BackgroundThe Respondents became assignees of leasehold rights in GIDC plots (in Pragna’s case, a plot sold in a departmental e-auction and transferred by GIDC in 2019). The department demanded GST from the assignees under RCM, invoking Section 74 and a further penalty under Section 122(2)(b). The Appellate Authorities set aside the demands following the Gujarat High Court in Gujarat Chamber of Commerce and Industry v. UOI (03.01.2025), and the department appealed to the Tribunal.Final VerdictThe Tribunal noted that it was undisputed that the case was squarely covered by Gujarat Chamber of Commerce and Industry, where the High Court held that assignment of GIDC leasehold rights for consideration is a transfer of benefits arising out of immovable property, outside Section 7(1)(a) read with Schedule II/III, and not liable to GST; the Bombay High Court took the same view in Aerocom Cushions (09.01.2026). The department’s SLPs against both judgments were dismissed by the Supreme Court on 22.05.2026 and 21.07.2026. Holding that the jurisdictional High Court’s judgment holds the field and binds the Tribunal, and the department’s intention to seek review does not dilute it in the absence of any stay or recall, the Tribunal held that GST is not leviable on the assignment transactions. The questions of invoking Sections 74 and 122(2)(b) and applicability of RCM did not survive; the department’s appeals were dismissed and the Orders-in-Appeal upheld.
Assistant Commissioner, CGST & Central Excise, Division-IX, Ankleshwar v. Pragna Chemical Industries (with Shivabhishek Industrial Park Pvt. Ltd. and Kumar Packaging) 06-10-2026
BackgroundThe Respondents became assignees of leasehold rights in GIDC plots (in Pragna’s case, a plot sold in a departmental e-auction and transferred by GIDC in 2019). The department demanded GST from the assignees under RCM, invoking Section 74 and a further penalty under Section 122(2)(b). The Appellate Authorities set aside the demands following the Gujarat High Court in Gujarat Chamber of Commerce and Industry v. UOI (03.01.2025), and the department appealed to the Tribunal.Final VerdictThe Tribunal noted that it was undisputed that the case was squarely covered by Gujarat Chamber of Commerce and Industry, where the High Court held that assignment of GIDC leasehold rights for consideration is a transfer of benefits arising out of immovable property, outside Section 7(1)(a) read with Schedule II/III, and not liable to GST; the Bombay High Court took the same view in Aerocom Cushions (09.01.2026). The department’s SLPs against both judgments were dismissed by the Supreme Court on 22.05.2026 and 21.07.2026. Holding that the jurisdictional High Court’s judgment holds the field and binds the Tribunal, and the department’s intention to seek review does not dilute it in the absence of any stay or recall, the Tribunal held that GST is not leviable on the assignment transactions. The questions of invoking Sections 74 and 122(2)(b) and applicability of RCM did not survive; the department’s appeals were dismissed and the Orders-in-Appeal upheld.
BackgroundThe appellant, which runs a resort at Udupi supplying accommodation, restaurant services and wedding and event venues, availed ITC in FY 2019-20 on inputs used to build the resort. After allowing Rs. 1,47,922.92 on electrical items, air-conditioners and expensed purchases, a Section 73 demand of Rs. 9,32,177 (tax Rs. 8,45,972, interest Rs. 1,607, penalty Rs. 84,598) was confirmed and upheld in first appeal. Relying on Safari Retreats, the appellant claimed that the resort is a “plant” and was not built “on its own account”.Final VerdictThe Tribunal held that, by Section 124 of the Finance Act, 2025 and the corresponding KGST amendment, clause (d) must be read from 01.07.2017 with the defined expression “plant and machinery”, which expressly excludes buildings and civil structures, so a resort building cannot qualify. Even under the unamended clause, Safari Retreats framed the functionality test only for “a mall, warehouse or any building other than a hotel or a cinema theatre” (citing Anand Theatres), so a resort supplying accommodation and food was outside it. Applying Safari Retreats on “own account”, which the amendment did not touch, it held that a building used as the setting of the taxpayer’s own hotel, restaurant and events business is constructed on its own account; no lease or licence to third parties was shown, and the words “including when … used in the course or furtherance of business” defeat the contrary plea. Under Section 155 the burden of identifying items outside clause (d) lay on the appellant, which identified nothing beyond what was already allowed. Interest (computed under Rule 88B) and penalty under Section 73(9) were sustained, and the appeal was dismissed.
