LATEST GST CASE LAWS: 23.12.2025
🔥📛 Bombay HC stays SCN on taxability of corporate guarantee issued to Reliance Power
➡️ The Court stayed the operation and implementation of the Show Cause Notice dated 24-09-2025 issued to Reliance Power, pending further orders.
➡️ The Court noted that similar matters involving Vedanta Ltd., Schloss HMA, and Kairos Properties already enjoy interim protection, and the present case is covered by those precedents.
➡️ The assessee has contested the CBIC Circulars dated 27-10-2023 and 11-07-2024, along with Rule 28(2) of the CGST Rules, all of which reinforce taxability of corporate guarantees under GST.
➡️ The Court directed that the current writ petition be tagged with the existing batch of petitions raising the same legal question on GST applicability to corporate guarantees.
➡️ The Department has been asked to submit its reply within four weeks, following which the matter will be heard along with the connected cases.
✔️ Bombay HC – Reliance Power Limited vs The Union of India & Ors [WRIT PETITION (L) NO. 41182 OF 2025]
🔥📛 Karnataka HC stays DGGI’s SCN denying concessional tax on Avaada’s solar EPC-contracts
➡️ The Karnataka High Court granted interim relief to Avaada Energy by staying the DGGI show cause notice proposing a GST demand of approx. ₹91 crore relating to solar projects across multiple States.
➡️ The SCN alleged that Avaada’s contractual bifurcation excludes essential components (e.g., solar modules) and therefore does not constitute supply of a “solar power generating system”, treating the arrangement instead as a works contract for immovable property.
➡️ Avaada argued that the concessional GST rate applies to both solar generating systems and their component parts, making their supplies correctly taxable at the concessional rate.
➡️ The Assessee submitted that DGGI Jaipur had previously investigated the same issue for projects in Rajasthan and ruled in its favour; hence, a coordinate DGGI unit cannot reopen or contradict that view. The fresh SCN was argued to be arbitrary and violative of Article 14.
➡️ Avaada contended that all facts were already disclosed to the Department, and therefore no suppression existed, making the invocation of Section 74 (extended period & higher penalty) unsustainable. The Court found a prima facie case and stayed the SCN accordingly.
✔️ Karnataka HC – Avaada Energy Pvt Ltd vs UOI [WP 38310/2025]
🔥📛 HC: Documentary evidence, prolonged custody, valid ground for bail in Rs. 160 cr ITC-fraud case
➡️ The Court reiterated that offences under Section 132 of the CGST Act carry a maximum punishment of five years and are triable by a Judicial Magistrate, reinforcing that such offences are not treated on par with the most serious criminal categories.
➡️ Since the investigation was complete and the challan filed, with all relevant documentary and electronic evidence already seized, the Court held that no further recovery remained, reducing the justification for continued custody.
➡️ With the accused already in custody since March 5, 2025, and in view of the voluminous documentary record, the Court found that the trial is unlikely to conclude soon, making prolonged detention punitive rather than investigatory.
➡️ Because the case rests primarily on documentary/electronic evidence, the Court held that the risk of tampering or influencing witnesses is negligible, and there was no material suggesting non-cooperation if bail were granted.
➡️ Relying on precedents such as Ratnambar Kaushik, the Court emphasized that bail is the rule and incarceration the exception, and that economic offences cannot be treated as a monolithic category warranting automatic denial of bail; courts must evaluate the gravity, statutory objectives, and case-specific circumstances.
✔️ P&H HC – Prince Kumar & Another v. State of Punjab & Another [CRM-M-33635-2025]
🔥📛 Interest can’t be levied under rule 133(3)(c) retrospectively on profiteering amount for pre-01.04.2020 period: GSTAT
➡️ The DGAP’s reinvestigation (after NAA’s remand) confirmed profiteering of ₹4,57,683 for the period 15.11.2017–30.06.2019, which the respondent accepted.
➡️ The authority held that interest under Rule 133(3)(c)—inserted only from 01.04.2020—could not apply retrospectively. Since the investigation period ended well before the amendment, no interest liability arose.
➡️ Penal provisions enabling penalty for profiteering were inserted after 2020. As the alleged profiteering period ended on 30.06.2019, the respondent did not fall within their ambit—hence no penalty.
➡️ As the recipients were unidentifiable (“faceless”), the profiteered sum was ordered to be deposited in the Consumer Welfare Funds (CWF) of the Centre and States, in equal proportion.
➡️ The ruling emphasized the legal principle that onerous or substantive amendments cannot be applied retrospectively, reinforcing predictability and fairness in anti-profiteering jurisprudence.
