LATEST GST CASE LAWS: 27.12.2025
🔥📛 HC: Allows correction of B2C supplies wrongly reported as B2B in GSTR 1
➡️ The Karnataka High Court held that a Show Cause Notice (SCN) issued only on the ground that the assessee was not entitled to correct GSTR-1—where B2C supplies were wrongly reported as B2B—is legally untenable and liable to be quashed.
➡️ The Court reiterated that GST law should not penalize assessees for bona fide clerical or reporting errors when there is no dispute regarding tax liability, payment of tax, or revenue loss to the department.
➡️ Relying on settled jurisprudence, the Court affirmed that assessees have a legal right to amend or rectify errors in GSTR-1, especially when such corrections are necessary to reflect the true nature of transactions.
➡️ The High Court emphasized that tax authorities cannot adopt a hyper-technical approach by mechanically denying corrections, particularly when the GST framework is still evolving and compliance errors are often inadvertent.
➡️ By relying on earlier decisions (including Orient Traders, Wipro Limited, and Aberdare Technologies), the Court reinforced a consistent judicial view that GST administration must be facilitative, and genuine errors in returns should be allowed to be corrected to ensure accurate tax reporting.
✔️ Karnataka HC – Hindustan Construction Company Ltd Vs Union of India [WRIT PETITION NO. 22377 OF 2022 (T-RES)]
🔥📛 HC: Directs reconsideration of ITC reversal, emphasizes compliance with GST circulars
➡️ The Karnataka High Court held that discrepancies between ITC claimed in GSTR-3B and reflected in GSTR-2A cannot automatically result in reversal of ITC. The statutory and circular-prescribed procedure must first be followed by the adjudicating authority.
➡️ The Court emphasized that Circular No. 183/15/2022-GST lays down a clear mechanism for dealing with GSTR-3B vs GSTR-2A mismatches, including verification, communication with the taxpayer, and opportunity to explain discrepancies. Ignoring this circular renders the adjudication legally flawed.
➡️ Relying on R.S. Marketing and Logistics (P) Ltd, the Court reiterated that mismatch alone is insufficient to deny ITC unless the prescribed reconciliation and verification steps are exhausted.
➡️ The failure of the adjudicating authority to follow the prescribed mismatch-resolution procedure was held to have caused prejudice to the assessee, as it denied a fair opportunity to reconcile, justify, or substantiate the ITC claim.
➡️ Consequently, the High Court set aside the adjudication orders and remanded the matter back for fresh consideration in accordance with law, directing authorities to reassess the issue strictly in line with the circular and judicial precedent.
✔️ Karnataka HC – Abhimaani Structures And Engineering Private Limited Vs The Superintendent of Central Tax [WRIT PETITION NO. 35021 OF 2025 (T-RES)]
🔥📛 Release of goods in transit rightly denied as transaction genuineness was doubted and CBIC Circular inapplicable: HC
➡️ The High Court reiterated that writ jurisdiction against GST adjudication orders is limited to exceptional circumstances (e.g., lack of jurisdiction, violation of natural justice). Since notice was issued and factual disputes existed, the writ petition was held not maintainable, and the petitioner was directed to pursue the statutory appellate remedy.
➡️ Although the petitioner claimed denial of personal hearing, records showed issuance of hearing notice and a disputed question of actual appearance. The Court held that such factual controversies require examination by the appellate authority, not in writ proceedings.
➡️ The detention and penalty order was founded on multiple factual findings—excess weight of about 1,300 kgs, absence of inward e-way bills from the supplier, and the driver’s statement raising doubts on genuineness of procurement. Such findings were deemed unsuitable for writ scrutiny.
➡️ The petitioner’s reliance on the CBIC Circular dated 31-12-2018 (treating consignor/consignee as deemed owner) was rejected. The Court clarified that the circular applies only where transaction documents are genuine and undisputed, and cannot override statutory provisions when tax evasion or bogus sourcing is prima facie established.
➡️ Considering the perishable nature of areca nuts, the Court balanced equities by directing conditional release of goods and conveyance. Release was ordered upon payment of penalty under the owner option and furnishing a bank guarantee for the balance penalty under the non-owner option, to be complied with within two days.
✔️ Calcutta HC – JJ Traders v. Union of India [WPA No. 2144 of 2025]
🔥📛 No liability to pay CGST/SGST if IGST was duly paid on supply of goods to common carrier for delivery to recipient: HC
➡️ The place of supply for goods (not involving import or export) is determined by the location where the movement of goods terminates for delivery to the recipient, not the place where movement originates.
➡️ Since the goods were supplied across State boundaries and delivery occurred outside the supplier’s State, the transaction qualified as an inter-State supply, correctly attracting IGST, and not CGST and SGST.
➡️ The transfer of title to goods upon handing them over to a common carrier, as per contractual terms, has no bearing on GST liability. GST is governed by statutory place-of-supply provisions, not by when or how ownership passes.
➡️ The petitioner had already discharged IGST on the goods as well as freight charges. Any demand for CGST and SGST on the same transaction would result in impermissible double taxation, which is contrary to GST principles.
➡️ Non-payment of CGST and SGST caused no revenue loss, as IGST had already been paid, making the situation revenue-neutral. Consequently, the show cause notice was held to be unsustainable and was quashed.
✔️ Karnataka HC – Toyota Kirloskar Motor (P.) Ltd. v. Union of India [WRIT PETITION NO. 6126 OF 2024 (T-RES)]
🔥📛 GST registration cancellation set aside as taxpayer agreed to file pending returns and pay cost; revocation to be reconsidered: HC
➡️ The assessee’s GST registration was cancelled due to non-filing of GST returns for the year 2024, following issuance of a show cause notice by the department in accordance with statutory procedure.
➡️ The record showed that the assessee was granted an opportunity of hearing, and therefore, the cancellation was not vitiated on grounds of violation of natural justice, even though the assessee claimed otherwise.
➡️ The assessee’s appeal against cancellation was dismissed by the appellate authority, confirming that the procedural requirements under GST law had been complied with by the department.
➡️ The court acknowledged that the non-compliance occurred due to adverse family circumstances, and emphasized that the assessee intended to re-enter the formal tax system and conduct business in compliance with GST law.
➡️ In the interest of revenue and formal economic participation, the court set aside the impugned orders and directed that if the assessee files all pending GST returns (including the period of cancellation), the authorities should consider revocation of registration in accordance with law.
✔️ Madhya Pradesh HC – Sakshi Enterprises v. Additional Commissioner Appeals [WRIT PETITION No. 44775 of 2025]
