Facts (Background):The petitioner, registered as an Input Service Distributor (ISD), accumulated Input Tax Credit during FY 2017-18 and 2018-19 and distributed the credit in March instead of distributing it month-wise. During audit, the department alleged violation of Rule 39(1)(a) of the CGST Rules which requires ITC available in a month to be distributed in the same month and issued a show cause notice proposing penalty of ₹8,38,67,332 under Section 122(1)(ix) of the CGST Act. The petitioner challenged the constitutional validity of Rule 39(1)(a) and the consequential proceedings.Court Decision:The High Court held that Section 20 of the CGST Act, as it stood prior to 01.04.2025, did not prescribe any time limit for distribution of Input Tax Credit by an Input Service Distributor. Rule 39(1)(a), by mandating that the credit available in a month must be distributed in the same month, introduced a substantive restriction not contemplated under the parent statute.The Court held that the rule-making authority cannot impose a limitation period through delegated legislation when the parent statute does not provide for such limitation. Consequently, Rule 39(1)(a) of the CGST Rules, to the extent it mandates distribution of ITC in the same month, was declared ultra vires Section 20 of the CGST Act.The Court further held that the audit proceedings and show cause notice were also vitiated due to violation of principles of natural justice and improper invocation of extended limitation when all details were disclosed in GST returns. Accordingly, Rule 39(1)(a) was struck down to that extent and the final audit report dated 22.01.2024 and show cause notice dated 30.01.2024 along with consequential proceedings were quashed.Cases Referred by Court:• Lakshmi Rattan Engineering Works Ltd. vs. CST• Sales Tax Officer vs. K. I. Abraham• Global Energy Ltd. vs. Central Electricity Regulatory Commission• Kunj Behari Lal Butail vs. State of H.P.• M/s Kirloskar Brothers Ltd. vs. State of Jharkhand• Bharat Barrel and Drum Manufacturing Company Ltd. vs. ESI Corporation• Pushpam Pharmaceuticals Company vs. CCE
BirlaNu Ltd. (ISD) vs. Union of India & Ors. 30-12-2026
Facts (Background):The petitioner, registered as an Input Service Distributor (ISD), accumulated Input Tax Credit during FY 2017-18 and 2018-19 and distributed the credit in March instead of distributing it month-wise. During audit, the department alleged violation of Rule 39(1)(a) of the CGST Rules which requires ITC available in a month to be distributed in the same month and issued a show cause notice proposing penalty of ₹8,38,67,332 under Section 122(1)(ix) of the CGST Act. The petitioner challenged the constitutional validity of Rule 39(1)(a) and the consequential proceedings.Court Decision:The High Court held that Section 20 of the CGST Act, as it stood prior to 01.04.2025, did not prescribe any time limit for distribution of Input Tax Credit by an Input Service Distributor. Rule 39(1)(a), by mandating that the credit available in a month must be distributed in the same month, introduced a substantive restriction not contemplated under the parent statute.The Court held that the rule-making authority cannot impose a limitation period through delegated legislation when the parent statute does not provide for such limitation. Consequently, Rule 39(1)(a) of the CGST Rules, to the extent it mandates distribution of ITC in the same month, was declared ultra vires Section 20 of the CGST Act.The Court further held that the audit proceedings and show cause notice were also vitiated due to violation of principles of natural justice and improper invocation of extended limitation when all details were disclosed in GST returns. Accordingly, Rule 39(1)(a) was struck down to that extent and the final audit report dated 22.01.2024 and show cause notice dated 30.01.2024 along with consequential proceedings were quashed.Cases Referred by Court:• Lakshmi Rattan Engineering Works Ltd. vs. CST• Sales Tax Officer vs. K. I. Abraham• Global Energy Ltd. vs. Central Electricity Regulatory Commission• Kunj Behari Lal Butail vs. State of H.P.• M/s Kirloskar Brothers Ltd. vs. State of Jharkhand• Bharat Barrel and Drum Manufacturing Company Ltd. vs. ESI Corporation• Pushpam Pharmaceuticals Company vs. CCE
