LATEST GST CASE LAWS: 18.12.2025
🔥📛 Karnataka-HC questions CBIC’s inaction in Uber’s writ for clarifying Section-9(5) applicability to subscription/SaaS models
➡️ Uber India challenged an adverse Karnataka AAR ruling holding it liable under Section 9(5) of the CGST Act, contending that subscription/SaaS-based passenger transportation models do not satisfy the statutory requirement of services being supplied “through” an electronic commerce operator.
➡️ The Karnataka High Court expressed strong displeasure at CBIC’s prolonged inaction despite earlier court directions to hear stakeholders and issue clarifications under Section 168, noting that CBIC merely referred the issue to the GST Council without resolving the ambiguity.
➡️ The assessee argued that conflicting advance rulings—particularly an adverse ruling in its own case, contrasted with favourable rulings for other industry players—have distorted competition, especially since Revenue has not appealed against favourable rulings, thereby allowing those positions to attain finality.
➡️ The lack of clarity on Section 9(5) has led to multiple writ petitions by similarly placed entities, increasing GST litigation. The assessee emphasized that a clear position would ensure uniformity across sectors using subscription/SaaS models (e.g., food delivery platforms).
➡️ The High Court directed authorities to comply with prior orders expeditiously, submit a status report, and place the issue before the GST Council if a meeting is held. It also tagged all related writ petitions for collective hearing on January 30, 2026, signalling a move toward sector-wide resolution.
✔️ Karnataka HC – Uber India Systems Private Limited v. Authority of Advance Ruling & Ors. [WP 25497/2024]
🔥📛 HC: Granting bail to Directors accused in fraudulent ITC-case, reiterates Article 21 safeguards in arrests
➡️ The High Court emphasized that offences under Sections 132 and 135(5) of the CGST Act, being triable by a Judicial Magistrate with a maximum punishment of five years, weigh in favour of granting regular bail, especially when compared to more serious non-bailable economic offences.
➡️ Since the investigation was already complete and no further recovery was required from the petitioners, continued pre-trial detention was held to be unjustified. Custodial detention cannot be used as a punitive measure once investigation purposes are over.
➡️ The Court reiterated that GST arrests must be based on valid “reasons to believe,” which must be duly recorded, and the grounds of arrest must be furnished in writing. Allegations of illegal or prolonged detention before production before a Magistrate were treated as a serious violation of personal liberty.
➡️ Relying on Supreme Court judgments (including Satender Kumar Antil, Balwinder Singh, and Tapas Kumar Palit), the Court reaffirmed that prolonged pre-trial custody, particularly where trials are unlikely to conclude in the near future, infringes the constitutional right to a speedy trial under Article 21.
➡️ Bail was granted as there was no material to show that the petitioners would tamper with evidence, influence witnesses, or fail to cooperate in the trial. The Court clarified that mere allegations of fake ITC, without such risks, cannot justify continued incarceration.
✔️ P&H HC – Baldeep Singh Sapra vs State (Directorate General of GST Intelligence), Chandigarh [Criminal Misc. No. M-47385 of 2025]
🔥📛 HC: Composite SCN ‘illegal’ for blurring Section 73/74 distinction, diluting timeline, causing prejudice
➡️ The Court categorically held that issuing a single/composite show cause notice (SCN) covering multiple financial years under Sections 73 or 74 of the CGST/KGST Act is illegal, without jurisdiction, and contrary to the statutory scheme. Each financial year must be dealt with independently through separate SCNs.
➡️ A composite SCN allows the Department to wrongly apply Section 74 (fraud/wilful misstatement) to all years, even where some years fall under Section 73, thereby artificially extending limitation and bypassing mandatory statutory safeguards. This blurring of statutory distinction was held to be impermissible.
➡️ ITC eligibility is determined year-wise, and each financial year involves distinct turnover, contracts, accounting treatments, legal provisions, and reconciliations. A single SCN alleging “wrong ITC” for multiple years deprives the taxpayer of the right to provide year-wise explanations and defenses, resulting in serious prejudice.
