Background & Relevant FactsThe petitioner, King Enterprises, challenged an order dated 8 January 2025 passed under Rule 86A of the CGST Rules, 2017, whereby ITC in its electronic credit ledger was blocked to the extent of Rs. 2.66 Crores. Crucially, on the date of the said blocking order, the actual ITC available in the petitioner's electronic ledger was only Rs. 7,06,770/-. The respondents sought to justify the blocking of ITC in excess of the available ledger balance — a phenomenon referred to by the Court as "negative blocking" — by arguing that Rule 86A permits blocking of amounts fraudulently availed and utilised, even if such amounts exceed the current ledger balance, and that such blocking operates as a lien on future credit entries. The petitioner did not object to blocking of ITC to the extent of the actual available balance of Rs. 7,06,770/-. Court Observations (Verbatim)"Thus, this is a case of 'negative blocking' to the extent, it concerns ITC over Rs. 07,06,770/-.""The arguments urged on behalf of the Respondents in the affidavit filed on behalf of the Respondents opposing the grant of any relief in this Petition run directly contrary to the following decisions: (i) Samay Alloys India Pvt Ltd Vs State of Gujarat, (ii) Laxmi Fine Chem Vs Assistant Commissioner, (iii) Best Crop Science Pvt Ltd through Authorised Representative Vs Principal Commissioner, CGST Commissionerate, Meerut & Ors, (iv) Karuna Rajendra Ringshia Proprietor R R Enterprises Vs Commissioner of Central Goods and Service Tax & Ors.""Besides, the arguments in the affidavit on behalf of the Respondents also run counter to this Court's decision in Rawman Metal & Alloyes (supra). Accordingly, we cannot accept such arguments and, on that basis, permit the blocking of ITC from the Petitioner's electronic ledger to the extent it exceeds Rs. 07,06,770/-.""As noted above, the High Courts of Gujarat, Telangana, and Delhi have held that such negative blocking was ultra vires Rule 86A." Final VerdictThe impugned order dated 8 January 2025 was quashed and set aside to the extent it blocked ITC beyond Rs. 7,06,770/-. A Writ of Mandamus was issued directing the respondents to unblock ITC in excess of Rs. 7,06,770/- within 15 days of uploading of the order. The Rule was made partly absolute with no order as to costs.
King Enterprises vs. Union of India & Ors. 18-11-2025
Background & Relevant FactsThe petitioner, King Enterprises, challenged an order dated 8 January 2025 passed under Rule 86A of the CGST Rules, 2017, whereby ITC in its electronic credit ledger was blocked to the extent of Rs. 2.66 Crores. Crucially, on the date of the said blocking order, the actual ITC available in the petitioner's electronic ledger was only Rs. 7,06,770/-. The respondents sought to justify the blocking of ITC in excess of the available ledger balance — a phenomenon referred to by the Court as "negative blocking" — by arguing that Rule 86A permits blocking of amounts fraudulently availed and utilised, even if such amounts exceed the current ledger balance, and that such blocking operates as a lien on future credit entries. The petitioner did not object to blocking of ITC to the extent of the actual available balance of Rs. 7,06,770/-. Court Observations (Verbatim)"Thus, this is a case of 'negative blocking' to the extent, it concerns ITC over Rs. 07,06,770/-.""The arguments urged on behalf of the Respondents in the affidavit filed on behalf of the Respondents opposing the grant of any relief in this Petition run directly contrary to the following decisions: (i) Samay Alloys India Pvt Ltd Vs State of Gujarat, (ii) Laxmi Fine Chem Vs Assistant Commissioner, (iii) Best Crop Science Pvt Ltd through Authorised Representative Vs Principal Commissioner, CGST Commissionerate, Meerut & Ors, (iv) Karuna Rajendra Ringshia Proprietor R R Enterprises Vs Commissioner of Central Goods and Service Tax & Ors.""Besides, the arguments in the affidavit on behalf of the Respondents also run counter to this Court's decision in Rawman Metal & Alloyes (supra). Accordingly, we cannot accept such arguments and, on that basis, permit the blocking of ITC from the Petitioner's electronic ledger to the extent it exceeds Rs. 07,06,770/-.""As noted above, the High Courts of Gujarat, Telangana, and Delhi have held that such negative blocking was ultra vires Rule 86A." Final VerdictThe impugned order dated 8 January 2025 was quashed and set aside to the extent it blocked ITC beyond Rs. 7,06,770/-. A Writ of Mandamus was issued directing the respondents to unblock ITC in excess of Rs. 7,06,770/- within 15 days of uploading of the order. The Rule was made partly absolute with no order as to costs.
