LATEST GST CASE LAWS: 13.12.2025
🔥📛 Delhi HC gives quietus to Patanjali resolution-plan date dispute, quashes pre-approval GST demand
➡️ The Delhi High Court held that the effective date of approval of the Resolution Plan under section 31 of the IBC was September 4, 2019, not July 24, 2019, as only the former reflected NCLT’s complete and final approval. Consequently, GST demands pertaining to the period prior to September 4, 2019 were set aside.
➡️ The Court emphasized that under section 31(1) of the IBC, NCLT must record its satisfaction on all material aspects of the Resolution Plan. Since the July 2019 order left critical issues—particularly the source of funds—unresolved, it did not amount to a final approval capable of extinguishing past tax liabilities.
➡️ Relying on the Andhra Pradesh High Court judgment, the Court reaffirmed that once a Resolution Plan is validly approved by NCLT, all prior statutory dues, including GST, stand extinguished and cannot be enforced against the successful resolution applicant.
➡️ The Revenue was directed to undertake a fresh GST assessment only for the period subsequent to September 4, 2019, reinforcing the principle that tax authorities cannot reopen or enforce claims relating to periods covered by an approved Resolution Plan.
➡️ While granting relief to the assessee, the Court allowed the Revenue to issue a fresh show cause notice for the post–cut-off period, with liberty to exclude the pendency of the writ petition while computing limitation, balancing revenue interests with insolvency law finality.
✔️ Delhi HC – Patanjali Foods Limited V/S Assistant Commissioner Cgst Narela Division & Ors [W.P.(C) 5784/2025]
🔥📛 Madras HC reserves verdict on petitions challenging extended period demands u/s 74
➡️ The Madras High Court reserved orders in a batch of petitions challenging show cause notices and consequential orders invoking the extended period under Section 74, including the case of Chennai Business Tower Pvt. Ltd., which had already secured a stay on recovery of tax demand relating to blocked ITC under Section 17(5)(d).
➡️ The Assessee contended that Section 74 can be invoked only when there is a wilful and positive act of suppression or misstatement with intent to evade tax, and not in cases involving mere interpretational disputes or bona fide claims.
➡️ It was argued that the alleged wrongful availment of ITC was already within the Revenue’s knowledge through suo motu intimation, recorded statements, and disclosures in GST returns, thereby negating any allegation of suppression or fraud.
➡️ The Assessee emphasized that the Revenue cannot routinely or mechanically resort to Section 74 when all material facts are disclosed, as such an approach dilutes the statutory distinction between Sections 73 and 74.
➡️ On substantive grounds, the Assessee maintained that ITC was legitimately availed since GST was paid on post-construction renting of immovable property, relying on the principles laid down by the Supreme Court in Safari Retreats, which recognizes ITC eligibility where output supplies are taxable.
✔️ Madras HC – Chennai Business Tower Pvt. Ltd. v. Union of India & Ors.
🔥📛 HC: No confiscation sans ‘evasion intent’ without Section-129 strict compliance; Remands for examining MOV-10 on merits
➡️ After the 2021 amendment removing the non-obstante clause from Section 130, detention and seizure of goods in transit must ordinarily be dealt with only under Section 129. The Proper Officer cannot invoke confiscation under Section 130 at the threshold unless there is clear, cogent material showing intent to evade tax. Transit-related proceedings and confiscation proceedings are now distinct and delinked.
➡️ Confiscation under Section 130 carries serious civil consequences and cannot be based on suspicion, assumptions, or ipse dixit. The Proper Officer must examine documents such as invoices, e-way bills, registration details, and consignment records and must form a reasoned opinion supported by concrete material showing intent to evade tax. Acts of third parties not directly linked to the dealer cannot justify confiscation.
➡️ Three-tier framework for transit violations (as per Circular 41/15/2018-GST)
The Court reaffirmed the graded approach to violations during transit:
–> Minor errors (clerical mistakes, small mismatches): No seizure or confiscation.
–> Contraventions without intent to evade tax: Detention under Section 129; release on payment of tax and penalty.
–> Grave violations with clear intent to evade tax (fake documents, forged invoices, unregistered dealer, goods mismatch): Confiscation under Section 130 may be initiated.
➡️ Proceedings under Sections 129 and 130 are not interchangeable. However, even if goods are released under Section 129 on payment of penalty, the Revenue may subsequently initiate Section 130 proceedings if independent incriminating material emerges. Each case depends on its facts; no blanket rule bars later confiscation.
