LATEST GST CASE LAWS: 22.04.2026
🔥📛 HC: Recovery u/s 76 unsustainable where GST collected is fully remitted through another registration
➡️ The Madras High Court (Madurai Bench) quashed a show cause notice issued under Section 76 of the CGST Act demanding about ₹14.63 crore, where the allegation was that the assessee collected GST but failed to remit it, noting that the factual premise of non-remittance was incorrect.
➡️ The assessee operated through two separate GST registrations for trading and transmission; while natural gas sale (trading) was subject to VAT, GST on transmission services was duly discharged by the transmission vertical, and the trading vertical merely recovered this GST component as reimbursement from customers.
➡️ The Court emphasized that a detailed pre-show cause inquiry had already established that the entire GST collected from customers was paid to the Government through the transmission vertical, with no discrepancy, thereby negating the foundation for invoking Section 76.
➡️ It held that mere existence of distinct registrations under Section 25(4) does not justify invoking Section 76 when the tax has actually reached the Government, and such action would effectively lead to impermissible double taxation, especially when the SCN ignored acknowledged payments made under the other registration.
➡️ The Court clarified that Section 76 targets cases of collection and non-remittance of tax, not technical distinctions between registrations; while distinct registrations are treated as separate persons, any tax collected cannot be retained, and ignoring actual remittance while raising demand and penalty is unsustainable, leading to the quashing of the SCN.
✔️ Madras HC – Gail (India) Ltd. vs The Additional Commissioner, Office of the Commissioner of GST and Central Excise [W.P.(MD) No. 13152 of 2020]
🔥📛 HC: Sets aside dissection of solar-EPC contracts on 70:30 valuation, citing non-adjudication of foundational issues
➡️ The Andhra Pradesh High Court set aside the assessment order because the Assessing Officer failed to examine whether the contract resulted in an immovable property (solar power system) or was merely a supply of movable goods with installation; this distinction is critical to determine the correct GST treatment and applicability of the concessional rate under the relevant notification.
➡️ The Court noted that the Assessing Officer did not evaluate the portion of turnover that occurred prior to 1 January 2019, i.e., before the insertion of the Explanation prescribing the 70:30 deemed valuation, thereby ignoring a key temporal aspect affecting tax liability.
➡️ It was held that Circular No. 163/19/2021-GST does not mandate retrospective application of the 70:30 valuation mechanism; rather, it only allows taxpayers the option to apply the Explanation, and therefore cannot be used by the Revenue to impose retrospective tax demands.
➡️ The Revenue’s approach of artificially splitting the contract into 70% goods (taxed at 5%) and 30% services (taxed at 18%) based on the Explanation was challenged as being beyond the scope of Section 8, with the assessee arguing that such deeming provisions are directory and not compulsory.
➡️ Observing that these foundational issues were not properly adjudicated, the Court remanded the matter for fresh assessment, directing the Assessing Officer to reconsider the nature of supply, pre-2019 turnover, and whether the Explanation creates a mandatory deeming fiction, while keeping the constitutional validity of the provision open.
✔️ Andhra Pradesh HC – Mytrah Energy India Private Limited vs. Union of India & Ors.[ WRIT PETITION NO: 4725/2023]
🔥📛 AAAR: No ITC on GST paid on leased land used for battery factory construction; Upholds AAR
➡️ The Gujarat AAAR upheld denial of ITC on GST paid for long-term lease of land from the Government for setting up a manufacturing facility, holding that Section 17(5)(d) overrides Section 16. Even if the lease is in the course of business, ITC is blocked where goods or services are used for construction of immovable property on own account.
➡️ Relying on earlier rulings (GACL-NALCO and Bayer Vapi), the AAAR confirmed that services related to land used for construction fall within the restriction under Section 17(5)(d). It rejected arguments for narrow interpretation of “for construction,” clarifying that the provision is clear and not subject to restrictive interpretation principles applicable to exemptions.
