LATEST GST CASE LAWS: 11.12.2025
🔥📛 Delhi-HC to examine DHL plea on incongruity between deemed-supply rules and export-realisation condition
➡️ DHL India challenged the inconsistency between Schedule I (read with Section 7), which deems supplies to related parties as taxable even without consideration, and Section 16 of the IGST Act, which mandates receipt of foreign exchange to qualify such supplies as “export of services” and enable refund of unutilised ITC.
➡️ The assessee argued that when the law itself taxes a supply made without consideration, it becomes impossible to satisfy the foreign-exchange condition, effectively blocking refunds—creating a statutory incompatibility that needs judicial resolution.
➡️ DHL cited similar issues already acknowledged by the Madras, Kerala and Karnataka High Courts, where notices have been issued, indicating broader judicial concern over the same statutory friction.
➡️ The Revenue opposed the writ petition on the ground that no refund application had been filed, relying on Mafatlal Industries to argue that writ jurisdiction should not be triggered without exhausting the refund process.
➡️ The Delhi High Court held that the matter warrants reconsideration because the provisions must be “harmoniously interpreted” to resolve the contradiction. It issued notice, directed CBIC to clarify its position, and scheduled the matter for detailed hearing in February.
✔️ Delhi HC – DHL EXPRESS (INDIA) PRIVATE LIMITED V/S UNION OF INDIA & ORS [W.P.(C) 17182/2025]
🔥📛 HC: Order cannot exceed amount in notice; Grants liberty to issue SCN for excess amount
➡️ The High Court held that the adjudication order under Section 74(9) demanding ₹7.61 crore was illegal because it exceeded the amount proposed in the show-cause notice (₹4.59 crore), violating Section 75(7) and basic principles of natural justice.
➡️ The Court clarified that if the assessing authority wishes to raise a demand higher than what is stated in the original SCN, it must issue a fresh SCN, provided such issuance is within the limitation period.
➡️ Although an appeal under Section 107 was available, the Court entertained the writ petition because the demand was confirmed on grounds and amounts beyond the SCN, which constitutes a jurisdictional error.
➡️ The Assessee had argued that a Goods Transport Agency (GTA) is not liable to pay GST under Sections 2(98) and 9(3) since the tax is imposed on the recipient under reverse charge, not the GTA. These arguments were noted but not conclusively adjudicated due to the primary defect in the SCN and order.
➡️ Due to the illegality in exceeding the SCN scope, the High Court set aside both the SCN and the order, directing the assessing authority to reconsider the matter and pass a fresh order strictly in accordance with law and natural justice.
✔️ J&K HC – Ukas Goods Carrier vs Union Territory of JK & Ors. [WP (C) No. 1961/2021]
🔥📛 HC: Section-74 SCN unjustified, where MRF voluntarily paid tax amid supply confusion; Cites no fraud/suppression
➡️ Since MRF Ltd. voluntarily informed the department that tyres, tubes and flaps (TTF) should be treated as a composite supply and paid the entire differential tax with interest, the Court held that fraud, wilful misstatement or suppression—mandatory triggers for Section 74—were absent.
➡️ The Court acknowledged a genuine ambiguity in the industry on whether strapped TTF constituted a composite or individual supply, especially after rate reductions for tubes and flaps. At most, this could warrant Section 73 (non-fraud) proceedings, not Section 74.
➡️ Since the assessee had paid the short-paid tax along with interest before issuance of SCN, even Section 73 proceedings were unwarranted, as the statutory conditions for issuing a notice no longer survived.
➡️ The fact that the payment occurred around the time of the DGGI investigation did not establish mala fide intent. The assessee had already communicated its decision to pay earlier, reaffirming absence of any fraudulent motive.
➡️ The Court clarified that MRF’s earlier treatment of TTF as a composite supply “to buy peace” does not preclude them from contesting the classification/composite-supply issue in future proceedings, leaving the substantive question open.
