LATEST GST CASE LAWS: 27.05.2025
🔥📛 In GST recovery via common order for 20 states, Delhi HC seeks clarity over jurisdiction
➡️ The Delhi High Court has granted interim relief to Zurich Kotak General Insurance Co. India Ltd. by staying any coercive action related to a GST demand of around ₹144 crores on the sale of salvage or wreckage after insurance claims are settled.
➡️ The tax authorities raised this demand citing non-payment of GST on the outward supply of salvage recovered by insurance companies post claim settlement.
➡️ The insurance company argued that the demand spans across 20 different States and includes State GST components, but the authorities have allowed only a common appeal, without clarifying how a single appellate body can handle such a multi-State issue.
➡️ The company also pointed out errors in the uploading of summary orders, which may have impacted the process and the assessment.
➡️ In response, the High Court has asked the relevant tax departments to pass any necessary rectification orders before the next hearing, which is scheduled for July 10, 2025.
✔️ Delhi HC – Zurich Kotak General Insurance vs. UOI [W.P.(C) 5002/2025]
🔥📛 HC: Restriction imposed under Rule 36(4) not unconstitutional, allows legitimate/eligible ITC: Dismisses L&T’s writ
➡️ The Madras High Court upheld the validity of Rule 36(4) of the CGST and TNGST Rules, which temporarily allowed limited Input Tax Credit (ITC) for invoices not uploaded by suppliers, stating it was a transitional measure to regulate ITC until full supplier compliance.
➡️ The Court highlighted that the rule was meant to address past issues under the VAT regime, where lack of supplier disclosure led to wrongful ITC claims and revenue loss, justifying the need for stricter controls under GST.
➡️ It acknowledged that as GST technology improved, particularly with the introduction of auto-populated GSTR-2A and other forms, the need for the restriction reduced and was eventually phased out.
➡️ The Court found no violation of Article 14 of the Constitution, holding that the rule did not unfairly discriminate but reasonably aimed to ensure only legitimate ITC claims were allowed.
➡️ Emphasizing the presumed constitutionality of tax laws, the Court concluded that the restrictions under Rule 36(4) were reasonable and necessary to uphold the integrity of the ITC system, thus dismissing the writ petitions challenging it.
✔️ Madras HC – L & T Geostructure LLP Vs Union of India an Ors [W.P.Nos.5978 and 5983 of 2020]
🔥📛 HC: Waives pre-deposit for appeal considering no doubt about Croma’s ITC entitlement
➡️ The Delhi High Court declined to entertain a writ petition challenging a GST demand related to wrongful availment of Input Tax Credit (ITC), and instead directed the assessee to pursue the statutory appeal route under Section 107 of the CGST Act.
➡️ The Court clarified that the issue involved—whether ITC should be taken under IGST or CGST/SGST due to suppliers being registered outside Delhi—requires a detailed factual examination, which is beyond the scope of writ jurisdiction.
➡️ Notably, the Court waived the requirement for pre-deposit for appeal, acknowledging that the assessee’s entitlement to ITC was not in serious doubt.
➡️ A key factor in the demand of approximately ₹77 crores was the Department’s interpretation that ITC was wrongly claimed under CGST/SGST instead of IGST due to the location of suppliers.
➡️ The Court also referred to its previous directions in earlier litigation, reminding the Adjudicating Authority to assess the matter independently rather than relying on audit memos, and allowed the assessee six weeks to file an appeal.
✔️ Delhi HC – Infiniti Retail Ltd. vs. UOI & Ors. [W.P.(C) 4347/2025]
🔥📛 HC: Relegating Assessee to alternate-remedy, elucidates legal distinction on writ ‘entertainability’ vs ‘maintainability’
➡️ The Chhattisgarh High Court dismissed a writ petition filed by the Assessee, who challenged a GST demand order on the grounds that a detailed show cause notice (SCN) was not issued and that the summary SCN (Form DRC-01) was only sent via email, which was claimed to be improper.
➡️ The Court emphasized the distinction between the “maintainability” and “entertainability” of a writ petition, noting that while maintainability concerns legal admissibility, entertainability involves the Court’s discretion.
➡️ Referring to the Supreme Court’s ruling in Godrej Sara Lee, the High Court reiterated the general principle that writ petitions should not be entertained when an alternate statutory remedy, such as an appeal, is available.
➡️ The Court acknowledged certain exceptions to this rule, such as when there is a violation of natural justice, use of repealed laws, or actions not in line with statutory provisions—but held that none of these exceptions applied in the present case.
➡️ Consequently, the High Court declined to interfere under Article 226 and directed the Assessee to pursue the appropriate appellate remedy, while allowing all legal contentions to remain open for consideration during appeal.
✔️ Chhattisgarh HC – Mayasheel Retail India Limited vs The State of Chhattisgarh & Others [WPT No. 84 of 2024]
🔥📛 Writ petition against SCN combining multiple tax years not maintainable as assessee had alternate remedy of appeal: HC
➡️ A show cause notice under Section 74 of the GST Act was issued to the assessee, followed by a final order.
➡️ The assessee argued that the notice was invalid because it combined multiple tax years in a single notice.
➡️ The court held that the assessee had an effective alternative remedy through the appellate process.
➡️ It was noted that the assessee did not challenge the show cause notice at the initial stage.
➡️ As a result, the writ petition was dismissed, and the court declined to intervene.
✔️ Calcutta HC – UBS Exports International (P.) Ltd. v. State of West Bengal [WPA No. 1841 of 2025]
🔥📛 Matter remanded as order raised demand exceeding SCN violating principles under section 75(7): HC
➡️ The petitioner received a show-cause notice under GST DRC-01 for the period July 2017 to March 2018, demanding a total of ₹8,81,080 as tax, interest, and penalty.
➡️ The petitioner did not respond to the show-cause notice, and the tax authorities later passed an order demanding ₹32,97,336, which was significantly higher than the amount mentioned in the notice.
➡️ The petitioner challenged the order, arguing that the final demand exceeded the amount stated in the show-cause notice and was therefore illegal.
➡️ The court observed that Section 75(7) of the GST Act clearly prohibits authorities from demanding any amount exceeding what is specified in the show-cause notice and from introducing new grounds not mentioned in the notice.
➡️ Since the final demand exceeded the amount stated in the notice, the court found the order to be in violation of Section 75(7) and remanded the matter back for passing a fresh order.
✔️ Allahabad HC – Vibhuti Tyres amount v. State of U.P. [WRIT TAX No. 2055 of 2025]
