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Latest GST Case Law and Judgements
S.No Name Date of Order Subject Actions
21Maruti Enterprise v. Union of India & Ors.01-05-2026Constitutional validity of Section 16(2)(c) of the Central Goods and Services Tax Act, 2017 — whether Input Tax Credit (ITC) can be denied to a bona fide purchasing dealer solely on account of the supplier's failure to deposit tax with the Government. View Download

BACKGROUNDA group of petitioners (purchasing dealers) challenged Section 16(2)(c) of the CGST Act, 2017 as arbitrary, ultra vires, and violative of Articles 14, 19(1)(g), 265, and 300A of the Constitution of India. In the alternative, they prayed that the provision be read down so as to apply only to fraudulent or collusive transactions, thereby protecting bona fide purchasers. The common thread across all petitions was that ITC was being denied to them solely because their respective suppliers had failed to deposit the tax collected with the Government — a default entirely outside the purchaser's control or knowledge.COURT OBSERVATIONS (VERBATIM)On the SOR and the inseparable link between ITC and actual tax payment (Para 43):"The SOR emphatically mentions about 'input tax credit making it available in respect of taxes paid'. Thus, availment of ITC is intrinsically connected with the factum of 'taxes paid'."On the GST regime being distinct from the VAT regime (Para 60):"Therefore, considering the overall scheme of the Act, any 'reading down' (narrow interpretation) of Section 16(2)(c) would trigger cascading fiscal consequences. The legal position under the former VAT regime was materially different, as input tax credit was confined within the originating state. In contrast, the GST regime is destination-based; therefore, input tax credit must operate seamlessly across state lines for inter-State supplies, requiring strict compliance to maintain fiscal balance."On the purchasing dealer not being remediless (Para 62):"The scheme of ITC under the GST framework does not envisage a situation where the purchasing dealer is left remediless. The Revenue is empowered to initiate recovery proceedings against the supplier under Sections 73 and 74 of the CGST Act for failure to discharge tax liability in respect of the original transaction. Further, in terms of Rule 37A of the CGST Rules, 2017 once the supplier discharges such tax liability, the purchasing dealer becomes entitled to re-avail the credit in the immediately succeeding month. Thus, the statutory mechanism does not permanently deprive the purchasing dealer of ITC; rather, the credit is restored upon payment of tax into the Government treasury. Mere delay or hardship in availing ITC, therefore, cannot constitute a valid ground for reading down Section 16(2)(c) of the CGST Act."On double taxation argument (Para 63):"The contention regarding double taxation is misconceived. It is well settled that ITC is not a constitutional or vested right, but a statutory concession, subject to the conditions and restrictions prescribed under the Act. Where the statute provides for reversal and re-availment of credit, the same cannot be characterised as double taxation so as to invalidate the provision."On Section 16(2)(c) being clear and unambiguous (Para 67):"...in the present case, Section 16(2)(c) of the CGST Act is clear, self-explanatory, and unambiguous. Its plain reading does not give rise to any constitutional or legal infirmity. The underlying intent of the provision is that the Government cannot be deprived of revenue on account of illegal or defaulting conduct on the part of the supplier."On distinguishing DVAT provisions from CGST (Para 68):"On a close scrutiny of the scheme of the GST regime, it is evident that Section 16(2)(c) of the CGST Act cannot be equated with the VAT regime, particularly with Section 9(2)(g) of the DVAT Act, as examined by the Delhi High Court in On Quest Merchandising India (P) Ltd. (supra). It is also noticed that the Tripura High Court, while following in the case of On Quest Merchandising India (P) Ltd. (supra), has read down Section 16(2)(c) of the CGST Act on the ground of practical impossibility for the purchaser to ensure that the supplier has deposited tax. With respect, we are unable to agree with the said view. The Tripura High Court proceeded on the premise that ITC is intended solely to avoid double taxation under the CGST regime, but did not adequately consider the interplay of Sections 41 and 53 of the CGST Act read with Rule 37A of the CGST Rules, 2017."On burden of proof under Section 155 (Para 70):"Thus, the purchasing dealer must discharge the initial burden of establishing eligibility to claim input tax credit. Such eligibility is intrinsically linked to the fulfilment of statutory conditions, including the deposit of tax by the supplier with the Government. The expression 'eligible' in Section 155 of the CGST Act cannot be construed as dependent upon a unilateral act of claim by the purchaser; rather, it has a direct nexus with the actual payment of tax by the supplier."On conjoint reading of Section 16(2) clauses (Para 80):"Thus, the Revenue cannot be directed to stop at clause (b), since eligibility for input tax credit is established only after the receipt of goods or services or both, and upon the tax charged in respect of such supply being duly paid to the Government. A registered person (dealer) cannot be held entitled to claim input tax credit unless all the conditions up to clause (c) are satisfied."On the doctrine of reading down not being applicable (Para 82):"We do not find that the provision of Section 16(2)(c) if read with the scheme of GST regime as discussed, conflicts with constitutional or legal principles. The provision of Section 16(2)(c) cannot be read in isolation, but has to read with attendant provisions as discussed hereinabove, which enables the government to secure its interest in revenue, by keeping a check on fraudulent transactions while maintaining the interest of genuine purchasers."On the Axel Kittel principle and a balanced approach (Para 87):"A balanced approach is needed, which finds place in the decision expressed by the European Court of Justice ('ECJ') in the case of Axel Kittel & Recolta Recycling SPRL (supra). Under this principle, the availment of ITC can be denied only if it is shown that the recipient knew or ought to have known that their purchase was connected with a fraudulent evasion of tax."On Government's obligation to act (Para 88):"Albeit, we acknowledge that the provisions of Section 16(2)(c) of the Act are to be viewed from a regulatory standpoint and are anchored in the legitimate objective of maintaining the integrity of the tax chain, preventing systemic revenue loss to the Government; however, it is high time that, in order to resolve the conundrum, the Government undertakes a comprehensive re-evaluation of the dicey situation which purchasers are facing. There is a pressing need for legislative amendments or clarifications to be issued within the GST framework to alleviate the disproportionate financial and administrative burdens currently placed upon purchasers who have an honest claim of ITC. Beyond mere policy changes, the Government should implement a robust, technology-driven tracking mechanism enabling verification of payments made by suppliers against specific invoices in real time, thereby insulating bona fide recipients from the defaults of their vendors."FINAL VERDICTSection 16(2)(c) of the CGST Act is neither read down nor declared ultra vires. The Court held the provision to be constitutionally valid, clear, and unambiguous when read conjointly with Sections 41(2), 53, and 155 of the CGST Act and Rule 37A of the CGST Rules, 2017. The writ petitions are listed for decision on individual merits. 👎 

Maruti Enterprise v. Union of India & Ors. 01-05-2026
Constitutional validity of Section 16(2)(c) of the Central Goods and Services Tax Act, 2017 — whether Input Tax Credit (ITC) can be denied to a bona fide purchasing dealer solely on account of the supplier's failure to deposit tax with the Government.

