LATEST GST CASE LAWS: 17.04.2026
🔥📛 GST on medicines supplied to in-patients at MRP under Bombay HC scanner; Stays demand
➡️ The Bombay High Court (Nagpur Bench) granted an interim stay on a GST demand raised against a hospital (KIMS, Nagpur), where the Revenue alleged that GST collected on medicines supplied to in-patients at MRP was not remitted, treating such supply as independent from exempt healthcare services.
➡️ The core dispute centers on whether medicines supplied to in-patients form part of a composite supply of healthcare services (which are exempt) or constitute a separate taxable supply; the Revenue argued for segregation, while the Assessee maintained that such supplies are integral to treatment.
➡️ The Assessee relied on the concept of “composite supply” under Sections 2(30), 2(74), and 2(90) of the GST Act, contending that medicines administered during treatment are inseparable from healthcare services, making the principal supply healthcare, which is exempt under Notification No. 12/2017-CT (Rate).
➡️ Supporting its position, the Assessee cited Circular No. 32/06/2018-GST, which clarifies that items like food supplied to in-patients are part of composite healthcare services; by analogy, medicines should also be treated similarly, reinforcing exemption.
➡️ On procedural grounds, the Assessee argued that the demand was invalid as it invoked Section 76 (tax collected but not paid) but was adjudicated under Section 73, which operates independently; acknowledging both substantive and procedural issues, the Court issued notice and stayed the demand order until further hearing.
✔️ Bombay High Court (Nagpur Bench) – Spanv Medisearch Lifesciences Pvt. Ltd. vs UOI & ors [WRIT PETITION NO. 2985/2026]
🔥📛 HC: M.S. Scrap falls within “specified goods” under Budgetary Support Scheme; Eligible for reimbursement
➡️ The Jammu & Kashmir and Ladakh High Court held that M.S. scrap generated during the manufacturing of TMT/CTD bars qualifies as “specified goods” under the Budgetary Support Scheme, since it arises as an unavoidable by-product of the same manufacturing process and is not independently produced.
➡️ The Court emphasized that Annexure-A of Notification SRO 519 is purely exclusionary in nature, disqualifying only those units that manufacture goods explicitly listed therein; since M.S. scrap is not specifically listed, its exclusion cannot be inferred.
➡️ It was decided that where the primary manufacturing activity (TMT/CTD bars) is eligible, incidental or residual outputs like scrap—produced through the identical process and retaining the essential character—cannot be denied benefits merely because they are not separately registered products.
➡️ The Court noted inconsistency in the Revenue’s stance: while claiming the assessee is not registered for scrap production, it simultaneously admitted that such scrap is inherently generated in the manufacturing process, thereby weakening the basis for denial of reimbursement.
➡️ Considering the assessee’s eligibility under earlier excise exemption notifications and subsequent transition to the GST budgetary support regime, the Court concluded that denial of reimbursement on the ground that M.S. scrap is not a specified good is unsustainable in law, and the assessee is entitled to the benefit.
✔️ J&K and Ladakh HC (Jammu) – Vijay Steel Industries vs UT of Jammu & Kashmir through State Tax Officer [WP(C) No. 956/2023]
🔥📛 HC: Opens appeal route for MD, directs temporary registration, separate DRC-07 where liability raised on Company/Director
➡️ The Telangana High Court addressed a situation where a Managing Director was deprived of the right to appeal because a single composite order in Form GST DRC-07 was issued jointly against the company and the individual, even though the Managing Director was not registered under GST.
➡️ The impugned order confirmed GST demand of ₹2.2 crores along with interest for irregular input tax credit (ITC) and imposed a penalty of ₹2.58 crores for alleged fraudulent ITC passing, but failed to distinguish liabilities separately between the company and its Managing Director.
➡️ Due to the absence of separate orders and lack of GST registration, the Managing Director could not file an appeal, highlighting a procedural gap where unregistered persons are denied statutory remedies when implicated in GST proceedings.
➡️ The Revenue acknowledged this issue and proposed corrective steps, including issuance of separate DRC-07 orders for the company and the Managing Director, and granting a temporary identification number under Section 16A through Form GST REG-12 upon application.
