BACKGROUNDThe proceedings arose from an audit of the taxpayer's records for July 2017 to March 2022. An SCN under Section 74(1) proposed recovery of alleged excess ITC together with interest and penalty. The adjudicating authority found that the ingredients necessary for invoking Section 74 had not been established and dropped the demand.The Department appealed and the appellate authority reversed the original order, relying substantially upon alleged failure to furnish information during audit. The taxpayer challenged that appellate order before the Tribunal.COURT OBSERVATIONThe Tribunal found that the proceedings were based upon statutory return data and reconciliation records already available on the GST portal. The reconciliation had been disclosed through statutory filings and the SCN did not establish the non-declaration contemplated by Explanation 2 to Section 74.The Tribunal held that the appellate authority had introduced a ground not contained in the SCN, namely failure to respond to audit observations/final audit report. Raising such a ground at the appellate stage was contrary to natural justice. The Tribunal also held that mere availment of ineligible self-assessed ITC, without contrary evidence, did not amount to suppression under Section 74.The Tribunal further held that failure to reply to an audit enquiry or final audit report, where the underlying data was already available on the portal, could not by itself amount to suppression.FINAL VERDICTThe Tribunal answered both issues in the negative: mere taking of ineligible self-assessed ITC under Section 42(1) did not amount to suppression, and mere failure to respond to an audit enquiry/final audit report did not amount to suppression under Section 74.The impugned Order-in-Appeal was therefore set aside and the appeals were allowed with consequential relief.CASE REFERRED BY COURTCosmic Dye Chemical v. Collector of Central Excise, Bombay — Supreme Court — 06.09.1994. Considered on the requirement of wilful intent in suppression/misstatement.Commissioner of Central Excise, Nagpur v. Ballarpur Industries Ltd. — Supreme Court — 30.08.2007. Considered on the strict construction of “suppression” and requirement of wilfulness.
SANTHOME LATEX ENTERPRISES v. COMMISSIONER OF CGST, THIRUVANANTHAPURAM 21-08-2026
BACKGROUNDThe proceedings arose from an audit of the taxpayer's records for July 2017 to March 2022. An SCN under Section 74(1) proposed recovery of alleged excess ITC together with interest and penalty. The adjudicating authority found that the ingredients necessary for invoking Section 74 had not been established and dropped the demand.The Department appealed and the appellate authority reversed the original order, relying substantially upon alleged failure to furnish information during audit. The taxpayer challenged that appellate order before the Tribunal.COURT OBSERVATIONThe Tribunal found that the proceedings were based upon statutory return data and reconciliation records already available on the GST portal. The reconciliation had been disclosed through statutory filings and the SCN did not establish the non-declaration contemplated by Explanation 2 to Section 74.The Tribunal held that the appellate authority had introduced a ground not contained in the SCN, namely failure to respond to audit observations/final audit report. Raising such a ground at the appellate stage was contrary to natural justice. The Tribunal also held that mere availment of ineligible self-assessed ITC, without contrary evidence, did not amount to suppression under Section 74.The Tribunal further held that failure to reply to an audit enquiry or final audit report, where the underlying data was already available on the portal, could not by itself amount to suppression.FINAL VERDICTThe Tribunal answered both issues in the negative: mere taking of ineligible self-assessed ITC under Section 42(1) did not amount to suppression, and mere failure to respond to an audit enquiry/final audit report did not amount to suppression under Section 74.The impugned Order-in-Appeal was therefore set aside and the appeals were allowed with consequential relief.CASE REFERRED BY COURTCosmic Dye Chemical v. Collector of Central Excise, Bombay — Supreme Court — 06.09.1994. Considered on the requirement of wilful intent in suppression/misstatement.Commissioner of Central Excise, Nagpur v. Ballarpur Industries Ltd. — Supreme Court — 30.08.2007. Considered on the strict construction of “suppression” and requirement of wilfulness.
