refund.
➡️ When a composite notice covers ‘tax periods’ spanning multiple FYs, the limitation clock runs from the due date of the annual return of the earliest FY involved. Proceedings for that FY lapse if limitation expires, but the entire SCN need not fail—remaining periods can survive if segregable.
➡️ The Court held that an audit under the GST Act may cover multiple years, provided the periods are complete (not fractional). However, where SCNs were found defective (e.g., violating Section 6(2)(b) or limitation), the Court quashed them for those specific petitions.
✔️ Allahabad HC – SA Aromatics Pvt Ltd and another vs Union of India and 5 others [WRIT TAX No. – 7515 of 2025]
🔥📛 HC: Writ Court cannot condone appeal delay beyond 120 days despite ‘sufficient cause’
➡️ The Gujarat High Court held that even with valid reasons, a writ court under Article 226 cannot condone delay beyond the maximum 120-day period prescribed under Section 107 of the CGST Act (90 days + 30 days).
➡️ The Court clarified that the 30-day condonable period under Section 107(4) is exhaustive. Once this period lapses, neither the appellate authority nor the High Court can extend it by re-examining “sufficient cause.”
➡️ The ruling relies heavily on the Supreme Court of India decisions in:
—> GlaxoSmithKline Consumer Healthcare Limited, Gujarat Energy Transmission Corporation Limited, and Singh Enterprises,
—> all affirming that courts cannot override statutory limitation where the legislature provides a fixed outer limit.
➡️ In this case, the assessee filed the appeal about 6 months late—well beyond the condonable period—citing issues with login credentials and accountant-linked email/phone. The Court held that such reasons are irrelevant once the statutory time limit has been exhausted.
➡️ The Court emphasised that GST procedures operate within rigid deadlines. Taxpayers must regularly monitor the GST portal and comply promptly, as relaxing limitation periods would negatively affect revenue administration.
✔️ Gujarat HC – Ravi Plumbing and Construction v. Union of India & Ors. [R/SPECIAL CIVIL APPLICATION NO. 844 of 2026]
