Facts:The petitioner was issued a show cause notice seeking recovery of alleged wrongful ITC availed by his deceased father. The father had passed away in September 2022, while the notice was issued in April 2024. The petitioner contended that recovery proceedings under Sections 74 and 93 could not be initiated against him for liabilities of the deceased. It was also argued that the adjudication order was passed without considering his reply, violating principles of natural justice. Court Decision:The Court held that considering the facts, the petitioner should be granted an opportunity of hearing before the adjudicating authority. It directed the petitioner to appear before the authority and allowed him to raise all contentions, including on applicability of Sections 74 and 93. The authority was directed to pass a fresh order after granting hearing and considering all submissions. All issues, including challenge to statutory provisions, were kept open.
Vinay Hiroo Thadani v. Deputy Commissioner of CGST & Central Excise & Ors. 04-03-2026
Facts:The petitioner was issued a show cause notice seeking recovery of alleged wrongful ITC availed by his deceased father. The father had passed away in September 2022, while the notice was issued in April 2024. The petitioner contended that recovery proceedings under Sections 74 and 93 could not be initiated against him for liabilities of the deceased. It was also argued that the adjudication order was passed without considering his reply, violating principles of natural justice. Court Decision:The Court held that considering the facts, the petitioner should be granted an opportunity of hearing before the adjudicating authority. It directed the petitioner to appear before the authority and allowed him to raise all contentions, including on applicability of Sections 74 and 93. The authority was directed to pass a fresh order after granting hearing and considering all submissions. All issues, including challenge to statutory provisions, were kept open.
BACKGROUND The petitioner-assessee held a 95-year lease of an industrial plot allotted by MIDC. In exercise of the transferable rights under the lease deed, the petitioner assigned the entire leasehold rights in favour of a third party with prior consent of MIDC, receiving consideration for the said assignment. The Department issued a Show Cause Notice under Section 73(5) of the Maharashtra GST Act, 2017 alleging that the petitioner had concealed this transaction and had not paid GST on it. The Department's case was that this assignment amounted to supply of services classifiable under other miscellaneous services taxable at 18% under Entry No. 35 of Notification No. 11/2017-CT (Rate). It was also admitted in the notice itself that the transaction did not amount to a sub-lease, as the petitioner's rights stood extinguished upon assignment. An adjudication order was passed on 30.12.2025 confirming the demand, which was challenged before the High Court.CRUCIAL COURT OBSERVATIONS (Verbatim)"In the case before us, the transaction under question is assignment of leasehold rights by the petitioner in favour of assignee, which, admittedly, is not a lease nor does it amount to sub-lease. In fact, in the show cause notice issued by respondent no.1, he has categorically mentioned that the transaction under question does not amount to sub-lease, as the petitioner's right stands extinguished by the said transaction.""Such petty services, in our view, cannot be extended to assignment of leasehold rights in an immovable property, to term it to be other miscellaneous services, as classified under Clause at Sr. No. 35 of the Notification. In that view of the matter, the notice could be said to be bad in law on this count alone.""This transaction, on the face of record, constitute transfer of immovable property by the petitioner to M/s. Kothari Belting Company. The transaction pertains exclusively to transfer of benefits arising out of an immovable property and has no nexus whatsoever with the business of the petitioner Company. Consequently, the essential element of supply of service, in the course of business or in furtherance of business, is completely absent.""We subscribe to this view for the reasons quoted in earlier part of our judgment so also because the view, in our considered opinion, is in consonance with the provisions of law on supply of services." (referring to Gujarat HC conclusion)"Further, the