LATEST GST CASE LAWS: 12.08.2025
🔥📛 H&M obtains interim-stay from Telangana-HC over scrap-sales subject to 10% deposit compliance
➡️ Telangana HC ordered interim suspension of the GST appellate order (GST APL-04) for FY 2018-19, subject to the petitioner depositing 10% of the disputed amount.
➡️ The confirmed demand arose from alleged non-payment of GST on (i) scrap sales and (ii) RCM liability on freight, forward charges, legal/professional fees, and security services.
➡️ The petitioner argued that scrap sales are non-taxable and that the demand was confirmed without proper reasoning or specific findings supporting taxability.
➡️ The petitioner contended that the GST APL-04 computation was vague, failing to indicate which issues were decided in its favour or against it, thus lacking transparency in determination.
➡️ The petitioner asserted no RCM-triggering transactions occurred in Telangana; HC ordered that no coercive recovery steps be taken and posted the matter for final hearing on 02.09.2025.
✔️ Telangana HC – Hennes and Mauritz Retail Pvt. Ltd. vs. Appellate Joint Commissioner (ST) [W.P. No. 22366 of 2025]
🔥📛 HC: Undue credit availment basis good-less invoices strikes at root of ITC facility; Dismisses writ
➡️ The Delhi High Court reiterated, citing Mukesh Kumar Garg, that in cases involving fraudulent availment of Input Tax Credit (ITC), the writ jurisdiction is generally not exercised due to the significant burden such fraud places on the exchequer and the integrity of the GST regime.
➡️ In this matter, the assessee was found, through a search operation, to have fraudulently availed ITC of ₹1 crore via goods-less invoices. This amount was specifically mentioned in the Show Cause Notice (SCN).
➡️ On procedural objections regarding pre-consultation notices and issuance of SCN summaries, the Court declined to intervene, directing the assessee to pursue the statutory appellate remedy. Reliance was placed on the Supreme Court’s decision in Commercial Steel and its adoption by the Allahabad HC in Elesh Aggarwal.
➡️ The Court directed that, in the appellate stage under Section 107, the authority must consider the Quest Infotech precedent when dealing with consolidated SCNs covering multiple years, ensuring the appeal is decided on merits without being dismissed on limitation grounds.
➡️ Fraudulent ITC claims are treated as serious violations that undermine GST’s credit framework; procedural challenges in such cases are typically addressed through statutory appeals rather than writ petitions.
✔️ Delhi HC – Banson Enterprises & Anr. vs. Assistant Commissioner Cgst & Ors [W.P.(C) 6503/2025]
🔥📛 HC: Recognizing two tier interest liability on GST-Refund delays, grants interest at 6% construing Appellate-Order as Original-Order
➡️ Under Sections 54 and 56 of the CGST Act, interest at 6% is payable if a refund ordered under Section 54(5) is not paid within 60 days, and 9% applies where an appellate order directs a refund and delay occurs beyond 60 days from that order.
➡️ An appellate authority’s order overturning the original refund denial is deemed to be an order under Section 54(5); the higher 9% rate applies if the refund is delayed beyond 60 days of such appellate order.
➡️ A fresh application after an appellate order is only for administrative purposes; it does not reset statutory timelines for interest computation.
➡️ The Court reaffirmed that interest on delayed refunds is compensatory in nature, meant to redress the assessee for loss of use of funds due to administrative delay.
➡️ The HC quashed the revenue’s order, allowed the assessee’s full interest claim on a delayed refund of ₹6.29 crores, and directed authorities to pay interest at 6% for delays post-first authority’s order and 9% post-appellate order.
✔️ Bombay HC – Lupin Limited Vs. Union of India & Ors. [WRIT PETITION NO. 610 OF 2024]
🔥📛 HC: Elucidating on ‘Entitlement’ vis-a-vis ‘entitled’ distinction, relegates taxpayer to Adjudicating-Authority challenging blocked-credit
➡️ The assessee’s ITC was questioned as its supplier’s GSTIN was cancelled, yet invoices were issued. The Revenue argued that no actual supply occurred, making ITC inadmissible; a show cause notice had been issued with the assessee’s reply pending.
➡️ The Court emphasized the difference between being “entitled to avail” ITC and “entitlement to” ITC, citing the Supreme Court’s Safari Retreats decision, and stressed that entitlement must be established through fact-based verification.
➡️ Verification of ITC claims requires assessment by the statutory authority through supporting evidence such as invoices, bank statements, and waybills; such adjudication is fact-intensive and beyond writ jurisdiction at the preliminary stage.
➡️ The HC observed that blocking ITC under Rule 86A must be exercised with caution, not automatically, and that objections to blocking should be decided by the concerned authority within a time-bound manner, as supported by precedents (SS Industries, Jayam & Co., Banson Enterprises).