Court DecisionThe Court allowed the writ petition and quashed the show cause notices and the Order-in-Original dated 1 February 2025 insofar as they imposed penalties of ₹133,60,60,889/- each on the petitioners under Section 122(1A) of the CGST Act.The Court held:Section 122(1A) applies to a “taxable person”:On a conjoint reading of Section 122(1) and 122(1A), the Court held that sub-section (1A) necessarily applies to a taxable person as defined under Section 2(107) of the CGST Act. The petitioners, being employees of M/s. Shemaroo Entertainment Ltd., were not taxable persons in their individual capacity and hence could not be proceeded against under Section 122(1A).Jurisdictional requirement not satisfied:Section 122(1A) requires that the person must (i) retain the benefit of the transaction covered under specified clauses of Section 122(1), and (ii) the transaction must be conducted at his instance. The impugned order did not record any finding that the petitioners retained any benefit of the alleged transactions. Therefore, the jurisdictional ingredients were not satisfied.No vicarious liability under Section 122(1A):The Court held that there is no principle of vicarious liability incorporated in Section 122 or Section 137 of the CGST Act so as to fasten such penalty on employees merely because they held managerial positions.Retrospective application impermissible:Section 122(1A) came into force with effect from 1 January 2021. The show cause notice covered the period from July 2017 onwards. The Court held that the penal provision could not be applied retrospectively for the period prior to 1 January 2021, in view of Article 20(1) of the Constitution of India.Accordingly, the impugned order was held to be illegal and without jurisdiction insofar as it related to the petitioners.Cases Referred by the Court1. Shantanu Sanjay Hundekari vs. Union of India, 2024 (89) G.S.T.L. 62 (Bom.)2. Union of India vs. Shantanu Sanjay Hundekari, (2025) 27 Centax 14 (S.C.)3. Bharat Parihar vs. State of Maharashtra & Ors., Writ Petition No. 3742 of 2023, decided on 30/06/2023.4. Mukesh Kumar Garg vs. Union of India & Ors., 2025 (5) TMI 922 – Delhi High Court
Amit Manilal Haria & Ors. vs. The Joint Commissioner, CGST & Central Excise & Anr. 25-02-2026
Court DecisionThe Court allowed the writ petition and quashed the show cause notices and the Order-in-Original dated 1 February 2025 insofar as they imposed penalties of ₹133,60,60,889/- each on the petitioners under Section 122(1A) of the CGST Act.The Court held:Section 122(1A) applies to a “taxable person”:On a conjoint reading of Section 122(1) and 122(1A), the Court held that sub-section (1A) necessarily applies to a taxable person as defined under Section 2(107) of the CGST Act. The petitioners, being employees of M/s. Shemaroo Entertainment Ltd., were not taxable persons in their individual capacity and hence could not be proceeded against under Section 122(1A).Jurisdictional requirement not satisfied:Section 122(1A) requires that the person must (i) retain the benefit of the transaction covered under specified clauses of Section 122(1), and (ii) the transaction must be conducted at his instance. The impugned order did not record any finding that the petitioners retained any benefit of the alleged transactions. Therefore, the jurisdictional ingredients were not satisfied.No vicarious liability under Section 122(1A):The Court held that there is no principle of vicarious liability incorporated in Section 122 or Section 137 of the CGST Act so as to fasten such penalty on employees merely because they held managerial positions.Retrospective application impermissible:Section 122(1A) came into force with effect from 1 January 2021. The show cause notice covered the period from July 2017 onwards. The Court held that the penal