BACKGROUNDA group of petitioners (purchasing dealers) challenged Section 16(2)(c) of the CGST Act, 2017 as arbitrary, ultra vires, and violative of Articles 14, 19(1)(g), 265, and 300A of the Constitution of India. In the alternative, they prayed that the provision be read down so as to apply only to fraudulent or collusive transactions, thereby protecting bona fide purchasers. The common thread across all petitions was that ITC was being denied to them solely because their respective suppliers had failed to deposit the tax collected with the Government — a default entirely outside the purchaser's control or knowledge.COURT OBSERVATIONS (VERBATIM)On the SOR and the inseparable link between ITC and actual tax payment (Para 43):"The SOR emphatically mentions about 'input tax credit making it available in respect of taxes paid'. Thus, availment of ITC is intrinsically connected with the factum of 'taxes paid'."On the GST regime being distinct from the VAT regime (Para 60):"Therefore, considering the overall scheme of the Act, any 'reading down' (narrow interpretation) of Section 16(2)(c) would trigger cascading fiscal consequences. The legal position under the former VAT regime was materially different, as input tax credit was confined within the originating state. In contrast, the GST regime is destination-based; therefore, input tax credit must operate seamlessly across state lines for inter-State supplies, requiring strict compliance to maintain fiscal balance."On the purchasing dealer not being remediless (Para 62):"The scheme of ITC under the GST framework does not envisage a situation where the purchasing dealer is left remediless. The Revenue is empowered to initiate recovery proceedings against the supplier under Sections 73 and 74 of the CGST Act for failure to discharge tax liability in respect of the original transaction. Further, in terms of Rule 37A of the CGST Rules, 2017 once the supplier discharges such tax liability, the purchasing dealer becomes entitled to re-avail the credit in the immediately succeeding month. Thus, the statutory mechanism does not permanently deprive the purchasing dealer of ITC; rather, the credit is restored upon payment of tax into the Government treasury. Mere delay or hardship in availing ITC, therefore, cannot constitute a valid ground for reading down Section 16(2)(c) of the CGST Act."On double taxation argument (Para 63):"The contention regarding double taxation is misconceived. It is well settled that ITC is not a constitutional or vested right, but a statutory concession, subject to the conditions and restrictions prescribed under the Act. Where the statute provides for reversal and re-availment of credit, the same cannot be characterised as double taxation so as to invalidate the provision."On Section 16(2)(c) being clear and unambiguous (Para 67):"...in the present case, Section 16(2)(c) of the CGST Act is clear, self-explanatory, and unambiguous. Its plain reading does not give rise to any constitutional or legal infirmity. The underlying intent of the provision is that the Government cannot be deprived of revenue on account of illegal or defaulting conduct on the part of the supplier."On distinguishing DVAT provisions from CGST (Para 68):"On a close scrutiny of the scheme of the GST regime, it is evident that Section 16(2)(c) of the CGST Act cannot be equated with the VAT regime, particularly with Section 9(2)(g) of the DVAT Act, as examined by the Delhi High Court in On Quest Merchandising India (P) Ltd. (supra). It is also noticed that the Tripura High Court, while following in the case of On Quest Merchandising India (P) Ltd. (supra), has read down Section 16(2)(c) of the CGST Act on the ground of practical impossibility for the purchaser to ensure that the supplier has deposited tax. With respect, we are unable to agree with the said view. The Tripura High Court proceeded on the premise that ITC is intended solely to avoid double taxation under the CGST regime, but did not adequately consider the interplay of Sections 41 and 53 of the CGST Act read with Rule 37A of the CGST Rules, 2017."On burden of proof under Section 155 (Para 70):"Thus, the purchasing dealer must discharge the initial burden of establishing eligibility to claim input tax credit. Such eligibility is intrinsically linked to the fulfilment of statutory conditions, including the deposit of tax by the supplier with the Government. The expression 'eligible' in Section 155 of the CGST Act cannot be construed as dependent upon a unilateral act of claim by the purchaser; rather, it has a direct nexus with the actual payment of tax by the supplier."On conjoint reading of Section 16(2) clauses (Para 80):"Thus, the Revenue cannot be directed to stop at clause (b), since eligibility for input tax credit is established only after the receipt of goods or services or both, and upon the tax charged in respect of such supply being duly paid to the Government. A registered person (dealer) cannot be held entitled to claim input tax credit unless all the conditions up to clause (c) are satisfied."On the doctrine of reading down not being applicable (Para 82):"We do not find that the provision of Section 16(2)(c) if read with the scheme of GST regime as discussed, conflicts with constitutional or legal principles. The provision of Section 16(2)(c) cannot be read in isolation, but has to read with attendant provisions as discussed hereinabove, which enables the government to secure its interest in revenue, by keeping a check on fraudulent transactions while maintaining the interest of genuine purchasers."On the Axel Kittel principle and a balanced approach (Para 87):"A balanced approach is needed, which finds place in the decision expressed by the European Court of Justice ('ECJ') in the case of Axel Kittel & Recolta Recycling SPRL (supra). Under this principle, the availment of ITC can be denied only if it is shown that the recipient knew or ought to have known that their purchase was connected with a fraudulent evasion of tax."On Government's obligation to act (Para 88):"Albeit, we acknowledge that the provisions of Section 16(2)(c) of the Act are to be viewed from a regulatory standpoint and are anchored in the legitimate objective of maintaining the integrity of the tax chain, preventing systemic revenue loss to the Government; however, it is high time that, in order to resolve the conundrum, the Government undertakes a comprehensive re-evaluation of the dicey situation which purchasers are facing. There is a pressing need for legislative amendments or clarifications to be issued within the GST framework to alleviate the disproportionate financial and administrative burdens currently placed upon purchasers who have an honest claim of ITC. Beyond mere policy changes, the Government should implement a robust, technology-driven tracking mechanism enabling verification of payments made by suppliers against specific invoices in real time, thereby insulating bona fide recipients from the defaults of their vendors."FINAL VERDICTSection 16(2)(c) of the CGST Act is neither read down nor declared ultra vires. The Court held the provision to be constitutionally valid, clear, and unambiguous when read conjointly with Sections 41(2), 53, and 155 of the CGST Act and Rule 37A of the CGST Rules, 2017. The writ petitions are listed for decision on individual merits. 👎 

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22Sumukha Ventures vs. Joint Commissioner of Commercial Taxes & Ors.24-04-2026Challenge to Show Cause Notice and Order-in-Original passed by the same officer who conducted the audit proceedings — violation of principles of natural justice under GST. View Download

BackgroundSumukha Ventures, a partnership firm based in Bengaluru, was subjected to proceedings initiated by both the audit authority and the enforcement authority under GST. The Deputy Commissioner of Commercial Taxes (Audit)-3.7 issued a Show Cause Notice dated 30.09.2025 (Form GST DRC-01, Reference No. ZD290925221988K). Thereafter, an Order-in-Original (Annexure-B) was passed by the same officer who had conducted the audit proceedings. The petitioner filed a Writ Petition under Articles 226 and 227 of the Constitution of India before the High Court of Karnataka challenging both the Show Cause Notice and the Order-in-Original. Court Observations (Verbatim)"It is submitted that such action is impermissible and being in violation of principles of natural justice, insofar as the authority while conducting audit has expressed its opinion and findings are recorded at one stage. It is submitted that once again if the same officer were to conduct the assessment proceedings, the authority would be guided by the findings made in the audit report.""Taking note that this identical question is often raised by assessees, it would be appropriate that this aspect has the benefit of adjudication by the appropriate authority. By keeping open all contentions raised, the matter is remitted to respondent No.2.""The petitioner to take their stand before respondent No.2, regarding the aspect of jurisdiction as raised in the present petition. Upon such objection being raised, it is open for the authority to obtain necessary orders on the administrative side from the authority which assigns i.e., the Joint Commissioner of Commercial Taxes (Administration) - respondent No.1.""Taking note of the nature of objection raised, the authority to record a finding of their aspect of jurisdiction as per the procedure referred to above and only thereafter, consider the proceedings on merits.""Needless to state, no steps to be taken on merits till finding is recorded in terms of the observations made." Final VerdictThe Order-in-Original (Annexure-B) was set aside and the matter was remitted to Respondent No. 2 (Deputy Commissioner) to first decide the question of jurisdiction — specifically whether the same officer who conducted the audit can also pass the adjudication order — before proceeding on merits. The petition was disposed of accordingly. Citations / Circulars ReferredReferenceDetailsCircular No. 31/05/2018-GSTDated 09.02.2018 (Annexure-AB) — referred by Petitioner regarding impermissibility of same officer conducting audit and adjudicationCircular No. 169/01/2022-GSTDated 12.03.2022 (Annexure-AC) — referred by Petitioner on same issueNote: No case laws (judicial precedents) were cited by the Court in this order. The above are only GST Circulars referred to by the petitioner's counsel during arguments.

Sumukha Ventures vs. Joint Commissioner of Commercial Taxes & Ors. 24-04-2026
Challenge to Show Cause Notice and Order-in-Original passed by the same officer who conducted the audit proceedings — violation of principles of natural justice under GST.

