Court DecisionThe Court allowed the writ petition and quashed the show cause notices and the Order-in-Original dated 1 February 2025 insofar as they imposed penalties of ₹133,60,60,889/- each on the petitioners under Section 122(1A) of the CGST Act.The Court held:Section 122(1A) applies to a “taxable person”:On a conjoint reading of Section 122(1) and 122(1A), the Court held that sub-section (1A) necessarily applies to a taxable person as defined under Section 2(107) of the CGST Act. The petitioners, being employees of M/s. Shemaroo Entertainment Ltd., were not taxable persons in their individual capacity and hence could not be proceeded against under Section 122(1A).Jurisdictional requirement not satisfied:Section 122(1A) requires that the person must (i) retain the benefit of the transaction covered under specified clauses of Section 122(1), and (ii) the transaction must be conducted at his instance. The impugned order did not record any finding that the petitioners retained any benefit of the alleged transactions. Therefore, the jurisdictional ingredients were not satisfied.No vicarious liability under Section 122(1A):The Court held that there is no principle of vicarious liability incorporated in Section 122 or Section 137 of the CGST Act so as to fasten such penalty on employees merely because they held managerial positions.Retrospective application impermissible:Section 122(1A) came into force with effect from 1 January 2021. The show cause notice covered the period from July 2017 onwards. The Court held that the penal provision could not be applied retrospectively for the period prior to 1 January 2021, in view of Article 20(1) of the Constitution of India.Accordingly, the impugned order was held to be illegal and without jurisdiction insofar as it related to the petitioners.Cases Referred by the Court1. Shantanu Sanjay Hundekari vs. Union of India, 2024 (89) G.S.T.L. 62 (Bom.)2. Union of India vs. Shantanu Sanjay Hundekari, (2025) 27 Centax 14 (S.C.)3. Bharat Parihar vs. State of Maharashtra & Ors., Writ Petition No. 3742 of 2023, decided on 30/06/2023.4. Mukesh Kumar Garg vs. Union of India & Ors., 2025 (5) TMI 922 – Delhi High Court
Amit Manilal Haria & Ors. vs. The Joint Commissioner, CGST & Central Excise & Anr. 25-02-2026
Court DecisionThe Court allowed the writ petition and quashed the show cause notices and the Order-in-Original dated 1 February 2025 insofar as they imposed penalties of ₹133,60,60,889/- each on the petitioners under Section 122(1A) of the CGST Act.The Court held:Section 122(1A) applies to a “taxable person”:On a conjoint reading of Section 122(1) and 122(1A), the Court held that sub-section (1A) necessarily applies to a taxable person as defined under Section 2(107) of the CGST Act. The petitioners, being employees of M/s. Shemaroo Entertainment Ltd., were not taxable persons in their individual capacity and hence could not be proceeded against under Section 122(1A).Jurisdictional requirement not satisfied:Section 122(1A) requires that the person must (i) retain the benefit of the transaction covered under specified clauses of Section 122(1), and (ii) the transaction must be conducted at his instance. The impugned order did not record any finding that the petitioners retained any benefit of the alleged transactions. Therefore, the jurisdictional ingredients were not satisfied.No vicarious liability under Section 122(1A):The Court held that there is no principle of vicarious liability incorporated in Section 122 or Section 137 of the CGST Act so as to fasten such penalty on employees merely because they held managerial positions.Retrospective application impermissible:Section 122(1A) came into force with effect from 1 January 2021. The show cause notice covered the period from July 2017 onwards. The Court held that the penal provision could not be applied retrospectively for the period prior to 1 January 2021, in view of Article 20(1) of the Constitution of India.Accordingly, the impugned order was held to be illegal and without jurisdiction insofar as it related to the petitioners.Cases Referred by the Court1. Shantanu Sanjay Hundekari vs. Union of India, 2024 (89) G.S.T.L. 62 (Bom.)2. Union of India vs. Shantanu Sanjay Hundekari, (2025) 27 Centax 14 (S.C.)3. Bharat Parihar vs. State of Maharashtra & Ors., Writ Petition No. 3742 of 2023, decided on 30/06/2023.4. Mukesh Kumar Garg vs. Union of India & Ors., 2025 (5) TMI 922 – Delhi High Court
