LATEST GST CASE LAWS: 21.08.2025
🔥📛 SC extends stay in Revenue’s SLP challenging ocean-freight refund to Torrent Power
➡️ The assessee sought refund of IGST (₹19.28 cr) and service tax (₹4.72 cr) paid on ocean freight under reverse charge, pursuant to Notification No. 10/2017-IGST (Rate), which was struck down as unconstitutional in Mohit Minerals.
➡️ The High Court quashed Revenue’s orders transferring the refund to the Consumer Welfare Fund on unjust enrichment grounds, holding that restitution must ultimately benefit consumers.
➡️ To address unjust enrichment, the HC accepted the assessee’s undertaking to park the refund in a designated account and pass the benefit to consumers through tariff fixation under GERC supervision.
➡️ Aggrieved by the HC’s direction to return the refund (instead of crediting it to the Fund), the Revenue filed an SLP before the Supreme Court.
➡️ The SC had earlier stayed the HC judgment on May 2, 2025; the stay has now been extended, and the matter is listed for final hearing on October 7, 2025.
✔️ SC – Union of India & Anr Vs Torrent Power Ltd. [Petition(s) for Special Leave to Appeal (C) No. 13084/2025]
🔥📛 HC: Quashes transfer of refund of ocean freight to consumer welfare fund; Grants refund upon conditions
➡️ The HC reiterated that refunds of taxes collected under an unconstitutional levy (here, IGST and service tax on ocean freight) are permissible under writ jurisdiction, independent of Section 54 of the CGST Act/Section 11B of the Excise Act.
➡️ Refunds remain subject to the principle of unjust enrichment—refund cannot benefit the assessee if the tax burden has been passed on to consumers.
➡️ Unlike in Sahakari Khand Udyog, the Court held that equity requires refunds to ultimately reach consumers, not the State, especially where a workable mechanism (tariff adjustment) exists to achieve this.
➡️ Torrent Power undertook, through a Board Resolution and affidavit, to keep the refunded sums in a designated fixed-deposit account and to adjust them in consumer tariffs as per Gujarat Electricity Regulatory Commission (GERC) orders under the Electricity Act, 2003.
➡️ The HC quashed the orders transferring refunds to the Consumer Welfare Fund, directed Revenue to release refunds within two weeks into the designated account, and mandated compliance reporting to ensure consumer benefit through tariff adjustment.
✔️ Gujarat HC – Torrent Power Ltd. vs Union of India & Anr [R/SPECIAL CIVIL APPLICATION NO. 13655 of 2024]
🔥📛 Assessee is directed to deposit Rs. 1 crore as security and Appellate Authority should hear appeal on merits: HC
➡️ The assessee was notified of discrepancies during scrutiny proceedings. Despite submitting explanations, the same were found unsatisfactory, leading to issuance of a pre-show cause notice (Form GST DRC-01A).
➡️ The adjudicating authority, after considering the assessee’s response, passed a detailed order determining a demand of ₹11.21 crore (including tax, interest, and penalty), with the tax component being ₹5.30 crore.
➡️ The assessee did not file an appeal within the prescribed limitation period. An appeal was eventually filed after a delay of 391 days, along with the statutory pre-deposit of ₹53 lakhs.
➡️ Since the appeal was filed beyond the permissible period, the appellate authority issued a show cause notice. The assessee neither appeared on the returnable date nor filed a response, leading to dismissal of the appeal.
➡️ The court held that if the assessee deposits the balance amount (after adjusting the pre-deposit) and provides additional security of ₹1 crore, the appellate authority must hear and decide the appeal on merits.
✔️ Calcutta HC – Annu Projects Ltd. v. Joint Commissioner of Commercial Taxes [WPA no. 4628 of 2025]
🔥📛 RCM on security services upheld; classification between body corporate and others wasn’t violative of Articles 14 or 19: HC
➡️ Before 1 January 2019, GST on security services was payable by the service provider under forward charge. After Notification No. 29/2018 amended Notification No. 13/2017, such services (when supplied by non-body corporates) became taxable under Reverse Charge Mechanism (RCM), making the recipient liable to pay GST.
➡️ Since under RCM the supplier (e.g., proprietors) has no output tax liability, their services are treated as exempt under Section 17 of the CGST Act. Consequently, input tax paid on goods/services used for providing such security services cannot be claimed as ITC by the supplier, though the recipient paying GST under RCM can claim ITC.
➡️ The petitioner argued that distinguishing between body corporates and non-body corporates for RCM applicability was arbitrary. The Court held that body corporates and non-body corporates are separate classes, the classification is based on intelligible differentia, and it has a rational nexus with legislative objectives. Hence, no violation of Article 14 was established.
➡️ The Court clarified that the constitutional guarantee of business freedom ensures the right to conduct business but does not guarantee market competitiveness. The absence of ITC benefit under RCM does not violate Article 19(1)(g).
➡️ The decision to apply RCM to specific classes of service providers is a matter of legislative policy under Section 9(3) of the CGST Act. Courts will not intervene unless there is manifest arbitrariness or a clear breach of constitutional rights. Provisions on RCM cannot be equated with the inverted duty structure since, unlike in inverted duty cases, no output tax is paid by the supplier here.
✔️ Bombay HC – Eagle Security & Personnel Services v. Union of India [WRIT PETITION NO. 1687 OF 2024]
🔥📛 HC set-aside order as SCN was uploaded without SCN and assessee didn’t appear before authority & kept seeking adjournments
➡️ Only the summary of the Show Cause Notice (Form DRC-01) was uploaded, without the detailed SCN and Relied Upon Documents (RUDs), due to departmental lapse.
➡️ Authorities admitted a technical glitch prevented uploading RUDs but claimed that complete documents were physically served on the assessee.
➡️ Despite receiving physical copies, the assessee did not file a detailed reply and instead repeatedly sought adjournments.
➡️ The Court noted errors on both sides: the department failed in procedural compliance (non-upload of SCN with RUDs on portal), while the assessee failed to exercise due diligence by not responding substantively.
➡️ The impugned demand order was set aside; matter remanded with direction that assessee be given proper opportunity of hearing before the Adjudicating Authority.
✔️ Delhi HC – Hind Paper House v. Commissioner State Goods and Service Tax Delhi [W.P.(C) No. 3294 of 2025]
🔥📛 SLP dismissed against HC ruling that telecom towers, not permanently attached, are movable & eligible for ITC
➡️ The Supreme Court in Bharti Airtel Ltd. v. CCE held that such towers are not “immovable property” since they lack permanency, can be dismantled, and are not intended to be permanently attached to the earth.
➡️ Placement on concrete foundations is only to withstand environmental conditions and does not confer immovability or permanence.
➡️ The mere legislative exclusion of telecom towers from the scope of “plant and machinery” under GST does not automatically mean that towers are to be treated as immovable.
➡️ Since towers are movable and not “immovable property,” denial of Input Tax Credit (ITC) under section 17(5)(d) of the CGST Act is unsustainable.
➡️ The Supreme Court found no ground to interfere, upholding that ITC on telecom towers cannot be denied on the basis of immovable property restrictions.
✔️ SC – Commissioner, CGST Appeal-1, Delhi Etc. v. Bharti Airtel Ltd. Etc. [SLP (CIVIL) Diary No. 35416 of 2025]
