| S.No | Name | Date of Order | Subject | Actions |
|---|---|---|---|---|
| 111 | Vidarbha Beverages & Ors. vs. State Tax Officer & Ors. | 13-02-2026 | GST liability on assignment of leasehold rights in immovable property; scope of “supply” (Sections 7 & 74, CGST Act, 2017 read with Schedule II & III) | View Download |
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 GST liability on assignment of leasehold rights in immovable property; scope of “supply” (Sections 7 & 74, CGST Act, 2017 read with Schedule II & III)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 | ||||
| 112 | Khalid Buhari vs Assistant Commissioner of CGST and Central Excise & Another | 13-02-2026 | Attachment of director’s bank account for company’s GST liability under Section 89 of the CGST Act without giving opportunity to discharge burden of proof. | View Download |
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 Attachment of director’s bank account for company’s GST liability under Section 89 of the CGST Act without giving opportunity to discharge burden of proof.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. | ||||
| 113 | Sterling & Wilson Pvt. Ltd. vs. Commissioner, Odisha Commissionerate of CT & GST & Ors. | 11-02-2026 | GSTR-1 v. GSTR-3B mismatch due to credit notes and advance adjustments – whether the First Appellate Authority can itself convert a Section 74 demand into Section 73, and the Tribunal’s power to examine facts. | View Download |
2. BackgroundFor FY 2018-19 the appellant, an EPC contractor, reported tax in GSTR-3B Rs. 27,06,634 lower than in GSTR-1. It attributed the difference to credit notes and advance adjustments recorded in its books and GSTR-3B but not amended in GSTR-1. A Section 74 demand of Rs. 65,17,849 was raised. The First Appellate Authority found no intent to evade, but itself recomputed the case under Section 73, confirming tax and interest with a 10% penalty, holding that the credit notes were beyond the Section 34(2) time limit and recipients’ ITC reversal was unproven.3. Final VerdictRejecting Revenue’s reliance on Hamida v. Md. Khalil, the Tribunal held that unlike Section 100 CPC, Section 112 read with Rule 112 does not confine the Tribunal to questions of law; it is the last fact-finding forum, and that Dilip Kumar & Co. (on exemption notifications) had no bearing on whether tax was actually short-paid. It noted that the only lapse found was the non-reflection in periodical returns of debit and credit notes duly accounted in the books, at a time when online filing was not fully operational, and adopted a pragmatic rather than pedantic approach. Relying on the text of Section 75(2) and CBIC Circular 254/11/2025-GST, it held that once Section 74 fails, it is the proper officer, not the appellate authority or the Tribunal, who must re-determine tax as if the notice had been issued under Section 73. The finding that Section 74 did not apply was upheld, but the Section 73 determinations of both lower authorities were set aside and the matter remanded, with liberty to file amendments within one month and a direction to examine the genuineness of the credit and debit notes and decide afresh after a hearing. | ||||
| Sterling & Wilson Pvt. Ltd. vs. Commissioner, Odisha Commissionerate of CT & GST & Ors. 11-02-2026 GSTR-1 v. GSTR-3B mismatch due to credit notes and advance adjustments – whether the First Appellate Authority can itself convert a Section 74 demand into Section 73, and the Tribunal’s power to examine facts.2. BackgroundFor FY 2018-19 the appellant, an EPC contractor, reported tax in GSTR-3B Rs. 27,06,634 lower than in GSTR-1. It attributed the difference to credit notes and advance adjustments recorded in its books and GSTR-3B but not amended in GSTR-1. A Section 74 demand of Rs. 65,17,849 was raised. The First Appellate Authority found no intent to evade, but itself recomputed the case under Section 73, confirming tax and interest with a 10% penalty, holding that the credit notes were beyond the Section 34(2) time limit and recipients’ ITC reversal was unproven.3. Final VerdictRejecting Revenue’s reliance on Hamida v. Md. Khalil, the Tribunal held that unlike Section 100 CPC, Section 112 read with Rule 112 does not confine the Tribunal to questions of law; it is the last fact-finding forum, and that Dilip Kumar & Co. (on exemption notifications) had no bearing on whether tax was actually short-paid. It noted that the only lapse found was the non-reflection in periodical returns of debit and credit notes duly accounted in the books, at a time when online filing was not fully operational, and adopted a pragmatic rather than pedantic approach. Relying on the text of Section 75(2) and CBIC Circular 254/11/2025-GST, it held that once Section 74 fails, it is the proper officer, not the appellate authority or the Tribunal, who must re-determine tax as if the notice had been issued under Section 73. The finding that Section 74 did not apply was upheld, but the Section 73 determinations of both lower authorities were set aside and the matter remanded, with liberty to file amendments within one month and a direction to examine the genuineness of the credit and debit notes and decide afresh after a hearing. | ||||
| 114 | Ashirwad Food Industries vs Union of India & Ors. | 09-02-2026 | No fresh pre-deposit for an appeal before GSTAT where the amount already deposited at the first appellate stage exceeds the pre-deposit on the reduced demand; limitation protected while GSTAT was not functional. | View Download |
