LATEST GST CASE LAWS: 16.04.2025
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🔥📛 Delhi HC summons officer denying refund of ECL balance; Cites “harrowing experience” of widow ➡️ A widow had to cancel her GST registration due to the death of her proprietor-husband. She had an excess Input Tax Credit (ITC) balance in her Electronic Cash Ledger (ECL) at the time of cancellation. She sought a refund of this amount but faced difficulties in obtaining it from the GST Department. ➡️ The Delhi High Court expressed strong dissatisfaction with the Revenue’s refusal to refund the excess ITC balance. The court highlighted the “harrowing experience” the petitioner had in trying to get the refund. ➡️ The High Court noted that the Revenue had failed to comply with its previous order directing the re-credit of approximately ₹10.45 Lakhs in the ECL. The court was astonished that despite the amount being in the ECL, the refund had not been given to the petitioner. ➡️ The petitioner argued that the ECL is effectively a deemed instrument belonging to her and any amount shown therein is her property. She contended that the GST Department cannot hold back the amount. ➡️ The High Court called the GST Department’s stance that the refund would not be liable to be paid because the petitioner is not a registered person under the GST Department as “completely baseless”. The court granted time to the Revenue to seek instructions and posted the matter for further hearing on May 5, 2025, while requiring the concerned officer to be physically present in court on the next date. ✔️ Delhi HC – Bhavna Luthra vs The Assistant Commissioner, Range-8, CGST, Delhi & Ors [W.P.(C) 4551/2025]
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🔥📛 HC: Quashes demand on transfer of development rights by land owner to realtor; Allows writ ➡️ The Bombay High Court (Nagpur Bench) ruled that the transfer of development rights from a landowner to a developer through a deed of declaration under Section 2 of the Maharashtra Apartment Ownership Act, 1970 is not subject to GST as per entry 5B of the notification dated 28 June 2017, as amended by the notification dated 29 March 2019. ➡️ The court considered an agreement of development between the petitioner and the landowner, which granted the petitioner the right to develop the property using its present Floor Space Index (FSI) or any increases thereof. ➡️ Based on this agreement, the court quashed the GST demand order and the underlying show cause notice, determining that the transaction did not fall under the scope of entry 5B in the context of GST laws in India. ➡️ The High Court distinguished between development rights and Transferable Development Rights (TDR) as defined in the Unified Development Control and Promotion Regulations for the State of Maharashtra. It clarified that the TDR/FSI mentioned in entry 5B cannot be related to the rights a developer obtains from the owner under the development agreement. ➡️ Consequently, the court allowed the writ petition, reinforcing the interpretation of GST applicability in such transactions under India’s GST framework. ✔️ Bombay HC – Shrinivasa Realcon Private Ltd. Vs. Deputy Commissioner Anti Evasion Branch, CGST & Central Excise Nagpur & others [WRIT PETITION NO. 7135 OF 2024] |
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🔥📛 Stay granted on final order pending petition as SCN failed to meet procedural requirements under Rule 142 ➡️ The assessee challenged a show cause notice on the grounds that it did not comply with Rule 142 of the CGST Rules, specifically because it was not uploaded on the portal. The assessee also argued that Section 74 was misused, as there was no allegation of tax evasion. ➡️ The court found that the show cause notice appears to be procedurally defective and jurisdictionally unsound. This means that the notice did not follow the proper procedures and the authority did not have the proper jurisdiction to issue it. ➡️ The court held that a subsequent final order passed by the GST authority during the pendency of the petition cannot validate proceedings that were illegal from the beginning. In other words, if the initial notice was wrong, a later order cannot make it right. ➡️ The denial of the opportunity for cross-examination was found to violate the principles of natural justice. This means that the assessee did not have a fair chance to defend themselves and question the evidence against them. ➡️ The operation of the impugned final order was stayed pending final adjudication. This means that the final order will not be implemented until the entire case is fully decided. The petition was admitted for further consideration. ✔️ Madhya Pradesh HC – Sanitex Chemicals Ltd. v. Central Excise GST [WP No. 40861 of 2024] |
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🔥📛 Advertisement tax demand post 01-07-2017 was illegal as levy stood deleted by virtue of section 173 of GST Act: HC ➡️ Petitioners had filed petitions to quash demand notices for advertisement tax and to prevent interference in their business of displaying advertisements on hoardings. ➡️ A coordinate bench of the court held that the levy of advertisement tax was deleted by Section 173, making the demand for tax from petitioners after 1 July 2017 illegal and without jurisdiction. ➡️ Respondents claimed that the money collected was an advertisement fee, not tax, and sought clarification that Kanpur Nagar Nigam did not need to refund any part of the collected fee. ➡️ The court clarified that the impugned demand fell under Section 173, and the deposited advertisement tax could be refunded, without issuing further directions. ➡️ Given the clarity of the court’s reasoning and the effect of its order, the instant application was dismissed. ✔️ Allahabad HC – Selvel Media Services (P.) Ltd. v. State of U.P. [WRIT TAX No. – 354 of 2018] |