Facts:The petitioner challenged an appellate order dated 15.05.2025 passed under Section 107 dismissing the appeal against an adjudication order under Section 74 dated 07.01.2025. The appeal was filed on 26.04.2025, beyond three months but within the condonable period of one month under Section 107(4). The appellate authority rejected the appeal on the grounds of delay and non-payment of pre-deposit though the adjudication order determined only interest and penalty and no tax demand.Court Decision:The Court held that under Section 107(6) as it stood at the time of filing the appeal, pre-deposit was required only in respect of the amount of tax in dispute. Since the impugned order involved only penalty and interest and there was no tax demand, there was no statutory requirement of pre-deposit. The Court observed that the proviso mandating pre-deposit even for penalty-only orders was inserted by the Finance Act, 2025 with effect from 01.10.2025 and was not applicable to the present case.The Court found that the appellate authority erred in rejecting the appeal for non-payment of pre-deposit. The matter was remanded to the Appellate Authority to consider the petitioner’s application for condonation of delay. If the delay is condoned, the appellate authority shall hear the appeal on merits without insisting on pre-deposit.
Barjinder Singh Kohli vs The Assistant Commissioner of Revenue & Ors. 03-11-2025
Facts:The petitioner challenged an appellate order dated 15.05.2025 passed under Section 107 dismissing the appeal against an adjudication order under Section 74 dated 07.01.2025. The appeal was filed on 26.04.2025, beyond three months but within the condonable period of one month under Section 107(4). The appellate authority rejected the appeal on the grounds of delay and non-payment of pre-deposit though the adjudication order determined only interest and penalty and no tax demand.Court Decision:The Court held that under Section 107(6) as it stood at the time of filing the appeal, pre-deposit was required only in respect of the amount of tax in dispute. Since the impugned order involved only penalty and interest and there was no tax demand, there was no statutory requirement of pre-deposit. The Court observed that the proviso mandating pre-deposit even for penalty-only orders was inserted by the Finance Act, 2025 with effect from 01.10.2025 and was not applicable to the present case.The Court found that the appellate authority erred in rejecting the appeal for non-payment of pre-deposit. The matter was remanded to the Appellate Authority to consider the petitioner’s application for condonation of delay. If the delay is condoned, the appellate authority shall hear the appeal on merits without insisting on pre-deposit.
BackgroundThe petitioner, M/S Pilcon Infrastructure Pvt. Ltd., had its ITC amounting to Rs. 13,96,220/- blocked in its Electronic Credit Ledger (ECL) by Respondent No. 2 (State Tax Authority) vide e-mail communication dated 24.07.2025.The sole reason recorded in the ECL for blocking was "Supplier found non-functioning", with a reference to attachment bearing ECL No. 20250709584828, which turned out to be an Alert Notice dated 13.06.2025 received by the Commissioner of State GST from the Directorate General of GST Intelligence (DGGI), Raipur Zonal Unit.The DGGI communication stated that M/s Maa Kamakhaya Trading, Surguja (GSTIN: 22FRAPR2468R1Z5) was found non-operational and had allegedly passed on fraudulent ITC without supply of goods through bogus invoices to various taxpayers, including those in Uttar Pradesh. The petitioner was one such recipient listed in Annexure-A of that communication.The petitioner contended that no 'reasons to believe' were recorded in writing by Respondent No. 2 as mandatorily required under Rule 86A(1) of the U.P. GST Rules, 2017, rendering the blocking action illegal and without jurisdiction. Court Observations (Verbatim)"Once the Rule requires 'reasons to believe' to be 'recorded in writing', the jurisdiction and authority to be exercised under Rule 86A of the Rules must subscribe to that mandatory condition. Though such reasons may be recorded ex-parte against the assessee, at the same time, the requirement of the statute to record the reasons is a non-negotiable condition. It is wholly mandatory.""Reliance placed by learned Standing Counsel on the 'Reason' as mentioned in the Electronic Credit Ledger, namely, 'Supplier found non-functioning', does not fulfill the requirement of Rule 86A(1) of the Rules, to the extent it does not reflect any application of mind to reach that conclusion.""That the goods claimed to have been supplied to the petitioner by the said supplier M/s Maa Kamakhaya Trading, Sarguja was a bogus transaction, may not be readily inferred, merely on the generic allegation made by DGGI, Raipur Zonal Unit that that dealer had made some non-generic transactions.""When the Rules require recording of 'reasons to believe', 'in writing', there must not only exist material that may give rise to the belief necessary to be recorded by respondent no.2 but the reasons must spring from material on record/leading to the necessary belief. It necessarily involves application of mind by the competent authority, here respondent no.2, to the facts brought before it.""Even though exercise of power under Rule 86A(1) of the Rules remained ex-parte to the assessee, yet, more especially for that reason, the requirement of the statute to first record 'reasons to believe', 'in writing' must be strictly enforced on the revenue authorities.""It may not be forgotten, granting ITC and maintaining its chain is the soul of a successful GST regime. Therefore, any doubt or suspicion alone may not lead an action by the authorities to block the ITC of the assessee and disrupt the entire value addition chain and consequentially tax payments without fulfilling the mandatory requirement of law — to record 'reasons to believe', 'in writing'." Final VerdictThe blocking of ITC vide e-mail dated 24.07.2025 was set aside. The Court directed that the blocked ITC be unblocked forthwith. Liberty granted to Respondent No. 2 to take fresh action strictly in accordance with law under Rule 86A(1), if warranted. Petition allowed. No order as to costs.