BackgroundThe petitioner challenged Order-in-Appeal dated 30.06.2025 to the extent it confirmed the demand of the Order-in-Original dated 04.02.2025 along with interest and penalty, invoking writ jurisdiction because GSTAT did not appear to be fully functional. The original demand was about Rs.2.38 crore, against which the petitioner had made a pre-deposit of Rs.23,85,182/- at the first appellate stage; the first appellate authority scaled the demand down to about Rs.40 lakh, the 20% pre-deposit on which would be about Rs.8 lakh. The Department submitted that GSTAT members had been appointed and e-filing was permitted, and that no coercive measures are initiated once a 20% pre-deposit is made. The issue was whether any further pre-deposit was required for the GSTAT appeal and how limitation would be treated.Final VerdictHaving perused the record, the Court found substance in the petitioner’s contention and held that, considering the deposit of Rs.23.85 lakh already made at the first appellate stage, there was no question of making any further pre-deposit for instituting an appeal against the order dated 30.06.2025. The Court further directed that if the appeal is filed within four weeks, GSTAT shall decide it on merits without adverting to limitation, since the petitioner was bona fide pursuing the writ and its impression that it could not file the appeal (the Tribunal not taking up appeals) was neither unreasonable nor lacking in bona fides. If the portal does not accept the appeal, physical filing is permitted and must be accepted without insisting on any fresh pre-deposit. All contentions on merits were left open and the writ petition was disposed of without costs. | ||||
| Ashirwad Food Industries vs Union of India & Ors. 09-02-2026 No fresh pre-deposit for an appeal before GSTAT where the amount already deposited at the first appellate stage exceeds the pre-deposit on the reduced demand; limitation protected while GSTAT was not functional.BackgroundThe petitioner challenged Order-in-Appeal dated 30.06.2025 to the extent it confirmed the demand of the Order-in-Original dated 04.02.2025 along with interest and penalty, invoking writ jurisdiction because GSTAT did not appear to be fully functional. The original demand was about Rs.2.38 crore, against which the petitioner had made a pre-deposit of Rs.23,85,182/- at the first appellate stage; the first appellate authority scaled the demand down to about Rs.40 lakh, the 20% pre-deposit on which would be about Rs.8 lakh. The Department submitted that GSTAT members had been appointed and e-filing was permitted, and that no coercive measures are initiated once a 20% pre-deposit is made. The issue was whether any further pre-deposit was required for the GSTAT appeal and how limitation would be treated.Final VerdictHaving perused the record, the Court found substance in the petitioner’s contention and held that, considering the deposit of Rs.23.85 lakh already made at the first appellate stage, there was no question of making any further pre-deposit for instituting an appeal against the order dated 30.06.2025. The Court further directed that if the appeal is filed within four weeks, GSTAT shall decide it on merits without adverting to limitation, since the petitioner was bona fide pursuing the writ and its impression that it could not file the appeal (the Tribunal not taking up appeals) was neither unreasonable nor lacking in bona fides. If the portal does not accept the appeal, physical filing is permitted and must be accepted without insisting on any fresh pre-deposit. All contentions on merits were left open and the writ petition was disposed of without costs. | ||||
| 115 | Instakart Services Private Limited v. Union of India & Ors. | 09-02-2026 | Validity of Section 16(2)(c) of the CGST/KGST Act and Rule 36(4) of the CGST/KGST Rules, and whether they should be read down so that bona fide recipients get ITC despite supplier default. | View Download |
BackgroundInstakart provides logistics, packaging, delivery and warehousing services to sellers on the Flipkart marketplace and is registered in several States. In 2021 it challenged Section 16(2)(c) and Rule 36(4) as violating Articles 14, 19(1)(g), 265 and 300A. It contended that these provisions cast an impossible burden on recipients to ensure that suppliers pay tax and file returns, which is beyond their control. In the alternative, it sought a reading down so that a recipient who satisfies all other conditions of Section 16(2) is not denied ITC for the supplier’s lapse. It relied on On Quest, Arise India, Shanti Kiran India and National Plasto Moulding (Gauhati High Court). The Revenue opposed the petition.Final VerdictThe Single Judge framed the question as whether the provisions are unconstitutional or should be read down in favour of bona fide recipients. He referred to the Karnataka High Court’s VAT-era rulings (Rajesh Jain, Jain Steels) that a purchaser who proves payment of tax to the seller cannot be deprived of credit, the Revenue’s remedy being against the seller. He also extracted extensively from the Tripura High Court’s judgment in Sahil Enterprises and expressed respectful agreement with it. The petition was disposed of in terms of National Plasto Moulding and Sahil Enterprises, and the Court directed that the impugned provisions contained in Section 16(2)(c) of the CGST / KGST Act and Rule 36(4) of the CGST / KGST Rules are hereby read down in a manner that allows the benefit of ITC to bonafide recipients such as the petitioner which have complied with all other conditions of Section 16(2), despite any fault, lapse or non-payment of tax by the suppliers. No specific demand order was under challenge, so the relief operates as a declaration on the provisions.Note: gstindia.biz shows the Case Law No. as “GIB- KERHC-2026-28”. The court is the Karnataka High Court, so the “KERHC” code may be a site labelling error. Subsequent development (interpretation): this order predates the Supreme Court’s dismissal in Bhandari Scrap Traders (24.07.2026), which affirmed the Gujarat High Court’s refusal to read down Section 16(2)(c). | ||||