M/s Flora Kingdom Farm Resort v. Commissioner of Commercial Taxes, Karnataka 30-09-2026
BackgroundThe appellant, which runs a resort at Udupi supplying accommodation, restaurant services and wedding and event venues, availed ITC in FY 2019-20 on inputs used to build the resort. After allowing Rs. 1,47,922.92 on electrical items, air-conditioners and expensed purchases, a Section 73 demand of Rs. 9,32,177 (tax Rs. 8,45,972, interest Rs. 1,607, penalty Rs. 84,598) was confirmed and upheld in first appeal. Relying on Safari Retreats, the appellant claimed that the resort is a “plant” and was not built “on its own account”.Final VerdictThe Tribunal held that, by Section 124 of the Finance Act, 2025 and the corresponding KGST amendment, clause (d) must be read from 01.07.2017 with the defined expression “plant and machinery”, which expressly excludes buildings and civil structures, so a resort building cannot qualify. Even under the unamended clause, Safari Retreats framed the functionality test only for “a mall, warehouse or any building other than a hotel or a cinema theatre” (citing Anand Theatres), so a resort supplying accommodation and food was outside it. Applying Safari Retreats on “own account”, which the amendment did not touch, it held that a building used as the setting of the taxpayer’s own hotel, restaurant and events business is constructed on its own account; no lease or licence to third parties was shown, and the words “including when … used in the course or furtherance of business” defeat the contrary plea. Under Section 155 the burden of identifying items outside clause (d) lay on the appellant, which identified nothing beyond what was already allowed. Interest (computed under Rule 88B) and penalty under Section 73(9) were sustained, and the appeal was dismissed.
BackgroundBy order dated 08.07.2026 the Tribunal had admitted the assessee’s appeal holding that no further pre-deposit under Section 112(8)(b) was required, relying on Ashirwad Food Industries (Jharkhand HC). The Department filed an interlocutory application to recall/modify that finding, contending that it was passed without hearing it and that the words “in addition to the amount paid under sub-section (6) of section 107” mandate a separate 10% deposit; it relied on Abhijit Nayak (Orissa HC, order dated 27.11.2025) and CIT v. Calcutta Knitwears (strict construction of taxing statutes). Admittedly, the assessee had deposited Rs.1,13,448/- under Section 107(6) against disputed tax of Rs.11,34,474/-, which the Appellate Authority reduced to Rs.1,02,012/-.Final VerdictThe Tribunal distinguished both authorities cited by the Department on facts and observed that the pre-deposit is not payment towards any separate or independent liability but a specified portion of the disputed tax itself; once the Appellate Authority reduces the demand, the surviving demand becomes the “tax in dispute” before the Tribunal, and a literal reading (illustrated by an assessee who pays the entire demand under protest) would yield an anomalous and unworkable result. It held that the statutory requirement cannot be applied mechanically where the amount already deposited equals or exceeds the aggregate percentage of the tax remaining in dispute before the Tribunal. Finding the facts identical to Ashirwad Food Industries, whose ratio on the same central legislation carries persuasive value, the Tribunal found no ground to interfere with the order dated 08.07.2026 and disposed of the IA without costs.
