BackgroundIn W.P. Nos. 21432 and 21433 of 2026, assessment orders were challenged whereby the petitioner's claim for ITC relating to construction-cum-leasing services was rejected. The petitioner had relied upon the Supreme Court judgment in Chief Commissioner of CGST and Others v. Safari Retreats Pvt. Ltd. and Others, particularly its interpretation of construction undertaken for leasing or licensing purposes vis-à-vis construction on the taxable person's own account. The petitioner contended that this judgment had not been properly considered while passing the assessment orders.In W.P. No. 22392 of 2026, the petitioner sought re-credit/refund of amounts debited from its electronic cash and credit ledgers pursuant to the assessment orders. It was contended that recovery was made without the prior intimation contemplated under Rule 142B(1) and without allowing the prescribed seven-day period.Court ObservationThe Court noted that the Supreme Court in Safari Retreats had held that construction cannot be regarded as being on the taxable person's own account where it is intended for sale, lease or licence. The Court observed that, in the factual context where the inputs were procured for construction and leasing, the proper officer ought to have considered the Supreme Court's judgment before recording findings.The Court found that the impugned assessment orders instead recorded that leasing could not convert otherwise blocked ITC into eligible credit, but these findings were entered without considering the ratio of the Supreme Court judgment in Safari Retreats. Consequently, the Court held that reconsideration of the assessment orders was warranted.With regard to recovery, the Court examined Rule 142B and observed that the proper officer is required to intimate the person in default regarding the recoverable amount and provide seven days from the date of intimation for payment. Recovery proceedings under the specified rules can be initiated only if the amount remains unpaid after expiry of that period. The Court found that this requirement had not been complied with in the present cases.Final VerdictThe assessment orders challenged in W.P. Nos. 21432 and 21433 of 2026 were set aside and the matters were remanded for reconsideration. The respondents were directed to provide a reasonable opportunity to the petitioner and issue fresh orders within five months from the date of receipt of the Court's order.In W.P. No. 22392 of 2026, considering the non-compliance with Rule 142B and the fact that the underlying assessment orders had been set aside, the Court directed the respondents to re-credit/refund the amounts debited from the electronic cash or credit ledgers to the corresponding ledger within two weeks from receipt of the order. The writ petitions were accordingly disposed of, with no order as to costs.Case Referred by CourtChief Commissioner of CGST and Others v. Safari Retreats Pvt. Ltd. and Others — Supreme Court, reported in (2024) 121 GSTR 184 (SC). 

BACKGROUNDA show cause notice under Section 73 was issued and an adjudication order was subsequently passed. The appeal against that order was rejected on the ground of delay under Section 107. Thereafter, an application for rectification under Section 161 was filed. The applicant later discovered that the rectification application had already been rejected, although the rejection order had not been communicated.The order-sheet contained an order dated 30.05.2024 stating that the rejection order could not be generated through the GST portal because of technical problems. However, the actual rejection order placed on record bore the handwritten signature of the Assistant Commissioner dated 30.05.2025. The Department did not dispute the relevant factual position emerging from the certified order-sheets.COURT OBSERVATIONSThe Court examined the order-sheet and the actual rejection order and found a clear inconsistency between them. The order-sheet dated 30.05.2024 recorded that the rejection order could not be generated because of technical glitches, whereas the actual rejection order was signed by the Assistant Commissioner on 30.05.2025.The Court therefore found that the impugned rejection order could not be sustained in law. The Court also noted that the applicant had not been afforded adequate opportunity to present its case during the Section 73 proceedings and that relevant records/documents were available or had been uploaded on the portal.FINAL VERDICTThe Court quashed and set aside the rejection order dated 30.05.2025 passed under Section 161. The matter was remanded to the Assistant Commissioner with a direction to reconsider and dispose of the rectification application after considering the grounds, supporting documents and records.The applicant was directed to appear before the authority within fifteen working days and the authority was directed to provide an opportunity of hearing and pass an appropriate reasoned order under Section 161, if rectification was warranted.

