LATEST GST CASE LAWS: 14.07.2025
🔥📛 SC: Upholds IGST exemption on Indigo’s re-import of repaired aircrafts’ parts; Dismisses Revenue’s appeal
➡️ The Supreme Court dismissed the Revenue’s appeal, thereby affirming the CESTAT Delhi’s decision which granted IGST exemption on re-imported repaired aircraft parts to Indigo Airlines.
➡️ CESTAT held that re-imports of repaired parts were eligible for exemption under Notification No. 45/2017-Cus, which originally provided relief from IGST and other duties on such goods.
➡️ The Revenue had relied on Notification No. 36/2021-Cus, which amended the original exemption to replace “duty of customs” with “said duty, tax or cess” — an attempt to expand the scope of applicable duties on re-imports. This interpretation was not accepted by the courts.
➡️ The court implicitly rejected the retrospective application of the 2021 amendment to cases prior to its issuance, thereby protecting the benefit of exemption for re-imports made under the original 2017 notification.
➡️ The ruling reinforces legal certainty for importers, especially airlines, by clarifying that re-imported repaired parts are entitled to IGST exemption, so long as they meet the conditions of the original exemption notification.
✔️ SC – The Commissioner of Customs (Air Cargo) v/s Interglobe Aviation Limited
🔥📛 HC: Negates innocence of being cyber-fraud victim involving GST-number; Dismisses writ involving fake ITC
➡️ The Court rejected the Assessee’s defense that their GST credentials were misused by a third party (Mr. Sampat Kumar) to generate fake Input Tax Credit (ITC), holding that such claims do not absolve the registered person from tax liability under GST law.
➡️ The Assessee and his family members had obtained multiple GST registrations but consistently filed NIL returns, which the Court interpreted as indicative of the absence of actual business activity and supportive of the Revenue’s claim of fraudulent ITC.
➡️ The Assessee failed to counter the factual assertions made by the Revenue in its counter affidavit. The Court highlighted this non-rebuttal as a critical weakness, reinforcing the credibility of the Department’s allegations.
➡️ The High Court held that the facts did not justify intervention under Article 226 of the Constitution, as the Assessee could not demonstrate any violation of fundamental rights or procedural irregularity in the demand raised.
➡️ The ruling underscores a key principle: the registered GST taxpayer is responsible for the use of their credentials and for ensuring compliance, regardless of alleged third-party misuse.
✔️ Patna HC – Mangalam Enterprises vs State of Bihar and Others [Civil Writ Jurisdiction Case No.1150 of 2025]
🔥📛 HC: Dismisses challenge to Section 16(2) phraseology; Directs to take recourse to appellate remedy
➡️ The High Court rejected the assessee’s plea to reinterpret the phrase “has been actually paid” in Section 16(2) of the CGST Act as “ought to have been paid,” affirming that input tax credit (ITC) is contingent upon actual payment of tax by the supplier to the government.
➡️ The assessee argued that no proceedings were initiated within 3 years as mandated by Section 73(10). However, the High Court did not entertain this claim as the assessee challenged the adjudication order directly via writ petition rather than using the appellate route.
➡️ The Court highlighted that under Section 107(1) of the CGST Act, any party aggrieved by an order passed by the adjudicating authority has a clear statutory remedy of appeal, making writ intervention inappropriate unless exceptional circumstances exist.
➡️ The petition was dismissed primarily due to the availability of an alternative remedy—namely, filing an appeal under Section 107—rather than addressing the substantive merits of the tax demand.
➡️ The judgment reiterates the judiciary’s restraint in reading down or altering unambiguous statutory language, especially in fiscal statutes, reinforcing that legislative clarity must be respected unless proven unconstitutional.
✔️ Karnataka HC – R.S. Enterprises Vs. The Assistant Commissioner of Commercial Taxes [WRIT PETITION NO. 103311 OF 2025 (T-RES)]
🔥📛 HC: Stays proceedings relating to discrepancy in tax head where demand is exceeding notice
➡️ The adjudication order raised CGST and SGST demands (Rs 2.76 Crores each), although the original show cause notice (SCN) was limited to IGST (Rs 2.98 Crores), with no mention of CGST or SGST. The Court flagged this as a significant jurisdictional issue.
➡️ A second SCN, increasing the IGST liability and introducing new CGST and SGST demands, was issued after the statutory limitation period (post 30th November 2024), raising serious concerns about its validity.
➡️ The petitioner contended that the final order imposed tax demands not proposed in the original SCN, and was excessive and unauthorized, violating principles of natural justice.
➡️ Acknowledging the legal irregularities, particularly the limitation breach and the order exceeding the scope of the original SCN, the Court observed that the matter merits detailed consideration.
➡️ The High Court stayed the recovery of the disputed tax demands and granted the Revenue six weeks to file a counter affidavit, reflecting the seriousness of the petitioner’s claims.
✔️ Allahabad HC – Ntt Cloud Voice And Communications India Private Limited. Versus State of U.P. and Another [WRIT TAX No. – 2793 of 2025]
🔥📛 HC: Demand order against legal heir of dead person after GSTIN cancellation post demise unenforceable
➡️ The Madras High Court held that any GST demand order issued against a deceased individual is legally void (“non-est in law”). Since the assessee (proprietor) had passed away before the issuance of the order, such action lacks legal standing.
➡️ Although the GST registration was cancelled retrospectively (effective from August 31, 2023), the demand order issued post-cancellation against a dead person remains unenforceable, as the cancellation itself does not revive authority over a deceased individual.
➡️ The Court noted that following the cancellation of registration and the death of the proprietor, no further access was made to the GST portal. As such, the legal heir (wife) did not receive any opportunity to contest or respond to the proceedings.
➡️ The Court remanded the matter to the Deputy State Tax Officer for fresh adjudication, directing that future proceedings be undertaken in compliance with law and only after appropriately involving the legal heir.
➡️ While quashing the invalid demand, the Court directed the legal heir to participate in the ongoing adjudication process initiated through the Show Cause Notice, ensuring that procedural fairness is maintained moving forward.
✔️ Madras HC – T Madhanprabhu Vs. The Deputy State Tax Officer [W.P. No. 22071 of 2025]
🔥📛 ITC not admissible on IGST paid for imported clinical trial drugs supplied free to hospitals as supply without consideration falls under section 17(5)(h): AAR
➡️ The supply of imported sample drugs free of cost to hospitals and clinics for clinical trials qualifies as the distribution of “free samples” or “gifts.” Consequently, input tax credit (ITC) on such goods is restricted under Section 17(5)(h) of the CGST Act, 2017.
➡️ When the applicant, a clinical research organization (CRO), imports sample drugs and pays IGST under Section 3(7) of the Customs Tariff Act, 1975, it is not entitled to claim ITC since the imported goods are supplied without consideration.
➡️ In scenarios where IGST and Basic Customs Duty (BCD) on imported sample drugs are paid by a third party (e.g., logistics provider or sponsor) under a Delivered Duty Paid (DDP) model, the applicant—though listed as the Importer on Record—cannot claim ITC, as the supplies remain without consideration.
➡️ Since no commercial invoices are raised and no consideration is received from hospitals or clinics for the clinical trial drugs, the supplies fall outside the ambit of “supply for consideration,” further disqualifying ITC claims under GST law.
➡️ The applicant is also not eligible to claim ITC on GST paid for services received from Customs House Agents, as these services relate directly to the import of sample drugs that are ultimately distributed free of cost.
✔️ Maharashtra AAR – PPD Pharmaceutical Development India (P.) Ltd., In re [GST-ARA-94/2022-23-/B-213]