Manoranjan Dash v. Commissionerate of CT GST, Premananda Naik 21-09-2026
BackgroundBy order dated 08.07.2026 the Tribunal had admitted the assessee’s appeal holding that no further pre-deposit under Section 112(8)(b) was required, relying on Ashirwad Food Industries (Jharkhand HC). The Department filed an interlocutory application to recall/modify that finding, contending that it was passed without hearing it and that the words “in addition to the amount paid under sub-section (6) of section 107” mandate a separate 10% deposit; it relied on Abhijit Nayak (Orissa HC, order dated 27.11.2025) and CIT v. Calcutta Knitwears (strict construction of taxing statutes). Admittedly, the assessee had deposited Rs.1,13,448/- under Section 107(6) against disputed tax of Rs.11,34,474/-, which the Appellate Authority reduced to Rs.1,02,012/-.Final VerdictThe Tribunal distinguished both authorities cited by the Department on facts and observed that the pre-deposit is not payment towards any separate or independent liability but a specified portion of the disputed tax itself; once the Appellate Authority reduces the demand, the surviving demand becomes the “tax in dispute” before the Tribunal, and a literal reading (illustrated by an assessee who pays the entire demand under protest) would yield an anomalous and unworkable result. It held that the statutory requirement cannot be applied mechanically where the amount already deposited equals or exceeds the aggregate percentage of the tax remaining in dispute before the Tribunal. Finding the facts identical to Ashirwad Food Industries, whose ratio on the same central legislation carries persuasive value, the Tribunal found no ground to interfere with the order dated 08.07.2026 and disposed of the IA without costs.
BackgroundAluminium colour-coated coils belonging to the appellant (principal), returned by its job worker Roofstyle Industries, were intercepted on 04.05.2023 under a job-work invoice of Rs. 1,841, a return e-way bill showing nil quantity, and the original delivery challan. Penalty of Rs. 2,50,884 was imposed under Section 129(3) for want of a valid delivery challan and e-way bill, and was upheld in first appeal. Before the Tribunal, Revenue argued that the e-way bill had to reflect the Rs. 6,96,900 value of the material.Final VerdictThe Tribunal found that the SCN rested on facts falsified by the department’s own records: the job-work tax invoice, the principal’s delivery challan (as required by Circular 38/12/2018) and e-way bill No. 521496456415 were all tendered at interception. The adjudication order impermissibly introduced a new ground of an “invalid” e-way bill and was non-speaking, while the appellate order relied on a ground outside the SCN (an e-way bill from A.S. Metals); Revenue’s attempt to improve the SCN at the Tribunal stage was rejected. On the question of law, reading Explanation 2 to Rule 138 with Section 15, it held that on return after job work the supply is only of job-work services, so the consignment value is the job-work charges plus tax, and the value of the principal’s goods is not includable in the e-way bill. As the consignment value of Rs. 1,841 was below the Rs. 50,000 threshold, no e-way bill was mandatory and proceedings for a defective or missing e-way bill were void ab initio. The appeal was allowed with consequential relief.
Metalloids India, Pathanamthitta v. Commissioner of State Tax, Kerala 17-09-2026
BackgroundAluminium colour-coated coils belonging to the appellant (principal), returned by its job worker Roofstyle Industries, were intercepted on 04.05.2023 under a job-work invoice of Rs. 1,841, a return e-way bill showing nil quantity, and the original delivery challan. Penalty of Rs. 2,50,884 was imposed under Section 129(3) for want of a valid delivery challan and e-way bill, and was upheld in first appeal. Before the Tribunal, Revenue argued that the e-way bill had to reflect the Rs. 6,96,900 value of the material.Final VerdictThe Tribunal found that the SCN rested on facts falsified by the department’s own records: the job-work tax invoice, the principal’s delivery challan (as required by Circular 38/12/2018) and e-way bill No. 521496456415 were all tendered at interception. The adjudication order impermissibly introduced a new ground of an “invalid” e-way bill and was non-speaking, while the appellate order relied on a ground outside the SCN (an e-way bill from A.S. Metals); Revenue’s attempt to improve the SCN at the Tribunal stage was rejected. On the question of law, reading Explanation 2 to Rule 138 with Section 15, it held that on return after job work the supply is only of job-work services, so the consignment value is the job-work charges plus tax, and the value of the principal’s goods is not includable in the e-way bill. As the consignment value of Rs. 1,841 was below the Rs. 50,000 threshold, no e-way bill was mandatory and proceedings for a defective or missing e-way bill were void ab initio. The appeal was allowed with consequential relief.