BACKGROUNDThe Income Tax Appellate Tribunal had allowed the assessee's appeals for various assessment years and the Assessing Officer subsequently passed appeal-effect orders determining substantial amounts refundable. Despite these orders, the refunds were not released. The Department insisted upon Form 26B, and the forms were rejected by referring to outstanding demands relating to the assessee and sister TANs.The Department defended its action by relying upon its practice and an SOP issued by the Centralized Processing Cell (TDS), contending that outstanding demands against associated TANs prevented processing of the refund. The assessee contended that Sections 200A and 201 operated in different fields and that Form 26B was not applicable once refund had arisen pursuant to an assessment or appellate order.COURT OBSERVATIONSThe Court examined Sections 200A and 201, Rule 31A and Form 26B and held that Section 201 deals with assessment of TDS, whereas Section 200A concerns adjustment of TDS before assessment at the CPC level. Rule 31A and Form 26B relate to that adjustment mechanism.The Court held that once a competent Assessing Officer has made an assessment under Section 201, or an appellate authority has passed an order giving rise to a refund, the refund becomes a vested and crystallised right of the assessee, subject to the Department's right to challenge the order in accordance with law. Such refund does not become subordinate to Section 200A or Rule 31A.The Court further held that the Assessing Officer or CPC cannot compel the assessee to furnish Form 26B once the refund arises pursuant to an assessment under Section 201 or an appellate order. Any withholding or adjustment has to be supported by a legally passed order under Section 245.Since the Department could not produce any order under Section 245 authorising withholding or adjustment, the Court held that reliance on outstanding demands against the assessee's PAN or sister TANs was legally untenable. The action was held to be arbitrary and violative of Articles 14, 19(1)(g) and 300A of the Constitution.FINAL VERDICTThe writ petitions were allowed. The respondents were directed to pay ₹53,09,56,470/- along with applicable interest under Sections 244A and 244A(1A) on or before 30.09.2026. If the amount was not credited by that date, the entire amount would carry additional interest at 1% per month over and above the statutory interest. 

BackgroundThe refund application was initially rejected by the Adjudicating Authority on 16.12.2019. An appeal against that rejection was allowed on 08.10.2020 because the order had been passed without granting an opportunity of hearing, and the matter was remanded for fresh adjudication. After a fresh notice and reply, the refund claim was again rejected by order dated 03.10.2022.Against the fresh rejection, a rectification application under Section 161 of the GST Act was filed on 02.01.2023, within the prescribed period of 90 days. The rectification application was rejected by a reasoned order dated 14.09.2023. Thereafter, an appeal was filed on 11.01.2024 challenging both the original order and the rectification order. The Appellate Authority rejected the appeal solely on limitation by calculating the limitation period from the original order dated 03.10.2022.Court ObservationThe Court held that the filing of the rectification application under Section 161 within the prescribed statutory period was a vital aspect directly affecting calculation of limitation under Section 107. Since the rectification application was duly considered and decided by a reasoned order dated 14.09.2023, the Appellate Authority was required to consider the limitation period from that date rather than mechanically calculating it from the original adjudication order dated 03.10.2022.The Court further observed that if, after calculating limitation from the date of the rectification order, the appeal was still found to be barred by limitation, the Appellate Authority could reject it on that ground. However, it was not permissible to reject the appeal by calculating limitation from the original adjudication order where a rectification application had been filed within the prescribed period and had subsequently been decided by the Adjudicating Authority.Final VerdictThe group of petitions succeeded. The High Court quashed and set aside the impugned orders of the Appellate Authority which had rejected the appeals on limitation.The matters were remanded to the Appellate Authority to decide the appeals afresh on merits and in accordance with law, after providing an opportunity of hearing, within 12 weeks from the date of receipt of the judgment. The Rule was made absolute.Case Referred by CourtNew Kailash Suppliers v. State of Gujarat & Ors.Gujarat High Court — 29.01.2026Special Civil Application No. 9540 of 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.