LATEST GST CASE LAWS: 07.07.2025
🔥📛 HC: Upholds registration cancellation for failure to disprove fake ITC, fictitious address
➡️ The Bombay High Court upheld the cancellation of the assessee’s GST registration under Section 29(2) r/w Rule 21, citing issuance of fake Input Tax Credit (ITC) and non-conduct of business from the declared premises.
➡️ The assessee failed to provide any documentary evidence to substantiate the genuineness of purchase and sale transactions, thereby not discharging the burden of proof as laid down in the Ecom Gill case.
➡️ The Court noted that proper procedure was followed by the authorities, including adherence to standard operating guidelines for adjudicating fake invoice cases, ruling out procedural lapses.
➡️ While the assessee argued that Section 29(2)(e) (involving fraud or suppression) was wrongly invoked, the Court clarified that the original order relied on Section 29(2) and Rule 21 without invoking any specific sub-clause, which is legally valid in such cases.
➡️ Both adjudicating authorities found that the supplier was non-existent upon physical verification, reinforcing that the ITC claims were fictitious and justifying the cancellation of registration without need for Court intervention.
✔️ Bombay HC – Afzal Husain Altaf Husain Saiyed vs UOI [WRIT PETITION NO. 17770 OF 2024]
🔥📛 HC: Bail revocation distinct from cancellation, rejects Revenue’s plea of recall without ‘cogent’ evidence
➡️ The Delhi High Court emphasized that a well-reasoned bail order cannot be overturned without substantial new evidence. Mere disagreement with the Magistrate’s decision is not sufficient for revocation.
➡️ The Court clarified the legal distinction—recall applies when bail is allegedly granted without proper consideration of relevant factors, whereas cancellation is based on violation of bail conditions. The current petition was wrongly framed as a recall attempt, not a cancellation.
➡️ The Court found no compelling reason to revoke bail—there was no threat of evidence tampering (since evidence is documentary/electronic), no flight risk, and no need for further custodial interrogation.
➡️ The Respondent had already undergone 28 days of judicial custody, and the DGGI had not yet filed a formal complaint under Section 132 of the CGST Act. Thus, bail was granted after due process and within the bounds of legal discretion.
➡️ The High Court upheld the Chief Metropolitan Magistrate’s (CMM) decision, stating that the discretion to grant bail was exercised judiciously and no cogent grounds were presented for interference.
✔️ Delhi HC – Directorate General of GST Intelligence vs Sudhir Gulati [CRL.M.C. 2666/2021]
🔥📛 DGGI action restricted to period not covered by ongoing State GST search and seizure proceedings: HC
➡️ The assessee contested simultaneous proceedings initiated by both the Central (DGGI) and State GST authorities for the same tax period, arguing that the State had already initiated action under Section 67 of the CGST/WBGST Act.
➡️ The court emphasized that multiple proceedings by different authorities for the same period are generally impermissible, especially when one authority has already initiated search and seizure without bringing it to a conclusion.
➡️ Section 65(7) of the CGST Act was highlighted, which implicitly discourages overlapping audits or investigations by multiple authorities for the same period, promoting procedural fairness.
➡️ Since the State GST department had already begun proceedings, including a search and seizure operation, and issued a show cause notice, the Central DGGI was barred from initiating a parallel investigation for that same period.
➡️ Any investigation or inquiry by Central authorities (DGGI) must be confined strictly to periods not already covered by the State’s ongoing or concluded proceedings.
✔️ Calcutta HC – Truvolt Engineering Company (P.) Ltd. v. Additional Assistant Director, Director General of GST Intelligence [WP APPEAL NO. 2606 of 2025]
🔥📛 Assessee allowed to file appeal despite expiry of limitation due to pending rectification proceedings: HC
➡️ The assessment was completed after duly considering the assessee’s written reply, indicating that principles of natural justice were ostensibly observed during adjudication.
➡️ Instead of challenging the assessment through an appeal, the assessee filed a rectification petition, which was later rejected. During this time, the statutory period for filing an appeal lapsed.
➡️ The revenue argued that the assessee had no valid reason to not file an appeal within the prescribed timeframe and that opting for rectification did not preclude the assessee from pursuing appellate remedy concurrently.
➡️ After the rectification was rejected and appeal period had expired, the assessee sought special permission to file an appeal, expressing readiness to deposit an additional 10% of the disputed tax (over and above the mandatory 10%).
➡️ The court allowed the assessee to file an appeal before the Appellate Authority on the condition of paying the additional 10% of the disputed tax demand. Upon such payment, the authority was directed to entertain the appeal and pass appropriate orders.
✔️ Madras HC – Tvl. Patil Constructions and Infrastructure Ltd. v. State Tax Officer, Tiruvannamalai [W.P. No. 20035 of 2025]
🔥📛 Assignment of immovable property benefits by lessee to assignee not covered under scope of supply and not liable to GST: HC
➡️ The petitioner, an allottee of an industrial plot from GIDC, transferred leasehold rights to a third party through a deed of assignment, with GIDC’s approval. This transfer was limited to leasehold interests and did not include any additional services or property rights.
➡️ The petitioner received a consideration of ₹13.69 crore from the assignee but did not charge or collect GST on this amount, treating the transaction as a mere transfer of rights in immovable property.
➡️ The tax department viewed the transaction as a taxable supply under Entry No. 16 of Heading 9972 of Notification No. 11/2017-ST (Rate), classifying it as a Real Estate Service liable to 18% GST on the consideration received.
➡️ The High Court held that the transfer was purely an assignment of leasehold interest, which constitutes a transfer of a benefit arising from immovable property, not a supply of service under the GST framework.
➡️ The decision relied on the Gujarat High Court ruling in Gujarat Chamber of Commerce and Industries v. UOI [2025] 94 GSTL 113 (Guj.), reinforcing that such transfers of leasehold rights are outside the scope of “supply” under GST. Consequently, the GST demand raised was quashed.
✔️ Gujarat HC – Saurashtra Tin and Metal Industries v. Union of India [R/SPECIAL CIVIL APPLICATION NO. 6279 of 2025]
🔥📛 Original bail and modification orders quashed due to inconsistent stands taken by assessee on pre-release deposit: SC
➡️ The accused, arrested in a tax evasion case involving ₹13.73 crores, had already deposited ₹2.86 crores. To secure release, he voluntarily offered to deposit an additional ₹2.5 crores. The High Court granted bail based on this offer, requiring ₹50 lakhs to be paid before release and the balance ₹2 crores within 10 days thereafter.
➡️ After release, the accused sought modification of the bail conditions, citing his wife’s pregnancy and father’s ill-health, and requested more time to deposit the amount. The High Court allowed extension but reiterated that failure to pay the full amount within 10 days from release would result in cancellation of bail.
➡️ The Supreme Court noted that the accused had taken advantage of the bail conditions without complying with them. It emphasized that judicial processes cannot be manipulated, and parties cannot “approbate and reprobate” — i.e., accept and reject the same order selectively.
➡️ Recognizing the abuse of the High Court’s bail order, the Supreme Court set aside both the original bail and the subsequent modification orders. It held that if the monetary offer had not been made, the High Court might have assessed the bail application purely on legal merits.
➡️ Despite the accused’s non-compliance, the Supreme Court granted limited interim protection from surrender, considering the humanitarian grounds cited. However, it remanded the matter to the High Court for fresh adjudication on the bail plea, based solely on legal and factual merits without influence from prior monetary offers.
✔️ SC – Kundan Singh v. Superintendent of CGST and Central Excise [SLP Appeal (Crl.) No(s).9111 of 2025]