➡️ The Court emphasized that returns, annual reconciliation, ITC availment timelines (Section 16(4)), limitation periods under Sections 73/74, and quantification under Section 75(7) all operate on a financial-year basis. This legislative design leaves no scope for consolidated proceedings across unrelated financial years.
➡️ Since valid jurisdiction is a foundational requirement under Sections 73/74, an SCN issued without jurisdiction can be quashed at inception. The Court rejected the Revenue’s objection of prematurity and set aside all proceedings arising from the defective composite SCN.
✔️ Karnataka HC – Pramur Homes and Shelters vs UOI & ors [WP No. 33081 of 2025]
🔥📛 Proceedings under Section 74 not justified if there was no fraud or suppression of fact to evade tax: HC
➡️ The demand proceedings were initiated solely on the allegation that the petitioner had purchased goods from a bogus supplier whose GST registration was shown as cancelled at the relevant time.
➡️ The petitioner established that purchases were made in the normal course of business and were duly supported by valid tax invoices, e-way bills, and other statutory documents, indicating genuine transactions.
➡️ It was an undisputed fact on record that the selling dealer’s GST registration was subsequently restored by the department, nullifying the allegation that the supplier was a non-existent or unregistered entity.
➡️ Once the supplier’s registration stood restored, the transactions could not be treated as purchases from an unregistered or bogus dealer, and no adverse inference could legally be drawn against the recipient.
➡️ In view of these peculiar facts, the High Court held that the demand, penalty, and appellate orders were unsustainable in law and quashed all the impugned orders, granting relief to the petitioner.
✔️ Allahabad HC – Bp Oil Mills Ltd v. Additional Commissioner Grade-2 [WRIT TAX Nos. 1841, 1843 and 1844 of 2024]
🔥📛 Goods couldn’t be seized just because shipping address wasn’t declared as additional place of business: HC
➡️ The court held that where a valid e-way bill accompanied the goods, the movement was genuine. Minor procedural issues—such as an unsigned manual delivery challan—cannot justify detention under section 129 when statutory electronic documentation is valid.
➡️ Although goods were procured from the Noida unit and invoices were raised by the Lucknow unit, the transaction structure was transparent and supported by documents. The delivery challan clearly indicated inter-unit transfer, negating any presumption of tax evasion.
➡️ A State GST circular specifically barred detention proceedings merely because the destination was not declared as an additional place of business. The court emphasized that such circulars are binding on departmental authorities.
➡️ Since the e-way bill reflected correct details and the department had knowledge of the petitioner’s business operations, no intent to evade tax could be inferred. Detention under section 129 requires more than technical or clerical discrepancies.
➡️ As the detention and subsequent orders were contrary to binding circulars and unsupported by evidence of tax evasion, the impugned orders were quashed. The court reaffirmed that enforcement actions must align with statutory provisions and departmental instructions.
✔️ Allahabad HC – Prostar M Info Systems Ltd. v. State of UP [WRIT TAX No. 1469 of 2024]
🔥📛 HC dismissed writ as there was no violation of principle of natural justice if no satisfactory reply was filed to SCN
➡️ The case involved allegations that the petitioner had floated multiple firms solely to fraudulently avail Input Tax Credit (ITC) without any actual supply of goods or services, indicating serious tax evasion concerns.
➡️ Courts generally refrain from exercising writ jurisdiction in cases of alleged fraudulent ITC availment, as such matters involve complex factual issues, interlinked transactions, and detailed examination of evidence.
➡️ Where a properly issued Show Cause Notice (SCN) is uploaded on the GST portal and the taxpayer fails to submit a satisfactory response, the Court is unlikely to interfere at the writ stage.
➡️ In cases involving multiple interconnected entities and notices, judicial interference is discouraged, as adjudication requires coordinated factual assessment best handled by the tax authorities.
