LATEST GST CASE LAWS: 09.07.2025
🔥📛 SC to resolve conflicting interpretations of Rule 86A on negative blocking of credit ledger
➡️ The Supreme Court (SC) has acknowledged a judicial conflict between the Delhi High Court and the Madras High Court on the interpretation of Rule 86A of the CGST Rules, prompting it to issue notice and take up the matter.
➡️ In Best Corp Science, the Delhi HC ruled that Rule 86A allows blocking only to the extent of existing Input Tax Credit (ITC) in the Electronic Credit Ledger. The term “amount equivalent to such credit” was interpreted to exclude negative blocking, disallowing the creation of a debit beyond available credit.
➡️ Contrastingly, in Skanthaguru Innovations, the Madras HC upheld the permissibility of negative blocking, interpreting Rule 86A to allow debit actions even if they result in the ledger reflecting a negative balance, provided ITC was “available at any point of time.”
➡️ The crux of the divergence lies in interpreting the phrase “credit of ITC available in ECL.” While Delhi HC mandates real-time availability for blocking, Madras HC permits retroactive assessment of availability, thereby enabling post-facto negative blocking.
➡️ The Supreme Court has condoned a 78-day delay in filing and scheduled the matter for hearing in August 2025, setting the stage for a conclusive resolution on whether Rule 86A permits negative balances in the ECrL.
✔️ SC – UOI & Ors. vs. Anand Traders [SPECIAL LEAVE PETITION (CIVIL) DIARY NO(S). 28945/2025]
🔥📛 Delhi HC to examine taxability of ‘Green coffee beans’ in raw and unroasted form
➡️ The assessee (Petitioner) filed a writ petition challenging the Revenue’s order denying GST exemption for ‘Green Coffee Beans’ (raw, unroasted), arguing that the decision was made without providing a fair opportunity for personal hearing—thus violating principles of natural justice.
➡️ The Petitioner contended that no personal hearing notice was served prior to the adverse order, which they claimed led to an ex-parte decision denying the exemption benefit.
➡️ The Revenue rebutted the Petitioner’s claim, asserting that multiple notices for personal hearing were issued and documented within the order. The Department referred to specific paragraphs to show service of notices through letters.
➡️ The Court directed the Revenue to substantiate its claim by placing on record the speed post receipts or other documentary proof of having served the hearing notices, reflecting a focus on procedural fairness and evidentiary standards.
➡️ In light of the dispute over notice service, the High Court listed the matter for further hearing on July 25, 2025, pending submission of proof by the Revenue.
✔️ Delhi HC – Vokin Biotech Pvt Ltd v/s The Additional Commissioner CGST, Delhi, West Commissionerate and Ors [W.P.(C) 3420/2025]
🔥📛 HC: Validating revised excise-return filed manually post GST, permits CENVAT-credit transition through TRAN-1
➡️ The Court upheld the Assessee’s manual revision of excise returns after July 1, 2017, noting that the excise portal was non-functional and thus electronic revision was not possible. This manual revision was necessary to reflect missed CENVAT credits.
➡️ The Assessee was permitted to transition CENVAT credit through a revised TRAN-1 form, as the revision was based on additional BoEs (Bills of Entry) not included earlier due to inadvertent omission, and the excise returns were duly updated to reflect this.
➡️ The revised TRAN-1 was submitted within the extended timeline prescribed by the Supreme Court in Filco Trade Centre Pvt. Ltd., i.e., before November 30, 2022. This timely action ensured compliance with judicial directions for credit transition.
➡️ The Court took note of the Assessee’s letter submitted within one year, as required under Rule 4 of the CENVAT Credit Rules, notifying authorities of the technical issues faced in filing electronically—thus satisfying procedural conditions for claiming credit.
➡️ Relying on its own precedent (Aberdare Technologies Pvt. Ltd.), the Court emphasized that the only objection raised by authorities was procedural (timing). Since the credit was otherwise legitimate and supported by documentation, the claim was allowed.
✔️ Bombay HC – Johnson Matthey Chemicals India Pvt. Ltd. Versus The Union of India & Ors [WRIT PETITION NO. 15536 OF 2023]
🔥📛 HC: Dept. of Home to reimburse GST to Hotelier on rentals paid for accommodating police personnel
➡️ The High Court held the J&K Home Department liable to reimburse the 12% GST paid by hoteliers on rental income for accommodating police personnel, recognizing the tax as a legitimate burden arising from government-mandated service.
