LATEST GST CASE LAWS: 18.06.2025
🔥📛 HC: Retrospective registration cancellation can’t invalidate ‘genuine’ ITC claim
➡️ The Himachal Pradesh High Court addressed a writ petition concerning denial of Input Tax Credit (ITC) due to the supplier’s GST registration being cancelled retrospectively.
➡️ The assessee claimed ITC by producing proof of tax payment to the supplier along with all necessary documents, and the supplier had filed the relevant GSTR-3B for the period.
➡️ The court observed that denial of ITC solely on the basis of retrospective cancellation of the supplier’s GST registration was not appropriate without verifying the genuineness of the transaction.
➡️ The Assessing Officer and Appellate Authority failed to examine the authenticity of the transaction and directly issued a notice under Section 16(2) of the CGST Act, which was improper.
➡️ The case was remanded to the Adjudicating Authority to properly evaluate all relevant documents and determine the genuineness of the transaction before deciding on ITC eligibility.
✔️ Himachal Pradesh – Himalaya Communication Pvt. Ltd. vs. UOI & Ors. [CWP No. 8809 of 2025]
🔥📛 HC: Sets aside tax demand for returns mismatch as Dept overlooked partial remittance via ECrL
➡️ The Madras High Court set aside the order that confirmed the entire tax demand due to discrepancies between GSTR-1 and GSTR-3B returns.
➡️ The court observed that the Assistant Commissioner overlooked the fact that the assessee had already paid 58% of the disputed tax amount by debiting the electronic credit ledger (ECrL).
➡️ It was noted that no credit was given for this 58% payment made through the electronic credit ledger, which was a significant oversight.
➡️ The High Court emphasized that this issue warrants reconsideration because the payment made through ECrL should have been accounted for.
➡️ The matter was sent back to the Assistant Commissioner with instructions to re-examine the case after properly crediting the amounts remitted via the electronic credit ledger.
✔️ Madras HC – Tvl. Prabha Drug House vs The Assistant Commissioner (ST) (FAC) [W.P. No. 19602 of 2025]
🔥📛 HC: Central registration no excuse for State Dept. for inaction against supplier not filing GSTR-1
➡️ The Jharkhand High Court directed the State GST Department to take action against a commercial vehicle rental service provider (Respondent 6) because the supplier failed to file GSTR-1 and did not remit the GST collected, preventing the service recipient (Assessee) from claiming Input Tax Credit (ITC).
➡️ The Court rejected the State Department’s claim that only Central GST authorities had jurisdiction, emphasizing that Section 76 requires action against every person, including those not registered under the JGST Act, if they fail to file GSTR-1 and remit GST.
➡️ The Court criticized the State Department’s inaction as unacceptable and stressed it is their mandatory duty to proceed against the non-compliant supplier.
➡️ Respondent 6’s argument that it was not liable to pay GST was dismissed because it had included CGST and JGST in its invoices, which was unexplained.
➡️ The plea of res judicata was rejected since the previous writ petition did not result in a final decision on merits; thus, the Court imposed Rs 1 lakh costs on Respondent 6 and directed the Revenue to initiate proceedings within eight weeks.
✔️ Jharkhand HC – RK Transport & Constructions Ltd vs The State of Jharkhand [W.P. (T) No. 1624 of 2024]
🔥📛 Cash credit account held to be liability of account holder and not a property subject to attachment under GST law: HC
➡️ A cash credit account represents a liability of the account holder to the bank as a loan facility, not an asset owned by the account holder.
➡️ Therefore, a cash credit account cannot be considered as the petitioner’s property.
➡️ The phrase “including bank account” in the relevant law refers only to regular bank accounts, not cash credit accounts.
➡️ Cash credit accounts are not covered under Section 83 of the GST Act, which deals with provisional attachment of property.
➡️ Consequently, the provisional attachment order against the cash credit account was set aside by the authority.