✔️ GSTAT Delhi – DGAP v. Dange Enterprise [NAPA/16/PB/2025]
🔥📛 GST registration restoration allowed beyond 270 days as officer empowered to condone delay upon full compliance: HC
➡️ The taxpayer’s GST registration was cancelled under Section 29(2)(c) due to continuous non-filing of returns for more than six months, following a show-cause notice requiring a response within 30 days.
➡️ After cancellation, the taxpayer filed all pending returns and paid the entire tax liability along with applicable interest and late fees.
➡️ The GST portal declined the revocation request solely because the statutory 270-day time limit for seeking revocation had expired.
➡️ The Court held that the proviso to Rule 22(4) empowers the proper officer to drop cancellation and restore registration through Form GST REG-20 once the taxpayer cures the default by filing pending returns and making full payment—even if portal timelines have lapsed.
➡️ The taxpayer was allowed to approach the authority for restoration, which must be considered expeditiously; limitation for the authority’s determination runs from the date of the Court’s order.
✔️ Gauhati HC – Barluit Organic Farmers Producer Company Ltd. v. Union of India [WP(C) No. 6502 of 2025]
🔥📛 No ITC reversal on post transaction registration cancellation of supplier: HC
➡️ The supplier’s GST registration was active on the date of supply. Purchases were supported by tax invoices, e-way bills, and payment through banking channels, satisfying Section 16 conditions.
➡️ The supplier had duly filed GSTR-1 and GSTR-3B for the relevant period (June 2021), and the tax on the outward supply was deposited. The transaction was auto-populated in the assessee’s GSTR-2A, and this data remained undisputed.
➡️ The later cancellation of the supplier’s registration, occurring after the transaction, could not invalidate the assessee’s ITC since the recipient cannot be penalized for events occurring post-supply.
➡️ Authorities invoked Section 74 based on allegations from the Central Investigation Bureau, Bihar, regarding a bogus supply chain. However, no foundational evidence of fraud, wilful misstatement, or suppression by the assessee was established.
➡️ Since the legal conditions for ITC were fulfilled and the invocation of Section 74 was unjustified, the orders reversing ITC and imposing IGST, interest, and penalty were set aside.
✔️ Allahabad HC – Saniya Traders v. Additional Commissioner Grade-2 [WRIT TAX No. 1743 of 2024]
🔥📛 Parallel GST proceedings sustainable if coordinated; assessee to comply with Central SCN and State summons: HC
➡️ The Court held that the issue of simultaneous action by State and Central GST authorities is no longer unsettled, having been substantively resolved by the Supreme Court in Armour Security (India) Ltd. v. Commissioner, CGST.
➡️ Merely because a State GST authority initiated inquiry first does not automatically bar the Central GST authority from issuing summons or initiating proceedings, unless the “same subject matter” has already reached the stage of adjudication as interpreted in Armour Security.
➡️ The Supreme Court ruling clarifies what constitutes initiation of proceedings and how to determine whether inquiries by State and Central authorities pertain to the same taxable event or subject matter.
➡️ The Court instructed the petitioner to appear before the Central GST authority, respond to the SCN, and raise all legal objections (including Section 6(2)(b) contentions) along with supporting documents.
➡️ The petitioner must also comply with the State GST summons and assist in the inquiry. Both authorities may proceed in accordance with law, guided by the principles laid down in Armour Security to avoid duplicative adjudication.
✔️ Himachal Pradesh HC – J.B. Rolling Mills Ltd. v. Union of India [Civil Writ Petition No. 6358 of 2024]
🔥📛 ITC is vested right; pre-18.07.2022 inverted duty refund can’t be denied despite later amendment transferring benefit: HC
➡️ The restriction on refund of unutilised ITC for goods placed in the negative list under the inverted duty structure applies only from 18.07.2022 onwards, and cannot be imposed on refund periods prior to this date.
➡️ Following Shree Arihant Oil and General Mills v. Union of India, ITC is an indefeasible, vested right accruing on the date of purchase. Therefore, ITC accumulated before 18.07.2022 cannot be denied merely because certain goods were later notified as ineligible.
➡️ For refund claims pertaining to periods before 18.07.2022, the subsequent amendment and the clarificatory FAQ/Circular dated 10.11.2022 cannot be applied retrospectively to reject legitimately accrued ITC refund claims.
➡️ The Rajasthan High Court relied on Mafatlal Industries Ltd. (1997) 5 SCC 536, which held that changes affecting refund rights apply prospectively. Thus, any restriction on refund of unutilised ITC due to inverted tax structure must apply only from the date of the notification, not before.
➡️ The view taken by coordinate benches and the High Court is consistent: refund benefits already passed on or accrued before 18.07.2022 cannot be withdrawn, and only benefits arising after the amendment date can be restricted.
✔️ Rajasthan HC – Swastik Oil Industries v. Union of India [D.B. Civil Writ Petition No. 11549, 11550, 17076 of 2023 and 8727, 9658 of 2024]
