LATEST GST CASE LAWS: 25.10.2025
🔥📛 Allahabad HC grants Dabur relief in ‘Hajmola Tablet’ classification row, stays Rs. 110 cr demand
➡️ The DGGI issued a ₹110 crore demand alleging that Hajmola Tablets should be classified as “food preparations not elsewhere specified” under heading 2106.90 (18% GST), instead of “Ayurvedic Medicines” under heading 3004 (12% GST), as claimed by Dabur.
➡️ Dabur argued that the Supreme Court (2002) had already classified Hajmola as an Ayurvedic medicine in the pre-GST regime, and since the tariff structure and relevant provisions remain materially unchanged, the same classification should continue under GST.
➡️ The assessee contended that World Customs Organization (WCO) notes or interpretations cannot override domestic tariff law, and where inconsistencies arise, Indian statutory and judicial interpretations must prevail.
➡️ Dabur submitted that the Revenue’s contrary stance disregards binding judicial precedents, violating the Doctrine of Judicial Discipline. Further, since all relevant facts and classification positions were fully disclosed, invocation of the extended limitation period was unjustified.
➡️ Observing the above contentions, the Court granted an interim stay on the ₹110 crore GST demand and halted further proceedings under the SCN. It directed completion of pleadings within a fixed timeline, pending final adjudication on merits.
✔️ Allahabad HC – Dabur India Ltd. vs Union of India & ors [WRIT TAX No. – 4709 of 2025]
🔥📛 HC: Revenue consolidating various tax periods in SCN is judicial overreach; Quashes demand against Developers
➡️ The Court held that issuing a single consolidated Show Cause Notice (SCN) covering multiple financial years/tax periods under GST is without jurisdiction and constitutes judicial overreach, as each tax period is a distinct unit for assessment and adjudication under the Act.
➡️ Referring to Sections 73(10) and 74(10), the Court emphasized that the GST law prescribes issuance of SCNs at least three months prior to the limitation period for each specific financial year. Hence, assessments and recovery actions must be year-specific and cannot be combined across multiple years.
➡️ By analyzing Sections 2(11) (assessment), 2(97) (return), and 2(106) (tax period), the Court clarified that GST liability arises in relation to a definite tax period based on returns filed for that period. Consequently, demands for “tax not paid/short paid” can only pertain to that specific tax period.
➡️ The Court distinguished earlier rulings in Ambika Traders and RioCare India, holding that those cases were not applicable under the GST framework, which is structured around self-assessment and period-based returns, unlike earlier tax regimes allowing consolidated actions.
➡️ Rejecting Revenue’s argument that the assessees should respond to the SCN before the adjudicating authority, the Court ruled that when a jurisdictional defect (such as impermissible consolidation) is evident, assessees are entitled to seek judicial intervention without first undergoing adjudication.
✔️ Bombay HC – Milroc Good Earth Developers vs UOI & ors [WRIT PETITION NO. 2203 OF 2025]
🔥📛 HC: Restores credit by quashing negative blocking beyond available balance in Electronic Credit Ledger
➡️ The Court held that powers under Rule 86A of the CGST Rules can only be exercised with respect to the Input Tax Credit actually available in the Electronic Credit Ledger (ECL) on the date the blocking order is issued — not on future credits.
➡️ Since only ₹600 was available in the taxpayer’s ECL when the order blocking ₹95.74 lakh ITC was issued, the Court ruled that blocking such a large notional amount was beyond the authority (ultra vires) of Rule 86A.
➡️ The judgment aligns with earlier decisions — Rawman Metal & Alloys (Bombay HC), Samay Alloys Pvt. Ltd. (Gujarat HC), Laxmi Fine Chem (Telangana HC), and Best Crop Science Pvt. Ltd. (Delhi HC) — reaffirming that Rule 86A cannot restrict ITC not yet credited.
➡️ The Court dismissed the department’s contention that future ITC credits could be pre-emptively blocked, clarifying that such interpretation has no statutory backing under the CGST framework.
➡️ The HC directed the restoration of ITC blocked for June–August 2025 within four weeks, but restrained the taxpayer from utilizing the restored amount until adjudication is completed, maintaining procedural fairness.
✔️ Bombay HC – Hindustan Steel v. Deputy Commissioner of State Tax, Goregaon East & Ors. [WRIT PETITION (L) NO. 28684 OF 2025]
🔥📛 HC: Demand post-IBC resolution plan approval wholly without jurisdiction
➡️ The Bombay High Court quashed the demand order for AY 2020–21, holding that once a Resolution Plan under the Insolvency and Bankruptcy Code (IBC) is approved, all pre-plan claims, including GST or other statutory dues, stand extinguished if not incorporated in the approved plan.