| Instakart Services Private Limited v. Union of India & Ors. 09-02-2026 Validity of Section 16(2)(c) of the CGST/KGST Act and Rule 36(4) of the CGST/KGST Rules, and whether they should be read down so that bona fide recipients get ITC despite supplier default.BackgroundInstakart provides logistics, packaging, delivery and warehousing services to sellers on the Flipkart marketplace and is registered in several States. In 2021 it challenged Section 16(2)(c) and Rule 36(4) as violating Articles 14, 19(1)(g), 265 and 300A. It contended that these provisions cast an impossible burden on recipients to ensure that suppliers pay tax and file returns, which is beyond their control. In the alternative, it sought a reading down so that a recipient who satisfies all other conditions of Section 16(2) is not denied ITC for the supplier’s lapse. It relied on On Quest, Arise India, Shanti Kiran India and National Plasto Moulding (Gauhati High Court). The Revenue opposed the petition.Final VerdictThe Single Judge framed the question as whether the provisions are unconstitutional or should be read down in favour of bona fide recipients. He referred to the Karnataka High Court’s VAT-era rulings (Rajesh Jain, Jain Steels) that a purchaser who proves payment of tax to the seller cannot be deprived of credit, the Revenue’s remedy being against the seller. He also extracted extensively from the Tripura High Court’s judgment in Sahil Enterprises and expressed respectful agreement with it. The petition was disposed of in terms of National Plasto Moulding and Sahil Enterprises, and the Court directed that the impugned provisions contained in Section 16(2)(c) of the CGST / KGST Act and Rule 36(4) of the CGST / KGST Rules are hereby read down in a manner that allows the benefit of ITC to bonafide recipients such as the petitioner which have complied with all other conditions of Section 16(2), despite any fault, lapse or non-payment of tax by the suppliers. No specific demand order was under challenge, so the relief operates as a declaration on the provisions.Note: gstindia.biz shows the Case Law No. as “GIB- KERHC-2026-28”. The court is the Karnataka High Court, so the “KERHC” code may be a site labelling error. Subsequent development (interpretation): this order predates the Supreme Court’s dismissal in Bhandari Scrap Traders (24.07.2026), which affirmed the Gujarat High Court’s refusal to read down Section 16(2)(c). | ||||
| 116 | Tvl. SAM Enterprises & Others vs. Commercial Tax Officer & Others | 08-02-2026 | Whether penalty imposed under Section 122(1)(ii) and Section 122(1)(vii) of the GST Act for availing ineligible Input Tax Credit through circular trading — without actual movement of goods and solely to boost turnover for obtaining bank loans — is sus | View Download |
BACKGROUNDNineteen writ petitions were filed by multiple petitioners — all engaged in the medical equipment supply business in Coimbatore — challenging assessment orders passed in Form GST DRC-07 under Section 74 of the respective GST enactments for tax periods ranging from 2020-2021 to 2024-2025. The Revenue, after investigation and inspection, found that the petitioners were part of an organised circular trading ring, wherein they billed each other without any actual movement of goods. The sole purpose was not to pass fake ITC to the end user but to artificially inflate their business turnover to create a creditworthy image before banks and obtain bank loans. The assessment orders recorded that 96% to 100% of the total purchase and sales turnover of the petitioners constituted circular trading transactions, with only 1% or less being genuine original transactions. CRUCIAL FACTSThe assessment orders in Form GST DRC-07 confirmed demands levying penalty under Section 122(1)(ii) — for issuing invoices without supply of goods — and Section 122(1)(vii) — for availing Input Tax Credit without actual receipt of goods. The total penalty imposed across all 19 petitions aggregated to approximately Rs.12.34 crores under Section 122(1)(vii) and Rs.13.67 crores under Section 122(1)(ii). The petitioners' primary legal argument before the High Court was that the maximum penalty imposable under Section 122(1) is Rs.10,000/- and the assessing officers had no authority to impose penalty equivalent to the ITC wrongly availed, as the doctrine of proportionality required the penalty to be commensurate with the gravity of the offence. They relied upon Supreme Court judgments in labour law and service law matters on the doctrine of proportionality. The Revenue countered that Section 122(1) uses the expression "whichever is higher" — Rs.10,000/- or the amount of tax evaded/ITC irregularly availed — leaving no discretion whatsoever to levy a lower amount. The Respondents further relied on the Supreme Court's ruling in Dharamendra Textile Processors on the mandatory nature of statutory penalties. COURT OBSERVATIONS (Verbatim — Crucial)On Circular Trading and the Petitioners' conduct:"The above table shows that the above tax payers are involved in circular trading and has 1% or less original transactions that too were done to portray themselves as genuine tax payers but that is not the case. The above tax payers just to boost up their turnover has billed themselves without any goods movement and their aim is not transfer fake ITC but to boost up their business turnover to get bank loans, to create an image that they are big players in this medical equipment supply business."On Section 122(1) — No discretion to levy Rs.10,000/- as minimum:"The language in Section 122(1) of the respective GST Enactments also does not give any discretion to the Assessing Officer to levy lesser of the amount i.e., Rs.10,000/- as the expression used is 'whichever is higher'.""The above decisions of the Hon'ble Supreme Court cannot be applied to the facts of the case specifically in the light of the language