✔️ Madras HC – MRF Ltd v. Additional Director, DGGI & anr. [W.P. Nos. 15215 & 15222 of 2022]
🔥📛 HC: Dismisses writ challenging centre’s SCN; Says section 6 applicability requires factual examination of state-central proceedings
➡️ The Bombay High Court held that determining whether Section 6 bars parallel proceedings requires a detailed factual examination, as its applicability in this case is itself disputed.
➡️ The Court emphasized that the scope, subject matter, and import of proceedings already concluded by State GST authorities must be compared with the issues raised in the Central authority’s show cause notice (SCN) before concluding any overlap.
➡️ Though the assessee argued that State authorities could not proceed once the Central authorities had initiated action on the same subject matter, the Court declined to accept this without a full factual and legal review.
➡️ Since the assessee relied on audit orders to claim bar under Section 6, the Court noted that the nature and scope of such audit proceedings must also be scrutinized to determine whether they preclude fresh action.
➡️ Relying on established jurisprudence, the Court held that no exceptional circumstances existed to justify bypassing the SCN process; therefore, writ jurisdiction under Article 226 could not be invoked to quash the SCN at this preliminary stage.
✔️ Bombay HC – Maharashtra Information Technology Ltd Vs The Union Of India Thr. Its The Principal Secretary Government Of India And Ors [WRIT PETITION NO. 11330 OF 2025]
🔥📛 HC: Best judgment assessment deemed withdrawn once returns filed with late fee
➡️ The Andhra Pradesh High Court reaffirmed that best-judgment assessment orders issued under Section 62 are deemed withdrawn once the taxpayer files the pending returns—whether within or beyond the prescribed time—along with applicable late fees.
➡️ The Court followed earlier Division Bench rulings in Brothers Engineering & Erectors Ltd. and Helmet House, which held that filing of returns nullifies the corresponding best-judgment assessments.
➡️ Since the assessee later filed GSTR-3B for May–June 2024 with late fees, the Court ruled that the earlier best-judgment assessments and resultant demand of ₹4 lakh (plus interest and 100% penalty under Section 74) on notional turnover no longer had legal force.
➡️ With the deemed withdrawal of Section 62 orders, the department is barred from initiating or continuing any recovery proceedings for tax, interest, or penalty raised under those withdrawn orders.
➡️ Given the statutory consequence of deemed withdrawal, the High Court set aside the impugned assessment and recovery actions, granting relief to the assessee.
✔️ Andhra Pradesh HC – Indubaala Enterprises LLP vs Deputy Commissioner [WRIT PETITION NOs: 31323, 31324 & 31330 of 2025]
🔥📛 HC: Assessee’s unawareness of SCN until clients received notices valid ground for belated appeal
➡️ The Delhi High Court held that the assessee’s claim of being unaware of the Show Cause Notice (SCN) until their clients received related notices is a valid explanation for the belated appeal, and therefore the delay should not be a ground for dismissal.
➡️ The Court directed the Appellate Authority to decide the appeal against cancellation of GST registration on merits without emphasizing limitation, recognizing the assessee’s right to a proper hearing.
➡️ Relying on the Anil Soni precedent, the Court reiterated that retrospective cancellation of GST registration is impermissible where the SCN fails to consider the unintended and adverse consequences of such cancellation.
➡️ The Court observed that failure to file returns during the COVID-19 period can be a valid and reasonable explanation, reducing the justification for harsh penal action like retrospective cancellation.
➡️ In view of the inadequate SCN, reasonable cause for non-filing, and improper retrospective cancellation, the Court concluded that the assessee deserved a full opportunity to present their case before the Appellate Authority.
✔️ Delhi HC – Ruby Bansal vs C.G.S.T. Delhi East Commissioner & anr. [W.P.(C) 18496/2025]
🔥📛 HC: Dismisses Revenue’s review petition against judgment that affirms mandatory 60-day disbursal time for refunds
➡️ The Calcutta High Court reaffirmed that refund must be disbursed within the statutory 60 days from the date of application, and failure to meet this timeline vitiates the adjudicating authority’s order rejecting the refund.
➡️ The Court held that its earlier judgment had fully considered the facts and law; therefore, Revenue cannot seek a review to reopen the entire matter or introduce fresh arguments or provisions not earlier relied upon.