Pilcon Infrastructure Pvt. Ltd. vs. State of U.P. & Another 29-10-2025
BackgroundThe petitioner, M/S Pilcon Infrastructure Pvt. Ltd., had its ITC amounting to Rs. 13,96,220/- blocked in its Electronic Credit Ledger (ECL) by Respondent No. 2 (State Tax Authority) vide e-mail communication dated 24.07.2025.The sole reason recorded in the ECL for blocking was "Supplier found non-functioning", with a reference to attachment bearing ECL No. 20250709584828, which turned out to be an Alert Notice dated 13.06.2025 received by the Commissioner of State GST from the Directorate General of GST Intelligence (DGGI), Raipur Zonal Unit.The DGGI communication stated that M/s Maa Kamakhaya Trading, Surguja (GSTIN: 22FRAPR2468R1Z5) was found non-operational and had allegedly passed on fraudulent ITC without supply of goods through bogus invoices to various taxpayers, including those in Uttar Pradesh. The petitioner was one such recipient listed in Annexure-A of that communication.The petitioner contended that no 'reasons to believe' were recorded in writing by Respondent No. 2 as mandatorily required under Rule 86A(1) of the U.P. GST Rules, 2017, rendering the blocking action illegal and without jurisdiction. Court Observations (Verbatim)"Once the Rule requires 'reasons to believe' to be 'recorded in writing', the jurisdiction and authority to be exercised under Rule 86A of the Rules must subscribe to that mandatory condition. Though such reasons may be recorded ex-parte against the assessee, at the same time, the requirement of the statute to record the reasons is a non-negotiable condition. It is wholly mandatory.""Reliance placed by learned Standing Counsel on the 'Reason' as mentioned in the Electronic Credit Ledger, namely, 'Supplier found non-functioning', does not fulfill the requirement of Rule 86A(1) of the Rules, to the extent it does not reflect any application of mind to reach that conclusion.""That the goods claimed to have been supplied to the petitioner by the said supplier M/s Maa Kamakhaya Trading, Sarguja was a bogus transaction, may not be readily inferred, merely on the generic allegation made by DGGI, Raipur Zonal Unit that that dealer had made some non-generic transactions.""When the Rules require recording of 'reasons to believe', 'in writing', there must not only exist material that may give rise to the belief necessary to be recorded by respondent no.2 but the reasons must spring from material on record/leading to the necessary belief. It necessarily involves application of mind by the competent authority, here respondent no.2, to the facts brought before it.""Even though exercise of power under Rule 86A(1) of the Rules remained ex-parte to the assessee, yet, more especially for that reason, the requirement of the statute to first record 'reasons to believe', 'in writing' must be strictly enforced on the revenue authorities.""It may not be forgotten, granting ITC and maintaining its chain is the soul of a successful GST regime. Therefore, any doubt or suspicion alone may not lead an action by the authorities to block the ITC of the assessee and disrupt the entire value addition chain and consequentially tax payments without fulfilling the mandatory requirement of law — to record 'reasons to believe', 'in writing'." Final VerdictThe blocking of ITC vide e-mail dated 24.07.2025 was set aside. The Court directed that the blocked ITC be unblocked forthwith. Liberty granted to Respondent No. 2 to take fresh action strictly in accordance with law under Rule 86A(1), if warranted. Petition allowed. No order as to costs.
