LATEST GST CASE LAWS: 27.11.2025
🔥📛 Delhi HC to examine mandatory-directory scope of section 54 limitation, and belated deficiency-memos legality
➡️ Delhi HC is examining whether the 2-year limitation under Section 54 for GST refund applications is mandatory or directory. The determination will impact whether authorities can legally condone delays in refund claims.
➡️ The writ petitions challenge 11 deficiency memos—some rejecting refund claims as time-barred and others being issued beyond the statutory 15-day limit under Rule 90 and Rule 93 of the CGST Rules. The Court has directed the Revenue to respond on both law and facts.
➡️ The assessee argues that deficiency memos cannot adjudicate limitation. According to the assessee, Rule 93 restricts deficiency memos to procedural issues (curable defects) and does not permit rejection on substantive grounds such as statutory time-bar.
➡️ The assessee contends that Section 54(3) uses the expression “may,” implying discretionary power to allow refunds even beyond the two-year period. This supports the argument that the limitation is not absolute.
➡️ To support the directory interpretation of limitation, the assessee cites Jharkhand and Madras High Court precedents holding that refund timelines may be relaxed in appropriate circumstances. The Delhi HC has posted the matter for further consideration on both legal interpretation and factual compliance.
✔️ Delhi HC – Panna Handicrafts vs Sales Tax Officer, Class II Avato & Ors [W.P.(C) 17906/2025]
🔥📛 HC : Quashing unjustified cancellation of boAt’s registration and imposing costs on Revenue
➡️ The Delhi High Court restored the GST registration of MS Imagine Marketing Ltd (boAt), holding that the cancellation order lacked basic reasoning and violated fundamental principles of adjudication.
➡️ The Court termed the Superintendent’s approach “cavalier” and “perverse,” noting that replies and documents filed by the taxpayer were ignored and orders appeared computer-generated without application of mind.
➡️ The Court highlighted that the cancellation order provided no reasons for effecting cancellation retrospectively from 15 October 2024, rendering the decision arbitrary.
➡️ The Court stressed that when returns and forms are already accessible on the GST system, repeatedly asking the taxpayer to furnish the same is unjustified and burdensome.
➡️ The Court underscored that adjudicating authorities must show fairness—especially where the taxpayer is a regular filer and has submitted replies and documents in time—failing which judicial intervention and costs may be imposed. A cost of ₹25,000 was levied personally on the Superintendent.
✔️ Delhi HC – MS Imagine Marketing Limited Vs Joint Commissioner CGST Appeals Ii Delhi & Anr [W.P.(C) 17699/2025& CM APPL. 73120/2025]
🔥📛 HC: Remands SEZ refund matter citing Revenue’s disregard of binding judgment and for factual verification
➡️ The High Court quashed multiple refund rejection orders against Lupin Limited (SEZ unit) as well as the appellate orders that upheld them.
➡️ The appellate authority refused to apply the Gujarat High Court ruling in Britannia Industries solely because the judgment was under challenge before the Supreme Court. The Bombay HC held this approach incorrect, reiterating that until contradicted, law declared by any High Court is binding nationwide (Godavaridevi Saraf principle).
➡️ Refunds were rejected on the ground that SEZ units can receive ISD credit/refunds only when suppliers of services claim refunds after endorsement by the SEZ Specified Officer, certifying receipt of goods/services for authorised operations.
➡️ Before the High Court, the department for the first time argued lack of endorsement for authorised operations under Section 16 of the IGST Act—an issue never raised by lower authorities.
➡️ The Court remanded the matter to the Assistant Commissioner to reconsider refund claims afresh, explicitly directing examination of (a) whether services were for authorised operations with proper endorsements, and (b) application of the legal position laid down in Britannia Industries.
✔️ Bombay HC – Lupin Limited Nagpur v. State of Maharashtra & Ors. [WRIT PETITION NO. 4164/2024]
🔥📛 Retrospective GST registration cancellation set aside as SCN lacked such proposal; fresh hearing after re-inspection: HC
➡️ Where the SCN alleged only that the principal place of business was untraceable but did not propose retrospective cancellation, the department could not legally cancel the registration retrospectively.
➡️ The cancellation order was issued without considering the taxpayer’s reply, wherein a request was made for re-inspection due to family bereavement. This non-consideration constituted a breach of natural justice.