✔️ Bombay HC – Skytech Rolling Mill (P.) Ltd. v. Joint Commissioner of State Tax Nodal [WRIT PETITION NO. 1928 OF 2025]
🔥📛 Order to be set aside as SCN was uploaded on GST portal without serving physical copy to assessee: HC
➡️ A show cause notice was issued to the assessee via a common portal, but the assessee claimed unawareness of the notice and did not respond.
➡️ The assessee only became aware of the proceedings after receiving an attachment order, prompting a challenge to the impugned order on grounds of violation of natural justice.
➡️ The court observed that the impugned assessment order was passed without giving the assessee a proper opportunity to be heard.
➡️ The officer issuing the notices had sent repeated reminders but failed to explore alternative methods of serving the notices when no response was received from the assessee.
➡️ Due to inadequate service of notices and denial of opportunity to the assessee, the court set aside the impugned order and remanded the matter for fresh consideration.
✔️ Madras HC – Hitech Building Solutions v. Deputy State Tax Officer [W.P. No.18019 of 2025]
🔥📛 Order confirming demand to be set aside due to presumption of department that assessee agreed with SCN despite filing reply: HC
➡️ The case involves a demand for tax or input tax credit (ITC) that does not include allegations of fraud.
➡️ The assessee submitted a reply to the show cause notice online within the stipulated time.
➡️ Despite receiving the reply, the authorities passed an order confirming the tax demand, wrongly stating that the assessee had failed to respond.
➡️ Based on this incorrect premise, an attachment order was also issued against the assessee.
➡️ The court held that since the reply was not properly considered and the order was passed on a false assumption, both the demand order and attachment order were set aside.
✔️ Gauhati HC – Assam Auto Spares v. State of Assam [WP (C) No. 1918 OF 2024]
🔥📛 Recovery of demand can not be initiated before expiry of 3 months from date of service of order: HC
➡️ The assessee’s appeal under Section 107 was dismissed on 24.01.2025, and the revenue recovered Rs.1,55,079 from the Electronic Credit/Cash Ledger within four days, without following proper recovery procedures.
➡️ The assessee argued that Section 78 requires a minimum three-month waiting period before recovery proceedings can be initiated after the order.
➡️ The assessee also highlighted that under Section 112, they have the right to file a second appeal with a 10% pre-deposit, which would stay the balance demand.
➡️ The revenue contended that recovery was justified due to the absence of any interim order.
➡️ The court held that premature recovery within four days violates Section 78’s mandatory three-month waiting period, undermines the assessee’s right under Section 112(9) to file a second appeal with stay, and directed refund of any amount recovered beyond the 10% pre-deposit, referencing a circular that allows pre-deposit even if appellate tribunals are not constituted.
✔️ Allahabad HC – S.A.B. Engg Works v. State of U.P. [WRIT TAX No. 2254 of 2025]
🔥📛 Blocked ITC beyond one-year statutory limit to be lifted irrespective of any further action by adjudicating authority: HC
➡️ The petitioner’s Input Tax Credit (ITC) amounting to Rs. 3,91,23,722 was blocked on 15.01.2024 by the Deputy Director of DGGI, Gurugram, causing the electronic credit ledger to reflect a negative balance.
➡️ The ITC remained blocked even as of April 2025, despite the statutory limitation period.
➡️ During this period, a show cause notice was issued on 03.08.2024, and an Order-in-Original was passed on 12.02.2025 denying ITC of Rs. 29,13,246 and confirming a demand of Rs. 55,38,110.
➡️ The assessee requested the unblocking of the electronic credit ledger (ECL) as the blocking period exceeded the one-year limit prescribed under Rule 86A of the CGST Rules, 2017.
➡️ The ruling held that ITC blocking cannot extend beyond the statutory one-year period, and the credit ledger must be unblocked upon expiry of this period, regardless of any ongoing adjudication or other proceedings against the assessee.
✔️ Delhi HC – Sai Ram Enterprieses v. Pr. ADG, DGGI, Gurugram [W.P.(C) No. 5438 of 2025]
