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
BACKGROUNDCommon adjudicatory proceedings concerned allegations that companies had fraudulently availed and utilised ITC on invoices without corresponding supply of goods. The individuals connected with those companies were proceeded against for penalties under Sections 74, 76(2) and 122(1), although no tax demand was proposed against them in their individual capacities.The petitioners challenged the adjudication order and also raised issues concerning the requirement of pre-deposit for pursuing statutory appeals. The SCNs had been issued in 2020, whereas the proviso to Section 107(6) was substituted with effect from 01.10.2025.COURT OBSERVATIONThe Court held that an appeal under Section 107 was maintainable against the impugned order and that the appellate remedy was governed by Section 107(6) as it stood when the respective SCNs were issued, since the adjudicatory proceedings had commenced before the amendment effective from 01.10.2025.On the question of Section 122(1), the Court noted that its applicability to a person who is not a taxable person was pending before the Supreme Court. Therefore, judicial propriety required the Court not to express an opinion on that issue; the remaining factual and legal grounds could appropriately be examined in statutory appeal.FINAL VERDICTThe writ petitions were disposed of by relegating the petitioners to the statutory appellate remedy under Section 107. All grounds were left open before the Appellate Authority. The pre-deposit requirement was directed to be governed by Section 107(6) as it stood on the dates of issuance of the respective SCNs. CASE REFERRED BY COURTGaurav Jain & Anr. v. Joint Commissioner (Appeals-II), CGST Delhi Zone & Anr. — High Court of Delhi — 31.07.2026.Mukesh Kumar Garg v. Union of India & Ors. — Supreme Court of India — 04.08.2025.
ARUN KUMAR JAIN & ORS. v. ADDITIONAL COMMISSIONER, CGST DELHI WEST COMMISSIONERATE & ORS. 13-08-2026
BACKGROUNDCommon adjudicatory proceedings concerned allegations that companies had fraudulently availed and utilised ITC on invoices without corresponding supply of goods. The individuals connected with those companies were proceeded against for penalties under Sections 74, 76(2) and 122(1), although no tax demand was proposed against them in their individual capacities.The petitioners challenged the adjudication order and also raised issues concerning the requirement of pre-deposit for pursuing statutory appeals. The SCNs had been issued in 2020, whereas the proviso to Section 107(6) was substituted with effect from 01.10.2025.COURT OBSERVATIONThe Court held that an appeal under Section 107 was maintainable against the impugned order and that the appellate remedy was governed by Section 107(6) as it stood when the respective SCNs were issued, since the adjudicatory proceedings had commenced before the amendment effective from 01.10.2025.On the question of Section 122(1), the Court noted that its applicability to a person who is not a taxable person was pending before the Supreme Court. Therefore, judicial propriety required the Court not to express an opinion on that issue; the remaining factual and legal grounds could appropriately be examined in statutory appeal.FINAL VERDICTThe writ petitions were disposed of by relegating the petitioners to the statutory appellate remedy under Section 107. All grounds were left open before the Appellate Authority. The pre-deposit requirement was directed to be governed by Section 107(6) as it stood on the dates of issuance of the respective SCNs. CASE REFERRED BY COURTGaurav Jain & Anr. v. Joint Commissioner (Appeals-II), CGST Delhi Zone & Anr. — High Court of Delhi — 31.07.2026.Mukesh Kumar Garg v. Union of India & Ors. — Supreme Court of India — 04.08.2025.