BackgroundThe respondent’s registration was cancelled from 12.11.2020 for not filing GSTR-3B for six months. Finding that all returns had been filed after the show cause notice, the First Appellate Authority revoked the cancellation and directed the proper officer to verify the filing of returns and payment of tax. The department appealed, contending that interest, late fee and penalty also had to be paid under Rule 23(1). The respondent did not appear despite three opportunities.Final VerdictThe Tribunal held that the liability under returns extends to interest, late fee and penalty, and that by not applying the proviso to Rule 23(1), the First Appellate Authority committed a jurisdictional and substantive error. It also observed that admitted dues are recoverable through Section 79, which the department ought to invoke before seeking the Tribunal’s aid for collection. Reading the appellate order as intending recovery of the Rule 23 amounts, it held that the department was free to collect interest under Section 50 and late fee under Section 47, and imposed a penalty of Rs. 10,000 under Rule 23, modifying the order to that extent. Since the revocation of cancellation was left intact and only ancillary dues and penalty were added, the outcome is neutral (partly in favour of each side).
Md Qamaruddin Khan v. M/s YRK Constructions, Hyderabad 17-09-2026
BackgroundThe respondent’s registration was cancelled from 12.11.2020 for not filing GSTR-3B for six months. Finding that all returns had been filed after the show cause notice, the First Appellate Authority revoked the cancellation and directed the proper officer to verify the filing of returns and payment of tax. The department appealed, contending that interest, late fee and penalty also had to be paid under Rule 23(1). The respondent did not appear despite three opportunities.Final VerdictThe Tribunal held that the liability under returns extends to interest, late fee and penalty, and that by not applying the proviso to Rule 23(1), the First Appellate Authority committed a jurisdictional and substantive error. It also observed that admitted dues are recoverable through Section 79, which the department ought to invoke before seeking the Tribunal’s aid for collection. Reading the appellate order as intending recovery of the Rule 23 amounts, it held that the department was free to collect interest under Section 50 and late fee under Section 47, and imposed a penalty of Rs. 10,000 under Rule 23, modifying the order to that extent. Since the revocation of cancellation was left intact and only ancillary dues and penalty were added, the outcome is neutral (partly in favour of each side).
BackgroundThe respondent manufactures agarbatti (HSN 3307) taxed at 5%, using perfumes, fragrances, chemicals and packaging materials taxed at 12–18%. A refund of Rs. 4,00,000 of ITC accumulated due to inverted tax structure (April 2022–March 2023) was sanctioned on 18.01.2024 and upheld by the First Appellate Authority. Revenue appealed, contending that para 3.2 of Circular 135/05/2020-GST (as substituted by Circular 173/05/2022-GST) took the case outside Section 54(3)(ii).Final VerdictThe Tribunal framed two questions: whether the credit had accumulated because the tax rate on inputs was higher than on output, and whether para 3.2 of the Circular stood in the way. Applying the definition of “inputs” in Section 2(59) and VKC Footsteps (SC), it held that the perfumes, chemicals and packaging materials were commercially distinct inputs taxed at higher rates than agarbatti, so the ITC had accumulated on account of an inverted rate structure squarely within Section 54(3)(ii). Para 3.2 applies only where input and output are the same goods taxed at different rates at different points of time, and has no application here. Reiterating its own view in Power Tech Global and that of the Principal Bench in Dow Chemical, the Tribunal held that CBIC circulars bind departmental officers but not the Tribunal, and are at most persuasive. The concurrent findings of the lower authorities were affirmed and Revenue’s appeal dismissed.
Commissioner, CGST & CX, Siliguri Commissionerate v. M/s Santosh Fragrance 16-09-2026
BackgroundThe respondent manufactures agarbatti (HSN 3307) taxed at 5%, using perfumes, fragrances, chemicals and packaging materials taxed at 12–18%. A refund of Rs. 4,00,000 of ITC accumulated due to inverted tax structure (April 2022–March 2023) was sanctioned on 18.01.2024 and upheld by the First Appellate Authority. Revenue appealed, contending that para 3.2 of Circular 135/05/2020-GST (as substituted by Circular 173/05/2022-GST) took the case outside Section 54(3)(ii).Final VerdictThe Tribunal framed two questions: whether the credit had accumulated because the tax rate on inputs was higher than on output, and whether para 3.2 of the Circular stood in the way. Applying the definition of “inputs” in Section 2(59) and VKC Footsteps (SC), it held that the perfumes, chemicals and packaging materials were commercially distinct inputs taxed at higher rates than agarbatti, so the ITC had accumulated on account of an inverted rate structure squarely within Section 54(3)(ii). Para 3.2 applies only where input and output are the same goods taxed at different rates at different points of time, and has no application here. Reiterating its own view in Power Tech Global and that of the Principal Bench in Dow Chemical, the Tribunal held that CBIC circulars bind departmental officers but not the Tribunal, and are at most persuasive. The concurrent findings of the lower authorities were affirmed and Revenue’s appeal dismissed.