BACKGROUNDAn Order-in-Original dated 18th December 2023 confirmed a tax liability against the Petitioner. The Petitioner's appeal before the Appellate Authority was rejected by an Order-in-Appeal dated 12th June 2024. The Petitioner then filed an appeal before the GST Tribunal on 5th February 2026 against the Order-in-Appeal.FACTSThe Petitioner received demand intimations by e-mails dated 3rd February 2026 and 6th February 2026. It informed the Respondent that the demand amount had been deposited/adjusted through Form GST DRC-03A and that the appeal was pending before the Tribunal. Despite this, a Recovery Notice dated 6th February 2026 was issued, and coercive steps were sought to be taken. The Petitioner approached the Bombay High Court under Article 226, seeking quashing of the Intimation and Recovery Notices and interim stay, on the ground that the Tribunal has no express power under the CGST Act/Rules to grant interim stay of recovery, and hence no efficacious alternative remedy existed. COURT OBSERVATIONS (Verbatim)On the scope of Section 113:"Considering the nature of the powers conferred under sub-section (1) of Section 113 to pass such orders 'as it thinks fit'... it cannot be inferred, that although the Tribunal is vested with the jurisdiction to pass substantive final orders on the Appeal... it would nonetheless lack jurisdiction to pass appropriate interim orders. The power to grant interim relief, including protection against recovery pending the Appeal, is inherent and incidental to the appellate jurisdiction conferred upon the Tribunal."On rejecting the Petitioner's proposition:"Also, on first principles, we are unable to accept a proposition that although the Appellate Tribunal is a statutory forum created under the scheme of Sections 111, 112 and 113 of the CGST Act, 2017, it would nevertheless be powerless to grant interim relief. Such an interpretation would render the appellate remedy illusory and defeat the legislative intent..."On the High Court not being a substitute forum:"This can never be the legislative intent, that the High Court should function as a forum for grant of interim relief, in matters squarely falling within the appellate jurisdiction of the Tribunal. This is inconceivable."On the GSTAT (Procedure) Rules, 2025 (Rules 10 & 29) supporting inherent power to grant interim relief — referred to as making "the position crystal clear."Reliance placed on Income Tax Officer, Cannanore vs. M. K. Mohammed Kunhi, 1968 SCC OnLine SC 71, where the Supreme Court held (in the context of Section 254 of the Income Tax Act, 1961, a provision "quite similar" to Section 113 of the CGST Act):"It is a firmly established rule that an express grant of statutory power carries with it by necessary implication the authority to use all reasonable means to make such grant effective... The powers which have been conferred by Section 254 on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers fully effective." CASE LAW REFERREDCaseCitationIncome Tax Officer, Cannanore vs. M. K. Mohammed Kunhi1968 SCC OnLine SC 71 FINAL VERDICTThe Court held that the GST Appellate Tribunal does have inherent jurisdiction to grant interim relief/stay of recovery pending appeal, and directed the Petitioner to move an interim application before the Tribunal within two weeks. As limited interim protection, the Recovery Notice dated 6th February 2026 was directed not to be acted upon until the Tribunal decides the interim application. Petition disposed of with no order as to costs; merits of the underlying dispute kept open.
The Hongkong and Shanghai Banking Corporation Ltd. vs. State of Maharashtra through the Secretary to the Government Revenue Dept. & Ors. 20-02-2026
BACKGROUNDAn Order-in-Original dated 18th December 2023 confirmed a tax liability against the Petitioner. The Petitioner's appeal before the Appellate Authority was rejected by an Order-in-Appeal dated 12th June 2024. The Petitioner then filed an appeal before the GST Tribunal on 5th February 2026 against the Order-in-Appeal.FACTSThe Petitioner received demand intimations by e-mails dated 3rd February 2026 and 6th February 2026. It informed the Respondent that the demand amount had been deposited/adjusted through Form GST DRC-03A and that the appeal was pending before the Tribunal. Despite this, a Recovery Notice dated 6th February 2026 was issued, and coercive steps were sought to be taken. The Petitioner approached the Bombay High Court under Article 226, seeking quashing of the Intimation and Recovery Notices and interim stay, on the ground that the Tribunal has no express power under the CGST Act/Rules to grant interim stay of recovery, and hence no efficacious alternative remedy existed. COURT OBSERVATIONS (Verbatim)On the scope of Section 113:"Considering the nature of the powers conferred under sub-section (1) of Section 113 to pass such orders 'as it thinks fit'... it cannot be inferred, that although the Tribunal is vested with the jurisdiction to pass substantive final orders on the Appeal... it would nonetheless lack jurisdiction to pass appropriate interim orders. The power to grant interim relief, including protection against recovery pending the Appeal, is inherent and incidental to the appellate jurisdiction conferred upon the Tribunal."On rejecting the Petitioner's proposition:"Also, on first principles, we are unable to accept a proposition that although the Appellate Tribunal is a statutory forum created under the scheme of Sections 111, 112 and 113 of the CGST Act, 2017, it would nevertheless be powerless to grant interim relief. Such an interpretation would render the appellate remedy illusory and defeat the legislative intent..."On the High