➡️ Arguments that the judgment was contrary to MD Securities, overlooked Sections 56/Rule 94, or that the only consequence of delay is interest liability, were dismissed. The Court held these do not constitute errors warranting review under Order XLVII Rule 1 CPC.
➡️ The Court clarified that even if MD Securities was an interlocutory order, a legal proposition laid down therein has binding precedential value, countering Revenue’s claim to the contrary.
➡️ Relying on Canon, Revenue argued that non-consideration of statutory provisions is a review ground. The Court rejected this, stating Canon does not mandate reopening every case where some provision or judgment was not cited, especially when the original judgment’s ratio was clear and limited.
✔️ Calcutta HC – The Assistant Commissioner of West Bengal State Tax, Cooch Behar Charge and others Vs Suraj Mangar [CPAN 71 of 2024]
🔥📛 HC: Practice of giving personal hearing for uploading order, inexplicable; Directs notice serving by e-mail/number
➡️ The Delhi High Court held that the assessee was denied proper opportunity at both stages—order-in-original and order-in-appeal—amounting to a violation of principles of natural justice.
➡️ The Court highlighted the abnormality that the order-in-original confirming a demand of ₹3.36 crore was passed within just one week of issuing the SCN, indicating lack of reasonable time for the assessee to respond.
➡️ The appellate authority passed the order even before the date fixed for personal hearing, showing procedural irregularity and rendering the hearing schedule meaningless.
➡️ The Court observed that fixing a “hearing” solely for uploading the order is inexplicable, serves no purpose, and such administrative practices must be re-examined by the department.
➡️ While condoning delay, the Court directed issuance of personal notice via email and mobile to the assessee, and ordered that the appeal be reheard and decided on merits in accordance with law.
✔️ Delhi HC – Jamil Trading Co Vs. Union of India & Ors [W.P.(C) 10513/2025]
🔥📛 HC: Reads down Section-16(2)(aa); Recipient to be heard before ITC-denial for supplier’s default
➡️ The Gauhati High Court held that the provision—which links a recipient’s ITC entitlement to the supplier’s GST compliance—cannot operate rigidly, as it imposes an onerous and impractical burden on bona fide purchasers.
➡️ Before denying ITC, authorities must provide the purchaser an opportunity to prove their bona fides through tax invoices and supporting documents. ITC cannot be denied merely because the supplier defaults, if the buyer acted in good faith.
➡️ The reading-down applies only until CBIC introduces a practical mechanism to address the issue of dependency on supplier filings—an aspect fully outside the control of the purchaser.
➡️ Despite reading it down, the Court refused to strike down Section 16(2)(aa). It acknowledged the legislative intent to deter fraudulent ITC claims and improve GST system transparency and compliance.
➡️ Petitioners argued that the provision is arbitrary because buyers have no statutory mechanism under Section 37 to monitor supplier compliance. Revenue defended the provision as a necessary tool to curb tax evasion and ensure systemic integrity.
✔️ Gauhati HC – MCLEOD Russel India Limited vs The Union of India [WP(C) No. 5725 OF 2022]
🔥📛 Delhi HC judgment allowing distribution of CENVAT-credit transitioned by ISD-registrant
➡️ The Delhi High Court held that legitimate CENVAT credit of an Input Service Distributor (ISD), duly reflected in TRAN-1, cannot be denied merely because it was not distributed in the same month as required under Rule 39(1)(a), when the delay arose due to technical glitches on the GST portal.
➡️ Since the assessee filed TRAN-1 on 15 August 2017, and the credit was clearly captured there, the Court ruled that procedural or technological barriers cannot prevent transition of valid ITC into GST. Legitimate credit cannot be “held back due to technical objections.”
➡️ The Court observed that although Section 140(7) contemplates rules for passing transitional credit pertaining to ISDs, the Government never prescribed such modalities. The issue was referred to the GST Council but no decision emerged, leaving ISDs without a statutory mechanism—supporting judicial intervention.