law laid down by the Gujarat High Court is binding on the authorities, i.e. the respondents in terms of the judgment of this Court in the case of Commissioner of Income-tax, Vidarbha and Marathwada, Nagpur Vs. Smt. Godavaridevi Saraf Tumsar [1978 (2) ELTJ 624 Bombay], wherein, the Court held that until a contrary decision is given by any other competent High Court, which is binding on Tribunal in the State of Bombay, it has to proceed on the footing that the law declared by the High Court, though of another State, is the final law of land.""We subscribe to the finding of the Gujarat High Court that the assignment by sale and transfer of leasehold rights of the plot of land allotted by the Corporation, like GIDC or MIDC to the lessee in favour of third party-assignee for a consideration, shall be assignment/sale/transfer of benefits arising out of immovable property by the lessee-assignor in favour of third party, and in such circumstances, the transaction would not be subject to levy of GST in terms of the GST Act."FINAL VERDICT The Writ Petition was allowed, the adjudication order dated 30.12.2025 was quashed and set aside, holding that assignment of leasehold rights in an MIDC plot constitutes transfer of benefits arising out of immovable property and is not liable to GST as it lacks the essential element of supply in the course or furtherance of business. 👍
Hindustan Equipment Craft vs. Assistant Commissioner of State Tax & Ors. 27-02-2026
BACKGROUND The petitioner-assessee held a 95-year lease of an industrial plot allotted by MIDC. In exercise of the transferable rights under the lease deed, the petitioner assigned the entire leasehold rights in favour of a third party with prior consent of MIDC, receiving consideration for the said assignment. The Department issued a Show Cause Notice under Section 73(5) of the Maharashtra GST Act, 2017 alleging that the petitioner had concealed this transaction and had not paid GST on it. The Department's case was that this assignment amounted to supply of services classifiable under other miscellaneous services taxable at 18% under Entry No. 35 of Notification No. 11/2017-CT (Rate). It was also admitted in the notice itself that the transaction did not amount to a sub-lease, as the petitioner's rights stood extinguished upon assignment. An adjudication order was passed on 30.12.2025 confirming the demand, which was challenged before the High Court.CRUCIAL COURT OBSERVATIONS (Verbatim)"In the case before us, the transaction under question is assignment of leasehold rights by the petitioner in favour of assignee, which, admittedly, is not a lease nor does it amount to sub-lease. In fact, in the show cause notice issued by respondent no.1, he has categorically mentioned that the transaction under question does not amount to sub-lease, as the petitioner's right stands extinguished by the said transaction.""Such petty services, in our view, cannot be extended to assignment of leasehold rights in an immovable property, to term it to be other miscellaneous services, as classified under Clause at Sr. No. 35 of the Notification. In that view of the matter, the notice could be said to be bad in law on this count alone.""This transaction, on the face of record, constitute transfer of immovable property by the petitioner to M/s. Kothari Belting Company. The transaction pertains exclusively to transfer of benefits arising out of an immovable property and has no nexus whatsoever with the business of the petitioner Company. Consequently, the essential element of supply of service, in the course of business or in furtherance of business, is completely absent.""We subscribe to this view for the reasons quoted in earlier part of our judgment so also because the view, in our considered opinion, is in consonance with the provisions of law on supply of services." (referring to Gujarat HC conclusion)"Further, the law laid down by the Gujarat High Court is binding on the authorities, i.e. the respondents in terms of the judgment of this Court in the case of Commissioner of Income-tax, Vidarbha and Marathwada, Nagpur Vs. Smt. Godavaridevi Saraf Tumsar [1978 (2) ELTJ 624 Bombay], wherein, the Court held that until a contrary decision is given by any other competent High Court, which is binding on Tribunal in the State of Bombay, it has to proceed on the footing that the law declared by the High Court, though of another State, is the final law of land.""We