LATEST GST CASE LAWS: 16.12.2025
🔥📛 Bombay-HC to examine Section-74 SCN for time-barred audit, unlawful bunching, and lack of suppression
➡️ The Bombay High Court granted ad-interim relief to Speedways Logistics after the Revenue stated that no adverse action would be taken till the next hearing, in a writ petition challenging an SCN issued under Section 74 as being pre-meditated and jurisdictionally flawed.
➡️ The Assessee challenged the validity of the GST audit on the ground that it was conducted and concluded beyond the mandatory time limits prescribed under Section 65(4), without any valid extension by the Commissioner, rendering the consequential SCN without jurisdiction.
➡️ The Assessee argued that Section 74 was invoked merely to overcome limitation under Section 73, as the SCN contained only bald allegations of “suppression” without specific material, evidence, or intent to evade tax—despite full disclosures in returns and during audit.
➡️ On merits, the Assessee refuted the demand relating to alleged “commission income,” contending that the department wrongly treated the margin charged over actual ocean freight as commission, ignoring that transportation of goods by vessel from India to outside India was exempt from IGST till 30 September 2022.
➡️ The SCN was also challenged for clubbing multiple financial years (2019-20 to 2022-23) in a single notice, contrary to the GST statutory scheme which requires determination of liability with reference to defined tax periods for each financial year.
✔️ Bombay HC – Speedways Logistics Private Ltd. v. Union of India & Ors. [WRIT PETITION NO. 7419 OF 2025]
🔥📛 GST on royalty, statutory charges for assigning natural resources usage rights under Orissa-HC scanner
➡️ The Orissa High Court granted interim protection to ESL Steel Limited by staying a GST demand of ₹512 crore (plus interest and penalty) relating to alleged GST liability on assignment of the right to use natural resources and allied statutory payments.
➡️ The Court noted the Assessee’s prima facie contention that statutory charges such as stamp duty, registration fees, and CAF payments are compulsory exactions under law and do not constitute “consideration” for any supply, as no service is rendered by the Government in return.
➡️ The Assessee’s argument that CAF payments cannot be artificially characterized as consideration for a “tolerated act” (i.e., diversion or conversion of forest land) was found persuasive, as such payments arise from statutory obligations and lack any element of quid pro quo.
➡️ The Court took note of serious procedural infirmities in the GST notice, including internal contradictions and impermissible clubbing of multiple financial years into a single consolidated demand, rendering the notice prima facie unsustainable.
➡️ Relying on its earlier ruling in Vedanta Limited, where bunching of notices across years was disapproved, the High Court held that ESL Steel had established a strong prima facie case, justifying grant of interim relief against the GST demand.
✔️ Orissa HC – ESL Steel Limited v. Union of India & Ors. [W.P.(C) No. 34653 of 2025]
🔥📛 HC: Citing Assessee’s co-operation, protects Assessee from coercive action pending investigation completion
➡️ The Allahabad High Court reaffirmed that no tax recovery—voluntary or otherwise—can be made during an ongoing GST investigation in the absence of a show cause notice or confirmed tax demand.
➡️ The Court took note of binding CBIC and DGGI Headquarters instructions that expressly prohibit officers from forcing taxpayers to deposit amounts during investigation, emphasizing administrative discipline within GST enforcement.
➡️ Any extraction of money without lawful authority or determination of tax liability violates Article 265 of the Constitution, which mandates that tax can be levied or collected only by authority of law.
➡️ Since the assessee was found to be fully cooperating with the investigation—a fact acknowledged by the Revenue—and no tax demand was pending, coercive action was held to be unjustified.
➡️ The High Court recorded the Revenue’s categorical assurance that no coercive recovery would be undertaken during the investigation, effectively granting interim protection and reinforcing taxpayer safeguards against investigative overreach.
✔️ Allahabad HC – Testbook Edu Solutions Pvt. Ltd. v. Senior Intelligence Officer, DGGI Meerut & anr. [WRIT TAX No. – 6634 of 2025]
🔥📛 HC: Grants interim-relief in plea against refund denial u/s 54(3); Holds full tax payment waives GSTAT pre-deposit
➡️ The Bombay High Court held that where the assessee has already paid the entire tax amount, no further amount is required to be paid or deposited for filing an appeal before the GST Appellate Tribunal (GSTAT), even though interest and penalty are disputed.
➡️ The assessee challenged the second proviso to Section 54(3) of the CGST Act as being manifestly arbitrary and ultra vires, after refund of accumulated Input Tax Credit (ITC) due to inverted duty structure was rejected through SCN, order-in-original, and order-in-appeal.
➡️ Since the principal tax liability was already discharged, the assessee contended that the statutory requirement of a 20% pre-deposit for GSTAT appeal could only apply to the disputed amount, and not to interest and penalty, which were independently contested.
➡️ Acknowledging that the tax was fully paid, the Court granted interim protection, restraining the Revenue from recovering interest and penalty during the pendency of the writ petition.
➡️ The Court expedited the hearing of the petition and clarified that if the petition ultimately fails, the assessee would be liable to pay interest on the interest and penalty amounts as finally determined, thereby balancing revenue interests with taxpayer protection.
