LATEST GST CASE LAWS: 16.07.2025
🔥📛 Rajasthan HC’s interim-stay over GST Demand on Corporate Guarantees provided by Vedanta
➡️ Vedanta Ltd. filed a writ petition contesting an assessment order that imposed GST on corporate guarantees given by a parent company to banks on behalf of its subsidiaries, even when no consideration was received.
➡️ The assessment relied on CBIC Circular No. 204/16/2023-GST and Schedule I of the CGST Act, which deem such guarantees as “supply between related parties” liable to GST, even without consideration.
➡️ Vedanta questioned the validity of Rule 28(2) of the CGST Rules, 2017, and the Circular, arguing that the presumptive 1% valuation of the guaranteed amount is excessive and economically burdensome.
➡️ The Rajasthan High Court took note of the submissions and granted an interim stay, directing that no GST recovery be made under the impugned assessment order for the time being.
➡️ The matter is now posted for final hearing on August 7, with the legality of the valuation mechanism and the Circular’s enforceability under judicial review.
✔️ Rajasthan HC – Vedanta Limited vs. UOI [D.B. Civil Writ Petition No. 10618/2025]
🔥📛 SC: Dismisses Revenue’s SLP challenging HC judgment limiting Commissioner’s revisionary powers staying refund sanctioned order
➡️ The Delhi High Court held that an allegation of wrongful Input Tax Credit (ITC) availment has no direct correlation with the validity of a refund sanction order, especially when the refund pertains to the Electronic Cash Ledger.
➡️ The Commissioner cannot exercise revisionary powers under Section 108 of the CGST Act to keep a refund order in abeyance unless it is clearly established that the order is erroneous, improper, or prejudicial to the interest of revenue.
➡️ Merely receiving post-facto intelligence suggesting possible ITC fraud does not justify staying a previously sanctioned refund, as such inputs do not inherently invalidate the original refund order.
➡️ The Supreme Court declined to interfere with the High Court’s decision, affirming that there was no legal basis for the Commissioner’s order and reinforcing the safeguards against arbitrary use of revisionary powers.
➡️ While upholding the High Court’s ruling, the Supreme Court clarified that it is not settling the underlying legal question and left the broader issue open for consideration in future cases.
✔️ SC – UOI & Ors vs HCC VCCL Joint Venture [Diary No(s). 24660/2025]
🔥📛 HC: CA certificate valid for transaction genuineness even if not from supplier
➡️ The Madras High Court quashed the assessment order passed under Section 74 of the CGST Act, observing that the officer had acted mechanically without proper application of mind.
➡️ The assessee explained that they could not obtain the required CA certificate from the supplier due to the supplier being under liquidation, and hence were unable to contest the mismatch between GSTR-2A and GSTR-3B.
➡️ Despite the assessee submitting a certificate from their own Chartered Accountant confirming receipt of goods, payment of GST, and completion of transactions, the authority failed to give due consideration to this document.
➡️ Citing CBIC Circular No. 183/15/2022-GST, the Court stressed that the proper officer should have evaluated the CA certificate and supporting documents before concluding the proceedings, instead of dismissing the matter arbitrarily.
➡️ The matter was remitted back to the Assistant Commissioner (Revenue) for fresh consideration under Section 73 (non-fraudulent cases), with the condition that the assessee deposits the disputed tax amount in the interim.
✔️ Madras HC – JIT Auto Comp Vs Assistant Commissioner [W.P. No. 16474 of 2024]
🔥📛 Interim bail granted as notice under Section 35(3) of the BNSS, 2023 was not served and reasons for arrest were not communicated: HC
➡️ The applicant-accused was arrested based on allegations that their firm availed and passed on ineligible Input Tax Credit (ITC) using invoices without any actual supply of goods, violating Section 132 of the CGST Act.
➡️ The applicant contested the arrest, arguing that the authorization for arrest lacked proper justification or written recording of “reasons to believe,” thereby undermining its legal validity.
➡️ The court observed that there was no compliance with Section 35(3) of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), which mandates prior notice and proper communication of arrest grounds — a mandatory procedural safeguard.
➡️ While some reasons for arrest were recorded, the court acknowledged procedural deficiencies and ruled that custodial interrogation was not necessary at this stage, leading to the grant of interim bail to the applicant.
➡️ This case highlights that any arrest under GST must strictly comply with procedural safeguards under BNSS and GST law, including a documented “reason to believe” and proper service of notice. Failure to do so can render the arrest legally vulnerable and attract judicial scrutiny.
✔️ Gauhati HC – Varun Goyal v. State of Assam [Crl. Pet. 699 OF 2025]
🔥📛 Demand order passed without issuing a show cause notice under Rule 142(1A) is to be set aside: HC
➡️ The Assessing Authority failed to serve a mandatory show cause notice (SCN) under Rule 142(1A) of the CGST Rules before initiating assessment proceedings for FY 2017–18.
➡️ The absence of the SCN amounted to a breach of the principles of natural justice, as the taxpayer was denied the opportunity to respond before the demand was finalized.
➡️ The Revenue did not dispute the claim that no such notice was served, effectively acknowledging procedural non-compliance.
➡️ The court relied on established judicial precedents holding that failure to serve the SCN renders the assessment and demand order legally unsustainable.
➡️ The demand order was set aside, and the matter was remanded to the Assessing Authority with directions to conduct fresh assessment in compliance with procedural requirements under the GST Act and Rules.
✔️ Andhra Pradesh HC – Sri Shakthi Communications v. Assistant Commissioner of State Taxes [WP NO. 8150 OF 2025]
🔥📛 Arithmetical error in order leading to excess tax demand allows assessee to seek rectification without limitation: HC
➡️ The assessee identified a clear arithmetical error that caused the tax demand to exceed the actual taxable value of transactions for the period 2018–19.
➡️ The court recognized the error as purely clerical or arithmetical in nature, resulting from an accidental slip or omission, not involving any substantive legal issue.
➡️ The assessee was entitled to seek rectification under Section 161 of the CGST Act, which allows correction of errors apparent on the face of the record.
➡️ The court held that the second proviso to Section 161, which exempts such rectifications from the six-month time limit, was directly applicable to this case.
➡️ The assessee was granted the liberty to file a rectification application under the second proviso, and the authorities were directed to consider it without applying the six-month limitation period stated in the first proviso.
✔️ Uttarakhand HC – J.V.M. Industries v. State of Uttarakhand [WP (M/B) No. 120 of 2025]
