Facts of the CaseThe complainant department filed Complaint No. GST/01/2018 before the learned Additional Chief Judicial Magistrate, Kasauli, alleging commission of offences under Section 69 read with Section 132 of the HPGST/CGST Act, 2017 and Section 20 of the IGST Act, 2017 against the petitioners, who were partners of M/s G.M. Powertech.It was alleged that the firm had availed fraudulent input tax credit (ITC) during the financial years 2017–18 and 2018–19 by declaring inward supplies from fictitious and non-existent firms based in Delhi and Uttar Pradesh. The GST portal verification revealed that goods were purportedly transported in fake or non-existent vehicles, including two-wheelers and cars incapable of carrying heavy consignments. Investigation showed that suppliers mentioned in invoices did not exist at the given addresses. Fraudulent ITC amounting to substantial sums was alleged.The learned Trial Court, upon finding sufficient material, summoned the accused and fixed the matter for recording pre-charge evidence.Aggrieved, the petitioners approached the High Court seeking quashing of the complaint and subsequent proceedings. They contended that the GST Acts were silent regarding investigation and filing of complaint, that departmental officers exercised unbridled powers, that Sections 69 and 132 were arbitrary and violative of Article 21 of the Constitution, and that the trial court erred in proceeding as a warrant case and ordering pre-charge evidence.The principal questions before the High Court were:Whether the provisions of the Code of Criminal Procedure apply to investigation and trial under the GST Acts.Whether the complaint and proceedings were liable to be quashed under Section 482 Cr.P.C.Whether the trial court erred in treating the matter as a warrant case and directing pre-charge evidence.Court Observations and DecisionThe High Court examined the law relating to quashing of criminal proceedings and reiterated the principles governing exercise of inherent powers under Section 482 Cr.P.C., as laid down by the Supreme Court. It observed that quashing is permissible only in limited circumstances such as absence of prima facie offence, legal bar to proceedings, or manifest abuse of process.On applicability of Cr.P.C., the Court relied on the Supreme Court’s decision in Radhika Agarwal v. Union of India, holding that by virtue of Sections 4(2) and 5 Cr.P.C., the provisions of the Code apply to offences under special statutes unless expressly excluded. It further noted that GST Acts are not a complete code in respect of search, seizure, arrest and procedure, and therefore Cr.P.C. provisions apply in the absence of any contrary provision.The Court rejected the contention that the Act was silent regarding investigation and filing of complaint. It held that Cr.P.C. governs such procedure unless excluded.Regarding the trial as a warrant case, the Court observed that Section 132 provides punishment up to five years’ imprisonment. Since a warrant case under Section 2(x) Cr.P.C. includes offences punishable with imprisonment exceeding two years, the trial court was correct in proceeding as a warrant case. Under Section 244 Cr.P.C., in cases instituted otherwise than on a police report, the Magistrate is required to record prosecution evidence after appearance of the accused. Therefore, ordering pre-charge evidence was legally justified.On the contention that investigation was improperly conducted, the Court held that while exercising inherent jurisdiction, it only examines whether a prima facie case exists and does not evaluate the sufficiency or credibility of evidence. The verification conducted by officials, who found that suppliers did not exist at the given addresses, was sufficient at the prima facie stage. Issues relating to quality of investigation are matters for trial.The Court also held that the decision in Mukesh Singh v. State (Narcotic Branch of Delhi) did not assist the petitioners, as it does not render departmental investigation invalid per se.Finding no ground falling within the parameters for quashing, the High Court dismissed the petition. It clarified that its observations were confined to disposal of the petition and would not affect the merits of the trial.Cases ReferredB.N. John v. State of U.P., 2025 SCC OnLine SC 7, Supreme Court of India.State of Haryana v. Ch. Bhajan Lal, 1992 Supp (1) SCC 335, Supreme Court of India.Ajay Malik v. State of Uttarakhand, 2025 SCC OnLine SC 185, Supreme Court of India.Radhika Agarwal v. Union of India, (2025) 150 GSTR 121, Supreme Court of India.Directorate of Enforcement v. Deepak Mahajan, (1994) 3 SCC 440, Supreme Court of India.A.R. Antulay v. Ramdas Sriniwas Nayak, (1984) 2 SCC 500, Supreme Court of India.Mukesh Singh v. State (Narcotic Branch of Delhi), AIR 2020 SC 4794, Supreme Court of India. 

