LATEST GST CASE LAWS: 28.10.2025
🔥📛 Karnataka HC stays SCN proposing demand basis 70:30 deemed valuation for wind project contracts
➡️ The assessee challenged a GST demand raised by DGGI, Chennai, which applied a deemed 70:30 ratio for goods and services under Explanation to Entry 234 of Notification No. 01/2017-CT (Rate). The company argued that actual bifurcation of goods and service values was available in the composite wind power contracts, making the deemed valuation arbitrary and inapplicable.
➡️ It was contended that the deemed valuation fiction contravenes established judicial precedents such as Gannon Dunkerley & Co. and Wipro Ltd., which hold that statutory fictions cannot override ascertainable actual values in composite contracts. The assessee relied on these principles to argue that GST should be computed on the real transactional value.
➡️ The assessee cited Munjaal Manishbhai Bhatt v. Union of India (Gujarat HC), where a similar deeming provision for land deduction in construction contracts under Notification No. 11/2017-CT (Rate) was struck down as ultra vires. This was invoked to reinforce the argument that arbitrary valuation ratios lack constitutional validity.
➡️ A key ground of challenge was that the DGGI Chennai lacked jurisdiction to issue the SCN under Section 74 of the CGST Act. The assessee argued that only a “Proper Officer” under the Act could issue such notices, and that Circular No. 3/3/2017 conferring this power on DGGI officers was ultra vires the statutory scheme.
➡️ Taking note of these substantive and jurisdictional issues, the Karnataka High Court granted an interim stay on the operation of the SCN. The matter was directed to be tagged with the pending Selco Solar Light Pvt. Ltd. case, which raises similar questions on the application of the deemed valuation mechanism in renewable energy projects.
✔️ Karnataka HC – Directorate General of GST Intelligence, Chennai vs Vestas Wind Technology Pvt Ltd [WP 26470/2025]
🔥📛 SC to decide if leasehold rights assignment is ‘land-transfer’ or ‘service’; Tags with GCCI-case
➡️ The Supreme Court has condoned delay and admitted the Revenue’s Special Leave Petition (SLP) challenging the Gujarat High Court ruling that quashed GST levy on the transfer of leasehold rights in land.
➡️ The Court observed that the central question is whether the assignment or transfer of leasehold rights constitutes a “transfer of land” (outside GST ambit) or amounts to a “supply of service” liable to GST under the CGST Act.
➡️ The Gujarat High Court, relying on its earlier ruling in Gujarat Chamber of Commerce and Industry & Ors., held that transfer of leasehold rights amounts to a transfer of land, and therefore not taxable under GST.
➡️ The specific case involved a transfer of leasehold rights from a partnership firm to a sole proprietor, who was one of the partners in the erstwhile firm. The High Court found no taxable supply in such intra-entity transfers.
➡️ The Supreme Court has tagged this SLP with the Revenue’s earlier SLP filed against the Gujarat Chamber of Commerce and Industry judgment, indicating that both matters will be heard together to resolve the broader issue of GST applicability on transfer of leasehold rights.
✔️ SC – Union of India vs Life Sciences and Chemical and Anr [SPECIAL LEAVE PETITION (CIVIL)… Diary No. 52380/2025]
🔥📛 HC: Upholds dual requirement of written reply and oral hearing for natural justice; Quashes order
➡️ The Court held that principles of natural justice, as embodied in the UPGST Act, mandate both — an opportunity to file a written reply and a personal (oral) hearing. These are distinct and cumulative requirements, not alternatives.
➡️ The notices issued under Section 73(1) and the reminder notice mentioned “N.A.” against the columns for hearing date, time, and venue. The Court ruled this omission effectively denied the assessee its statutory right to an oral hearing, rendering the assessment process defective.
➡️ Relying on Section 75(4) of the UPGST Act, the Court emphasized that before passing any order adverse to the assessee, the authority must grant a personal hearing. This right cannot be defeated merely because the assessee did not file a written reply.
➡️ The Court clarified that failure to submit a written reply may close that specific opportunity but does not extinguish the assessee’s right to be personally heard. The two opportunities operate independently.
➡️ As the assessing authority failed to provide an opportunity for oral hearing, the order was held unsustainable for violating statutory mandates and principles of natural justice. The matter was remanded for fresh proceedings in accordance with law.
✔️ Allahabad HC – A to Z Car Solutions Vs. State of UP & Ors. [WRIT TAX No. – 3851 of 2025]
🔥📛 HC: Quashes electronic credit ledger blocking beyond Rs. 1 Crore
➡️ The Allahabad High Court held that the Deputy Commissioner exceeded his pecuniary jurisdiction by blocking the petitioner’s electronic credit ledger (ECL) under Section 86A of the UPGST Rules, 2017, for an amount exceeding ₹1 crore.
