LATEST GST CASE LAWS: 08.07.2025
🔥📛 Calcutta HC restrains DGGI from carrying ‘search & seizure’ pending similar proceedings before State
➡️ The Court held that once a State authority has initiated search and seizure proceedings for a specific tax period (2022–2023 to 2024–2025), the Central authority (DGGI) should not simultaneously conduct proceedings for the same period unless the earlier proceedings are logically concluded.
➡️ While prima facie there is no statutory bar under Sections 65(7) and 66(6) of the CGST Act on conducting an enquiry alongside an audit, the Court cautioned that multiple enquiries by different authorities should not occur unless prior actions are concluded.
➡️ The Court emphasized the principle that registered taxpayers should not be subjected to multiple and overlapping enquiries by different tax authorities for the same period, which could result in undue harassment and procedural duplication.
➡️ The Central authority (DGGI) was specifically restrained from proceeding with investigations for tax periods already under scrutiny by the State authority. Any enquiry by the DGGI must be limited to periods not yet covered by the State.
➡️ In line with procedural fairness, the Court directed the Revenue Department to file a counter affidavit, reflecting due consideration of the taxpayer’s grievance regarding multiple ongoing proceedings for overlapping periods.
✔️ Calcutta HC – Truvolt Engineering Company Pvt. Ltd. & Anr. vs The Additional Assistant Director, Director General Of GST Intelligence & Ors. [WPA 2606 of 2025]
🔥📛 Noting ‘GST on mining-lease’ sub-judice before Courts, Chhattisgarh HC stays penalty against Ultratech
➡️ The Chhattisgarh High Court observed that Section 74 of the CGST Act applies only in cases involving fraud, willful misstatement, or suppression of facts. Since the show cause notice (SCN) did not establish such elements, the Court found a strong prima facie case in favor of the petitioner (Ultratech Cement) and granted interim relief by staying the penalty order.
➡️ Ultratech Cement had already discharged the GST liability along with applicable interest under the reverse charge mechanism (RCM) on mining lease fees before the SCN was issued. This voluntary payment was highlighted to counter the invocation of penalty provisions under Section 74.
➡️ The petitioner argued that the penalty imposed was unjustified as the SCN lacked any substantive allegation of fraud, suppression, or willful misstatement, which are mandatory for invoking Section 74. The Court found merit in this argument based on a plain reading of the provision.
➡️ The High Court took cognizance of similar matters pending before the Supreme Court (notably the Udaipur Chamber of Commerce case) and other High Courts, further supporting the petitioner’s case for interim protection.
➡️ The absence of a functioning Chairman in the State GST Tribunal was also noted by the Court, which contributed to the decision to grant interim relief, as the petitioner lacked an alternative statutory remedy.
✔️ Chhattisgarh HC At Bilaspur – Ultratech Cement Limited v/s Union of India & Ors. [WPT No. 90 of 2025]
🔥📛 HC: Exposes Revenue’s blunder in calling HUL ‘non- existing’ entity; Quashes ITC denial
➡️ The Revenue department issued a Show Cause Notice (SCN) deeming Hindustan Unilever Limited (HUL), a well-known FMCG conglomerate, as a fictitious and non-existent entity without any supporting evidence, which led to the denial of Input Tax Credit (ITC) for the assessee.
➡️ The assessee challenged the SCN by presenting valid invoices and GSTR-2A records that reflected legitimate inward supplies from HUL, thereby substantiating the genuineness of the transactions.
➡️ The department conceded that the classification of HUL as a fictitious entity was erroneous and had occurred due to an oversight while issuing the SCN.
➡️ The Madras High Court criticized the Revenue for lack of due diligence and observed that concluding HUL to be non-existent without inquiry or substantiation demonstrated a clear non-application of mind.
➡️ The High Court quashed the original demand order, directed the Revenue to issue a fresh SCN with a minimum of 7 days’ clear notice for a personal hearing, and emphasized adherence to principles of natural justice.
✔️ Madras HC – Sri Balaji Trading Company Vs. The Assistant Commissioner (ST)(FAC) [Writ Petition No.21448 of 2025]
🔥📛 HC: Criticises Revenue’s “cut and paste” exercise; Quashes Rs. 70.5 cr demand citing Proper-Officer’s non-application of mind
➡️ The Bombay High Court quashed a GST demand of approx. ₹70.57 crores, finding that the adjudicating authority merely copy-pasted allegations from the Show Cause Notice (SCN) without independently examining or reasoning the demand—indicating a clear non-application of mind.
➡️ The Court emphasized that under Sections 73(9) and 75(6) of the CGST Act, any adjudication must be reasoned and based on representation made by the assessee. A decision lacking reason or analysis violates the legal mandate and the statutory framework.
➡️ Reiterating natural justice, the Court held that an order passed without duly considering the assessee’s submissions, case law, or CBIC circulars reflects a procedural impropriety, rendering the decision unsustainable in law.
