LATEST GST CASE LAWS: 18.11.2025
🔥📛 HC: 2-yr limitation for claiming refund of wrongly paid tax only directory; Directs merit-based decision
➡️ The Karnataka High Court held that the two-year limitation for refund under Section 54 cannot defeat a claim where tax was collected without authority of law.
➡️ Applying Article 265 and the principles of restitution/unjust enrichment, the Court held that the department cannot retain IGST paid by mistake when the taxpayer was not liable to pay it.
➡️ Referring to Section 77 of the CGST Act, Section 19 of the IGST Act, and Rule 89(1A), the Court emphasized that taxes wrongly paid under the wrong head (inter-State vs. intra-State) must be refunded.
➡️ The Court relied on the Madras HC (Lenovo India) and AP HC (Nspira Management) to reaffirm that refund cannot be denied on limitation when tax was inadvertently paid and subsequently correctly discharged under another head.
➡️ Since the Revenue admitted the excess IGST payment but rejected the claim only on limitation, the HC set aside the order and remanded the case for a fresh decision on merits, confirming the assessee’s entitlement to refund.
✔️ Karnataka HC – Merck Life Science Private Limited Vs Union of India & Ors [WRIT PETITION NO. 27259 OF 2024 (T-RES)]
🔥📛 ISD mechanism compulsory for distribution of common input service ITC from 1 April 2025; shifting credit from regular GST registration to ISD not allowed: AAR
➡️ ISD registration becomes mandatory for common input services from 1 April 2025 as per the amended provisions introduced through Notification No. 16/2024-Central Tax.
➡️ Any location receiving common input service invoices for multiple States must be registered as an Input Service Distributor (ISD); the law no longer permits receipt of such invoices under a regular GST registration.
➡️ ITC on common input services must be distributed strictly through the ISD mechanism, and only via ISD-issued documents, in accordance with the amended statutory framework.
➡️ Transferring ITC from a regular registration to an ISD registration (to correct how invoices were initially received) is not permissible under the amended law and cannot be continued post-1 April 2025.
➡️ The Authority held the query admissible and ruled that the applicant, a manufacturer in Tamil Nadu, must route both receipt and distribution of common input service ITC through its ISD registration, and prior practices based on past circulars will no longer be valid.
✔️ Tamil Nadu AAR – MRF Ltd., In re [TN/33/ARA/2025]
🔥📛 Revised IGST refund applications to be decided expeditiously where no timely deficiency memo issued: HC
➡️ The assessee filed refund claims for excess IGST paid on zero-rated supplies for the period April 2019–June 2020; initial claims were rejected for alleged deficiencies, after which revised applications were submitted.
➡️ No deficiency memo was issued within the statutory 15-day period for the revised applications, yet the Department later raised fresh deficiency objections and kept the claims pending.
➡️ The Court held that refund processing must strictly adhere to statutory timelines, as delays undermine the scheme of GST and adversely impact taxpayers’ cash flow.
➡️ The Department was directed to take a prompt and reasoned decision on all pending refund claims, while the petitioner was required to appear and clarify any specific deficiencies pointed out.
➡️ The Court ordered that the refund orders be passed within one month in accordance with law and disposed of the writ petition on these terms.
✔️ Delhi HC – Gameloft Software (P.) Ltd. v. Assistant Commissioner of Central Tax [W.P. (C) no. 16315 of 2025]
🔥📛 SCN quashed for non-service within statutory three-month window as per sec. 73(2); technical glitch plea rejected: HC
➡️ The Court held that Section 73(2), read with Section 73(10) of the CGST Act, mandates that a show cause notice (SCN) must be served at least three months before the outer time limit for passing the order; this requirement is not merely procedural.
➡️ Although the SCN was dated 31.05.2024, it was actually served on 12.08.2024—well within the last month of the extended limitation period (till 31.08.2024)—violating the statutory three-month window.
➡️ The Court found the department’s justification of a CBIC technical error untenable, especially when proper service could have been ensured within time.
➡️ Despite the taxpayer’s address amendment being approved on 15.05.2024, the SCN was wrongly dispatched to the old address on 03.06.2024, further rendering the service invalid.
➡️ Since the SCN for FY 2019-20 was not validly served within the statutory timeframe, the Court quashed the SCN and all consequential proceedings, allowing the petition.
✔️ Delhi HC – C.H. Robinson Worldwide Freight India (P.) Ltd. v. Additional Commissioner, CGST-Delhi-South [W.P. (C) No. 15508 of 2024]
🔥📛 GST not leviable on DDA’s conversion charges as these form part of immovable property sale consideration: HC
➡️ The petitioners, long-term leaseholders of commercial units in DLF South Court Mall, sought conversion to freehold in November 2023 and paid the DDA-prescribed conversion charges—initially with no GST demand.
➡️ Despite additional demands raised in June 2024 (paid under protest) and non-grant of conversion approval, the DDA later (April 2025) retrospectively imposed GST of approx. ₹30.26 lakh, relying on an SOP issued on 28 March 2025 that treated conversion charges as consideration for “foregoing future rent.”
➡️ The Court noted that conversion was governed by the DDA’s July 2016 scheme and the 23 June 2023 notified conversion rates, neither of which contained any stipulation for GST on account of the authority foregoing lease rentals.
➡️ The dispute centred on whether conversion charges fell under the deeming entry for “agreeing to tolerate an act” (a taxable supply of service) or under the exclusion for sale of land/building, which lies outside the GST net.