provision could not be applied retrospectively for the period prior to 1 January 2021, in view of Article 20(1) of the Constitution of India.Accordingly, the impugned order was held to be illegal and without jurisdiction insofar as it related to the petitioners.Cases Referred by the Court1. Shantanu Sanjay Hundekari vs. Union of India, 2024 (89) G.S.T.L. 62 (Bom.)2. Union of India vs. Shantanu Sanjay Hundekari, (2025) 27 Centax 14 (S.C.)3. Bharat Parihar vs. State of Maharashtra & Ors., Writ Petition No. 3742 of 2023, decided on 30/06/2023.4. Mukesh Kumar Garg vs. Union of India & Ors., 2025 (5) TMI 922 – Delhi High Court
Court Decision:The writ petition challenged the recovery notice dated 25.11.2025 issued in Form GST DRC-13 by which the petitioner’s bank account was attached for the tax liability of M/s. Trans Car India Private Limited, where the petitioner was a Director.The company had earlier suffered an adverse Order-in-Original dated 31.05.2023. The writ petition filed against that order was dismissed with liberty to file an appeal before the Appellate Authority. Instead of filing the appeal, the company filed a writ appeal which was also dismissed. Since no relief was obtained against the Order-in-Original, the department proceeded to attach the petitioner’s bank account for recovery.The Court examined Section 89 of the CGST Act relating to liability of directors of a private company. The Court held that under Section 89(1), directors can be held jointly and severally liable for unpaid tax of the company if the tax cannot be recovered from the company, unless the director proves that the non-recovery cannot be attributed to gross neglect, misfeasance, or breach of duty on his part. The burden of proof lies on the director to establish this.The Court held that the petitioner must be given an opportunity to discharge this burden. Therefore, the impugned recovery notice attaching the petitioner’s bank account was quashed and the matter was remitted to the first respondent to pass a fresh order on merits after giving notice and opportunity to the petitioner to file a proper reply explaining why recovery should not be made from him. The authority was directed to complete the process within two weeks from receipt of the order.Cases Referred by the Court:None.
Khalid Buhari vs Assistant Commissioner of CGST and Central Excise & Another 13-02-2026
Court Decision:The writ petition challenged the recovery notice dated 25.11.2025 issued in Form GST DRC-13 by which the petitioner’s bank account was attached for the tax liability of M/s. Trans Car India Private Limited, where the petitioner was a Director.The company had earlier suffered an adverse Order-in-Original dated 31.05.2023. The writ petition filed against that order was dismissed with liberty to file an appeal before the Appellate Authority. Instead of filing the appeal, the company filed a writ appeal which was also dismissed. Since no relief was obtained against the Order-in-Original, the department proceeded to attach the petitioner’s bank account for recovery.The Court examined Section 89 of the CGST Act relating to liability of directors of a private company. The Court held that under Section 89(1), directors can be held jointly and severally liable for unpaid tax of the company if the tax cannot be recovered from the company, unless the director proves that the non-recovery cannot be attributed to gross neglect, misfeasance, or breach of duty on his part. The burden of proof lies on the director to establish this.The Court held that the petitioner must be given an opportunity to discharge this burden. Therefore, the impugned recovery notice attaching the petitioner’s bank account was quashed and the matter was remitted to the first respondent to pass a fresh order on merits after giving notice and opportunity to the petitioner to file a proper reply explaining why recovery should not be made from him. The authority was directed to complete the process within two weeks from receipt of the order.Cases Referred by the Court:None.