BACKGROUNDIron scrap being transported with tax invoices and other documents was intercepted without an e-way bill. Proceedings under Section 129 were initiated and tax and penalty were imposed. The First Appellate Authority subsequently set aside the order on the ground that the e-way bill was produced later during the proceedings.The Revenue challenged that decision, contending that the e-way bill was mandatory at the time of transportation and that subsequent generation could not cure the statutory violation. The Tribunal also considered the nature of the electronic e-way bill mechanism compared with manually generated invoices.COURT OBSERVATIONThe Tribunal held that generation of an e-way bill is a statutory requirement intended to ensure transparency and prevent tax evasion. A subsequently generated e-way bill could not be treated as curing the violation existing at the time of interception because the e-way bill is electronically generated and time-stamped.The Tribunal further found that the circumstances of the transportation, including the nature and route of the goods, supported the conclusion that there was an intention to evade tax. It therefore found that the First Appellate Authority had erred in interfering with the Section 129(3) order.FINAL VERDICTThe Revenue's appeal was allowed. The order dated 09.03.2018 passed under Section 129(3) imposing tax and penalty was restored, and the order of the First Appellate Authority setting it aside was quashed.
BACKGROUNDIron scrap being transported with tax invoices and other documents was intercepted without an e-way bill. Proceedings under Section 129 were initiated and tax and penalty were imposed. The First Appellate Authority subsequently set aside the order on the ground that the e-way bill was produced later during the proceedings.The Revenue challenged that decision, contending that the e-way bill was mandatory at the time of transportation and that subsequent generation could not cure the statutory violation. The Tribunal also considered the nature of the electronic e-way bill mechanism compared with manually generated invoices.COURT OBSERVATIONThe Tribunal held that generation of an e-way bill is a statutory requirement intended to ensure transparency and prevent tax evasion. A subsequently generated e-way bill could not be treated as curing the violation existing at the time of interception because the e-way bill is electronically generated and time-stamped.The Tribunal further found that the circumstances of the transportation, including the nature and route of the goods, supported the conclusion that there was an intention to evade tax. It therefore found that the First Appellate Authority had erred in interfering with the Section 129(3) order.FINAL VERDICTThe Revenue's appeal was allowed. The order dated 09.03.2018 passed under Section 129(3) imposing tax and penalty was restored, and the order of the First Appellate Authority setting it aside was quashed.
BackgroundThe appellant was engaged in the purchase and sale of motorcycles and spare parts. On 20.01.2025, a vehicle carrying motorcycles was intercepted by the Mobile Squad at about 7:25 A.M. At the time of interception, the E-Way Bill had not been generated. However, an E-Way Bill was generated at about 7:34 A.M., approximately nine minutes after interception, and was produced before the inspecting authority.The appellant contended that the motorcycles were covered by genuine tax invoices, purchase invoices, challans, ledger accounts and bank records. It was also submitted that there was no discrepancy in quantity, value or classification and no suppression, fake documentation, unaccounted goods or other material indicating an intention to evade tax. Proceedings under Section 129 resulted in a penalty of Rs. 2,63,330/-, which was confirmed by the First Appellate Authority, leading to the present appeal.Court ObservationThe Tribunal observed that the E-Way Bill was admittedly generated after interception, which constituted a procedural lapse. However, the lapse occurred in the background of a genuine and fully identifiable transaction. The goods were motorcycles identifiable through engine and chassis numbers and were subject to RTO registration. The transaction was supported by invoices, challans, ledger accounts and bank records, and no discrepancy in quantity, value or classification was found.The Tribunal further observed that there was no independent material demonstrating suppression, clandestine movement, undervaluation, fake documentation or any other positive circumstance indicating tax evasion. The peculiar facts therefore showed a bona fide procedural lapse rather than an act forming part of an attempt to evade tax.Final VerdictThe Tribunal allowed the appeal. The order dated 04.02.2025 passed by the Proper Officer under Section 129(3) of the CGST/UPGST Act, 2017, imposing CGST penalty of Rs. 1,31,665/- and SGST penalty of Rs. 1,31,665/- (total Rs. 2,63,330/-), was set aside. The consequential order of the First Appellate Authority confirming the penalty was also set aside.The Tribunal directed that the Rs. 2,63,330/- deposited by the appellant be refunded, in accordance with law, subject to verification of payment and statutory requirements.