subscribe to the finding of the Gujarat High Court that the assignment by sale and transfer of leasehold rights of the plot of land allotted by the Corporation, like GIDC or MIDC to the lessee in favour of third party-assignee for a consideration, shall be assignment/sale/transfer of benefits arising out of immovable property by the lessee-assignor in favour of third party, and in such circumstances, the transaction would not be subject to levy of GST in terms of the GST Act."FINAL VERDICT The Writ Petition was allowed, the adjudication order dated 30.12.2025 was quashed and set aside, holding that assignment of leasehold rights in an MIDC plot constitutes transfer of benefits arising out of immovable property and is not liable to GST as it lacks the essential element of supply in the course or furtherance of business. 👍
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
BACKGROUNDAn Order-in-Original dated 18th December 2023 confirmed a tax liability against the Petitioner. The Petitioner's appeal before the Appellate Authority was rejected by an Order-in-Appeal dated 12th June 2024. The Petitioner then filed an appeal before the GST Tribunal on 5th February 2026 against the Order-in-Appeal.FACTSThe Petitioner received demand intimations by e-mails dated 3rd February 2026 and 6th February 2026. It informed the Respondent that the demand amount had been deposited/adjusted through Form GST DRC-03A and that the appeal was pending before the Tribunal. Despite this, a Recovery Notice dated 6th February 2026 was issued, and coercive steps were sought to be taken. The Petitioner approached the Bombay High Court under Article 226, seeking quashing of the Intimation and Recovery Notices and interim stay, on the ground that the Tribunal has no express power under the CGST Act/Rules to grant interim stay of recovery, and hence no efficacious alternative remedy existed. COURT OBSERVATIONS (Verbatim)On the scope of Section 113:"Considering the nature of the powers conferred under sub-section (1) of Section 113 to pass such orders 'as it thinks fit'... it cannot be inferred, that although the Tribunal is vested with the jurisdiction to pass substantive final orders on the Appeal... it would nonetheless lack jurisdiction to pass appropriate interim orders. The power to grant interim relief, including protection against recovery pending the Appeal, is inherent and incidental to the appellate jurisdiction conferred upon the Tribunal."On rejecting the Petitioner's proposition:"Also, on first principles, we are unable to accept a proposition that although the Appellate Tribunal is a statutory forum created under the scheme of Sections 111, 112 and 113 of the CGST Act, 2017, it would nevertheless be powerless to grant interim relief. Such an interpretation would render the appellate remedy illusory and defeat the legislative intent..."On the High Court not being a substitute forum:"This can never be the legislative intent, that the High Court should function as a forum for grant of interim relief, in matters squarely falling within the appellate jurisdiction of the Tribunal. This is inconceivable."On the GSTAT (Procedure) Rules, 2025 (Rules 10 & 29) supporting inherent power to grant interim relief — referred to as making "the position crystal clear."Reliance placed on Income Tax Officer, Cannanore vs. M. K. Mohammed Kunhi, 1968 SCC OnLine SC 71, where the Supreme Court held (in the context of Section 254 of the Income Tax Act, 1961, a provision "quite similar" to Section 113 of the CGST Act):"It is a firmly established rule that an express grant of statutory power carries with it by necessary implication the authority to use all reasonable means to make such grant effective... The powers which have been conferred by Section 254 on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers fully effective." CASE LAW REFERREDCaseCitationIncome Tax Officer, Cannanore vs. M. K. Mohammed Kunhi1968 SCC OnLine SC 71 FINAL VERDICTThe Court held that the GST Appellate Tribunal does have inherent jurisdiction to grant interim relief/stay of recovery pending appeal, and directed the Petitioner to move an interim application before the Tribunal within two weeks. As limited interim protection, the Recovery Notice dated 6th February 2026 was directed not to be acted upon until the Tribunal decides the interim application. Petition disposed of with no order as to costs; merits of the underlying dispute kept open.
