LATEST GST CASE LAWS: 25.07.2025
🔥📛 SC: Final adjudication order a substantive safeguard, not mere formality, ensures right to appeal overturns HC judgment
➡️ The Supreme Court held that once a notice under Section 129 is issued, the proper officer is mandatorily required to pass a reasoned final order in Form GST MOV-09 and DRC-07, irrespective of whether tax and penalty were paid. This ensures procedural fairness and enables the assessee to exercise the right to appeal.
➡️ The Court clarified that payment of tax and penalty (via DRC-03), especially under protest or business compulsion, does not amount to voluntary admission of liability. The system-generated DRC-05 cannot be treated as a conclusive closure in the absence of a formal adjudication.
➡️ The absence of an adjudication order cannot be used to deny the assessee their statutory right to appeal. The High Court’s refusal to direct adjudication was found contrary to legal principles, as it effectively frustrated the taxpayer’s appellate remedy.
➡️ Even if the payment is made, the taxpayer’s recorded objections and the lack of a mechanism to mark protest should not prejudice their rights. The Court emphasized that business exigencies forcing payment do not imply acceptance of liability.
➡️ Reiterating the importance of Article 265 (no tax without authority of law) and natural justice, the SC directed the officer to pass a reasoned order after hearing the assessee, ensuring transparency, accountability, and preservation of taxpayer rights under GST law.
✔️ SC – ASP Traders vs. State of U.P. & Ors. [CIVIL APPEAL NO. 9764 OF 2025]
🔥📛 Delhi HC in challenge to refund-denial on educational services, seeks affidavit on receipt from ‘foreign university’
➡️ In the absence of a functioning GST Appellate Tribunal, the Revenue approached the Delhi High Court under writ jurisdiction to challenge the refund order passed by the Appellate Authority in favor of the Assessee, who provided educational consultancy services facilitating admissions to foreign universities.
➡️ The Revenue contended that the lower authorities failed to properly examine the contractual agreement to verify if the consideration for services was received in convertible foreign exchange—a key requirement for classifying the supply as an export of service under GST.
➡️ The Assessee opposed the Revenue’s plea for a refund stay by citing a coordinate bench judgment from the Delhi HC in its own earlier case, where similar refunds were allowed for previous assessment years under comparable circumstances.
➡️ The Court emphasized that business-critical refunds, once upheld by appellate authorities, cannot be withheld indefinitely. It directed the Commissioner (Refunds) to compute the total refund amount as per the Appellate Authority’s order and issue a formal order by 31st August 2025.
➡️ To settle the factual issue, the HC instructed both parties to file short affidavits substantiating whether the Assessee received payment in foreign exchange, supported by sample invoices and FIRC copies. The matter is listed for further hearing on 9th September 2025.
✔️ Delhi HC – Commissioner of Delhi, Goods and Service Tax, DGST Delhi vs Global Opportunities Private Limited [W.P.(C) 10189/2025]
🔥📛 SC: To decide Revenue challenge to IMA Judgment on ‘mutuality’ principle
➡️ The Supreme Court has admitted the Special Leave Petition (SLP) filed by the Revenue against the Kerala High Court judgment that struck down a key GST provision. The matter is scheduled for hearing in September 2025.
➡️ The Division Bench of the Kerala High Court allowed IMA’s appeal, holding that supplies by an association (like IMA) to its own members are not taxable under GST due to the principle of mutuality. It declared the 2021 amendment inserting Section 7(1)(aa) as constitutionally invalid.
➡️ Representing the Revenue, the Additional Solicitor General cited the Explanation to Section 7(1)(aa), which includes a non-obstante clause aimed at shielding the provision from being invalidated by judicial decisions.
➡️ Senior Advocate, appearing for IMA, argued that unless a constitutional amendment is introduced, the Explanation cannot salvage the provision if the parent clause itself has been held unconstitutional.
➡️ The Supreme Court clarified that no recovery proceedings shall be initiated against IMA for the past period, offering interim relief pending final adjudication in September 2025.
✔️ SC – Union of India and Ors vs Indian Medical Association and Anr [Diary No. – 32713/2025]
🔥📛 ITC fraud allegation needs factual probe; writ not maintainable and petitioner should pursue appeal remedy: HC
➡️ The petitioner, previously registered under the VAT regime as M/s Samyak International, claimed that a provisional GSTIN was auto-generated in the same name without their consent. This GSTIN was allegedly misused to fraudulently avail and pass on ITC amounting to ₹48 crores.
➡️ The petitioner asserted that they had ceased operations under M/s Samyak International from 28-07-2017 and had started a new business under M/s Samyak Fashion (India). Upon being informed by the GST Department about the fraudulent transactions, they lodged a police complaint, leading to the registration of an FIR.
➡️ The impugned order revealed that fraudulent ITC had been passed on to or availed by approximately 63 entities under the disputed GSTIN, indicating a large-scale scam involving substantial factual examination.
➡️ The court held that due to the complex and disputed factual matrix — including identity misuse, scale of transactions, and nature of fraud — the matter could not be adjudicated under a writ petition. Such issues must be resolved through a fact-finding process.
➡️ The court advised the petitioner to pursue remedies available under the statutory appellate mechanism prescribed in GST law, reinforcing that writ jurisdiction is not the appropriate forum for disputes involving detailed factual verification.
✔️ Delhi HC – Samyak Jain v. Superintendent (Adjudication), Central GST Delhi [W.P.(C) No. 9139 of 2025]
🔥📛 HC directed authority to decide promptly since registration of assessee was suspended thrice
➡️ The assessee’s GST registration was suspended three times by the department through successive Show Cause Notices (SCNs), each citing violations of GST provisions.
➡️ In each instance, the assessee complied by depositing tax dues (including Rs. 50,000) and filing appropriate replies, leading to the revocation of suspension by the GST Department.
➡️ The repeated suspension without prompt final adjudication raised concerns. The court emphasized that suspension cannot be used repeatedly or indefinitely as a punitive tool.
➡️ Authorities are obligated to promptly conclude proceedings under the latest SCN after providing an opportunity of hearing, to avoid prolonged uncertainty and disruption to the assessee’s business.
➡️ The case reinforces that due process and fair hearing must be adhered to in registration suspension matters, balancing tax enforcement with the assessee’s right to conduct business.
✔️ Delhi HC – Steelex Enterprises v. Assistant Commissioner [W.P.(C) No. 8295 of 2025]
🔥📛 Penalty could not be imposed in absence of intimation issued in Form GST DRC-01A: HC
➡️ The supplier’s GST registration was cancelled for non-payment of outward tax liability. As a result, the supplier was considered non-genuine under GST law.
➡️ The assessee failed to furnish valid documents such as tax invoices, e-way bills, or transport receipts to substantiate the genuineness of the purchases and movement of goods.
➡️ Since the supplier did not discharge GST liability on the transactions, the input tax credit claimed by the assessee was held to be inadmissible and required to be reversed.
➡️ The department issued a show cause notice and passed an order-in-original demanding reversal of ITC along with penalty; the demand for reversal of ITC was upheld based on the facts.
➡️ The penalty was deemed unwarranted as no prior intimation in Form GST DRC-01A was issued to the assessee. Hence, while ITC reversal stood, the penalty was deleted.
✔️ Gujarat HC – R V Enterprises v. State of Gujarat [R/SPECIAL CIVIL APPL. NO. 20134 of 2023]