➡️ The authority dismissed arguments on legislative intent and ambiguity, holding that Section 17(5)(d) is explicit and leaves no scope for alternative interpretation. It also rejected comparisons with other clauses and reliance on case law like Dilip Kumar, stating that no ambiguity exists to justify such arguments.
➡️ The AAAR ruled that distinctions such as leasing vs renting, green belt land, or timing of payments (pre- vs post-construction) are irrelevant. Since the entire land is leased for factory establishment and construction is undertaken on own account, the ITC restriction applies fully and cannot be apportioned or bypassed.
➡️ ITC claims on repairs, maintenance, renovation, and land-related services were also denied, as “construction” includes reconstruction and alterations under Section 17(5). The AAAR emphasized that financial hardship or cost implications are irrelevant, reiterating that tax statutes must be strictly interpreted without equity considerations.
✔️ Gujarat AAAR – In the matter of Agratas Energy Storage Solutions Pvt. Ltd. [ADVANCE RULING(APPEAL) NO. GUJ/GAAAR/APPEAL/2026/04]
🔥📛 HC: Filing reconciliation statement in GSTR-9C along-with annual returns, mandatory; Sustains late fees
➡️ The Madras High Court (Madurai Bench) held that where a taxpayer files Form GSTR-9 (annual return) without simultaneously furnishing Form GSTR-9C (reconciliation statement), it amounts to non-filing of return under Section 44 of the CGST Act, thereby attracting late fee under Section 47.
➡️ The Court rejected the assessee’s argument that late fee applies only to GSTR-9 and not GSTR-9C, clarifying that after statutory amendments, the reconciliation statement is not merely procedural but forms an integral part of the annual return framework when applicable.
➡️ Interpreting the term “includes” in Section 44, the Court emphasized that it expands the scope of “annual return” to cover reconciliation statements where mandated, and Rule 80(3) specifies the class of taxpayers (e.g., turnover exceeding ₹5 crore) for whom filing GSTR-9C is compulsory.
➡️ The requirement to furnish GSTR-9C “along with” the annual return was construed strictly, meaning both documents must be filed together; delayed filing of GSTR-9C, even if GSTR-9 was filed earlier with late fee paid, constitutes incomplete compliance and justifies additional late fee.
➡️ The Court upheld the levy of ₹1.69 lakh late fee, declined relief under amnesty notification, and disagreed with the Kerala High Court ruling in Anishia Chandrakanth, reinforcing that non-filing of GSTR-9C equates to non-filing of return for Section 44 compliance.
✔️ Madras HC – Tvl. Madhu Agencies vs State Tax Officer [W.P.(MD) No. 7794 of 2026]
🔥📛 HC: Rules on ‘relevant date’ for counting limitation regarding unutilised ITC-refund as per unamended Explanation-2(e)
➡️ The Delhi High Court held that for refund of unutilised Input Tax Credit (ITC) relating to FY 2017–18, the “relevant date” for computing the two-year limitation under Section 54 must be determined as per the unamended Explanation 2(e), i.e., the end of the financial year (March 31, 2018), making the March 2020 refund application within time and not time-barred.
➡️ The Court clarified that refund claims for unutilised ITC fall under the first proviso to Section 54(3) and constitute a distinct category of refund; hence, the limitation period cannot be computed using Explanation 2(a) (date of export), which applies only to refunds of tax paid on exports, not to accumulated ITC.
➡️ It was held that amendments to Explanation 2(e) effective from February 1, 2019 cannot be applied retrospectively to transactions that occurred prior to the amendment; the applicable law must be the one in force at the time of the transaction, and taxpayers’ limitation rights cannot be curtailed by subsequent changes.
➡️ The Court emphasized that unutilised ITC refunds involve a different mechanism, requiring valid availment, reflection in the Electronic Credit Ledger, and accumulation at the end of the financial year, making return filing timelines critical; this distinguishes such refunds from straightforward tax-paid export refunds.