The Hongkong and Shanghai Banking Corporation Ltd. vs. State of Maharashtra through the Secretary to the Government Revenue Dept. & Ors. 20-02-2026
BACKGROUNDAn Order-in-Original dated 18th December 2023 confirmed a tax liability against the Petitioner. The Petitioner's appeal before the Appellate Authority was rejected by an Order-in-Appeal dated 12th June 2024. The Petitioner then filed an appeal before the GST Tribunal on 5th February 2026 against the Order-in-Appeal.FACTSThe Petitioner received demand intimations by e-mails dated 3rd February 2026 and 6th February 2026. It informed the Respondent that the demand amount had been deposited/adjusted through Form GST DRC-03A and that the appeal was pending before the Tribunal. Despite this, a Recovery Notice dated 6th February 2026 was issued, and coercive steps were sought to be taken. The Petitioner approached the Bombay High Court under Article 226, seeking quashing of the Intimation and Recovery Notices and interim stay, on the ground that the Tribunal has no express power under the CGST Act/Rules to grant interim stay of recovery, and hence no efficacious alternative remedy existed. COURT OBSERVATIONS (Verbatim)On the scope of Section 113:"Considering the nature of the powers conferred under sub-section (1) of Section 113 to pass such orders 'as it thinks fit'... it cannot be inferred, that although the Tribunal is vested with the jurisdiction to pass substantive final orders on the Appeal... it would nonetheless lack jurisdiction to pass appropriate interim orders. The power to grant interim relief, including protection against recovery pending the Appeal, is inherent and incidental to the appellate jurisdiction conferred upon the Tribunal."On rejecting the Petitioner's proposition:"Also, on first principles, we are unable to accept a proposition that although the Appellate Tribunal is a statutory forum created under the scheme of Sections 111, 112 and 113 of the CGST Act, 2017, it would nevertheless be powerless to grant interim relief. Such an interpretation would render the appellate remedy illusory and defeat the legislative intent..."On the High Court not being a substitute forum:"This can never be the legislative intent, that the High Court should function as a forum for grant of interim relief, in matters squarely falling within the appellate jurisdiction of the Tribunal. This is inconceivable."On the GSTAT (Procedure) Rules, 2025 (Rules 10 & 29) supporting inherent power to grant interim relief — referred to as making "the position crystal clear."Reliance placed on Income Tax Officer, Cannanore vs. M. K. Mohammed Kunhi, 1968 SCC OnLine SC 71, where the Supreme Court held (in the context of Section 254 of the Income Tax Act, 1961, a provision "quite similar" to Section 113 of the CGST Act):"It is a firmly established rule that an express grant of statutory power carries with it by necessary implication the authority to use all reasonable means to make such grant effective... The powers which have been conferred by Section 254 on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers fully effective." CASE LAW REFERREDCaseCitationIncome Tax Officer, Cannanore vs. M. K. Mohammed Kunhi1968 SCC OnLine SC 71 FINAL VERDICTThe Court held that the GST Appellate Tribunal does have inherent jurisdiction to grant interim relief/stay of recovery pending appeal, and directed the Petitioner to move an interim application before the Tribunal within two weeks. As limited interim protection, the Recovery Notice dated 6th February 2026 was directed not to be acted upon until the Tribunal decides the interim application. Petition disposed of with no order as to costs; merits of the underlying dispute kept open.
BackgroundAn Order-in-Original was passed under the CGST Act on 18th December 2023, confirming a tax liability against the Petitioner. The Petitioner filed an appeal before the Appellate Authority, which was rejected by an Order-in-Appeal dated 12th June 2024. The Petitioner then filed a further appeal before the GST Appellate Tribunal on 5th February 2026. In the interregnum, the Petitioner received demand intimations by e-mails dated 3rd February 2026 and 6th February 2026. The Petitioner informed the Revenue that the demand amount had been deposited and adjusted through Form GST DRC-03A and that an appeal was pending before the Tribunal. Despite this, a Recovery Notice dated 6th February 2026 was issued and steps were sought to be taken to implement the same. The Petitioner thereupon filed a Writ Petition before the Bombay High Court under Article 226 of the Constitution, contending that coercive recovery proceedings ought not to