BACKGROUNDThe dispute arose from rejection of refund of transitional ITC. The Court found that the petitioner had not produced the TRAN-1 declaration or satisfactory material establishing availability of the disputed transitional credit in the Electronic Credit Ledger as on 01.07.2017.The writ petition was also filed after expiry of the statutory appeal period. The Court therefore considered whether its discretionary jurisdiction under Article 226 could be invoked to revive the time-barred claim.COURT OBSERVATIONSThe Court held that the transitional credit could support the refund only if the petitioner established that the credit was available in the Electronic Credit Ledger as on 01.07.2017. In the absence of satisfactory proof, interference with the adjudication order was not warranted.The Court further held that Article 226 could not be exercised to resurrect a cause of action which had become unenforceable by limitation. Entertaining the belated writ petition would be contrary to the principle that litigation should attain finality.FINAL VERDICTThe writ petition was dismissed as devoid of merit. The Court declined to interfere with the refund rejection order.CASE REFERRED BY COURTThe same cases were referred to and considered in the judgment:Moriroku UT India (P) Ltd. v. State of U.P. & Ors. — Supreme Court of India — 2008..A.V. Venkateswaran, Collector of Customs, Bombay v. Ramchand Sobhraj Wadhwani — Supreme Court of India — 1961.Rikhab Chand Jain v. Union of India — Supreme Court of India — 2025.Lt. Col. K.C. Chandra Bhanu v. Union of India — High Court of Kerala — 2026.Assistant Commissioner (CT) LTU v. Glaxo Smith Kline Consumer Health Care Ltd. — Supreme Court of India — 2020.
AVT McCormick Ingredients Pvt. Ltd. v. Union of India and Others 20-08-2026
BACKGROUNDThe dispute arose from rejection of refund of transitional ITC. The Court found that the petitioner had not produced the TRAN-1 declaration or satisfactory material establishing availability of the disputed transitional credit in the Electronic Credit Ledger as on 01.07.2017.The writ petition was also filed after expiry of the statutory appeal period. The Court therefore considered whether its discretionary jurisdiction under Article 226 could be invoked to revive the time-barred claim.COURT OBSERVATIONSThe Court held that the transitional credit could support the refund only if the petitioner established that the credit was available in the Electronic Credit Ledger as on 01.07.2017. In the absence of satisfactory proof, interference with the adjudication order was not warranted.The Court further held that Article 226 could not be exercised to resurrect a cause of action which had become unenforceable by limitation. Entertaining the belated writ petition would be contrary to the principle that litigation should attain finality.FINAL VERDICTThe writ petition was dismissed as devoid of merit. The Court declined to interfere with the refund rejection order.CASE REFERRED BY COURTThe same cases were referred to and considered in the judgment:Moriroku UT India (P) Ltd. v. State of U.P. & Ors. — Supreme Court of India — 2008..A.V. Venkateswaran, Collector of Customs, Bombay v. Ramchand Sobhraj Wadhwani — Supreme Court of India — 1961.Rikhab Chand Jain v. Union of India — Supreme Court of India — 2025.Lt. Col. K.C. Chandra Bhanu v. Union of India — High Court of Kerala — 2026.Assistant Commissioner (CT) LTU v. Glaxo Smith Kline Consumer Health Care Ltd. — Supreme Court of India — 2020.
Facts The petitioner, a logistics service provider registered under GST, challenged Section 16(2)(c) and Rule 36(4), contending that they impose an impossible burden on recipients to ensure tax payment by suppliers. It was argued that denial of ITC due to supplier default is arbitrary and beyond the control of the recipient. The petitioner sought declaration of the provisions as unconstitutional or alternatively sought reading down to protect bona fide recipients who complied with statutory requirements. Court Decision:The High Court declined to strike down Section 16(2)(c) and Rule 36(4). The Court held that the provisions cannot be declared unconstitutional. However, relying on precedents, the Court held that bona fide purchasers cannot be denied ITC merely due to default of the selling dealer, unless there is fraud, collusion, or lack of genuineness in the transaction. The matter was considered in light of judicial precedents emphasizing protection of genuine transactions and limiting denial of ITC only in appropriate cases. Cases Referred by Court:• Commissioner of Trade and Taxes v. Arise India Ltd. • On Quest Merchandising India Pvt. Ltd. v. Union of India • Corporation Bank v. Saraswati Abharansala • Gheru Lal Bal Chand v. State of Haryana • State of Karnataka v. Rajesh Jain • Onyx Designs v. Assistant Commissioner of Commercial Taxes
Instakart Services Private Limited v. Union of India & Ors. 09-02-2026