➡️ Retrospective cancellation under GST law cannot be exercised automatically; it requires explicit grounds and reasoning, which must be indicated in the SCN and supported by findings.
➡️ The revenue’s assertion of non-appearance and possible evasion was insufficient to retrospectively cancel registration in absence of due process and specific notice.
➡️ The High Court set aside the retrospective effect of cancellation and directed the department to conduct re-inspection, grant a fresh personal hearing, and issue a decision strictly in accordance with law.
✔️ Delhi HC – Stalwart India Alloys Ltd. v. Union of India [W.P.(C) No. 16845 of 2025]
🔥📛 Recovery of interest can be made only after issuance of intimation in Form GST DRC-01D: HC
➡️ Recovery of interest on delayed tax payment cannot be initiated without first giving the taxpayer a proper opportunity to file a reply and be heard.
➡️ The department must issue DRC-01D as per Rule 142(1A) before commencing recovery of interest; direct bank attachment without this step violates procedural requirements.
➡️ The notice issued in DRC-13 to the petitioner’s bank to place lien on ₹23.17 lakh was deemed invalid because it preceded adjudication and was not supported by due process.
➡️ The taxpayer’s partial deposit of ₹7.5 lakh under protest did not cure the procedural illegality or justify bypassing adjudication.
➡️ The court relied on earlier rulings—Rajkamal Builder Infrastructure (P.) Ltd. and Reliance Formulation (P.) Ltd.—to hold that recovery of interest must follow proper adjudication with notice and hearing.
✔️ Gujarat HC – Bombay Art v. Union of India [R/SPECIAL CIVIL APPLICATION NO. 16855 of 2024]
🔥📛 Appellate order under GST Act set aside as unreasoned conclusion failed mandate of sec. 74(12):HC
➡️ Section 74(12) mandates that appellate orders must contain clear reasoning. An order that merely states a conclusion without addressing the issues raised fails this statutory requirement.
➡️ The appellate authority did not examine the petitioners’ claim of acting as agents rather than suppliers or the supporting CBIC Circular No. 57/31/2018-GST and documents submitted. This non-consideration vitiated the order.
➡️ By repeating the adjudicating authority’s view without independent analysis, the appellate authority demonstrated non-application of mind—contrary to the appellate scheme of Section 107.
➡️ The High Court observed that the two-page order was mostly recitals and lacked reasoning, making it unsustainable under Article 226 of the Constitution.
➡️ Since the appellate decision was legally deficient, the High Court set it aside and remanded the case for fresh adjudication in accordance with law and after properly assessing the petitioners’ submissions.
✔️ Calcutta HC – Indrani Dhar v. State of West Bengal [WPA No. 20674 of 2025]
🔥📛 Ex-parte GST order set aside as assessee denied effective hearing due to consultant’s oversight and portal issues: HC
➡️ The adjudicating authority issued a Show Cause Notice (SCN) and a reminder fixing a date for personal hearing, but no reply or appearance was recorded, leading to an ex-parte order imposing tax demand for the period April 2019 to March 2020.
➡️ The taxpayer explained that non-filing of reply and non-attendance at the hearing was due to oversight by the previous consultant and lack of direct access to the GST portal.
➡️ The Court held that despite issuance of SCN and reminder, the adjudication was conducted without ensuring an effective opportunity of hearing, resulting in a breach of the principles of natural justice.
➡️ The impugned ex-parte demand order was quashed and the matter remanded for fresh adjudication, allowing the taxpayer to file a reply and be granted a personal hearing.
➡️ The Court refrained from deciding the validity of the GST notifications challenged by the petitioner, clarifying that any fresh order passed would be subject to the final outcome of the pending SLP before the Supreme Court.
✔️ Delhi HC – Walsons Services (P.) Ltd. v. Sales Tax Officer [W.P.(C) No. 16730 OF 2025]
🔥📛 Challenge to GST notice for lack of digital signature unsustainable as RFN and acted-upon service sufficed: HC
➡️ The Court held that GST notices and orders issued electronically must carry digital signatures; however, once the taxpayer participates in proceedings without objection, later objections based solely on absence/visibility of signature are not maintainable.
➡️ Objections invoking Rule 26(3) (digital signature requirement) were rejected. The Court clarified that the rule applies only to registration-related documents under Chapter 3, not to adjudication under Sections 73/74.
