LATEST GST CASE LAWS: 18.07.2025
🔥📛 MP HC stays demand issued basis Rule 96(10); Seeks Revenue’s reply on effect of omission
➡️ The Petitioner argues that Rule 96(10), which earlier restricted refund eligibility for certain imports under concessional duty, was omitted via Notification dated October 08, 2024, without a savings clause. As per settled legal principles, this renders the Rule inapplicable to ongoing and future proceedings, making any demand based on it legally unsustainable.
➡️ The Petitioner relies on the Kerala High Court’s decision in Sance Laboratories Pvt. Ltd., which declared Rule 96(10) ultra vires the CGST Act, and the Gujarat High Court’s ruling in Addwrap Packaging Pvt. Ltd. & Ors., which held that omission without a savings clause nullifies the Rule’s retrospective application, thereby bolstering the argument against the IGST demand.
➡️ It is submitted that the Petitioner had voluntarily reversed the benefit availed under Notification No. 78/2017-Cus. dated October 13, 2017, by paying IGST along with applicable interest on inputs, in accordance with CBIC Circular dated September 10, 2024—thereby fulfilling the conditions of Rule 96(10) even if it were deemed applicable.
➡️ Acknowledging the legal complexity, the High Court has sought the Revenue’s pointed response on the consequences of omitting Rule 96(10), particularly in light of the binding judgments of other High Courts and the absence of a transitional provision.
➡️ The Court has granted an interim stay on the IGST demand and directed the Revenue to file a para-wise reply to the Petitioner’s affidavit, indicating that the matter will be examined in detail on both constitutional validity and procedural compliance grounds.
✔️ Madhya Pradesh HC – Navin Flourine International Limited v. Union of India & Ors [WP No. 17447 of 2024]
🔥📛 SC: Laments HC’s interim bail granted in tandem with Trial Court’s rejection: Orders surrender
➡️ The Supreme Court set aside the Karnataka High Court’s interim order granting bail to an accused in a ₹660+ crore GST fraud case, finding the High Court’s actions procedurally irregular and warranting interference.
➡️ The Revenue highlighted, and the Supreme Court agreed, that the High Court issued its bail order in undue haste—on the same day the Trial Court had rejected bail—without being informed of the ongoing proceedings before the Special Economic Offences Court. This raised serious questions of judicial propriety.
➡️ The Supreme Court instructed that the pending matter before the High Court be reassigned to a suitable bench as per the Chief Justice’s direction, ensuring both parties are heard before further proceedings.
➡️ Respondent No. 1 has been directed to surrender before the Trial Court within one week. The High Court has been restrained from deciding the matter finally until this surrender takes place, preserving procedural fairness.
➡️ While the Respondent claimed the alleged tax evasion was under ₹5 crore, the Revenue argued (and the SC acknowledged) that the fraud involved ₹660+ crore, jointly committed with her husband. The Court reiterated that any person committing an offence under GST law is liable, regardless of individual monetary involvement.
✔️ SC – SENIOR INTELLIGENCE OFFICER vs RITU NITIN MINOCHA [Special Leave to Appeal (Crl.) No(s).3736/2025]
🔥📛 HC: Recipient to reverse ITC for supplier’s failure to remit tax, absence of relevant documentation
➡️ The Gujarat High Court upheld the reversal of Input Tax Credit (ITC) claimed by the recipient, on the grounds that the supplier failed to remit the corresponding tax to the government, as required under Section 16(2)(c) of the CGST Act.
➡️ The petitioner failed to provide key evidence—such as valid tax invoices, e-way bills, and transport documents—to prove the genuineness of the transactions and the existence of actual supply, weakening their ITC claim.
➡️ The Court emphasized that the tax department had already conducted an inquiry and found that the supplier did not discharge any outward tax liability, reinforcing the conclusion that ITC cannot be availed in such cases.
➡️ Rejecting the petitioner’s plea to reinterpret the provision, the Court held that ITC eligibility is conditional upon the actual deposit of tax by the supplier; non-payment invalidates the credit, regardless of the recipient’s intent or due diligence.