Court not being a substitute forum:"This can never be the legislative intent, that the High Court should function as a forum for grant of interim relief, in matters squarely falling within the appellate jurisdiction of the Tribunal. This is inconceivable."On the GSTAT (Procedure) Rules, 2025 (Rules 10 & 29) supporting inherent power to grant interim relief — referred to as making "the position crystal clear."Reliance placed on Income Tax Officer, Cannanore vs. M. K. Mohammed Kunhi, 1968 SCC OnLine SC 71, where the Supreme Court held (in the context of Section 254 of the Income Tax Act, 1961, a provision "quite similar" to Section 113 of the CGST Act):"It is a firmly established rule that an express grant of statutory power carries with it by necessary implication the authority to use all reasonable means to make such grant effective... The powers which have been conferred by Section 254 on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers fully effective." CASE LAW REFERREDCaseCitationIncome Tax Officer, Cannanore vs. M. K. Mohammed Kunhi1968 SCC OnLine SC 71 FINAL VERDICTThe Court held that the GST Appellate Tribunal does have inherent jurisdiction to grant interim relief/stay of recovery pending appeal, and directed the Petitioner to move an interim application before the Tribunal within two weeks. As limited interim protection, the Recovery Notice dated 6th February 2026 was directed not to be acted upon until the Tribunal decides the interim application. Petition disposed of with no order as to costs; merits of the underlying dispute kept open.
BackgroundAn Order-in-Original was passed under the CGST Act on 18th December 2023, confirming a tax liability against the Petitioner. The Petitioner filed an appeal before the Appellate Authority, which was rejected by an Order-in-Appeal dated 12th June 2024. The Petitioner then filed a further appeal before the GST Appellate Tribunal on 5th February 2026. In the interregnum, the Petitioner received demand intimations by e-mails dated 3rd February 2026 and 6th February 2026. The Petitioner informed the Revenue that the demand amount had been deposited and adjusted through Form GST DRC-03A and that an appeal was pending before the Tribunal. Despite this, a Recovery Notice dated 6th February 2026 was issued and steps were sought to be taken to implement the same. The Petitioner thereupon filed a Writ Petition before the Bombay High Court under Article 226 of the Constitution, contending that coercive recovery proceedings ought not to continue while the appeal was pending before the Tribunal.Relevant FactsThe Revenue's counsel submitted that since the appeal was pending before the Tribunal, the Petitioner should have approached the Tribunal for interim relief — including on the basis of Section 112(9) of the CGST Act, which provides that upon payment of the pre-deposit amount under Section 112(8), recovery proceedings for the balance amount shall be deemed stayed till disposal of the appeal. The Petitioner's counsel countered that there is no express provision under the CGST Act or the Rules framed thereunder empowering the Tribunal to grant interim orders staying recovery proceedings, and therefore no efficacious alternative remedy existed before the Tribunal, necessitating recourse to this Court under Article 226. The sole question before the Court was whether the GSTAT, under the statutory scheme of Sections 111, 112 and 113 of the CGST Act, is empowered to pass interim orders, including a stay of recovery proceedings, pending disposal of an appeal.Court Observations (Verbatim)"...it cannot be inferred, that although the Tribunal is vested with the jurisdiction to pass substantive final orders on the Appeal to confirm, modify or annul the decision or order appealed against...it would nonetheless lack jurisdiction to pass appropriate interim orders. The power to grant interim relief, including protection against recovery pending the Appeal, is inherent and incidental to the appellate jurisdiction conferred upon the Tribunal. Thus, the appellate power of the Tribunal being wide in its sweep, necessarily wields with the appellate tribunal, the authority and jurisdiction to pass appropriate interim orders relevant to subject matter of the appeal, so as to make the appellate remedy effective."— Para 10"...we are unable to accept a proposition that although the Appellate Tribunal is a statutory forum created under the scheme of Sections 111, 112 and 113 of the CGST Act, 2017, it would nevertheless be powerless to grant interim relief. Such an interpretation would render the appellate remedy illusory and defeat the legislative intent, cumulatively and wholesomely gathered from the provisions as noted hereinabove, surrounding the constitution of the Appellate Tribunal."— Para 11"The consequence of what is urged on behalf of the petitioner is to the effect that although the Appellate Tribunal would have powers to set aside the order impugned before it, the interim relief authority would be vested with the High Court in the proceedings under Article 226 of the Constitution. This can never be the legislative intent, that the High Court should function as a forum for grant of interim relief, in matters squarely falling within the appellate jurisdiction of the Tribunal. This is inconceivable."