➡️ Under Rule 142, electronic issuance of SCN and orders presupposes digital signature and generation of a Reference Number (RFN). Presence of RFN on DRC-01/DRC-07 summaries was held adequate proof of proper service.
➡️ Following the Division Bench ruling dated 17.09.2025, the Court reiterated that a common SCN or a single OIO covering multiple tax periods is impermissible. Separate SCNs, separate OIOs, and separate DRC-07s must be issued for each period.
➡️ Consistent with New Morning Star Travels v. Deputy Commissioner, failure to issue prior intimation in Form DRC-01A for periods prior to 2021 renders the assessment unsustainable. Accordingly, the composite OIO and related DRC-07s were quashed and the matter remanded for fresh action after due opportunity.
✔️ Andhra Pradesh HC – Sahiti Agencies v. Assistant Commissioner of Central Tax and Central Excise [WRIT PETITION NO. 14874 OF 2025]
🔥📛 Demand order quashed for failure to issue mandatory pre‑SCN notice under rule 142(1)(A); matter remanded: HC
➡️ Proceedings initiated under Section 61 (scrutiny of return) must culminate either in Section 73 (non-fraud cases) or Section 74 (fraud cases); therefore, procedural safeguards applicable to such proceedings must be followed.
➡️ Before issuing a notice under Section 73 in non-fraud cases, the department is required to issue a pre-show-cause intimation under Rule 142(1A) so that the assessee is given an opportunity to respond to the proposed tax demand.
➡️ In the case discussed, the proper officer issued a notice under Section 61 and directly passed an assessment order under Section 73 without issuing a mandatory Rule 142(1A) intimation, depriving the assessee of the opportunity for voluntary compliance.
➡️ This procedural lapse was held to be impermissible, leading to the setting aside of the assessment orders; the matters were remanded to the proper officer for fresh action after issuing the required Rule 142(1A) notice.
➡️ The ruling applies only to assessments for periods prior to the amendment of Rule 142(1A) dated 15-10-2020, acknowledging that procedural requirements changed after the amendment.
✔️ Andhra Pradesh HC – Sri Sanjeeva Sai Flour Mill v. Deputy Assistant Commissioner (ST) [WRIT PETITION Nos. 25295, 25297, 25308 and 25316 of 2025]
🔥📛 No mechanism to transition blocked cesses into GST; Cash refund not allowed u/s 142(3)
➡️ No refund allowed for blocked cesses under Section 142(3) of CGST Act: The Larger Bench held that cash refund of unutilised EC, SHEC and KKC carried forward to the GST regime is not permissible, as these cesses were not eligible for transition and were already lapsed/blocked before 01.07.2017.
➡️ Refund claims filed after cessation of cesses are time-barred: Since EC and SHEC became defunct w.e.f. 01.03.2015 and 01.06.2015 respectively, any subsequent refund claims (filed after 01.03.2016 / 01.06.2016) were held to be barred by limitation under Section 11B of the Central Excise Act.
➡️ Slovan India not applicable; reliance placed on Sutherland Global: The Tribunal distinguished the Slovak India decision and followed the Sutherland Global ruling of Madras High Court, holding that with no corresponding cesses under the CGST regime, refund under GST cannot arise when credit itself was not admissible ab initio.
➡️ TRAN-1 and ER-1 do not confer eligibility to transition cess credits: The Bench clarified that TRAN-1 contains only a general ‘CENVAT Credit’ field without any provision for EC/SHEC/KKC, and circulars confirm that only eligible duties shown in ER-1 columns (excluding columns for EC/SHEC) could be transitioned. Therefore, mere reporting in TRAN-1 does not create a legal right to carry forward cess credits.
➡️ No vested or indefeasible right to cesses after they were blocked: The Tribunal rejected the argument that cess credits constitute a permanently vested CENVAT right, citing rulings of Delhi HC (Cellular Operators Association) and Rajasthan HC (Banswara Syntex) which had already declared such cesses lapsed even before the GST rollout.
✔️ CESTAT Delhi – M/s. KEI INDUSTRIES LTD. v. COMMISSIONER OF CENTRAL GOODS & SERVICE TAX & CENTRAL EXCISE-ALWAR [Excise Appeal No. 50090 of 2024]