BackgroundThe appellant was engaged in the purchase and sale of motorcycles and spare parts. On 20.01.2025, a vehicle carrying motorcycles was intercepted by the Mobile Squad at about 7:25 A.M. At the time of interception, the E-Way Bill had not been generated. However, an E-Way Bill was generated at about 7:34 A.M., approximately nine minutes after interception, and was produced before the inspecting authority.The appellant contended that the motorcycles were covered by genuine tax invoices, purchase invoices, challans, ledger accounts and bank records. It was also submitted that there was no discrepancy in quantity, value or classification and no suppression, fake documentation, unaccounted goods or other material indicating an intention to evade tax. Proceedings under Section 129 resulted in a penalty of Rs. 2,63,330/-, which was confirmed by the First Appellate Authority, leading to the present appeal.Court ObservationThe Tribunal observed that the E-Way Bill was admittedly generated after interception, which constituted a procedural lapse. However, the lapse occurred in the background of a genuine and fully identifiable transaction. The goods were motorcycles identifiable through engine and chassis numbers and were subject to RTO registration. The transaction was supported by invoices, challans, ledger accounts and bank records, and no discrepancy in quantity, value or classification was found.The Tribunal further observed that there was no independent material demonstrating suppression, clandestine movement, undervaluation, fake documentation or any other positive circumstance indicating tax evasion. The peculiar facts therefore showed a bona fide procedural lapse rather than an act forming part of an attempt to evade tax.Final VerdictThe Tribunal allowed the appeal. The order dated 04.02.2025 passed by the Proper Officer under Section 129(3) of the CGST/UPGST Act, 2017, imposing CGST penalty of Rs. 1,31,665/- and SGST penalty of Rs. 1,31,665/- (total Rs. 2,63,330/-), was set aside. The consequential order of the First Appellate Authority confirming the penalty was also set aside.The Tribunal directed that the Rs. 2,63,330/- deposited by the appellant be refunded, in accordance with law, subject to verification of payment and statutory requirements.
BACKGROUNDThe proceedings arose from an SCN under Section 73 alleging excess ITC for the financial years 2018-19 to 2020-21. The Revenue subsequently appropriated part of the amount already paid and disputed whether the remaining reversal could be mapped to the demand.The taxpayer had made reversals through the electronic ledgers and furnished reconciliation material. The first appellate authority accepted the reconciliation and held that the excess ITC had been reversed, but the Revenue challenged the order, particularly concerning the proof of reversal and liability for interest and penalty.COURT OBSERVATIONThe Tribunal found no reason to disagree with the first appellate authority's conclusion that the excess ITC had been reversed. The Revenue's objection that there was no proof linking the payments to the disputed liability was not accepted because the reversal had been acknowledged through DRC-04 and the reconciliation had been scrutinised by the appellate authority.However, the Tribunal found that the appellate authority had not properly considered the liability for interest and penalty. Since the demand was under Section 73 and the relevant period fell within Section 128A, the Tribunal held that the taxpayer was entitled to the benefit of Section 128A subject to compliance with its prescribed procedure.FINAL VERDICTThe matter was remanded to the first appellate authority under Section 113(1) for fresh computation of interest and penalty, if any, attributable to the taxpayer. The taxpayer was to be given an opportunity of hearing, and the instructions contained in Circular No. 192/04/2023-GST were to be considered.If any interest or penalty liability remained after fresh computation, the taxpayer was permitted to seek waiver under Section 128A, which was to be considered in accordance with the relevant provisions and Circular No. 238/32/2024-GST.
ATANU MONDAL v. DIRECTOR, M/s D.R. STEEL CONSTRUCTION CO. PVT. LTD. 18-08-2026
BACKGROUNDThe proceedings arose from an SCN under Section 73 alleging excess ITC for the financial years 2018-19 to 2020-21. The Revenue subsequently appropriated part of the amount already paid and disputed whether the remaining reversal could be mapped to the demand.The taxpayer had made reversals through the electronic ledgers and furnished reconciliation material. The first appellate authority accepted the reconciliation and held that the excess ITC had been reversed, but the Revenue challenged the order, particularly concerning the proof of reversal and liability for interest and penalty.COURT OBSERVATIONThe Tribunal found no reason to disagree with the first appellate authority's conclusion that the excess ITC had been reversed. The Revenue's objection that there was no proof linking the payments to the disputed liability was not accepted because the reversal had been acknowledged through DRC-04 and the reconciliation had been scrutinised by the appellate authority.However, the Tribunal found that the appellate authority had not properly considered the liability for interest and penalty. Since the demand was under Section 73 and the relevant period fell within Section 128A, the Tribunal held that the taxpayer was entitled to the benefit of Section 128A subject to compliance with its prescribed procedure.FINAL VERDICTThe matter was remanded to the first appellate authority under Section 113(1) for fresh computation of interest and penalty, if any, attributable to the taxpayer. The taxpayer was to be given an opportunity of hearing, and the instructions contained in Circular No. 192/04/2023-GST were to be considered.If any interest or penalty liability remained after fresh computation, the taxpayer was permitted to seek waiver under Section 128A, which was to be considered in accordance with the relevant provisions and Circular No. 238/32/2024-GST.