BackgroundSumukha Ventures, a partnership firm based in Bengaluru, was subjected to proceedings initiated by both the audit authority and the enforcement authority under GST. The Deputy Commissioner of Commercial Taxes (Audit)-3.7 issued a Show Cause Notice dated 30.09.2025 (Form GST DRC-01, Reference No. ZD290925221988K). Thereafter, an Order-in-Original (Annexure-B) was passed by the same officer who had conducted the audit proceedings. The petitioner filed a Writ Petition under Articles 226 and 227 of the Constitution of India before the High Court of Karnataka challenging both the Show Cause Notice and the Order-in-Original. Court Observations (Verbatim)"It is submitted that such action is impermissible and being in violation of principles of natural justice, insofar as the authority while conducting audit has expressed its opinion and findings are recorded at one stage. It is submitted that once again if the same officer were to conduct the assessment proceedings, the authority would be guided by the findings made in the audit report.""Taking note that this identical question is often raised by assessees, it would be appropriate that this aspect has the benefit of adjudication by the appropriate authority. By keeping open all contentions raised, the matter is remitted to respondent No.2.""The petitioner to take their stand before respondent No.2, regarding the aspect of jurisdiction as raised in the present petition. Upon such objection being raised, it is open for the authority to obtain necessary orders on the administrative side from the authority which assigns i.e., the Joint Commissioner of Commercial Taxes (Administration) - respondent No.1.""Taking note of the nature of objection raised, the authority to record a finding of their aspect of jurisdiction as per the procedure referred to above and only thereafter, consider the proceedings on merits.""Needless to state, no steps to be taken on merits till finding is recorded in terms of the observations made." Final VerdictThe Order-in-Original (Annexure-B) was set aside and the matter was remitted to Respondent No. 2 (Deputy Commissioner) to first decide the question of jurisdiction — specifically whether the same officer who conducted the audit can also pass the adjudication order — before proceeding on merits. The petition was disposed of accordingly. Citations / Circulars ReferredReferenceDetailsCircular No. 31/05/2018-GSTDated 09.02.2018 (Annexure-AB) — referred by Petitioner regarding impermissibility of same officer conducting audit and adjudicationCircular No. 169/01/2022-GSTDated 12.03.2022 (Annexure-AC) — referred by Petitioner on same issueNote: No case laws (judicial precedents) were cited by the Court in this order. The above are only GST Circulars referred to by the petitioner's counsel during arguments.

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23Ankur Kampani v. Union of India & Others20-04-2026Quashing of GST penalty order passed without issuance of notice — violation of principles of natural justice and Section 75(4) of the CGST Act, 2017. View Download

BackgroundA penalty of Rs. 4,03,26,803/- was imposed on the petitioner vide order dated 15.12.2025 under Sections 122(1)(A), 122(1)(x) and 122(1)(xvi) of the Central Goods and Services Tax Act, 2017, read with the State Goods and Services Tax Act, 2017 and Section 20 of the IGST Act, 2017. Crucially, prior to passing of the said order, no notice whatsoever was issued to the petitioner. Court Observations (Verbatim)"The impugned order is not only violative of the principles of natural justice but is also in conflict with the provisions of Section 75(4) of the Central Goods and Services Tax Act, 2017. Therefore, we have no hesitation in quashing the impugned order qua the petitioner." Final VerdictThe impugned penalty order was quashed. However, liberty was granted to the respondents to proceed afresh against the petitioner in accordance with law.  

Ankur Kampani v. Union of India & Others 20-04-2026
Quashing of GST penalty order passed without issuance of notice — violation of principles of natural justice and Section 75(4) of the CGST Act, 2017.

BackgroundA penalty of Rs. 4,03,26,803/- was imposed on the petitioner vide order dated 15.12.2025 under Sections 122(1)(A), 122(1)(x) and 122(1)(xvi) of the Central Goods and Services Tax Act, 2017, read with the State Goods and Services Tax Act, 2017 and Section 20 of the IGST Act, 2017. Crucially, prior to passing of the said order, no notice whatsoever was issued to the petitioner. Court Observations (Verbatim)"The impugned order is not only violative of the principles of natural justice but is also in conflict with the provisions of Section 75(4) of the Central Goods and Services Tax Act, 2017. Therefore, we have no hesitation in quashing the impugned order qua the petitioner." Final VerdictThe impugned penalty order was quashed. However, liberty was granted to the respondents to proceed afresh against the petitioner in accordance with law.  

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24NHD Motors vs. Government of NCT of Delhi & Ors.15-04-2026Validity of demand order passed ex-parte under Section 73 of Delhi GST Act, 2017 where SCN was uploaded only on the obscure 'Additional Notices Tab' of the GST portal, denying the assessee an effective opportunity of hearing. View Download

BackgroundNHD Motors, a GST-registered partnership firm (GSTIN: 07AAMFN6084D1Z3), was issued an SCN dated 9th December, 2023 for FY 2018-19 under Section 73 of the Delhi GST Act, 2017. The SCN was uploaded exclusively on the 'Additional Notices Tab' of the GST portal — a tab that was not prominently visible to taxpayers prior to 16th January, 2024 (when the portal was subsequently modified to make this tab visible). Since the petitioner was unaware of the SCN, no reply was filed. Consequently, an ex-parte demand order dated 5th April, 2024 was passed raising a demand of ₹23,67,282/-. The petitioner contended that no excess ITC had been availed and that the amount was also mis-calculated. The respondent argued that a reminder was issued on 27th February, 2024 (after 16th January, 2024) and thus effective service was achieved.Court Observations (Verbatim)"There is no dispute that, after 16th January, 2024, certain changes were introduced on the GST portal and the 'Additional Notices Tab' was made visible. However, in the present case, the SCN had been issued prior to the said date. In such circumstances, and considering that the petitioner was not afforded a proper opportunity of hearing and had not filed any reply to the SCN, this Court is of the view that the matter deserves to be remanded to the concerned Adjudicating Authority.""This Court is unable to agree with the aforesaid contention of the respondent. The reminder pertained to the SCN uploaded prior to 16th January, 2024 in the same 'Additional Notices Tab' in which the SCN itself had been uploaded, a tab, in which the SCN was not visible to the petitioner. In such circumstances, where the SCN itself was never effectively served upon the petitioner, any subsequent communication styled as a reminder in respect thereof cannot, in law, be treated as a valid or effective reminder to the said SCN."Final VerdictThe impugned demand order dated 5th April, 2024 is set aside and the matter is remanded. The petitioner is granted time till 8th May, 2026 to file reply to the SCN; the Adjudicating Authority shall issue a personal hearing notice, duly communicated to the petitioner, and pass a fresh order after considering the reply and submissions. Access to the GST portal is to be provided to the petitioner for uploading reply and accessing related documents. 

NHD Motors vs. Government of NCT of Delhi & Ors. 15-04-2026
Validity of demand order passed ex-parte under Section 73 of Delhi GST Act, 2017 where SCN was uploaded only on the obscure 'Additional Notices Tab' of the GST portal, denying the assessee an effective opportunity of hearing.

BackgroundNHD Motors, a GST-registered partnership firm (GSTIN: 07AAMFN6084D1Z3), was issued an SCN dated 9th December, 2023 for FY 2018-19 under Section 73 of the Delhi GST Act, 2017. The SCN was uploaded exclusively on the 'Additional Notices Tab' of the GST portal — a tab that was not prominently visible to taxpayers prior to 16th January, 2024 (when the portal was subsequently modified to make this tab visible). Since the petitioner was unaware of the SCN, no reply was filed. Consequently, an ex-parte demand order dated 5th April, 2024 was passed raising a demand of ₹23,67,282/-. The petitioner contended that no excess ITC had been availed and that the amount was also mis-calculated. The respondent argued that a reminder was issued on 27th February, 2024 (after 16th January, 2024) and thus effective service was achieved.Court Observations (Verbatim)"There is no dispute that, after 16th January, 2024, certain changes were introduced on the GST portal and the 'Additional Notices Tab' was made visible. However, in the present case, the SCN had been issued prior to the said date. In such circumstances, and considering that the petitioner was not afforded a proper opportunity of hearing and had not filed any reply to the SCN, this Court is of the view that the matter deserves to be remanded to the concerned Adjudicating Authority.""This Court is unable to agree with the aforesaid contention of the respondent. The reminder pertained to the SCN uploaded prior to 16th January, 2024 in the same 'Additional Notices Tab' in which the SCN itself had been uploaded, a tab, in which the SCN was not visible to the petitioner. In such circumstances, where the SCN itself was never effectively served upon the petitioner, any subsequent communication styled as a reminder in respect thereof cannot, in law, be treated as a valid or effective reminder to the said SCN."Final VerdictThe impugned demand order dated 5th April, 2024 is set aside and the matter is remanded. The petitioner is granted time till 8th May, 2026 to file reply to the SCN; the Adjudicating Authority shall issue a personal hearing notice, duly communicated to the petitioner, and pass a fresh order after considering the reply and submissions. Access to the GST portal is to be provided to the petitioner for uploading reply and accessing related documents. 

