LATEST GST CASE LAWS: 28.08.2025
🔥📛 Orissa HC stays Rs. 231 cr demand against Vedanta, challenging vires of ISD provisions
➡️ Vedanta contests the constitutional validity of Section 21, arguing that it unfairly allows recovery from recipients of ISD-distributed credit, even though recipients have no control over the ISD mechanism, thereby penalizing passive parties.
➡️ Petitioner contends that Section 21 conflicts with Sections 73/74, which permit recovery only where credit is wrongly “availed” or “utilized,” unlike ISD distribution where the recipient merely receives credit.
➡️ Validity of Section 20 read with relevant rules is questioned on grounds that the law does not prescribe objective guidelines for determining “attributability” of services, rendering the scheme arbitrary.
➡️ The composite SCN covering multiple financial years is challenged as impermissible; HC finds merit, relying on Karnataka HC ruling in Veremax Technologie Services Ltd. which held such notices invalid.
➡️ Considering refund sanction orders already finalized, absence of a savings clause for pre-April 2025 ISD provisions, and a prima facie case in favour of the petitioner, the HC stayed the operation of the SCN and tagged the matter with similar pending cases.
✔️ Orissa HC – Vedanta Limited vs Union of India and Others [W.P.(C) No. 23286 of 2025]
🔥📛 SC stays retrospective penalty-proceedings u/s 122(1A) for ITC-fraud, to examine applicability on non-taxable person
➡️ The Supreme Court admitted the assessee’s SLP against the Delhi HC order, staying recovery of the penalty demand subject to the assessee depositing 25% of the demand with the GST Department (through Electronic or Cash Ledger).
➡️ Assessee’s Core Arguments: (i) Section 122(1) is not applicable to a non-taxable person; (ii) Section 122(1A) cannot be applied retrospectively for AYs 2017–2020 since it became effective only from January 1, 2021.
➡️ The Delhi HC had dismissed the writ petition (with costs), observing that the assessee was allegedly involved in an ITC fraud through the creation of 28 firms in collusion with traders to claim fictitious ITC.
➡️ The HC had directed the assessee to pursue the statutory appellate remedy, instead of invoking writ jurisdiction.
➡️ The SC’s interim protection raises an important question on the prospective vs. retrospective applicability of Section 122(1A), and on the scope of penalty for non-taxable persons, both of which will have significant implications for pending and future GST penalty disputes.
✔️ SC – Mukesh Kumar Garg vs Union of India & Ors [PETITION(S) FOR SPECIAL LEAVE TO APPEAL (C) NO(S). 18178/2025]
🔥📛 HC: Directs Delhi Police Economic Offences Wing to probe impersonation of identity, GSTIN misuse; Seeks status report
➡️ The Delhi HC held that when allegations involve impersonation and misuse of credentials for GSTIN fraud, the matter falls within the investigative domain of the Delhi Police Economic Offences Wing (EOW), rather than being treated solely as a tax adjudication by GST authorities.
➡️ The assessee contested a demand exceeding ₹48 crores, arguing that it never sought provisional registration, had already closed its business, and was not involved in the transactions leading to the alleged liability.
➡️ In 2018–19, the assessee was informed that its provisional GSTIN had been misused by unknown persons. The fraudulent use resulted in wrongful availment and passing of ITC, triggering proceedings against the assessee.
➡️ The Court noted that the Delhi Police merely forwarded the complaint to the GST Department without conducting its own inquiry, despite the fraud allegations squarely requiring criminal investigation.
➡️ The Court directed Delhi Police EOW to conduct a proper investigation and file a status report by 12 November 2025. It also ordered that all adjudication documents be furnished to the assessee for effective representation.
✔️ Delhi HC – Samyak Jain vs. Superintendent (Adjudication), Central GST Delhi & Ors. [W.P.(C) 9139/2025]
🔥📛 HC: Upholds Section 74 notice over intermediary-services; Rules on roles of Investigating-Adjudicating Authority
➡️ The HC upheld the SCN issued under Section 74 of the CGST Act to a SaaS company over GST liability on student recruitment solutions for foreign universities and students, dismissing the writ petition at this preliminary stage.
➡️ The Court emphasized that investigation and adjudication are distinct functions. The Investigating Authority’s opinion merely triggers issuance of the SCN, while the Adjudicating Authority, being quasi-judicial, must decide independently.