BACKGROUNDThe appeal arose from an order concerning alleged non-payment of IGST under reverse charge in respect of OIDAR services received from a supplier located outside India. The First Appellate Authority had dropped the demand, and the Revenue challenged that decision before the Tribunal.During hearing, both sides pointed out that the matter involved OIDAR services and therefore raised a question regarding the jurisdiction of the State Bench vis-à-vis the Principal Bench.COURT OBSERVATIONThe Tribunal examined Section 109(5) of the CGST Act, which provides for exclusive Principal Bench jurisdiction where the issue involves place of supply, together with the notification issued on 17.09.2025. It noted that Section 14 of the IGST Act specifically deals with OIDAR services.The Tribunal held that appeals involving OIDAR services fall exclusively within the jurisdiction of the Principal Bench, GSTAT, New Delhi, and that the State Bench therefore had no jurisdiction to entertain the appeal.FINAL VERDICTThe Registry was directed to transfer the appeal along with the complete record to the Principal Bench, GSTAT, New Delhi, for disposal in accordance with law. The parties were directed to appear before the Registrar of the Principal Bench on 21.08.2026.
VISHAL CHAUDHARY v. DIRECTOR, BANGLA FOODS PRIVATE LIMITED 14-08-2026
BACKGROUNDThe appeal arose from an order concerning alleged non-payment of IGST under reverse charge in respect of OIDAR services received from a supplier located outside India. The First Appellate Authority had dropped the demand, and the Revenue challenged that decision before the Tribunal.During hearing, both sides pointed out that the matter involved OIDAR services and therefore raised a question regarding the jurisdiction of the State Bench vis-à-vis the Principal Bench.COURT OBSERVATIONThe Tribunal examined Section 109(5) of the CGST Act, which provides for exclusive Principal Bench jurisdiction where the issue involves place of supply, together with the notification issued on 17.09.2025. It noted that Section 14 of the IGST Act specifically deals with OIDAR services.The Tribunal held that appeals involving OIDAR services fall exclusively within the jurisdiction of the Principal Bench, GSTAT, New Delhi, and that the State Bench therefore had no jurisdiction to entertain the appeal.FINAL VERDICTThe Registry was directed to transfer the appeal along with the complete record to the Principal Bench, GSTAT, New Delhi, for disposal in accordance with law. The parties were directed to appear before the Registrar of the Principal Bench on 21.08.2026.
BACKGROUNDGoods were transported from one registered premises to another registered premises of the same registered person under a delivery challan. During transit, the goods were intercepted because no e-way bill was available, and penalty was imposed under Section 129(3), without any tax demand.The First Appellate Authority upheld the penalty. The dispute before the Tribunal was whether an internal stock transfer, which did not constitute a taxable supply, could attract penalty under Section 129 merely because the e-way bill was not generated.COURT OBSERVATIONThe Tribunal held that the movement involved only one registered person, with no second entity and no consideration. It therefore did not constitute a “supply” under Section 7. Consequently, Section 9 did not create any tax liability on the movement.Since Section 129(1) computes penalty with reference to “tax payable on such goods”, and there was no tax payable on the stock transfer, the Tribunal held that penalty under Section 129 was not leviable. The Tribunal also found that the appellate authority had not given any reason, other than absence of an e-way bill, for treating the transaction as non-genuine.The Tribunal applied the ratio of Fabricship Pvt. Ltd. and held that where the transaction does not involve two distinct entities and there is no consideration, it falls outside the charging provisions and consequently outside Section 129.FINAL VERDICTThe Tribunal answered the question of law in the negative, holding that penalty under Section 129 is not leviable for transport without an e-way bill when the movement is on account of stock transfer. The impugned Order-in-Appeal was set aside and the appeal was allowed with consequential relief.CASE REFERRED BY COURTFabricship Pvt. Ltd. v. Union of India — Bombay High Court Vacmet India Ltd. v. Additional Commissioner Grade-2 (Appeal) — Allahabad High Court — 17.10.2023.Goverdhan Oil Mill v. Additional Commissioner — Allahabad High Court — 10.04.2024.
