LATEST GST CASE LAWS: 28.04.2025
|
🔥📛 Karnataka HC stays over Rs. 50 crores GST demand against ‘Mad-over-Donuts’ pertaining bakery-product classification ➡️ The Karnataka High Court (HC) has stayed a demand exceeding Rs. 50 crores issued by the Karnataka State GST authorities against Himesh Foods Private Limited (the Petitioner). The Petitioner operates under the brand name Mad Over Donuts (MOD) and is involved in the business of preparing and selling donuts and bakery products. ➡️ The demand was initiated following a scrutiny of the returns filed by the Petitioner. The Karnataka GST authorities alleged that there was a short payment of tax due to the classification of supplies (donuts and other products sold over the counter across their stores). ➡️ The Petitioner highlighted that a consolidated Show Cause Notice (SCN) covering multiple registrations, including that of Karnataka, had already been issued by the Directorate General of GST Intelligence (DGGI) Mumbai Zonal Unit. This SCN covered the same subject matter and the Petitioner argued that the Karnataka authorities should not independently raise demands. ➡️ The Karnataka HC took cognizance of the submissions made by the Petitioner and acknowledged the potential for procedural irregularities and unnecessary harassment due to overlapping proceedings. As a result, the HC granted interim relief to the Petitioner. ➡️ The HC directed the Revenue not to take any precipitative or coercive steps until the next date of hearing. The matter has been listed for the next hearing on June 6, 2025. ✔️ Karnataka HC – Himesh Foods Private Limited vs State of Karnataka & Ors [WP 10169/2025]
|
|
🔥📛 HC: Quashes order cancelling registration basis verification of Assessee’s GSTR-2A; Imposes cost on Revenue ➡️ The Deputy Commissioner cancelled the GST registration of the Assessee based on the findings of the Joint Commissioner. The cancellation was due to issues found during a physical verification at the Assessee’s old address, which was locked, leading to the presumption that the firm was bogus. ➡️ Penalty proceedings were initiated against the Assessee due to the cancellation of their GST registration from a back date. However, the Joint Commissioner dropped these proceedings after verifying the authenticity of the Assessee’s inward transactions reflected in their GSTR-2A. ➡️ The Madhya Pradesh High Court (HC) set aside the Deputy Commissioner’s order of cancellation. The HC relied on the Joint Commissioner’s findings, which confirmed the genuineness of the Assessee’s transactions and returns in GSTR-2A. The HC observed that the suppliers listed in the GSTR-2A were active, indicating genuine purchases. ➡️ The HC found discrepancies in the manner the physical verification was conducted, which contravened Rule-25 of the CGST Rules, 2017. This rule outlines the proper procedures for conducting physical verifications. ➡️ The HC restored the Assessee’s GST registration number. Additionally, the HC imposed a cost of Rs. 10,000 on the Deputy Commissioner for the improper cancellation, payable to the Assessee. ✔️ Madhya Pradesh HC – Empire Steel Holdings vs Union of India & Others [WRIT PETITION No. 31219 of 2024]
|
|
🔥📛 Transfer of partly constructed property on ‘as is where is’ basis without construction service component does not attract GST: HC ➡️ The assessee bought a partly constructed commercial shopping mall from a liquidator on an “as is where is” basis and paid a significant amount of stamp duty. ➡️ The assessee paid GST under protest and later claimed a refund, but the revenue rejected the claim, arguing that the transaction was covered under Entry 5(b) of Schedule II (construction services). ➡️ The court held that the transaction was purely a sale of immovable property and did not involve any construction service element, as no such service was contemplated in the agreement between the assessee and the liquidator. ➡️ Entry 5(b) of Schedule II requires a mutual agreement between the parties that one would provide construction services to the other, which was absent in this case. Therefore, the transaction should be classified under Entry 5 of Schedule III (neither supply of goods nor services). ➡️ The refund claim was allowed with interest, and the writ petition was upheld, reflecting the correct application of India’s GST laws in this scenario. ✔️ Karnataka HC – Rohan Corporation India Pvt Ltd. v. Union of India [WRIT PETITION NO. 12700 OF 2023 (T-RES)]
|
|
🔥📛 SC directed Revenue to adjudicate SCN on GST levy for imported services in employer-employee relationship within six months ➡️ The assessee filed a writ petition in the High Court challenging a show cause notice (SCN) related to the levy of GST on the import of services, arguing that GST was not applicable in their case. ➡️ The High Court did not delve into the merits of the case and instead directed the assessee to reply to the SCN for further proceedings, refusing to invoke its writ jurisdiction. ➡️ The assessee appealed to the Supreme Court through a Special Leave Petition (SLP), claiming an employer-employee relationship, which, according to Income Tax provisions and relevant circulars, exempted them from GST. ➡️ The Supreme Court held that since the SCN had already been issued, the assessee could raise all their pleas and contentions before the adjudicating authority, which was directed to decide the issue on its merits within six months. ➡️ Consequently, the Supreme Court did not interfere with the High Court’s order, leading to the dismissal of the SLP. ✔️ SC – Barminco Indian Underground Mining Services LLP v. Deputy Commissioner [Special Leave to Appeal (C) No. 9090 of 2025]
|