BackgroundThe respondent buys fabric and pre-stitched garments (5%) and chemicals and packing materials (12–18%), and supplies finished apparel at 5% after bleaching, dyeing, printing, stitching, branding and packing. Its inverted duty refunds of Rs. 34,47,623 (March 2024) and Rs. 7,86,037 (February 2024) were rejected on the ground that input and output fall under the same HSN. The First Appellate Authority allowed them, and Revenue appealed, also alleging non-verification of capital-goods invoices, GSTR-2B mismatches, export ITC and annual (rather than period-wise) computation.Final VerdictThe Tribunal held that the concept of “manufacture” is no longer relevant under GST, since the levy under Section 9(1) is on supply, so refund eligibility does not depend on whether the claimant is a trader or a manufacturer. Para 3 of Circular 135/05/2020-GST, by its very heading, deals with accumulation due to a reduction in the GST rate, and para 3.2 applies only where the same goods attract different rates at different points of time; it has no application where there is no rate reduction. Following the Madras High Court in Vindhya Spinning Mills (14.07.2026), it held that Section 54(3)(ii) draws no distinction between principal and other inputs, so where higher-taxed chemicals and packing materials cause the accumulation, refund cannot be denied because one input shares the output’s rate or HSN. Computation had been period-specific under Rule 89(5), and the verification objections had already been examined by both lower authorities and were not rebutted by any evidence. Revenue’s appeals were dismissed.
Commissioner of CGST & Central Excise, Kolkata North v. M/s HP Cotton Casuals Pvt. Ltd. 10-09-2026
BackgroundThe respondent buys fabric and pre-stitched garments (5%) and chemicals and packing materials (12–18%), and supplies finished apparel at 5% after bleaching, dyeing, printing, stitching, branding and packing. Its inverted duty refunds of Rs. 34,47,623 (March 2024) and Rs. 7,86,037 (February 2024) were rejected on the ground that input and output fall under the same HSN. The First Appellate Authority allowed them, and Revenue appealed, also alleging non-verification of capital-goods invoices, GSTR-2B mismatches, export ITC and annual (rather than period-wise) computation.Final VerdictThe Tribunal held that the concept of “manufacture” is no longer relevant under GST, since the levy under Section 9(1) is on supply, so refund eligibility does not depend on whether the claimant is a trader or a manufacturer. Para 3 of Circular 135/05/2020-GST, by its very heading, deals with accumulation due to a reduction in the GST rate, and para 3.2 applies only where the same goods attract different rates at different points of time; it has no application where there is no rate reduction. Following the Madras High Court in Vindhya Spinning Mills (14.07.2026), it held that Section 54(3)(ii) draws no distinction between principal and other inputs, so where higher-taxed chemicals and packing materials cause the accumulation, refund cannot be denied because one input shares the output’s rate or HSN. Computation had been period-specific under Rule 89(5), and the verification objections had already been examined by both lower authorities and were not rebutted by any evidence. Revenue’s appeals were dismissed.
