LATEST GST CASE LAWS: 24.08.2026
🔥📛 AAR: Recipient of Allen’s coaching service determined by contractual liability to pay; E-invoicing obligation independent of ITC eligibility
➡️ The Rajasthan AAR held that, for coaching services supplied by Allen Career Institute, the “recipient” under Section 2(93)(a) of the CGST Act is the person contractually liable to pay the consideration; mere payment of fees or furnishing of a GSTIN by a parent, guardian or sponsoring business enterprise does not by itself make that person the recipient.
➡️ A parent, guardian or sponsoring business enterprise can qualify as the recipient where it has assumed a contractual obligation to pay the coaching fees. The decisive factor is legal liability to pay consideration, not the fact of payment alone.
➡️ Referring to Notification No. 13/2020-Central Tax read with Rule 48(4) of the CGST Rules, the AAR held that the e-invoicing requirement applies where coaching services are supplied to a GST-registered parent, guardian or sponsoring business enterprise that is contractually liable to pay the consideration.
➡️ The supplier’s obligation to issue an e-invoice is independent of whether the recipient is eligible to claim input tax credit or whether the expenditure is incurred for business purposes. ITC entitlement is governed separately under Sections 16 and 17 of the CGST Act and is examined at the recipient’s end.
➡️ Subsequent denial or ineligibility of ITC does not invalidate the supplier’s invoice or remove the e-invoicing obligation. However, the proper officer remains free to examine the genuineness of individual transactions and determine whether the stated recipient genuinely satisfies Section 2(93)(a).
✔️ Rajasthan AAR – In the matter of Allen Career Institute Pvt Ltd [ADVANCE RULING NO. RAJ/AAR/2026-27/11]
🔥📛 GSTAT: Transporting goods without mandatory E-Way Bill evidences tax evasion intent; Subsequent production insufficient
➡️ GSTAT Lucknow held that failure to carry a mandatory E-Way Bill during movement of goods under Rule 138(1) can establish an intention to evade tax, particularly where the invoice is manually issued and the E-Way Bill, which must be generated online, is deliberately not created.
➡️ The Tribunal observed that transporting goods without an E-Way Bill may enable a taxpayer to manipulate accounting records at convenience; therefore, subsequent production of the E-Way Bill does not necessarily cure the violation or negate the inference of tax evasion.
➡️ GSTAT rejected the First Appellate Authority’s reasoning that absence of discrepancies in the accompanying documents and later production of the E-Way Bill were sufficient grounds to interfere with the order passed under Section 129(3).
➡️ In assessing intent, the Tribunal considered the surrounding facts, including that the iron scrap was shown as loaded at Baheri, Bareilly in Uttar Pradesh and destined for Kichha in Uttarakhand, a short distance of about 25 km, with Baheri located close to the Uttarakhand border.
➡️ Considering the geographical proximity of the origin and destination together with the absence of the mandatory E-Way Bill during transit, GSTAT found the intention to evade tax to be clearly established, allowed the Revenue’s appeal, and restored the Proper Officer’s Section 129(3) order imposing tax and penalty.
✔️ GSTAT Lucknow – Om Prakash vs Prop, 0 Talpura Talpura Baheri Upbar 243201 , Islam Trading Co [APL/79/LCK/2026]
🔥📛 HC: Deputy Commissioner under UPGST Act empowered to issue Section 122 SCN where demand exceeds Rs. 2.5 crore
➡️ The Allahabad High Court held that, under the UPGST framework, the Deputy Commissioner of State Tax is competent to issue a show-cause notice for penalty proceedings under Section 122, relying on State Circular dated December 11, 2018 and Circular dated May 10, 2022.
➡️ Interpreting the State circulars, the Court observed that pecuniary jurisdiction in cases involving amounts exceeding ₹2.5 crore can lie with the Deputy Commissioner; therefore, the notice could not be treated as inherently without jurisdiction merely because the proposed penalty exceeded ₹1 crore.
➡️ The assessee argued that, in the absence of a corresponding State circular implementing CBIC Circular No. 254/11/2025-GST on monetary limits and officer competency, only an Additional Commissioner or Joint Commissioner should have issued the notice; the Revenue countered that Section 127, read with the existing UPGST circulars, provided sufficient authority for the Deputy Commissioner to initiate Section 122 proceedings.
