LATEST GST CASE LAWS: 26.06.2025
🔥📛 Is NOIDA liable to compensate for GST paid under wrong head? SC to examine
➡️ NOIDA admitted to erroneously filing the GST transaction under B2C instead of B2B, leading to the tax payment not reflecting in the assessee’s returns—despite the tax being collected and deposited. The error became unrectifiable once the return revision window closed.
➡️ The Allahabad High Court recognized that the assessee fulfilled their GST obligations by paying the tax to NOIDA. The non-reflection in their GST credit was due to NOIDA’s filing error, not any fault of the assessee.
➡️ The Court invoked its writ jurisdiction and issued a mandamus compelling NOIDA to compensate the assessee for the GST mismatch loss. It underscored that the assessee should not suffer due to administrative or technical lapses by the tax-collecting authority.
➡️ The High Court directed NOIDA to recover the amount from the responsible officer, highlighting individual accountability for tax filing errors that financially harm taxpayers.
➡️ The decision cited Batliboi Environmental Engineers vs. Hindustan Petroleum Corporation, reinforcing that equitable remedies and restitution are warranted when administrative errors impair a taxpayer’s rightful claims under GST.
✔️ SC – New Okhla Industrial Development Authority vs. Surender Gupta [Petition(s) for Special Leave to Appeal (C) No(s). 14908/2025]
🔥📛 SC: Dismisses SLP by DGGI on negative blocking of Electronic Credit Ledger
➡️ The Supreme Court rejected the Directorate General of GST Intelligence’s (DGGI) Special Leave Petition (SLP), affirming the Delhi High Court’s decision and finding no grounds for interference in the case concerning negative blocking of the Electronic Credit Ledger (ECrL).
➡️ The Delhi High Court ruled that blocking an ECrL operating with a negative balance is legally untenable, emphasizing that input tax credit (ITC) cannot be blocked beyond the available balance in the ledger.
➡️ Relying on the earlier decision in Best Corp Science, the Court reiterated that debiting excess ITC from the ECrL—beyond the credited amount—is not permitted under the law.
➡️ The High Court clarified that Rule 86A of the CGST Rules is not a tax recovery or assessment tool but rather an emergency provision meant solely to temporarily restrict the use of available ITC to protect revenue interests.
➡️ It was further held that Rule 86A cannot be used as a substitute for proper recovery proceedings under the CGST Act. The rule does not authorize debiting or creating negative entries in the ECrL for recovery purposes.
✔️ SC – Deputy Director, Directorate General Of Gst Intelligence, Dzu & Ors Vs Kings Security Guard Services Private Limited [SPECIAL LEAVE PETITION (CIVIL) Diary No(s). 17900/2025]
🔥📛 HC: Goods mismatch in tax invoice and transport a clerical error; Quashes confiscation
➡️ The High Court ruled that a mismatch between the goods under transport and the tax invoice—caused by a clerical error—does not amount to tax evasion. The error, in this case, was unintentional and did not suggest any fraudulent intent by the assessee.
➡️ The Court emphasized that in cases of suspected tax evasion, the initial burden is on the tax authorities to prove intent to evade tax. The Department failed to discharge this burden and did not refute the genuineness of the documents (tax invoice, packing list, bill of entry) submitted by the assessee.
➡️ Despite the transport vehicle carrying only dry grapes (while the invoice also mentioned copra), the confiscation of goods under Section 130 was held unjustified, especially when no copra was physically found and tax had already been paid.
➡️ The Joint Commissioner (Appeals)’s order contained factual discrepancies regarding the quantity of goods, further weakening the Department’s case and reinforcing procedural lapses in the adjudication process.
➡️ The High Court concluded that there was no tax evasion by the petitioner and quashed the confiscation and tax demand order. It also directed the authorities to refund the amount paid by the assessee, reinforcing judicial protection against penalizing procedural lapses without mala fide intent.
✔️ Karnataka HC – Mataji Industries Vs Joint Commissioner Of Commercial Taxes (Appeals) [WRIT PETITION NO. 104602 OF 2023 (T-RES)]
🔥📛 HC: Limitation computable from conciliation agreement date crystallising excess-tax quantum; Quashes DMRC’s refund rejection
➡️ The Delhi High Court held that the “relevant date” for computing the limitation period under Section 54 of the CGST Act is the date of finalization of the conciliation agreement—not the date of original tax payment. This is because the excess payment became ascertainable only after the dispute was resolved.
➡️ The Court applied Explanation 2(d) (date of communication of judgment, decree, etc.) instead of Explanation 2(h) (residual clause), reasoning that a conciliation agreement is akin to an arbitral award and thus equivalent to a civil court decree under Section 36 of the Arbitration and Conciliation Act.
➡️ The residual clause in Explanation 2(h) was deemed inapplicable as Explanation 2(d) specifically addressed the situation. The Court emphasized that the residual clause should only be invoked when no other specific explanation applies.
➡️ The GST Department’s rejection of the refund claim on the ground that limitation started in 2017 (when tax was paid) was set aside. The Court affirmed that DMRC could not have determined the excess payment until the dispute was settled in 2021.
➡️ The High Court directed the GST authorities to process DMRC’s refund claim along with applicable interest, and ensure the refund amount is credited within one month from the date of the order.
✔️ Delhi HC – Delhi Metro Rail Corporation Ltd. vs. The Commissioner (Appeals) & Anr [W.P.(C) 10635/2022]
🔥📛 ITC reversal held valid where supplier failed to remit tax and assessee could not establish genuineness of transaction: HC
➡️ The assessee’s appeal challenging the cancellation of GST registration was dismissed solely on the ground of limitation, without examining the merits of the case.
➡️ In response, the assessee filed a writ petition before the High Court, requesting reinstatement of the cancelled registration.
➡️ The Court observed that in earlier, similarly situated cases, directions were issued to restore registration if the assessee undertook to fulfill specific compliance obligations.
➡️ Consistent with precedent, the Court permitted restoration of registration, directing the assessee to approach the competent authority within 7 days, subject to the completion of all statutory requirements (e.g., filing of pending returns, payment of due taxes and penalties).
➡️ This judgment reinforces that procedural lapses (like delay in appeal filing) may be condoned through writ jurisdiction, provided the assessee is willing to comply fully with tax obligations, thus offering a remedial route for genuine taxpayers.
✔️ J&K HC – Paramjeet Singh v. Union Territory of J & K [WP(C) No. 1350 OF 2025]
🔥📛 Petition dismissed where records showed notices and order were conveyed to assessee despite claim of non-receipt: HC
➡️ The assessee filed an appeal against the order-in-original, but the appellate authority dismissed it as time-barred, citing a delay of 31 days beyond the prescribed limitation period.
➡️ The assessee argued that the DRC-07 and the Show Cause Notice (SCN) were never received, and this lack of communication was the reason for the delay in filing the appeal.
➡️ Upon review, the court found that all relevant documents, including the order-in-original, DRC-07, and SCN, had been duly communicated to the assessee, nullifying the claim of non-receipt.
➡️ The court held that the reason provided by the assessee for seeking condonation of delay was factually incorrect and contradicted by the available records.
➡️ As there was no valid ground for condonation of delay, the court dismissed the writ petition, reinforcing the principle that appeals filed beyond the prescribed time limit without genuine cause are not maintainable.
✔️ P&H HC – Pharmaceutical and Medical Devices Bureau of India (PMBI) v. State of Haryana [CWP No. 12111 of 2025 (O & M)]