BackgroundFollowing an anti-evasion inspection, a consolidated SCN for July 2017–November 2023 demanded GST of about Rs. 20.90 crore on affiliation, registration, documentation, licence and late fees, invoking Section 74 for July 2017–August 2018. The first appellate authority dropped documentation charges, late entry fees and licence fees, and regularised affiliation fees up to 17.06.2021 under Circular 234/28/2024-GST. It upheld tax on affiliation fees after 18.06.2021 and on annual and late registration charges for the whole period, with Section 74 and penalties. Eight issues were framed in CISCE’s appeal.Final VerdictThe Tribunal held that a consolidated SCN covering several years is not invalid without demonstrable prejudice. Applying Dilip Kumar & Co. (strict construction of exemptions) and distinguishing High Court rulings on statutory universities, since CISCE is a registered society, it held that affiliation, including processing and form charges, is an independent taxable supply and not a service “relating to admission to, or conduct of examination” under Entry 66(b)(iv). Annual and late registration charges were likewise held taxable and outside the regularisation in Circular 234/28/2024-GST, whose challenge was rejected.In CISCE’s favour, it held that since no tax was separately collected, the amounts received must be treated as cum-tax under Rule 35, and that, the respondent having called for and received details in 2023, fraud, wilful misstatement or suppression was not established. The demand for July 2017–August 2018 (Rs. 1,29,60,720) was therefore set aside as time-barred, together with its interest and penalty. Demands for September 2018–November 2023 were upheld with Section 73 penalty and the Section 125 penalty of Rs. 25,000, no penalty or interest was to apply to the regularised affiliation period, and the liability was ordered to be recomputed. The outcome is neutral: the levy was upheld, but with substantial relief.
Council for the Indian School Certificate Examinations v. Commissioner, CGST Delhi East & Ors. 31-08-2026
BackgroundFollowing an anti-evasion inspection, a consolidated SCN for July 2017–November 2023 demanded GST of about Rs. 20.90 crore on affiliation, registration, documentation, licence and late fees, invoking Section 74 for July 2017–August 2018. The first appellate authority dropped documentation charges, late entry fees and licence fees, and regularised affiliation fees up to 17.06.2021 under Circular 234/28/2024-GST. It upheld tax on affiliation fees after 18.06.2021 and on annual and late registration charges for the whole period, with Section 74 and penalties. Eight issues were framed in CISCE’s appeal.Final VerdictThe Tribunal held that a consolidated SCN covering several years is not invalid without demonstrable prejudice. Applying Dilip Kumar & Co. (strict construction of exemptions) and distinguishing High Court rulings on statutory universities, since CISCE is a registered society, it held that affiliation, including processing and form charges, is an independent taxable supply and not a service “relating to admission to, or conduct of examination” under Entry 66(b)(iv). Annual and late registration charges were likewise held taxable and outside the regularisation in Circular 234/28/2024-GST, whose challenge was rejected.In CISCE’s favour, it held that since no tax was separately collected, the amounts received must be treated as cum-tax under Rule 35, and that, the respondent having called for and received details in 2023, fraud, wilful misstatement or suppression was not established. The demand for July 2017–August 2018 (Rs. 1,29,60,720) was therefore set aside as time-barred, together with its interest and penalty. Demands for September 2018–November 2023 were upheld with Section 73 penalty and the Section 125 penalty of Rs. 25,000, no penalty or interest was to apply to the regularised affiliation period, and the liability was ordered to be recomputed. The outcome is neutral: the levy was upheld, but with substantial relief.
BackgroundFor April 2020–March 2021, a mismatch between GSTR-3B and the returns led the department to treat Rs. 1,00,408 each of CGST and SGST (Rs. 2,00,816 in total) as excess ITC under Section 73, with no allegation of fraud or suppression. The First Appellate Authority upheld it, reasoning under Section 16(2)(c) that ITC is available only under the head in which tax was deposited. The question of law referred was the treatment of ITC misreported across heads without exceeding aggregate eligibility.Final VerdictApplying the Kerala High Court Division Bench in Rejimon Padickapparambil Alex v. UOI (W.A. 54/2024) and CBIC Circular No. 192/04/2023-GST, which treat the electronic credit ledger as a single pool or “wallet” of IGST, CGST and SGST, the Tribunal held that the demand cannot be sustained merely because credit was reflected under an incorrect tax head, since the department had not established actual loss of revenue or availment beyond aggregate entitlement and the eligibility of the credit was not disputed. With the principal demand unsustainable, interest and penalty could not survive independently. However, as neither lower authority had verified from the ledger and returns that matching IGST credit was available and unclaimed, the appeal was allowed with a direction that the proper officer verify sufficient eligible IGST credit and drop the demand if the IGST credit stands unclaimed, with consequential relief including restoration or adjustment of ITC.