➡️ The Court also applied the doctrine of election, noting that the assessee had participated in the proceedings and contested the matter on merits without raising any jurisdictional objection before the adjudicating authority, and challenged the officer’s competence only after an adverse penalty order was passed.
➡️ Since the Court found no prima facie absence of jurisdiction, it declined to entertain the writ petition and directed the assessee to pursue the statutory appellate remedy; however, it clarified that the assessee could seek exclusion of the period spent in writ proceedings under Section 14 of the Limitation Act, 1963.
✔️ Allahabad HC – Nageen Traders and Molding India Pvt. Ltd.Thru. Director Abdul Rahim Khan vs State of U.P. Thru. Prin. Secy. State Tax Dept.. Govt. Lko. and 2 others [WRIT TAX No. – 989 of 2026]
🔥📛 AAR: 5% GST on brass/wood handicraft job work subject to registration and ‘handicraft’ conditions; Otherwise 18%
➡️ The AAR held that processing raw brass into handicraft statues can attract 5% GST as job-work services only where the goods belong to another registered person, the activity satisfies the definition of “job work” under Section 2(68) of the CGST Act, and the finished goods qualify as handicrafts predominantly made by hand by craftsmen.
➡️ The same 5% concessional rate applies to qualifying job-work services relating to wooden handicrafts, including carved wood products, under Sr. No. 26 of Notification No. 11/2017-Central Tax (Rate), as amended with effect from September 22, 2025; if the prescribed conditions are not met, the services are taxable at 18% under the applicable residual entry of Sr. No. 26.
➡️ Since the Applicant was unregistered and proposed to process goods belonging to itself, the AAR ruled that the activity did not constitute “job work” under Section 2(68); consequently, the 5% concessional rate was unavailable and the services were liable to GST at 18% under residual Item (vii) of Sr. No. 26.
➡️ Resin statues were classified under CTH 3926 40 29 and ornamental resin vases under CTH 3926 40 99; classification under CTH 9703 00 90 was rejected because Heading 9703 applies to original sculptures and statuary, while Chapter 97 excludes mass-produced reproductions and conventional commercial craftsmanship.
➡️ Marble and wooden deities of Gods and Goddesses were held exempt under Sr. No. 124 of Notification No. 09/2025-Central Tax (Rate) and the corresponding IGST notification, provided the supplied articles are genuinely deities; marble deities fall under CTH 6802 91 00, while wooden deities fall under CTH 4420 11 00 or 4420 19 00 depending on the type of wood.
✔️ Rajasthan AAR – In the matter of Tushar Agarwal [RAJ/AAR/2026-27/10]
🔥📛 GSTAT: Composition benefit ceases on crossing Rs.1.5 cr turnover; Rule 35 cum-tax benefit for calculating differential tax
➡️ Hyderabad GSTAT held that the composition option under Section 10(3) automatically ceases from the date a registered person’s aggregate turnover exceeds the prescribed ₹1.50 crore limit. From that date, the taxpayer becomes liable to pay GST at the normal applicable rate, and the cessation operates by force of law in terms of Section 10(3) read with Rule 6(2).
➡️ The case concerned a red clay brick manufacturer for FY 2020-21 and FY 2021-22, where e-way bill data showed turnover of about ₹1.95 crore against the turnover declared in FORM GST CMP-08. The authorities consequently denied composition benefit after the threshold was crossed and determined differential tax of ₹1,27,250 for FY 2020-21 and ₹6,43,856 for FY 2021-22, despite the taxpayer’s plea that the excess turnover was inadvertent during the COVID-19 period.
➡️ GSTAT clarified that differential tax under the regular scheme can arise only on supplies made on and after the date on which the composition option ceased. Therefore, tax cannot be recomputed under the regular scheme for supplies made before the statutory turnover threshold was crossed.
➡️ Since a composition taxpayer is prohibited from separately collecting tax from recipients and from availing input tax credit, invoices issued without a separately identified tax component must be regarded as showing the total consideration received. Accordingly, such invoice values are to be treated as inclusive of GST rather than as taxable value on which GST must again be added.
➡️ GSTAT held that the cum-tax principle under Rule 35 must therefore be applied while recomputing the differential liability, even though the taxpayer had not specifically claimed that benefit. The proper officer was directed to calculate tax on post-cessation supplies by extracting the tax component from the declared invoice value under the Rule 35 formula and to correspondingly recompute interest and penalty on the revised tax liability.