✔️ Bombay HC – Beekaylon Synthetics Pvt. Ltd. vs UOI [WRIT PETITION NO. 5319 OF 2024]
🔥📛 HC: Quashes refund denial, reaffirms that inverted-duty ITC refund is allowed for Metro-related works contracts
➡️ The Karnataka High Court reaffirmed that works-contract services provided for construction of BMRCL’s elevated metro line are eligible for refund of unutilized ITC under inverted duty structure, consistent with its earlier ruling in the assessee’s own case.
➡️ Relying on the Supreme Court’s decision in Larsen & Toubro, the Court held that refund restriction under Section 54(3) applies only to real-estate construction meant for sale, and does not extend to metro infrastructure projects, which serve a public utility function.
➡️ The Court clarified that the services supplied to BMRCL were not covered under Notification No. 20/2017 (which restricts refunds), but were rightly classifiable under Notification No. 11/2017, Notification No. 15/2017, and Notification No. 15/2023, all of which include works-contract services relating to metro projects.
➡️ For the earlier period involving refund denial of ₹20.2 crores, the High Court had already set aside the rejection and ordered refund. As these orders had attained finality, they were held to be binding on the Revenue for subsequent periods involving identical facts and issues.
➡️ Applying the principle of consistency, the Court allowed the instant petition for the periods September–December 2019 and September–October 2020, and directed the Revenue to refund the denied amounts with applicable interest within six weeks.
✔️ Karnataka HC – ITD Cemindia JV Vs The Joint Commissioner of Commercial Taxes & Ors [WRIT PETITION NO. 24837 OF 2023 (T-RES)]
🔥📛 HC: Sets aside order for ignoring CESS disclosure in GSTR-9 and payment of differential sum
➡️ The High Court upheld the appellate finding that proceedings could not be sustained under Section 74 (fraud/wilful suppression) due to absence of intent, but clarified that merely shifting to Section 73 does not automatically validate the tax demand without proper consideration of subsequent disclosures.
➡️ The Court held that disclosures and corrections made in GSTR-9, along with payment of differential tax, must be duly considered by appellate authorities, especially where such disclosures render the initial omission revenue-neutral.
➡️ Rejecting Revenue’s argument, the Court ruled that amended Section 44(2), effective from 1 October 2023, cannot be applied retrospectively to annual returns filed prior to its enforcement, thereby protecting the assessee’s reliance on valid disclosures made earlier.
➡️ The Court emphasized that where the assessee has not availed ITC on CESS paid on inward supplies but has paid CESS on outward supplies, ignoring such unavailed credit could lead to unjust enrichment of the Revenue and violate constitutional principles.
➡️ Invoking Article 265 of the Constitution, the Court cautioned that tax authorities must not collect tax without proper legal authority or disregard legitimate adjustments, holding that blanket rejection of GSTR-9 disclosures lacks justification.
✔️ Calcutta HC – Bidyut Autotech Private Limited and another Vs The Assistant Commissioner of State Tax & Ors [WPA 12637 of 2025]
🔥📛 Delhi-HC judgment giving quietus to Patanjali’s resolution-plan date dispute & quashing pre-approval demand
➡️ The Delhi High Court held that for the purposes of Section 31(1) of the IBC, the effective date of approval of the Resolution Plan is 4 September 2019, when the NCLT granted final approval, and not any earlier or later date reflected in website extracts or interim orders.
➡️ Although the NCLT passed an order on 24 July 2019, the Court noted that this order expressly left several issues open (paras 93–94). Hence, it did not amount to final approval of the Resolution Plan.
➡️ Applying the Supreme Court ruling in Ghanashyam Mishra, the Court quashed all GST demands relating to periods prior to 4 September 2019, reiterating that a successful resolution applicant takes over the corporate debtor on a “clean slate”.
➡️ The Court clarified that GST authorities are not barred from issuing fresh show cause notices for periods after 4 September 2019, as liabilities arising post-approval are not extinguished by the Resolution Plan.
➡️ For computing limitation for issuing fresh GST notices, the Court directed that the period during which the writ petition remained pending must be excluded, offering procedural relief to the Revenue while protecting the assessee from stale demands.
✔️ Delhi HC – Patanjali Foods Limited vs Assistant Commissioner CGST Narela Division & ors. [W.P.(C) 5784/2025]
🔥📛 Omission of Rule 96(10) of CGST Rules without any saving provision abates related pending IGST refund proceedings: HC
➡️ Manufacturer-exporters had claimed IGST refunds on export of goods. Rule 96(10) of the CGST Rules (inserted in 2018) restricted such refunds where certain benefits were availed, leading to issuance of summons, show cause notices (SCNs), adjudication orders, and even appellate proceedings by the department.
➡️ The 54th GST Council acknowledged that Rule 96(10) created unnecessary complications and recommended its deletion. Acting on this, Rule 96(10) was omitted with effect from 8 October 2024, without any saving or transitional clause.
➡️ Applying the settled legal doctrine, the Court held that when a provision is omitted without a saving clause, all pending proceedings under that provision automatically abate, unless the underlying transactions are already “passed and closed.”