Facts (Background):The petitioner alleged that GST officers illegally detained him from 17.06.2025 to 20.06.2025 after calling him to the office of a Chartered Accountant in connection with investigation into fraudulent input tax credit by M/s Kabsan Services Pvt. Ltd. He contended that he was taken into custody without summons and that the formal arrest was shown only on 21.06.2025 under Section 69 of the CGST Act for offences under Sections 132(1)(b), 132(1)(c) and 132(1)(i). The petitioner sought compensation of ₹10,00,000 for alleged illegal detention.Court Decision:The Court held that the petitioner had been issued summons under Section 70 of the CGST Act for inquiry and recording of statement. The petitioner acknowledged the summons and appeared before the authorities from 17.06.2025 to 20.06.2025 without raising any objection. The Court further held that Section 70 of the CGST Act does not require issuance of seven days’ prior notice before appearance for inquiry and that attendance pursuant to summons for investigation cannot be treated as detention.The Court observed that the petitioner was formally arrested on 21.06.2025 after ascertainment of his involvement and was produced before the Magistrate on the same day. Since the petitioner had voluntarily attended the inquiry and no illegal detention was established, the claim for compensation was rejected and the writ petition was dismissed.Cases Referred by Court:• Joginder Kumar vs. State of U.P.• D.K. Basu vs. State of West Bengal• Dikshant vs. State of Maharashtra• FSM Education Pvt. Ltd. vs. Union of India• Ram Kotumal Issrani vs. Directorate of Enforcement• Radhika Agarwal vs. Union of India
Kanhaiya Nilambar Jha vs. Union of India & Ors. 05-02-2026
Facts (Background):The petitioner alleged that GST officers illegally detained him from 17.06.2025 to 20.06.2025 after calling him to the office of a Chartered Accountant in connection with investigation into fraudulent input tax credit by M/s Kabsan Services Pvt. Ltd. He contended that he was taken into custody without summons and that the formal arrest was shown only on 21.06.2025 under Section 69 of the CGST Act for offences under Sections 132(1)(b), 132(1)(c) and 132(1)(i). The petitioner sought compensation of ₹10,00,000 for alleged illegal detention.Court Decision:The Court held that the petitioner had been issued summons under Section 70 of the CGST Act for inquiry and recording of statement. The petitioner acknowledged the summons and appeared before the authorities from 17.06.2025 to 20.06.2025 without raising any objection. The Court further held that Section 70 of the CGST Act does not require issuance of seven days’ prior notice before appearance for inquiry and that attendance pursuant to summons for investigation cannot be treated as detention.The Court observed that the petitioner was formally arrested on 21.06.2025 after ascertainment of his involvement and was produced before the Magistrate on the same day. Since the petitioner had voluntarily attended the inquiry and no illegal detention was established, the claim for compensation was rejected and the writ petition was dismissed.Cases Referred by Court:• Joginder Kumar vs. State of U.P.• D.K. Basu vs. State of West Bengal• Dikshant vs. State of Maharashtra• FSM Education Pvt. Ltd. vs. Union of India• Ram Kotumal Issrani vs. Directorate of Enforcement• Radhika Agarwal vs. Union of India
Facts (Background):Search and inspection proceedings were initiated against the petitioner on 06.01.2021 under Section 67(2) of the RGST Act pursuant to authorization issued by the Additional Commissioner. Based on the search proceedings, a show cause notice dated 30.03.2023 was issued and an order dated 05.06.2023 was passed by the proper officer. The petitioner filed an appeal under Section 107 of the RGST Act, which was dismissed on 11.12.2023 by the Appellate Authority.Court Decision:The High Court held that the authorization for inspection and search under Section 67 of the RGST Act was issued by the same officer who later acted as the Appellate Authority under Section 107 while deciding the appeal arising out of those proceedings. The Court observed that such dual exercise of power violates the principle of natural justice that no person should be a judge in his own cause.Accordingly, the appellate order dated 11.12.2023 passed under Section 107 of the RGST Act was quashed and set aside. The matter was remanded back to the Appellate Authority with a direction that the appeal be decided afresh by a competent appellate authority other than the officer who authorized the search proceedings.Cases Referred by Court:None.
Ramjilal Mohanlal vs. Union of India & Ors. 29-01-2026
Facts (Background):Search and inspection proceedings were initiated against the petitioner on 06.01.2021 under Section 67(2) of the RGST Act pursuant to authorization issued by the Additional Commissioner. Based on the search proceedings, a show cause notice dated 30.03.2023 was issued and an order dated 05.06.2023 was passed by the proper officer. The petitioner filed an appeal under Section 107 of the RGST Act, which was dismissed on 11.12.2023 by the Appellate Authority.Court Decision:The High Court held that the authorization for inspection and search under Section 67 of the RGST Act was issued by the same officer who later acted as the Appellate Authority under Section 107 while deciding the appeal arising out of those proceedings. The Court observed that such dual exercise of power violates the principle of natural justice that no person should be a judge in his own cause.Accordingly, the appellate order dated 11.12.2023 passed under Section 107 of the RGST Act was quashed and set aside. The matter was remanded back to the Appellate Authority with a direction that the appeal be decided afresh by a competent appellate authority other than the officer who authorized the search proceedings.Cases Referred by Court:None.