➡️ The Court refrained from deciding on merits and directed the assessee to file objections and reply to the notice before the adjudicating authority, which is obliged to consider them and pass an order within prescribed timelines.
✔️ Orrisa HC – Transtech Solution vs. The Commissioner CT & GST [W.P.(C) No. 13821 of 2025]
🔥📛 Limitation period for refund claim of amount wrongly deposited to be counted from date of deposit under correct head: HC
➡️ The assessee mistakenly classified certain transactions for FY 2017-18 as intra-State supplies, paying CGST and SGST instead of IGST.
➡️ The error came to light during an audit, after which the assessee paid the short-paid IGST on 04-03-2023.
➡️ A refund was sought for the wrongly paid CGST and SGST amounts, originally deposited with the returns for FY 2017-18.
➡️ The court held that the two-year limitation period for claiming a refund should be calculated from the date of IGST payment (04-03-2023), not from the original CGST/SGST payment date in January 2018.
➡️ The assessee was entitled to a refund of the wrongly paid CGST and SGST, along with applicable interest, as the rejection based on an earlier limitation date was an error in law.
✔️ Patna HC – Sai Steel v. State of Bihar [Civil Writ Jurisdiction Case No. 13163 of 2024]
🔥📛 Portal error led to GST demand of 36% not contemplated under Act; reassessment for 18% GST imposition required: HC
➡️ The case involved a GST demand relating to the period 2019–20, not arising from fraud, but due to a technical error on the GST web portal in computing tax liability.
➡️ The petitioner filed GSTR-1 for October 2019 showing GST at 9% SGST and 9% CGST on sales of ₹89.84 lakh (total 18% GST), but the portal incorrectly applied 18% for each (SGST and CGST), effectively imposing 36% GST.
➡️ The petitioner highlighted the discrepancy in their reply to the notice, showing that the excess tax rate was purely due to a system-generated error, not due to misreporting or non-compliance.
➡️ The court held that GST law never contemplated a 36% rate and that the error was clearly attributable to the portal, not the taxpayer’s conduct.
➡️ The department was directed to reassess the tax liability, taking the portal error into account, and to correct the demand accordingly.
✔️ Kerala HC – Sunlight Boards (P.) Ltd. v. State Tax Officer [WP(C) NO. 16590 OF 2025]
🔥📛 Interest on delayed refund is to be automatically paid without any separate claim for same: HC
➡️ Under Section 56 of the CGST Act, interest on delayed refunds is a statutory obligation, automatically payable once the conditions are met, irrespective of whether the taxpayer has specifically claimed it.
➡️ Interest becomes payable if the refund amount is not credited within 60 days from the date of receipt of the refund application by the proper officer.
➡️ The absence of an explicit claim for interest by the taxpayer does not amount to a waiver; authorities cannot deny interest on this basis.
➡️ Even when refund orders are passed without mention of interest, the statutory provision mandates payment of interest if there is a delay beyond the 60-day limit.
➡️ The payment of such interest is not discretionary but a legal consequence of delay, reinforcing the principle that statutory entitlements under GST cannot be overridden by procedural lapses or omissions in claim.
✔️ Delhi HC – Xilinx India Technology Services (P.) Ltd. v. Assistant Commissioner State Tax [W.P.(C) No. 2547 of 2025]
🔥📛 Stay on recovery of GST demand as provisions of Sec. 122(1A) couldn’t be applied retrospectively: SC
➡️ The GST Department alleged that the petitioner, in collusion with others, created 28 firms and availed Input Tax Credit (ITC) without actual supply of goods. A detailed investigation led to a show cause notice and subsequent penalty order.
➡️ The petitioner claimed they were neither an authorized signatory nor a taxable person, arguing that at most a nominal penalty of ₹25,000 under Section 122(3) of the CGST Act could be imposed.
➡️ The Court held that determining the petitioner’s role and the appropriateness of the penalty required a factual inquiry, which could not be undertaken in writ jurisdiction. Disputes over penalty quantum and applicability of Sections 122(1) or 122(3) must be addressed through the statutory appellate process under Section 107.
➡️ Before the Supreme Court, two main arguments were raised:
–> Section 122(1) applies only to taxable persons, and thus could not apply to the petitioner.
–> Section 122(1A), effective from 01.01.2021, could not be applied retrospectively to assessment years 2017–2020.
➡️ The Court stayed recovery of the demand on the condition that the petitioner deposit 25% of the demand amount with the GST department, payable via Electronic Ledger or Cash Ledger.
✔️ SC – Mukesh Kumar Garg v. Union of India [SLP TO APPEAL (C) NO(S). 18178 of 2025]