in Section 122(1) of the respective GST Enactments. The expression used in Section 122(1) is 'whichever is higher'."On inapplicability of Dharamendra Textile ratio to GST Section 122:"Section 11-AC of the Central Excise Act, 1944 which fell for consideration is the above-mentioned decision of the Hon'ble Supreme Court is different from Section 122 of the respective GST Enactments. The Hon'ble Supreme Court in Union of India Vs. Rajasthan Spinning and Weaving Mills, (2009) 13 SCC 448, has pointed out that the ratio was confined to Section 11-AC of the Central Excise Act, 1944 and no observations with regard to the several other statutory provisions that came up for consideration in that decision."On prima facie liability:"No doubt that the Petitioners have wrongly availed the Input Tax Credit and have apparently passed on the credit to boost up their respective turn overs with a view to take undue advantage of the system, prima facie they are liable to penalty under Section 122(1) of the respective GST Enactments."On availability of statutory remedy and writ jurisdiction:"The provisions of the respective GST Enactments contemplate an appellate remedy before the Appellate Authority under Section 107 of the respective GST Enactments and further appeal before GST Tribunal under Section 122 of the respective GST Enactments and thereafter remedy before the High Court. The finer aspects of law at best can be left to be decided by the Division Bench of this Court in its appellate jurisdiction under Section 117 of the respective GST Enactments which is in line with the Judgment of the Hon'ble Supreme Court in L.Chandrakumar Vs. Union of India and others, (1997) 3 SCC 261.""The Petitioner cannot short circuit the statutory mechanism prescribed by citing the decisions and the principle laid under the indirect tax enactments which have been subsumed into the respective GST Enactments."On pre-deposit waiver:"Since pre-deposit of huge penalty as prescribed under Section 107 of the respective GST Enactments will cause undue hardship to the respective Petitioners and make the appellate remedy illusory, pre-deposit of 10% of penalty under Section 107 of the respective GST Enactments is dispensed with at the time of filing the appeals before the Appellate Authority." FINAL VERDICTAll 19 writ petitions are dismissed. Liberty granted to petitioners to file appeals before the Appellate Authority under Section 107 within 30 days. The mandatory pre-deposit of 10% of penalty under Section 107 is waived in view of the large quantum of penalty, to prevent the appellate remedy from becoming illusory. Appellate Authority directed to decide the appeals preferably within 90 days.👎 THUMBS DOWN (Against Assessees — Writ dismissed; however significant relief granted by way of pre-deposit waiver) | ||||
| Tvl. SAM Enterprises & Others vs. Commercial Tax Officer & Others 08-02-2026 Whether penalty imposed under Section 122(1)(ii) and Section 122(1)(vii) of the GST Act for availing ineligible Input Tax Credit through circular trading — without actual movement of goods and solely to boost turnover for obtaining bank loans — is susBACKGROUNDNineteen writ petitions were filed by multiple petitioners — all engaged in the medical equipment supply business in Coimbatore — challenging assessment orders passed in Form GST DRC-07 under Section 74 of the respective GST enactments for tax periods ranging from 2020-2021 to 2024-2025. The Revenue, after investigation and inspection, found that the petitioners were part of an organised circular trading ring, wherein they billed each other without any actual movement of goods. The sole purpose was not to pass fake ITC to the end user but to artificially inflate their business turnover to create a creditworthy image before banks and obtain bank loans. The assessment orders recorded that 96% to 100% of the total purchase and sales turnover of the petitioners constituted circular trading transactions, with only 1% or less being genuine original transactions. CRUCIAL FACTSThe assessment orders in Form GST DRC-07 confirmed demands levying penalty under Section 122(1)(ii) — for issuing invoices without supply of goods — and Section 122(1)(vii) — for availing Input Tax Credit without actual receipt of goods. The total penalty imposed across all 19 petitions aggregated to approximately Rs.12.34 crores under Section 122(1)(vii) and Rs.13.67 crores under Section 122(1)(ii). The petitioners' primary legal argument before the High Court was that the maximum penalty imposable under Section 122(1) is Rs.10,000/- and the assessing officers had no authority to impose penalty equivalent to the ITC wrongly availed, as the doctrine of proportionality required the penalty to be commensurate with the gravity of the offence. They relied upon Supreme Court judgments in labour law and service law matters on the doctrine of proportionality. The Revenue countered that Section 122(1) uses the expression "whichever is higher" — Rs.10,000/- or the amount of tax evaded/ITC irregularly availed — leaving no discretion whatsoever to levy a lower amount. The Respondents further relied on the Supreme Court's ruling in Dharamendra Textile Processors on the mandatory nature of statutory penalties. COURT OBSERVATIONS (Verbatim — Crucial)On Circular Trading and the Petitioners' conduct:"The above table shows that the above tax payers are involved in circular trading and has 1% or less original transactions that too were done to portray themselves as genuine tax payers but that is not the case. The above tax payers just to boost up their turnover has billed themselves without any goods movement and their aim is not transfer fake ITC but to boost up their business turnover to get bank loans, to create an image that they are big players in this medical equipment supply business."On Section 122(1) — No