LATEST GST CASE LAWS: 08.11.2025
🔥📛 Delhi HC grants Ebix interim-relief over 11 frozen bank accounts; Finds Revenue’s action disproportionate
➡️ The Delhi HC observed that while the alleged fraudulent ITC amount was only ₹3.1 crore, the attachment of 11 bank accounts was grossly disproportionate, crippling the operations of a company employing over 3,500 people. The Court held such excessive action contrary to the doctrine of proportionality under GST law.
➡️ The Court found the Provisional Attachment Letter, dated September 25 but communicated on November 4, to be a procedural irregularity and violative of principles of natural justice, as the delay deprived the assessee of the opportunity to seek timely remedies.
➡️ Ebix Technologies was not an investigation target; it was only summoned under Section 70 in relation to investigations of its service providers. Yet, its accounts were attached without proper inquiry. Further, its objections were rejected via an unreasoned and delayed communication, evidencing non-application of mind by the Department.
➡️ The HC expressed serious concern over the conduct of DGGI Meerut, noting that officers (i) issued summons without commencing a formal investigation, (ii) froze multiple accounts before considering replies, and (iii) rejected objections without reasoned orders — all contrary to fair administrative practice under GST.
➡️ Relying on Brijbihari Concast (P) Ltd., the Court held that prima facie the attachment could not continue. It granted interim relief, allowing the assessee to operate all bank accounts subject to maintaining ₹1 crore in any one attached account, and directed the officers who signed the attachment order to appear personally on the next hearing date (Nov. 11).
✔️ Delhi HC – EBIX Technologies Limited Formerly Known AS EBIXCASH Limited vs. DGGI [W.P.(C) 16882/2025]
🔥📛 HC: Quashes ECrL blocking communicated via SMS sans reasons and pre-decisional hearing; Directs immediate unblocking
➡️ The Court held that blocking the assessee’s Electronic Credit Ledger (ECL) under Rule 86A without granting a pre-decisional hearing violates the principles of natural justice. The action was taken solely via a text message, depriving the assessee of an opportunity to respond or explain.
➡️ The communication merely stated that ITC worth ₹33.3 lakhs was blocked, without specifying any factual or legal basis. The Court emphasized that such a mechanical or unexplained action cannot stand in law and requires explicit reasons to justify belief of inadmissible credit.
➡️ The Court found that the Revenue’s reliance on enforcement authority reports amounted to “borrowed satisfaction,” which is legally impermissible. The proper authority must form its own independent opinion based on evidence, not simply rely on external findings.
➡️ Since the blocking order lacked independent reasoning and procedural fairness, it was quashed. The Court directed the immediate unblocking of the ECL to allow the petitioner to file returns without further hindrance.
➡️ The judgment reaffirmed the principles laid down in K-9 Enterprises, emphasizing that blocking ITC under Rule 86A must be supported by cogent reasons, independent satisfaction, and adherence to due process.
✔️ Karnataka HC – S. A. Enterprises Vs The Assistant Commissioner of Central Tax [WRIT PETITION NO. 27868 OF 2025]
🔥📛 HC: Declines to quash CGST order citing jurisdictional overlap; Directs Assessee to file appeal within 3 weeks
➡️ The assessee challenged an order issued under Section 74 of the CGST Act, asserting that the Central GST proceedings lacked jurisdiction since the same subject matter had already been adjudicated by the State GST authorities under Sections 73 and 74 of the UPGST Act. The challenge was based on an alleged breach of Section 6(2)(b) of the CGST Act and CBEC Circular dated 05.10.2018, which seek to prevent duplication of proceedings by Centre and State authorities.
➡️ The Revenue countered that both proceedings involved distinct ITC transactions arising from different supplies, and therefore, the issue of jurisdiction did not arise. It emphasized that the impugned order was passed after due notice and hearing, and was legally sustainable.
➡️ The High Court held that the question of “lack of jurisdiction” in this context was not a pure question of law. Determining whether both proceedings concern the same subject matter requires factual examination, which falls within the scope of the appellate authority, not the writ court.
➡️ The Court noted that the Supreme Court’s ruling in Armour Security (India) Ltd. does not render the writ remedy exclusive for such disputes, reaffirming that statutory remedies should generally be exhausted where factual determinations are necessary.
➡️ The High Court dismissed the writ petition, declining to interfere under Article 226, but granted the assessee liberty to file a statutory appeal within three weeks. It directed that the appeal be entertained on merits, without objection on limitation, and be disposed of expeditiously.
✔️ Allahabad HC – Meerut Steels Vs. Union of India & Ors. [WRIT TAX No. – 1855 of 2025]
🔥📛 HC: Allows partial negative blocking considering Assessee’s pending tax liability and need for Revenue’s examination
➡️ The Madras High Court allowed continuation of negative Electronic Credit Ledger (ECrL) blocking of ₹48.9 lakhs under Rule 86A(2), despite the assessee having only ₹14.2 lakhs of available credit on the blocking date, considering a direction to block ₹62.3 lakhs.
