LATEST GST CASE LAWS: 27.09.2025
🔥📛 Bombay-HC to examine levy on 1/3rd land value regardless of sale agreement conditions
➡️ The petitioner has assailed the GST Notification dated 28 June 2017, which mandates that one-third of the total consideration in construction transactions be deemed as land value, irrespective of the actual terms of the sale agreement.
➡️ The petitioner cited the Gujarat High Court decision in Munjaal Manishbhai Bhatt, where this deeming provision was held unconstitutional for being arbitrary and contrary to the scheme of GST.
➡️ Although the Gujarat HC ruling has been challenged by the Revenue in the Supreme Court, the petitioner highlighted that no stay has been granted on its operation, leaving the judgment effective for reliance.
➡️ The Bombay High Court granted liberty to the petitioner to submit, by way of a compilation, copies of sale agreements with buyers and records of inter-entity transactions, ensuring the Revenue is served before filing in Court.
➡️ The proceedings directly question the validity of a uniform one-third land deduction under GST valuation rules, with potential implications for real estate developers and buyers on how tax is apportioned between construction and land components.
✔️ Bombay HC – Rajprabha Developers Pvt. Ltd. & Anr. Versus Union of India & Ors. [WRIT PETITION NO. 12141 OF 2025]
🔥📛 GSTAT: Proceedings before GSTAT ‘inquisitorial’ not ‘adversarial’; Closes Theco-India case over DGAP’s failure to prove profiteering
➡️ GSTAT (Delhi) closed anti-profiteering proceedings against Theco India Pvt. Ltd., holding that there was no material evidence to prove profiteering by not passing on ITC benefit to end consumers.
➡️ The NAA had earlier ordered the company to pass on profiteered amount of ₹4.78 lakh on two products and asked DGAP to expand investigation across 85 products for July 2017–August 2019, which led to DGAP reporting a higher figure of ₹1.49 crore.
➡️ GSTAT noted DGAP’s own admission that it lacked documentary evidence showing actual profiteering; while prices of 158 SKUs increased, 316 SKUs saw reductions, and no analysis was provided to show net profiteering under Section 171.
➡️ The Tribunal reiterated that anti-profiteering proceedings are inquisitorial, not adversarial, and the initial burden of proof lies with DGAP to establish profiteering with credible evidence.
➡️ In absence of concrete proof, GSTAT refused to fasten liability on the respondent, reinforcing that mere price variations without correlation to ITC benefit cannot sustain a profiteering allegation.
✔️ GSTAT Delhi – DGAP Vs. Theco India Pvt. Ltd. [NAPA/17/PB/2025]
🔥📛 GSTAT: DGAP closes anti-profiteering case against builder, finds no Section 171 violation
➡️ GSTAT Delhi closed the anti-profiteering proceedings against Legacy Global Projects Pvt. Ltd. after reviewing the Karnataka State Screening Committee’s report, which found no case of profiteering.
➡️ The Tribunal held that no further investigation under Section 171 of the CGST Act was warranted, as the matter did not involve undue benefit of Input Tax Credit (ITC) or non-passing of GST rate reduction benefits.
➡️ The original complainant confirmed that the builder had refunded the money after cancellation of the flat allotment, thereby resolving the direct dispute.
➡️ While acknowledging possible grievances between the buyer and builder, GSTAT clarified that such issues fall outside the purview of Section 171 proceedings, which are limited to profiteering in GST context.
➡️ The ruling reinforces that anti-profiteering jurisdiction applies strictly to cases of non-passing of ITC benefits or GST rate reductions, and not to broader contractual or consumer disputes with builders.
✔️ GSTAT Delhi – DGAP vs Legacy Global Projects Pvt. Ltd. [NAPA/164/PB/2025]
🔥📛 HC: 2-year limitation u/s 54 inapplicable to refund of tax paid by mistake; Quashes deficiency-memo
➡️ The HC held that the 2-year time limit prescribed under Section 54 of the CGST Act does not apply where tax was paid by mistake, following earlier rulings (Comsol Energy – Gujarat HC, Louis Dreyfus – AP HC).
