LATEST GST CASE LAWS – 30.06.2025 – A2Z TAXCORP LLP

LATEST GST CASE LAWS: 30.06.2025

🔥📛 HC: Delayed E-way bill generation not a ground for detention

➡️ The court observed that although the stock transfer documents and E-way bill were not available at the time of interception, they were produced before the detention order was passed, which is crucial for assessing the validity of detention.

➡️ The goods in question—petrol and diesel delivery machines intended for installation at a petrol pump—were not meant for open market sale, affecting the determination of their taxable value.

➡️ The assessee’s contention that the movement was a stock transfer (not a sale) was supported by a certificate indicating the goods were not for trade, impacting the tax liability under GST.

➡️ The authorities’ claim that the documents produced were “afterthought” was dismissed, as the documents were submitted before passing the detention order, reinforcing the importance of procedural fairness.

➡️ The court relied on prior judgments (Vacment India and Goverdhan Oil Mill) to uphold the principle that goods not intended for sale cannot be taxed as sale of goods, thereby quashing the GST demand and penalties under Form GST MOV-09.

✔️ Allahabad HC – T.K. Printers vs. Additional Commissioner [WRIT TAX No. – 1486 of 2023]

🔥📛 HC: Accepting genuine reason for return filing default, not filing timely revocation, appeal, allows conditional restoration

➡️ The court recognized the assessee’s explanation as genuine, noting that delays in GST return filing and revocation application were due to incomplete delivery of capital goods and internal company issues affecting payment of GST dues.

➡️ Despite the statutory timeline for revocation having lapsed, the court ordered restoration of the GST registration, emphasizing a fair and reasonable approach based on the assessee’s circumstances.

➡️ The court set conditions for restoration, including payment of Rs. 10,000 to a designated government institution as a form of cost or penalty.

➡️ The revenue department was directed to update the GST portal to facilitate the assessee’s ability to file pending returns and pay outstanding taxes, penalties, or fines following restoration.

➡️ Tax liabilities (tax, interest, fines) shall not be adjusted against any unutilized or unclaimed Input Tax Credit (ITC) without prior scrutiny and approval, ensuring stricter control over ITC use post-restoration.

✔️ Madras HC – Vamana Extrusions Pvt. Ltd. vs The Superintendent [W.P. No. 19925 of 2025]

🔥📛 HC: Grants further opportunity to Assessee claiming ITC on account of non-traceable suppliers; Allows writ

➡️ The Kerala High Court examined the denial of Input Tax Credit (ITC) to the Assessee under Sections 16(2)(c) and 16(4) of the CGST Act, due to suppliers becoming non-traceable, impacting the validity of transactions.

➡️ The Court referred to its earlier ruling in M. Trade Links, holding that similar factual circumstances warrant consistent application of legal principles, thereby supporting the Assessee’s entitlement to claim ITC.

➡️ The Court remanded the matter, allowing the Assessee to claim the disputed ITC subject to production of relevant supporting documents, aligning with guidelines outlined in M. Trade Links judgment (specifically paragraph 101).

➡️ The Assessee was directed to furnish the required documents within one month of receiving the judgment copy, failing which the benefit of this decision would be forfeited.

➡️ The writ petition was allowed, reinforcing the principle that ITC denial solely due to non-traceable suppliers can be reconsidered upon proper documentary proof, thereby safeguarding legitimate credit claims in GST compliance.

✔️ Kerala HC – Hercules Automobiles International Pvt Ltd vs Union of India & Ors [WP(C) NO. 21131 OF 2025]

🔥📛 HC: Writ not maintainable for wrong entry in returns as B2C instead of B2B

➡️ The assessee paid rent including GST, but the building owner recorded the transaction as B2C (Business to Consumer) instead of B2B (Business to Business), causing the rent payment to not reflect correctly in the assessee’s auto-populated GSTR-2A.

➡️ Despite the misclassification, the owner of the premises had remitted the GST to the government, indicating tax compliance on the owner’s part, but the assessee’s input tax credit claim was affected due to the wrong classification.

➡️ The Madras HC emphasized that the assessee’s remedy lies in filing an appeal against the assessment order before the designated appellate authority, rather than approaching the High Court via a writ petition.

➡️ The Court mandated a pre-deposit of 25% of the disputed tax amount (comprising the existing statutory 10% deposit plus an additional 15%) as a prerequisite for the appeal to proceed.

➡️ The Court clarified that if funds are attached in the assessee’s bank account, the authorities must allow the assessee to withdraw up to 25% of the disputed tax amount to fulfill the pre-deposit requirement for filing the appeal.

✔️ Madras HC – Eximio Services and Solutions Pvt. Ltd. vs. The Superintendent of GST & Central Excise [W.P. No. 20608 of 2025]

🔥📛 HC: Confiscation, interception, inspection resting upon driver’s reply contrary to S.130

➡️ The High Court held that the confiscation proceedings violated Section 130(4) of the CGST Act, 2017, as the action was arbitrary and contrary to the statutory provisions governing confiscation.

➡️ The entire chain of actions—interception, inspection, issuance of show cause notice, confiscation, and penalty imposition—occurred on the same day without providing the assessee an opportunity to be heard, breaching principles of natural justice.

➡️ The show cause notice and subsequent actions were based solely on the reply given by the vehicle’s driver, which the court found insufficient and procedurally flawed for determining liability.

➡️ The Court quashed the confiscation order, fine, and penalty imposed on the assessee due to procedural irregularities and non-compliance with legal mandates.

➡️ Remand for Proper Reconsideration: The matter was remanded to the Competent Authority/Deputy Commissioner, Commercial Tax, Dehradun, directing them to reinitiate the confiscation proceedings starting from the issuance of the show cause notice, ensuring adherence to due process.

✔️ Uttarakhand HC – Gajanand Granite vs. Office of State Tax Officer [WRIT PETITION (M/B) No. 358 OF 2025]

🔥📛 HC: No fetter on GSTAT’s Selection Committee right to de-novo evaluate candidature

➡️ The Orissa High Court upheld the Search-cum-Selection Committee’s authority to reconstitute itself and restart the selection process for GSTAT Members, even after candidates, including the petitioner, were shortlisted. There is no statutory barrier to initiating the process afresh.

➡️ The reconstitution and re-interview process followed receipt of classified inputs from the Intelligence Bureau regarding the petitioner’s suitability, which the Court found a legitimate ground for the Committee to reconsider the selections.

➡️ Citing the Supreme Court’s precedent in Kali Dass Batish, the Court confirmed that relying on Intelligence Bureau inputs for scrutinizing applications and selecting candidates does not constitute illegality.

➡️ The Court interpreted Rule 3 pragmatically, noting that it does not explicitly address procedures for a reconstituted Committee but clearly permits issuing fresh vacancy circulars and scrutinizing applications anew.

➡️ The phrase “as it may deem fit” in Rule 3 was understood as granting flexible discretion to the Committee in conducting the selection process, without placing undue restrictions or creating procedural deterrents.

✔️ Orissa HC – Pranaya Kishore Harichandan vs Union of India and Others [W.P.(C) No. 15220 of 2025]

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