➡️ The Court noted that the assessee had a pending tax liability of ₹23.75 lakhs (₹11.8 lakhs each for CGST and SGST) and that the blocked credit pertained to input tax credit (ITC) allegedly availed from a non-existent supplier, warranting further investigation by the Revenue.
➡️ To balance both sides’ interests, the Court partially stayed the Assistant Commissioner’s blocking order and limited the negative blocking to 50% of the assessee’s tax liability, thereby allowing negative blocking of ₹37 lakhs (₹48.9 lakhs – ₹11.8 lakhs) to continue until the next return filing and tax payment date.
➡️ The assessee relied on Karuna Rajendra Ringshia (Delhi HC) to argue that Rule 86A(1) does not authorize an order compelling a taxpayer to replenish ITC already utilized. It further submitted that due to negative blocking, it was unable to discharge its current tax dues.
➡️ Acknowledging the assessee’s predicament, the Court permitted it to debit ₹11.8 lakhs (towards tax liability) from the negatively blocked credit and replenish the same before the next due date for tax payment. The Revenue was also directed to complete adjudication within 30 days.
✔️ Madras HC – Tvl. Red Rose Garments v. Assistant Commissioner (ST) & Anr. [W.P. No. 31542 of 2025]
🔥📛 HC: Quashes SCN issued beyond limitation under Section 73(2); Three-month gap before order mandatory
➡️ The Delhi High Court quashed a show cause notice (SCN) alleging wrongful ITC availment of approx. ₹11.85 crore for FY 2019–20, holding it to be issued beyond the statutory limitation period prescribed under Section 73(2) read with Section 73(10) of the CGST Act.
➡️ Although the SCN was dated 31 May 2024, it was actually issued only on 12 August 2024, leaving less than the mandatory three months before the outer time limit of 31 August 2024 (as extended by Notification No. 56/2023-CT). Hence, it violated the statutory time requirement.
➡️ The Court dismissed the Revenue’s argument that the delay was due to a “technical glitch” in the GST portal and that the notice had been dispatched earlier to an outdated address, emphasizing that such excuses cannot override statutory timelines.
➡️ Relying on its earlier ruling in Tata Play Ltd., the Court reiterated that the three-month period under Section 73(2) is mandatory, ensuring assessees have adequate time to respond before adjudication. Any deviation renders the proceedings void.
➡️ As the SCN itself was invalid due to being time-barred, the Court quashed not only the notice but also all subsequent proceedings, reinforcing that adherence to procedural timelines is essential for validity under GST law.
✔️ Delhi HC – C.H. Robinson Worldwide Freight India Pvt. Ltd. v. Addl. Commissioner, CGST-Delhi South & Ors. [W.P.(C) 15508/2024]
🔥📛 Interest on IGST refund for unconstitutional ocean freight levy held payable as retention violated Article 265:HC
➡️ Two separate Show Cause Notices (SCNs) were issued for the same period (July 2017–March 2018) and on identical grounds, resulting in two assessment orders—each raising the same demand—indicating a clear procedural duplication.
➡️ Issuance of multiple SCNs and duplicate orders for a single tax period reflected an error in the adjudicatory process and violation of principles of natural justice.
➡️ Although notices were served by email, the assessee was not effectively afforded an opportunity to file a reply or avail of a personal hearing before the orders were passed.
➡️ The High Court set aside both impugned orders, observing procedural lapses and duplication, and remanded the matter to the Adjudicating Authority for fresh adjudication after providing due opportunity to the assessee.
➡️ The Court refrained from examining the merits of the demand and expressly kept all rights and contentions of the assessee open, emphasizing the necessity of fair process and avoidance of duplicate proceedings under GST law.
✔️ Delhi HC – Poorvi Cards v. Commissioner, Delhi Goods and Services tax [W.P. (C) No. 9565 of 2024]
🔥📛 SLP disposed of; assessee’s non-participation in ITC fraud proceedings unjustified, writ against order in original rightly dismissed
➡️ The assessee was alleged to have fraudulently availed input tax credit (ITC) based on invoices issued by dummy and non-existent firms, indicating a case of bogus transactions and wrongful credit claims.
➡️ Despite being aware of the ongoing investigation, the assessee neither filed a reply nor attended the personal hearing, citing suspension of GST registration as a reason. The Court held this as a case of callous and non-cooperative conduct.
➡️ The High Court refused to condone the assessee’s inaction and dismissed the writ petition, observing that the assessee deliberately chose not to participate in the adjudication process concerning fraudulent ITC claims.
➡️ The impugned order was signed by the Additional Commissioner on 1 February 2025, and DRC-07 was uploaded on 9 February 2025. The Court held that the order was issued within the prescribed limitation period and thus valid in law.
➡️ While dismissing the petition, the Court granted liberty to the assessee to file a statutory appeal under GST law. To ensure fairness, the Court allowed time until 31 October 2025 for filing the appeal, with directions that the issue of delay be considered sympathetically given the assessee’s pending litigation before higher forums.
✔️ SC – Ganpati Polymers v. Commissioner of Central Goods and Services Tax [SLP to Appeal (C) No. 27867 of 2025]