M.S. STEELS v. THE COMMISSIONER OF KERALA STATE GST 14-08-2026
BACKGROUNDGoods were transported from one registered premises to another registered premises of the same registered person under a delivery challan. During transit, the goods were intercepted because no e-way bill was available, and penalty was imposed under Section 129(3), without any tax demand.The First Appellate Authority upheld the penalty. The dispute before the Tribunal was whether an internal stock transfer, which did not constitute a taxable supply, could attract penalty under Section 129 merely because the e-way bill was not generated.COURT OBSERVATIONThe Tribunal held that the movement involved only one registered person, with no second entity and no consideration. It therefore did not constitute a “supply” under Section 7. Consequently, Section 9 did not create any tax liability on the movement.Since Section 129(1) computes penalty with reference to “tax payable on such goods”, and there was no tax payable on the stock transfer, the Tribunal held that penalty under Section 129 was not leviable. The Tribunal also found that the appellate authority had not given any reason, other than absence of an e-way bill, for treating the transaction as non-genuine.The Tribunal applied the ratio of Fabricship Pvt. Ltd. and held that where the transaction does not involve two distinct entities and there is no consideration, it falls outside the charging provisions and consequently outside Section 129.FINAL VERDICTThe Tribunal answered the question of law in the negative, holding that penalty under Section 129 is not leviable for transport without an e-way bill when the movement is on account of stock transfer. The impugned Order-in-Appeal was set aside and the appeal was allowed with consequential relief.CASE REFERRED BY COURTFabricship Pvt. Ltd. v. Union of India — Bombay High Court Vacmet India Ltd. v. Additional Commissioner Grade-2 (Appeal) — Allahabad High Court — 17.10.2023.Goverdhan Oil Mill v. Additional Commissioner — Allahabad High Court — 10.04.2024.
BACKGROUNDAutomobile spare parts were transported under e-invoices, but the vehicle was intercepted without an e-way bill. Proceedings under Section 129 were initiated and penalty was imposed. The goods and conveyance were subsequently released on furnishing security, but the penalty order in MOV-09 was passed 47 days after the MOV-07 notice.The appellant contended that the supplies were covered by valid e-invoices, GST had been paid and there was no intention to evade tax. The Tribunal considered whether the seven-day period in Section 129(3) was mandatory and whether the delayed order was void.COURT OBSERVATIONThe Tribunal held that the word “shall” used in Section 129(3) demonstrated the legislative intent that the prescribed timelines were mandatory. The fiscal nature of the statute also required strict construction. The absence of an express consequence for non-compliance did not make the seven-day period directory.The Tribunal further found that the e-invoices had been generated electronically and the corresponding GST had been paid through returns. Therefore, there was no material showing mens rea to evade tax merely because the e-way bill had not been generated.FINAL VERDICTThe Tribunal held that the order under Section 129(3) had not been passed within the mandatory seven-day period. The MOV-09 order dated 04.06.2022, passed 47 days after the MOV-07 notice, was therefore illegal and without jurisdiction.The impugned Order-in-Appeal was set aside and the appeal was allowed with consequential relief. The respondent was directed to release the Bank Guarantee immediately.CASE REFERRED BY COURTMohd Hazzak Lohar & Others v. Commissioner of State Tax, J&K — High Court of Jammu & Kashmir and LadakhAllcargo Logistics Limited v. State of Gujarat — Gujarat High CourtKhatu Enterprises v. State of Gujarat — Gujarat High CourtDeepam Roadways v. Deputy State Tax Officer, Chennai — Madras HighUdhayam Steels (P.) Ltd. v. Deputy Tax Officer (Int.) — Madras High Court — 28.12.2022.D.K. Enterprises v. Assistant/Deputy Commissioner (ST) — Madras High Court — 29.08.2022.Pawan Carrying Corporation v. State of Bihar — Patna High CourtK.P. Sugandh Ltd. v. Chief Commissioner of CT & GST, Odisha
SIDDHI VINAYAK AUTOMOBILES v. COMMISSIONER OF KERALA STATE GST, THIRUVANANTHAPURAM 14-08-2026
BACKGROUNDAutomobile spare parts were transported under e-invoices, but the vehicle was intercepted without an e-way bill. Proceedings under Section 129 were initiated and penalty was imposed. The goods and conveyance were subsequently released on furnishing security, but the penalty order in MOV-09 was passed 47 days after the MOV-07 notice.The appellant contended that the supplies were covered by valid e-invoices, GST had been paid and there was no intention to evade tax. The Tribunal considered whether the seven-day period in Section 129(3) was mandatory and whether the delayed order was void.COURT OBSERVATIONThe Tribunal held that the word “shall” used in Section 129(3) demonstrated the legislative intent that the prescribed timelines were mandatory. The fiscal nature of the statute also required strict construction. The absence of an express consequence for non-compliance