➡️ As per the statutory framework and the guidelines issued on November 23, 2021, the Deputy Commissioner’s authority to block credit is restricted to cases involving sums up to ₹1 crore; amounts exceeding this threshold fall within the purview of the Joint Commissioner or Additional Commissioner.
➡️ Since the Deputy Commissioner had blocked ₹5,09,48,306 — far beyond the prescribed limit — the Court held that the order was partly without jurisdiction and liable to be quashed to that extent.
➡️ The Court clarified that the order would remain valid only to the extent of ₹1 crore, and the balance amount above ₹1 crore could be utilised by the taxpayer in accordance with law.
➡️ The petitioner was permitted to apply under Rule 86A for unblocking of the ECL, and the concerned officer was directed to pass a reasoned order in compliance with legal provisions and principles of natural justice.
✔️ Allahabad HC – Mahendra Enterprises Vs. State of UP & Anr. [WRIT TAX No. – 2809 of 2025]
🔥📛 HC: Cannot hold-back re-credit of ITC due to technical limitation of GST portal
➡️ The assessee had claimed a refund of accumulated Input Tax Credit (ITC) due to an inverted duty structure for the period up to March 2018. However, an amount of ₹23,32,278, pertaining to July 2017 to February 2018, was adjusted against an alleged erroneous refund through Form GST-RFD-06.
➡️ Upon realizing the adjustment error, the assessee requested re-credit of the ITC. The request was declined by authorities, citing the absence of an available option on the GST Portal to re-credit amounts that were adjusted against any demand, erroneous refund, or recovery of government dues.
➡️ In its affidavit, the Revenue admitted that the re-credit could not be processed solely due to technical limitations of the GST Portal. Despite the issuance of Form PMT-03, the system lacked functionality to facilitate such re-credit.
➡️ Acknowledging that the denial was based purely on procedural or system constraints—not on the merits of the claim—the Delhi High Court directed the Revenue to manually re-credit the eligible ITC amount to the assessee’s Electronic Credit Ledger.
➡️ The Court reaffirmed that taxpayers cannot be denied substantive benefits or refunds due to technical or procedural deficiencies in the GST system. Authorities are obligated to provide relief through manual intervention when the GST Portal lacks necessary functionality.
✔️ Delhi HC – Mohan Footcare Pvt. Ltd Vs Deputy Commissioner of CGST [W.P.(C) 6804/2024]
🔥📛 HC: Writ not-maintainable if legible copies of order not sought before limitation expiry
➡️ The Delhi High Court held that the assessee’s failure to challenge the refund-withholding order within the prescribed limitation period of three months (extendable by one month) under Section 107 of the CGST Act rendered the appeal time-barred. The Court emphasized that the delay could not be condoned beyond this statutory period.
➡️ The Court declined to entertain the writ petition, clarifying that writ remedies cannot be used to bypass the appellate mechanism provided under the GST law, especially when the assessee had an adequate opportunity to appeal but failed to do so within time.
➡️ It was observed that the assessee had actively participated in the adjudication proceedings prior to the passing of the refund-withholding order. Hence, the Court found no breach of natural justice, as due process had been followed by the authorities.
➡️ Rejecting the assessee’s argument that the order was illegible, the Court noted that the onus lay on the assessee to obtain a legible copy from the Department if required. The assessee’s inaction could not excuse its failure to file a timely appeal.
➡️ Concluding the matter, the Court directed that the withheld IGST refund be adjusted against the demand arising from fraudulent ITC availment, and disposed of the writ petition accordingly.
✔️ Delhi HC – Moms Cradle Private Limited vs. UOI & Anr. [W.P.(C) 15509/2025]
🔥📛 HC: Unsigned order valid if officer details present; Permits to appeal against procedural infractions
➡️ The Delhi High Court allowed the assessee to file an appeal against the rectification order issued under Section 161 of the CGST Act, directing that the appeal be filed with the requisite pre-deposit.
➡️ The Court rejected the assessee’s plea that the order-in-original was invalid merely because it lacked the officer’s physical signature, emphasizing that such a defect does not render the order void.
➡️ It was held that when the DRC-07 accompanying the order includes the officer’s name, designation, and ward details, the absence of a manual signature on the order itself does not invalidate the proceedings.
➡️ The Court followed the Madras High Court’s ruling in HVR Solar Private Limited, reaffirming that DRC-07 with complete officer details is sufficient for validating the order.
➡️ The writ petition challenging the order-in-original was dismissed, with the Court directing the assessee to pursue the statutory appellate remedy instead of invoking writ jurisdiction.
✔️ Delhi HC – Future Consumer Limited vs. UOI & Ors. [W.P.(C) 15611/2025]