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25Manoja Kumar Nayak vs Commissioner, 08-04-2026Validity of initiation of proceedings under Section 74 of the CGST Act, 2017 and levy of tax, interest under Section 50, and penalty — where ITC availed from an alleged non-existent supplier had already been voluntarily reversed by the taxpayer prior to View Download

BACKGROUNDThe petitioner, M/s. Manoja Kumar Nayak (GSTIN: 21AANPN1032G2Z6), engaged in transportation and works contract, availed Input Tax Credit (ITC) of Rs.4,39,970/- (IGST) during August–December 2017 on the strength of invoices issued by  Auxesia Traders, Kolkata (GSTIN: 19APGPB1744M1ZS). The said supplier was subsequently found to be a non-existent/fictitious entity, based on an Alert Notice No.11/2023-24 dated 19.03.2024 issued by DGGI, Kolkata Zonal Unit, and on the statement of its proprietor Shri Tamoji Bose recorded in 2019. Upon receipt of a letter dated 12.07.2024 from the Superintendent (Anti-Evasion), CGST & Central Excise, Rourkela Commissionerate, requesting reversal of the ITC, the petitioner proactively reversed the entire ITC of Rs.4,39,970/- through GSTR-3B returns filed for April 2023 (Rs.2,64,342/-) and June 2024 (Rs.1,75,128/-), well before issuance of the Show Cause Notice. The petitioner intimated this reversal to the Superintendent vide letter dated 17.07.2024, also pointing out that the Electronic Credit Ledger had a surplus balance exceeding the reversed amount at all material times, and therefore no interest under Section 50 was payable. Despite this, a Summary Show Cause Notice and Demand Show Cause Notice both dated 26.07.2024 were issued under Section 74 of the CGST Act. The petitioner filed a reply dated 30.01.2025 reiterating the voluntary reversal and surplus ECL balance. Ignoring the reply, the Adjudicating Authority passed Order-in-Original dated 03.02.2025 confirming demand of Rs.4,39,970/- (IGST), interest under Section 50, and penalty of Rs.4,39,970/- under Section 74 — solely on the basis of the DGGI Alert Notice, without any independent inquiry. Both petitioners (the second being M/s. Babamani Roadways & Borewells, similarly situated) filed writ petitions before the Orissa High Court challenging these orders. COURT OBSERVATIONS (Verbatim / Near-Verbatim)On mechanical invocation of Section 74 without independent inquiry:"The Adjudicating Authority without independent application of mind merely based on Alert Notice dated 19.03.2024 received from the DGGI, Kolkata Zonal Unit traversed his authority under Section 74 of the GST Act.""Thus, it can be seen from the approach made by the Adjudicating Authority that he blindly followed the Alert Notice of the DGGI, without undertaking any independent inquiry to ascertain credibility of such allegation qua the petitioner... Hence, discrediting such inchoate material being utilised for the purpose of raising demand of tax, interest and penalty under Section 74 this Court thus finds the determination of liability null and invalid in absence of any independent inquiry being carried out to verify the allegation contained in the Alert Notice of the DGGI.""Allegation against supplier vide Alert Notice No.11/2023-24, dated 19.03.2024 would not ipso facto empower the Adjudicating Authority to initiate action against the recipient (petitioner) under Section 74. The language employed in Section 74 suggests that strong and tangible material must be available on record to suggest that the petitioner had the conscious and active involvement in such dubious transactions."On supplier's default not ipso facto establishing recipient's fraud:"It may be highlighted that input tax credit could be availed erroneously or on a mistaken interpretation of law. Therefore, it would not be apposite to form an opinion that in each and every case where the supplier admits or defaults, it would lead to infer that the recipient fraudulently in order to evade tax has availed the input tax credit against fake/bogus invoices.""No inference or presumption or assumption can be deduced that mere availability of balance in the Electronic Credit Ledger would lead to suggest there was utilization."On the period of limitation and abuse of Section 74:"It is emerged from the chronology of events obtained on record that after the period of limitation stipulated in Section 73 is lapsed, the Adjudicating Authority has sought to initiate proceeding under Section 74... pertaining to transactions during August, 2017 to December, 2017, the proceeding under Section 74 is drawn up by issue of Summary of Show Cause Notice and Demand Show Cause Notice, both dated 26.07.2024 conspicuously after 8 years of the alleged transactions."On interest under Section 50:"The Clarification dated 17.07.2023 read juxtaposed with provisions of Rule 88B there is no ambiguity that when the Electronic Credit Ledger has sufficient balance left for adjustment of reversal of input tax credit no interest is chargeable or payable under Section 50."On penalty and double taxation:"Since there is no tax implication in the instant case, as the matter related to wrong availment of input tax credit on account of fake/bogus invoices issued by the supplier and the petitioner has reversed the alleged amount of input tax credit prior to initiation of proceeding under Section 74, the imposition of penalty cannot be a mechanical exercise of power and, thus such order is unsustainable.""Once it is conceded by the Revenue that the amount of input tax credit for a sum of Rs.4,39,970/- has been reversed, raising demand to the same without giving due credit to such reversal is unethical and without authority of law. In such an event, since net tax effect would be 'zero', thereby no penalty would be imposable."On bona fides of the petitioner:"Nonetheless, the petitioner has shown bona fide by reversing the amount of input tax credit the moment a letter from the Superintendent (Anti-Evasion) was issued bringing such conduct of the supplier to his notice." FINAL VERDICTBoth writ petitions allowed. The Order-in-Original dated 03.02.2025 passed under Section 74 — confirming demand of Rs.4,39,970/-, interest under Section 50, and penalty of Rs.4,39,970/- — is quashed. No order as to costs.   

Manoja Kumar Nayak vs Commissioner, 08-04-2026
Validity of initiation of proceedings under Section 74 of the CGST Act, 2017 and levy of tax, interest under Section 50, and penalty — where ITC availed from an alleged non-existent supplier had already been voluntarily reversed by the taxpayer prior to

