LATEST GST CASE LAWS: 30.07.2025
🔥📛 Delhi HC to interpret whether Rule-101(4) mandates Revenue disclosing audit gaps and assessee’s reply
➡️ The Court examined whether the phrases “may inform the registered person” and “may file his reply” imply discretion. It opined that while issuing information or seeking a reply may seem optional, the provision must be read in totality.
➡️ The Court emphasized that the use of “shall finalise the findings” makes it mandatory for the GST department to consider the taxpayer’s reply, if filed, before concluding the audit process. Ignoring the reply violates procedural fairness.
➡️ Since the department extracted the audit memo and proceeded without considering the petitioner’s reply, the Court held that this prima facie breached the principles of natural justice, warranting judicial scrutiny.
➡️ Given the pending interpretation of Rule 101(4) and the premature progression to SCN without addressing the taxpayer’s response, the Court stayed further proceedings under the SCN until further orders.
➡️ The amount deposited under protest is to be retained in a fixed deposit (FD) by the department, ensuring the taxpayer’s rights are protected during litigation. The matter is next listed for hearing on September 17, 2025.
✔️ Delhi HC -Dhruv Medicos Pvt Ltd vs Deputy Commissioner of CGST, Central GST Circle, Audit-1 and ors [W.P.(C) 10213/2025]
🔥📛 Cannot harass Advocate with search, unless personally involved in client’s illegality; Delhi HC stays summon
➡️ The Court held that an advocate cannot be subjected to coercive action or harassment by the GST Department unless there is concrete evidence suggesting personal involvement in any alleged illegality, beyond professional representation.
➡️ Documents provided by clients to their legal counsel are protected under attorney-client privilege. The Court emphasized the need to examine whether the search and seizure operations respected these legal protections.
➡️ The GST Department is restrained from accessing or copying the contents of the seized CPU, which may contain privileged or confidential legal material, without the presence of the Petitioner or an authorised representative.
➡️ The Advocate claimed that during the search, the Department improperly seized personal legal documents, such as the firm’s Partnership Deed, despite these having no relevance to the alleged GST violations of the client.
➡️ The High Court directed that the Petitioner need not appear before the GST Department until further notice and instructed the Department to file an affidavit. The matter is listed for the next hearing on August 4, 2025.
✔️ Delhi HC – Puneet Batra vs UOI & ors [W.P.(C) 11021/2025]
🔥📛 Delhi HC grants Canon India stay on recovery initiated pursuant to Audit
➡️ The Delhi High Court issued notice and restrained the department from initiating coercive recovery actions under Section 74 of the CGST Act, where the demand arose pursuant to audit proceedings.
➡️ The petitioner contended that the mandatory 10% pre-deposit for filing an appeal under Section 107 had been duly met through reversal of Input Tax Credit (ITC), rather than cash payment, before the Commissioner (Appeals).
➡️ The petitioner challenged the constitutional validity of Notification No. 74/2018, arguing it conflicts with Section 49 of the CGST Act and Rules 85 and 86 by mandating cash payment (not ITC) for any additional liability disclosed in GSTR-9 via Form GST DRC-03.
➡️ The legal challenge raised concerns over restricting taxpayers from utilizing available ITC for liabilities voluntarily disclosed in annual returns, asserting this goes beyond the scope permitted under Section 49.
➡️ The Court is examining whether inserting instructions via rules (without express legislative backing) can override statutory provisions, particularly where such instructions limit the use of ITC contrary to the CGST Act’s intent.
✔️ Delhi HC – Canon India Pvt. Ltd. vs. Commissioner of Central Tax [W.P.(C) 10497/2025]
🔥📛 HC: 60 days disbursal time for refunds ‘mandatory’; Quashes orders rejecting refunding on extraneous factors
➡️ The Calcutta High Court held that the 60-day timeline for processing GST refunds under Section 54(7) is mandatory, not directory. The use of the word “shall” reflects legislative intent for strict compliance, and any delay vitiates the refund process.
➡️ The Court highlighted several statutory breaches by the PO, including:
–> Issuance of acknowledgment two days beyond the 15-day limit (Rule 90(2));
–> Delay of 29 days in issuing the Show Cause Notice after acknowledgment;
–> Fixing the reply date beyond the 60-day period, undermining the opportunity for a hearing.