Facts (Background):The petitioner’s GST registration was cancelled by an order dated 28.10.2022 after issuance of a show cause notice dated 12.10.2022 alleging that the registration had been obtained by fraud, wilful misstatement, or suppression of facts. The petitioner filed a reply to the show cause notice explaining the circumstances, including that the business had already been discontinued. Despite this, the authority cancelled the registration without addressing the reply or providing proper reasons.Court Decision:The High Court observed that the show cause notice was a cyclostyled notice without specific allegations and that there were serious discrepancies between the allegations in the show cause notice and the reasons recorded in the cancellation order. The authority had not considered the petitioner’s reply or provided any particulars of defects or objections.The Court held that the authority acted in a casual and mechanical manner without properly exercising jurisdiction under the CGST Act. Accordingly, the impugned order dated 28.10.2022 cancelling the GST registration was quashed and set aside, and the petitioner’s GST registration was restored.Cases Referred by Court:None.
Om Enterprises vs. Union of India & Ors. 29-01-2026
Facts (Background):The petitioner’s GST registration was cancelled by an order dated 28.10.2022 after issuance of a show cause notice dated 12.10.2022 alleging that the registration had been obtained by fraud, wilful misstatement, or suppression of facts. The petitioner filed a reply to the show cause notice explaining the circumstances, including that the business had already been discontinued. Despite this, the authority cancelled the registration without addressing the reply or providing proper reasons.Court Decision:The High Court observed that the show cause notice was a cyclostyled notice without specific allegations and that there were serious discrepancies between the allegations in the show cause notice and the reasons recorded in the cancellation order. The authority had not considered the petitioner’s reply or provided any particulars of defects or objections.The Court held that the authority acted in a casual and mechanical manner without properly exercising jurisdiction under the CGST Act. Accordingly, the impugned order dated 28.10.2022 cancelling the GST registration was quashed and set aside, and the petitioner’s GST registration was restored.Cases Referred by Court:None.
Facts (Background):The petitioner challenged the order dated 25.04.2025 passed by the appellate authority rejecting the appeal filed under Section 107 of the GST Act on the ground of delay. Against the original order dated 12.08.2024, the petitioner had filed a rectification application under Section 161 on 05.11.2024 which was rejected on 19.03.2025. The petitioner thereafter filed an appeal on 25.03.2025.Court Decision:The Court held that the rectification application filed under Section 161 and its disposal is a relevant factor for computing the limitation period for filing an appeal under Section 107. The limitation would start from the date of rejection of the rectification application.Since the rectification application was rejected on 19.03.2025 and the appeal was filed on 25.03.2025, the appeal was within time. The appellate authority failed to consider this aspect and erroneously rejected the appeal as time-barred. The Court therefore quashed the appellate order dated 25.04.2025 and remanded the matter to the appellate authority to decide the appeal afresh after granting opportunity of hearing.Cases Referred by Court:· M/s SPK and Co. v. State Tax Officer, W.P.(MD) No.27787 of 2024, Madras High Court, Order dated 22.11.2024
New Kailash Suppliers vs State of Gujarat & Ors. 29-01-2026
Facts (Background):The petitioner challenged the order dated 25.04.2025 passed by the appellate authority rejecting the appeal filed under Section 107 of the GST Act on the ground of delay. Against the original order dated 12.08.2024, the petitioner had filed a rectification application under Section 161 on 05.11.2024 which was rejected on 19.03.2025. The petitioner thereafter filed an appeal on 25.03.2025.Court Decision:The Court held that the rectification application filed under Section 161 and its disposal is a relevant factor for computing the limitation period for filing an appeal under Section 107. The limitation would start from the date of rejection of the rectification application.Since the rectification application was rejected on 19.03.2025 and the appeal was filed on 25.03.2025, the appeal was within time. The appellate authority failed to consider this aspect and erroneously rejected the appeal as time-barred. The Court therefore quashed the appellate order dated 25.04.2025 and remanded the matter to the appellate authority to decide the appeal afresh after granting opportunity of hearing.Cases Referred by Court:· M/s SPK and Co. v. State Tax Officer, W.P.(MD) No.27787 of 2024, Madras High Court, Order dated 22.11.2024