BACKGROUNDThe petitioner, M/s. Manoja Kumar Nayak (GSTIN: 21AANPN1032G2Z6), engaged in transportation and works contract, availed Input Tax Credit (ITC) of Rs.4,39,970/- (IGST) during August–December 2017 on the strength of invoices issued by  Auxesia Traders, Kolkata (GSTIN: 19APGPB1744M1ZS). The said supplier was subsequently found to be a non-existent/fictitious entity, based on an Alert Notice No.11/2023-24 dated 19.03.2024 issued by DGGI, Kolkata Zonal Unit, and on the statement of its proprietor Shri Tamoji Bose recorded in 2019. Upon receipt of a letter dated 12.07.2024 from the Superintendent (Anti-Evasion), CGST & Central Excise, Rourkela Commissionerate, requesting reversal of the ITC, the petitioner proactively reversed the entire ITC of Rs.4,39,970/- through GSTR-3B returns filed for April 2023 (Rs.2,64,342/-) and June 2024 (Rs.1,75,128/-), well before issuance of the Show Cause Notice. The petitioner intimated this reversal to the Superintendent vide letter dated 17.07.2024, also pointing out that the Electronic Credit Ledger had a surplus balance exceeding the reversed amount at all material times, and therefore no interest under Section 50 was payable. Despite this, a Summary Show Cause Notice and Demand Show Cause Notice both dated 26.07.2024 were issued under Section 74 of the CGST Act. The petitioner filed a reply dated 30.01.2025 reiterating the voluntary reversal and surplus ECL balance. Ignoring the reply, the Adjudicating Authority passed Order-in-Original dated 03.02.2025 confirming demand of Rs.4,39,970/- (IGST), interest under Section 50, and penalty of Rs.4,39,970/- under Section 74 — solely on the basis of the DGGI Alert Notice, without any independent inquiry. Both petitioners (the second being M/s. Babamani Roadways & Borewells, similarly situated) filed writ petitions before the Orissa High Court challenging these orders. COURT OBSERVATIONS (Verbatim / Near-Verbatim)On mechanical invocation of Section 74 without independent inquiry:"The Adjudicating Authority without independent application of mind merely based on Alert Notice dated 19.03.2024 received from the DGGI, Kolkata Zonal Unit traversed his authority under Section 74 of the GST Act.""Thus, it can be seen from the approach made by the Adjudicating Authority that he blindly followed the Alert Notice of the DGGI, without undertaking any independent inquiry to ascertain credibility of such allegation qua the petitioner... Hence, discrediting such inchoate material being utilised for the purpose of raising demand of tax, interest and penalty under Section 74 this Court thus finds the determination of liability null and invalid in absence of any independent inquiry being carried out to verify the allegation contained in the Alert Notice of the DGGI.""Allegation against supplier vide Alert Notice No.11/2023-24, dated 19.03.2024 would not ipso facto empower the Adjudicating Authority to initiate action against the recipient (petitioner) under Section 74. The language employed in Section 74 suggests that strong and tangible material must be available on record to suggest that the petitioner had the conscious and active involvement in such dubious transactions."On supplier's default not ipso facto establishing recipient's fraud:"It may be highlighted that input tax credit could be availed erroneously or on a mistaken interpretation of law. Therefore, it would not be apposite to form an opinion that in each and every case where the supplier admits or defaults, it would lead to infer that the recipient fraudulently in order to evade tax has availed the input tax credit against fake/bogus invoices.""No inference or presumption or assumption can be deduced that mere availability of balance in the Electronic Credit Ledger would lead to suggest there was utilization."On the period of limitation and abuse of Section 74:"It is emerged from the chronology of events obtained on record that after the period of limitation stipulated in Section 73 is lapsed, the Adjudicating Authority has sought to initiate proceeding under Section 74... pertaining to transactions during August, 2017 to December, 2017, the proceeding under Section 74 is drawn up by issue of Summary of Show Cause Notice and Demand Show Cause Notice, both dated 26.07.2024 conspicuously after 8 years of the alleged transactions."On interest under Section 50:"The Clarification dated 17.07.2023 read juxtaposed with provisions of Rule 88B there is no ambiguity that when the Electronic Credit Ledger has sufficient balance left for adjustment of reversal of input tax credit no interest is chargeable or payable under Section 50."On penalty and double taxation:"Since there is no tax implication in the instant case, as the matter related to wrong availment of input tax credit on account of fake/bogus invoices issued by the supplier and the petitioner has reversed the alleged amount of input tax credit prior to initiation of proceeding under Section 74, the imposition of penalty cannot be a mechanical exercise of power and, thus such order is unsustainable.""Once it is conceded by the Revenue that the amount of input tax credit for a sum of Rs.4,39,970/- has been reversed, raising demand to the same without giving due credit to such reversal is unethical and without authority of law. In such an event, since net tax effect would be 'zero', thereby no penalty would be imposable."On bona fides of the petitioner:"Nonetheless, the petitioner has shown bona fide by reversing the amount of input tax credit the moment a letter from the Superintendent (Anti-Evasion) was issued bringing such conduct of the supplier to his notice." FINAL VERDICTBoth writ petitions allowed. The Order-in-Original dated 03.02.2025 passed under Section 74 — confirming demand of Rs.4,39,970/-, interest under Section 50, and penalty of Rs.4,39,970/- — is quashed. No order as to costs.   

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26Florida Solvent Private Limited v. Superintendent, CGST & Central Excise & Ors. 01-04-2026Cancellation of GST registration under Sections 29(2)(a), 29(2)(e) of CGST Act, 2017 read with Rule 21(e) of CGST Rules, 2017 on alleged fraudulent ITC. Issue relating to denial of Input Tax Credit under Section 16(2)(c) of CGST Act, 2017 and validity of View Download

Case Facts:The petitioner challenged the Order-in-Original dated 04.12.2025 cancelling its GST registration ab-initio. The allegation was that the petitioner availed fraudulent ITC from suppliers whose registrations were cancelled. The petitioner contended that relevant documents were furnished and transactions were bona fide, and cancellation was based only on suppliers’ status.Court Decision:The impugned order lacked cogent findings on whether ITC was validly availed in the normal course of business.Mere cancellation of suppliers’ registration cannot by itself justify cancellation of petitioner’s registration.The authority failed to examine documents and record findings on the alleged illegality of ITC.The order was arbitrary due to non-application of mind.The impugned order cancelling GST registration was set aside.Matter remanded for fresh consideration after granting hearing to the petitioner.Authorities permitted to continue investigation and take action in accordance with law.All contentions kept open.

Florida Solvent Private Limited v. Superintendent, CGST & Central Excise & Ors. 01-04-2026
Cancellation of GST registration under Sections 29(2)(a), 29(2)(e) of CGST Act, 2017 read with Rule 21(e) of CGST Rules, 2017 on alleged fraudulent ITC. Issue relating to denial of Input Tax Credit under Section 16(2)(c) of CGST Act, 2017 and validity of

Case Facts:The petitioner challenged the Order-in-Original dated 04.12.2025 cancelling its GST registration ab-initio. The allegation was that the petitioner availed fraudulent ITC from suppliers whose registrations were cancelled. The petitioner contended that relevant documents were furnished and transactions were bona fide, and cancellation was based only on suppliers’ status.Court Decision:The impugned order lacked cogent findings on whether ITC was validly availed in the normal course of business.Mere cancellation of suppliers’ registration cannot by itself justify cancellation of petitioner’s registration.The authority failed to examine documents and record findings on the alleged illegality of ITC.The order was arbitrary due to non-application of mind.The impugned order cancelling GST registration was set aside.Matter remanded for fresh consideration after granting hearing to the petitioner.Authorities permitted to continue investigation and take action in accordance with law.All contentions kept open.

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27Avik Televentures Private Limited v. Office of the GST Officer, 30-03-2026Whether an Order-in-Original confirming a substantial GST demand is liable to be quashed where the Adjudicating Authority issued a "Reminder" seeking voluminous documents with less than one effective working day's notice, passed the order on the very same View Download