discretion to levy Rs.10,000/- as minimum:"The language in Section 122(1) of the respective GST Enactments also does not give any discretion to the Assessing Officer to levy lesser of the amount i.e., Rs.10,000/- as the expression used is 'whichever is higher'.""The above decisions of the Hon'ble Supreme Court cannot be applied to the facts of the case specifically in the light of the language in Section 122(1) of the respective GST Enactments. The expression used in Section 122(1) is 'whichever is higher'."On inapplicability of Dharamendra Textile ratio to GST Section 122:"Section 11-AC of the Central Excise Act, 1944 which fell for consideration is the above-mentioned decision of the Hon'ble Supreme Court is different from Section 122 of the respective GST Enactments. The Hon'ble Supreme Court in Union of India Vs. Rajasthan Spinning and Weaving Mills, (2009) 13 SCC 448, has pointed out that the ratio was confined to Section 11-AC of the Central Excise Act, 1944 and no observations with regard to the several other statutory provisions that came up for consideration in that decision."On prima facie liability:"No doubt that the Petitioners have wrongly availed the Input Tax Credit and have apparently passed on the credit to boost up their respective turn overs with a view to take undue advantage of the system, prima facie they are liable to penalty under Section 122(1) of the respective GST Enactments."On availability of statutory remedy and writ jurisdiction:"The provisions of the respective GST Enactments contemplate an appellate remedy before the Appellate Authority under Section 107 of the respective GST Enactments and further appeal before GST Tribunal under Section 122 of the respective GST Enactments and thereafter remedy before the High Court. The finer aspects of law at best can be left to be decided by the Division Bench of this Court in its appellate jurisdiction under Section 117 of the respective GST Enactments which is in line with the Judgment of the Hon'ble Supreme Court in L.Chandrakumar Vs. Union of India and others, (1997) 3 SCC 261.""The Petitioner cannot short circuit the statutory mechanism prescribed by citing the decisions and the principle laid under the indirect tax enactments which have been subsumed into the respective GST Enactments."On pre-deposit waiver:"Since pre-deposit of huge penalty as prescribed under Section 107 of the respective GST Enactments will cause undue hardship to the respective Petitioners and make the appellate remedy illusory, pre-deposit of 10% of penalty under Section 107 of the respective GST Enactments is dispensed with at the time of filing the appeals before the Appellate Authority." FINAL VERDICTAll 19 writ petitions are dismissed. Liberty granted to petitioners to file appeals before the Appellate Authority under Section 107 within 30 days. The mandatory pre-deposit of 10% of penalty under Section 107 is waived in view of the large quantum of penalty, to prevent the appellate remedy from becoming illusory. Appellate Authority directed to decide the appeals preferably within 90 days.👎 THUMBS DOWN (Against Assessees — Writ dismissed; however significant relief granted by way of pre-deposit waiver) | ||||
| 117 | Vikas Chachan v. State of Rajasthan & Ors. | 05-02-2026 | Condonation of delay in filing GST appeal where order was only uploaded on portal and not otherwise communicated | View Download |
Facts :The petitioner challenged the inability to file an appeal against assessment order dated 15.06.2023 due to delay. The order raised demand towards tax, interest and penalty for FY 2020–21. The petitioner contended that the order was only uploaded on the GST portal and not served physically, and due to closure of business, he did not access the portal. As a result, the petitioner remained unaware of the order and could not file appeal within limitation.Court Decision:The Court held that although the Appellate Authority is bound by limitation under Section 107, in the present case the delay occurred due to reasons beyond the petitioner’s control. It observed that non-consideration of appeal on merits would cause prejudice. Following earlier Division Bench decisions, the Court condoned the delay and directed the Appellate Authority to entertain the appeal and decide it on merits.Cases Referred:Molana Construction Company v. Central Goods and Service Tax Department & Ors.Man Singh Tanwar v. Commissioner, Central Goods and Services Tax Department & Ors.RPC PSIPL JV v. State of Rajasthan & Ors. | ||||
| Vikas Chachan v. State of Rajasthan & Ors. 05-02-2026 Condonation of delay in filing GST appeal where order was only uploaded on portal and not otherwise communicatedFacts :The petitioner challenged the inability to file an appeal against assessment order dated 15.06.2023 due to delay. The order raised demand towards tax, interest and penalty for FY 2020–21. The petitioner contended that the order was only uploaded on the GST portal and not served physically, and due to closure of business, he did not access the portal. As a result, the petitioner remained unaware of the order and could not file appeal within limitation.Court Decision:The Court held that although the Appellate Authority is bound by limitation under Section 107, in the present case the delay occurred due to reasons beyond the petitioner’s control. It observed that non-consideration of appeal on merits would cause prejudice. Following earlier Division Bench decisions, the Court condoned the delay and directed the Appellate Authority to entertain the appeal and decide it on merits.Cases Referred:Molana Construction Company v. Central Goods and Service Tax Department & Ors.Man Singh Tanwar v. Commissioner, Central Goods and Services Tax Department & Ors.RPC PSIPL JV v. State of Rajasthan & Ors. | ||||
