LATEST GST CASE LAWS: 29.09.2025
🔥📛 Calcutta-HC to examine validity of Sec.74 notice vis-à-vis exempted-supplies; Restricts DGGI proceedings to tyre sales
➡️ The High Court noted that whether Section 74 of the WBGST/CGST Act can be invoked for alleged excess claim of exemption is a complex issue requiring detailed examination on affidavits.
➡️ Petitioners contended that earlier scrutiny notices under Section 73 had already acknowledged their availment of ITC against exempt supplies. Hence, reinitiating proceedings under Section 74 on grounds of suppression was misconceived.
➡️ It was argued that, since the Department had accepted the exempt supply position in prior notices, it could not now recharacterize the same as “suppression” to justify invoking Section 74.
➡️ The DGGI maintained that Petitioners wrongly availed exemption benefits under a notification, which justified action under Section 74 on account of alleged suppression.
➡️ The Court held that for “Table 3” (tyre sales), Section 74 proceedings could continue, but qua exempt supply issues, enforcement under Section 74 was restrained without prior leave of Court. Petitioners were directed to file replies within 10 days.
✔️ Calcutta HC – Maharaja Carriers Pvt. Ltd. & Anr. Versus The Additional Director, DGGI (SNU-East), Kolkata & Ors. [WPA 21043 of 2025]
🔥📛 Bombay HC issues notice in writ challenging section 16(2)(c); Refuses unconditional stay
➡️ Christie’s India (assessee) challenged the validity of Section 16(2)(c) of the CGST Act, 2017 (and MGST counterpart) as violative of Articles 14, 19(1)(g) and 300A, while also contesting a demand of ₹1 crore plus equivalent penalty and interest.
➡️ The assessee sought unconditional stay of recovery, arguing that Respondent No. 5 had already deposited ₹21 lakhs and was liable for the disputed tax, and that additional pre-deposit of 10% would be unfair.
➡️ Relying on rulings of Kerala, Patna, and Madhya Pradesh High Courts upholding Section 16(2)(c), Revenue argued that State cannot be deprived of its dues merely due to disputes between assessee and Respondent No. 5.
➡️ The Court held that the ₹21 lakh deposit by Respondent No. 5 does not extinguish assessee’s liability; disputes with Respondent No. 5 cannot justify unconditional stay; and if the assessee believes liability lies with Respondent No. 5, it must pursue independent recovery action.
➡️ While refusing unconditional stay, the Court stayed recovery subject to the assessee depositing ₹20 lakhs within 6 weeks. Given the constitutional challenge to a central statute, notice was also directed to the Attorney General of India.
✔️ Bombay HC – Christie’s India Private Limited. Vs Union of India & Ors. [WRIT PETITION (L) NO. 16964 OF 2025]
🔥📛 GST registration can’t be cancelled retrospectively if SCN didn’t propose retrospective cancellation: HC
➡️ The assessee applied for cancellation of GST registration due to business closure.
➡️ Revenue authorities sought additional information; since the assessee did not furnish it, the cancellation application was rejected.
➡️ Subsequently, the department issued a show cause notice proposing cancellation of registration, but it did not mention retrospective effect.
➡️ The impugned order cancelled registration retrospectively, which was held invalid since retrospective cancellation was not part of the show cause notice.
➡️ Cancellation was to take effect from the date of the show cause notice. The GST department, however, retained the right to initiate separate proceedings for any other violations under law.
✔️ Delhi HC – Sumit Saree Centre v. Commissioner of DGST [W.P. (C) no. 13773 of 2025]
🔥📛 Appellate Authority must verify assessee’s documents before reversing refund order: HC
➡️ The petitioner claimed refund under the category “Export of Goods/Services without payment of Tax” in terms of section 54 of the CGST Act. After verification, the adjudicating authority (Respondent No. 3) sanctioned the refund through Form GST RFD-06.
➡️ The department reviewed the refund sanction orders and filed appeals before the Appellate Authority, arguing that the sanctioning authority failed to specifically mention Bank Realization Certificates (BRCs) and supporting documents evidencing receipt of foreign remittance.
➡️ The petitioner contended that BRCs and other required documents had already been submitted with the refund claim, and these were duly verified by the adjudicating authority along with invoice details before granting refund.
➡️ The Appellate Authority reversed the refund orders without properly considering (i) the BRCs and relevant documents already on record, and (ii) the verification and findings recorded by Respondent No. 3 in RFD-06.
➡️ The court held that the Appellate Authority’s order was contrary to records and ignored material evidence. Consequently, the appellate order was quashed, and the original refund sanction order of Respondent No. 3 was restored.
✔️ Gujarat HC – Hitachi Energy India Ltd. v. Union of India [R/SPECIAL CIVIL APPLICATION NOS. 1824 and 3053 of 2024]
🔥📛 Cancellation of registration upheld where assessee failed to reply to SCN alleging fake invoicing: HC
➡️ The assessee’s GST registration was cancelled on allegations of issuing invoices without actual supply of goods/services, leading to wrongful ITC availment/refund.
➡️ The notice clearly set out the allegations of fake invoicing, giving the assessee sufficient understanding of the proposed action.
➡️ The assessee did not file any reply or contest the allegations, amounting to implied acceptance of the charges in the notice.
➡️ The claim of breach of natural justice was rejected, as the assessee’s failure to respond negated any procedural unfairness.
➡️ Even though retrospective effect was not expressly proposed in the notice, the cancellation order with retrospective effect was sustained given the serious, unchallenged nature of the allegations.
✔️ Bombay HC – M.N. Trading Co. v. Union of India [WRIT PETITION NO. 1757 OF 2024]