BACKGROUNDThe CGST Department (Delhi-South) conducted a scrutiny of the returns filed by the petitioner, M/s. C.H. Robinson Worldwide Freight India Private Limited, for Financial Year 2019-20 and alleged discrepancies in availment of Input Tax Credit. Consequently, a Show Cause Notice (SCN) dated 31st May, 2024 was issued raising a demand of Rs.11,85,45,612/-. As per Notification No. 56/2023-Central Tax dated 28th December, 2023, the last date for issuance of the adjudication order under Section 73(10) of the CGST Act for FY 2019-20 was extended till 31st August, 2024. This meant that the SCN, mandatorily required to be issued at least three months prior to this outer limit (i.e., by 31st May, 2024), was not actually served on the petitioner on that date. The Department instead issued DRC-01 only on 12th August, 2024, citing a technical glitch as the reason. Furthermore, even the earlier dispatch on 3rd June, 2024 was made to the wrong address of the petitioner at Vasant Kunj — despite the fact that the petitioner's address had already been updated in the Department's own records on 15th May, 2024, i.e., prior to the dispatch. The petitioner filed the writ petition challenging the SCN as being barred by limitation under Section 73(2) read with Section 73(10) of the CGST Act.COURT OBSERVATIONS (Verbatim)On the mandatory nature of the three-month period under Section 73(2):"A perusal of the above stated provisions would show that an order has to be passed by the 'proper officer' within a period of three years from the due date for furnishing the annual returns for the said financial year. For issuance of a show cause notice, at least three months' period prior to the time limit under Section 73(10) of the CGST Act would be available. Thus, the show cause notice has to be issued at least three months prior to the outer limit prescribed for passing of an order under Section 73(10) of the CGST Act.""On the other hand, Section 73(2) of the CGST Act provides that at least three months prior to the outer limit of 3 years for passing an order under Section 73(10) of the CGST Act, a notice is to be served.""While the purpose behind Section 73(10) of the CGST Act is to fix the date by which an adjudication order has to be issued, the purpose of Section 73(2) of the CGST Act is to ensure that at least three months is available to the taxable person for filing a reply to the show cause notice issued to them and for being heard in a proper manner. Thus, the time period between issuance of the show cause notice and the outer limit for passing of the order should be at least three months."On the three-month period being mandatory:"The three month's period prescribed in Section 73(2) of the CGST Act is mandatory when read with Section 73(10) of the CGST Act."On rejection of Department's technical glitch plea and wrong address:"The Department's stand that due to a technical glitch, the DRC-01 could not be issued on 31st May, 2024 but was reissued on 12th August, 2024 would not be tenable in law. Further, the impugned SCN dated 31st May, 2024 was not served to the Petitioner within the time limit prescribed in Section 73(2) read with Section 73(10) of the CGST Act. Moreover, even the address of the Petitioner at which the same has been communicated is the wrong address considering the amendment of the Petitioner's address was permitted by the Department on 15th May, 2024 itself.""The SCN dated 28th May, 2024 dispatched on 3rd June, 2024 cannot, therefore, be held to be within time in terms of Section 73(2) of the CGST Act."FINAL VERDICTWrit petition allowed. The SCN and any order passed consequent thereto stand quashed as the SCN was not served within the mandatory three-month period prescribed under Section 73(2) read with Section 73(10) of the CGST Act, and was additionally sent to the wrong address.
C.H. Robinson Worldwide Freight India Private Limited vs Additional Commissioner, CGST Delhi South & Ors. 29-10-2025
BACKGROUNDThe CGST Department (Delhi-South) conducted a scrutiny of the returns filed by the petitioner, M/s. C.H. Robinson Worldwide Freight India Private Limited, for Financial Year 2019-20 and alleged discrepancies in availment of Input Tax Credit. Consequently, a Show Cause Notice (SCN) dated 31st May, 2024 was issued raising a demand of Rs.11,85,45,612/-. As per Notification No. 56/2023-Central Tax dated 28th December, 2023, the last date for issuance of the adjudication order under Section 73(10) of the CGST Act for FY 2019-20 was extended till 31st August, 2024. This meant that the SCN, mandatorily required to be issued at least three months prior to this outer limit (i.e., by 31st May, 2024), was not actually served on the petitioner on that date. The Department instead issued DRC-01 only on 12th August, 2024, citing a technical glitch as the reason. Furthermore, even the earlier dispatch on 3rd June, 2024 was made to the wrong address of the petitioner at Vasant Kunj — despite the fact that the petitioner's address had already been updated in the Department's own records on 15th May, 2024, i.e., prior to the dispatch. The petitioner filed the writ petition challenging the SCN as being barred by limitation under Section 73(2) read with Section 73(10) of the CGST Act.COURT OBSERVATIONS (Verbatim)On the mandatory nature of the three-month period under Section 73(2):"A perusal of the above stated provisions would show that an order has to be passed by the 'proper officer' within a period of three years from the due date for furnishing the annual returns for the said financial year. For issuance of a show cause notice, at least three months' period prior to the time limit under Section 73(10) of the CGST Act would be available. Thus, the show cause notice has to be issued at least three months prior to the outer limit prescribed for passing of an order under Section 73(10) of the CGST Act.""On the other hand, Section 73(2) of the CGST Act provides that at least three months prior to the outer limit of 3 years for passing an order under Section 73(10) of the CGST Act, a notice is to be served.""While the purpose behind Section 73(10) of the CGST Act is to fix the date by which an adjudication order has to be issued, the purpose of Section 73(2) of the CGST Act is to ensure that at least three months is available to the taxable person for filing a reply to the show cause notice issued to them and for being heard in a proper manner. Thus, the time period between issuance of the show cause notice and the outer limit for passing of the order should be at least three months."On the three-month period being mandatory:"The three month's period prescribed in Section 73(2) of the CGST Act is mandatory when read with Section 73(10) of the CGST Act."On rejection of Department's technical glitch plea and wrong address:"The Department's stand that due to a technical glitch, the DRC-01 could not be issued on 31st May, 2024 but was reissued on 12th August, 2024 would not be tenable in law. Further, the impugned SCN dated 31st May, 2024 was not served to the Petitioner within the time limit prescribed in Section 73(2) read with Section 73(10) of the CGST Act. Moreover, even the address of the Petitioner at which the same has been communicated is the wrong address considering the amendment of the Petitioner's address was permitted by the Department on 15th May, 2024 itself.""The SCN dated 28th May, 2024 dispatched on 3rd June, 2024 cannot, therefore, be held to be within time in terms of Section 73(2) of the CGST Act."FINAL VERDICTWrit petition allowed. The SCN and any order passed consequent thereto stand quashed as the SCN was not served within the mandatory three-month period prescribed under Section 73(2) read with Section 73(10) of the CGST Act, and was additionally sent to the wrong address.