BACKGROUNDThe assessee had sold a residential property and claimed exemption under Section 54F on the basis that the sale consideration had been reinvested in acquisition of another residential property in the name of his wife. The claim was initially disclosed in the return but was later questioned through reassessment proceedings, resulting in denial of exemption. The CIT(A) and ITAT also rejected the claim.Before the High Court, the assessee contended that Section 54F did not require the new residential property to be registered exclusively in his own name and relied upon judgments including Jangpal Singh Tanwar, Gurnam Singh and Kamal Wahal. The Revenue relied upon decisions of the Punjab and Haryana High Court holding that the new property must be purchased in the assessee's own name.COURT OBSERVATIONSThe Court first found that both the original asset and the new asset were residential properties. Consequently, Section 54F was not the applicable provision; Section 54 governed the transaction. The Court specifically noted that this distinction had not been noticed by the Assessing Officer, CIT(A) or ITAT.The Court then held that exemption under Section 54 could be claimed only where the sale of the original residential property and purchase of the new residential property were transactions executed by the same assessee. Husband and wife are distinct legal entities, and the two transactions could not be clubbed merely because the husband had provided the funds.The Court relied particularly upon Jai Narayan and Dinesh Verma, holding that where the statutory provision refers to purchase by the “assessee”, purchase of the new property in the name of another person, including the spouse, does not satisfy the statutory requirement.The Court also considered and disagreed with the approach in Kamal Wahal, V. Natarajan and Mrs. Jennifer Bhide. It agreed with the reasoning in Kamal Kant Kamboj and held that Gurnam Singh was distinguishable because that case concerned property purchased jointly in the names of the assessee and his son, whereas the property in the present case stood solely in the wife's name.The Court further observed that Bahadur Singh had followed Dinesh Verma and that the SLP against Bahadur Singh had been dismissed by the Supreme Court on 29.08.2023. The Court held that the questions raised by the assessee therefore stood conclusively decided against him.Finally, Jangpal Singh Tanwar was distinguished because in that case the reinvestment was jointly in the names of the assessee, his wife and his son, and the other joint owners had also contributed to the investment. The Court also noted that Jangpal Singh Tanwar had not noticed the earlier decisions in Dinesh Verma and Bahadur Singh.FINAL VERDICTThe High Court held that the questions of law raised by the assessee stood conclusively decided against him and that the investment in property solely in the wife's name did not qualify for the exemption under the applicable provision. The appeal was therefore dismissed, with no order as to costs.CASE REFERRED BY COURTJai Narayan v. Income Tax Officer — Punjab and Haryana High Court — 2007.Commissioner of Income Tax, Faridabad v. Dinesh Verma — Punjab and Haryana High Court — 06.07.2015.Kamal Kant Kamboj v. Income Tax Officer, Ward-3, Haryana — Punjab and Haryana High Court — 2017Bahadur Singh v. Commissioner of Income Tax (Appeals) — Punjab and Haryana High Court — 2023Bahadur Singh SLP, SLP (Civil) Diary No.31033 of 2022 — Supreme Court of India — 29.08.2023Commissioner of Income Tax v. Gurnam Singh — Punjab and Haryana High Court — 2010 Commissioner of Income Tax v. Kamal Wahal — Delhi High Court — 2013.Commissioner of Income Tax v. V. Natarajan — Madras High Court — 2006.Mrs. Jennifer Bhide — Karnataka High Court — 2011.CIT v. Vegetable Products Ltd. — Supreme Court of India — 1973.
Subh Karan Yadav v. Income Tax Officer, Rewari, Haryana 12-08-2026
BACKGROUNDThe assessee had sold a residential property and claimed exemption under Section 54F on the basis that the sale consideration had been reinvested in acquisition of another residential property in the name of his wife. The claim was initially disclosed in the return but was later questioned through reassessment proceedings, resulting in denial of exemption. The CIT(A) and ITAT also rejected the claim.Before the High Court, the assessee contended that Section 54F did not require the new residential property to be registered exclusively in his own name and relied upon judgments including Jangpal Singh Tanwar, Gurnam Singh and Kamal Wahal. The Revenue relied upon decisions of the Punjab and Haryana High Court holding that the new property must be purchased in the assessee's own name.COURT OBSERVATIONSThe Court first found that both the original asset and the new asset were residential properties. Consequently, Section 54F was not the applicable provision; Section 54 governed the transaction. The Court specifically noted that this distinction had not been noticed by the Assessing Officer, CIT(A) or ITAT.The Court then held that exemption under Section 54 could be claimed only where the sale of the original residential property and purchase of the new residential property were transactions executed by the same assessee. Husband and wife are distinct legal entities, and the two transactions could not be clubbed merely because the husband had provided the funds.The Court relied particularly upon Jai Narayan and Dinesh Verma, holding that where the statutory provision refers to purchase by the “assessee”, purchase of the new property in the name of another person, including the spouse, does not satisfy the statutory requirement.The Court also considered and disagreed with the approach in Kamal Wahal, V. Natarajan and Mrs. Jennifer Bhide. It agreed with the reasoning in Kamal Kant Kamboj and held that Gurnam Singh was distinguishable because that case concerned property purchased jointly in the names of the assessee and his son, whereas the property in the present case stood solely in the wife's name.The Court further observed that Bahadur Singh had followed Dinesh Verma and that the SLP against Bahadur Singh had been dismissed by the Supreme Court on 29.08.2023. The Court held that the questions raised by the assessee therefore stood conclusively decided against him.Finally, Jangpal Singh Tanwar was distinguished because in that case the reinvestment was jointly in the names of the assessee, his wife and his son, and the other joint owners had also contributed to the investment. The Court also noted that Jangpal Singh Tanwar had not noticed the earlier decisions in Dinesh Verma and Bahadur Singh.FINAL VERDICTThe High Court held that the questions of law raised by the assessee stood conclusively decided against him and that the investment in property solely in the wife's name did not qualify for the exemption under the applicable provision. The appeal was therefore dismissed, with no order as to costs.CASE REFERRED BY COURTJai Narayan v. Income Tax Officer — Punjab and Haryana High Court — 2007.Commissioner of Income Tax, Faridabad v. Dinesh Verma — Punjab and Haryana High Court — 06.07.2015.Kamal Kant Kamboj v. Income Tax Officer, Ward-3, Haryana — Punjab and Haryana High Court — 2017Bahadur Singh v. Commissioner of Income Tax (Appeals) — Punjab and Haryana High Court — 2023Bahadur Singh SLP, SLP (Civil) Diary No.31033 of 2022 — Supreme Court of India — 29.08.2023Commissioner of Income Tax v. Gurnam Singh — Punjab and Haryana High Court — 2010 Commissioner of Income Tax v. Kamal Wahal — Delhi High Court — 2013.Commissioner of Income Tax v. V. Natarajan — Madras High Court — 2006.Mrs. Jennifer Bhide — Karnataka High Court — 2011.CIT v. Vegetable Products Ltd. — Supreme Court of India — 1973.