➡️ The Court noted that refund eligibility must be decided through proper adjudication—by issuing a show cause notice, granting hearing, and passing a speaking order—rather than by summary rejection through defect memos.
➡️ The assessee had paid GST on hostel accommodation services due to landlords charging GST, though such services were exempt under Entry 12 of Notification No. 12/2017-CTR.
➡️ Revenue argued that even after Covid-related extensions, the refund claim filed on 1 April 2024 was beyond the permissible period. The Court disagreed, emphasizing that limitation cannot bar recovery of tax paid without authority of law.
➡️ Invoking Article 265 of the Constitution (no tax without authority of law), the HC directed Revenue to re-examine the refund application without applying the limitation bar and pass appropriate orders within 4 weeks.
✔️ Andhra Pradesh HC – Nspira Management Services Private Limited vs Assistant/ Deputy Commissioner of Central tax [WRIT PETITION Nos. 18287 & 14905 OF 2024]
🔥📛 HC refused to entertain writ against SCN alleging that authority proceeded on pre-conceived notion
➡️ The show cause notice specifically recorded reasons for invoking Section 74 (fraud, willful misstatement, suppression), and such invocation could not be challenged at the preliminary stage.
➡️ The assessee’s claim that authorities acted with a pre-conceived notion was rejected, as this objection could be raised in virtually all proceedings and cannot invalidate the notice.
➡️ The adjudicating authority is expected to handle the matter impartially and ensure a fair process before concluding on allegations of fraud or suppression.
➡️ The assessee must be provided with all documents relied upon by the department so as to enable proper defense against the allegations.
➡️ After supplying documents and hearing the assessee, the authority must pass a reasoned and speaking order in compliance with principles of natural justice.
✔️ Delhi HC – MS Chetak Motors (P.) Ltd. v. Additional Commissioner (Anti-Evasion) CGST, Delhi South [W.P.(C) No. 14127/2025]
🔥📛 SCN alleging suppression not sustainable since revenue was already aware of same in proceeding before AAR/AAAR: HC
➡️ The assessee conducted GMAT (Type-III) tests in India for GMAC, USA. The key dispute was whether these services qualified as “OIDAR services.” The AAR held they involved substantial human intervention and hence fell outside OIDAR.
➡️ On appeal, the AAAR classified Type-III tests differently, leading the assessee to challenge the ruling before the Division Bench, where recovery was stayed pending final adjudication.
➡️ Despite the pending classification dispute, the department issued a notice alleging suppression of facts and wilful evasion of GST on Type-III tests for July 2017–June 2021.
➡️ The court noted that the revenue was fully aware of the assessee’s activities, having participated in the AAR and AAAR proceedings. Thus, allegations of suppression or intent to evade tax were neither substantiated nor tenable.
➡️ Since the classification issue was sub judice and suppression was unproven, the impugned show cause notice was held unsustainable and quashed.
✔️ Karnataka HC – NCS Pearson Inc. v. Union of India [WRIT PETITION NO. 7635 OF 2024 (T-RES)]
🔥📛 Limitation period for appeal against order wouldn’t start from date of uploading on portal but from date of communication to assessee: HC
➡️ A surprise inspection led to issuance of a show cause notice under Section 74; despite reply and hearing, an adverse order was passed levying tax, interest, and penalty.
➡️ The assessee argued that the orders were only uploaded on the GST portal without proper communication, causing them to miss the appeal filing timeline.
➡️ The department contended that uploading the order on the portal itself constituted communication, triggering the limitation period.
➡️ The term “communication” requires actual intimation to the assessee; mere uploading on the portal, without other modes of service, does not satisfy this requirement. Uploading is mandatory but not sufficient in isolation.
➡️ Since the order was not properly communicated, limitation had not begun. The authority was directed to serve the order through appropriate means, and the assessee was given liberty to file appeal under Section 107. The impugned order could not be enforced until such communication.
✔️ Madras HC – Sharp Tanks and Structurals (P.) Ltd. v. Deputy Commissioner (GST) (Appeals), Tirunelveli [W.P.(MD)Nos. 24684 & 24685 of 2025]
