LATEST GST CASE LAWS: 23.04.2025
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🔥📛 Bombay HC to hear UBL’s challenge to refund-denial w.r.t. GST paid on liquor license-fees ➡️ United Breweries Ltd. (UBL) has challenged Section 118(2) of the Finance Act, 2022 and Section 19(2) of the Maharashtra Goods and Services Tax (Amendment) Act, 2022 in the Bombay High Court (HC). These sections effectively denied UBL a refund of tax paid on liquor license fees for the period prior to the exemption granted in 2019. ➡️ Following the 26th GST Council meeting, it was decided that GST would not be levied on license fees and application fees for alcoholic liquor for human consumption. Notification No. 25/2019-CT (R) was issued, providing an exemption for liquor license fees from GST. ➡️ The Central Government, through the Finance Act, 2022, inserted Section 118(2), which effectively stalled UBL from claiming a refund for the tax paid on liquor license fees for the past period. This created a disparity between those who paid the tax under protest and those who took the risk of non-remittance during the said period. ➡️ Similar amendments were made in the Maharashtra Goods and Services Tax (Amendment) Act, 2022 through the insertion of Section 19(2). This further complicated UBL’s ability to claim refunds for the past period. ➡️ The Bombay High Court allowed UBL’s amendment application to include Section 19(2) of the Amendment Act in its writ petition challenging Section 118(2) of the Finance Act, 2022. The matter has been posted for admission on June 6, 2025. ✔️ Bombay HC – United Breweries Limited vs Union of India & Ors [WRIT PETITION NO. 15715 OF 2022] |
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🔥📛 Free electricity supply to sugar factory includible in ‘transaction value’? Bombay HC to examine ➡️ The Bombay High Court has granted an interim stay on a demand order that sought to include the free supply of electricity and steam to a Sugar Factory in the transaction value for discharging GST. ➡️ The court remarked that there seems to be some substance in the petitioners’ argument, at least prima facie, warranting the interim relief. ➡️ The petitioners contended that they have been paying tax by considering the transaction value as the sole value for consideration in accordance with Section 15 (1) of the GST law. They also pointed out that the transaction value for Co-operative Sugar Factories has been fixed by the State Government as per the relevant policy. ➡️ The policy allows for a Build, Own, Operate and Transfer (BOOT) based co-generation project for electricity and steam generation in collaboration with private companies. Under this, the Sugar Factory supplies Bagasse free of cost to Shree Renuka Sugars Limited (SRSL), which then generates electricity and steam, supplying 50% of it back to the Sugar Factory free of cost. ➡️ A condition was set that SRSL would pay Rs. 60 per ton as sugarcane crushing royalty for the first 9 years and Rs. 70 per ton for the next 9 years. The assessee argued that this has been the transaction value on which they have been paying tax, initially under VAT, then service tax from 2012, and subsequently GST from 2017. ✔️ Bombay HC – Ajinkyatara Sahakari Sakhar Karkhana Ltd & Anr vs. UOI & Ors. [WRIT PETITION NO. 4916 OF 2025] |
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🔥📛 HC: Grants interim-relief against demand premised on time-extension notifications ➡️ The Bombay High Court has granted interim relief to a taxpayer who filed a writ petition challenging the validity of certain time-extension notifications (Notification Nos. 13/2022-Central Tax, 09/2023-Central Tax, and Notification No. 56/2023) under India’s GST laws. ➡️ The taxpayer contested the validity of these notifications, which likely pertain to extensions of time for compliance or other procedural matters under the GST framework. ➡️ The court cited a similar matter involving Evie Real Estate, where interim relief had been previously granted. This indicates that the court found a precedent in the Evie Real Estate case that supported granting relief in the current case. ➡️ The court allowed the taxpayer’s prayer to stay the operation of the impugned order. This means that the court has temporarily halted the enforcement of the demand order issued against the taxpayer, pending the final disposal of the petition. ➡️ The interim relief is granted on the condition that it will remain in effect until the hearing and final disposal of the petition. This provides the taxpayer temporary protection from the consequences of the demand order while the legal challenge is ongoing. ✔️ Bombay HC – Shyam Udyog Vs. Union of India & Ors. [WRIT PETITION (L) NO. 10058 OF 2025] |
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🔥📛 HC: Serving of notice through common-portal a ‘proper-mode’; Differs with own view ➡️ The Madras High Court has ruled that serving notices/orders through the common portal is a proper mode of service under Section 169 of the CGST Act, 2017. This decision was based on the interpretation of Section 169 and the Division Bench judgement in A. Sanjeevi Naidu, which interpreted Rule 52 of the TNGST Rules, 1959, a provision similar to Section 169. ➡️ The Court directed petitioners to remit 25% of the tax demanded as a pre-deposit for de-novo adjudication. This means that before a fresh adjudication can take place, the petitioners must deposit a quarter of the tax amount in question. ➡️ The Court emphasized that the various modes of service prescribed in Section 169 are alternate to each other. It rejected the interpretation in Udumalpet Sarvodaya Sangam, which was contrary to the Division Bench judgement in Sanjeevi’s case. The Court also highlighted that it did not need to refer the matter to a Larger Bench as the Division Bench judgement adequately covered the issue. ➡️ The Court stressed the importance of literal interpretation of the law, rejecting the argument that the plain language should be departed from due to assumed hardship. It invoked the legal maxim ‘dura lex sed lex’ (the law is hard, but it is the law) to uphold the prevalence of law over equity. ➡️ The Court found that the common portal is a ‘designated-computer-resource’ under Section 13 of the IT Act, as taxpayers are given unique login IDs and passwords to access it. It rejected the argument that the GST portal is not a designated computer resource of the assessee and that receipt occurs only when the communication is retrieved. The Court also suggested that alerts through SMS/E-Mail could be triggered through a Circular by the Commissioner, but this would not affect the validity of service. ✔️ Madras HC – Poomika Infra Developers vs State Tax Officer [W.P. Nos. 33562, 33563, 33565, 33573, 33692, 33758 of 2024, 1842, and 1949 of 2025] |
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🔥📛 HC: Dismisses challenge to bank-attachment for DRC-07 non-issuance before passing order without filing appeal ➡️ The Revenue authorities in Telangana attached the bank account of an Assessee. This action was based on an order-in-original (O-I-O) issued in 2022. The Assessee challenged this bank attachment in a writ petition before the High Court of Telangana. ➡️ The Assessee argued that the O-I-O was defective because the Departmental Review Committee (DRC)-07, which is a procedural requirement under India’s GST laws, had not been issued before passing the O-I-O. Therefore, they claimed that the bank attachment based on this defective order should be interfered with by the court. ➡️ The High Court dismissed the Assessee’s writ petition. It held that even if the O-I-O was defective, the Assessee could not assume that it was bad in law without challenging it through the appropriate appeal process. The court emphasized that even a void order needs to be challenged in the proper legal proceedings. ➡️ The High Court also noted that the writ petition was not filed within the stipulated time limit prescribed for preferring an appeal. This further justified the dismissal of the Assessee’s petition. ➡️ The High Court relied on several judgments of the Supreme Court of India, including the case of Glaxo Smith Kline Consumer Health Care, to support the principle that the effect of a void order can only be struck down through a competent legal forum and not by mere assumption of its invalidity. ✔️ Telangana HC – Sri Bhagavathi Granite Industries vs The Assistant Commissioner (ST) [WRIT PETITION No. 25839 of 2024] |
