BackgroundThe petitioner is engaged in providing financial back-office services to an overseas entity under a service agreement. The department treated these services as "intermediary services" under Section 13(8)(b) of the IGST Act, 2017, holding that the place of supply was in India and hence the transactions could not qualify as "export of services." A show cause notice dated 28.11.2024 was issued. The petitioner filed detailed replies on 27.01.2025 and 06.02.2025 relying upon at least nine judicial precedents and a Board Circular dated 20.09.2021. However, the adjudicating authority passed an order dated 24.02.2025 confirming the GST demand of ₹70,57,98,208/- for the period April 2020 to March 2021, without independently addressing any of the contentions or precedents cited by the petitioner. A comparative chart submitted by the petitioner's counsel demonstrated that the so-called "reasoning" in the impugned order was a verbatim cut-and-paste of the allegations in the show cause notice itself. Court Observations (Verbatim)Para 8: "We are satisfied that the adjudicating authority has failed to independently apply its mind to the various contentions raised in the replies filed on behalf of the Petitioner. Instead, the adjudicating authority has chosen to copy or rather cut and paste verbatim the allegations in the show cause notice dated 28 November 2024 to pass them off as reasons supporting the impugned order."Para 13: "Besides the grounds, the adjudicating authority is obliged to issue an order after thoroughly considering all relevant arguments and to state the reasons supporting its decision briefly. Any decision made without considering the main contentions or without providing any supporting reasons would be indicative of a lack of application of mind. Simply cutting and pasting the allegations in the show cause notice or mechanically reciting them verbatim does not inspire confidence that due consideration has been shown to the cause, and the decision is made after its due consideration. Ultimately, these are aspects of natural justice principles that should guide the decision-making process in such cases."Para 15: "The phrase 'consider' does not mean that the contents of the representation are transcribed in the impugned order and without any discussion on the contentions raised, a conclusion is reached. In this case, the so-called reasoning is merely a cut-and-paste of most of the contents of the show cause notice, as noticed above."Para 17: "Section 75(6) of the CGST Act provides that the proper officer, in his order, shall set out the relevant facts and the basis of his decision. The emphasis of this provision is on the 'basis of decision'. This means the emphasis is on the reasons that support the decision. Merely cutting and pasting the allegations from the show cause notice does not amount to giving any independent reasons after due consideration the assessee's contentions or after due application of mind to those contentions."Para 19: "Since this is a case of complete non-application of mind and violation of principles of natural justice, there is no point in directing the Petitioner to pursue the alternative remedy of appeal. A clear breach of natural justice is an exception to the general rule that statutory remedies should usually be exhausted before seeking this Court's extraordinary intervention." Final VerdictThe impugned demand order dated 24.02.2025 was quashed and set aside. The matter was remanded to the adjudicating authority for fresh consideration and disposal of the show cause notice within three months, with a direction to follow principles of natural justice, including an opportunity of hearing and proper consideration of the petitioner's replies. All contentions on merits were left open.👍 In favour of the Assessee Cases / Provisions ReferredCitationCase NameWrit Petition No.2836 of 2021 (Bombay HC, decided 11.06.2024)Piramal Enterprises Limited v. State of Maharashtra & Anr.(1985) SCC OnLine SC 178Union of India & Anr. v. Tulsiram Patel2017 SCC OnLine Hyd. 164S. Kiranmayi v. Sri N. Sambasiva RaoStatutory Provisions Referred:Section 13(8)(b) of the IGST Act, 2017 — Place of supply of intermediary servicesSection 73(9) of the CGST Act / MGST Act — Determination of tax and issuance of demand orderSection 75(6) of the CGST Act — Requirement to set out relevant facts and basis of decisionSection 7(5)(c) of the IGST Act — Inter-state supply provisionsSection 8(2) of the IGST Act — Intra-state supply provisionsSection 2(6) of the IGST Act — Definition of "export of services" 

Facts :The petitioner challenged an order passed under Section 73 of the CGST/SGST Act on the ground that proper notice was not served. It was contended that although the show cause notice was uploaded on the GST portal, it was not served through other modes under Section 169(1)(a) to (c). The petitioner argued that mere portal upload does not constitute valid service and the order violated principles of natural justice.Court Decision:The Court held that Section 169 permits service of notice through any one of the prescribed modes, including making it available on the common portal under Section 169(1)(d). It ruled that service through the portal constitutes valid service and is sufficient compliance under the statute. Relying on the Division Bench decision in Sunil Kumar K., the Court found no infirmity in the proceedings and dismissed the writ petition, granting liberty to pursue statutory remedies.Cases Referred:Sunil Kumar K. v. State Tax Officer-I, Kottarakkara