➡️ Accepting these submissions, the High Court directed the authorities to issue two distinct DRC-07 orders within two weeks and to grant a temporary registration to the Managing Director within a prescribed timeline, with the limitation period for filing an appeal to run from the date of the fresh order, thereby restoring the right to appeal.
✔️ Telangana HC – Bharat Kumar Agarwal v. Joint Commissioner (AE) [Writ Petition Nos. 9166 and 9354 of 2026]
🔥📛 HC: Pre-clinical trial R&D services to foreign clients qualify as exports; Place-of-supply notification applied retrospectively
➡️ Karnataka High Court held that pre-clinical R&D and testing services provided by an Indian assessee to overseas clients qualify as export of services, since the recipient is located outside India and the place of supply is deemed to be outside India, thereby falling outside the GST and Service Tax net.
➡️ The Court relied on Notification No. 4/2019 and the 37th GST Council recommendations to conclude that even where services are physically performed in India, the place of supply can shift outside India if the recipient is located abroad, reinforcing export status.
➡️ It rejected the Revenue’s reliance on Section 13(3)(a) of the IGST Act, clarifying that this provision applies only where services are performed on goods that are temporarily made available by the recipient; in this case, the samples were consumed during testing and not returned, hence not qualifying as “goods” in that sense.
➡️ The Court emphasized that the true nature of the transaction was provision of integrated research services culminating in reports delivered to foreign clients, and not mere processing or treatment of goods, thereby supporting classification as export of services.
➡️ Relying on its earlier ruling in IProcess Clinical Marketing, the Court held that the relevant notification has retrospective effect, and accordingly quashed the tax demands, interest, and penalties for both Service Tax and GST periods, providing significant relief and clarity for similar R&D service exporters.
✔️ Karnataka HC – Bioneeds India Private Limited & Anr. Vs. The Commissioner of Central Tax [WRIT PETITION NO. 21677 OF 2024 (T-RES)]
🔥📛 AAR: Textbook printing and supply by State Bureau exempt only when content is owned; Attracts 18% GST otherwise
➡️ The Maharashtra AAR held that printing activities are classified based on ownership of intellectual property (IPR): where the printer owns the content, the supply is treated as goods (printed books) and is exempt under Notification No. 2/2017-CT(R); where the content is supplied by the customer, the activity is treated as a supply of services under SAC 9989, attracting 18% GST.
➡️ The ruling establishes a clear test for classification—ownership of content determines tax treatment. If the printer develops and owns the content and uses its own materials, the transaction qualifies as a supply of goods; if the customer provides the content and the printer merely prints, it is a service; and if both content and physical inputs are supplied by the customer, the activity is treated as job work.
➡️ Applying this principle, the AAR ruled that printing of “Big Books” for partially blind students is exempt when the applicant owns the content, but taxable as a service when content is customer-provided, highlighting that identical physical outputs may have different GST treatment depending on IPR ownership.
➡️ Similarly, printing of online admission booklets, study materials, and other publications where content is provided by government departments or other customers is treated as a supply of services taxable at 18%, reinforcing that mere printing without ownership of content does not qualify as supply of goods.
➡️ The AAR further clarified that sales of books through open market channels, supplies to Zilla Parishads, and publications under directions of government departments must all be evaluated on the same ownership test, aligning with Circular No. 11/11/2017 and relevant GST notifications, thereby providing a consistent framework for GST classification in the printing industry.
✔️ Maharashtra AAR – In the matter of Maharashtra State Bureau of Textbook Production & Curriculum Research [NO. GST-ARA-74/2021-22/B-37]
🔥📛 HC: Recovery of deceased Assessee arrears from heir, invalid without prior-notice, and Sec. 93 compliance
➡️ The Bombay High Court held that invoking Section 79 to attach the bank account of a deceased assessee’s son for recovery of the father’s GST dues constitutes a clear jurisdictional error, especially where the son is a separate registered taxable person. Mere similarity in trade name cannot justify automatic recovery without first establishing legal liability through due process.