✔️ GSTAT Hyderabad – Parameshwara Bricks Vs State Tax Officer & Ors. [APL/26/HYD/2026]
🔥📛 HC: Transitional credit unavailable for refund absent proof of credit in ECrL from appointed day
➡️ The Kerala High Court held that transitional input tax credit carried forward from the pre-GST regime cannot automatically be included in “Net ITC” for refund under Rule 89(4); the taxpayer must establish that the transitional credit was validly available in the Electronic Credit Ledger from the appointed day.
➡️ The assessee, an exporter of spice extracts and oleoresins, had carried forward excess VAT credit through Form GST TRAN-1, but the amount was credited to its Electronic Credit Ledger only on December 27, 2017. The refund authority rejected its inclusion in the refund claim because the credit was not shown as having been available during the relevant refund period.
➡️ Interpreting Section 140 and Rule 117, the Court observed that eligible unutilised credit under the earlier tax regime is intended to be carried forward as the opening balance in the Electronic Credit Ledger from July 1, 2017. However, entitlement to refund depends on satisfactory proof that the credit was duly transitioned and stood credited from that date.
➡️ The Court noted that the assessee had not produced the relevant Form GST TRAN-1 or other satisfactory material demonstrating the availability of the disputed credit in the Electronic Credit Ledger as on July 1, 2017. In the absence of such evidence, the adjudicating authority was justified in refusing the refund.
➡️ The writ petition was also dismissed because of substantial delay after expiry of the statutory appellate periods under Sections 107 and 108. Relying on Supreme Court precedents, the Court held that Article 226 jurisdiction should not ordinarily be used to revive a time-barred remedy, as doing so would undermine statutory limitation periods and the public policy favouring finality of litigation.
✔️ Kerala HC – AVT Mccormick Ingredients Pvt.Ltd Vs Union Of India & Ors [WP(C) NO. 12964 OF 2019]
🔥📛 GSTAT: Merely taking ineligible self-assessed ITC without verification not ‘suppression’ for invoking section 74; Drops demand
➡️ The GSTAT, Thiruvananthapuram Bench held that merely availing ineligible self-assessed ITC in the Electronic Credit Ledger does not, by itself, amount to suppression of facts sufficient to invoke Section 74 of the CGST Act.
➡️ The Tribunal found that allegations that the assessee claimed ITC without verifying eligibility were vague and unsupported by evidence. Even failure to properly verify ITC eligibility does not establish suppression unless Revenue proves that the assessee knew the credit was ineligible and deliberately claimed it.
➡️ The GSTAT agreed with the adjudicating authority that contravention of Sections 16(2) or 42(1) does not automatically establish fraud, wilful misstatement or suppression. The burden remains on Revenue to produce specific evidence showing deliberate wrongdoing before proceedings under Section 74 can be sustained.
➡️ The Tribunal strongly disapproved of Revenue introducing new grounds at the appellate stage that were absent from the show-cause notice, and of the first appellate authority relying on those grounds. Such an approach violates principles of natural justice because the assessee must be informed of, and given an opportunity to respond to, the precise allegations forming the basis of the demand.
➡️ The GSTAT further held that non-response to an audit enquiry or final audit report cannot, by itself, constitute suppression, particularly where the nature, timing and statutory basis of the information sought are not established. As the show-cause notice lacked proper investigation and evidence supporting Section 74, the Tribunal allowed the assessee’s appeals and set aside the Order-in-Appeal.
✔️ GSTAT Thiruvananthapuram Bench – Santhome Latex Enterprises vs The Commissioner of CGST Thiruvananthapuram [APL/21/TVP/2026]
🔥📛 HC: Mere supplier cancellation insufficient to allege fraudulent ITC; Absent prima facie collusion, grants anticipatory bail
➡️ The Karnataka High Court held that a purchaser cannot be denied ITC merely because a supplier’s GST registration was later cancelled or the supplier subsequently became non-existent; the department must prima facie establish fraud or collusion between the supplier and purchaser.
➡️ Where the purchaser claims to have received goods, paid the invoice value and GST through banking channels, filed regular GST returns, and cooperated with the investigation, subsequent adverse findings against suppliers alone are insufficient to establish that ITC was availed on fraudulent invoices.
➡️ For an allegation under Section 132(1)(c) concerning fraudulent availment of ITC, there must first be prima facie material showing that the supplier committed the offences contemplated under Section 132(1)(a) or 132(1)(b), such as issuing invoices without actual supply; mere cancellation of registration or present non-existence of suppliers does not satisfy this requirement.