did not make the seven-day period directory.The Tribunal further found that the e-invoices had been generated electronically and the corresponding GST had been paid through returns. Therefore, there was no material showing mens rea to evade tax merely because the e-way bill had not been generated.FINAL VERDICTThe Tribunal held that the order under Section 129(3) had not been passed within the mandatory seven-day period. The MOV-09 order dated 04.06.2022, passed 47 days after the MOV-07 notice, was therefore illegal and without jurisdiction.The impugned Order-in-Appeal was set aside and the appeal was allowed with consequential relief. The respondent was directed to release the Bank Guarantee immediately.CASE REFERRED BY COURTMohd Hazzak Lohar & Others v. Commissioner of State Tax, J&K — High Court of Jammu & Kashmir and LadakhAllcargo Logistics Limited v. State of Gujarat — Gujarat High CourtKhatu Enterprises v. State of Gujarat — Gujarat High CourtDeepam Roadways v. Deputy State Tax Officer, Chennai — Madras HighUdhayam Steels (P.) Ltd. v. Deputy Tax Officer (Int.) — Madras High Court — 28.12.2022.D.K. Enterprises v. Assistant/Deputy Commissioner (ST) — Madras High Court — 29.08.2022.Pawan Carrying Corporation v. State of Bihar — Patna High CourtK.P. Sugandh Ltd. v. Chief Commissioner of CT & GST, Odisha
BACKGROUNDThe taxpayer had exported goods and claimed refund of accumulated ITC. The original authority rejected the refund claims on alleged deficiencies, while the First Appellate Authority allowed the refund claims and set aside the original orders. The Revenue challenged the appellate orders before the Tribunal.The Revenue relied, inter alia, upon alleged absence of toll-plaza movement in the State from which the goods were stated to have been dispatched and alleged cancellation of registrations of suppliers further up the supply chain. The goods, however, had been received at the ship-to location and subsequently exported.COURT OBSERVATIONThe Tribunal observed that the goods were transported under the Bill-to-Ship-to model and the documents produced included e-way bills, bilty copies, shipping bills, EGM details, transporter certificate and banking records. The Tribunal found that these documents substantiated the movement and subsequent export and that the Revenue had not disputed them. The conditions under Section 16(2) were therefore satisfied.The Tribunal held that toll-plaza receipts are not mandatory documents for establishing transportation of goods or for availing ITC. It also held that the taxpayer could not be denied refund merely because of irregularities relating to a second-line supplier with whom it had no direct transaction.The Tribunal further held that the additional grounds raised by the Revenue for the first time before the Tribunal could not be considered as additional evidence in the absence of the documents/investigation material required under Rule 45(1) of the GSTAT (Procedure) Rules, 2025 and Rule 112(1) of the CGST Rules, 2017.FINAL VERDICTThe Tribunal dismissed both Revenue appeals and upheld the impugned appellate orders allowing the refund claims.CASE REFERRED BY COURTRaghuvansh Agro Farms Ltd. v. State of U.P. — Allahabad High Court — 17.12.2025.
PR. COMMISSIONER, CGST & CX, SILIGURI COMMISSIONERATE v. AGARWALA’S BITUMEX PRIVATE LIMITED 08-08-2026
BACKGROUNDThe taxpayer had exported goods and claimed refund of accumulated ITC. The original authority rejected the refund claims on alleged deficiencies, while the First Appellate Authority allowed the refund claims and set aside the original orders. The Revenue challenged the appellate orders before the Tribunal.The Revenue relied, inter alia, upon alleged absence of toll-plaza movement in the State from which the goods were stated to have been dispatched and alleged cancellation of registrations of suppliers further up the supply chain. The goods, however, had been received at the ship-to location and subsequently exported.COURT OBSERVATIONThe Tribunal observed that the goods were transported under the Bill-to-Ship-to model and the documents produced included e-way bills, bilty copies, shipping bills, EGM details, transporter certificate and banking records. The Tribunal found that these documents substantiated the movement and subsequent export and that the Revenue had not disputed them. The conditions under Section 16(2) were therefore satisfied.The Tribunal held that toll-plaza receipts are not mandatory documents for establishing transportation of goods or for availing ITC. It also held that the taxpayer could not be denied refund merely because of irregularities relating to a second-line supplier with whom it had no direct transaction.The Tribunal further held that the additional grounds raised by the Revenue for the first time before the Tribunal could not be considered as additional evidence in the absence of the documents/investigation material required under Rule 45(1) of the GSTAT (Procedure) Rules, 2025 and Rule 112(1) of the CGST Rules, 2017.FINAL VERDICTThe Tribunal dismissed both Revenue appeals and upheld the impugned appellate orders allowing the refund claims.CASE REFERRED BY COURTRaghuvansh Agro Farms Ltd. v. State of U.P. — Allahabad High Court — 17.12.2025.