Facts:An inspection was conducted at the premises of the assessee on 08.03.2012 in relation to transactions in Indian Made Foreign Liquor and Foreign Made Foreign Liquor. Based on the inspection, a show cause notice dated 20.12.2018 proposing penalty under Section 45A of the Kerala General Sales Tax Act, 1963 was issued. The assessee challenged the notice contending that it was issued after an unreasonable delay and therefore barred by limitation.Court Decision:The Division Bench held that even though Section 45A of the Act does not prescribe any specific limitation period for initiating penalty proceedings, such proceedings must be initiated within a reasonable period of time. Referring to other provisions of the Act, the Court observed that the statute prescribes a five-year period for completion of assessments and escaped assessments, which can be treated as a reasonable benchmark.Since the inspection related to the assessment year 2011-12 and the show cause notice was issued only on 20.12.2018, the notice was issued beyond the reasonable period of five years. The Court further held that repeated notices issued by the department seeking production of records could not extend the limitation period. Accordingly, the writ appeal was allowed, the judgment of the Single Judge was set aside, and the show cause notice was quashed.Cases Referred by Court:State of Punjab & Others vs. Bhatinda District Co-operative Milk Producers Union Ltd.W.A. No. 344 of 2017 (Kerala High Court)W.P.(C) No. 2253 of 2017 (Kerala High Court)
Taj Garden Retreat vs. State of Kerala & Anr. 23-10-2025
Facts:An inspection was conducted at the premises of the assessee on 08.03.2012 in relation to transactions in Indian Made Foreign Liquor and Foreign Made Foreign Liquor. Based on the inspection, a show cause notice dated 20.12.2018 proposing penalty under Section 45A of the Kerala General Sales Tax Act, 1963 was issued. The assessee challenged the notice contending that it was issued after an unreasonable delay and therefore barred by limitation.Court Decision:The Division Bench held that even though Section 45A of the Act does not prescribe any specific limitation period for initiating penalty proceedings, such proceedings must be initiated within a reasonable period of time. Referring to other provisions of the Act, the Court observed that the statute prescribes a five-year period for completion of assessments and escaped assessments, which can be treated as a reasonable benchmark.Since the inspection related to the assessment year 2011-12 and the show cause notice was issued only on 20.12.2018, the notice was issued beyond the reasonable period of five years. The Court further held that repeated notices issued by the department seeking production of records could not extend the limitation period. Accordingly, the writ appeal was allowed, the judgment of the Single Judge was set aside, and the show cause notice was quashed.Cases Referred by Court:State of Punjab & Others vs. Bhatinda District Co-operative Milk Producers Union Ltd.W.A. No. 344 of 2017 (Kerala High Court)W.P.(C) No. 2253 of 2017 (Kerala High Court)
Facts:The petitioner challenged the adjudication order dated 30.06.2023 passed under Section 74 of the KGST Act read with Section 122(1)(vii), which demanded tax, interest and a penalty of ₹6,05,17,933. In the show cause notice dated 27.03.2023, tax and penalty were proposed in equal amounts. However, while passing the final order, the authority drastically reduced the tax and interest liability but increased the penalty amount far beyond the penalty proposed in the show cause notice. The appellate authority dismissed the appeal confirming the penalty.Court Decision:The High Court held that Section 74(1) permits imposition of penalty only up to an amount equivalent to the tax specified in the show cause notice. Section 75(7) further provides that the amount demanded in the final order cannot exceed the amount specified in the show cause notice and cannot be based on grounds other than those mentioned in the notice.The Court observed that in the present case the tax and interest amounts were reduced in the final order, but the penalty was increased beyond the amount proposed in the show cause notice and also beyond the tax determined in the order. Such action was contrary to Sections 74 and 75 of the KGST Act.Accordingly, the Court set aside the impugned orders to the extent of the penalty demand of ₹6,05,17,933 and remitted the matter back to the adjudicating authority for fresh consideration limited to the issue of penalty, while directing the petitioner to pay the confirmed tax and interest amounts.