➡️ Relying on Suresh Trading Company, Gargo Traders, Akram Pasha and Tarun Jain, the Court emphasized that tax authorities must establish substantive evidence of bogus transactions or collusion rather than infer fraud solely from the subsequent status of the supplier.
➡️ The Court granted anticipatory bail to the petitioners, holding that custodial interrogation is not automatically justified merely because the allegations involve an economic offence, particularly where the accused have no criminal antecedents, have already joined the investigation, cooperated with authorities and undertaken to continue such cooperation.
✔️ Karnataka HC – Venkatasubbaiah C Vs Superintendent of Central Tax & Ors [CRIMINAL PETITION NO. 9023 OF 2026]
🔥📛 GSTAT: Post-death demand against proprietor untenable without Section 93 notice and inquiry into inherited estate
➡️ GST proceedings against a deceased sole proprietor cannot be sustained merely on the basis of orders passed during or after the proprietor’s lifetime where the Department fails to invoke Section 93 against the legal heir. The Tribunal held that the Revenue must issue appropriate notice to the legal heir and examine whether any estate of the deceased has devolved upon the heir before seeking recovery.
➡️ Section 93(1)(b) permits recovery of tax, interest and penalty from a legal representative only to the extent of the estate of the deceased that is capable of meeting the liability. Accordingly, the Department must establish the existence and extent of inherited estate; without such inquiry or evidence, liability cannot automatically be fastened on the legal heir.
➡️ The Tribunal clarified that Section 93, read with Sections 73, 74 and 74A, can permit assessment or recovery proceedings to continue or even be initiated after the taxpayer’s death. However, such proceedings must comply with the statutory safeguards applicable to legal representatives, including examination of whether the business was continued and whether recoverable estate exists.
➡️ In the present case, no notice was issued to the son of the deceased proprietor, no inquiry was made regarding inherited assets, and no action under Section 93 was taken even for about two years after the proprietor’s death. The Tribunal therefore held that the appellate order and the underlying demand proceedings were unsustainable and liable to be set aside.
➡️ On the substantive ITC issue, the Tribunal relied on newly inserted Section 16(5), which retrospectively allows ITC for FY 2017-18 where the relevant returns were filed by November 30, 2021. Since the disputed GSTR-3B returns were filed on July 31, 2018 and June 6, 2019, the ITC was held to be admissible notwithstanding the earlier time-limit objection under Section 16(4).
✔️ GSTAT Thiruvananthapuram Bench – Vijayan Sahadevan (Deceased) Vs The Commissioner of Kerala State GST Thiruvananthapuram [APL/19/TVP/2026]
🔥📛 SC: Section 74 notice cannot rest on mechanical invocation of fraud/suppression absent specific allegations in SCN
➡️ The Supreme Court held that invocation of Section 74 of the CGST/MPGST Act requires the show-cause notice itself to contain specific allegations and facts showing how fraud, wilful misstatement or suppression of facts was inferred; a mechanical or general reference to “fraud or concealment of facts” is insufficient to justify the extended limitation period.
➡️ Setting aside the Madhya Pradesh High Court’s view, the Supreme Court ruled that a writ court can examine whether the foundational requirements for issuing a notice under Section 74 exist, particularly where the notice is alleged to be without material particulars or reflects non-application of mind.
➡️ The Court further examined whether the notice dated June 13, 2025 for FY 2018-19 could survive under the normal limitation provisions of Section 73 and held that it could not; even after accounting for the extended annual-return deadline and the COVID-19 limitation exclusion, the permissible period had expired on February 28, 2025.
➡️ The Revenue could not cure deficiencies in the show-cause notice by introducing detailed allegations of fraud or suppression through a counter affidavit before the Court. The validity of a statutory notice or order must be judged on the reasons and material contained in the document itself and cannot subsequently be supplemented during litigation.
➡️ Accordingly, the Supreme Court quashed the defective show-cause notice as well as the consequential adjudication order and restrained the Revenue from taking further proceedings based on that notice, reinforcing that Section 74 proceedings must satisfy both substantive pleading requirements and the applicable statutory limitation period.
✔️ SC – G.R. Infra Projects Limited Ratlam Vs The State of Madhya Pradesh & Ors [Civil Appeal No. 11277 of 2026]