BACKGROUNDThe adjudicating authority directed reversal of proportionate ITC attributable to exempt supplies for the financial years 2017-18 to 2019-20 and imposed interest and an equivalent penalty under Section 74. The First Appellate Authority subsequently allowed the taxpayer's appeal by applying the 2022 amendment to Rule 43 retrospectively.The Revenue challenged the retrospective application of the amendment and the dropping of the demand. The Tribunal therefore considered the monetary-limit objection, the temporal operation of the 2022 amendment and the validity of the Section 74 proceedings.COURT OBSERVATIONThe Tribunal held that the amendment to Rule 43 was specifically brought into force from 05.07.2022. Although Section 164(3) empowered retrospective rulemaking, the rule-making authority chose to make the amendment prospective. The First Appellate Authority therefore erred in applying it retrospectively to transactions of 2017-2020.On Section 74, the Tribunal held that the Revenue had failed to bring material establishing a deliberate intention to evade tax. The Tribunal relied upon the strict meaning of “suppression of facts” and concluded that the Section 74(1) notice was not sustainable.Consequently, under Section 75(2), the proper officer was directed to determine the tax liability as if the notice had been issued under Section 73.FINAL VERDICTThe Tribunal held that the First Appellate Authority was incorrect in giving retrospective effect to the 2022 amendment to Rule 43. However, since the invocation of Section 74 was not sustainable for want of established fraud, wilful misstatement or suppression, the matter was directed to be dealt with under Section 75(2) as a Section 73 proceeding.CASE REFERRED BY COURTSedco Forex International Drill Inc. v. Commissioner of Income-tax, Dehradun — Supreme CourtHitendra Vishnu Thakur v. State of Maharashtra — Supreme CourtSuchitra Components Ltd. v. Commissioner of Central Excise, Guntur — Supreme CourtAllied Motors (P.) Ltd. v. Commissioner of Income-tax — Supreme Court.Sree Sankaracharya University of Sanskrit v. Dr. Manu — Supreme Court.Pushpam Pharmaceutical Company v. Collector of Central Excise, Bombay — Supreme Court.Anand Nishikawa Co. Ltd. — Supreme Court.
THE COMMISSIONER, CGST & CX, KOLKATA NORTH COMMISSIONERATE v. POWER TECH GLOBAL PRIVATE LIMITED 05-08-2026
BACKGROUNDThe adjudicating authority directed reversal of proportionate ITC attributable to exempt supplies for the financial years 2017-18 to 2019-20 and imposed interest and an equivalent penalty under Section 74. The First Appellate Authority subsequently allowed the taxpayer's appeal by applying the 2022 amendment to Rule 43 retrospectively.The Revenue challenged the retrospective application of the amendment and the dropping of the demand. The Tribunal therefore considered the monetary-limit objection, the temporal operation of the 2022 amendment and the validity of the Section 74 proceedings.COURT OBSERVATIONThe Tribunal held that the amendment to Rule 43 was specifically brought into force from 05.07.2022. Although Section 164(3) empowered retrospective rulemaking, the rule-making authority chose to make the amendment prospective. The First Appellate Authority therefore erred in applying it retrospectively to transactions of 2017-2020.On Section 74, the Tribunal held that the Revenue had failed to bring material establishing a deliberate intention to evade tax. The Tribunal relied upon the strict meaning of “suppression of facts” and concluded that the Section 74(1) notice was not sustainable.Consequently, under Section 75(2), the proper officer was directed to determine the tax liability as if the notice had been issued under Section 73.FINAL VERDICTThe Tribunal held that the First Appellate Authority was incorrect in giving retrospective effect to the 2022 amendment to Rule 43. However, since the invocation of Section 74 was not sustainable for want of established fraud, wilful misstatement or suppression, the matter was directed to be dealt with under Section 75(2) as a Section 73 proceeding.CASE REFERRED BY COURTSedco Forex International Drill Inc. v. Commissioner of Income-tax, Dehradun — Supreme CourtHitendra Vishnu Thakur v. State of Maharashtra — Supreme CourtSuchitra Components Ltd. v. Commissioner of Central Excise, Guntur — Supreme CourtAllied Motors (P.) Ltd. v. Commissioner of Income-tax — Supreme Court.Sree Sankaracharya University of Sanskrit v. Dr. Manu — Supreme Court.Pushpam Pharmaceutical Company v. Collector of Central Excise, Bombay — Supreme Court.Anand Nishikawa Co. Ltd. — Supreme Court.