➡️ After deletion of the reference to Section 67(6) from Section 129, provisional release is no longer available in transit cases under Section 129. Provisional release under Section 67(6) applies only where goods are seized for reasons linked to intent to evade tax. Once goods are confiscated, release is governed exclusively by Section 130, not Section 129.
✔️ SC – Panchhi Traders vs State of Gujarat & Anr [R/SPECIAL CIVIL APPLICATION NO. 9250 of 2020]
🔥📛 Orders refund of pre-GST security-deposit paid for ‘Transporter’ registration; Costs Officer for malafide action
➡️ The Tripura High Court strongly deprecated the Superintendent’s action of initiating proceedings under Section 77 of the Tripura VAT Act, 2005 after a lapse of 6–9 years, solely triggered by the transporter’s request for refund of a pre-GST security deposit. Such action was held to be arbitrary, mala fide, without jurisdiction, and violative of Articles 14 and 265 of the Constitution.
➡️ The Court clarified that limitation provisions applicable to “tax” claims do not extend to a security deposit. Since the deposit was taken in the pre-GST VAT regime for transporter registration and had no statutory survival under GST, the petitioner was entitled to refund with interest @ 7%.
➡️ Relying on Gauhati HC in T.R. Freight Movers, the Court reiterated that a transporter—who merely facilitates movement of goods—cannot be foisted with tax liability in the absence of any statutory mechanism to assess alleged tax evasion. Further, penalty under Section 77 cannot be imposed mechanically without establishing deliberate defiance of law.
➡️ The Court emphasized that while the VAT Act mandates dealers to preserve records for 5 years and bars assessment beyond that period, it does not impose stricter obligations on transporters. Hence, proceedings against a transporter beyond the 5-year limitation are impermissible, as a transporter cannot be placed in a worse position than a dealer.
➡️ The Court rejected the Revenue’s argument that Section 77 has no limitation merely because it is silent on the issue. It held that allowing indefinite invocation of penalty provisions would result in a “perpetual sword” hanging over taxpayers, enabling arbitrary action at the whim of authorities—contrary to settled constitutional and judicial principles.
✔️ Tripura HC at Agartala – M/s North East Carrying Corporation Ltd. v. The State of Tripura [WP(C) No. 36 of 2025]
🔥📛 Refund for export of services not denied for alleged non-production of remittance proofs if eBRCs/FIRCs submitted: HC
➡️ The petitioner had exported services without payment of tax and rightly claimed refund of unutilised ITC under the zero-rated supply provisions for FY 2018-19 and 2019-20. The jurisdictional authority, after due verification, initially sanctioned the refund.
➡️ In response to the show cause notices, the petitioner had duly produced eBRCs/FIRCs along with transaction-wise details evidencing receipt of foreign consideration. These documents were part of the official record and demonstrated compliance with refund conditions.
➡️ The appellate authority set aside the sanctioned refunds on the ground of non-production of eBRCs/FIRCs. The Court held this finding to be factually incorrect, as the records clearly showed that such documents had already been furnished.
➡️ The Court observed that details of foreign remittances were available with the department itself. Hence, an alleged procedural lapse or incorrect allegation of non-submission could not be used to deny a substantive refund benefit for genuine export of services.
➡️ Since the foundational premise of non-production of documents was erroneous, the appellate orders, SCNs, adjudication orders, recovery proceedings, and DRC-07 were held unsustainable and quashed. The respondents were directed to grant the refund as originally sanctioned along with applicable interest.
✔️ Karnataka HC – Mavenir Systems (P.) Ltd. v. Union of India [WRIT PETITION NO. 15323 OF 2022 (T-RES)]
🔥📛 Writ against GST show cause notice post-search not maintainable as SCN violations can be urged in adjudication: HC
➡️ The Court reiterated that interference at the SCN stage is unwarranted when the notices are issued by the proper officer in the course of investigation, especially for demands not involving fraud.
➡️ Allegations such as seizure without a formal panchanama or reliance on an unsigned seizure list (Rule 139) do not, by themselves, invalidate SCNs; such issues must be examined during adjudication.
➡️ The Court held that the absence of prior scrutiny of returns or preliminary opportunity does not bar issuance of SCNs under Section 73, particularly when proceedings arise from search-based investigations.
➡️ The petitioner was given liberty to raise issues relating to violations of statutory procedure, lack of opportunity, or evidentiary deficiencies during adjudication, not through writ jurisdiction.