continue while the appeal was pending before the Tribunal.Relevant FactsThe Revenue's counsel submitted that since the appeal was pending before the Tribunal, the Petitioner should have approached the Tribunal for interim relief — including on the basis of Section 112(9) of the CGST Act, which provides that upon payment of the pre-deposit amount under Section 112(8), recovery proceedings for the balance amount shall be deemed stayed till disposal of the appeal. The Petitioner's counsel countered that there is no express provision under the CGST Act or the Rules framed thereunder empowering the Tribunal to grant interim orders staying recovery proceedings, and therefore no efficacious alternative remedy existed before the Tribunal, necessitating recourse to this Court under Article 226. The sole question before the Court was whether the GSTAT, under the statutory scheme of Sections 111, 112 and 113 of the CGST Act, is empowered to pass interim orders, including a stay of recovery proceedings, pending disposal of an appeal.Court Observations (Verbatim)"...it cannot be inferred, that although the Tribunal is vested with the jurisdiction to pass substantive final orders on the Appeal to confirm, modify or annul the decision or order appealed against...it would nonetheless lack jurisdiction to pass appropriate interim orders. The power to grant interim relief, including protection against recovery pending the Appeal, is inherent and incidental to the appellate jurisdiction conferred upon the Tribunal. Thus, the appellate power of the Tribunal being wide in its sweep, necessarily wields with the appellate tribunal, the authority and jurisdiction to pass appropriate interim orders relevant to subject matter of the appeal, so as to make the appellate remedy effective."— Para 10"...we are unable to accept a proposition that although the Appellate Tribunal is a statutory forum created under the scheme of Sections 111, 112 and 113 of the CGST Act, 2017, it would nevertheless be powerless to grant interim relief. Such an interpretation would render the appellate remedy illusory and defeat the legislative intent, cumulatively and wholesomely gathered from the provisions as noted hereinabove, surrounding the constitution of the Appellate Tribunal."— Para 11"The consequence of what is urged on behalf of the petitioner is to the effect that although the Appellate Tribunal would have powers to set aside the order impugned before it, the interim relief authority would be vested with the High Court in the proceedings under Article 226 of the Constitution. This can never be the legislative intent, that the High Court should function as a forum for grant of interim relief, in matters squarely falling within the appellate jurisdiction of the Tribunal. This is inconceivable."— Para 12GST Appellate Tribunal (Procedure) Rules, 2025 — Notification dated 24 April 2025, Ministry of Finance:Rule 10 — Inherent Powers: "Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the Appellate Tribunal to make such orders or give such directions as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Appellate Tribunal."Rule 29 — Interlocutory Applications: "Every interlocutory application for stay, direction, rectification in order, condonation of delay, early hearing, exemption from production of copy of order appealed against or extension of time prayed for in pending matters shall include all the information as per the prescribed GSTAT FORM-01..."(Quoting Supreme Court in ITO Cannanore v. M.K. Mohammed Kunhi): "The powers which have been conferred by Section 254 on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers fully effective."— Para 14 (SC observation relied upon)Final VerdictThe Court held that GSTAT has jurisdiction to pass interim orders including stay of recovery, and rejected the Petitioner's contention to the contrary. The Writ Petition was disposed of with a direction to the Petitioner to file an interim application before the Tribunal within two weeks. As limited interim protection, the Recovery Notice dated 6th February 2026 was restrained from being acted upon until the Tribunal decides such interim application. Tribunal Registry was also directed to enable filing of interim applications on its portal. No order as to costs.Cases Referred by CourtIncome Tax Officer, Cannanore v. M.K. Mohammed KunhiSupreme Court of India | 1968 SCC OnLine SC 71 | Held: ITAT has inherent power to stay recovery pending appeal even without express provision, as power to pass "such orders as it thinks fit" under Section 254 of the Income Tax Act implies all ancillary and incidental powers to make appellate jurisdiction effective.