➡️ Despite upholding ITC reversal, the Court waived the penalty owing to the department’s failure to issue a mandatory pre-show cause notice in Form GST DRC-01A, reflecting the importance of procedural compliance in enforcement actions.
✔️ Gujarat HC – R V Enterprises & Anr Vs State of Gujarat & Ors [R/SPECIAL CIVIL APPLICATION NO. 20134 of 2023]
🔥📛 Revocation application for GST registration to be reconsidered as non-filing was unintentional and assessee willing to comply: HC
➡️ The assessee’s GST registration was cancelled solely due to non-filing of monthly returns, as required under the GST regime.
➡️ The assessee contended that he genuinely believed his auditor was regularly filing the required returns, indicating no willful default or intent to evade compliance.
➡️ Despite the assessee’s willingness to comply, his application for revocation of cancellation was not entertained by the authorities, without proper consideration of his explanation.
➡️ The assessee expressed readiness to immediately file all pending returns and pay applicable taxes, along with any interest and penalties, demonstrating a proactive intent to regularize compliance.
➡️ The court quashed the cancellation order and remanded the matter to the concerned authority, directing them to reconsider the revocation application. The assessee was granted four weeks to fulfill all compliance obligations.
✔️ Karnataka HC – Z.A. Electricals and Constructions v. Joint Commissioner of Commercial Taxes [WRIT PETITION NO. 12470 OF 2025 (T-RES)]
🔥📛 Notifications extending time to issue notice/order curtailed authorities’ rights by prescribing shorter limitation, violating Article 14 of Constitution: HC
➡️ The CGST Act prescribes a limitation period of 2 years and 9 months (for notice under Section 73(2)) and 3 years (for order under Section 73(10)) from the due date of filing the annual return, for demands not involving fraud. This statutory timeline must be strictly adhered to.
➡️ The Supreme Court’s order dated 10.01.2022 in In Re: Cognizance for Extension of Limitation extended the limitation period by excluding the duration from 15.03.2020 to 28.02.2022 due to the COVID-19 pandemic. This extension was applicable to all judicial and quasi-judicial proceedings, including GST matters.
➡️ Notifications No. 09/2023 and 56/2023, issued under Section 168A of the CGST Act, erroneously curtailed the extended limitation periods for FYs 2017-18 to 2019-20, instead of providing benefit. This diminished authorities’ vested rights to issue notices/orders and was held arbitrary and contrary to established judicial principles.
➡️ Section 168A does not empower the Government to reduce or curtail statutory limitation already available under Section 73. Further, Notification No. 56/2023 was issued without proper GST Council recommendation and based on inputs from the GIC, which lacks statutory standing—rendering the notification procedurally and legally invalid.
➡️ The notifications were found to be based on a misinterpretation of legal provisions and Supreme Court orders, resulting in arbitrary treatment and violation of Article 14 of the Constitution. Thus, both Notifications No. 09/2023 and 56/2023 were held ultra vires and unsustainable.
✔️ Madras HC – Tata Play Ltd. v. Union of India [W.P.Nos. 34065, 34073, 34074, 35455, 35463 and 35458 of 2023]
🔥📛 Belated ITC claim for FY 2017-18 to 2020-21 covered by Section 16(5) amendment; matter remanded for fresh decision: HC
➡️ The assessee was denied Input Tax Credit (ITC) on the grounds of delay in claiming credit beyond the time limit specified under Section 16(4) of the CGST Act for the periods 2017-18 to 2020-21.
➡️ The Deputy State Tax Officer held that the assessee had violated the time limitation for availing ITC, thereby contravening Section 16(4).
➡️ The Madras High Court in SJB Automobiles (P.) Ltd. ruled that the issue of belated ITC claims had been legislatively addressed by the insertion of Section 16(5), signaling a change in the legal framework.
➡️ Citing SJB Automobiles, the Court quashed the impugned order and remitted the matter back to the authority to pass a fresh order based on the amended statutory provisions.
➡️ The judgment emphasizes that ITC claims previously considered time-barred may warrant reconsideration under the amended law, reinforcing the importance of aligning tax positions with evolving legislative changes.
✔️ Madras HC – New PSP Traders v. Deputy State Tax Officer [W.P(MD)No. 17026 of 2025]