Facts The petitioner, a logistics service provider registered under GST, challenged Section 16(2)(c) and Rule 36(4), contending that they impose an impossible burden on recipients to ensure tax payment by suppliers. It was argued that denial of ITC due to supplier default is arbitrary and beyond the control of the recipient. The petitioner sought declaration of the provisions as unconstitutional or alternatively sought reading down to protect bona fide recipients who complied with statutory requirements. Court Decision:The High Court declined to strike down Section 16(2)(c) and Rule 36(4). The Court held that the provisions cannot be declared unconstitutional. However, relying on precedents, the Court held that bona fide purchasers cannot be denied ITC merely due to default of the selling dealer, unless there is fraud, collusion, or lack of genuineness in the transaction. The matter was considered in light of judicial precedents emphasizing protection of genuine transactions and limiting denial of ITC only in appropriate cases. Cases Referred by Court:• Commissioner of Trade and Taxes v. Arise India Ltd. • On Quest Merchandising India Pvt. Ltd. v. Union of India • Corporation Bank v. Saraswati Abharansala • Gheru Lal Bal Chand v. State of Haryana • State of Karnataka v. Rajesh Jain • Onyx Designs v. Assistant Commissioner of Commercial Taxes
Facts:The petitioner, engaged in procurement and sale of edible oils, purchased oils in bulk and repacked them for sale at 5% GST. Due to higher GST rates on certain inputs, unutilised Input Tax Credit (ITC) accumulated, and refund was claimed under the inverted duty structure. Refund applications were rejected by authorities and appellate authority on the ground that input and output goods were the same. Aggrieved, the petitioner filed the present writ petition challenging rejection of refund.Court Decision:The High Court allowed the petition and set aside the impugned orders rejecting refund.Held that Section 54(3)(ii) of the CGST Act does not prohibit refund merely because input and output goods are the same.Refund is admissible if ITC accumulation is due to higher tax on inputs compared to output supply.Circular No. 135/05/2020 restricting refund where input and output are same was held inapplicable and later restriction removed by Circular No. 173/05/2022.The 2022 Circular being beneficial and clarificatory was held retrospectively applicable.“Net ITC” includes all inputs irrespective of tax rates as per Rule 89(5).Cases Referred by Court:Indian Oil Corporation Ltd. vs. Commissioner of CGST (Delhi High Court, 2023)Suchitra Components Ltd. vs. CCE, Guntur (2006)K.P. Varghese vs. Income Tax Officer (1981)Union of India vs. VKC Footsteps India Pvt. Ltd. (Supreme Court)Baker Hughes Asia Pacific Ltd. vs. Union of IndiaShivaco Associates vs. Joint Commissioner of State TaxBMG Informatics Pvt. Ltd. vs. Union of IndiaMalabar Fuel Corporation vs. ACCT & CEMO Industries vs. Union of IndiaEveready Spinning Mills Pvt. Ltd. vs. ACCT
South Indian Oil Corporation vs. The Assistant Commissioner, 12-12-2025
Facts:The petitioner, engaged in procurement and sale of edible oils, purchased oils in bulk and repacked them for sale at 5% GST. Due to higher GST rates on certain inputs, unutilised Input Tax Credit (ITC) accumulated, and refund was claimed under the inverted duty structure. Refund applications were rejected by authorities and appellate authority on the ground that input and output goods were the same. Aggrieved, the petitioner filed the present writ petition challenging rejection of refund.Court Decision:The High Court allowed the petition and set aside the impugned orders rejecting refund.Held that Section 54(3)(ii) of the CGST Act does not prohibit refund merely because input and output goods are the same.Refund is admissible if ITC accumulation is due to higher tax on inputs compared to output supply.Circular No. 135/05/2020 restricting refund where input and output are same was held inapplicable and later restriction removed by Circular No. 173/05/2022.The 2022 Circular being beneficial and clarificatory was held retrospectively applicable.“Net ITC” includes all inputs irrespective of tax rates as per Rule 89(5).Cases Referred by Court:Indian Oil Corporation Ltd. vs. Commissioner of CGST (Delhi High Court, 2023)Suchitra Components Ltd. vs. CCE, Guntur (2006)K.P. Varghese vs. Income Tax Officer (1981)Union of India vs. VKC Footsteps India Pvt. Ltd. (Supreme Court)Baker Hughes Asia Pacific Ltd. vs. Union of IndiaShivaco Associates vs. Joint Commissioner of State TaxBMG Informatics Pvt. Ltd. vs. Union of IndiaMalabar Fuel Corporation vs. ACCT & CEMO Industries vs. Union of IndiaEveready Spinning Mills Pvt. Ltd. vs. ACCT
Facts:An inspection was conducted at the premises of the assesse on 08.03.2012 in relation to transactions in Indian Made Foreign Liquor and Foreign Made Foreign Liquor. Based on the inspection, a show cause notice dated 20.12.2018 proposing penalty under Section 45A of the Kerala General Sales Tax Act, 1963 was issued. The assessee challenged the notice contending that it was issued after an unreasonable delay and therefore barred by limitation.Court Decision:The Division Bench held that even though Section 45A of the Act does not prescribe any specific limitation period for initiating penalty proceedings, such proceedings must be initiated within a reasonable period of time. Referring to other provisions of the Act, the Court observed that the statute prescribes a five-year period for completion of assessments and escaped assessments, which can be treated as a reasonable benchmark.Since the inspection related to the assessment year 2011-12 and the show cause notice was issued only on 20.12.2018, the notice was issued beyond the reasonable period of five years. The Court further held that repeated notices issued by the department seeking production of records could not extend the limitation period. Accordingly, the writ appeal was allowed, the judgment of the Single Judge was set aside, and the show cause notice was quashed.Cases Referred by Court:State of Punjab & Others vs. Bhatinda District Co-operative Milk Producers Union Ltd.W.A. No. 344 of 2017 (Kerala High Court)W.P.(C) No. 2253 of 2017 (Kerala High Court)