Metal N Strips vs. Joint Commissioner of Commercial Tax (Appeals-3) & Anr. 17-10-2025
Facts:The petitioner challenged the adjudication order dated 30.06.2023 passed under Section 74 of the KGST Act read with Section 122(1)(vii), which demanded tax, interest and a penalty of ₹6,05,17,933. In the show cause notice dated 27.03.2023, tax and penalty were proposed in equal amounts. However, while passing the final order, the authority drastically reduced the tax and interest liability but increased the penalty amount far beyond the penalty proposed in the show cause notice. The appellate authority dismissed the appeal confirming the penalty.Court Decision:The High Court held that Section 74(1) permits imposition of penalty only up to an amount equivalent to the tax specified in the show cause notice. Section 75(7) further provides that the amount demanded in the final order cannot exceed the amount specified in the show cause notice and cannot be based on grounds other than those mentioned in the notice.The Court observed that in the present case the tax and interest amounts were reduced in the final order, but the penalty was increased beyond the amount proposed in the show cause notice and also beyond the tax determined in the order. Such action was contrary to Sections 74 and 75 of the KGST Act.Accordingly, the Court set aside the impugned orders to the extent of the penalty demand of ₹6,05,17,933 and remitted the matter back to the adjudicating authority for fresh consideration limited to the issue of penalty, while directing the petitioner to pay the confirmed tax and interest amounts.
Facts:The petitioner challenged the order dated 13.08.2025 passed by the Appellate Authority dismissing the appeal as time-barred. The appeal was filed on 25.11.2024 against the adjudication order dated 26.07.2024. The petitioner contended that the limitation period of three months under Section 107(1) should be computed from the next day of the order and that the appeal was filed within the additional condonable period of one month under Section 107(4).Court Decision:The Court held that under Section 9 of the General Clauses Act, the day on which the order is passed must be excluded while computing the limitation period. Accordingly, the three-month limitation under Section 107(1) commenced from 27.07.2024 and expired on 27.10.2024. The further condonable period of one month under Section 107(4) extended up to 26.11.2024. Since the appeal was filed on 25.11.2024, it was within the permissible period.The Court set aside the order of the appellate authority which had incorrectly treated the appeal as time-barred and directed that the appeal be decided on merits.Cases Referred by Court:· State of Himachal Pradesh and Another v. Himachal Techno Engineers and Another, (2010) 12 SCC 210· Bibi Salma Khatoon v. State of Bihar, (2001) 7 SCC 197· Dodds v. Walker, (1981) 1 WLR 1027; (1981) 2 All ER 609
Laxmi Motors vs State of M.P. and Others 15-10-2025
Facts:The petitioner challenged the order dated 13.08.2025 passed by the Appellate Authority dismissing the appeal as time-barred. The appeal was filed on 25.11.2024 against the adjudication order dated 26.07.2024. The petitioner contended that the limitation period of three months under Section 107(1) should be computed from the next day of the order and that the appeal was filed within the additional condonable period of one month under Section 107(4).Court Decision:The Court held that under Section 9 of the General Clauses Act, the day on which the order is passed must be excluded while computing the limitation period. Accordingly, the three-month limitation under Section 107(1) commenced from 27.07.2024 and expired on 27.10.2024. The further condonable period of one month under Section 107(4) extended up to 26.11.2024. Since the appeal was filed on 25.11.2024, it was within the permissible period.The Court set aside the order of the appellate authority which had incorrectly treated the appeal as time-barred and directed that the appeal be decided on merits.Cases Referred by Court:· State of Himachal Pradesh and Another v. Himachal Techno Engineers and Another, (2010) 12 SCC 210· Bibi Salma Khatoon v. State of Bihar, (2001) 7 SCC 197· Dodds v. Walker, (1981) 1 WLR 1027; (1981) 2 All ER 609
Facts:The petitioner, a developer engaged in construction projects, challenged the show cause notice dated 28.03.2025 issued under Sections 74(1) and 74A of the CGST Act proposing tax, interest and penalty for the period from FY 2017-18 to FY 2023-24. The petitioner contended that the notice illegally clubbed multiple financial years in a single show cause notice contrary to the scheme of the CGST Act.Court Decision:The Court held that under the statutory scheme of the CGST Act, tax liability is determined with reference to the “tax period”, which is linked to the return filed for that period. Returns are filed either monthly or annually, and when the assessment is based on annual returns, the relevant tax period corresponds to the particular financial year.The Court observed that Sections 73(10) and 74(10) prescribe limitation for issuing orders based on the due date for filing the annual return for the respective financial year. Since the limitation operates separately for each financial year, the statute does not permit consolidation of multiple financial years into a single show cause notice.The Court further held that issuance of consolidated show cause notices covering several financial years frustrates the