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.
BackgroundThe batch of writ petitions arose from appeals that had been rejected as time-barred after the respective taxpayers had first pursued rectification proceedings under Section 161. The petitioners contended that they had bona fide pursued the rectification remedy and that the period spent in those proceedings should be excluded while computing the three-month limitation under Section 107. The Revenue opposed this, arguing that GST is a self-contained code, that limitation under Section 107 begins from communication of the original order, and that filing a rectification petition does not stop or suspend the limitation period.In the case of E2E Supply Chain Solutions Limited, the rectification petition was primarily based on the non-consideration of credit notes that had been submitted before the order-in-original. The petitioner had also relied upon the earlier decision of the Madras High Court in SPK and Co. while pursuing the matter. On examination, the Court found that there was a genuine basis for pursuing rectification and that the requirements of good faith and due diligence were satisfied.Court ObservationThe Limitation Act, as such, does not apply to quasi-judicial authorities, including GST appellate authorities. However, the principles underlying Section 14 can apply to GST appellate proceedings.GST legislation does not expressly or impliedly exclude the principles underlying Section 14. The fact that Section 107 permits condonation only for a further period of one month does not mean that Section 14's principle of exclusion of time is also excluded.A rectification petition rejected because there is “no error apparent” can, in an appropriate case, constitute a bona fide mistaken remedy falling within “other cause of a like nature” under the principles of Section 14. Such rejection is not necessarily a full-fledged adjudication of the larger dispute.However, exclusion is not automatic merely because a rectification petition was filed. The proceedings must concern the same matter and parties, and the earlier proceeding must have been pursued with due diligence and in good faith. Good faith requires the Court to broadly examine whether there was some basis for filing the rectification petition, so that the provision is not abused merely to extend the appeal period.Where the requirements are satisfied, the entire period from filing of the rectification petition until its rejection is liable to be excluded. Thus, the taxpayer gets the prescribed three-month appeal period after such exclusion, subject to the further one-month period available under Section 107(4).The Court clarified that limitation under Section 107 ordinarily starts from communication of the specific order being appealed against. Therefore, an appeal against the original order runs from communication of that original order; filing rectification does not itself replace that starting point.Final VerdictIn the case of E2E Supply Chain Solutions Limited, the Court held that the petitioner had established good faith and due diligence because the rectification petition concerned non-consideration of credit notes submitted before the original order. Accordingly, the petitioner was entitled to exclusion of the time spent in the rectification proceedings.The Court ultimately set aside the impugned appellate order and directed the appellate authority to receive and dispose of the appeal on merits. W.P. No.2629 of 2026 was specifically included among the seven writ petitions allowed for this purpose.Case Referred by CourtThe Court considered, among others, the following authorities in arriving at its conclusions:M.P. Steel Corporation v. Commissioner of Central ExciseConsolidated Engineering Enterprises v. Principal SecretaryCCE v. Hongo India (P) Ltd..Commissioner of Sales Tax, U.P. v. Parson Tools and Plants.