➡️ Revenue argued that (a) ISDs must distribute all available ITC in the same month, and (b) ISDs cannot file TRAN-1 under the CGST Act. The Court rejected this, holding that when technology barriers prevent month-wise distribution, ISDs cannot be denied the right to transition closing balances.
➡️ Following precedents like Siemens, Vision Distribution, and Dell International, the Court directed the GST Department and GSTN to reflect the credit in the assessee’s Electronic Credit Ledger within three months, after which the assessee gets one month to distribute the credit to its sub-offices.
✔️ Delhi HC – Clyde Pumps Private Limited vs UOI & ors [W.P.(C) 4400/2022]
🔥📛 GSTAT: No retrospective interest levy u/r 133(3)(c); Upholds profiteering on Subway franchisee
➡️ GSTAT Delhi accepted the DGAP report dated 20-11-2025, confirming that Dange Enterprise (Subway franchisee) profiteered ₹4.5 lakh during Nov 2017–Jun 2019, limited to faceless recipients.
➡️ The Tribunal held that interest cannot be imposed, as the investigation period does not materially fall within the period when interest under Rule 133(3)(c) became applicable.
➡️ Noting that this was the second DGAP report with the same profiteering figure, and that the Respondent had already admitted profiteering for the same period, GSTAT accepted the quantification without further dispute.
➡️ Rejecting DGAP’s argument that the provision is “clarificatory and curative,” the Tribunal held — relying on the wording of Notification No. 31/2019 introducing the amendment — that the use of the word “further” denotes an additional future obligation, not a retrospective one.
➡️ The Respondent was directed to deposit the entire profiteered amount into the Central and State Consumer Welfare Funds, shared equally, with no interest component.
✔️ GSTAT Delhi – DGAP Vs. Dange Enterprise [NAPA/16/PB/2025]
🔥📛 GSTAT: Drops anti-profiteering probe against ‘Eclat Serum’ supplier as DGAP could not obtain sufficient details
➡️ The investigation against Shree Suktam Enterprise arose from directions issued in the S.R. Lifesciences anti-profiteering case, requiring DGAP to examine suppliers of “Eclat Serum 30gm” for alleged non-passing of ITC benefits.
➡️ A Rule 129 notice issued in August 2023 was returned undelivered, and spot verification by State Tax authorities confirmed that the Respondent did not exist at the declared address, where another entity was found operating.
➡️ Despite repeated follow-ups with DGGI and various GST authorities, DGAP could not trace the supplier or obtain the data needed to determine whether profiteering occurred.
➡️ Noting that DGAP exhausted available avenues, the GSTAT held that no finding on profiteering is possible without supporting evidence and therefore the anti-profiteering proceedings cannot be sustained.
➡️ While dropping proceedings, the Tribunal instructed the department to verify whether the Respondent was involved in bogus billing and take appropriate action under the CGST Act if warranted.
✔️ GSTAT Delhi – DGAP Vs. Shree Suktam Enterprise [NAPA/157/PB/2025]
🔥📛 AAR: Rent received from Godown leased for storage of Paddy not taxable
➡️ AAR Tamil Nadu held that rent received for a godown used exclusively for storage of paddy is exempt from GST under S. No. 54 of Notification 12/2017-CT (Rate), which covers services relating to storage/warehousing of agricultural produce.
➡️ The ruling notes that the applicant leased premises where the tenant installed rice-mill machinery and used the godown for storage of paddy; however, the tenant refused to pay GST on rent, leading to the clarification request.
➡️ The AAR compared S. No. 24 of Notification 11/2017-CT (Rate) (taxable services) with S. No. 54 of Notification 12/2017 (exempt services), concluding that the latter squarely applies when the service relates to storage of agricultural produce.
➡️ The authority emphasized that paddy qualifies as “agricultural produce”, as it is the rice grain with husk and fits all criteria prescribed in GST law for goods that remain unprocessed or processed in a manner that does not change their essential characteristics.
➡️ On this basis, the AAR ruled that rent pertaining to the godown used for storage of paddy is not taxable under GST, and the service is fully exempt.
✔️ Tamil Nadu AAR – In the matter of Lena Modern Rice Mill [Advance Ruling No. 47/AAR/2025]