BACKGROUNDThe Department conducted a detailed investigation and found that the petitioner and his son had incorporated or established 28 firms which, in collusion with various other traders, facilitated fraudulent availment of Input Tax Credit without any actual supply of goods or services. One of the firms — a sole proprietary concern of the petitioner — was identified as part of this network. The total fake ITC availed by entities controlled by the petitioner's son was alleged to be more than Rs.115 crores. After investigation, analysis of documents, and recording of statements of associated persons, a Show Cause Notice dated 31.07.2024 was issued to several companies and individuals including the petitioner. A detailed Order-in-Original was passed on 30.01.2025 confirming demands and imposing penalties on the petitioner and multiple connected firms and individuals. Personal hearing was granted and the petitioner filed a reply. Aggrieved, the petitioner filed a writ petition before the Delhi High Court. Notably, the petitioner's son had already filed an appeal before the Appellate Authority against the very same impugned order. CRUCIAL FACTSThe petitioner challenged the impugned order on the ground that he was not a taxable person under Section 74 read with Section 122(1) of the CGST Act, being neither the authorized signatory nor the operator of the main firm which availed the ITC — that firm being run by his son. He further argued that at best, under Section 122(3), the maximum penalty imposable on him was Rs.25,000/-. He also argued that under Section 75(13) of the CGST Act, once penalty is imposed under Section 73 or 74, no further penalty for the same act can be imposed under any other provision of the CGST Act. The Revenue contended that the petitioner's own sole proprietary concern was part of the fake firm network, and that staff of the son had admitted to irregularities committed by both father and son. The Revenue also urged that the impugned order being an appealable order under Section 107, the writ petition was not maintainable — particularly given that one co-noticee (the son) had already availed of the appellate remedy against the same order.  COURT OBSERVATIONS (Verbatim — Crucial)On misuse of ITC and the GST regime:"It is observed by this Court in a large number of writ petitions that this facility under Section 16 of the CGST Act has been misused by various individuals, firms, entities and companies to avail of ITC even when the output tax is not deposited or when the entities or individuals who had to deposit the output tax are themselves found to be not existent. Such misuse, if permitted to continue, would create an enormous dent in the GST regime itself."On seriousness of allegations:"The allegations against the Petitioner in the impugned order are extremely serious in nature. They reveal the complex maze of transactions, which are alleged to have been carried out between various non-existent firms for the sake of enabling fraudulent availment of the ITC."On writ jurisdiction and factual disputes:"The Court, in exercise of its writ jurisdiction, cannot adjudicate upon or ascertain the factual aspects pertaining to what was the role played by the Petitioner, whether the penalty imposed is justified or not, whether the same requires to be reduced proportionately in terms of the invoices raised by the Petitioner under his firm or whether penalty is liable to be imposed under Section 122(1) and Section 122(3) of the CGST Act."On multiplicity of proceedings:"The persons, who are involved in such transactions, cannot be allowed to try different remedies before different forums, inasmuch as the same would also result in multiplicity of litigation and could also lead to contradictory findings of different Forums, Tribunals and Courts."On when writ jurisdiction is available:"Writ jurisdiction is not barred in such cases, especially if there is any arbitrary action by the Department or the order itself is without jurisdiction or there is non-compliance of principles of natural justice. In the present case, none of the three grounds are made out as the SCN and the impugned order have been passed by the appropriate authority which has jurisdiction. Secondly, the Petitioner had been awarded an opportunity to file a reply and had also been afforded a hearing."On clean hands doctrine:"It is well settled in various decisions of the Supreme Court that petitions under Article 226 of the Constitution of India would be liable to be entertained only in case of persons who come with clean hands and not in favour of the persons who present twisted facts or misrepresent the true and correct picture on record." FINAL VERDICTThe writ petition is dismissed with costs of Rs.50,000/- to be deposited with the Delhi High Court Bar Association within four weeks. The petitioner is at liberty to urge all issues in an appeal under Section 107 of the CGST Act.👎 THUMBS DOWN (Against Assessee — Dismissed with costs)