BackgroundThe batch of writ petitions arose from appeals that had been rejected as time-barred after the respective taxpayers had first pursued rectification proceedings under Section 161. The petitioners contended that they had bona fide pursued the rectification remedy and that the period spent in those proceedings should be excluded while computing the three-month limitation under Section 107. The Revenue opposed this, arguing that GST is a self-contained code, that limitation under Section 107 begins from communication of the original order, and that filing a rectification petition does not stop or suspend the limitation period.In the case of E2E Supply Chain Solutions Limited, the rectification petition was primarily based on the non-consideration of credit notes that had been submitted before the order-in-original. The petitioner had also relied upon the earlier decision of the Madras High Court in SPK and Co. while pursuing the matter. On examination, the Court found that there was a genuine basis for pursuing rectification and that the requirements of good faith and due diligence were satisfied.Court ObservationThe Limitation Act, as such, does not apply to quasi-judicial authorities, including GST appellate authorities. However, the principles underlying Section 14 can apply to GST appellate proceedings.GST legislation does not expressly or impliedly exclude the principles underlying Section 14. The fact that Section 107 permits condonation only for a further period of one month does not mean that Section 14's principle of exclusion of time is also excluded.A rectification petition rejected because there is “no error apparent” can, in an appropriate case, constitute a bona fide mistaken remedy falling within “other cause of a like nature” under the principles of Section 14. Such rejection is not necessarily a full-fledged adjudication of the larger dispute.However, exclusion is not automatic merely because a rectification petition was filed. The proceedings must concern the same matter and parties, and the earlier proceeding must have been pursued with due diligence and in good faith. Good faith requires the Court to broadly examine whether there was some basis for filing the rectification petition, so that the provision is not abused merely to extend the appeal period.Where the requirements are satisfied, the entire period from filing of the rectification petition until its rejection is liable to be excluded. Thus, the taxpayer gets the prescribed three-month appeal period after such exclusion, subject to the further one-month period available under Section 107(4).The Court clarified that limitation under Section 107 ordinarily starts from communication of the specific order being appealed against. Therefore, an appeal against the original order runs from communication of that original order; filing rectification does not itself replace that starting point.Final VerdictIn the case of E2E Supply Chain Solutions Limited, the Court held that the petitioner had established good faith and due diligence because the rectification petition concerned non-consideration of credit notes submitted before the original order. Accordingly, the petitioner was entitled to exclusion of the time spent in the rectification proceedings.The Court ultimately set aside the impugned appellate order and directed the appellate authority to receive and dispose of the appeal on merits. W.P. No.2629 of 2026 was specifically included among the seven writ petitions allowed for this purpose.Case Referred by CourtThe Court considered, among others, the following authorities in arriving at its conclusions:M.P. Steel Corporation v. Commissioner of Central ExciseConsolidated Engineering Enterprises v. Principal SecretaryCCE v. Hongo India (P) Ltd..Commissioner of Sales Tax, U.P. v. Parson Tools and Plants.
BACKGROUNDThe appeal arose from an order imposing penalties under Sections 122 and 125 read with Section 20 of the IGST Act. The Registry raised the issue of statutory pre-deposit for admission of the appeal.The SCN, original adjudication order and appellate order had all been issued before 01.10.2025, when the Finance Act, 2025 amendment introducing the additional pre-deposit for penalty-only orders came into force.COURT OBSERVATIONThe Tribunal noted that the amended proviso to Section 112(8) became effective only from 01.10.2025 and did not indicate retrospective application. Since the impugned appellate order was issued before the amendment, the Tribunal held that the amended pre-deposit condition could not be imposed on the appeal.FINAL VERDICTThe Tribunal held that no pre-deposit was required under Section 112 for the present appeal. It clarified that the order would not prejudice the merits and that, if at the final hearing the Tribunal concluded that the amended pre-deposit provision was applicable, the appellant would have to comply with that requirement. Notice was issued and the matter was directed to be listed after four weeks.CASE REFERRED BY COURTBarjinder Singh Kohli v. Assistant Commissioner & Others — Calcutta High Court — 03.11.2025. The Tribunal held that the decision squarely covered the issue of pre-deposit in a penalty-only matter where the proceedings commenced before 01.10.2025.
BACKGROUNDThe appeal arose from an order imposing penalties under Sections 122 and 125 read with Section 20 of the IGST Act. The Registry raised the issue of statutory pre-deposit for admission of the appeal.The SCN, original adjudication order and appellate order had all been issued before 01.10.2025, when the Finance Act, 2025 amendment introducing the additional pre-deposit for penalty-only orders came into force.COURT OBSERVATIONThe Tribunal noted that the amended proviso to Section 112(8) became effective only from 01.10.2025 and did not indicate retrospective application. Since the impugned appellate order was issued before the amendment, the Tribunal held that the amended pre-deposit condition could not be imposed on the appeal.FINAL VERDICTThe Tribunal held that no pre-deposit was required under Section 112 for the present appeal. It clarified that the order would not prejudice the merits and that, if at the final hearing the Tribunal concluded that the amended pre-deposit provision was applicable, the appellant would have to comply with that requirement. Notice was issued and the matter was directed to be listed after four weeks.CASE REFERRED BY COURTBarjinder Singh Kohli v. Assistant Commissioner & Others — Calcutta High Court — 03.11.2025. The Tribunal held that the decision squarely covered the issue of pre-deposit in a penalty-only matter where the proceedings commenced before 01.10.2025.
