LATEST GST CASE LAWS: 21.07.2025
🔥📛 Calcutta HC stays ITC recovery against recipient basis insolvency RP approved against supplier
➡️ The Calcutta High Court restrained Revenue authorities from recovering Input Tax Credit (ITC) from the recipient (Petitioner) due to the supplier’s (M/s Cosmic Ferro Alloys Ltd.) failure to remit GST, especially as the supplier had undergone insolvency proceedings under the IBC.
➡️ The Court noted that the supplier’s liabilities were extinguished through a Resolution Plan approved by the NCLT, and the Revenue had not lodged any claims during the Corporate Insolvency Resolution Process (CIRP).
➡️ The Petitioner argued they should not be penalized under Section 16(2)(c) of the CGST Act (which mandates tax payment by the supplier as a condition for ITC eligibility) due to the supplier’s tax default being a result of insolvency, not the Petitioner’s fault.
➡️ The High Court directed the Revenue to disclose records showing whether it took any steps (e.g., filing claims during CIRP) to safeguard its interest, while requiring the Petitioner to produce the NCLT-approved Resolution Plan.
➡️ The Court ordered a 10% deposit from the Petitioner within four weeks and granted a stay on the recovery order by the Appellate Authority pending further hearing.
✔️ Calcutta HC – M/s Lalwani Ferro Alloys ltd. Vs. Assistant Commissioner, CGST & CX [WPA 13913 of 2025]
🔥📛 HC: Assessee precluded from cross-examining officers issuing summons and arrest-memo; Dismisses writ
➡️ The Gujarat High Court held that officers who issued summons or arrest memos are not required to be cross-examined by the assessee, as they acted in an official capacity. Hence, denial of cross-examination for such officers by the Revenue was found to be valid.
➡️ The assessee’s request to cross-examine a co-noticee was denied on the ground that the opportunity had already been provided earlier, but the assessee did not utilize it. The Court held that this does not amount to a denial of natural justice.
➡️ The Court referred to the Supreme Court decision in Telstar Travels, emphasizing that when adjudication is based on documentary evidence, the denial of cross-examination does not automatically violate principles of natural justice, particularly if no prejudice is shown.
➡️ The High Court reiterated that a statutory appeal under Section 107 of the CGST Act is an appropriate remedy. It dismissed the writ petition, emphasizing that appeal proceedings are a continuation of the original adjudication process where all legal submissions can be raised.
➡️ The Court found that the assessee failed to show any material prejudice resulting from the denial of cross-examination, especially when the investigation and findings were primarily document-based.
✔️ Gujarat HC – Sazid Ali Khan Vs Office Of Principal Commissioner, Central Gst And Central Excise Commissionerate, Vadodara-I & Ors [R/SPECIAL CIVIL APPLICATION NO. 6437 of 2025]
🔥📛 HC: No embargo on transferring un-utilized ITC between amalgamating companies located in distinct States
➡️ The Bombay High Court ruled that unutilized ITC (IGST and CGST) in the electronic credit ledger can be transferred from a Transferor Company in one State to a Transferee Company in another State, even though the GST portal currently lacks this functionality. The Court emphasized that Section 18(3) of the CGST Act does not restrict ITC transfers based on State boundaries.
➡️ The Court held that the Transferee Company, having assumed all liabilities and obligations of the now-dissolved Transferor Company, is legally entitled to claim the unutilized ITC under Section 18(3). The amalgamation triggers this statutory right, regardless of the companies being in different States.
➡️ The Court rejected the Revenue’s argument that ITC must only be utilized within the State where it was earned, clarifying that such a limitation is not found in the statute. The GST framework supports seamless credit utilization, including across State lines in merger scenarios.
➡️ Contrary to the Revenue’s claim, the Court ruled that the Transferee is not required to take GST registration in the Transferor’s State to execute the ITC transfer. Section 22(4) deems the Transferee registered from the date of incorporation post-merger, and there is no embargo in law mandating dual State registration for ITC transfer.