BackgroundThe Petitioner, engaged in trading and export of branded mobile phones, was subjected to a Special Audit for Financial Year 2021-22 appointed under Section 66 of the CGST/DGST Act, 2017 vide email dated 06.12.2024. Upon completion of the audit, observations were communicated on 03.03.2025, to which the Petitioner filed a detailed response on 02.04.2025. Thereafter, a demand notice dated 11.09.2025, based on the special audit report dated 27.03.2025, raised a demand of Rs. 33,54,21,609/- requiring discharge within 7 days. A Show Cause Notice dated 24.09.2025 was subsequently issued proposing a demand of Rs. 58,02,79,384/-, with a reply deadline and personal hearing fixed for 28.10.2025. The Petitioner filed a detailed reply along with supporting documents on 24.10.2025, having sought a short adjournment of the hearing. Then, on 27.12.2025 at 05:20 PM, a communication styled as "Reminder-1" was issued calling for additional documents by 29.12.2025 and fixing a personal hearing for 30.12.2025 — the intervening 28.12.2025 being a Sunday. Despite a request for a 7-day extension made on 29.12.2025, the Order-in-Original was passed on 31.12.2025 confirming a demand of Rs. 26,72,64,497/- (including tax, interest and penalty) — on the very same day as the last personal hearing.Critical Timeline27.12.2025 — 05:20 PMReminder-1 issued demanding voluminous documents including certified bank statements by 29.12.2025; personal hearing fixed for 30.12.202528.12.2025Sunday — no working day available29.12.2025Petitioner sought 7-day adjournment — request not considered30.12.2025 & 31.12.2025Personal hearings held; petitioner's authorised representative participated; additional reply filed on 31.12.202531.12.2025 — same dayOIO passed confirming demand of Rs. 26,72,64,497/- on the very day the hearing concluded — the last date under Section 73(10) limitationSeparate SCN dated 04.07.2025 for the same FY 2021-22, also adjudicated on 31.12.2025, resulted in the Petitioner being discharged on all counts — including the very same ITC issues — creating a directly contradictory finding in the impugned OIO.Relevant FactsThe Petitioner raised three distinct grounds: first, that the opportunity of hearing was illusory and not real — Reminder-1 was issued at 05:20 PM on 27.12.2025, with 28.12.2025 being a Sunday, leaving less than one effective working day to collate voluminous documents including certified bank statements and records running into several hundred pages; second, that the OIO was passed with undue haste — the personal hearing concluded and the OIO was signed on the very same date (31.12.2025), the last date permissible under Section 73(10), raising a legitimate apprehension that material placed on record was not adequately considered; and third, that parallel proceedings were run on the same subject matter for the same FY, with a separate SCN dated 04.07.2025 having been adjudicated on the same date resulting in complete discharge of the Petitioner, rendering the impugned OIO internally contradictory. Additionally, a complete copy of the OIO was not furnished, only a partial copy having been placed on record. The Revenue contended that the petition was not maintainable given an appeal remedy under Section 107, that the petitioner had appeared and filed an additional reply, that the two SCNs pertained to distinct transactions, and that the order was reasoned.Court Observations (Verbatim)"Reminder-1 was issued on 27.12.2025 at 05:20 PM, calling upon the petitioner to furnish additional documents by 29.12.2025 and to appear for personal hearing on 30.12.2025. Admittedly, 28.12.2025 was a Sunday. The petitioner, therefore, had less than one effective working day to collate the material and respond."— Para 28"The nature of documents sought, including certified bank statements and voluminous records running into several hundred pages, could not have been reasonably procured and furnished within such a truncated timeline. The petitioner, in fact, sought a short adjournment of seven days on 29.12.2025. The record does not indicate that the said request was duly considered."— Para 29"Though it is the stand of the respondent that the petitioner participated in the personal hearing on 30.12.2025 and 31.12.2025, mere participation cannot be constructed as compliance with the requirement of affording a fair and effective opportunity. The opportunity contemplated under Sections 66(4) and 75(4) of the CGST/DGST Act is not a mere formality but must be real, reasonable and effective."— Para 30"The timeline, as notice hereinabove, clearly demonstrates that the opportunity afforded to the petitioner was illusory. The petitioner was neither granted adequate time to place the requisite material on record nor to effectively respond to the issues raised in the special audit and the SCN."— Para 31"The submission of the respondent that the petitioner had earlier filed a reply to the SCN does not dilute the requirement of granting a reasonable opportunity when additional material is sought to be relied upon. Once further documents were called for and a hearing was fixed, the respondent was under an obligation to ensure that sufficient time was afforded."— Para 32"This Court also finds merit in the contention of the petitioner that the OIO has been passed with undue haste. The personal hearing concluded on 31.12.2025 and the OIO has been passed on the very same date, confirming a substantial liability. In the facts of the present case, such haste raises a legitimate apprehension that the material placed on record may not have been adequately considered by the Adjudicating Authority."— Para 33"The contention of the respondent regarding availability of an alternate remedy under Section 107 of the Act does not merit acceptance in the present case. It is well settled that where an order is passed in violation of the principles of natural justice the existence of an alternate remedy would not operate as a bar to the exercise of writ jurisdiction."— Para 34Final VerdictPetition allowed. OIO dated 31.12.2025 confirming demand of Rs. 26,72,64,497/- quashed and set aside. Matter remanded for fresh adjudication as a "last chance" — Petitioner to appear before the Adjudicating Authority on 06.04.2026 with written submissions and required documents. Authority directed to grant real opportunity of hearing, consider all contentions, and pass an expeditious reasoned order. Court has not gone into the merits; all rights and remedies of both parties kept open.  

Avik Televentures Private Limited v. Office of the GST Officer, 30-03-2026
Whether an Order-in-Original confirming a substantial GST demand is liable to be quashed where the Adjudicating Authority issued a "Reminder" seeking voluminous documents with less than one effective working day's notice, passed the order on the very same

BackgroundThe Petitioner, engaged in trading and export of branded mobile phones, was subjected to a Special Audit for Financial Year 2021-22 appointed under Section 66 of the CGST/DGST Act, 2017 vide email dated 06.12.2024. Upon completion of the audit, observations were communicated on 03.03.2025, to which the Petitioner filed a detailed response on 02.04.2025. Thereafter, a demand notice dated 11.09.2025, based on the special audit report dated 27.03.2025, raised a demand of Rs. 33,54,21,609/- requiring discharge within 7 days. A Show Cause Notice dated 24.09.2025 was subsequently issued proposing a demand of Rs. 58,02,79,384/-, with a reply deadline and personal hearing fixed for 28.10.2025. The Petitioner filed a detailed reply along with supporting documents on 24.10.2025, having sought a short adjournment of the hearing. Then, on 27.12.2025 at 05:20 PM, a communication styled as "Reminder-1" was issued calling for additional documents by 29.12.2025 and fixing a personal hearing for 30.12.2025 — the intervening 28.12.2025 being a Sunday. Despite a request for a 7-day extension made on 29.12.2025, the Order-in-Original was passed on 31.12.2025 confirming a demand of Rs. 26,72,64,497/- (including tax, interest and penalty) — on the very same day as the last personal hearing.Critical Timeline27.12.2025 — 05:20 PMReminder-1 issued demanding voluminous documents including certified bank statements by 29.12.2025; personal hearing fixed for 30.12.202528.12.2025Sunday — no working day available29.12.2025Petitioner sought 7-day adjournment — request not considered30.12.2025 & 31.12.2025Personal hearings held; petitioner's authorised representative participated; additional reply filed on 31.12.202531.12.2025 — same dayOIO passed confirming demand of Rs. 26,72,64,497/- on the very day the hearing concluded — the last date under Section 73(10) limitationSeparate SCN dated 04.07.2025 for the same FY 2021-22, also adjudicated on 31.12.2025, resulted in the Petitioner being discharged on all counts — including the very same ITC issues — creating a directly contradictory finding in the impugned OIO.Relevant FactsThe Petitioner raised three distinct grounds: first, that the opportunity of hearing was illusory and not real — Reminder-1 was issued at 05:20 PM on 27.12.2025, with 28.12.2025 being a Sunday, leaving less than one effective working day to collate voluminous documents including certified bank statements and records running into several hundred pages; second, that the OIO was passed with undue haste — the personal hearing concluded and the OIO was signed on the very same date (31.12.2025), the last date permissible under Section 73(10), raising a legitimate apprehension that material placed on record was not adequately considered; and third, that parallel proceedings were run on the same subject matter for the same FY, with a separate SCN dated 04.07.2025 having been adjudicated on the same date resulting in complete discharge of the Petitioner, rendering the impugned OIO internally contradictory. Additionally, a complete copy of the OIO was not furnished, only a partial copy having been placed on record. The Revenue contended that the petition was not maintainable given an appeal remedy under Section 107, that the petitioner had appeared and filed an additional reply, that the two SCNs pertained to distinct transactions, and that the order was reasoned.Court Observations (Verbatim)"Reminder-1 was issued on 27.12.2025 at 05:20 PM, calling upon the petitioner to furnish additional documents by 29.12.2025 and to appear for personal hearing on 30.12.2025. Admittedly, 28.12.2025 was a Sunday. The petitioner, therefore, had less than one effective working day to collate the material and respond."— Para 28"The nature of documents sought, including certified bank statements and voluminous records running into several hundred pages, could not have been reasonably procured and furnished within such a truncated timeline. The petitioner, in fact, sought a short adjournment of seven days on 29.12.2025. The record does not indicate that the said request was duly considered."— Para 29"Though it is the stand of the respondent that the petitioner participated in the personal hearing on 30.12.2025 and 31.12.2025, mere participation cannot be constructed as compliance with the requirement of affording a fair and effective opportunity. The opportunity contemplated under Sections 66(4) and 75(4) of the CGST/DGST Act is not a mere formality but must be real, reasonable and effective."— Para 30"The timeline, as notice hereinabove, clearly demonstrates that the opportunity afforded to the petitioner was illusory. The petitioner was neither granted adequate time to place the requisite material on record nor to effectively respond to the issues raised in the special audit and the SCN."— Para 31"The submission of the respondent that the petitioner had earlier filed a reply to the SCN does not dilute the requirement of granting a reasonable opportunity when additional material is sought to be relied upon. Once further documents were called for and a hearing was fixed, the respondent was under an obligation to ensure that sufficient time was afforded."— Para 32"This Court also finds merit in the contention of the petitioner that the OIO has been passed with undue haste. The personal hearing concluded on 31.12.2025 and the OIO has been passed on the very same date, confirming a substantial liability. In the facts of the present case, such haste raises a legitimate apprehension that the material placed on record may not have been adequately considered by the Adjudicating Authority."— Para 33"The contention of the respondent regarding availability of an alternate remedy under Section 107 of the Act does not merit acceptance in the present case. It is well settled that where an order is passed in violation of the principles of natural justice the existence of an alternate remedy would not operate as a bar to the exercise of writ jurisdiction."— Para 34Final VerdictPetition allowed. OIO dated 31.12.2025 confirming demand of Rs. 26,72,64,497/- quashed and set aside. Matter remanded for fresh adjudication as a "last chance" — Petitioner to appear before the Adjudicating Authority on 06.04.2026 with written submissions and required documents. Authority directed to grant real opportunity of hearing, consider all contentions, and pass an expeditious reasoned order. Court has not gone into the merits; all rights and remedies of both parties kept open.  

