LATEST GST CASE LAWS: 21.05.2025
🔥📛 Bombay HC stays demand on transfer of leasehold rights by original lessee to third party
➡️ The Bombay High Court has stayed the operation of an order that imposed a demand on the assignment of leasehold rights by the original lessee to a third party for a plot of land allotted by the Maharashtra Industrial Development Corporation (MIDC).
➡️ The court referred to the judgment of the Gujarat High Court in the case of Gujarat Chambers of Commerce and Industry and Others, noting that no contrary view was placed before it.
➡️ The Bombay High Court observed that this is an important issue that needs to be addressed by the court.
➡️ Relying on its own previous judgments in Siemens Limited and Chambers of Small Industries Association & Another, the court decided to stay the operation of the order.
➡️ The matter has been posted for further hearing on June 10, 2025.
✔️ Bombay HC – B. Sorabji vs The Union of India & Ors. [WRIT PETITION NO.6041 OF 2025]
🔥📛 Delhi HC’s long arm goes after ‘untraceable’ assessees who forged SCNs , obtained relief fraudulently
➡️ The Delhi High Court (HC) discovered a case of forgery involving four assessees who obtained fraudulent relief by forging Show Cause Notices (SCNs). The HC has directed the freezing of their bank accounts.
➡️ The Revenue pointed out the forgery through a Review Petition, revealing that the actual SCNs contained reasons. In response, the HC has taken stern action, including directing Aadhar verification of the assessees by UIDAI, calling the Oath Commissioner to testify regarding the attestation of the deponents’ affidavits, and instructing the GST Department to verify its records related to the assessees.
➡️ The HC observed that the four individuals are untraceable, expressing surprise at how their affidavits were attested or notarized and questioning how the counsel for the petitioner identified them.
➡️ The counsel for the “untraceable” assessees stated that his clients have not contacted him since the GST Department filed the Review Petition.
➡️ The HC has recalled its earlier order and has listed the matter for further hearing on May 28, 2025.
✔️ Delhi HC – SR Enterprises. vs Principal Commissioner of Goods and Service Tax, East Delhi [W.P.(C) 685/2025]
🔥📛 HC: Following Aberdare Technologies, issues notice to Revenue for rectification of returns
➡️ The Delhi High Court (HC) has issued a notice to the Revenue Department in response to a petition filed by an Assessee. The Assessee is seeking rectification of their Goods and Services Tax (GST) returns filed under GSTR-1 to enable the recipient to avail input tax credit.
➡️ The Assessee cited the precedent from the case of Aberdare Technologies. This precedent likely supports the Assessee’s argument for rectification of the GST returns.
➡️The Delhi HC has directed the Revenue Department to take instructions and has scheduled the matter for further hearing on 27th May 2025.
✔️ Delhi HC – Issar Industries Vs. The Superintendent of CGST and Central Excise [W.P.(C) 4624/2025]
🔥📛 HC: Computational accuracy not a prerequisite in SCN alleging floating of fake firms; Dismisses writ
➡️ The Delhi High Court dismissed a second writ petition filed by Assessees (including a Chartered Accountant) challenging a Show Cause Notice (SCN) in Form DRC-01. The petitioners argued that the SCN was not in accordance with the law and did not compute tax or penalty individually for each Assessee.
➡️ Following an earlier order in a related writ petition, the High Court had directed the Revenue to generate summary demands electronically in Forms GST-DRC-01 and DRC-02.
➡️ The High Court reviewed the contents of the SCN, which included serious allegations against the Assessees, leading to their arrest during the investigation. The adjudication process was still at the SCN stage with ongoing hearings.
➡️ The Court noted that disciplinary proceedings had been initiated by the Institute of Chartered Accountants of India (ICAI) and refused to exercise writ jurisdiction. It validated the SCN as an annexure to DRC-02 for the purpose of computation.
➡️ The High Court acknowledged the complexity of the transactions involving multiple parties. It concluded that mentioning the exact amount for each noticee in the SCN was sufficient to inform them of the amount involved at that stage.
✔️ Delhi HC – Sulender Shah and Anr vs Additional Commissioner/Joint Commissioner, CGST Delhi and Anr [W.P.(C) 6481/2025, CM APPLs. 29538/2025 & 29539/2025]
🔥📛 HC: Recovery from cash/credit ledger 4 days from appellate-order, prior to 3-months unsustainable
➡️ The Allahabad High Court (HC) observed that recovery proceedings against an assessee from their Electronic Credit Ledger or Electronic Cash Ledger could not be enforced for three months after the dismissal of an appeal, even if a pre-deposit for a further appeal was made.
➡️ The HC clarified the intent of Section 78, which governs the initiation of recovery proceedings, stating that such proceedings can only be initiated three months after the amount becomes payable. Any action taken before this period requires recorded reasons.
➡️ Upon dismissal of an appeal, the HC noted that Section 78’s proviso allows the proper officer to require payment within three months, provided reasons are recorded.
➡️ The HC highlighted that under Section 112, depositing 10% of the disputed tax stays the rest of the demand. If recovery is initiated despite this, it undermines Section 112(9), which allows appeals to be filed with a 10% pre-deposit.
➡️ Citing a CBIC Circular, the HC emphasized that pre-deposits can be made even if appellate tribunals are not constituted. Consequently, the HC quashed the recovery action and directed that the assessee’s account be credited with the amount exceeding the 10% demand.
✔️ Allahabad HC – S.A.B. Engg Works vs. State of U.P. & Anr. [WRIT TAX No. – 2254 of 2025]