➡️ SCNs, adjudication orders, and appeals (including cases where 10% pre-deposit had been made) relating to IGST refund denial were held not to be completed or closed transactions. Therefore, such proceedings could not survive after omission of Rule 96(10).
➡️ Since Rule 96(10) no longer existed and no saving was provided, all pending SCNs and proceedings emanating therefrom were quashed. The department was barred from continuing or enforcing actions solely based on the omitted rule.
✔️ Delhi HC – Vinayak International Housewares (P.) Ltd. v. Union of India [W. P. (C) nos. 3154, 3165 and 10687 of 2023]
🔥📛 HC seeks joint affidavit from Customs and GST Dept. to determine the ‘proper officer’ for issuing SCN on export related refund
➡️ The petitioner, an exporter of sealing materials and auto/machinery components, had paid IGST on exports and claimed refunds along with export incentives. The dispute arose when authorities questioned the correctness of the refund and export benefits availed.
➡️ A Show Cause Notice (SCN) alleged incorrect classification of exported goods under HSN 4016 93 40 instead of HSN 4504 10 10, leading to wrongful IGST refund, inadmissible drawback, and other export benefits.
➡️ The petitioner challenged the SCN on jurisdictional grounds, arguing that matters relating to IGST refund and classification under GST law could only be initiated by the GST Department, not by the Customs Department.
➡️ The Court held that the issue of whether the Customs Department was the “proper officer” to issue the SCN required detailed consideration. Accordingly, the matter was directed to be listed for further hearing on this legal question.
➡️ On the issue of classification of goods, the Court clarified that it involved factual and technical examination. Therefore, the petitioner was relegated to the statutory appellate remedy under Section 107 of the CGST Act, rather than invoking writ jurisdiction.
✔️ Delhi HC – Talbros Sealing Material (P.) Ltd. v. Additional Commissioner of Customs Export [W.P.(C) No. 17723 of 2025]
🔥📛 Writ relief denied as petitioner engaged in collusive fake ITC scheme and misused GST framework: HC
➡️ Although the authorities did not strictly follow the prescribed interception procedure (as goods were already stationed outside the factory when Form MOV-02 was issued), procedural lapses alone did not invalidate the action where substantive tax evasion was evident.
➡️ Mere generation of an e-way bill and tax invoice, or the fact that the vehicle was GPS-enabled and had reached its destination, does not establish lawful movement of goods if surrounding facts indicate manipulation or bogus transactions.
➡️ The driver’s statement revealed that goods were collected from unknown persons at Nangloi, Delhi, through multiple small vehicles and then consolidated at the petitioner’s factory, clearly indicating unaccounted procurement and tax evasion.
➡️ The petitioner was found to have colluded with bogus entities, generated fictitious outward supplies, and availed fake input tax credit by exploiting the lack of automated cross-verification between liability and credit ledgers in the GST system.
➡️ The Court held that such conduct amounted to subversion of the GST regime and defrauding the public exchequer; therefore, the petitioner was not entitled to any relief, and the writ petition was dismissed with costs of ₹50,000.
✔️ Rajasthan HC – Korfex Industries (P.) Ltd. v. State of Rajasthan [D.B. Civil Writ Petition No. 12230 OF 2025]
🔥📛 HC: Quashes demand against NBCC acting as implementing-agency for leasing-services, basis FinMin’s clarification on section-86
➡️ The GST demand of approx. ₹45.36 crore was raised against NBCC (India) Ltd. on the premise that, acting as an agent of the Ministry of Urban Development (MoUD), it supplied taxable leasing services for commercial spaces under the Kidwai Nagar (East) redevelopment project and failed to discharge GST on lease rentals of ₹252.01 crore collected through an escrow account.
➡️ NBCC contended that it acted purely as an agent of the Ministry, that lease proceeds were credited into a Ministry-controlled escrow account and never accrued to NBCC, and therefore it was not the principal supplier. It was further argued that lease amounts collected from Government Departments, autonomous bodies and PSUs were exempt, while GST on non-business entities was payable by recipients under the Reverse Charge Mechanism (RCM).
➡️ Relying on settled principles of agency law, NBCC argued that liability to pay GST rests with the principal supplier (the Ministry), as NBCC neither appropriated nor earned the lease rentals and merely facilitated collection on behalf of the Ministry.
➡️ The Ministry of Finance clarified that Section 86 of the CGST Act creates joint and several liability only in relation to goods, not services. It categorically opined that where the Ministry is the principal supplier and is available to meet any GST demand, initiating proceedings against the agent is unnecessary and legally unsustainable.
➡️ Taking note of the MoF’s authoritative clarification, the Delhi High Court held that the GST demand raised by CGST Delhi South had no merit and accordingly set aside the demand order dated 29 January 2025. The ruling reinforces that agents cannot be fastened with GST liability for services where they are not principal suppliers and Section 86 is wrongly invoked.
✔️ Delhi HC – NBCC (India) Limited v. Additional Commissioner, CGST Delhi South [W.P.(C) 6687/2025]