— Para 12GST Appellate Tribunal (Procedure) Rules, 2025 — Notification dated 24 April 2025, Ministry of Finance:Rule 10 — Inherent Powers: "Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the Appellate Tribunal to make such orders or give such directions as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Appellate Tribunal."Rule 29 — Interlocutory Applications: "Every interlocutory application for stay, direction, rectification in order, condonation of delay, early hearing, exemption from production of copy of order appealed against or extension of time prayed for in pending matters shall include all the information as per the prescribed GSTAT FORM-01..."(Quoting Supreme Court in ITO Cannanore v. M.K. Mohammed Kunhi): "The powers which have been conferred by Section 254 on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers fully effective."— Para 14 (SC observation relied upon)Final VerdictThe Court held that GSTAT has jurisdiction to pass interim orders including stay of recovery, and rejected the Petitioner's contention to the contrary. The Writ Petition was disposed of with a direction to the Petitioner to file an interim application before the Tribunal within two weeks. As limited interim protection, the Recovery Notice dated 6th February 2026 was restrained from being acted upon until the Tribunal decides such interim application. Tribunal Registry was also directed to enable filing of interim applications on its portal. No order as to costs.Cases Referred by CourtIncome Tax Officer, Cannanore v. M.K. Mohammed KunhiSupreme Court of India | 1968 SCC OnLine SC 71 | Held: ITAT has inherent power to stay recovery pending appeal even without express provision, as power to pass "such orders as it thinks fit" under Section 254 of the Income Tax Act implies all ancillary and incidental powers to make appellate jurisdiction effective.
The Hongkong and Shanghai Banking Corporation Ltd v. State of Maharashtra & Ors. 20-02-2026
BackgroundAn Order-in-Original was passed under the CGST Act on 18th December 2023, confirming a tax liability against the Petitioner. The Petitioner filed an appeal before the Appellate Authority, which was rejected by an Order-in-Appeal dated 12th June 2024. The Petitioner then filed a further appeal before the GST Appellate Tribunal on 5th February 2026. In the interregnum, the Petitioner received demand intimations by e-mails dated 3rd February 2026 and 6th February 2026. The Petitioner informed the Revenue that the demand amount had been deposited and adjusted through Form GST DRC-03A and that an appeal was pending before the Tribunal. Despite this, a Recovery Notice dated 6th February 2026 was issued and steps were sought to be taken to implement the same. The Petitioner thereupon filed a Writ Petition before the Bombay High Court under Article 226 of the Constitution, contending that coercive recovery proceedings ought not to continue while the appeal was pending before the Tribunal.Relevant FactsThe Revenue's counsel submitted that since the appeal was pending before the Tribunal, the Petitioner should have approached the Tribunal for interim relief — including on the basis of Section 112(9) of the CGST Act, which provides that upon payment of the pre-deposit amount under Section 112(8), recovery proceedings for the balance amount shall be deemed stayed till disposal of the appeal. The Petitioner's counsel countered that there is no express provision under the CGST Act or the Rules framed thereunder empowering the Tribunal to grant interim orders staying recovery proceedings, and therefore no efficacious alternative remedy existed before the Tribunal, necessitating recourse to this Court under Article 226. The sole question before the Court was whether the GSTAT, under the statutory scheme of Sections 111, 112 and 113 of the CGST Act, is empowered to pass interim orders, including a stay of recovery proceedings, pending disposal of an appeal.Court Observations (Verbatim)"...it cannot be inferred, that although the Tribunal is vested with the jurisdiction to pass substantive final orders on the Appeal to confirm, modify or annul the decision or order appealed against...it would nonetheless lack jurisdiction to pass appropriate interim orders. The power to grant interim relief, including protection against recovery pending the Appeal, is inherent and incidental to the appellate jurisdiction conferred upon the Tribunal. Thus, the appellate power of the Tribunal being wide in its sweep, necessarily wields with the appellate tribunal, the authority and jurisdiction to pass appropriate interim orders relevant to subject matter of the appeal, so as to make the appellate remedy effective."