➡️ The petitioner was relegated to the statutory appellate mechanism, reinforcing the principle that writ petitions should not be used to bypass effective alternative remedies under GST law.
✔️ Delhi HC – A V Metals Marketing (P.) Ltd. v. Principal Commissioner CGST [W.P.(C) No. 18230 OF 2025]
🔥📛 Writ allowed restoring GST registration as bona fide illness and portal issues justified delay in filing returns: HC
➡️ The petitioner’s GST registration was cancelled due to non-filing of GST returns for six consecutive months, which occurred because of medical issues and a dispute with his Chartered Accountant who controlled the GST portal credentials.
➡️ Upon cancellation, the petitioner approached the GST Department seeking access to the GST portal. The Department provided a new username and temporary password via email, acknowledging the petitioner’s difficulty in accessing the portal earlier.
➡️ Despite receiving new credentials, the GST portal allowed filing of returns only for limited recent periods and did not permit filing of all pending past returns, preventing full statutory compliance.
➡️ The petitioner demonstrated a genuine intention to continue business and to regularize compliance by filing all pending GST returns along with applicable late fees and interest.
➡️ The Court held that cancellation was not justified in the given circumstances and directed restoration of GST registration, along with provision of full portal access, reinforcing that bona fide taxpayers should not be denied registration solely due to procedural or technical impediments when they are willing to comply.
✔️ Delhi HC – Eves Fashion v. Union of India [W.P. (C) No. 17991 of 2025]
🔥📛 Appellate Authority lacks power to waive mandatory pre-deposit for appeals under GST Act: HC
➡️ The Appellate Authority has no statutory power to waive the mandatory pre-deposit requirement prescribed under GST law, even if the assessee contends that the tax demand is illegal.
➡️ The Appellate Authority was legally justified in dismissing the appeal due to non-compliance with the statutory pre-deposit condition, as such compliance is a prerequisite for entertaining an appeal.
➡️ Since the assessee could not pursue the appeal solely due to the pre-deposit issue and the GST Appellate Tribunal was not yet functional, the High Court intervened to prevent denial of appellate remedy.
➡️ An amount exceeding 10% of the disputed tax had already been recovered, which effectively satisfied the pre-deposit requirement under section 107(6) of the CGST Act.
➡️ The matter was remanded to the Appellate Authority with a clear direction to hear and decide the appeal on merits, without insisting on any further pre-deposit, as the statutory condition stood fulfilled.
✔️ Calcutta HC – Arup Kumar Chatterjee v. Assistant Commissioner of State Tax, Bureau of Investigation (South Bengal) [WPA No. 20961 of 2025]
🔥📛 Adverse order passed on rectification without proper notice violates natural justice; matter remanded for fresh decision: HC
➡️ Once a rectification order is passed, the original adjudication order stands obliterated. Therefore, any writ petition challenging only the original order becomes infructuous and is liable to be dismissed. The correct legal course is to challenge the rectification order or the rejection of a subsequent rectification request.
➡️ Rectification under GST law is meant to correct apparent mistakes. However, when rectification results in a fresh or enhanced tax demand on a new ground (adverse rectification), it goes beyond a mere clerical correction and attracts additional procedural safeguards.
➡️ As per the third proviso to the rectification provision, any rectification that adversely affects the taxpayer must be preceded by due notice and an opportunity of hearing. Mere issuance of document-call notices does not satisfy this requirement.
➡️ In this case, although notices seeking documents were issued, no specific proposal or show cause notice for confirming a fresh demand of about ₹3.85 crore was issued. This procedural lapse rendered the adverse rectification legally unsustainable.
➡️ While noting the petitioner’s non-cooperation in responding to document requests, the Court held that procedural fairness cannot be dispensed with. Accordingly, the adverse portion of the rectification order was set aside and remitted, with the impugned rectification being treated as a show cause notice for fresh adjudication.
✔️ Madras HC – Tvl. Anand Transports v. Assistant Commissioner (ST) [W.P. Nos. 44477 and 44479 of 2025]