➡️ The Court emphasized that liability under Section 93 (regarding legal representatives or persons continuing the business of a deceased taxable person) cannot be presumed. The Department must first determine, through proper adjudication, whether the petitioner qualifies as a successor or has continued the deceased’s business, based on evidence and statutory conditions.
➡️ It was observed that the Department violated principles of natural justice by attaching the petitioner’s bank account without issuing prior notice or granting an opportunity of hearing. Such absence of due process renders the action fundamentally flawed and warrants judicial interference under writ jurisdiction.
➡️ The Court reiterated that provisional attachment under Section 83 must be exercised cautiously, as it affects property rights protected under Article 300A of the Constitution. Relying on established Supreme Court jurisprudence, it held that freezing a bank account without due process leads to serious civil consequences and is unconstitutional.
➡️ Noting key facts such as separate GST registrations, distinct places of business, and absence of any adjudication or show cause notice under Section 93, the Court quashed the attachment order (Form GST DRC-13). However, it allowed the Revenue liberty to initiate proper proceedings in accordance with law to determine any potential liability of the petitioner.
✔️ Bombay HC – Navin Vishwanathan Prop. of M/s. Oriental Facility Vs State of Maharashtra and Ors [WRIT PETITION NO. 8709 OF 2025]
🔥📛 HC: Post-adjudication, recovery u/s-79 valid without prior dealer notice; Authorization not mandatory
➡️ The Andhra Pradesh High Court upheld the validity of recovery proceedings under Section 79(1)(c) of the GST law, ruling that once a tax liability is finalized through an assessment order, the department can directly initiate recovery from third parties, including banks, without issuing prior notice to the assessee.
➡️ The Court clarified that Section 79 does not mandate prior authorization from a higher authority before issuing a garnishee notice, emphasizing that if the statute itself does not prescribe such a requirement, it cannot be read into the provision; action by a duly empowered “proper officer” is sufficient.
➡️ Rejecting the assessee’s argument on lack of adjudication under Sections 73/74, the Court noted that a valid assessment order had already been passed, uploaded on the GST portal, and remained unchallenged, thereby attaining finality and forming a valid basis for recovery action.
➡️ The Court also dismissed the plea of violation of natural justice, holding that once the assessment order determining tax dues is not contested within the prescribed time, the assessee cannot later object to consequential recovery proceedings initiated under Section 79.
➡️ Stressing the factual background, the Court justified coercive recovery as the assessee failed to discharge tax liability even after one year of the assessment order, affirming that the law permits recovery from any person holding or owing money to the defaulting taxpayer without procedural impediments.
✔️ Andhra Pradesh HC – V.V.S. Enterprises vs. State of Andhra Pradesh & Ors. [WRIT PETITION No. 6645/2026]
🔥📛 Bombay HC refers validity of consolidated SCN for multiple tax periods to Larger Bench; Interim-orders to continue
➡️ The Bombay High Court has observed that the issue of whether consolidated show cause notices can be issued under Sections 73 and 74 of the CGST Act for multiple financial years involves significant legal complexity and requires authoritative interpretation, thereby warranting consideration by a Larger Bench.
➡️ Acknowledging the detailed and well-reasoned arguments from both sides, the Court has expressed a clear view that the present controversy cannot be conclusively settled at the current bench level and must be examined more comprehensively by a Larger Bench.
➡️ The Court has specifically framed key questions of law, including whether Sections 73 and 74 permit issuance of a single show cause notice covering multiple tax periods, and whether sub-section (10) of these provisions either allows or restricts such consolidation of proceedings.
➡️ It has also raised important questions regarding the impact of Section 160 of the CGST Act on such proceedings, particularly in cases where notices are consolidated across tax periods, and whether the earlier ruling in Milroc Goods Earth Developers correctly interprets the law by disallowing such clubbing.
➡️ Pending final determination by the Larger Bench, the Court has deferred adjudication on these issues and directed that the existing interim order will continue to remain in force until a conclusive ruling is delivered.
✔️ Bombay HC – Rollmet LLP Vs UOI & Ors [WP/16848/2025]