Facts (Background):The petitioner received a show cause notice dated 12.06.2024 proposing levy of tax and penalty for the tax periods 2018-19 to 2020-21. The petitioner challenged the notice before the High Court contending that a single show cause notice cannot be issued covering multiple assessment periods or financial years.Court Decision:The High Court held that assessment proceedings for each taxation period or financial year must be initiated through separate show cause notices. Since the impugned notice covered multiple taxation periods in a single show cause notice, the Court set aside the notice following the earlier judgment of the same Court. The writ petition was allowed with liberty to the authorities to initiate proceedings in accordance with law.Cases Referred by Court:• S.J Constructions vs. Assistant Commissioner & Ors.
Uber India Systems Private Limited vs. Deputy Commissioner of Central Tax & Ors. 28-01-2026
Facts (Background):The petitioner received a show cause notice dated 12.06.2024 proposing levy of tax and penalty for the tax periods 2018-19 to 2020-21. The petitioner challenged the notice before the High Court contending that a single show cause notice cannot be issued covering multiple assessment periods or financial years.Court Decision:The High Court held that assessment proceedings for each taxation period or financial year must be initiated through separate show cause notices. Since the impugned notice covered multiple taxation periods in a single show cause notice, the Court set aside the notice following the earlier judgment of the same Court. The writ petition was allowed with liberty to the authorities to initiate proceedings in accordance with law.Cases Referred by Court:• S.J Constructions vs. Assistant Commissioner & Ors.
The writ petition was allowed and the impugned order dated 11 February 2025 passed under Section 73(9) of the Goods and Services Tax Act, 2017, along with the show cause notice dated 13 November 2024, were quashed and set aside.The Court held that Section 75(7) of the Act, 2017 mandates that the amount of tax, interest and penalty demanded in the order shall not exceed the amount specified in the show cause notice and no demand shall be confirmed on grounds other than those specified in the notice.In the present case, the show cause notice did not quantify any interest for the period April 2020 to March 2021, though interest was later imposed in the adjudication order. The Court held that failure to quantify interest in the show cause notice, despite the relevant period being known to the authorities, was in contravention of Section 75(7).The contention of the GST authorities relying on Section 75(9), that interest is payable whether or not specified in the order, was rejected. The Court held that Section 75(9) applies to non-specification of interest in the order determining tax liability, and not to non-quantification in the show cause notice.Liberty was granted to the authorities to issue a fresh show cause notice in accordance with law and proceed afresh.Cases Referred by Court:M/s Vrinda Automation vs. State of Uttar Pradesh and another, Writ Tax No. 2006 of 2025, decided on 14 May 2025
Ziva Auto Sales Thru. Prop. Akhand Pratap and Another vs State of U.P. Thru. Secy. State Tax Lko. and Another 28-01-2026