| 118 | Kanhaiya Nilambar Jha vs. Union of India & Ors. | 05-02-2026 | : Legality of summons and alleged illegal detention during GST inquiry – Sections 69, 70 and 132 of the CGST Act, 2017. | View Download |
Facts :The petitioner alleged that GST officers illegally detained him from 17.06.2025 to 20.06.2025 after calling him to the office of a Chartered Accountant in connection with investigation into fraudulent input tax credit by M/s Kabsan Services Pvt. Ltd. He contended that he was taken into custody without summons and that the formal arrest was shown only on 21.06.2025 under Section 69 of the CGST Act for offences under Sections 132(1)(b), 132(1)(c) and 132(1)(i). The petitioner sought compensation of ₹10,00,000 for alleged illegal detention. Court Decision:The Court held that the petitioner had been issued summons under Section 70 of the CGST Act for inquiry and recording of statement. The petitioner acknowledged the summons and appeared before the authorities from 17.06.2025 to 20.06.2025 without raising any objection. The Court further held that Section 70 of the CGST Act does not require issuance of seven days’ prior notice before appearance for inquiry and that attendance pursuant to summons for investigation cannot be treated as detention.The Court observed that the petitioner was formally arrested on 21.06.2025 after ascertainment of his involvement and was produced before the Magistrate on the same day. Since the petitioner had voluntarily attended the inquiry and no illegal detention was established, the claim for compensation was rejected and the writ petition was dismissed. Cases Referred by Court:• Joginder Kumar vs. State of U.P.• D.K. Basu vs. State of West Bengal• Dikshant vs. State of Maharashtra• FSM Education Pvt. Ltd. vs. Union of India• Ram Kotumal Issrani vs. Directorate of Enforcement• Radhika Agarwal vs. Union of India | ||||
| Kanhaiya Nilambar Jha vs. Union of India & Ors. 05-02-2026 : Legality of summons and alleged illegal detention during GST inquiry – Sections 69, 70 and 132 of the CGST Act, 2017.Facts :The petitioner alleged that GST officers illegally detained him from 17.06.2025 to 20.06.2025 after calling him to the office of a Chartered Accountant in connection with investigation into fraudulent input tax credit by M/s Kabsan Services Pvt. Ltd. He contended that he was taken into custody without summons and that the formal arrest was shown only on 21.06.2025 under Section 69 of the CGST Act for offences under Sections 132(1)(b), 132(1)(c) and 132(1)(i). The petitioner sought compensation of ₹10,00,000 for alleged illegal detention. Court Decision:The Court held that the petitioner had been issued summons under Section 70 of the CGST Act for inquiry and recording of statement. The petitioner acknowledged the summons and appeared before the authorities from 17.06.2025 to 20.06.2025 without raising any objection. The Court further held that Section 70 of the CGST Act does not require issuance of seven days’ prior notice before appearance for inquiry and that attendance pursuant to summons for investigation cannot be treated as detention.The Court observed that the petitioner was formally arrested on 21.06.2025 after ascertainment of his involvement and was produced before the Magistrate on the same day. Since the petitioner had voluntarily attended the inquiry and no illegal detention was established, the claim for compensation was rejected and the writ petition was dismissed. Cases Referred by Court:• Joginder Kumar vs. State of U.P.• D.K. Basu vs. State of West Bengal• Dikshant vs. State of Maharashtra• FSM Education Pvt. Ltd. vs. Union of India• Ram Kotumal Issrani vs. Directorate of Enforcement• Radhika Agarwal vs. Union of India | ||||
| 119 | Lovelesh Singhal v. Central Board of Indirect Taxes & Customs & Ors. | 02-02-2026 | Validity of CBIC Circular No. 3/3/2017 dated 05.07.2017 — Authority to Assign | View Download |
Background & IssueThe petitioner, proprietor of M/s Shivani Overseas, challenged a summons dated 03.11.2025 issued under Section 70 of the CGST Act, 2017 in connection with an inquiry relating to M/s Midas Marketing Inc. The summons directed the petitioner to appear and produce bank statements, sales invoices, and ledgers. The summons was issued by the Superintendent/Senior Intelligence Officer in reliance upon Circular No. 3/3/2017 dated 05.07.2017 issued by the Central Board of Excise and Customs (now CBIC). The core legal issue before the Court was whether the said circular was validly issued — specifically, whether the Board (CBIC) had the authority to assign functions to "proper officers" under Section 2(91) of the CGST Act, or whether such power vested exclusively in the "Commissioner in the Board" as defined under Section 2(25) read with Section 168(2) of the CGST Act. The petitioner contended that only the "Commissioner in the Board" — being a Commissioner or Joint Secretary posted in the Board — could assign such functions, and that the circular issued in the name of the "Board" was therefore without legal authority, rendering the summons issued thereunder void.Court's DecisionThe Court, after examining the statutory framework, held that there was no ground to interfere with the validity of Circular No. 3/3/2017. It observed that since the Commissioner is admittedly a constituent part of the Board, the assignment of functions through the circular must be presumed to have been initiated at the level of the Commissioner in the Board and duly approved by the Board, as contemplated under Section 168(2) of the CGST Act. The Court further noted that the petitioner had failed to discharge the burden of establishing that the circular was issued without authority — he merely relied upon the language of the preamble of the circular using the word "Board," without pleading or proving through documents that the required procedure under Section 168(2) was