➡️ Starting August 2025, the Home Department must pay GST in addition to the fixed rent, not inclusive of it. This change acknowledges the statutory obligation to separately account for GST in taxable supplies.
➡️ The court directed the hotelier (Petitioner) to obtain GST registration by July 31, 2025, enabling proper invoicing and compliance with GST law for services rendered to the government.
➡️ The Court observed that the rental rate, fixed at ₹300 in 2013, remains unchanged despite inflation and repeated representations. It recommended the formation of a new Rent Assessment Committee to address this imbalance.
➡️ The judgment acknowledges that the rental agreement predates the GST regime. Nonetheless, it emphasizes that GST is applicable and must be factored into service contracts involving government departments, reinforcing the transition compliance obligations.
✔️ J&K HC – Iqbal Mubarik Vs. U.T. of Jammu & Kashmir & Ors. [WP(C) No. 1154/2024]
🔥📛 ITC claim for FY 2017-18 to be allowed as return filed in September 2019 was within extended time limit under section 16(5): HC
➡️ The assessee’s input tax credit (ITC) claim was rejected by tax authorities on the grounds that the credit pertained to the financial year 2017-18 but was availed in the return for September 2019, beyond the time limit prescribed under the proviso to Section 16(4) of the CGST Act.
➡️ Both the proper officer and the Appellate Authority upheld the rejection, strictly relying on the limitation period specified under Section 16(4), reinforcing that ITC claims made beyond the due date of the September return following the financial year were inadmissible.
➡️ The legal landscape changed significantly with the retrospective insertion of Section 16(5) (effective from 01.07.2017), which altered the interpretation of time limits for availing ITC and filing returns.
➡️ In light of the new provision, the government extended the due date for filing returns under Section 39 for the tax periods 2017-18 to 2020-21 until 30th November 2021, thereby impacting the application of time restrictions under Section 16(4).
➡️ Given the changed legal framework and extended timelines, the court held that the rejection orders were not tenable. It set aside the impugned orders and remanded the matter back to the adjudicating authority for reconsideration in line with the updated legal provisions.
✔️ Calcutta HC – DYS Impex (P.) Ltd. v. Assistant Commissioner of Revenue [WPA No. 2980 of 2025]
🔥📛 Cancellation of GST registration to be upheld as supplier was found non-existent and assessee failed to prove genuineness of transactions: HC
➡️ The assessee’s GST registration was cancelled due to availing Input Tax Credit (ITC) based on transactions with suppliers who were found non-existent during physical verification of their declared place of business.
➡️ Despite assurances before both adjudicating authorities, the assessee failed to provide any documentary evidence—such as invoices, payment proofs, or delivery challans—to establish the genuineness of the purchase and sale transactions.
➡️ Both authorities concurrently found that the assessee’s major suppliers did not exist at their registered addresses, reinforcing that the ITC claim was not supported by actual movement of goods or legitimate business activity.
➡️ Due to the absence of valid documentation and the non-verifiable nature of the suppliers, the authorities concluded that the ITC claimed was fraudulent and hence inadmissible under GST provisions.
➡️ The court upheld the findings of the lower authorities, noting no perversity or legal error in their decision. It ruled that no interference was warranted, reinforcing the principle that ITC cannot be claimed on fictitious or unverifiable transactions.
✔️ Bombay HC – Afzal Husain Altaf Husain Saiyed v. Union of India [WRIT PETITION NO. 17770 OF 2024]
🔥📛 Confiscation proceedings to be set aside as notice served via WhatsApp held invalid: HC
➡️ The authorities served the notice of confiscation proceedings under Section 130 of the CGST Act via WhatsApp, which is not a valid mode of service as per Section 169 of the Act.
➡️ While digital platforms like WhatsApp were temporarily accepted during the COVID-19 pandemic, they are no longer recognized for official notice service under the CGST framework unless explicitly permitted.
➡️ The absence of proper service of notice, as prescribed under Section 169, rendered the entire proceedings invalid, as compliance with procedural safeguards is mandatory for confiscation actions under Section 130.
➡️ Since the required legal notice was not properly served, the authorities lacked jurisdiction to initiate or conclude confiscation proceedings against the petitioner.
➡️ Consequently, the order of confiscation and related detention proceedings were held to be without legal standing and were set aside by the court due to procedural irregularity.
✔️ Kerala HC – Mathai M.V. v. Senior Enforcement Officer [WA NO. 973 OF 2025]