Taj Garden Retreat vs. State of Kerala & Anr. 23-10-2025
Facts:An inspection was conducted at the premises of the assesse on 08.03.2012 in relation to transactions in Indian Made Foreign Liquor and Foreign Made Foreign Liquor. Based on the inspection, a show cause notice dated 20.12.2018 proposing penalty under Section 45A of the Kerala General Sales Tax Act, 1963 was issued. The assessee challenged the notice contending that it was issued after an unreasonable delay and therefore barred by limitation.Court Decision:The Division Bench held that even though Section 45A of the Act does not prescribe any specific limitation period for initiating penalty proceedings, such proceedings must be initiated within a reasonable period of time. Referring to other provisions of the Act, the Court observed that the statute prescribes a five-year period for completion of assessments and escaped assessments, which can be treated as a reasonable benchmark.Since the inspection related to the assessment year 2011-12 and the show cause notice was issued only on 20.12.2018, the notice was issued beyond the reasonable period of five years. The Court further held that repeated notices issued by the department seeking production of records could not extend the limitation period. Accordingly, the writ appeal was allowed, the judgment of the Single Judge was set aside, and the show cause notice was quashed.Cases Referred by Court:State of Punjab & Others vs. Bhatinda District Co-operative Milk Producers Union Ltd.W.A. No. 344 of 2017 (Kerala High Court)W.P.(C) No. 2253 of 2017 (Kerala High Court)
BackgroundThe Respondent-assessee was subjected to proceedings under Section 74(9) of the CGST Act. A tax and penalty of more than Rs. 9.40 Crores was imposed upon him. During the enquiry, the proper officer recorded statements of third parties and entirely based his opinion of guilt on those statements, which were subsequently relied upon while passing the impugned order. The assessee requested an opportunity to cross-examine those persons — a request that was denied. Despite the availability of an appellate remedy, the assessee filed a Writ Petition before the Single Judge of the Kerala High Court alleging a serious infraction of the principles of natural justice. The Single Judge allowed the Writ Petition and set aside the impugned order, relying on Andaman Timber Industries v. Commissioner of Central Excise, Kolkata-II [(2016) 15 SCC 785]. The Revenue preferred the present Writ Appeal challenging that judgment.Relevant FactsThe Revenue contended that Section 74 of the CGST Act contains no express provision for cross-examination of witnesses, and therefore no such right can be insisted upon as a matter of law. The Revenue further argued that the Single Judge wrongly relied on Andaman Timber Industries, which was rendered without considering the binding three-Judge Bench decisions of the Supreme Court in Kanungo & Co. v. Collector of Customs [1983 (13) ELT 1486 (SC)] and Surjeet Singh Chhabra v. Union of India [1997 (89) ELT 646 (SC)]. The assessee countered that the principles of natural justice must be read into the statute regardless of express provision, and that denial of cross-examination — when statements of third parties formed the entire evidentiary foundation against him — rendered the proceedings void. The Division Bench also considered, suo motu, that certain persons were arrayed as co-noticees in the same proceedings and distinguished the right of cross-examination in respect of independent witnesses from co-noticees.Court Observations (Verbatim)"The question of maintainability of the writ petition, despite the existence of an alternate remedy, is no longer res integra...when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation." — However, since the challenge was on the ground of violation of natural justice, the writ petition was held to be perfectly maintainable.— Para 9 & 10 (relying on CIT v. Chhabil Dass Agarwal)"It is now settled law that in every quasi-judicial proceedings, the rule of natural justice has to be followed. The rule of natural justice is the tenet of every adjudication proceedings, a violation of which renders the proceedings void. When courts are called upon to decide the validity of quasi-judicial proceedings on the ground of violation of principles of natural justice, it cannot shut its eyes and adopt a pedantic approach and hold that unless the said principle is specifically extended under plenary legislation or the rules framed under it, the insistence of the principles is not mandatory."— Para 15"The entire basis for the formation of an opinion of guilt against the petitioner was the statements of third parties recorded by the proper officer. If the writ petitioner was to prefer an effective representation against the proposals in the notice, he had to know the basis of the allegations against him and test the evidence used against him. It was therefore imperative for the proper officer to have granted the opportunity of cross-examination to the petitioner."