➡️ The Court rejected the Revenue’s argument that the assessee should have pursued alternate statutory remedies, clarifying that a breach of natural justice forms a valid exception allowing direct judicial intervention.
➡️ In light of the above violations, the High Court remanded the matter to the adjudicating authority with clear instructions to follow due process, apply independent judgment, and provide a reasoned order after fully considering the assessee’s representation.
✔️ Bombay HC – GlobeOp Financial Services (India) Pvt Ltd vs Deputy Commissioner of State Tax [WRIT PETITION (L) NO.12528 OF 2025]
🔥📛 HC: Quashes appeal rejection for defying Court’s directive on excluding time spent for prosecution
➡️ The High Court held that the Appellate Authority erred in rejecting the Assessee’s appeal as time-barred without deducting the period spent in bona fide prosecution of a writ petition, as required under Section 14. The HC emphasized that ignoring this statutory exclusion—especially after a prior court direction—violates judicial discipline and is a serious jurisdictional error.
➡️ The Assessee was previously granted liberty by the High Court to file an appeal with the benefit of time exclusion. The Appellate Authority’s failure to honor this directive was held to be sufficient ground for quashing the impugned order, reinforcing the binding nature of judicial directions on administrative bodies.
➡️ The Assistant Commissioner passed a separate order despite the matter being under appeal with the Commissioner (Appeals), which the Court found to be legally unsustainable. The ruling reaffirms that parallel adjudication on the same issue must be avoided once an appeal is entertained.
➡️ The High Court reiterated that allowing simultaneous or collateral proceedings on the same cause of action violates fair procedure, undermines the statutory remedy of appeal, and breaches the principles of judicial discipline and natural justice.
➡️ On these grounds, particularly the failure to apply Section 14 and improper parallel adjudication, the High Court quashed the appellate order and remanded the case for reconsideration, directing the authorities to act in accordance with legal mandates and judicial guidance.
✔️ Karnataka HC – Apkon Ventures Private Limited Vs The Commissioner Of Central Tax (Appeals-II) [WRIT PETITION NO. 17719 OF 2025 (T-RES)]
🔥📛 Right to appeal cannot be denied due to system error and manual appeal filed beyond limitation was to be accepted: HC
➡️ The right to appeal under Section 107 of the CGST Act is a statutory remedy available to any taxpayer aggrieved by an order passed by the authorities, regardless of whether the disputed tax amount has already been paid.
➡️ A technical/system error—such as the GST portal reflecting a ‘NIL’ demand in Form GST MOV-09—cannot be a valid ground to deny the taxpayer’s right to file an appeal, especially when the system prevented compliance with statutory timelines.
➡️ The payment of tax under protest does not extinguish the taxpayer’s right to challenge the underlying order; such payment does not imply acceptance of liability or waiver of the right to appeal.
➡️ Where delay in filing the appeal is due to reasons beyond the assessee’s control—like being unable to file electronically due to system issues—condonation of delay should be granted, as the assessee cannot be expected to perform an impossible act.
➡️ The authorities cannot take advantage of procedural or technical shortcomings on the part of the system they control. In such cases, the appeal must be restored and heard on merits to uphold the principles of natural justice.
✔️ Kerala HC – Balvinder Singh v. Assistant Enforcement Officer [WP (C) NO. 2342 OF 2025]
🔥📛 ITC fraud case to be tried as warrant case since offence attracts imprisonment exceeding two years: HC
➡️ GST authorities, upon physical verification, found that the business entities mentioned in the invoices did not exist at the declared addresses. This led to the inference that the invoices were fake and that no actual supply of goods took place, justifying initiation of proceedings for Input Tax Credit (ITC) fraud.
➡️ The Trial Court initiated proceedings as a warrant case, which is appropriate under Section 132 of the HPGST/CGST Act, given the offence involves imprisonment up to five years. Under Section 2(x) of the CrPC, any offence punishable with more than two years’ imprisonment qualifies as a warrant case.
➡️ The contention that CrPC provisions do not apply to the GST Act was rejected. Since the GST Act prescribes criminal penalties (including imprisonment), procedural aspects under the CrPC—such as investigation, inquiry, and trial—are applicable and necessary for lawful prosecution.
➡️ In cases initiated by a complaint (not a police report), Section 244 of the CrPC mandates that the Magistrate must first hear the prosecution and record evidence before deciding on the framing of charges. This procedural step was properly followed by the Trial Court.
➡️ The Magistrate’s order to the prosecution to produce evidence before proceeding further was consistent with procedural law and required under the CrPC for warrant cases instituted by complaint. Therefore, the petition to quash the complaint was not sustainable.
✔️ Himachal Pradesh HC – Gagandeep Singh v. State of H.P. [Cr. MMO No. 338 of 2024]