— Para 10"...we are unable to accept a proposition that although the Appellate Tribunal is a statutory forum created under the scheme of Sections 111, 112 and 113 of the CGST Act, 2017, it would nevertheless be powerless to grant interim relief. Such an interpretation would render the appellate remedy illusory and defeat the legislative intent, cumulatively and wholesomely gathered from the provisions as noted hereinabove, surrounding the constitution of the Appellate Tribunal."— Para 11"The consequence of what is urged on behalf of the petitioner is to the effect that although the Appellate Tribunal would have powers to set aside the order impugned before it, the interim relief authority would be vested with the High Court in the proceedings under Article 226 of the Constitution. This can never be the legislative intent, that the High Court should function as a forum for grant of interim relief, in matters squarely falling within the appellate jurisdiction of the Tribunal. This is inconceivable."— Para 12GST Appellate Tribunal (Procedure) Rules, 2025 — Notification dated 24 April 2025, Ministry of Finance:Rule 10 — Inherent Powers: "Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the Appellate Tribunal to make such orders or give such directions as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Appellate Tribunal."Rule 29 — Interlocutory Applications: "Every interlocutory application for stay, direction, rectification in order, condonation of delay, early hearing, exemption from production of copy of order appealed against or extension of time prayed for in pending matters shall include all the information as per the prescribed GSTAT FORM-01..."(Quoting Supreme Court in ITO Cannanore v. M.K. Mohammed Kunhi): "The powers which have been conferred by Section 254 on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers fully effective."— Para 14 (SC observation relied upon)Final VerdictThe Court held that GSTAT has jurisdiction to pass interim orders including stay of recovery, and rejected the Petitioner's contention to the contrary. The Writ Petition was disposed of with a direction to the Petitioner to file an interim application before the Tribunal within two weeks. As limited interim protection, the Recovery Notice dated 6th February 2026 was restrained from being acted upon until the Tribunal decides such interim application. Tribunal Registry was also directed to enable filing of interim applications on its portal. No order as to costs.Cases Referred by CourtIncome Tax Officer, Cannanore v. M.K. Mohammed KunhiSupreme Court of India | 1968 SCC OnLine SC 71 | Held: ITAT has inherent power to stay recovery pending appeal even without express provision, as power to pass "such orders as it thinks fit" under Section 254 of the Income Tax Act implies all ancillary and incidental powers to make appellate jurisdiction effective.
Facts:The petitioner, a manufacturer, transitioned input tax credit into GST regime by filing TRAN-1 and TRAN-2 forms. An audit was conducted, followed by a show cause notice demanding recovery of transitional credit with interest and penalty. Verification of records was carried out by departmental officers, but the verification reports were not furnished to the petitioner. Despite request and objections, the adjudicating authority passed an order confirming demand without granting opportunity to respond to such reports. Court Decision:The Court held that non-furnishing of verification reports, which formed the basis of the impugned order, amounted to breach of principles of natural justice. It observed that conclusions were drawn without giving the petitioner an opportunity to respond to the verification findings. The Court also noted that the order was passed in haste without complete verification of records. Accordingly, the impugned order dated 5 February 2025 was quashed and set aside, and the matter was remanded for de novo adjudication with directions to furnish verification reports and grant a proper hearing.
Pidilite Industries Limited v. Union of India & Ors. 20-02-2026
Facts:The petitioner, a manufacturer, transitioned input tax credit into GST regime by filing TRAN-1 and TRAN-2 forms. An audit was conducted, followed by a show cause notice demanding recovery of transitional credit with interest and penalty. Verification of records was carried out by departmental officers, but the verification reports were not furnished to the petitioner. Despite request and objections, the adjudicating authority passed an order confirming demand without granting opportunity to respond to such reports. Court Decision:The Court held that non-furnishing of verification reports, which formed the basis of the impugned order, amounted to breach of principles of natural justice. It observed that conclusions were drawn without giving the petitioner an opportunity to respond to the verification findings. The Court also noted that the order was passed in haste without complete verification of records. Accordingly, the impugned order dated 5 February 2025 was quashed and set aside, and the matter was remanded for de novo adjudication with directions to furnish verification reports and grant a proper hearing.