➡️ Acknowledging the absence of functionality on the GST portal for cross-State ITC transfers in amalgamation cases, the Court directed the GST Council and GSTN to develop and implement an appropriate mechanism to facilitate such transfers digitally, ensuring alignment with the law’s intent.
✔️ Bombay HC – Umicore Autocat India Private Limited vs UOI & ors [WRIT PETITION NO. 463 of 2024]
🔥📛 HC: Basis Assessee’s pre-deposit in terms of circular, quashes recovery notice absent tribunal
➡️ The assessee filed a writ petition challenging recovery notices issued by CGST authorities, despite having deposited 10% of the disputed tax amount as required under Section 107(6) of the CGST Act while filing a first appeal.
➡️ The High Court acknowledged that the assessee was unable to file a second appeal under Section 112 due to the non-constitution of the GST Appellate Tribunal, effectively limiting the assessee’s appellate remedy.
➡️ The Court referred to CBIC Circular No. 224/18/2024 dated 11.07.2024, which mandates that no recovery shall be initiated if the assessee has paid the statutory pre-deposit and the Tribunal is non-functional.
➡️ The Court found that the recovery notices issued on multiple dates were contrary to the CBIC circular and the statutory framework, given the assessee’s compliance with the pre-deposit requirement.
➡️ The High Court set aside the recovery notices and ruled that no coercive recovery action should be undertaken against the assessee, affirming the protection available under the CBIC circular in the absence of an operational appellate tribunal.
✔️ Delhi HC – Kusum Healthcare Private Limited Vs Assistant Commissioner, Division Okhla, Cgst Delhi South Commissionerate & Ors [W.P.(C) 3889/2025]
🔥📛 HC: Quashes appeal dismissal for non-appearance on very first day of admission
➡️ The Karnataka High Court quashed the appellate authority’s order dismissing a GST appeal solely due to the assessee’s non-appearance on the very first date of hearing, deeming such dismissal premature and unjust.
➡️ The Court held that the assessee was not given an adequate opportunity to be heard, as the appeal was disposed of ex parte without allowing reasonable time to present a defence.
➡️ It was emphasized that appellate authorities have a responsibility to ensure fair hearing procedures, especially at the initial stages of listing, and must not treat initial non-appearance as refusal to participate.
➡️ The judgment reinforced that reasonable opportunity must be provided before taking adverse decisions, underscoring the importance of procedural fairness in appellate GST proceedings.
➡️ The High Court issued a writ of certiorari, setting aside the dismissal and remanding the matter back to the Joint Commissioner (Appeals) for fresh adjudication, ensuring due process is followed.
✔️ Karnataka HC – N. H. and Co. Vs. The Assistant Commissioner & Anr. [WRIT PETITION NO. 17126 OF 2025]
🔥📛 HC: SCN issued for non-filing of returns subsequent to date of cancellation of provisional-registration untenable
➡️ The Assessee, operating as a sole proprietorship under the name Shree Durga Automobiles, ceased business operations in April 2019 and applied for GST registration cancellation on 8th May 2019. This application date becomes central to the dispute.
➡️ The provisional registration was cancelled retrospectively from 9th June 2020, and later, a final cancellation order was passed on 4th August 2021 due to non-filing of returns. However, the Assessee contended that the cancellation order and prior SCN were not served at the registered address, resulting in lack of awareness.
➡️ The Court ruled that the SCN dated 22nd July 2021 was legally untenable, as it was issued after the registration had already been cancelled, rendering it ineffective. The Petitioner could not be expected to file returns for a period when the registration was no longer active.
➡️ The Delhi High Court clarified that the GST registration should stand cancelled from the date of application, i.e., 8th May 2019, aligning with the Assessee’s intent and application, rather than the later dates arbitrarily determined by the department.
➡️ The judgment reinforces the principle that cancellation orders and SCNs must be properly served and that procedural lapses, especially affecting the taxpayer’s rights, can render such orders invalid.
✔️ Delhi HC – Kamal Kindra vs Commissioner of State Tax and Others [W.P.(C) 9237/2025]
