LATEST GST CASE LAWS: 14.05.2025
🔥📛 Grants interim-relief to two-wheeler dealer over GST on smart-card fee, other charges
➡️ The Bombay High Court granted interim relief to a two-wheeler dealer who received a show cause notice for recovering GST on various charges collected from customers, including RTO reimbursement, safety cess, insurance charges, registration charges, hypothecation charges, and smart card fees.
➡️ The dealer argued that it had already paid GST on the Rs. 2000 charged per customer and highlighted a jurisdictional error, stating that under Rule 33, insurance amounts do not constitute a service, thus not making the dealer liable for service tax on those amounts.
➡️ The court, after hearing the arguments, issued a notice in response to the show cause notice.
➡️ The case has been listed for further hearing on June 16, 2025.
➡️ The interim relief allows the dealer to continue its operations without being immediately subjected to the demands of the show cause notice until the next hearing.
✔️ Bombay HC – Sudarshan Motors vs. UOI [WRIT PETITION NO. 2295 OF 2025]
🔥📛 HC: Selling-price comparison with market-price beyond scope of return-scrutiny; Quashes notice citing jurisdiction
➡️ The Jharkhand High Court (HC) is examining a case where the tax authorities issued notices for scrutiny of returns by comparing the transaction value of stone-boulders/stone-chips sold by the assessee to the prevalent market value, which the HC considers as “wholly without jurisdiction”.
➡️ The HC observed that mere differences in transaction value compared to the prevalent market value do not provide a basis for action. It emphasized that the Revenue cannot assess the difference between the market price and the price paid by the purchaser as the transaction value unless the transactions are proven to be a sham.
➡️ The HC is specifically looking into whether the GST-ASMT-10 notices issued under Section 61, alleging that the Petitioners quoted a lower market price in their returns than the actual market price, are beyond the scope of Section 61 and without jurisdiction.
➡️ The HC noted that the notice issued by the competent officer was beyond the scope of Section 61 because it focused on comparing the Petitioners’ selling price with the prevalent market price instead of pointing out discrepancies in the returns filed by the Petitioners.
➡️ The HC allowed the writ petition but granted the Assessing Officer the liberty to issue fresh notices regarding any actual discrepancies in the returns.
✔️ Jharkhand HC – Sri Ram Stone Works & Ors. vs. State of Jharkhand [W.P. (T) No. 5535 of 2024]
🔥📛 HC: ITC misuse creates enormous dent in GST regime; Cannot allow forum shopping, imposes cost
➡️ The Delhi High Court (HC) ruled on a writ petition involving fraudulent availment of Input Tax Credit (ITC) worth over Rs. 115 crores, highlighting that such misuse could severely undermine the GST regime. The HC noted a complex web of transactions between non-existent firms and emphasized the significant number of similar writ petitions filed regarding fake ITC claims without actual supply of goods.
➡️ The HC clarified that ITC, introduced under Section 16 of the CGST Act, is a business-friendly feature aimed at easing the tax burden on inputs already taxed at the source. However, this facility is being misused by unscrupulous elements.
➡️ The petitioner and another individual were accused of colluding with various traders to establish 28 firms to avail fake ITC without supplying any goods. The Additional Commissioner-Adjudication, CGST, had passed a detailed order against several firms and imposed penalties.
➡️ The HC opined that the detailed and appealable order under Section 107 of the CGST Act required factual analysis, which is not within the writ jurisdiction. The HC also criticized unscrupulous litigants for attempting different remedies in various forums.
➡️ The HC dismissed the writ petition and ordered the petitioner to deposit Rs. 50,000 as costs with the Delhi High Court Bar Association.
✔️ Delhi HC – Mukesh Kumar Garg v. UOI [W.P.(C) 5737/2025 & CM APPL. 26171/2025]
🔥📛 SLP dismissed as refund claim for ITC accrued before cutoff date could not be denied for refund application filed afterwards: SC
➡️ Petitioners, involved in manufacturing, distributing, and branding edible oils and specialty fats in India, faced an inverted duty structure where input raw materials attracted higher GST rates than their final products. This situation allowed them to claim a refund of unutilized input tax credit (ITC) under Section 54.
➡️ The petitioners filed refund claims for periods before July 18, 2022, under Section 54. However, their refund claims were rejected by the revenue authorities, who cited Circular No. 181/13/2022-GST. This circular interpreted Notification No. 9/2022-Central Tax (Rate), dated July 13, 2022, to mean that no refunds could be granted for applications filed after July 18, 2022, even if the ITC was accrued before that date.
➡️ The High Court, in its order, held that the specific stipulation in the notification, which came into effect only from July 18, 2022, clearly meant that ITC accumulated in the tax credit ledger of the registered person before July 18, 2022, could be recovered by filing an application under Section 54.
➡️ The High Court concluded that Circular No. 181/13/2022-GST, to the extent it clarified that the restriction imposed by the notification dated July 13, 2022, would apply to all refund applications filed on or after July 18, 2022, was incorrect and had to be struck down.
➡️ Consequently, the High Court set aside the impugned order rejecting the refund claims, and the subsequent Special Leave Petition (SLP) filed against the impugned order was dismissed.
✔️ SC – Assistant Commissioner of Central Taxes v. Gemini Edibles and Fats India Ltd. [SLP Appeal (C) Nos. 12495-12498 of 2025]
🔥📛 Scrutiny u/s 61 is intended to address mismatch between return and related particulars filed; comparison of sale value with market price falls outside its scope: HC
➡️ The competent officer issued notices under Section 61 to writ petitioners, comparing the price at which they sold stone-boulders/stone-chips with the prevalent market price, rather than pointing out discrepancies in their returns.
➡️ The primary objective of Section 61 is to enable the Assessing Officer to identify discrepancies and errors in the returns filed by registered persons.
➡️ If corrective measures are not undertaken by the registered person despite the discrepancies pointed out, the proper officer may initiate appropriate action under Sections 65 to 67 and Sections 73 or 74 of the Act.
➡️ The notices issued in this case, which compared the sale price of goods with the market price, were beyond the scope of Section 61 and without jurisdiction.
➡️ It is established law that unless the sale transactions are proven to be sham or merely because goods were sold at a concessional rate, the Revenue cannot assess the difference between the market price and the price paid by the purchaser as the transaction value. Therefore, the notices issued under Section 61 to the writ petitioners were quashed/set aside.
✔️ Jharkhand HC – Sri Ram Stone Works v. State of Jharkhand [W.P. (T) Nos. 5425, 5427, 5535, 5684, 5725, 5840, 5913, 6056, 6079, 6080, 6093, 6190 of 2024 AND 171 AND 1239 of 2025]
🔥📛 Notice issued to revenue as compliance with deficiency memo should not be considered as new refund application: HC
➡️ The assessee filed a refund application under Section 54 before the due date.
➡️ A deficiency memo was issued by the respondents, and the assessee complied with it.
➡️ The refund application was rejected on the grounds of limitation, treating the deficiency memo as a fresh application.
➡️ The assessee appealed, but the appeal was dismissed due to the limitation issue.
➡️ The matter is now to be listed for hearing, and notice will be issued to the respondents.
✔️ Gujarat HC – Savex Technologies (P.) Ltd. v. Union of India [R/SPECIAL CIVIL APPLICATION NO. 4200 of 2025]