BACKGROUND & FACTSShrinivasa Realcon Pvt. Ltd. (petitioner/developer) entered into an Agreement of Development dated 07.01.2022 (also referred to as 07.04.2022 in the order) with a landowner for development of Plot No. 2 admeasuring 8,000 sq. ft., Mouza Lendra, into a multi-storied complex. The consideration under the agreement was Rs. 7 crores and two apartments to the landowner. The petitioner was granted the right to develop the property by utilizing its present FSI or any increases thereof. No TDR or FSI was purchased by the owner or by the petitioner from any external person or entity in execution of this agreement.The department issued a Show Cause Notice dated 24.07.2024 demanding GST on the aforesaid transaction, followed by a second Show Cause Notice dated 14.08.2024, claiming GST under Entry 5B of the Notification dated 28.06.2017 as amended by Notification dated 29.03.2019. The department sought to rely on Clause 18 of the Development Agreement — which merely required the landowner to execute a deed of declaration under Section 2 of the Maharashtra Apartment Ownership Act, 1970, and execute apartment deeds in favour of individual buyers nominated by the developer — to contend that a "transfer" was involved attracting Entry 5B. An order dated 10.12.2024 was also passed pursuant to the show cause notices. The petitioner challenged both the show cause notices and the consequent order before the High Court. COURT OBSERVATIONS (Verbatim)Para 4: "A perusal of the language of entry 5B, above would indicate, that it relates to services which can be said to be supplied by any person by way of transfer of development rights or Floor Space Index (FSI) [including additional FSI] for construction of a project by a promoter. The expression 'transfer of development rights' read in conjunction with 'FSI' as indicated in entry 5B, would only relate to a TDR (Transferable Development Rights) as contemplated by clause 11.2.2 under the regulations for grant of TDR in the Unified Development Control and Promotion Regulations for the State of Maharashtra, clause 11.2.1 of which defines transferable development rights, to mean compensation in the form of Floor Space Index (FSI) or development rights, which shall entitle the owner for construction of built up area subject to the provisions in the said regulations. It therefore, follows, that the TDR / FSI as contemplated by entry 5B, cannot be related, to the rights which a developer derives from the owner under the agreement of development for constructing the building for the owners, in lieu of the owner agreeing to permit the developer to transfer certain built up units for consideration to be appropriated by the developer."Para 5: "In the instant case, the agreement dated 07.4.2022 (page 27) is an agreement of development entered into between the petitioner and the land owner, in terms of which, the petitioner, has been granted right to develop the property in question by utilizing its present FSI or any increases thereof. Mr. Naik, learned Senior Counsel, upon instructions, submits, that in the execution of the agreement dated 07.4.2022 no TDR or FSI has been purchased by the owner or for that matter by the petitioner from any person / entity whomsoever."Para 6: "Clause 18 relied upon by Mr. Nalamwar, learned counsel for the respondents merely indicates, that the owners shall sign and execute a deed of declaration under Section 2 of the Maharashtra Apartment Ownership Act, 1970, submitting the entire scheme to the provisions of the Maharashtra Apartment Ownership Act and the execution of the apartment deeds in favour of each individual buyers to the nominees of the developers. It is, therefore, apparent, that the transaction as contemplated in terms of the agreement dated 07.4.2022 does not fall within entry 5B of the Notification dated 28.6.2017, as it stand amended by the Notification dated 29.3.2019, in view of which, neither the show cause notice dated 14.08.2023 (page 123) nor the consequent order dated 10.12.2024 (page 137), can be sustained and are hereby quashed and set aside." FINAL VERDICTWrit petition allowed. The Development Agreement dated 07.04.2022 does not involve any TDR/FSI as contemplated under Entry 5B of the GST Notification. Both the show cause notices and the consequent order are quashed and set aside. GST under Entry 5B is not leviable on the transaction. 👍

BACKGROUNDThe petitioner, a proprietary firm, was subjected to GST proceedings for the tax period 2019-20 by the State Tax Officer, Arumbakkam Assessment Circle, Chennai. The respondent-authority uploaded all notices and communications solely on the GST online portal. The petitioner remained unaware of these notices and consequently could not file a reply within the stipulated time. Taking advantage of this lapse, the respondent passed a demand order dated 27.08.2024 under Section 73, along with a summary in Form GST DRC-07, without granting any opportunity of personal hearing. Further, the tax authority had already recovered more than 80% of the total disputed tax demand of Rs. 2,12,546/- from the petitioner's bank account through attachment. Aggrieved, the petitioner filed the present writ petition under Article 226 of the Constitution of India before the Madras High Court, challenging the impugned order on twin grounds: (i) contravention of the CGST/TNGST Act, 2017, and (ii) violation of principles of natural justice. COURT OBSERVATIONS (Verbatim)Para 7: "In the cases on hand, it is clear that no opportunity of personal hearing was provided to the petitioner prior to the passing of impugned order. Hence, this Court is of the view that the impugned order was passed in violation of principles of natural justice since it is just and necessary to provide an opportunity to the petitioner to establish their case on merits." FINAL VERDICTThe impugned order dated 27.08.2024 was set aside and the matter was remanded to the State Tax Officer for fresh consideration. The petitioner was directed to file reply/objections with supporting documents within three weeks from receipt of the order. The respondent was directed to thereafter issue a 14-day clear notice fixing a personal hearing date and pass appropriate orders on merits, in accordance with law, as expeditiously as possible. No costs were awarded.👍 In favour of the Assessee