Facts:The petitioner association challenged GST liability on services rendered to its members under various welfare schemes. It relied on the doctrine of mutuality, contending that services by an association to its members are not taxable. Amendments introduced by the Finance Act, 2021 inserted Section 7(1)(aa) deeming such transactions as taxable supplies retrospectively from 01.07.2017. The Single Judge upheld the validity of levy but struck down the retrospective operation, leading to cross appeals by both parties.  Court Decision:The Division Bench upheld the constitutional validity of Sections 2(17)(e) and 7(1)(aa) of the CGST/KGST Acts, holding that the legislature was competent to treat transactions between an association and its members as taxable supplies. It held that the amendment validly removes the basis of the doctrine of mutuality for GST purposes. However, the Court held that giving retrospective effect to the amendment from 01.07.2017 was not legally sustainable on principles of fairness. Accordingly, retrospective operation of the amendment was set aside, while upholding its prospective applicability.  Cases Referred by Court:•    State of West Bengal v. Calcutta Club Ltd. •    Ranchi Club Ltd. v. Chief Commissioner of Central Excise & Service Tax •    Secretary, Madras Gymkhana Club Employees Union v. Management of Gymkhana Club •    Cricket Club of India Ltd. v. Bombay Labour Union •    JCTO v. Young Men’s Indian Association •    State of Madras v. Gannon Dunkerley & Co. •    Union of India v. Martin Lottery Agencies Ltd. •    Jayam & Co. v. State of Tamil Nadu •    Rai Ramakrishna v. State of Bihar •    Star India Pvt. Ltd. v. CCE •    Union of India v. Exide Industries Ltd.  

Facts:The petitioner challenged the requirement of pre-deposit under Section 107(6) of the CGST Act for filing an appeal against proceedings arising from a show cause notice dated 14.06.2022 alleging wrongful availment of input tax credit for the period 2017-18 to 2019-20. The petitioner sought waiver of the pre-deposit on the ground of financial hardship and amounts allegedly receivable from Government departments.Court Decision:The Court held that Section 107(6) mandates payment of the admitted amount of tax, interest, penalty and a pre-deposit of 10% of the disputed tax for filing an appeal. The provision does not confer discretion on the Court to waive the statutory pre-deposit requirement.The Court declined the request for waiver of pre-deposit and held that the petitioner must comply with the statutory requirement. However, the petitioner was permitted to approach the Appellate Authority and request adjustment of amounts already lying with the department or government entities towards the pre-deposit. The writ petition was disposed of with liberty to pursue the remedy before the appellate authority.Cases Referred by Court:Shubh Impex v. Union of India, (2018) 361 ELT 199 (Del)Anjani Technoplast Ltd. v. CCE, (2017) 348 ELT A132 (SC)Diamond Entertainment Technologies (P.) Ltd. v. Commissioner of Central Goods and Tax Commissionerate, Dehradun & Anr.Pioneer Corporation v. Union of India, (2016) 340 ELT 63Manoj Kumar Jha v. DRI, (2019) 365 ELT 166 (Del)Vice-Chancellor, University of Allahabad v. Dr. Anand Prakash MishraA.B. Bhaskara Rao v. CBIManish Goel v. Rohini GoelState of Bihar v. Arvind Kumar

BackgroundNetgear Technologies India Pvt. Ltd. had filed a refund application claiming export of services without payment of IGST for the tax period October 2017 to March 2018. The refund was initially rejected. On appeal, the Joint Commissioner (Appeals) allowed the appeal vide Order-in-Appeal (OIA) dated March 9, 2021, holding that the services rendered amounted to export of services and that the petitioner was not an intermediary. The Revenue neither challenged this OIA nor obtained any stay against it. The petitioner then filed a writ petition before the Delhi High Court seeking disbursement of refund in terms of the OIA. The High Court, in W.P.