–> These delays cumulatively rendered the entire proceeding procedurally flawed.
➡️ The PO’s reasoning for rejection—small business premises and absence of inward E-way Bills—was deemed subjective and irrelevant, especially when the applicant had complied with all legal requirements for export under GST laws.
➡️ The Court held that once the exporter furnishes conclusive customs documentation (e.g., shipping bill, Export General Manifest), the GST authorities cannot question the receipt of goods by the foreign importer, as such inquiry falls outside their jurisdiction.
➡️ The Court criticized the inconsistent standards applied—strict adherence for taxpayers, but leniency for authorities—and directed the refund to be processed within 30 days, along with interest under Section 56, reinforcing accountability in administrative conduct.
✔️ Calcutta HC – Suraj Mangar vs. The Assistant Commissioner of West Bengal State Tax [M.A.T. No. 104 of 2024]
🔥📛 SC issues notice in SLP against HC order quashing ITC demand despite supplier’s error in mentioning GSTIN on invoices
➡️ The assessee was denied input tax credit (ITC) solely because the supplier’s invoices mistakenly mentioned the assessee’s Bombay GSTIN instead of the Delhi GSTIN where the credit was claimed.
➡️ The High Court held that the sole basis for denial of ITC was a clerical mistake on the part of the supplier. It ruled that denying credit for such a minor error would cause undue hardship and substantial loss to the assessee.
➡️ Given that the error was unintentional and involved no fraud or misrepresentation, the High Court set aside the demand order, thereby allowing the ITC claim.
➡️ The Revenue argued in the Special Leave Petition (SLP) that the High Court overlooked Section 25(4) of the CGST Act, which treats each GST registration (even under the same PAN) as a distinct person, affecting cross-state ITC entitlement.
➡️ A notice was issued by the Supreme Court on the Revenue’s SLP, signaling a potential review of the High Court’s interpretation and application of the law regarding ITC eligibility across distinct GST registrations.
✔️ SC – Union of India v. B Braun Medical India (P.) Ltd. [SLP Appeal (C) No. 17790 of 2025]
🔥📛 HC set-aside order as nor SCN was served upon assessee neither opportunity of hearing was granted
➡️ The assessee, engaged in wholesale tobacco distribution, was alleged to have supplied goods to fictitious entities. These entities used invoices issued by the assessee to wrongfully avail Input Tax Credit (ITC), including compensation cess.
➡️ Although show cause notices (SCNs) were issued to the assessee’s customers, no such notice was served to the assessee itself. This deprived the assessee of an opportunity to respond or explain its position.
➡️ The assessee submitted that its GST account did not reflect any SCN upload. This further corroborated the claim of non-communication and supported the argument of procedural lapse.
➡️ The authorities did not grant a personal hearing to the assessee before passing the order-in-original, violating the mandatory procedural safeguards under GST law.
➡️ The court held that non-service of SCN and denial of a personal hearing constituted a breach of natural justice principles. Consequently, the demand raised against the assessee was quashed.
✔️ Delhi HC – Deepak Sales Corporation v. Additional Commissioner GST Delhi North [W.P.(C) 5103 OF 2025]
🔥📛 HC grants anticipatory bail to person accused of issuing fake GST invoices to avail ineligible ITC
➡️ The petitioner was accused of creating bogus firms in the names of employees to issue fake GST invoices, thereby fraudulently availing and passing on ineligible Input Tax Credit (ITC), causing revenue loss to the State.
➡️ Throughout the investigation period, the petitioner was neither arrested nor was any warrant issued against him, indicating that custodial interrogation was not deemed necessary by the authorities.
➡️ A co-accused in the same case had already secured regular bail from a Co-ordinate Bench of the High Court, establishing a precedent and suggesting non-stringent risk factors.
➡️ The court observed that the petitioner posed no risk of tampering with evidence or influencing the investigation, further reducing the justification for custodial detention.
➡️ Given the above factors, the court allowed the petitioner’s anticipatory bail application, subject to furnishing a bail bond and two sureties, reinforcing the principle of bail over jail in cases lacking custodial necessity.
✔️ Jharkhand HC – Raaj Jaiswal v. Directorate General of Goods and Services Tax Intelligence [A.B.A. No. 8095 of 2024]