statutory limitation scheme and deprives the assessee of the opportunity to give year-specific explanations. Accordingly, the consolidated show cause notices issued for multiple financial years were held to be without jurisdiction and were quashed.Cases Referred by Court:· R A and Co. v. Additional Commissioner of Central Taxes, W.P. No.17239 of 2025 (Madras High Court)· Titan Company Ltd. v. Joint Commissioner of GST & Central Excise, W.P. No.33164 of 2023 (Madras High Court)· Veremax Technologie Services Limited v. Assistant Commissioner of Central Tax, W.P. No.15810 of 2024 (Karnataka High Court)· Bangalore Golf Club v. Assistant Commissioner of Commercial Taxes (Enforcement)-22, W.P. No.16500 of 2024 (Karnataka High Court)· Tharayil Medicals v. Deputy Commissioner, 2025:KER:30805 (Kerala High Court)· State of Jammu and Kashmir and Others v. Caltex (India) Ltd., AIR 1966 SC 1350· RioCare India Pvt. Ltd. v. Assistant Commissioner, CGST & C.Ex., (2025) 26 Centax 339 (Bombay High Court)· Ambika Traders v. Additional Commissioner, Adjudication DGGSTI, CGST Delhi North, W.P.(C) No.4783 of 2025 (Delhi High Court)
Milroc Good Earth Developers vs Union of India & Ors. 09-10-2025
Facts:The petitioner, a developer engaged in construction projects, challenged the show cause notice dated 28.03.2025 issued under Sections 74(1) and 74A of the CGST Act proposing tax, interest and penalty for the period from FY 2017-18 to FY 2023-24. The petitioner contended that the notice illegally clubbed multiple financial years in a single show cause notice contrary to the scheme of the CGST Act.Court Decision:The Court held that under the statutory scheme of the CGST Act, tax liability is determined with reference to the “tax period”, which is linked to the return filed for that period. Returns are filed either monthly or annually, and when the assessment is based on annual returns, the relevant tax period corresponds to the particular financial year.The Court observed that Sections 73(10) and 74(10) prescribe limitation for issuing orders based on the due date for filing the annual return for the respective financial year. Since the limitation operates separately for each financial year, the statute does not permit consolidation of multiple financial years into a single show cause notice.The Court further held that issuance of consolidated show cause notices covering several financial years frustrates the statutory limitation scheme and deprives the assessee of the opportunity to give year-specific explanations. Accordingly, the consolidated show cause notices issued for multiple financial years were held to be without jurisdiction and were quashed.Cases Referred by Court:· R A and Co. v. Additional Commissioner of Central Taxes, W.P. No.17239 of 2025 (Madras High Court)· Titan Company Ltd. v. Joint Commissioner of GST & Central Excise, W.P. No.33164 of 2023 (Madras High Court)· Veremax Technologie Services Limited v. Assistant Commissioner of Central Tax, W.P. No.15810 of 2024 (Karnataka High Court)· Bangalore Golf Club v. Assistant Commissioner of Commercial Taxes (Enforcement)-22, W.P. No.16500 of 2024 (Karnataka High Court)· Tharayil Medicals v. Deputy Commissioner, 2025:KER:30805 (Kerala High Court)· State of Jammu and Kashmir and Others v. Caltex (India) Ltd., AIR 1966 SC 1350· RioCare India Pvt. Ltd. v. Assistant Commissioner, CGST & C.Ex., (2025) 26 Centax 339 (Bombay High Court)· Ambika Traders v. Additional Commissioner, Adjudication DGGSTI, CGST Delhi North, W.P.(C) No.4783 of 2025 (Delhi High Court)
Case Facts:The petitioner challenged a bank attachment notice issued for recovery of tax dues of a company in which he was a director. An assessment order had been passed against the company for the tax period 2018–19. The petitioner claimed resignation from the company and sought immunity under Section 89(1), submitting a representation to authorities. The company had separately challenged the assessment order, which was pending before the Court. Court Decision:The Court held that the issue of petitioner’s liability under Section 89 requires adjudication. It directed the authorities to treat the impugned attachment notice as a show cause notice and decide the matter after giving opportunity to the petitioner. The petitioner was directed to submit a detailed representation within 30 days, and the authority to pass orders within two months thereafter. The bank attachment was ordered to be lifted pending such adjudication, subject to conditions.
Subir Ghosh v. The Deputy Commissioner (ST) & Ors. 17-09-2025
Case Facts:The petitioner challenged a bank attachment notice issued for recovery of tax dues of a company in which he was a director. An assessment order had been passed against the company for the tax period 2018–19. The petitioner claimed resignation from the company and sought immunity under Section 89(1), submitting a representation to authorities. The company had separately challenged the assessment order, which was pending before the Court. Court Decision:The Court held that the issue of petitioner’s liability under Section 89 requires adjudication. It directed the authorities to treat the impugned attachment notice as a show cause notice and decide the matter after giving opportunity to the petitioner. The petitioner was directed to submit a detailed representation within 30 days, and the authority to pass orders within two months thereafter. The bank attachment was ordered to be lifted pending such adjudication, subject to conditions.
