LATEST GST CASE LAWS: 16.05.2026
🔥📛 SC affirms HC-judgment that UP cannot impose VAT on Reliance’s inter-State natural gas sales
➡️ The Supreme Court upheld the Allahabad High Court (Lucknow Bench) ruling that the sale of natural gas by Reliance Industries Limited from the KG Basin in Andhra Pradesh to buyers in Uttar Pradesh constituted an inter-State sale and therefore could not be subjected to VAT under the UPVAT Act by the State of Uttar Pradesh.
➡️ The Court noted that the gas moved from Gadimoga, Andhra Pradesh to Uttar Pradesh pursuant to Gas Sales and Purchase Agreements, while transportation was separately arranged through Reliance Gas Transportation Infrastructure Limited and GAIL, establishing a direct nexus between the sale transaction and inter-State movement of goods.
➡️ Affirming the High Court’s reasoning, the Supreme Court observed that delivery of gas to the transporter/bailee at Gadimoga and its subsequent movement across States clearly demonstrated that the movement of goods was occasioned by the sale itself, satisfying the test of an inter-State sale under Section 3 of the Central Sales Tax Act, 1956.
➡️ The judgment reiterates that Section 3 of the Central Sales Tax Act embodies the constitutional framework governing inter-State trade and prevents States from levying local sales tax or VAT on transactions that are intrinsically inter-State in nature, thereby preserving the constitutional allocation of taxing powers.
➡️ The ruling provides significant guidance for GST and indirect tax professionals by emphasizing that the substance of contractual arrangements and the movement of goods pursuant to a sale transaction are decisive in determining the nature of supply, and that States cannot impose local VAT where the transaction qualifies as an inter-State sale under the constitutional and statutory scheme.
✔️ SC – State of Uttar Pradesh and ors. Vs Reliance Industries Ltd. and ors. [CIVIL APPEAL NO. 3910 OF 2016]
🔥📛 Rajasthan HC stays ‘copy-paste’ appellate order lacking independent application of mind; Summons officer
➡️ The Rajasthan High Court strongly criticised the first appellate authority for disposing of the Assessee’s GST appeal by allegedly reproducing the Order-in-Original almost verbatim, without demonstrating any independent reasoning or judicial application of mind in the appellate proceedings.
➡️ Upon comparing the adjudication order and the appellate order, including the Assessee’s tabular comparison, the Court observed prima facie that the appellate authority had merely “copied and pasted” the original order with only minor additions such as insertion of case laws, while the substantive contents remained identical.
➡️ The High Court remarked that such use of computer and information technology, without independent consideration of facts and legal submissions, reflected a serious procedural lapse and amounted to an abuse of the appellate process expected under GST law.
➡️ The Court further observed that the appellate authority’s approach appeared to be a superficial attempt to present the appellate order as an independent adjudication, describing it as a “cavalier approach” and a “feeble effort” to masquerade the original order as its own.
➡️ Taking serious note of the issue, the High Court directed that the concerned appellate officer be impleaded as a party to the proceedings, ordered filing of a personal affidavit explaining the observations made by the Court, directed the officer to remain present through video conferencing on the next hearing date, and stayed the operation of both the original and appellate orders till further hearing scheduled on July 6, 2026.
✔️ Rajasthan HC – Ircon PB Tollway Ltd. v. Union of India & Ors. [D.B. Civil Writ Petition No. 9602/2026]
🔥📛 P&H HC remands expatriate secondment dispute for reconsideration in light of CBIC circulars/judicial precedents
➡️ Punjab and Haryana High Court set aside the original GST/IGST demand order on expatriate employee secondment/deputation and remanded the matter for fresh adjudication, holding that the taxability of such arrangements under the reverse charge mechanism requires a detailed factual examination rather than a mechanical application of earlier rulings.
➡️ The dispute concerned whether deputation of expatriate employees by overseas group entities amounted to import of manpower supply services liable to GST under reverse charge, with the Assessee contending that the arrangement represented an employer-employee relationship and not an independent supply of services by the foreign entity.
➡️ The Assessee argued that the ruling of Northern Operating Systems Pvt. Ltd. judgment cannot be universally applied to all secondment structures, since the legal position depends on specific contractual terms, control over employees, salary arrangements, and the actual nature of the employment relationship in each case.
➡️ Reliance was placed on the decisions of Delhi High Court in Metal One Corporation India Pvt. Ltd. and Karnataka High Court in Alstom Transport India Ltd., which emphasized that secondment/deputation arrangements must be independently evaluated on their own facts to determine whether they constitute taxable manpower supply services.
➡️ Accepting the need for reconsideration, the High Court directed the adjudicating authority to freshly examine the applicability of CBIC Instruction No. 05/2023-GST, Circular No. 210/4/2024-GST, and the judicial precedents cited by the Assessee, and thereafter issue a reasoned order in accordance with law after proper factual analysis.
✔️ P&H HC – Yamazen Machinery & Tools India Pvt. Ltd. v. Union of India & Ors. [CWP-7448-2024]
🔥📛 Bombay HC grants interim relief on taxability of university activities in light of ‘supply’ definition
➡️ The Bombay High Court granted interim stay on GST recovery proceedings initiated against Gondwana University, observing that the dispute raised by the University was already covered by earlier judicial pronouncements relied upon by the assessee.
➡️ The University argued that the primary issue for determination was whether its activities fall within the scope of “supply” under Section 7 of the CGST/MGST Act, and consequently whether GST liability under Section 9 could at all be invoked against such educational and statutory functions.