The Hongkong and Shanghai Banking Corporation Ltd v. State of Maharashtra & Ors. 20-02-2026
BackgroundAn Order-in-Original was passed under the CGST Act on 18th December 2023, confirming a tax liability against the Petitioner. The Petitioner filed an appeal before the Appellate Authority, which was rejected by an Order-in-Appeal dated 12th June 2024. The Petitioner then filed a further appeal before the GST Appellate Tribunal on 5th February 2026. In the interregnum, the Petitioner received demand intimations by e-mails dated 3rd February 2026 and 6th February 2026. The Petitioner informed the Revenue that the demand amount had been deposited and adjusted through Form GST DRC-03A and that an appeal was pending before the Tribunal. Despite this, a Recovery Notice dated 6th February 2026 was issued and steps were sought to be taken to implement the same. The Petitioner thereupon filed a Writ Petition before the Bombay High Court under Article 226 of the Constitution, contending that coercive recovery proceedings ought not to continue while the appeal was pending before the Tribunal.Relevant FactsThe Revenue's counsel submitted that since the appeal was pending before the Tribunal, the Petitioner should have approached the Tribunal for interim relief — including on the basis of Section 112(9) of the CGST Act, which provides that upon payment of the pre-deposit amount under Section 112(8), recovery proceedings for the balance amount shall be deemed stayed till disposal of the appeal. The Petitioner's counsel countered that there is no express provision under the CGST Act or the Rules framed thereunder empowering the Tribunal to grant interim orders staying recovery proceedings, and therefore no efficacious alternative remedy existed before the Tribunal, necessitating recourse to this Court under Article 226. The sole question before the Court was whether the GSTAT, under the statutory scheme of Sections 111, 112 and 113 of the CGST Act, is empowered to pass interim orders, including a stay of recovery proceedings, pending disposal of an appeal.Court Observations (Verbatim)"...it cannot be inferred, that although the Tribunal is vested with the jurisdiction to pass substantive final orders on the Appeal to confirm, modify or annul the decision or order appealed against...it would nonetheless lack jurisdiction to pass appropriate interim orders. The power to grant interim relief, including protection against recovery pending the Appeal, is inherent and incidental to the appellate jurisdiction conferred upon the Tribunal. Thus, the appellate power of the Tribunal being wide in its sweep, necessarily wields with the appellate tribunal, the authority and jurisdiction to pass appropriate interim orders relevant to subject matter of the appeal, so as to make the appellate remedy effective."— Para 10"...we are unable to accept a proposition that although the Appellate Tribunal is a statutory forum created under the scheme of Sections 111, 112 and 113 of the CGST Act, 2017, it would nevertheless be powerless to grant interim relief. Such an interpretation would render the appellate remedy illusory and defeat the legislative intent, cumulatively and wholesomely gathered from the provisions as noted hereinabove, surrounding the constitution of the Appellate Tribunal."— Para 11"The consequence of what is urged on behalf of the petitioner is to the effect that although the Appellate Tribunal would have powers to set aside the order impugned before it, the interim relief authority would be vested with the High Court in the proceedings under Article 226 of the Constitution. This can never be the legislative intent, that the High Court should function as a forum for grant of interim relief, in matters squarely falling within the appellate jurisdiction of the Tribunal. This is inconceivable."— Para 12GST Appellate Tribunal (Procedure) Rules, 2025 — Notification dated 24 April 2025, Ministry of Finance:Rule 10 — Inherent Powers: "Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the Appellate Tribunal to make such orders or give such directions as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Appellate Tribunal."Rule 29 — Interlocutory Applications: "Every interlocutory application for stay, direction, rectification in order, condonation of delay, early hearing, exemption from production of copy of order appealed against or extension of time prayed for in pending matters shall include all the information as per the prescribed GSTAT FORM-01..."(Quoting Supreme Court in ITO Cannanore v. M.K. Mohammed Kunhi): "The powers which have been conferred by Section 254 on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers fully effective."— Para 14 (SC observation relied upon)Final VerdictThe Court held that GSTAT has jurisdiction to pass interim orders including stay of recovery, and rejected the Petitioner's contention to the contrary. The Writ Petition was disposed of with a direction to the Petitioner to file an interim application before the Tribunal within two weeks. As limited interim protection, the Recovery Notice dated 6th February 2026 was restrained from being acted upon until the Tribunal decides such interim application. Tribunal Registry was also directed to enable filing of interim applications on its portal. No order as to costs.Cases Referred by CourtIncome Tax Officer, Cannanore v. M.K. Mohammed KunhiSupreme Court of India | 1968 SCC OnLine SC 71 | Held: ITAT has inherent power to stay recovery pending appeal even without express provision, as power to pass "such orders as it thinks fit" under Section 254 of the Income Tax Act implies all ancillary and incidental powers to make appellate jurisdiction effective.