BACKGROUNDThe taxpayer transitioned credit from the pre-GST regime into GST under Section 140. The credit had been reflected in the pre-GST returns and had not been disputed under the erstwhile regime. The Department subsequently issued proceedings challenging the eligibility of the transitioned credit.The lower authorities confirmed recovery of the disputed transitional credit along with interest and penalty. The taxpayer challenged the denial, contending that credit validly existing under the erstwhile law could not be denied merely because it had transitioned into GST.COURT OBSERVATIONThe Tribunal examined the legal effect of transition from the pre-GST regime and held that the transitional credit could not be denied merely by raising objections that had not been raised under the erstwhile regime. In respect of Krishi Kalyan Cess, the Tribunal relied upon the existing legal position and held that its transition was in order.The Tribunal also held that the VAT credit transitioned under Section 140(6) could not be denied in the absence of a specific contrary finding or evidence. Other objections such as invoice description/address issues were also found insufficient where such objections had not been raised at the relevant stage.The Tribunal further found invocation of Section 74 and the 100% penalty wholly unjustified, since the proceedings arose from disclosures made through TRAN-1 and subsequent submissions rather than concealment.FINAL VERDICTThe Tribunal held that the transitional ITC was eligible, set aside the impugned order and allowed the appeal with consequential relief.CASE REFERRED BY COURTGodrej & Boyce Mfg. Co. Ltd. v. Union of India & Ors. — Bombay High Court .Usha Martin Limited — High Court — order dated 10.11.2022. Kunjal Synergies Pvt. Ltd. v. Assistant Commissioner of CGST & CEX — Calcutta High Court.Steel Authority of India Ltd. v. State of Jharkhand — Jharkhand High Court.
TATA UNISTORE LIMITED v. COMMISSIONER, CGST & CENTRAL EXCISE, NAVI MUMBAI COMMISSIONERATE 31-07-2026
BACKGROUNDThe taxpayer transitioned credit from the pre-GST regime into GST under Section 140. The credit had been reflected in the pre-GST returns and had not been disputed under the erstwhile regime. The Department subsequently issued proceedings challenging the eligibility of the transitioned credit.The lower authorities confirmed recovery of the disputed transitional credit along with interest and penalty. The taxpayer challenged the denial, contending that credit validly existing under the erstwhile law could not be denied merely because it had transitioned into GST.COURT OBSERVATIONThe Tribunal examined the legal effect of transition from the pre-GST regime and held that the transitional credit could not be denied merely by raising objections that had not been raised under the erstwhile regime. In respect of Krishi Kalyan Cess, the Tribunal relied upon the existing legal position and held that its transition was in order.The Tribunal also held that the VAT credit transitioned under Section 140(6) could not be denied in the absence of a specific contrary finding or evidence. Other objections such as invoice description/address issues were also found insufficient where such objections had not been raised at the relevant stage.The Tribunal further found invocation of Section 74 and the 100% penalty wholly unjustified, since the proceedings arose from disclosures made through TRAN-1 and subsequent submissions rather than concealment.FINAL VERDICTThe Tribunal held that the transitional ITC was eligible, set aside the impugned order and allowed the appeal with consequential relief.CASE REFERRED BY COURTGodrej & Boyce Mfg. Co. Ltd. v. Union of India & Ors. — Bombay High Court .Usha Martin Limited — High Court — order dated 10.11.2022. Kunjal Synergies Pvt. Ltd. v. Assistant Commissioner of CGST & CEX — Calcutta High Court.Steel Authority of India Ltd. v. State of Jharkhand — Jharkhand High Court.