➡️ Any observations on merits by the Investigating Authority (even if superior in rank) cannot bind or influence the Adjudicating Authority while adjudicating the matter.
➡️ Referring to CBIC Circular dated 09.02.2018, the Court noted that adjudication can be conducted by an officer not below the rank of Additional Commissioner/Joint Commissioner, thus addressing the petitioner’s contention on jurisdiction.
➡️ If the assessee submits in writing that adjudication be conducted specifically by an Additional Commissioner/Joint Commissioner, the department shall issue a corrigendum; otherwise, adjudication will proceed as per the Circular.
✔️ Madhya Pradesh HC – Study Metro Edu Consultants Pvt. Ltd. vs. Joint Director & Ors. [WRIT PETITION No. 30467 of 2023]
🔥📛 HC: Quashes refund rejection of zero-rated supplies over LUT timing noting Rule 89 compliance
➡️ The Delhi HC quashed the order denying refund of unutilized ITC of ₹10.05 lakhs on zero-rated exports, holding the rejection reasons as baseless.
➡️ Court clarified that since exports were made only after filing of LUT (from Sept 2021), the department’s objection that the LUT was filed “after exports” was factually incorrect and legally untenable.
➡️ HC emphasized that for zero-rated supplies, documents submitted with the refund application itself are adequate, fulfilling Rule 89 requirements and aligning with CBIC Circular 125/2019.
➡️ Reiterating the principle that zero-rated refund is intended as an incentive to exporters, the Court held such benefits cannot be denied arbitrarily on technical grounds.
➡️ Authorities were directed to release the refund within 2 weeks along with statutory interest, failing which enhanced interest @12% p.a. would apply beyond September 03, 2025.
✔️ Delhi HC – Alkesh Tacker Vs. Union of India & Ors. [W.P.(C) 2486/2025]
🔥📛 HC: DRC-07 on email to 650 noticees or to Chartered Accountants sufficient service
➡️ The assessee’s challenge to a consolidated adjudication order covering multiple financial years was rejected, with the Court reaffirming that such consolidation is valid as per the precedent in Ambika Traders.
➡️ Though the DRC-07 was uploaded on the portal after the limitation period (Feb 19, 2025), the Court held that service via email dated Feb 04, 2025 constituted valid communication within time.
➡️ Considering that there were 650 noticees involved and allegations of fraudulent ITC claims of ₹173 crores, the Court accepted that some reasonable delay in uploading DRC-07 forms is permissible.
➡️ The Court clarified that if the adjudication order is duly communicated within the limitation period, subsequent delay in uploading Form DRC-07 on the GST portal does not render the order time-barred.
➡️ The writ petition was disposed of, with the assessee relegated to the statutory appellate remedy under Section 107 of the CGST Act, where the plea of limitation can still be raised.
✔️ Delhi HC – Suresh Kumar vs. Commissioner CGST Delhi [W.P.(C) 12199/2025]
🔥📛 HC: Delay in DRC-07 upload, not determinative of limitation; Service through email valid
➡️ The Court clarified that Section 74(10) mandates issuance of the adjudication order within 5 years, not the uploading of DRC-07. Since DRC-07 is only a summary of the order under Rule 142, any delay in its uploading does not render the order time-barred.
➡️ Service of the adjudication order by e-mail is a statutorily recognized mode under Section 169. Such service constitutes valid issuance within limitation, even if it does not fall under the “deemed service” provisions.
➡️ Referring to the Ambika Traders case, the Court upheld that in cases of fraudulent ITC spanning several tax periods, a consolidated SCN and adjudication order is permissible and often necessary to capture the full extent of bogus transactions.
➡️ The extended period under Section 74 was held applicable given the large-scale fraud involving more than 89 recipients availing/passing ITC through non-existent suppliers, establishing sufficient grounds for invoking extended limitation.
➡️ The assessee’s challenges (time-bar, invalid service, improper SCN) were rejected. The writ petition was dismissed, with liberty granted to pursue the statutory appellate remedy against the demand of ₹51.87 lakh.
✔️ Delhi HC – Rishi Enterprises. Vs. Additional Commissioner Central Tax Delhi North & Anr [W.P.(C) 4374/2025]