The writ petition was allowed and the impugned order dated 11 February 2025 passed under Section 73(9) of the Goods and Services Tax Act, 2017, along with the show cause notice dated 13 November 2024, were quashed and set aside.The Court held that Section 75(7) of the Act, 2017 mandates that the amount of tax, interest and penalty demanded in the order shall not exceed the amount specified in the show cause notice and no demand shall be confirmed on grounds other than those specified in the notice.In the present case, the show cause notice did not quantify any interest for the period April 2020 to March 2021, though interest was later imposed in the adjudication order. The Court held that failure to quantify interest in the show cause notice, despite the relevant period being known to the authorities, was in contravention of Section 75(7).The contention of the GST authorities relying on Section 75(9), that interest is payable whether or not specified in the order, was rejected. The Court held that Section 75(9) applies to non-specification of interest in the order determining tax liability, and not to non-quantification in the show cause notice.Liberty was granted to the authorities to issue a fresh show cause notice in accordance with law and proceed afresh.Cases Referred by Court:M/s Vrinda Automation vs. State of Uttar Pradesh and another, Writ Tax No. 2006 of 2025, decided on 14 May 2025
Facts (Background):The petitioner challenged the show cause notice dated 30.05.2025 issued under Section 74 of the CGST Act alleging suppression of taxable value and short payment of CGST for the period April 2018 to March 2024. The petitioner contended that the notice illegally clubbed multiple financial years in a single show cause notice.Court Decision:The Court held that under the statutory scheme of the CGST Act, assessment and recovery of tax are linked to specific tax periods and financial years. The Act prescribes limitation under Sections 73(10) and 74(10) separately for each financial year, based on the due date of filing the annual return.The Court relied on earlier decisions of the Bombay High Court holding that consolidation of multiple financial years in a single show cause notice is not permissible, as it aggregates different tax periods having separate limitation periods and statutory treatment.Accordingly, the show cause notice dated 30.05.2025 was quashed and set aside. The Court granted liberty to the authorities to issue fresh notices strictly in accordance with Section 74 of the CGST Act, if there is no other legal impediment.Cases Referred by Court:· M/s Milroc Good Earth Developers v. Union of India & Ors., Writ Petition No. 2203 of 2025 (Bombay High Court, Goa Bench)· Rite Water Solutions (India) Ltd. v. Joint Commissioner, CGST & Central Excise, Nagpur & Ors., Writ Petition No. 466 of 2025 (Bombay High Court)· M/s Mathur Polymers v. Union of India & Ors., W.P.(C) 2394 of 2025 (Delhi High Court)· Commissioner of Income-tax, Vidarbha and Marathwada, Nagpur v. Smt. Godavaridevi Saraf Tumsar, 1978 (2) ELTJ 624 (Bombay)
Marfani Steel Impex, through its proprietor Mohammed Irfan Marfani vs The Principal Commissioner, Central Goods and Services Tax & Central Excise, Nagpur & Ors. 17-01-2026
Facts (Background):The petitioner challenged the show cause notice dated 30.05.2025 issued under Section 74 of the CGST Act alleging suppression of taxable value and short payment of CGST for the period April 2018 to March 2024. The petitioner contended that the notice illegally clubbed multiple financial years in a single show cause notice.Court Decision:The Court held that under the statutory scheme of the CGST Act, assessment and recovery of tax are linked to specific tax periods and financial years. The Act prescribes limitation under Sections 73(10) and 74(10) separately for each financial year, based on the due date of filing the annual return.The Court relied on earlier decisions of the Bombay High Court holding that consolidation of multiple financial years in a single show cause notice is not permissible, as it aggregates different tax periods having separate limitation periods and statutory treatment.Accordingly, the show cause notice dated 30.05.2025 was quashed and set aside. The Court granted liberty to the authorities to issue fresh notices strictly in accordance with Section 74 of the CGST Act, if there is no other legal impediment.Cases Referred by Court:· M/s Milroc Good Earth Developers v. Union of India & Ors., Writ Petition No. 2203 of 2025 (Bombay High Court, Goa Bench)· Rite Water Solutions (India) Ltd. v. Joint Commissioner, CGST & Central Excise, Nagpur & Ors., Writ Petition No. 466 of 2025 (Bombay High Court)· M/s Mathur Polymers v. Union of India & Ors., W.P.(C) 2394 of 2025 (Delhi High Court)· Commissioner of Income-tax, Vidarbha and Marathwada, Nagpur v. Smt. Godavaridevi Saraf Tumsar, 1978 (2) ELTJ 624 (Bombay)