➡️ Since the petitioner had earlier withdrawn writ petitions with liberty to pursue remedies before the assessing authority, the Court found no justification to take a different view and dismissed the present writs.
✔️ Telangana HC – MR Steels v. Deputy Commissioner of State Tax VI [WP No. 34743 of 2025]
🔥📛 Mechanical GST registration cancellation, ignoring replies and documents, set aside for breach of natural justice: HC
➡️ The show cause notice (SCN) for cancellation was vague, lacked specific reasons, and yet the registration was retrospectively cancelled without any justification for the effective date. Such backdated cancellation, without reasons or proper consideration of the taxpayer’s reply, was held to be legally unsustainable.
➡️ The cancellation order mechanically ignored crucial documents (lease deeds and GST returns) submitted by the petitioner, merely stating that the reply was “not considerable.” This reflected a cavalier, templated, computer-generated approach without independent reasoning or application of mind.
➡️ The revocation application was rejected solely on technical grounds, as the reply was filed slightly beyond the stipulated period. The authority failed to consider the reply and supporting documents, rendering the rejection arbitrary and contrary to principles of fairness.
➡️ The appellate authority wrongly sustained the cancellation without addressing the substantive procedural lapses, including lack of reasons, non-consideration of evidence, and denial of fair opportunity. The appellate order was therefore held to be completely erroneous.
➡️ The High Court set aside the cancellation, revocation rejection, and appellate orders, restored the GST registration, and directed fresh adjudication after proper hearing. Costs were imposed on the department, recoverable from the concerned Superintendent, underscoring the duty of GST authorities to act fairly and responsibly, especially when returns are already available on the portal.
✔️ Delhi HC – Ms Imagine Marketing Ltd. v. Joint Commissioner CGST Appeals II Delhi [W.P.(C) No. 17699 of 2025]
🔥📛 Single consolidated appeal can be filed against order raising demand for multiple financial years: HC
➡️ Where a single Order-in-Original and one Form DRC-07 cover multiple audit sub-paras and multiple financial years, the Court held that one consolidated statutory appeal under Section 107 of the CGST Act is legally permissible.
➡️ Even though the demand was consolidated, the amounts attributable to each audit sub-para and period were clearly decipherable from the impugned order. Hence, the order could not be treated as vague or unworkable for appellate purposes.
➡️ Challenges relating to the correct invocation of Section 74 (fraud, suppression, wilful misstatement)—especially where the SCN relies on returns and records available on the GST portal (GSTR-3B, GSTR-9, balance sheet)—are questions of merit that should be examined by the Appellate Authority, not in writ jurisdiction.
➡️ The Court directed that if the petitioner files an appeal by the specified date, the Appellate Authority shall not reject it on the ground of limitation and must adjudicate the appeal on merits.
➡️ Recognizing procedural complexity, the Court extended the time for making the mandatory pre-deposit up to 20 December 2025, thereby enabling the taxpayer to effectively pursue the statutory appeal.
✔️ Delhi HC – South East Asia Company v. Superintendent, CGST Range-28, Central Taxes, GST Delhi North Commissionerate [W.P.(C) No. 17469 of 2025]
🔥📛 State GST officers’ cross-empowerment to issue CGST SCNs valid as unqualified statutory mandate exists: HC
➡️ The petitioner challenged the jurisdiction of State GST officers to issue authorization and a show cause notice under Section 74 of the CGST Act, arguing that such officers lacked authority under the Central law.
➡️ It was contended that Section 6 of the CGST Act permits State/UT GST officers to act as proper officers under the CGST Act only after the Government issues a notification specifying conditions, based on GST Council recommendations.
➡️ The Court held that Section 6(1) itself creates a legislative mandate for cross-empowerment of SGST/UTGST officers as proper officers under the CGST Act, and this empowerment exists by default under the statute.
➡️ The requirement of a notification is not a pre-condition for empowerment, but only a mechanism to impose future qualifications or conditions on the exercise of powers, if and when the Government decides to do so.
➡️ In the absence of any notified conditions, State/UT GST officers are fully authorized to act as proper officers under the CGST Act, including issuing authorizations and show cause notices. The statute cannot be interpreted to defer cross-empowerment until a future notification is issued.
✔️ Kerala HC – Pinnacle Vehicles and Services (P.) Ltd. v. Joint Commissioner, (Intelligence & Enforcement), Kozhikode [W.P (C). NO. 25724 OF 2024]