➡️ The Court observed that conversion charges inherently form part of the sale consideration for immovable property; therefore, GST was prima facie not leviable on such conversion demands raised by DDA.
✔️ Delhi HC – Mala Sahni Seth v. Delhi Development Authority [W.P. (C) No. 16214 of 2025]
🔥📛 Delhi HC recalls interim-relief to Ebix on bank-attachment; Cites discrepancies in attachment-letter receipt date
➡️ The Delhi High Court found prima facie that Ebix Technologies misrepresented the date of receiving the provisional-attachment letter. Departmental records (dak register) showed delivery on 10 October 2025, contradicting the assessee’s claim of first receiving it via WhatsApp on 4 November 2025.
➡️ Because of this misrepresentation, the Court recalled its earlier interim order that had allowed the assessee to operate its bank accounts subject to maintaining a balance of ₹1 crore.
➡️ The earlier relief had been granted due to concerns about the lack of proportionality in the provisional attachment of 11 bank accounts relating to alleged fraudulent ITC availment by the assessee’s service provider.
➡️ The Court noted that the Bombay High Court had issued an interim injunction in Ashok Kumar Goel restraining dealings in movable assets, including bank balances. In light of this, the Delhi HC held that its prior order permitting bank-account operations must be withdrawn.
➡️ The assessee must continue to maintain ₹1 crore across the attached accounts. The Revenue must furnish detailed reasons for the attachment within one week, enabling the assessee to respond. The matter is listed for further hearing on 28 November 2025, and the assessee may pursue available legal remedies.
✔️ Delhi HC – EBIX Technologies Limited Formerly Known AS EBIXCASH Limited vs. DGGI [W.P.(C) 16882/2025]
🔥📛 Gauhati HC refuses interim relief in matter involving GST credentials misuse by private parties
➡️ The petitioner, a Class-III contractor, faced blocking of his GSTIN due to an alleged mismatch between outward supplies and tax payments, highlighted through a FORM GST DRC-01B intimation for differential tax of approx. ₹29.11 lakh for Oct–Dec 2024.
➡️ The petitioner claimed that private respondents (Nos. 4 & 5) fraudulently used his GST credentials to generate fictitious outward supplies and avail ITC, causing the mismatch and ensuing liability.
➡️ The High Court noted that the petitioner did not properly respond to the DRC-01B intimation, despite filing a written representation, which weakened his request for interim relief.
➡️ Observing the petitioner’s non-compliance with procedural requirements, the Gauhati High Court held that no interim relief could be granted at this stage, especially given the contested facts and alleged fraud.
➡️ The Court issued notice in the matter and directed the petitioner to serve respondent Nos. 4 & 5 by speed post within two working days, enabling further adjudication on the alleged misuse of GST credentials.
✔️ Gauhati HC – Md. Fazie Ali v. Commissioner of Taxes, Assam & Ors. [WP(C)/6057/2025]
🔥📛 HC: Penalty payment for goods release doesn’t absolve Proper-Officer from issuing section-129(3) order; Imposes costs
➡️ The Tripura High Court held that payment of penalty solely to secure release of detained goods/vehicle does not absolve the Proper Officer from issuing the mandatory MOV-09 order under Section 129(3) of the CGST Act.
➡️ The Court emphasized that Section 129(3) has two compulsory steps:
(i) issuance of MOV-7 notice, and
(ii) passing of a reasoned MOV-09 order confirming/justifying penalty.
–> Non-issuance of MOV-09 makes the entire penalty action legally unsustainable.
➡️ Since the officer failed to pass an order for over 16 months, despite the assessee’s express request and despite acknowledging the payment was “under dispute,” the Court held that the penalty levy and collection were without authority of law, violating Articles 14, 19(1)(g), 265, and 300-A.
➡️ The Court directed refund of the entire penalty within 2 months with 9% interest, and imposed ₹25,000 personal costs on the Superintendent for violating statutory mandates and forcing the assessee to pay under duress.
➡️ The Court instructed the Finance Department and Commissioner of State Taxes to examine the conduct of the concerned officer and initiate disciplinary action if warranted, signalling strict accountability for non-compliance with Section 129 procedures.
✔️ Tripura HC – R. G. Group Vs. Union of India & Ors. [WP(C) No. 611 of 2025]
🔥📛 HC: Sets aside excessive penalty imposed beyond SCN amount; Directs reconsideration limited to penalty quantum
➡️ The Karnataka High Court held that Sections 74(1), 74(9), and 75(7) restrict authorities from imposing a penalty higher than what is proposed in the show cause notice (SCN) or higher than the tax determined.
➡️ Invoking Section 75(7), the Court emphasized that no demand—tax, interest, or penalty—can be confirmed on grounds not explicitly stated in the SCN.
➡️ The Court relied on Section 75(13) to reiterate that where penalty is imposed under Sections 73 or 74, no parallel penalty for the same act or omission can be invoked under any other provision of the KGST Act.
➡️ Since the penalty imposed (₹6.05 crore) exceeded both the SCN proposal and the confirmed tax amount, the Court ruled the levy as illegal and contrary to statutory provisions.
➡️ While upholding the tax and interest, the Court set aside only the penalty portion and remanded it for fresh adjudication, directing the assessee to deposit tax and interest and appear before the authority on 5 December 2025.
✔️ Karnataka HC – Metal N Strips Vs. Joint Commissioner of Commercial Tax & Anr. [WRIT PETITION NO. 3208 OF 2024]