Facts:The petitioner, a manufacturer, transitioned input tax credit into GST regime by filing TRAN-1 and TRAN-2 forms. An audit was conducted, followed by a show cause notice demanding recovery of transitional credit with interest and penalty. Verification of records was carried out by departmental officers, but the verification reports were not furnished to the petitioner. Despite request and objections, the adjudicating authority passed an order confirming demand without granting opportunity to respond to such reports. Court Decision:The Court held that non-furnishing of verification reports, which formed the basis of the impugned order, amounted to breach of principles of natural justice. It observed that conclusions were drawn without giving the petitioner an opportunity to respond to the verification findings. The Court also noted that the order was passed in haste without complete verification of records. Accordingly, the impugned order dated 5 February 2025 was quashed and set aside, and the matter was remanded for de novo adjudication with directions to furnish verification reports and grant a proper hearing.
Pidilite Industries Limited v. Union of India & Ors. 20-02-2026
Facts:The petitioner, a manufacturer, transitioned input tax credit into GST regime by filing TRAN-1 and TRAN-2 forms. An audit was conducted, followed by a show cause notice demanding recovery of transitional credit with interest and penalty. Verification of records was carried out by departmental officers, but the verification reports were not furnished to the petitioner. Despite request and objections, the adjudicating authority passed an order confirming demand without granting opportunity to respond to such reports. Court Decision:The Court held that non-furnishing of verification reports, which formed the basis of the impugned order, amounted to breach of principles of natural justice. It observed that conclusions were drawn without giving the petitioner an opportunity to respond to the verification findings. The Court also noted that the order was passed in haste without complete verification of records. Accordingly, the impugned order dated 5 February 2025 was quashed and set aside, and the matter was remanded for de novo adjudication with directions to furnish verification reports and grant a proper hearing.
Facts The petition challenged a show cause notice demanding GST of ₹59,40,000 plus interest on transfer of leasehold rights in MIDC land. The petitioner had assigned leasehold rights for ₹3.30 crore with MIDC’s consent and paid additional premium. Authorities treated the transaction as “supply of services” under Section 7 read with Schedule II and classified it as taxable miscellaneous services. Court DecisionThe Court held that assignment of leasehold rights amounts to transfer of benefits arising out of immovable property and not a supply of services. It found that the transaction was neither lease nor sub-lease and the petitioner’s rights stood extinguished upon assignment. The activity lacked the essential element of being in the course or furtherance of business required under Section 7 of the CGST Act. Classification under “other miscellaneous services” was rejected as inapplicable. Accordingly, the show cause notice and adjudication order were quashed and set aside. Cases Referred• Gujarat Chamber of Commerce and Industry v. Union of India, (2025) 170
Vidarbha Beverages & Ors. vs. State Tax Officer & Ors. 13-02-2026
Facts The petition challenged a show cause notice demanding GST of ₹59,40,000 plus interest on transfer of leasehold rights in MIDC land. The petitioner had assigned leasehold rights for ₹3.30 crore with MIDC’s consent and paid additional premium. Authorities treated the transaction as “supply of services” under Section 7 read with Schedule II and classified it as taxable miscellaneous services. Court DecisionThe Court held that assignment of leasehold rights amounts to transfer of benefits arising out of immovable property and not a supply of services. It found that the transaction was neither lease nor sub-lease and the petitioner’s rights stood extinguished upon assignment. The activity lacked the essential element of being in the course or furtherance of business required under Section 7 of the CGST Act. Classification under “other miscellaneous services” was rejected as inapplicable. Accordingly, the show cause notice and adjudication order were quashed and set aside. Cases Referred• Gujarat Chamber of Commerce and Industry v. Union of India, (2025) 170
Facts :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 :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: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.
Om Enterprises vs. Union of India & Ors. 29-01-2026
Facts: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.
Facts: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:· 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)· 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: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:· 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)· 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)