— Para 14"A breach of the principles of natural justice strikes at the fundamental core of procedural fairness, rendering the decision invalid unless exceptional circumstances justify such deviation...the denial of natural justice at the initial stage cannot be cured at the appellate stage...the principles of natural justice are the cornerstone of justice, ensuring that no person is condemned unheard."— Para 16 (relying on Krishnadatt Awasthy v. State of M.P., 2025 SCC Online 179)"Principles of natural justice that are reflected in Article 311, are not an empty incantation. They form the very bedrock of Article 14 and any violation of these principles tantamounts to a violation of Article 14 of the Constitution...principles of natural justice guaranteed under Article 14, prohibit a decision-making adjudicatory authority from taking any arbitrary action, be it substantive or procedural in nature."— Para 22 (relying on Aureliano Fernandes v. State of Goa [(2024) 1 SCC 632], Para 35-36)"We hold that in appropriate cases, extending an opportunity of cross-examination in a proceedings under Section 74(9) of the CGST Act 2017 is an integral part of the principles of natural justice, a violation of which will render the proceedings void."— Para 25 (Court's final conclusion)Important Limitation (Para 24): The right to cross-examine does NOT extend to co-noticees. The assessee can only request the proper officer to supply copies of replies submitted by co-noticees — not seek their cross-examination.Final VerdictWrit Appeal filed by Revenue dismissed. Single Judge's order setting aside the impugned GST order confirmed and upheld. Division Bench held that in proceedings under Section 74(9) of the CGST Act, the right to cross-examine independent witnesses whose statements form the basis of the impugned order is an integral part of the principles of natural justice — denial thereof renders the order void. No costs.Cases Referred by CourtAndaman Timber Industries v. Commissioner of Central Excise, Kolkata-IIRelied upon(2016) 15 SCC 785 — Supreme Court — Single Judge's basis for allowing writ petition; upheld by Division BenchKanungo & Co. v. Collector of Customs, Calcutta and OthersDistinguished1983 (13) ELT 1486 (SC) — Supreme Court — Rendered under Sea Customs Act, 1878 (repealed); held inapplicable; cannot have universal applicationSurjeet Singh Chhabra v. Union of IndiaDistinguished1997 (89) ELT 646 (SC) — Supreme Court — Relied upon by Revenue; not accepted by Division BenchCommissioner of Income Tax & Ors. v. Chhabil Dass AgarwalRelied upon(2014) 1 SCC 603 — Supreme Court — Four exceptional circumstances where writ lies despite alternate remedy, including violation of natural justiceKrishnadatt Awasthy v. State of M.P. and OthersRelied upon3-Judge Bench2025 SCC Online 179 — Supreme Court — Breach of natural justice strikes at fundamental core of procedural fairness; denial at initial stage cannot be cured at appellate stageAyaaubkhan Noorkhan Pathan v. State of MaharashtraRelied upon(2013) 4 SCC 465 — Supreme Court — Non-extension of cross-examination opportunity vitiates decision; part of principles of natural justiceAjay Saraogi v. Union of IndiaRelied upon2024 (136) GSTR 330 — Calcutta High Court (Division Bench) — Right of cross-examination imbued under Customs Act; principles of natural justice not excludedUnion of India & Another v. Tulsiram PatelRelied uponConstitution Bench(1985) 3 SCC 398 — Supreme Court — Principles of natural justice cannot be altogether excluded even by plenary/subordinate legislation; if excluded, such rule is ultra viresKothari Filaments and Another v. Commissioner of Customs (Port) Kolkata and OthersRelied upon(2009) 2 SCC 192 — Supreme Court — Customs Act does not specifically exclude natural justice; denial of cross-examination of relied-upon witnesses renders confiscation order invalidAureliano Fernandes v. State of Goa and OthersRelied upon(2024) 1 SCC 632 — Supreme Court — Natural justice is not empty incantation; forms bedrock of Article 14; violation tantamounts to violation of Article 14; Audi Alteram Partem is a twin anchor of natural justiceManeka Gandhi v. Union of IndiaRelied upon7-Judge Bench(1978) 1 SCC 248 — Supreme Court — Referenced within Aureliano Fernandes; life and liberty cannot be restricted except by procedure that is just, fair and reasonable
The Joint Commissioner, Central Tax & Central Excise & Ors. v. Nishad K.U. 17-07-2025