not followed. Applying the well-settled principle of presumption of validity of subordinate legislation — as reaffirmed in State of Tamil Nadu v. P. Krishnamurthy (2006) 4 SCC 517, G.M. (Operations) S.B.I. & Anr. v. R. Periyasamy, Civil Appeal No. 10942/2014, and Ram Krishna Dalmia v. S.R. Tendolkar, 1958 SCC OnLine SC 6 — the Court held that the onus lay on the petitioner to prove invalidity, which he failed to discharge.Most Relevant Court Observation"In law, we have to presume that the circular is valid and the onus is on the petitioner to discharge the burden of establishing that the circular was issued without authority or legal approval." The Court further observed: "The fact remains that it is not in dispute that the Commissioner is also a part of the Board. Once it is not in dispute that the Commissioner is part of the Board, and sub-section (2) of Section 168 contemplates that the assignment of functions to the Central Tax Officers is upon a proposal of the Commissioner in the Board, we see no reason to disbelieve that the same was not under the authority of the Commissioner, which was approved by the Board as required under sub-section (2) of Section 168."Cases ReferredState of Tamil Nadu v. P. Krishnamurthy, (2006) 4 SCC 517 | G.M. (Operations) S.B.I. & Anr. v. R. Periyasamy, Civil Appeal No. 10942/2014 | Ram Krishna Dalmia v. S.R. Tendolkar, 1958 SCC OnLine SC 6 | ||||
| Lovelesh Singhal v. Central Board of Indirect Taxes & Customs & Ors. 02-02-2026 Validity of CBIC Circular No. 3/3/2017 dated 05.07.2017 — Authority to AssignBackground & IssueThe petitioner, proprietor of M/s Shivani Overseas, challenged a summons dated 03.11.2025 issued under Section 70 of the CGST Act, 2017 in connection with an inquiry relating to M/s Midas Marketing Inc. The summons directed the petitioner to appear and produce bank statements, sales invoices, and ledgers. The summons was issued by the Superintendent/Senior Intelligence Officer in reliance upon Circular No. 3/3/2017 dated 05.07.2017 issued by the Central Board of Excise and Customs (now CBIC). The core legal issue before the Court was whether the said circular was validly issued — specifically, whether the Board (CBIC) had the authority to assign functions to "proper officers" under Section 2(91) of the CGST Act, or whether such power vested exclusively in the "Commissioner in the Board" as defined under Section 2(25) read with Section 168(2) of the CGST Act. The petitioner contended that only the "Commissioner in the Board" — being a Commissioner or Joint Secretary posted in the Board — could assign such functions, and that the circular issued in the name of the "Board" was therefore without legal authority, rendering the summons issued thereunder void.Court's DecisionThe Court, after examining the statutory framework, held that there was no ground to interfere with the validity of Circular No. 3/3/2017. It observed that since the Commissioner is admittedly a constituent part of the Board, the assignment of functions through the circular must be presumed to have been initiated at the level of the Commissioner in the Board and duly approved by the Board, as contemplated under Section 168(2) of the CGST Act. The Court further noted that the petitioner had failed to discharge the burden of establishing that the circular was issued without authority — he merely relied upon the language of the preamble of the circular using the word "Board," without pleading or proving through documents that the required procedure under Section 168(2) was not followed. Applying the well-settled principle of presumption of validity of subordinate legislation — as reaffirmed in State of Tamil Nadu v. P. Krishnamurthy (2006) 4 SCC 517, G.M. (Operations) S.B.I. & Anr. v. R. Periyasamy, Civil Appeal No. 10942/2014, and Ram Krishna Dalmia v. S.R. Tendolkar, 1958 SCC OnLine SC 6 — the Court held that the onus lay on the petitioner to prove invalidity, which he failed to discharge.Most Relevant Court Observation"In law, we have to presume that the circular is valid and the onus is on the petitioner to discharge the burden of establishing that the circular was issued without authority or legal approval." The Court further observed: "The fact remains that it is not in dispute that the Commissioner is also a part of the Board. Once it is not in dispute that the Commissioner is part of the Board, and sub-section (2) of Section 168 contemplates that the assignment of functions to the Central Tax Officers is upon a proposal of the Commissioner in the Board, we see no reason to disbelieve that the same was not under the authority of the Commissioner, which was approved by the Board as required under sub-section (2) of Section 168."Cases ReferredState of Tamil Nadu v. P. Krishnamurthy, (2006) 4 SCC 517 | G.M. (Operations) S.B.I. & Anr. v. R. Periyasamy, Civil Appeal No. 10942/2014 | Ram Krishna Dalmia v. S.R. Tendolkar, 1958 SCC OnLine SC 6 | ||||
| 120 | Shilpa Medicare Limited v. State of Andhra Pradesh | 31-01-2026 | Transfer of a research and development unit between two units of the same company across two States — held exempt by the Advance Ruling Authority but a taxable supply of goods with no transferable credit by the Appellate Authority. At issue: the reach o | View Download |
