LATEST GST CASE LAWS: 29.08.2025
🔥📛 HC: Basis non-issuance of SCN after investigation, Delhi-HC to examine validity of fresh re-attachment u/s-83
➡️ The Assessee argued, relying on SC in Kesari Nandan Mobile, that re-attachment of bank accounts after the statutory one-year period under Section 83 CGST Act is not permissible.
➡️ The Department opposed relief citing Kesari Nandan Mobile (para 31) and alleging fraudulent availment of ITC of approx. ₹40 crores.
➡️ Court noted that despite investigation commencing in May 2024 and Assessee already depositing ₹1.2 crore under protest, no SCN has been issued even after more than a year.
➡️ With over ₹6 crores lying frozen in bank accounts, the Court observed that business operations had come to a standstill and that indefinite blocking of funds beyond the 10% pre-deposit principle was unjustified.
➡️ Court allowed Assessee to operate both bank accounts, subject to retention of ₹2 crores as fixed deposit to secure Revenue’s interest. Pleadings to be completed, with the validity of re-attachments left open for final adjudication.
✔️ Delhi HC – Osiya Metal Industries Vs. Director General DGGI [W.P.(C) 12521/2025]
🔥📛 HC: Notices sent to GST-Practitioner ‘sufficient communication ‘; Dismisses writ with costs
➡️ The writ petition was dismissed with a cost of ₹50,000 payable to the CGST Department as the petitioner concealed material facts about receipt of notices. The Court held there was no jurisdictional error or violation of natural justice.
➡️ Petitioners are obligated to specifically plead whether notices were received on the registered email address. Failure to do so amounts to concealment, particularly when the Department establishes that notices were duly sent.
➡️ Under Section 169(1)(c) of the CGST Act, service of notice on the registered email (including that of a Chartered Accountant/GST practitioner if reflected on the GST portal) is valid. In this case, the GST portal showed the email as the proprietor’s registered email, not merely a consultant’s, making the service proper.
➡️ The Court clarified that reliance on the Neelam Ajit Phatarpekar case under the Income Tax Act was misplaced, as the statutory language of the Income Tax Act differs from that of the CGST Act.
➡️ Reiterating its judgment in Ambika Traders, the Court held that a combined show cause notice covering multiple financial years is legally valid under Section 74(10). Such consolidation is justified where transactions span several years, as it helps establish the modus operandi of the assessee.
✔️ Delhi HC – Mathur Polymers vs. UOI & Ors. [W.P.(C) 2394/2025]
🔥📛 SC: Dismisses Revenue’s SLP over recovery from liquidated-company’ Director of legacy excise dues
➡️ The Supreme Court refused to interfere with the Andhra Pradesh High Court’s decision that had quashed recovery notices issued under the CGST Act for dues arising under the repealed Central Excise Act, 1944.
➡️ The Court clarified that recovery of legacy Central Excise dues cannot be pursued by invoking provisions of the CGST Act, as the liability pertains to a repealed law and not to CGST.
➡️ The High Court held, and SC did not disturb, that Section 88(3) of the CGST Act permits recovery from directors only where the underlying liability (tax, penalty, or interest) has been determined under the CGST Act itself.
➡️ Personal liability orders of ₹1.3 crore each against company directors were held unsustainable when issued under CGST provisions for Central Excise dues, since Section 88(3) does not extend to legacy tax liabilities.
➡️ While rejecting the CGST-based recovery notices, the SC granted liberty to the Revenue to pursue appropriate remedies available under the Central Excise Act for recovery of such pre-GST dues.
✔️ SC – UOI & Ors. vs. Ravindra Muthavarapu Etc. [Petitions for Special Leave to Appeal (C) Nos. 21610-21615/2025]
🔥📛 Appellate Authority does not have power to remand matter back to Adjudicating Authority: HC
➡️ A formal enquiry was conducted at the assessee’s premises, followed by a show cause notice and cancellation of GST registration.
➡️ The assessee’s application for revocation of cancellation was rejected by the adjudicating authority.
➡️ On appeal, the Appellate Authority found that the cancellation order was unsustainable and allowed the appeal, though it imposed a condition of fact verification.
➡️ The court held that once the Appellate Authority concludes that the cancellation order cannot be sustained, it cannot remand the matter or grant a “second chance” to the revenue.
➡️ The remand directions were set aside; however, the revenue retains liberty to initiate fresh proceedings in accordance with law.
✔️ Allahabad HC – Kanha Shree Steels v. Assistant Deputy Commissioner [WRIT TAX No. 2746 of 2025]
🔥📛 HC allows assessee to file rectified GSTR-1 as he inadvertently showed turnover of sister concern in his GSTR-1
➡️ The State Tax Officer issued a show-cause notice as outward supplies reported in GSTR-1 exceeded those in GSTR-3B, and input tax credit (ITC) claimed in GSTR-3B was higher than ITC reflected in suppliers’ GSTR-1.
➡️ The assessee explained that during the initial year of GST, sales data of its sister concern was mistakenly uploaded in its GSTR-1, creating an artificial mismatch with GSTR-3B.
➡️ Despite the explanation, tax demand with interest and penalty was raised. The appellate authority dismissed the assessee’s appeal on the ground of limitation without examining merits.
➡️ The assessee approached the High Court seeking permission to rectify its GST returns, arguing that the discrepancy was a clerical error that required correction.
➡️ The High Court held that the error in turnover reporting was inadvertent and rectifiable. The assessee was permitted to file revised GSTR-1 to align with GSTR-3B, and the impugned appellate order was set aside.
✔️ Gujarat HC – Sanghvi Metal Corporation v. Union of India [R/SPECIAL CIVIL APPLICATION NO. 9857 of 2025]
🔥📛 Penalty on assessee to be quashed due to uncorroborated supplier claims of fraudulent registration: HC
➡️ At the time of interception, the transporter carried all documents mandated under Rule 138A(1)(a) & (b). Hence, there was no contravention of Section 68 read with Rule 138A.
➡️ Since the statutory requirements were fulfilled, detention and penalty under Section 129 could not be invoked.
➡️ The department failed to establish any intent to evade tax, which is a necessary condition for invoking Section 129 proceedings.
➡️ Penalty was imposed based solely on the supplier’s unverified claim of fraudulent registration, without giving the petitioner an opportunity to be heard, rendering the action illegal.
➡️ Later cancellation of the supplier’s GST registration did not affect the genuineness of the petitioner’s transaction on the date of detention; hence, the penalty order was unsustainable and set aside.
✔️ Calcutta HC – Sandip Kumar Pandey v. Assistant Commissioner of State Tax Bureau of Investigation [M.A.T. 1088 of 2025]