Facts :The petitioner, a registered GST dealer, was subjected to assessment proceedings under Section 73 of the CGST/KGST Act for certain tax periods. Discrepancies were found between GSTR-3B, GSTR-1, and GSTR-2A returns, leading to issuance of show-cause notices through the GST portal. The petitioner contended that such notices and consequent ex parte orders were not effectively communicated and came to light only during recovery proceedings. Due to lack of knowledge, the statutory appeal period expired.Court Decision:The Court held that uploading notices on the GST portal is a valid mode of service under Section 169, and a registered dealer is expected to monitor such communications. However, since the impugned orders were ex parte and had serious civil consequences, the Court balanced equities and set aside the orders. The matter was remitted for fresh adjudication subject to conditions: appearance before authority, filing objections, deposit of 20% of tax, and payment of ₹75,000 as costs. Non-compliance would result in revival of the original orders.
Anchor Shipping Services v. Assistant Commissioner of Commercial Taxes 20-02-2026
Facts :The petitioner, a registered GST dealer, was subjected to assessment proceedings under Section 73 of the CGST/KGST Act for certain tax periods. Discrepancies were found between GSTR-3B, GSTR-1, and GSTR-2A returns, leading to issuance of show-cause notices through the GST portal. The petitioner contended that such notices and consequent ex parte orders were not effectively communicated and came to light only during recovery proceedings. Due to lack of knowledge, the statutory appeal period expired.Court Decision:The Court held that uploading notices on the GST portal is a valid mode of service under Section 169, and a registered dealer is expected to monitor such communications. However, since the impugned orders were ex parte and had serious civil consequences, the Court balanced equities and set aside the orders. The matter was remitted for fresh adjudication subject to conditions: appearance before authority, filing objections, deposit of 20% of tax, and payment of ₹75,000 as costs. Non-compliance would result in revival of the original orders.
Facts :The petitioner challenged the show cause notice dated 16.11.2024 and order dated 13.01.2025 passed under the GST Act. The proceedings were initiated after cancellation of the petitioner’s GST registration pursuant to application dated 29.04.2023. The petitioner contended that notices were not properly served as they were only uploaded on the GST portal. Reliance was placed on judgments holding that portal service alone is insufficient when registration stands cancelled.Court Decision:The Court held that where GST registration is cancelled, the assessee is not expected to monitor the portal, and service only through the portal does not constitute valid service under Section 169. It found that there was failure to ensure effective service and also emphasized the requirement of personal hearing under Section 75(4). The impugned order was quashed with liberty to the Department to issue fresh notice and adjudicate the matter after granting opportunity of hearing.Cases Referred:M/s Ahs Steels v. Commissioner of State TaxesM/s Katyal Industries v. State of U.P.Radha Krishan Industries v. State of Himachal PradeshM/s Jaipal Singh v. Commissioner, State Goods and Services Tax Commissionerate, Dehradun
Raj Shekhar Pandey v. State Tax Officer 16-02-2026
Facts :The petitioner challenged the show cause notice dated 16.11.2024 and order dated 13.01.2025 passed under the GST Act. The proceedings were initiated after cancellation of the petitioner’s GST registration pursuant to application dated 29.04.2023. The petitioner contended that notices were not properly served as they were only uploaded on the GST portal. Reliance was placed on judgments holding that portal service alone is insufficient when registration stands cancelled.Court Decision:The Court held that where GST registration is cancelled, the assessee is not expected to monitor the portal, and service only through the portal does not constitute valid service under Section 169. It found that there was failure to ensure effective service and also emphasized the requirement of personal hearing under Section 75(4). The impugned order was quashed with liberty to the Department to issue fresh notice and adjudicate the matter after granting opportunity of hearing.Cases Referred:M/s Ahs Steels v. Commissioner of State TaxesM/s Katyal Industries v. State of U.P.Radha Krishan Industries v. State of Himachal PradeshM/s Jaipal Singh v. Commissioner, State Goods and Services Tax Commissionerate, Dehradun
Facts :The petitioners’ goods and vehicles were intercepted and detained under Section 129 of the CGST/SGST Act on allegations of undervaluation of goods in transit.Orders in Form GST MOV-06 and MOV-10 were issued proposing confiscation and penalty.Petitioners challenged the detention and confiscation proceedings as without jurisdiction and sought release of goods and vehicles.The matters involved multiple writ petitions raising a common issue regarding valuation of goods at the stage of interception.Court Decision:The Court held that at the stage of interception under Section 129, authorities cannot undertake determination of valuation of goods.Issues relating to valuation and tax liability must be examined by the assessing authority and not by officers at check post during transit.Confiscation or penalty merely on the ground of undervaluation of goods in transit is not a valid exercise of power under Section 129/130.The Court also held that one State’s authorities cannot levy penalty or confiscate goods for alleged tax evasion in another State.Accordingly, goods and vehicles seized under the impugned orders were directed to be released.Cases Referred:Alfa Group vs Assistant State Tax Officer (Kerala High Court)K.P. Sugandam & Ors. vs State of Chhattisgarh & Ors.Pattal Andrea and Company vs Assistant Commercial Tax Officer & Ors.Panchi Trades vs State of GujaratShambu Saran Agarwal & Company vs Additional Commissioner Grade 5