Background. The petitioner transferred its research and development unit at Vizianagaram, Andhra Pradesh to its own unit at Bengaluru, Karnataka, the agreement covering all liabilities including statutory liabilities, all employees on the same terms and continuity of service, books, records, customer contracts, know-how, brands and other intangibles. The Authority for Advance Ruling held, on 24.02.2020, that the transaction was a supply of service covered by Sl. No. 2 of Notification No. 12/2017-CT (Rate) and that the unutilised credit of the Vizianagaram unit — IGST Rs. 2,29,24,118, CGST Rs. 50,50,789 and APGST Rs. 35,40,668 — could be transferred to the Bengaluru unit. On the department’s application, the Appellate Authority for Advance Ruling set that aside on 10.11.2020, holding the transaction to be a taxable supply of goods with no entitlement to transfer the credit to Karnataka.Observations of the Court. On exemption, the Court held that the petitioner would in any event be entitled to the benefit of the exemption by virtue of the notification, while expressly leaving open the larger doubt whether such services could have been brought within the purview of GST at all, given that the Act does not provide for taxing a transfer of business as a going concern as a supply of service.On credit, the Court rejected the Appellate Authority’s construction of “change in the constitution of a registered person” as connoting an internal structural change, such as a proprietary firm becoming a partnership. Such a reading would cut out sale, merger and lease, in each of which the transferor exits the picture and there is no internal change; the phrase must be understood as permitting transfer of credit from the ledger of the transferor to the transferee. The Court further observed that unutilised credit is an asset in the hands of the transferor, and on a sale of the entire business it is only reasonable that this asset also travels, Section 18(3) supplying the statutory basis. It also held that the authorities, having treated the Andhra Pradesh and Karnataka units as distinct persons under Sections 25(4) and 25(5) so as to tax the transfer, cannot simultaneously contend that the two units are parts of the same registered person and that there is no transfer. As regards the credit under the Central and Integrated levies it foresaw no difficulty, the administering authority being the Central Government; but the transfer from the APGST Act to the KGST Act would affect two States, and Karnataka was not before the Court.Final verdict. The writ petition was disposed of by setting aside the ruling of the Appellate Authority for Advance Ruling dated 10.11.2020, with the direction that further consideration of the issue by the authorities shall be on the basis of the observations in the order. The question of admissibility of transfer between the APGST Act and the KGST Act was directed to be placed before the authorities under both enactments, the petitioner being at liberty to approach them and agitate its rights. | ||||
| Shilpa Medicare Limited v. State of Andhra Pradesh 31-01-2026 Transfer of a research and development unit between two units of the same company across two States — held exempt by the Advance Ruling Authority but a taxable supply of goods with no transferable credit by the Appellate Authority. At issue: the reach oBackground. The petitioner transferred its research and development unit at Vizianagaram, Andhra Pradesh to its own unit at Bengaluru, Karnataka, the agreement covering all liabilities including statutory liabilities, all employees on the same terms and continuity of service, books, records, customer contracts, know-how, brands and other intangibles. The Authority for Advance Ruling held, on 24.02.2020, that the transaction was a supply of service covered by Sl. No. 2 of Notification No. 12/2017-CT (Rate) and that the unutilised credit of the Vizianagaram unit — IGST Rs. 2,29,24,118, CGST Rs. 50,50,789 and APGST Rs. 35,40,668 — could be transferred to the Bengaluru unit. On the department’s application, the Appellate Authority for Advance Ruling set that aside on 10.11.2020, holding the transaction to be a taxable supply of goods with no entitlement to transfer the credit to Karnataka.Observations of the Court. On exemption, the Court held that the petitioner would in any event be entitled to the benefit of the exemption by virtue of the notification, while expressly leaving open the larger doubt whether such services could have been brought within the purview of GST at all, given that the Act does not provide for taxing a transfer of business as a going concern as a supply of service.On credit, the Court rejected the Appellate Authority’s construction of “change in the constitution of a registered person” as connoting an internal structural change, such as a proprietary firm becoming a partnership. Such a reading would cut out sale, merger and lease, in each of which the transferor exits the picture and there is no internal change; the phrase must be understood as permitting transfer of credit from the ledger of the transferor to the transferee. The Court further observed that unutilised credit is an asset in the hands of the transferor, and on a sale of the entire business it is only reasonable that this asset also travels, Section 18(3) supplying the statutory basis. It also held that the authorities, having treated the Andhra Pradesh and Karnataka units as distinct persons under Sections 25(4) and 25(5) so as to tax the transfer, cannot simultaneously contend that the two units are parts of the same registered person and that there is no transfer. As regards the credit under the Central and Integrated levies it foresaw no difficulty, the administering authority being the Central Government; but the transfer from the APGST Act to the KGST Act would affect two States, and Karnataka was not before the Court.Final verdict. The writ petition was disposed of by setting aside the ruling of the Appellate Authority for Advance Ruling dated 10.11.2020, with the direction that further consideration of the issue by the authorities shall be on the basis of the observations in the order. The question of admissibility of transfer between the APGST Act and the KGST Act was directed to be placed before the authorities under both enactments, the petitioner being at liberty to approach them and agitate its rights. | ||||