BackgroundThe Respondent-assessee was subjected to proceedings under Section 74(9) of the CGST Act. A tax and penalty of more than Rs. 9.40 Crores was imposed upon him. During the enquiry, the proper officer recorded statements of third parties and entirely based his opinion of guilt on those statements, which were subsequently relied upon while passing the impugned order. The assessee requested an opportunity to cross-examine those persons — a request that was denied. Despite the availability of an appellate remedy, the assessee filed a Writ Petition before the Single Judge of the Kerala High Court alleging a serious infraction of the principles of natural justice. The Single Judge allowed the Writ Petition and set aside the impugned order, relying on Andaman Timber Industries v. Commissioner of Central Excise, Kolkata-II [(2016) 15 SCC 785]. The Revenue preferred the present Writ Appeal challenging that judgment.Relevant FactsThe Revenue contended that Section 74 of the CGST Act contains no express provision for cross-examination of witnesses, and therefore no such right can be insisted upon as a matter of law. The Revenue further argued that the Single Judge wrongly relied on Andaman Timber Industries, which was rendered without considering the binding three-Judge Bench decisions of the Supreme Court in Kanungo & Co. v. Collector of Customs [1983 (13) ELT 1486 (SC)] and Surjeet Singh Chhabra v. Union of India [1997 (89) ELT 646 (SC)]. The assessee countered that the principles of natural justice must be read into the statute regardless of express provision, and that denial of cross-examination — when statements of third parties formed the entire evidentiary foundation against him — rendered the proceedings void. The Division Bench also considered, suo motu, that certain persons were arrayed as co-noticees in the same proceedings and distinguished the right of cross-examination in respect of independent witnesses from co-noticees.Court Observations (Verbatim)"The question of maintainability of the writ petition, despite the existence of an alternate remedy, is no longer res integra...when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation." — However, since the challenge was on the ground of violation of natural justice, the writ petition was held to be perfectly maintainable.— Para 9 & 10 (relying on CIT v. Chhabil Dass Agarwal)"It is now settled law that in every quasi-judicial proceedings, the rule of natural justice has to be followed. The rule of natural justice is the tenet of every adjudication proceedings, a violation of which renders the proceedings void. When courts are called upon to decide the validity of quasi-judicial proceedings on the ground of violation of principles of natural justice, it cannot shut its eyes and adopt a pedantic approach and hold that unless the said principle is specifically extended under plenary legislation or the rules framed under it, the insistence of the principles is not mandatory."— Para 15"The entire basis for the formation of an opinion of guilt against the petitioner was the statements of third parties recorded by the proper officer. If the writ petitioner was to prefer an effective representation against the proposals in the notice, he had to know the basis of the allegations against him and test the evidence used against him. It was therefore imperative for the proper officer to have granted the opportunity of cross-examination to the petitioner."— Para 14"A breach of the principles of natural justice strikes at the fundamental core of procedural fairness, rendering the decision invalid unless exceptional circumstances justify such deviation...the denial of natural justice at the initial stage cannot be cured at the appellate stage...the principles of natural justice are the cornerstone of justice, ensuring that no person is condemned unheard."— Para 16 (relying on Krishnadatt Awasthy v. State of M.P., 2025 SCC Online 179)"Principles of natural justice that are reflected in Article 311, are not an empty incantation. They form the very bedrock of Article 14 and any violation of these principles tantamounts to a violation of Article 14 of the Constitution...principles of natural justice guaranteed under Article 14, prohibit a decision-making adjudicatory authority from taking any arbitrary action, be it substantive or procedural in nature."— Para 22 (relying on Aureliano Fernandes v. State of Goa [(2024) 1 SCC 632], Para 35-36)"We hold that in appropriate cases, extending an opportunity of cross-examination in a proceedings under Section 74(9) of the CGST Act 2017 is an integral part of the principles of natural justice, a violation of which will render the proceedings void."— Para 25 (Court's final conclusion)Important Limitation (Para 24): The right to cross-examine does NOT extend to co-noticees. The assessee can only request the proper officer to supply copies of replies submitted by co-noticees — not seek their cross-examination.Final VerdictWrit Appeal filed by Revenue dismissed. Single Judge's order setting aside the impugned GST order confirmed and upheld. Division Bench held that in proceedings under Section 74(9) of the CGST Act, the right to cross-examine independent witnesses whose statements form the basis of the impugned order is an integral part of the principles of natural justice — denial thereof renders the order void. No costs.Cases Referred by CourtAndaman Timber Industries v. Commissioner of Central Excise, Kolkata-IIRelied upon(2016) 15 SCC 785 — Supreme Court — Single Judge's basis for allowing writ petition; upheld by Division BenchKanungo & Co. v. Collector of Customs, Calcutta and OthersDistinguished1983 (13) ELT 1486 (SC) — Supreme Court — Rendered under Sea Customs Act, 1878 (repealed); held inapplicable; cannot have universal applicationSurjeet Singh Chhabra v. Union of IndiaDistinguished1997 (89) ELT 646 (SC) — Supreme Court — Relied upon by Revenue; not accepted by Division BenchCommissioner of Income Tax & Ors. v. Chhabil Dass AgarwalRelied upon(2014) 1 SCC 603 — Supreme Court — Four exceptional circumstances where writ lies despite alternate remedy, including violation of