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28SFC Global Commodity Private Limited vs Union of India & Ors.13-03-2026Whether the Appellate Authority can reject an appeal merely on the ground of non-appearance of the appellant without dealing with the written grounds raised in the appeal memo. View Download

BackgroundThe petitioner-assessee challenged an order dated 24.09.2025 passed by the Deputy Commissioner of Sales Tax (Respondent No. 4) before the Appellate Authority. In the appeal, the petitioner had filed detailed written submissions raising specific grounds including violation of principles of natural justice, timely filing of replies to both RFT-08 notices, request for personal hearing not granted by the adjudicating authority, breach of Section 75(4) of the CGST Act, 2017, and that belated generation of RFT-01 was due to administrative lapse and system auto-generation which should not have prejudiced the petitioner. The Appellate Authority rejected the appeal solely on the ground that the petitioner did not personally appear before it despite being given an opportunity of hearing, without addressing any of the grounds raised in the appeal memo.Facts Relevant to Understanding the JudgmentThe petitioner had timely filed replies to both RFT-08 notices and had specifically requested personal hearing before the adjudicating authority, which was not granted. The adjudicating order was challenged before the Appellate Authority with specific written grounds. The Appellate Authority, instead of dealing with the merits of those grounds, dismissed the appeal only because the petitioner did not remain personally present on the date of hearing, despite the fact that detailed written submissions were already on record. The vires of Rule 96(5A) of the CGST Rules, 2017 were not challenged by the petitioner at this stage.Court Observations (Verbatim)"We have noticed that the petitioner-assessee as well as the respondent have committed irregularity before the Appellate Authority." (Para 3)"All these contentions raised by the petitioners have been ignored by the Appellate Authority by merely observing that since the petitioner / appellant was though afforded an opportunity of hearing to remain personally present, he did not remain present and hence the appeal was liable to be rejected and accordingly the appeal was disallowed." (Para 3.1)"We find that the Appellate Authority while rejecting the appeal has committed an illegality by not dealing with the submissions raised by the petitioner in his appeal memo for the reason that the petitioner did not remain present though he was granted the opportunity of hearing. It is always open for the Appellate Authority to pass a reasoned order by dealing with the grounds raised in the appeal memo even if the party does not remain present." (Para 3.2)Final VerdictThe Appellate Order dated 24.09.2025 was quashed and set aside. The matter was remanded back to the Appellate Authority to decide afresh by giving opportunity of hearing to the petitioner. It was further clarified that even if the petitioner does not remain present on personal hearing, the Appellate Authority shall consider the grounds of appeal raised in the appeal memo and decide in accordance with law within 12 weeks.

SFC Global Commodity Private Limited vs Union of India & Ors. 13-03-2026
Whether the Appellate Authority can reject an appeal merely on the ground of non-appearance of the appellant without dealing with the written grounds raised in the appeal memo.

BackgroundThe petitioner-assessee challenged an order dated 24.09.2025 passed by the Deputy Commissioner of Sales Tax (Respondent No. 4) before the Appellate Authority. In the appeal, the petitioner had filed detailed written submissions raising specific grounds including violation of principles of natural justice, timely filing of replies to both RFT-08 notices, request for personal hearing not granted by the adjudicating authority, breach of Section 75(4) of the CGST Act, 2017, and that belated generation of RFT-01 was due to administrative lapse and system auto-generation which should not have prejudiced the petitioner. The Appellate Authority rejected the appeal solely on the ground that the petitioner did not personally appear before it despite being given an opportunity of hearing, without addressing any of the grounds raised in the appeal memo.Facts Relevant to Understanding the JudgmentThe petitioner had timely filed replies to both RFT-08 notices and had specifically requested personal hearing before the adjudicating authority, which was not granted. The adjudicating order was challenged before the Appellate Authority with specific written grounds. The Appellate Authority, instead of dealing with the merits of those grounds, dismissed the appeal only because the petitioner did not remain personally present on the date of hearing, despite the fact that detailed written submissions were already on record. The vires of Rule 96(5A) of the CGST Rules, 2017 were not challenged by the petitioner at this stage.Court Observations (Verbatim)"We have noticed that the petitioner-assessee as well as the respondent have committed irregularity before the Appellate Authority." (Para 3)"All these contentions raised by the petitioners have been ignored by the Appellate Authority by merely observing that since the petitioner / appellant was though afforded an opportunity of hearing to remain personally present, he did not remain present and hence the appeal was liable to be rejected and accordingly the appeal was disallowed." (Para 3.1)"We find that the Appellate Authority while rejecting the appeal has committed an illegality by not dealing with the submissions raised by the petitioner in his appeal memo for the reason that the petitioner did not remain present though he was granted the opportunity of hearing. It is always open for the Appellate Authority to pass a reasoned order by dealing with the grounds raised in the appeal memo even if the party does not remain present." (Para 3.2)Final VerdictThe Appellate Order dated 24.09.2025 was quashed and set aside. The matter was remanded back to the Appellate Authority to decide afresh by giving opportunity of hearing to the petitioner. It was further clarified that even if the petitioner does not remain present on personal hearing, the Appellate Authority shall consider the grounds of appeal raised in the appeal memo and decide in accordance with law within 12 weeks.

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29Singhvi Trandelink LLP & Anr. v. State of Gujarat & Anr.05-03-2026Whether an order is sustainable where the documents relied upon during investigation were supplied to the assessee only subsequently and not along with the show cause notice, and where the opportunity to cross-examine witnesses whose statements were relie View Download

BackgroundThe petitioners challenged an order passed by the SGST authority. Pursuant to an earlier order dated 24.02.2026, the department filed an affidavit dated 02.03.2026 setting out the relevant details and seeking to explain the issue of non-cross-examination of witnesses. Two procedural grievances were at the core of the matter: the non-supply of relied-upon documents along with the show cause notice, and the refusal to permit cross-examination of witnesses whose statements were relied upon by the department.FactsOn instructions from the Assistant Commissioner (SGST) present in Court, it was submitted that the explanation in the department's affidavit relating to non-cross-examination of the witnesses did not appear to be in consonance with the settled position of law, and that an appropriate opportunity was required to be extended to the petitioners to cross-examine the relevant witnesses as demanded. As regards the documents mentioned in the affidavit-in-reply, it was conceded that the same were supplied during the course of inquiry and not along with the show cause notice. The Court thus had before it two short grounds: subsequent (rather than contemporaneous) supply of the relied-upon documents, and refusal of cross-examination.Court Observations (Verbatim)Para 3: "Under the circumstances, since we find that the documents on which reliance has been placed during the investigation / inquiry were supplied to the petitioners subsequently and not along with the show cause notice, the same would amount to violation of the principles of natural justice. The second aspect pertains to the refusal to extend the opportunity of cross-examination, as demanded by the petitioners, of those witnesses whose statements have been relied upon by the department. Such inaction also violates the fundamental principle of fair opportunity of hearing."Para 4: "Thus, only on these two short grounds, the impugned order deserves to be quashed and set aside. The matter is remanded to the respondent authority for a fresh inquiry / investigation from the stage of issuance of the show cause notice."Para 5: "We direct that all the documents on which reliance is placed by the respondents shall be supplied to the petitioner along with the list of Relied Upon Documents (RUDs). In the event, the petitioner requests cross-examination of any witnesses whose statements are relied upon by the department, such opportunity shall be extended and appropriate orders shall be passed in accordance with law. The inquiry shall be completed within a period of three months."Para 7: "It is clarified that we are not setting aside the show cause notice and the inquiry shall proceed thereafter, after the RUDs are supplied to the petitioners."VerdictThe impugned order was quashed and set aside on the two grounds of non-supply of relied-upon documents with the show cause notice and refusal of cross-examination, both being violations of natural justice. The matter was remanded for fresh inquiry from the stage of the show cause notice, with a direction to supply all RUDs and extend cross-examination if requested; the show cause notice itself was not set aside, and the inquiry is to be completed within three months.