Facts:The petitioner, a registered assessee, was subjected to inspection and show cause notices were issued under Section 74 of the TNGST Act for FY 2020-21 and 2021-22. Orders in Form GST DRC-07 dated 28.02.2024 demanding tax, interest and penalty were passed. The petitioner contended that the orders were only uploaded on the GST portal and were not otherwise communicated, resulting in the lapse of the time limit for filing appeal under Section 107.Court Decision:The Court held that Section 107 provides that limitation for filing appeal runs from the date on which the order is “communicated” to the assessee. Section 169 deals with modes of “service”, but the expressions “served” and “communicated” are not synonymous. Mere uploading of the order on the GST portal does not amount to communication of the order to the assessee.Since the impugned orders had only been uploaded on the portal and were not communicated to the petitioner through other modes, the limitation period for filing appeal had not commenced. The Court directed the authority to communicate the impugned orders to the petitioner, after which the petitioner would be at liberty to file an appeal under Section 107. Until such communication, the orders could not be enforced. Cases Referred by Court:· Pandidorai Sethupathi Raja v. Superintendent of Central Tax, Nungambakkam Zone IV, Chennai Central Range, Chennai, 2022 SCC OnLine Mad 8986· Koduvayur Constructions v. Assistant Commissioner-Works Contract, Palakad, 2023 SCC OnLine Ker 11392· Ram Prasad Sharma v. Chief Commissioner, 2020 SCC OnLine MP 4650· New Hanumat Marbles v. State of Punjab, 2023 SCC OnLine P&H 7171· Dhanraj v. Vikram Singh, 2023 LiveLaw (SC) 456· Shahul Hameed v. CTO, Tuticorin-II (WP(MD) No.26481 of 2024)· Namasivaya Auto Cars v. The Deputy Sales Tax Officer-I, Korattur, 2025 (6) TMI 2027· Binod Traders v. Union of India, 2025 (6) TMI 251 (Patna High Court)· Raj International v. Commissioner (CGST), 2025 SCC OnLine Del 2707· A. Sanjeevi Naidu v. The Deputy Commercial Tax Officer, Kanchipuram, 1972 SCC OnLine Mad 347· R v. Secretary of State for the Home Department, (1994) 1 AC 530· NHAI v. Madhukar Kumar, (2022) 14 SCC 661· Techno Prints v. Chhattisgarh Textbook Corporation, 2025 INSC 236· Southern Electricity Supply Co. of Orissa Ltd. v. Sri Seetaram Rice Mill, (2012) 2 SCC 108· Lalaram Thekedar v. Union of India, Writ Tax No.2786 of 2025 (Allahabad High Court)
Sharp Tanks and Structurals Private Limited vs The Deputy Commissioner (GST) (Appeals) & Another 17-09-2025
Facts:The petitioner, a registered assessee, was subjected to inspection and show cause notices were issued under Section 74 of the TNGST Act for FY 2020-21 and 2021-22. Orders in Form GST DRC-07 dated 28.02.2024 demanding tax, interest and penalty were passed. The petitioner contended that the orders were only uploaded on the GST portal and were not otherwise communicated, resulting in the lapse of the time limit for filing appeal under Section 107.Court Decision:The Court held that Section 107 provides that limitation for filing appeal runs from the date on which the order is “communicated” to the assessee. Section 169 deals with modes of “service”, but the expressions “served” and “communicated” are not synonymous. Mere uploading of the order on the GST portal does not amount to communication of the order to the assessee.Since the impugned orders had only been uploaded on the portal and were not communicated to the petitioner through other modes, the limitation period for filing appeal had not commenced. The Court directed the authority to communicate the impugned orders to the petitioner, after which the petitioner would be at liberty to file an appeal under Section 107. Until such communication, the orders could not be enforced. Cases Referred by Court:· Pandidorai Sethupathi Raja v. Superintendent of Central Tax, Nungambakkam Zone IV, Chennai Central Range, Chennai, 2022 SCC OnLine Mad 8986· Koduvayur Constructions v. Assistant Commissioner-Works Contract, Palakad, 2023 SCC OnLine Ker 11392· Ram Prasad Sharma v. Chief Commissioner, 2020 SCC OnLine MP 4650· New Hanumat Marbles v. State of Punjab, 2023 SCC OnLine P&H 7171· Dhanraj v. Vikram Singh, 2023 LiveLaw (SC) 456· Shahul Hameed v. CTO, Tuticorin-II (WP(MD) No.26481 of 2024)· Namasivaya Auto Cars v. The Deputy Sales Tax Officer-I, Korattur, 2025 (6) TMI 2027· Binod Traders v. Union of India, 2025 (6) TMI 251 (Patna High Court)· Raj International v. Commissioner (CGST), 2025 SCC OnLine Del 2707· A. Sanjeevi Naidu v. The Deputy Commercial Tax Officer, Kanchipuram, 1972 SCC OnLine Mad 347· R v. Secretary of State for the Home Department, (1994) 1 AC 530· NHAI v. Madhukar Kumar, (2022) 14 SCC 661· Techno Prints v. Chhattisgarh Textbook Corporation, 2025 INSC 236· Southern Electricity Supply Co. of Orissa Ltd. v. Sri Seetaram Rice Mill, (2012) 2 SCC 108· Lalaram Thekedar v. Union of India, Writ Tax No.2786 of 2025 (Allahabad High Court)