natural justiceKrishnadatt Awasthy v. State of M.P. and OthersRelied upon3-Judge Bench2025 SCC Online 179 — Supreme Court — Breach of natural justice strikes at fundamental core of procedural fairness; denial at initial stage cannot be cured at appellate stageAyaaubkhan Noorkhan Pathan v. State of MaharashtraRelied upon(2013) 4 SCC 465 — Supreme Court — Non-extension of cross-examination opportunity vitiates decision; part of principles of natural justiceAjay Saraogi v. Union of IndiaRelied upon2024 (136) GSTR 330 — Calcutta High Court (Division Bench) — Right of cross-examination imbued under Customs Act; principles of natural justice not excludedUnion of India & Another v. Tulsiram PatelRelied uponConstitution Bench(1985) 3 SCC 398 — Supreme Court — Principles of natural justice cannot be altogether excluded even by plenary/subordinate legislation; if excluded, such rule is ultra viresKothari Filaments and Another v. Commissioner of Customs (Port) Kolkata and OthersRelied upon(2009) 2 SCC 192 — Supreme Court — Customs Act does not specifically exclude natural justice; denial of cross-examination of relied-upon witnesses renders confiscation order invalidAureliano Fernandes v. State of Goa and OthersRelied upon(2024) 1 SCC 632 — Supreme Court — Natural justice is not empty incantation; forms bedrock of Article 14; violation tantamounts to violation of Article 14; Audi Alteram Partem is a twin anchor of natural justiceManeka Gandhi v. Union of IndiaRelied upon7-Judge Bench(1978) 1 SCC 248 — Supreme Court — Referenced within Aureliano Fernandes; life and liberty cannot be restricted except by procedure that is just, fair and reasonable
Facts :The petitioner challenged an order passed under Section 73 of the CGST/SGST Act on the ground that proper notice was not served. It was contended that although the show cause notice was uploaded on the GST portal, it was not served through other modes under Section 169(1)(a) to (c). The petitioner argued that mere portal upload does not constitute valid service and the order violated principles of natural justice.Court Decision:The Court held that Section 169 permits service of notice through any one of the prescribed modes, including making it available on the common portal under Section 169(1)(d). It ruled that service through the portal constitutes valid service and is sufficient compliance under the statute. Relying on the Division Bench decision in Sunil Kumar K., the Court found no infirmity in the proceedings and dismissed the writ petition, granting liberty to pursue statutory remedies.Cases Referred:Sunil Kumar K. v. State Tax Officer-I, Kottarakkara
T.K. Navas v. Commissioner of Goods and Services Taxes & Ors. 09-06-2025
Facts :The petitioner challenged an order passed under Section 73 of the CGST/SGST Act on the ground that proper notice was not served. It was contended that although the show cause notice was uploaded on the GST portal, it was not served through other modes under Section 169(1)(a) to (c). The petitioner argued that mere portal upload does not constitute valid service and the order violated principles of natural justice.Court Decision:The Court held that Section 169 permits service of notice through any one of the prescribed modes, including making it available on the common portal under Section 169(1)(d). It ruled that service through the portal constitutes valid service and is sufficient compliance under the statute. Relying on the Division Bench decision in Sunil Kumar K., the Court found no infirmity in the proceedings and dismissed the writ petition, granting liberty to pursue statutory remedies.Cases Referred:Sunil Kumar K. v. State Tax Officer-I, Kottarakkara
Facts:The petitioner association challenged GST liability on services rendered to its members under various welfare schemes. It relied on the doctrine of mutuality, contending that services by an association to its members are not taxable. Amendments introduced by the Finance Act, 2021 inserted Section 7(1)(aa) deeming such transactions as taxable supplies retrospectively from 01.07.2017. The Single Judge upheld the validity of levy but struck down the retrospective operation, leading to cross appeals by both parties. Court Decision:The Division Bench upheld the constitutional validity of Sections 2(17)(e) and 7(1)(aa) of the CGST/KGST Acts, holding that the legislature was competent to treat transactions between an association and its members as taxable supplies. It held that the amendment validly removes the basis of the doctrine of mutuality for GST purposes. However, the Court held that giving retrospective effect to the amendment from 01.07.2017 was not legally sustainable on principles of fairness. Accordingly, retrospective operation of the amendment was set aside, while upholding its prospective applicability. Cases Referred by Court:• State of West Bengal v. Calcutta Club Ltd. • Ranchi Club Ltd. v. Chief Commissioner of Central Excise & Service Tax • Secretary, Madras Gymkhana Club Employees Union v. Management of Gymkhana Club • Cricket Club of India Ltd. v. Bombay Labour Union • JCTO v. Young Men’s Indian Association • State of Madras v. Gannon Dunkerley & Co. • Union of India v. Martin Lottery Agencies Ltd. • Jayam & Co. v. State of Tamil Nadu • Rai Ramakrishna v. State of Bihar • Star India Pvt. Ltd. v. CCE • Union of India v. Exide Industries Ltd.