Singhvi Trandelink LLP & Anr. v. State of Gujarat & Anr. 05-03-2026
Whether an order is sustainable where the documents relied upon during investigation were supplied to the assessee only subsequently and not along with the show cause notice, and where the opportunity to cross-examine witnesses whose statements were relie

BackgroundThe petitioners challenged an order passed by the SGST authority. Pursuant to an earlier order dated 24.02.2026, the department filed an affidavit dated 02.03.2026 setting out the relevant details and seeking to explain the issue of non-cross-examination of witnesses. Two procedural grievances were at the core of the matter: the non-supply of relied-upon documents along with the show cause notice, and the refusal to permit cross-examination of witnesses whose statements were relied upon by the department.FactsOn instructions from the Assistant Commissioner (SGST) present in Court, it was submitted that the explanation in the department's affidavit relating to non-cross-examination of the witnesses did not appear to be in consonance with the settled position of law, and that an appropriate opportunity was required to be extended to the petitioners to cross-examine the relevant witnesses as demanded. As regards the documents mentioned in the affidavit-in-reply, it was conceded that the same were supplied during the course of inquiry and not along with the show cause notice. The Court thus had before it two short grounds: subsequent (rather than contemporaneous) supply of the relied-upon documents, and refusal of cross-examination.Court Observations (Verbatim)Para 3: "Under the circumstances, since we find that the documents on which reliance has been placed during the investigation / inquiry were supplied to the petitioners subsequently and not along with the show cause notice, the same would amount to violation of the principles of natural justice. The second aspect pertains to the refusal to extend the opportunity of cross-examination, as demanded by the petitioners, of those witnesses whose statements have been relied upon by the department. Such inaction also violates the fundamental principle of fair opportunity of hearing."Para 4: "Thus, only on these two short grounds, the impugned order deserves to be quashed and set aside. The matter is remanded to the respondent authority for a fresh inquiry / investigation from the stage of issuance of the show cause notice."Para 5: "We direct that all the documents on which reliance is placed by the respondents shall be supplied to the petitioner along with the list of Relied Upon Documents (RUDs). In the event, the petitioner requests cross-examination of any witnesses whose statements are relied upon by the department, such opportunity shall be extended and appropriate orders shall be passed in accordance with law. The inquiry shall be completed within a period of three months."Para 7: "It is clarified that we are not setting aside the show cause notice and the inquiry shall proceed thereafter, after the RUDs are supplied to the petitioners."VerdictThe impugned order was quashed and set aside on the two grounds of non-supply of relied-upon documents with the show cause notice and refusal of cross-examination, both being violations of natural justice. The matter was remanded for fresh inquiry from the stage of the show cause notice, with a direction to supply all RUDs and extend cross-examination if requested; the show cause notice itself was not set aside, and the inquiry is to be completed within three months.

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30Singhvi Trandelink LLP & Anr. v. State of Gujarat & Anr.05-03-2026Whether an order is sustainable where the documents relied upon during investigation were supplied to the assessee only subsequently and not along with the show cause notice, and where the opportunity to cross-examine witnesses whose statements were relie View Download

BackgroundThe petitioners challenged an order passed by the SGST authority. Pursuant to an earlier order dated 24.02.2026, the department filed an affidavit dated 02.03.2026 setting out the relevant details and seeking to explain the issue of non-cross-examination of witnesses. Two procedural grievances were at the core of the matter: the non-supply of relied-upon documents along with the show cause notice, and the refusal to permit cross-examination of witnesses whose statements were relied upon by the department.FactsOn instructions from the Assistant Commissioner (SGST) present in Court, it was submitted that the explanation in the department's affidavit relating to non-cross-examination of the witnesses did not appear to be in consonance with the settled position of law, and that an appropriate opportunity was required to be extended to the petitioners to cross-examine the relevant witnesses as demanded. As regards the documents mentioned in the affidavit-in-reply, it was conceded that the same were supplied during the course of inquiry and not along with the show cause notice. The Court thus had before it two short grounds: subsequent (rather than contemporaneous) supply of the relied-upon documents, and refusal of cross-examination.Court Observations (Verbatim)Para 3: "Under the circumstances, since we find that the documents on which reliance has been placed during the investigation / inquiry were supplied to the petitioners subsequently and not along with the show cause notice, the same would amount to violation of the principles of natural justice. The second aspect pertains to the refusal to extend the opportunity of cross-examination, as demanded by the petitioners, of those witnesses whose statements have been relied upon by the department. Such inaction also violates the fundamental principle of fair opportunity of hearing."Para 4: "Thus, only on these two short grounds, the impugned order deserves to be quashed and set aside. The matter is remanded to the respondent authority for a fresh inquiry / investigation from the stage of issuance of the show cause notice."Para 5: "We direct that all the documents on which reliance is placed by the respondents shall be supplied to the petitioner along with the list of Relied Upon Documents (RUDs). In the event, the petitioner requests cross-examination of any witnesses whose statements are relied upon by the department, such opportunity shall be extended and appropriate orders shall be passed in accordance with law. The inquiry shall be completed within a period of three months."Para 7: "It is clarified that we are not setting aside the show cause notice and the inquiry shall proceed thereafter, after the RUDs are supplied to the petitioners."VerdictThe impugned order was quashed and set aside on the two grounds of non-supply of relied-upon documents with the show cause notice and refusal of cross-examination, both being violations of natural justice. The matter was remanded for fresh inquiry from the stage of the show cause notice, with a direction to supply all RUDs and extend cross-examination if requested; the show cause notice itself was not set aside, and the inquiry is to be completed within three months.

Singhvi Trandelink LLP & Anr. v. State of Gujarat & Anr. 05-03-2026
Whether an order is sustainable where the documents relied upon during investigation were supplied to the assessee only subsequently and not along with the show cause notice, and where the opportunity to cross-examine witnesses whose statements were relie

BackgroundThe petitioners challenged an order passed by the SGST authority. Pursuant to an earlier order dated 24.02.2026, the department filed an affidavit dated 02.03.2026 setting out the relevant details and seeking to explain the issue of non-cross-examination of witnesses. Two procedural grievances were at the core of the matter: the non-supply of relied-upon documents along with the show cause notice, and the refusal to permit cross-examination of witnesses whose statements were relied upon by the department.FactsOn instructions from the Assistant Commissioner (SGST) present in Court, it was submitted that the explanation in the department's affidavit relating to non-cross-examination of the witnesses did not appear to be in consonance with the settled position of law, and that an appropriate opportunity was required to be extended to the petitioners to cross-examine the relevant witnesses as demanded. As regards the documents mentioned in the affidavit-in-reply, it was conceded that the same were supplied during the course of inquiry and not along with the show cause notice. The Court thus had before it two short grounds: subsequent (rather than contemporaneous) supply of the relied-upon documents, and refusal of cross-examination.Court Observations (Verbatim)Para 3: "Under the circumstances, since we find that the documents on which reliance has been placed during the investigation / inquiry were supplied to the petitioners subsequently and not along with the show cause notice, the same would amount to violation of the principles of natural justice. The second aspect pertains to the refusal to extend the opportunity of cross-examination, as demanded by the petitioners, of those witnesses whose statements have been relied upon by the department. Such inaction also violates the fundamental principle of fair opportunity of hearing."Para 4: "Thus, only on these two short grounds, the impugned order deserves to be quashed and set aside. The matter is remanded to the respondent authority for a fresh inquiry / investigation from the stage of issuance of the show cause notice."Para 5: "We direct that all the documents on which reliance is placed by the respondents shall be supplied to the petitioner along with the list of Relied Upon Documents (RUDs). In the event, the petitioner requests cross-examination of any witnesses whose statements are relied upon by the department, such opportunity shall be extended and appropriate orders shall be passed in accordance with law. The inquiry shall be completed within a period of three months."Para 7: "It is clarified that we are not setting aside the show cause notice and the inquiry shall proceed thereafter, after the RUDs are supplied to the petitioners."VerdictThe impugned order was quashed and set aside on the two grounds of non-supply of relied-upon documents with the show cause notice and refusal of cross-examination, both being violations of natural justice. The matter was remanded for fresh inquiry from the stage of the show cause notice, with a direction to supply all RUDs and extend cross-examination if requested; the show cause notice itself was not set aside, and the inquiry is to be completed within three months.

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Total: 148 case laws