➡️ Rejecting a uniform application of export-based limitation, the Court noted that applying Explanation 2(a) to ITC refunds would create anomalies and potentially extinguish legitimate claims before they arise, thereby defeating the scheme of GST law; accordingly, the Revenue was directed to process the refund on merits within three months.
✔️ Delhi HC – Kanika Exports v. Union of India & Ors. along with M/s Malik Seasoning and Spices Pvt. Ltd. v. Commissioner of GST [W.P.(C) 12512/2021]
🔥📛 Bombay HC directs grant of RoDTEP-benefits to sugar exporters; Directs refund of past recoveries
➡️ The Bombay High Court held that exporters of white refined/crystal sugar are entitled to RoDTEP benefits even after sugar exports were classified as “restricted” under Notification No. 10/2015-20 dated May 24, 2022, clarifying that such restriction is regulatory in nature and not an absolute prohibition, as exports were still permitted under quotas with Directorate of Sugar approvals.
➡️ The Court rejected the Revenue’s position that “restricted” goods are automatically ineligible under the RoDTEP scheme, emphasizing that exporters who complied with quota allocations and obtained valid permissions cannot be denied benefits, especially when exports were lawfully undertaken within the regulatory framework.
➡️ Relying on Gujarat High Court rulings in similar matters (which attained finality after dismissal of SLPs by the Supreme Court), the Court noted that even departmental communications acknowledged these precedents and the lack of approval to challenge them further, reinforcing consistency in granting RoDTEP benefits.
➡️ Interpreting the notification and scheme harmoniously, the Court observed that while sugar exports are regulated to meet domestic needs, the policy explicitly permits exports within approved quotas; therefore, denying incentives to compliant exporters defeats the objective of promoting exports under the Foreign Trade Policy.
➡️ The Court criticized the Revenue for contesting settled issues across multiple High Courts, warning against inconsistent litigation leading to judicial uncertainty, and directed authorities to grant RoDTEP benefits in all eligible cases, refund recovered amounts with 6% interest, and refrain from coercive recovery actions.
✔️ Bombay HC – RIKA GLOBAL IMPEX LIMITED & Ors VS UNION OF INDIA AND ORS [WRIT PETITION NO. 2310 OF 2024]
🔥📛 SC rejects Revenue’s appeal, affirming coal sizing as ‘manufacture’, not ‘mining service’
➡️ The CESTAT Kolkata upheld the Commissioner’s decision to drop service tax demands under “Business Auxiliary Service” (BAS), holding that coal sizing undertaken by the assessee could not be taxed as a service because ownership of the coal remained with the assessee until delivery to customers, meaning the activity was not performed on goods belonging to the client as required under Section 65(19)(v) of the Finance Act, 1994.
➡️ The Tribunal interpreted contractual terms with buyers (CESC and CPL) to conclude that title in coal passed only after completion of sizing, thereby negating the essential condition for BAS classification and establishing that the assessee was acting as a seller of goods rather than a service provider.
➡️ It further held that coal sizing—comprising segregation, crushing, and grading—is an incidental and integral process that renders coal marketable, qualifying as part of “manufacture” rather than a separate service, especially since VAT/CST had consistently been paid on the full sale value including sizing charges.
➡️ Relying on settled law, including the principle that an activity constituting “manufacture” cannot simultaneously be taxed as a service, the Tribunal concluded that the issue was no longer res integra and that dual taxation under service tax provisions was impermissible.
➡️ The Supreme Court dismissed the Revenue’s appeal, noting its concession that excise duty had already been paid on the sizing activity; it affirmed that such processing amounts to manufacture and therefore cannot be taxed under service categories like mining services, reinforcing the principle that once an activity is treated as manufacture, service tax (and by extension GST on services) is not applicable.
✔️ SC – COMMISSIONER OF CGST AND CENTRAL EXCISE vs. M/S INTEGRATED COAL MINING LIMITED [Diary No. – 10388/2026]