Indian Medical Association, Kerala State Branch v. Union of India & Ors. 11-04-2025
Facts:The petitioner association challenged GST liability on services rendered to its members under various welfare schemes. It relied on the doctrine of mutuality, contending that services by an association to its members are not taxable. Amendments introduced by the Finance Act, 2021 inserted Section 7(1)(aa) deeming such transactions as taxable supplies retrospectively from 01.07.2017. The Single Judge upheld the validity of levy but struck down the retrospective operation, leading to cross appeals by both parties. Court Decision:The Division Bench upheld the constitutional validity of Sections 2(17)(e) and 7(1)(aa) of the CGST/KGST Acts, holding that the legislature was competent to treat transactions between an association and its members as taxable supplies. It held that the amendment validly removes the basis of the doctrine of mutuality for GST purposes. However, the Court held that giving retrospective effect to the amendment from 01.07.2017 was not legally sustainable on principles of fairness. Accordingly, retrospective operation of the amendment was set aside, while upholding its prospective applicability. Cases Referred by Court:• State of West Bengal v. Calcutta Club Ltd. • Ranchi Club Ltd. v. Chief Commissioner of Central Excise & Service Tax • Secretary, Madras Gymkhana Club Employees Union v. Management of Gymkhana Club • Cricket Club of India Ltd. v. Bombay Labour Union • JCTO v. Young Men’s Indian Association • State of Madras v. Gannon Dunkerley & Co. • Union of India v. Martin Lottery Agencies Ltd. • Jayam & Co. v. State of Tamil Nadu • Rai Ramakrishna v. State of Bihar • Star India Pvt. Ltd. v. CCE • Union of India v. Exide Industries Ltd.
Facts:The respondent-assessee challenged a show cause notice dated 29.07.2024 issued under Section 74 of the CGST Act demanding tax, interest and penalty for the financial years 2017-18 to 2023-24 through a single consolidated notice. The Single Judge permitted the authority to pass an order for FY 2017-18 within limitation and directed separate adjudication orders for the remaining years. The department filed a writ appeal challenging that direction.Court Decision:The Division Bench held that under Section 74 of the CGST Act the determination of tax is linked to the financial year to which the alleged tax evasion relates, and the limitation for passing adjudication orders is computed separately for each financial year from the due date of filing the annual return.The Court held that although the statute does not expressly prohibit issuance of a consolidated show cause notice, the proper officer should ideally issue separate notices for different financial years because the limitation for adjudication differs for each year. A consolidated notice covering several financial years could prejudice the assessee by curtailing the effective time available for defence and evidence.Finding no error in the reasoning of the Single Judge, the Court dismissed the writ appeal and upheld the direction permitting separate adjudication orders for each financial year after granting opportunity of hearing.Cases Referred by Court: CIT v. Simon Carves Ltd., (1976) 4 SCC 435
Joint Commissioner (Intelligence & Enforcement) & Anr. vs Lakshmi Mobile Accessories 05-02-2025
Facts:The respondent-assessee challenged a show cause notice dated 29.07.2024 issued under Section 74 of the CGST Act demanding tax, interest and penalty for the financial years 2017-18 to 2023-24 through a single consolidated notice. The Single Judge permitted the authority to pass an order for FY 2017-18 within limitation and directed separate adjudication orders for the remaining years. The department filed a writ appeal challenging that direction.Court Decision:The Division Bench held that under Section 74 of the CGST Act the determination of tax is linked to the financial year to which the alleged tax evasion relates, and the limitation for passing adjudication orders is computed separately for each financial year from the due date of filing the annual return.The Court held that although the statute does not expressly prohibit issuance of a consolidated show cause notice, the proper officer should ideally issue separate notices for different financial years because the limitation for adjudication differs for each year. A consolidated notice covering several financial years could prejudice the assessee by curtailing the effective time available for defence and evidence.Finding no error in the reasoning of the Single Judge, the Court dismissed the writ appeal and upheld the direction permitting separate adjudication orders for each financial year after granting opportunity of hearing.Cases Referred by Court: CIT v. Simon Carves Ltd., (1976) 4 SCC 435
Facts:The petitioner challenged the show cause notice dated 29.07.2024 issued under Section 74 of the CGST Act proposing tax, interest and penalty for the financial years 2018-19 to 2023-24. The petitioner apprehended that the authorities would pass a composite adjudication order covering multiple financial years and sought direction for passing separate orders and granting opportunity for cross-examination.Court Decision:The Court held that at the stage of show cause notice there was no material to assume that the authorities would adopt a procedure contrary to law or deny opportunity of hearing. Therefore, interference with the show cause notice was not warranted.However, considering the limitation period for passing order for the financial year 2017-18, the Court permitted the authority to pass an order for that year within the prescribed limitation after granting opportunity of hearing. For the subsequent financial years, the Court observed that separate adjudication orders ought to be issued for each year even if the show cause notice is composite, and directed the authority to pass separate orders after granting reasonable opportunity of hearing. The writ petition was disposed of with these directions.Cases Referred by Court:· W.P.(C) No.35156 of 2024 (Kerala High Court)