(C) No. 10461 of 2022 decided on May 18, 2023, directed the respondents to disburse the refund with applicable interest within four weeks. Pursuant to this, the refund of Rs. 26,88,280 along with interest of Rs. 5,04,439 was sanctioned vide order dated July 26, 2023. Thereafter, the Revenue — instead of pursuing the proper appellate remedy — issued a fresh Show Cause Notice (SCN) dated August 3, 2024 under Section 74 of the CGST Act for the same tax period, alleging that the refund was erroneously sanctioned and seeking its recovery along with interest and penalty. Court Observations (Verbatim)On the nature of the SCN and absence of fraud allegations:"The SCN carries no specific allegation of fraud, wilful misstatement or suppression against the petitioner. We are thus of the firm view that absent the same, the jurisdiction assumed by the respondent under section 74 is clearly erroneous and untenable."On the requirement for invoking Section 74:"It is pertinent to note that section 74 uses the expression 'by reason of' and thus being indicative of the power conferred by that provision being liable to be invoked only if it be found that the assessee had indulged in acts constituting fraud, wilful misstatement or suppression of facts in order to evade tax."On mechanical issuance of the SCN:"In view of the absence of clear and specific reasoning in the impugned SCN and which could be read as justifying the invocation of section 74, we find ourselves unable to sustain the impugned SCN for a tax period that had already been assessed by the GST authorities or to countenance the SCN as operating as a fetter on the grant of refund which was affirmed and recognised by the court in Netgear Technologies India."On the real intent behind the SCN:"We are constrained to observe that the SCN appears to have been issued solely to avoid the inevitable consequences which flow from our decision rendered inter partes in the earlier round of litigation. We are of the firm opinion that a claim for refund cannot be legally or justifiably stalled by the adoption of circuitous means as the present." Cases Cited by the CourtNetgear Technologies India Pvt. Ltd. v. Assistant Commissioner of GST, Delhi East Commissionerate — 2023 SCC OnLine Del 8724 (W.P.(C) No. 10461 of 2022, May 18, 2023)Zones Corporate Solutions Pvt. Ltd. v. Commissioner of Central Goods and Services Tax Delhi East — 2020-VIL-302-DELAlex Tour and Travel Private Limited v. Assistant Commissioner, CGST, Division-Janakpuri — (2024) 122 GSTR 81 (Delhi); 2023 SCC OnLine Del 2709Parity Infotech Solutions Pvt. Ltd. v. Government of NCT of Delhi — (2023) 120 GSTR 30 (Delhi); (2023) 4 HCC (Del) 685HCL Infotech Ltd. v. Commissioner, Commercial Tax — (2025) 141 GSTR 324 (All); 2024 SCC OnLine All 5769Raj Bahadur Narain Singh Sugar Mills Ltd. v. Union of India — (1997) 6 SCC 81; (1996) 88 ELT 24 (SC)Collector of Central Excise v. H.M.M. Limited — 1995 SCC OnLine SC 82; 1995 Supp (3) SCC 322; (1995) 76 ELT 497 (SC) Final VerdictThe writ petition was allowed. The impugned SCN dated August 3, 2024 was quashed and set aside. The refund claim of the petitioner was directed to be attended to and disposed of forthwith, subject to any orders that may be passed on any appeal the respondents may institute against   

Facts :The petitioner challenged an assessment order dated 31.10.2023 passed under Section 73(9) of the GST Act raising tax, interest and penalty demand. It contended that no show cause notice was effectively communicated, as notices were uploaded on the GST portal under the heading “additional notices and orders” instead of “notices and orders”. Due to this, the petitioner remained unaware and could not file any reply. The petitioner relied on portal screenshots to demonstrate improper placement of notices.Court Decision:The Court held that the petitioner had made out a case of improper service of notice. It observed that although Section 169 permits service through the common portal, the manner of uploading must ensure that notices are effectively communicated. Since the respondents failed to establish that notices were properly placed under the correct heading and the petitioner’s claim remained unrebutted, the impugned assessment order and demand were set aside. The matter was remanded with direction to allow the petitioner to file reply and thereafter pass a fresh order after hearing.Cases Referred:Anhad Impex v. Assistant Commissioner, Ward 16Ola Fleet Technologies Pvt. Ltd. v. State of U.P.Sudarshan Beopar Company Limited v. Union of India