LATEST GST CASE LAWS: 22.05.2025
🔥📛 SC: Dismisses Revenue’s SLP against quashing of ECrL negative blocking
➡️ The Delhi High Court had set aside the negative blocking of the Electronic Credit Ledger (ECrL) under Rule 86A.
➡️ The High Court referred to the Best Crop Science Ltd case, which held that Rule 86A(1) does not require a taxpayer to replenish their ECrL based on past fraudulent ITC availment.
➡️ The Revenue filed a Special Leave Petition (SLP) against the Delhi High Court’s order.
➡️ The Supreme Court dismissed the Revenue’s SLP, stating that there was no case for interference under Article 136 of the Constitution of India.
➡️ The Supreme Court concluded that the Special Leave Petition was accordingly dismissed.
✔️ SC – Director General of Goods and Service Tax Intelligence & anr. Vs Super Products [SPECIAL LEAVE PETITION (CIVIL) DIARY NO(S). 21064/2025]
🔥📛 SC: Dismisses SLP against HC ruling upholding penalty for return and tax payment default
➡️ The Supreme Court (SC) dismissed the Special Leave Petition (SLP) filed by the assessee against the Andhra Pradesh High Court’s decision.
➡️ The High Court had upheld the penalty imposed under Section 74 of the GST Act on the assessee for non-filing of returns and non-payment of taxes.
➡️ The High Court had ruled that non-filing of monthly returns could be considered as suppression of fact, if not fraud or misstatement, and rejected the assessee’s excuse that the default occurred due to non-payment of dues by their sole client.
➡️ The High Court opined that defaults, subject to the requirement of making out a case of fraud, wilful misstatement, or suppression of fact, were sufficient for invoking Section 74.
➡️ The Supreme Court stated that it saw no good reason to interfere with the order passed by the Andhra Pradesh High Court.
✔️ SC – Sriba Nirman Company vs The Commissioner (Appeals), Guntur, Central Tax and Customs & ors. [Petition for Special Leave to Appeal (C) No. 14270/2025]
🔥📛 HC: Allowing IGST refund to Columbia Sportwear, clarifies key concepts of intermediary vs principal-to-principal relationship
➡️ The Karnataka High Court has directed the Revenue Department to refund IGST plus interest to Columbia Sportswear India within three months, quashing previous orders that classified its export of customer support services as “intermediary services.”
➡️ The Court examined the “Buying Support Services Agreements” and determined that Columbia Sportswear India’s role in aiding the recipient in identifying the best product sources was conducted independently, without representing or binding the recipient directly or indirectly.
➡️ The High Court referred to jurisprudence from previous cases (Amazon Development Centre India, Bharati Cellular Ltd, and Future Gaming Solutions) and relevant Circulars and Notifications, concluding that the assessee is not an “intermediary” under Section 2(13) of the IGST Act or the Finance Act, 1994. Instead, the services provided qualify as exports of services by an independent service provider.
➡️ The Court clarified key tests to distinguish between intermediary and principal-to-principal relationships, including: (i) the function of arranging or facilitating the supply of goods/services, (ii) the existence of three parties with one acting as an agent, (iii) a triangular relationship, (iv) an agreement obligating the service provider to act on behalf of another, and (v) the absence of three parties ruling out the agreement from intermediary services.
➡️ The High Court also highlighted the distinction between an “intermediary” under Section 2(13) of the IGST Act and an “agent” under Section 2(5) of the CGST Act, emphasizing that an intermediary’s role is limited to facilitating or arranging supplies between the principal and a third party. Additionally, the Court held that the refund application was not time-barred, referring to Notification No. 13/2022-Central Tax, which extended the time limit for passing orders.
✔️ Karnataka HC – Columbia Sportswear India Sourcing Pvt. Ltd. Vs UOI & ors [WRIT PETITION NO. 12116 OF 2024 (T-RES)]
🔥📛 Delhi HC directs mediation between ministries to resolve disputed levy on lease proceeds
➡️ The Delhi High Court (HC) has stayed a demand order filed by NBCC (India) Limited, which challenges the demand for lease proceeds deposited in an escrow account. The account was opened as per an agreement between the Ministry of Urban Development (MoUD) and the assessee for developing residential and commercial spaces in Kidwai Nagar (East).
➡️ NBCC argues that the transaction with the government entity is exempt from Goods and Services Tax (GST) and contends that the demand for GST is untenable.
➡️ The High Court has directed the Revenue Department to take instructions on whether they are pressing for the GST demand. The HC has also issued a notice and recommended exploring a resolution between the department and the MoUD.
➡️ The HC has directed a meeting to be held between the joint secretaries of the MoUD and the Finance Ministry on or before July 10, 2025. This is due to the disputed period being 2017-2018, with proceedings also initiated for subsequent years.
➡️ The matter has been posted for further hearing on August 18, 2025.
✔️ Delhi HC – NBCC (India) Limited. vs Additional Commissioner , CGST Delhi, South & Ors [W.P.(C) 6687/2025]
🔥📛 SLP dismissed against HC order for unblocking of credit ledger since revenue failed to provide pre-decisional hearing as per Rule 86A: SC
➡️ The taxpayers had deposited amounts under protest or coercion, which were credited to their Electronic Credit Ledger.
➡️ The taxpayers challenged orders that blocked their Electronic Credit Ledgers under Rule 86A, arguing that such blocking required a pre-decisional hearing.
➡️ The Revenue Department contended that the blocking was based on a field visit report indicating that the suppliers were non-existent.
➡️ The High Court held that a pre-decisional hearing is mandatory before blocking credit under Rule 86A due to the serious civil consequences involved. The Revenue Department failed to form an independent opinion and relied solely on another officer’s report, which did not fulfill the mandatory requirements of Rule 86A.
➡️ The High Court quashed the impugned blocking orders, allowed the taxpayers’ appeals, and held that the Special Leave Petition (SLP) filed against the impugned order was to be dismissed.
✔️ SC – State of Karnataka v. K-9 Enterprises [SLP (CIVIL) Diary No. 11543 of 2025]
🔥📛 Exercise of powers under section 168A recognized as appropriate given exceptional circumstances and did not violate natural justice: HC
➡️ The assessee challenged Notification No. 56/2023-CT dated 28-12-2023, G.O.(Ms) No.1 dated 2-1-2024, and the assessment order under section 73(9) for the Assessment Year 2018-2019, claiming these were arbitrary, without jurisdiction, and violated section 168A of the TNGST Act and Articles 14 and 19(1)(g) of the Constitution of India.
➡️ The assessee argued that section 168A of the CGST Act was meant for extraordinary circumstances like the COVID-19 pandemic, initially extended through Notification No.13/2022-CT until 30-9-2023, and that the impugned notifications and assessment order did not align with the purpose of section 168A, failing to consider the post-pandemic recovery period and adequate compliance time already provided.
➡️ The court held that the impugned notifications and assessment order were valid and issued in accordance with the provisions of the GST Act, TNGST Act, and the constitutional framework.
➡️ The exercise of powers under section 168A of the CGST Act and TNGST Act was found to be appropriate, with due consideration of exceptional circumstances.
➡️ The respondents acted within their jurisdiction, did not violate the principles of natural justice or the assessee’s fundamental rights under Articles 14 and 19(1)(g) of the Constitution of India, and the writ petition was dismissed.
✔️ Madras HC – Tvl. N.V.R. Sons v. Union of India [W.P.(MD)No. 9947 of 2025]