Lucknow Test House v. Additional Commissioner Grade-II, State Tax, Lucknow & Ors. 27-08-2026
BackgroundFor April 2020–March 2021, a mismatch between GSTR-3B and the returns led the department to treat Rs. 1,00,408 each of CGST and SGST (Rs. 2,00,816 in total) as excess ITC under Section 73, with no allegation of fraud or suppression. The First Appellate Authority upheld it, reasoning under Section 16(2)(c) that ITC is available only under the head in which tax was deposited. The question of law referred was the treatment of ITC misreported across heads without exceeding aggregate eligibility.Final VerdictApplying the Kerala High Court Division Bench in Rejimon Padickapparambil Alex v. UOI (W.A. 54/2024) and CBIC Circular No. 192/04/2023-GST, which treat the electronic credit ledger as a single pool or “wallet” of IGST, CGST and SGST, the Tribunal held that the demand cannot be sustained merely because credit was reflected under an incorrect tax head, since the department had not established actual loss of revenue or availment beyond aggregate entitlement and the eligibility of the credit was not disputed. With the principal demand unsustainable, interest and penalty could not survive independently. However, as neither lower authority had verified from the ledger and returns that matching IGST credit was available and unclaimed, the appeal was allowed with a direction that the proper officer verify sufficient eligible IGST credit and drop the demand if the IGST credit stands unclaimed, with consequential relief including restoration or adjustment of ITC.
BackgroundOn 27.03.2018 the Mobile Squad, Bareilly intercepted iron goods moving under Tax Invoice No. 29 without an e-way bill, and tax of Rs. 47,844 with equal penalty was imposed under Section 129(3). The First Appellate Authority set it aside (24.09.2021), relying on later production of the e-way bill and documents. Revenue appealed, contending that the violation of Rule 138 was not cured afterwards. The respondent did not appear.Final VerdictHolding that the e-way bill under Rule 138(1) is an integral part of the statutory mechanism, the Tribunal distinguished the High Court precedents relied upon below (Singh Tyre, KL Industries, Harley Foods, Modern Traders, Rai Prexim). Because the e-way bill is generated online while the invoice is manual, transporting goods without an e-way bill was held to be substantive non-compliance establishing an intention to evade tax, reinforced by the short Baheri (UP)–Kichha (Uttarakhand) route. Referring to its own order of 20.08.2026 in Om Prakash v. Islam Trading Co., which involved the same dealer, goods, destination and modus operandi, the Tribunal held that the repeated lapse, with the e-way bill surfacing only after interception, was a deliberate course of conduct and not a mere technical lapse. Revenue’s appeal was allowed, the appellate order set aside and the original order of 09.03.2018 under Section 129(3) restored.
Santosh Mani Mishra (Revenue) v. M/s Islam Trading Company, Baheri, Bareilly 25-08-2026
BackgroundOn 27.03.2018 the Mobile Squad, Bareilly intercepted iron goods moving under Tax Invoice No. 29 without an e-way bill, and tax of Rs. 47,844 with equal penalty was imposed under Section 129(3). The First Appellate Authority set it aside (24.09.2021), relying on later production of the e-way bill and documents. Revenue appealed, contending that the violation of Rule 138 was not cured afterwards. The respondent did not appear.Final VerdictHolding that the e-way bill under Rule 138(1) is an integral part of the statutory mechanism, the Tribunal distinguished the High Court precedents relied upon below (Singh Tyre, KL Industries, Harley Foods, Modern Traders, Rai Prexim). Because the e-way bill is generated online while the invoice is manual, transporting goods without an e-way bill was held to be substantive non-compliance establishing an intention to evade tax, reinforced by the short Baheri (UP)–Kichha (Uttarakhand) route. Referring to its own order of 20.08.2026 in Om Prakash v. Islam Trading Co., which involved the same dealer, goods, destination and modus operandi, the Tribunal held that the repeated lapse, with the e-way bill surfacing only after interception, was a deliberate course of conduct and not a mere technical lapse. Revenue’s appeal was allowed, the appellate order set aside and the original order of 09.03.2018 under Section 129(3) restored.
