LATEST GST CASE LAWS: 25.06.2025
🔥📛 Calcutta HC to examine validity of penalty notice issued u/s 122 for clandestine supply
➡️ The Calcutta HC has restrained Revenue from proceeding with orders related to notices under Section 122 of the CGST/WBGST Act without Court permission, specifically questioning the statutory authority of issuing Section 122 notices following a search and seizure under Section 35(6).
➡️ The petitioner challenged the validity of the seizure, emphasizing that the Revenue had failed to record the mandatory satisfaction required under Section 67 before confiscating goods or documents during search operations.
➡️ Revenue contended the legality of the Section 122 notice, arguing that goods discovered in searches and suspected to be unaccounted were appropriately targeted under this provision due to their susceptibility to confiscation.
➡️ The Court indicated a prima facie view that the proper course for issuing notices, given the nature of the alleged violations under Section 35(6), should have been under Sections 73 or 74 rather than Section 122.
➡️ Considering the sensitive context of supplies made to the Ministry of Defence, the Court directed the petitioner to deposit 20% of the disputed amount to secure the release of seized goods, scheduling further hearing on the matter for July 2025.
✔️ Calcutta HC – Traco Enterprises & Anr. Versus The Deputy Commissioner of Revenue, WBGST Park Street Charge & Ors [WPA 12641 of 2025]
🔥📛 SC: Deprecates Accused’s practice of bypassing bail condition by first agreeing to deposit, then backtracking
➡️ The Supreme Court criticized the practice of GST evasion accused persons initially volunteering to deposit substantial amounts to secure bail, only to later challenge these conditions by claiming their counsel lacked authority or the conditions were overly burdensome.
➡️ While emphasizing the importance of safeguarding an accused person’s rights under Article 21, the Supreme Court reiterated that courts should avoid imposing excessively onerous conditions when granting bail.
➡️ The Supreme Court explicitly condemned the strategy of accused parties taking contradictory positions (“approbating and reprobating”), such as voluntarily agreeing to deposits and subsequently claiming hardship or unauthorized representation, stressing the necessity of maintaining judicial integrity.
➡️ Given the petitioner’s inconsistent stance regarding the voluntary deposit and subsequent modification application, the Supreme Court annulled the original bail and modification orders, remanding the matter back to the High Court for fresh consideration purely on merits without any external influence.
➡️ Despite disapproving of the petitioner’s conduct, the Supreme Court granted limited interim protection against immediate surrender, highlighting a cautious balance between judicial discipline and protection of the accused’s fundamental rights.
✔️ SC – Kundan Singh vs The Superintendent Of CGST And Central Excise [Petition(s) for Special Leave to Appeal (Crl.) No(s).9111/2025]
🔥📛 HC: Revenue-neutrality renders tax-appeal nugatory, sustains relief to duty-free-shop operator for period prior to April-2021
➡️ Madras High Court addressed the GST implications for Flemingo Duty-Free Shops operating at Chennai Airport, specifically regarding GST liability prior to April 2021 under a bonded warehouse license and concession agreement with AAI.
➡️ The case differentiated GST liability into three segments: (a) July to December 2017 (tax collected under protest by AAI); (b) January 2018 to July 2019 (AAI paid GST of Rs.18.68 crores without passing it to Assessee); and (c) July 2019 onwards (complete stay, no GST collection or payment).
➡️ The court upheld the principle that if the GST transaction is revenue-neutral—where payment of GST would ultimately result in a refund due to zero-rated status—no appeal challenging such tax neutrality is justified.
➡️ The HC explicitly directed the Revenue to process the refund claimed by AAI for GST remitted without passing it on to Flemingo DFS during January 2018 to July 2019, affirming procedural correctness in refund applications.
➡️ While rejecting Revenue’s appeal on revenue neutrality grounds, the HC allowed Revenue the liberty to independently assess and establish whether the GST effect was indeed revenue-neutral for periods prior to April 2021, thereby clarifying procedural flexibility under GST law.
✔️ Madras HC – Union of India. Vs Flemingo Duty Free Shop Pvt Ltd. and Ors [W.A. No.674 of 2023]
🔥📛 No interest to be levied if tax liability was deposited in ECL before due date of GSTR-3B despite tax amount is debited later: HC
➡️ The assessee failed to file GSTR-3B returns from July 2017 to July 2019 due to technical problems with digital signatures on the GST portal but had deposited the entire tax liability in the Electronic Cash Ledger before the due dates.
➡️ The Revenue imposed interest under Section 50, read with Section 73(1) of the CGST Act, arguing that interest was due because the Electronic Cash Ledger was debited later, upon return filing.
➡️ The court clarified, as per Rule 88B(1) of CGST Rules, 2017, interest accrual stops once the tax liability amount is deposited into the Electronic Cash Ledger, irrespective of the date of actual debit.
➡️ Since the tax amount was credited to the Electronic Cash Ledger timely, no interest liability arose even though the actual debit occurred after the due date while filing delayed returns.
➡️ The court quashed the interest demand by the Revenue, highlighting that timely deposit into the Electronic Cash Ledger prevents interest liability, thus disposing of the writ petition on those grounds.
✔️ Madras HC – Tamilnadu State Transport Corporation (Villupuram) Ltd. v. Additional Commissioner of Central Tax, Chennai [W.P. No.9793 of 2024]