BackgroundThe matter arose from the judgment of the Gujarat High Court in SCA No. 749/2025, which considered the constitutional validity of Section 16(2)(c) of the CGST Act in the context of ITC where the supplier fails to pay the requisite tax. The High Court undertook a detailed analysis of the differences between the Delhi Value Added Tax Act, 2004 and the CGST Act, 2017, including the scheme governing availment of ITC under GST.The High Court also considered Section 41 and Sections 73 and 74 of the CGST Act, observing that under the GST regime, reversed ITC could be re-availed after the supplier-dealer discharges the tax liability. The Gujarat High Court consequently found no ground to declare Section 16(2)(c) unconstitutional or to read down its provisions.Court ObservationThe Supreme Court noted that although a special leave petition had been entertained in relation to the Tripura High Court's decision in Sahil Enterprises v. Union of India & Ors., the exercise undertaken by the Gujarat High Court was materially different. The Supreme Court specifically accepted the Gujarat High Court's detailed distinction between the Delhi VAT Act and the CGST Act and held that there was no possibility of drawing parity between the two enactments for treating a purchasing dealer under the CGST Act on the same footing as a bona fide purchasing dealer under the Delhi VAT Act when the supplier fails to pay tax.The Court further agreed with the Gujarat High Court's consideration of Sections 41, 73 and 74 of the CGST Act regarding re-availment of reversed ITC upon discharge of the supplier's tax liability.Final VerdictThe Supreme Court held that the Gujarat High Court was fully justified in concluding that no grounds existed to declare Section 16(2)(c) of the CGST Act unconstitutional or to read down the provision. The Supreme Court expressed its complete and respectful agreement with the Gujarat High Court's view and affirmed and upheld the impugned judgment.Accordingly, the Special Leave Petitions were dismissed, and any pending applications were also disposed of.Case Referred by CourtSahil Enterprises v. Union of India & Ors. — Tripura High Court, decision referred to as (2026) 154 GSTR 108 (Tri.). The Supreme Court considered the distinction between the Tripura High Court decision and the Gujarat High Court's analysis in the present matter.
Bhandari Scrap Traders v. Union of India & Ors. 24-07-2026
BackgroundThe matter arose from the judgment of the Gujarat High Court in SCA No. 749/2025, which considered the constitutional validity of Section 16(2)(c) of the CGST Act in the context of ITC where the supplier fails to pay the requisite tax. The High Court undertook a detailed analysis of the differences between the Delhi Value Added Tax Act, 2004 and the CGST Act, 2017, including the scheme governing availment of ITC under GST.The High Court also considered Section 41 and Sections 73 and 74 of the CGST Act, observing that under the GST regime, reversed ITC could be re-availed after the supplier-dealer discharges the tax liability. The Gujarat High Court consequently found no ground to declare Section 16(2)(c) unconstitutional or to read down its provisions.Court ObservationThe Supreme Court noted that although a special leave petition had been entertained in relation to the Tripura High Court's decision in Sahil Enterprises v. Union of India & Ors., the exercise undertaken by the Gujarat High Court was materially different. The Supreme Court specifically accepted the Gujarat High Court's detailed distinction between the Delhi VAT Act and the CGST Act and held that there was no possibility of drawing parity between the two enactments for treating a purchasing dealer under the CGST Act on the same footing as a bona fide purchasing dealer under the Delhi VAT Act when the supplier fails to pay tax.The Court further agreed with the Gujarat High Court's consideration of Sections 41, 73 and 74 of the CGST Act regarding re-availment of reversed ITC upon discharge of the supplier's tax liability.Final VerdictThe Supreme Court held that the Gujarat High Court was fully justified in concluding that no grounds existed to declare Section 16(2)(c) of the CGST Act unconstitutional or to read down the provision. The Supreme Court expressed its complete and respectful agreement with the Gujarat High Court's view and affirmed and upheld the impugned judgment.Accordingly, the Special Leave Petitions were dismissed, and any pending applications were also disposed of.Case Referred by CourtSahil Enterprises v. Union of India & Ors. — Tripura High Court, decision referred to as (2026) 154 GSTR 108 (Tri.). The Supreme Court considered the distinction between the Tripura High Court decision and the Gujarat High Court's analysis in the present matter.