Lakshmi Mobile Accessories vs Joint Commissioner (Intelligence & Enforcement) & Anr. 28-01-2025
Facts:The petitioner challenged the show cause notice dated 29.07.2024 issued under Section 74 of the CGST Act proposing tax, interest and penalty for the financial years 2018-19 to 2023-24. The petitioner apprehended that the authorities would pass a composite adjudication order covering multiple financial years and sought direction for passing separate orders and granting opportunity for cross-examination.Court Decision:The Court held that at the stage of show cause notice there was no material to assume that the authorities would adopt a procedure contrary to law or deny opportunity of hearing. Therefore, interference with the show cause notice was not warranted.However, considering the limitation period for passing order for the financial year 2017-18, the Court permitted the authority to pass an order for that year within the prescribed limitation after granting opportunity of hearing. For the subsequent financial years, the Court observed that separate adjudication orders ought to be issued for each year even if the show cause notice is composite, and directed the authority to pass separate orders after granting reasonable opportunity of hearing. The writ petition was disposed of with these directions.Cases Referred by Court:· W.P.(C) No.35156 of 2024 (Kerala High Court)
BackgroundThe writ petition had challenged Section 16(2)(c) of the CGST/SGST Act to the extent that it required an assessee claiming ITC to ensure that the supplier of the inputs had actually paid the output tax to the Government. The learned Single Judge had rejected the challenge to the statutory provision in a batch of writ petitions. The Division Bench had earlier affirmed that decision in Nahasshukoor v. Assistant Commissioner II Circle, Alappuzha and Others.The appellant also submitted that certain mistakes made while entering figures in Form GSTR-3B could not be brought to the notice of the learned Single Judge when the writ petition was heard. The Single Judge had, however, granted liberty to claim the benefit of two CBIC circulars before the appropriate authority and directed the authority to examine and process the claim. The appellant sought an opportunity to place the GSTR-3B errors also before the assessing authority along with the claims under the circulars.Court ObservationThe Court held that the principal challenge to Section 16(2)(c) had already received approval from a Division Bench in Nahasshukoor. Consequently, the challenge to the statutory provision was bound to fail.However, the Court accepted the appellant’s request regarding the mistakes in Form GSTR-3B. It considered it appropriate to extend the time granted by the Single Judge by one month so that the appellant could claim the benefit of the two specified circulars and also raise the issue concerning errors in Form GSTR-3B before the adjudicating authority.Final VerdictThe writ appeal was dismissed insofar as it challenged the statutory provisions, and the findings of the learned Single Judge were otherwise upheld.The Court extended by one month from 6 November 2024 the time for approaching the assessing authority to claim the benefit of Circular Nos. 183/15/2022-GST and 193/5/2023-GST and to raise the issue of errors in Form GSTR-3B. The assessing authority was directed to consider and adjudicate the matter expeditiously. The writ appeal was accordingly disposed of.Cases Referred by CourtNahasshukoor v. Assistant Commissioner II Circle, Alappuzha and Others — High Court of Kerala — 2024.
Muhammed Abdul Saini v. State Tax Officer & Others 06-11-2024
BackgroundThe writ petition had challenged Section 16(2)(c) of the CGST/SGST Act to the extent that it required an assessee claiming ITC to ensure that the supplier of the inputs had actually paid the output tax to the Government. The learned Single Judge had rejected the challenge to the statutory provision in a batch of writ petitions. The Division Bench had earlier affirmed that decision in Nahasshukoor v. Assistant Commissioner II Circle, Alappuzha and Others.The appellant also submitted that certain mistakes made while entering figures in Form GSTR-3B could not be brought to the notice of the learned Single Judge when the writ petition was heard. The Single Judge had, however, granted liberty to claim the benefit of two CBIC circulars before the appropriate authority and directed the authority to examine and process the claim. The appellant sought an opportunity to place the GSTR-3B errors also before the assessing authority along with the claims under the circulars.Court ObservationThe Court held that the principal challenge to Section 16(2)(c) had already received approval from a Division Bench in Nahasshukoor. Consequently, the challenge to the statutory provision was bound to fail.However, the Court accepted the appellant’s request regarding the mistakes in Form GSTR-3B. It considered it appropriate to extend the time granted by the Single Judge by one month so that the appellant could claim the benefit of the two specified circulars and also raise the issue concerning errors in Form GSTR-3B before the adjudicating authority.Final VerdictThe writ appeal was dismissed insofar as it challenged the statutory provisions, and the findings of the learned Single Judge were otherwise upheld.The Court extended by one month from 6 November 2024 the time for approaching the assessing authority to claim the benefit of Circular Nos. 183/15/2022-GST and 193/5/2023-GST and to raise the issue of errors in Form GSTR-3B. The assessing authority was directed to consider and adjudicate the matter expeditiously. The writ appeal was accordingly disposed of.Cases Referred by CourtNahasshukoor v. Assistant Commissioner II Circle, Alappuzha and Others — High Court of Kerala — 2024.