Golden Traders & Others vs Deputy Assistant Commissioner of State Tax & Others 16-02-2026
Facts :The petitioners’ goods and vehicles were intercepted and detained under Section 129 of the CGST/SGST Act on allegations of undervaluation of goods in transit.Orders in Form GST MOV-06 and MOV-10 were issued proposing confiscation and penalty.Petitioners challenged the detention and confiscation proceedings as without jurisdiction and sought release of goods and vehicles.The matters involved multiple writ petitions raising a common issue regarding valuation of goods at the stage of interception.Court Decision:The Court held that at the stage of interception under Section 129, authorities cannot undertake determination of valuation of goods.Issues relating to valuation and tax liability must be examined by the assessing authority and not by officers at check post during transit.Confiscation or penalty merely on the ground of undervaluation of goods in transit is not a valid exercise of power under Section 129/130.The Court also held that one State’s authorities cannot levy penalty or confiscate goods for alleged tax evasion in another State.Accordingly, goods and vehicles seized under the impugned orders were directed to be released.Cases Referred:Alfa Group vs Assistant State Tax Officer (Kerala High Court)K.P. Sugandam & Ors. vs State of Chhattisgarh & Ors.Pattal Andrea and Company vs Assistant Commercial Tax Officer & Ors.Panchi Trades vs State of GujaratShambu Saran Agarwal & Company vs Additional Commissioner Grade 5
Facts The petition challenged a show cause notice demanding GST of ₹59,40,000 plus interest on transfer of leasehold rights in MIDC land. The petitioner had assigned leasehold rights for ₹3.30 crore with MIDC’s consent and paid additional premium. Authorities treated the transaction as “supply of services” under Section 7 read with Schedule II and classified it as taxable miscellaneous services. Court DecisionThe Court held that assignment of leasehold rights amounts to transfer of benefits arising out of immovable property and not a supply of services. It found that the transaction was neither lease nor sub-lease and the petitioner’s rights stood extinguished upon assignment. The activity lacked the essential element of being in the course or furtherance of business required under Section 7 of the CGST Act. Classification under “other miscellaneous services” was rejected as inapplicable. Accordingly, the show cause notice and adjudication order were quashed and set aside. Cases Referred• Gujarat Chamber of Commerce and Industry v. Union of India, (2025) 170
Vidarbha Beverages & Ors. vs. State Tax Officer & Ors. 13-02-2026
Facts The petition challenged a show cause notice demanding GST of ₹59,40,000 plus interest on transfer of leasehold rights in MIDC land. The petitioner had assigned leasehold rights for ₹3.30 crore with MIDC’s consent and paid additional premium. Authorities treated the transaction as “supply of services” under Section 7 read with Schedule II and classified it as taxable miscellaneous services. Court DecisionThe Court held that assignment of leasehold rights amounts to transfer of benefits arising out of immovable property and not a supply of services. It found that the transaction was neither lease nor sub-lease and the petitioner’s rights stood extinguished upon assignment. The activity lacked the essential element of being in the course or furtherance of business required under Section 7 of the CGST Act. Classification under “other miscellaneous services” was rejected as inapplicable. Accordingly, the show cause notice and adjudication order were quashed and set aside. Cases Referred• Gujarat Chamber of Commerce and Industry v. Union of India, (2025) 170
Court Decision:The writ petition challenged the recovery notice dated 25.11.2025 issued in Form GST DRC-13 by which the petitioner’s bank account was attached for the tax liability of M/s. Trans Car India Private Limited, where the petitioner was a Director.The company had earlier suffered an adverse Order-in-Original dated 31.05.2023. The writ petition filed against that order was dismissed with liberty to file an appeal before the Appellate Authority. Instead of filing the appeal, the company filed a writ appeal which was also dismissed. Since no relief was obtained against the Order-in-Original, the department proceeded to attach the petitioner’s bank account for recovery.The Court examined Section 89 of the CGST Act relating to liability of directors of a private company. The Court held that under Section 89(1), directors can be held jointly and severally liable for unpaid tax of the company if the tax cannot be recovered from the company, unless the director proves that the non-recovery cannot be attributed to gross neglect, misfeasance, or breach of duty on his part. The burden of proof lies on the director to establish this.The Court held that the petitioner must be given an opportunity to discharge this burden. Therefore, the impugned recovery notice attaching the petitioner’s bank account was quashed and the matter was remitted to the first respondent to pass a fresh order on merits after giving notice and opportunity to the petitioner to file a proper reply explaining why recovery should not be made from him. The authority was directed to complete the process within two weeks from receipt of the order.