➡️ The Court took note of an earlier decision of the Bombay High Court in Writ Petition No. 4389/2025 dated 27.04.2026, where it had been observed that the core controversy relates to examining whether the impugned activities are taxable supplies under the GST framework.
➡️ Accepting the assessee’s contention that the legal issue was substantially covered by prior rulings, the High Court held that the matter required detailed consideration at the final stage and that immediate coercive recovery would not be justified pending adjudication.
➡️ Accordingly, the Court granted interim relief by staying coercive action and recovery proceedings against the University, reinforcing the principle that disputed GST demands involving unresolved questions on the applicability of Sections 7 and 9 warrant judicial protection until final determination.
✔️ Bombay HC – Gondwana University v. Union of India [WRIT PETITION NO. 4024 OF 2026]
🔥📛 HC: Quashes non-speaking refund rejection, ignoring Assessee’s distinct-person plea; Directs de novo adjudication
➡️ Bombay High Court quashed both the adjudication and appellate orders rejecting refund claims of Apollo India Services LLP, holding that the authorities failed to issue a reasoned and speaking order while denying GST refund on export of services provided to its overseas group entity.
➡️ The Assessee, engaged in operational, finance, and risk support services for a US-based entity, had claimed refund under Section 54 of the CGST/MGST Acts read with Section 16 of the IGST Act on the ground that the services qualified as export of services under Section 2(6) of the IGST Act.
➡️ The Revenue authorities initially rejected the refund applications alleging non-submission of documents and failure to satisfy export conditions, while the appellate authority additionally held that the activities were in the nature of liaison services rendered to itself and, for the first time, treated the Assessee as an intermediary.
➡️ The Assessee argued that both entities were separate legal persons incorporated in different jurisdictions and not merely establishments of distinct persons, and further contended that the appellate authority ignored detailed submissions, agreements, and supporting documents furnished during personal hearings to establish eligibility for refund.
➡️ The High Court observed that the impugned orders contained no specific findings on the refund claims and merely reproduced clauses of the agreement without proper analysis, making them bald and non-speaking orders; accordingly, the Court accepted the Revenue’s suggestion for remand and directed fresh adjudication through a proper, reasoned order after considering the Assessee’s submissions.
✔️ Bombay HC – Apollo India Services LLP v. The State of Maharashtra and others [WRIT PETITION NO. 5268 OF 2024]
🔥📛 HC: Excess DRC-03 payment during investigation satisfies pre-deposit requirement; Directs issuance of State-wide administrative instructions
➡️ Allahabad High Court held that excess GST payment made through Form GST DRC-03 during investigation can be treated as valid discharge of the mandatory 10% pre-deposit required under Section 107 for filing an appeal, where the Assessee had already deposited more than Rs. 1.10 crore against a disputed demand exceeding Rs. 7 crore.
➡️ The Court observed that insisting on a separate pre-deposit despite substantial payment already made during investigation would be unreasonable and contrary to the purpose of Section 107, particularly when the deposited amount adequately covered the statutory requirement for maintaining the appeal.
➡️ Taking note of the GSTN advisory, the Court clarified that payments made through Form GST DRC-03 are not automatically tagged to a specific demand or appeal reference, which may prevent such payments from being reflected as pre-deposit unless subsequently mapped through Form GST DRC-03A.
➡️ Recognising the technical nature of the issue, the Court noted that GSTN has already introduced a mechanism through Form GST DRC-03A to link earlier payments with the relevant demand, and therefore procedural or system-related difficulties should not deprive taxpayers of their appellate remedy.
➡️ The Court permitted the Assessee to file the appeal within two weeks without any objection on limitation, directed GSTN authorities to resolve technical issues faced by the Assessee, and ordered circulation of the judgment to senior Central and State GST authorities in Uttar Pradesh for issuance of appropriate administrative instructions to address similar difficulties faced by registered persons.
✔️ Allahabad HC – Novitech Health Care Private Limited Vs Commissioner CGST & Central Excise, Commissionerate Agra & Ors. [WRIT TAX No. – 1845 of 2026]
🔥📛 HC: Tax paid under protest anterior to demand-order adjustable against mandatory pre-deposit for appeal filing
➡️ The Bombay High Court modified its earlier interim order and held that amounts already deposited under protest during the disputed period can, prima facie, be considered towards the mandatory pre-deposit requirement under Section 107(6)(b) of the CGST Act for maintaining an appeal.
➡️ The Court relied on the Supreme Court decision in VVF (India) Ltd ruling, where it was held that amounts deposited prior to assessment cannot be ignored in the absence of a statutory exclusion and that payments made under protest must be considered while verifying compliance with mandatory pre-deposit conditions.
➡️ The assessee, Ncdex E Markets Ltd, involved in a dispute concerning alleged TCS liability for October 2018 to March 2022, had deposited Rs. 30.81 crores under protest from April 2021 onwards as a precautionary measure, which exceeded the statutory pre-deposit cap of Rs. 20 crores prescribed under Section 107(6)(b).
➡️ The Revenue argued that GST law does not recognize the concept of payment “under protest” and contended that the deposits amounted to admission of liability, thereby falling within Section 107(6)(a) rather than qualifying as pre-deposit for appeal purposes; however, the High Court noted that the fact of payment under protest was undisputed and left the legal validity of such characterization open for final adjudication.
➡️ Observing that the assessee had already deposited an amount exceeding the statutory 10% requirement, the High Court held, on a prima facie basis, that no additional deposit was necessary for continuation of interim protection and accordingly disposed of the interim application by modifying its earlier direction requiring a further 10% pre-deposit.
✔️ Bombay HC – Ncdex E Markets Ltd v. Union of India [INTERIM APPLICATION NO. 81 OF 2026]