➡️ Since the Corporate Insolvency Resolution Process (CIRP) had begun before the Revenue issued the show-cause notice (SCN) and passed the order, the Court held that such actions were without jurisdiction, being contrary to the IBC framework.
➡️ The Court reaffirmed the principles laid down in Ghanashyam Mishra & Sons Pvt. Ltd. v. Edelweiss ARC and Vaibhav Goel v. Union of India, reiterating that post-approval, no authority can raise or enforce demands relating to periods preceding the Resolution Plan.
➡️ Referring to the 2019 amendment to Section 31(1) of the IBC, the Court emphasized that the legislative intent clearly bars any recovery of pre-plan statutory dues once a Resolution Plan is approved by the NCLT.
➡️ The High Court declared the SCN and consequent demand order null and void, as they were issued in defiance of settled law and Supreme Court rulings. It refused to direct the assessee to pursue appellate remedies, noting the lack of jurisdiction on the Revenue’s part.
✔️ Bombay HC – Srei Equipment Finance Ltd. v. Assistant Commissioner, CGST & C.EX., Navi Mumbai & Ors. [WRIT PETITION NO. 2220 OF 2025]
🔥📛 AAAR: TR-6 challan not a valid tax-paying document for availing credit, upholds AAR
➡️ The AAAR upheld that a TR-6 challan is not a prescribed document under Section 16(2) of the CGST Act read with Rule 36(1)(d) for availing ITC. Rule 36 specifically limits eligibility to a bill of entry or similar document prescribed under the Customs Act for IGST assessment on imports.
➡️ The authority emphasized that the phrases “prescribed under the Customs Act” and “for the assessment of integrated tax on imports” impose a restrictive and purposeful interpretation, confirming that ITC eligibility arises only when tax is assessed through a bill of entry, not by other means such as a TR-6 challan.
➡️ While acknowledging Circular No. 16/2023-Customs (linked to Cosmo Films), which permits use of TR-6 challans due to system limitations in re-assessment, the AAAR clarified that TR-6 challans may represent assessment in substance, but they do not automatically qualify as a “similar document” for ITC unless specifically prescribed.
➡️ The AAAR held that the appellant should have pursued bill-of-entry-wise re-assessment for paying differential IGST, which would have enabled seamless ITC availment. Paying duty in bulk through TR-6 challans for entire financial years (2022–23 and 2023–24) fell outside the mechanism envisaged under GST law.
➡️ The ruling rejected reliance on pre-GST case law (e.g., Essel Propack, Ambuja Cement), noting that pre-GST mechanisms lacked GSTN-linked transmission of customs duties. It clarified that when the IGST Act borrows CGST provisions mutatis mutandis, it requires strict adherence to the procedural framework of the CGST Act, including prescribed documentation for ITC claims. Appeal dismissed; TR-6 challan payments not valid for ITC under GST unless backed by proper re-assessed bills of entry or specific statutory prescription.
✔️ Tamil Nadu AAAR – In the matter Becton Dickinson India Private Limited [Order-in-Appeal No. AAAR/06/2025 (AR)]
🔥📛 HC: Quashes Customs’ Public Notice restricting GST on auctioned-cargo; Rules CFS liable to collect as ‘supplier’
➡️ The Madras High Court struck down Public Notice No. 17/2021 and the consequential letter issued by the Joint Commissioner of Customs, holding them to be without jurisdiction and contrary to Sections 3, 7(1), and 9(1) of the CGST Act, 2017 and Sections 157–159 of the Customs Act, 1962. The Court found that Customs authorities lacked the power to issue directions affecting GST levy or collection.
➡️ The Court clarified that IGST levied on import of goods under Section 3(7) of the Customs Tariff Act read with Section 5 of the IGST Act is a separate and independent levy from GST chargeable on the subsequent sale of goods through auction under Section 9 of the CGST Act.
➡️ In auctions conducted under Section 48 of the Customs Act, once goods are sold, the Container Freight Station (CFS) acts as the supplier, and the successful bidder becomes the recipient. The goods lose their “imported goods” character, bringing the transaction within the scope of Section 7(1) of the CGST Act—thereby attracting GST on the auction value.
➡️ The Court emphasized that Sections 152 and 157 of the Customs Act empower Customs officers to issue public notices only to clarify procedural or policy matters within Customs law. Such powers cannot extend to directions impacting liability under other statutes, such as the CGST Act.
➡️ Reaffirming statutory principles, the Court held that GST must be paid on auctioned cargo, regardless of whether the auction is conducted by the Customs Department or a CFS. The successful bidder must pay GST on the bid value before taking delivery, and any direction prohibiting the custodian from collecting GST is legally unsustainable.
✔️ Madras HC – National Association of Container Freight Stations vs The Joint Commissioner of Customs (CH-IV) [WP No. 11222 of 2022, WP NO. 152 OF 2022 AND WP NO. 149 OF 2022]