Khalid Buhari vs Assistant Commissioner of CGST and Central Excise & Another 13-02-2026
Court Decision:The writ petition challenged the recovery notice dated 25.11.2025 issued in Form GST DRC-13 by which the petitioner’s bank account was attached for the tax liability of M/s. Trans Car India Private Limited, where the petitioner was a Director.The company had earlier suffered an adverse Order-in-Original dated 31.05.2023. The writ petition filed against that order was dismissed with liberty to file an appeal before the Appellate Authority. Instead of filing the appeal, the company filed a writ appeal which was also dismissed. Since no relief was obtained against the Order-in-Original, the department proceeded to attach the petitioner’s bank account for recovery.The Court examined Section 89 of the CGST Act relating to liability of directors of a private company. The Court held that under Section 89(1), directors can be held jointly and severally liable for unpaid tax of the company if the tax cannot be recovered from the company, unless the director proves that the non-recovery cannot be attributed to gross neglect, misfeasance, or breach of duty on his part. The burden of proof lies on the director to establish this.The Court held that the petitioner must be given an opportunity to discharge this burden. Therefore, the impugned recovery notice attaching the petitioner’s bank account was quashed and the matter was remitted to the first respondent to pass a fresh order on merits after giving notice and opportunity to the petitioner to file a proper reply explaining why recovery should not be made from him. The authority was directed to complete the process within two weeks from receipt of the order.
Case Facts:The petitioner challenged Order-in-Appeal dated 30.06.2025 confirming GST demand along with interest and penalty.Statutory remedy of appeal before GST Appellate Tribunal was available, but the Tribunal was not fully functional.Petitioner had already deposited ₹23.85 lakhs at the first appellate stage against an original demand of about ₹2.38 crores, later reduced to about ₹40 lakhs.The dispute centered on whether further pre-deposit was required for filing appeal before the Tribunal.Court Decision:Court held that no further pre-deposit is required for filing appeal before GSTAT considering earlier deposit of ₹23.85 lakhs.Petitioner permitted to file appeal within four weeks from the date of order.Tribunal directed to decide appeal on merits without considering limitation if filed within the stipulated time.If electronic filing is not possible, petitioner allowed to file appeal physically and same must be accepted without additional pre-deposit.All issues on merits left open for adjudication by the Tribunal.Writ petition disposed of without costs.
Ashirwad Food Industries vs Union of India & Ors. 09-02-2026
Case Facts:The petitioner challenged Order-in-Appeal dated 30.06.2025 confirming GST demand along with interest and penalty.Statutory remedy of appeal before GST Appellate Tribunal was available, but the Tribunal was not fully functional.Petitioner had already deposited ₹23.85 lakhs at the first appellate stage against an original demand of about ₹2.38 crores, later reduced to about ₹40 lakhs.The dispute centered on whether further pre-deposit was required for filing appeal before the Tribunal.Court Decision:Court held that no further pre-deposit is required for filing appeal before GSTAT considering earlier deposit of ₹23.85 lakhs.Petitioner permitted to file appeal within four weeks from the date of order.Tribunal directed to decide appeal on merits without considering limitation if filed within the stipulated time.If electronic filing is not possible, petitioner allowed to file appeal physically and same must be accepted without additional pre-deposit.All issues on merits left open for adjudication by the Tribunal.Writ petition disposed of without costs.
