BACKGROUNDThe dispute concerned a show-cause notice dated 13.06.2025 for AY 2018-19. The assessee contended that the notice was beyond Section 73 limitation. The State sought to justify the proceedings under Section 74 by relying on allegations of fraud and suppression elaborated in its counter affidavit.COURT OBSERVATIONSThe Supreme Court held that the Section 73 limitation expired on 28.02.2025 after applying the statutory extensions and the COVID-19 exclusion. The SCN dated 13.06.2025 was therefore beyond Section 73 limitation. The Court further held that Section 74 cannot be invoked merely by mechanically using the words fraud, wilful misstatement or suppression; the factual basis must emanate from the SCN itself.FINAL VERDICTThe Supreme Court allowed the Civil Appeal, set aside the High Court's order and quashed the impugned Section 74 show-cause notice.Cases Referred by Court:• Re: Cognizance for Extension of Limitation, Suo Motu Writ Petition (C) No. 3 of 2020 — Supreme Court of India — relied upon for exclusion of the COVID-19 period while computing statutory limitation, including the period from 15.03.2020 to 28.02.2022.
G.R. Infra Projects Limited, Ratlam v. State of Madhya Pradesh & Ors. 19-08-2026
BACKGROUNDThe dispute concerned a show-cause notice dated 13.06.2025 for AY 2018-19. The assessee contended that the notice was beyond Section 73 limitation. The State sought to justify the proceedings under Section 74 by relying on allegations of fraud and suppression elaborated in its counter affidavit.COURT OBSERVATIONSThe Supreme Court held that the Section 73 limitation expired on 28.02.2025 after applying the statutory extensions and the COVID-19 exclusion. The SCN dated 13.06.2025 was therefore beyond Section 73 limitation. The Court further held that Section 74 cannot be invoked merely by mechanically using the words fraud, wilful misstatement or suppression; the factual basis must emanate from the SCN itself.FINAL VERDICTThe Supreme Court allowed the Civil Appeal, set aside the High Court's order and quashed the impugned Section 74 show-cause notice.Cases Referred by Court:• Re: Cognizance for Extension of Limitation, Suo Motu Writ Petition (C) No. 3 of 2020 — Supreme Court of India — relied upon for exclusion of the COVID-19 period while computing statutory limitation, including the period from 15.03.2020 to 28.02.2022.
BackgroundThe appellant was engaged in the purchase and sale of motorcycles and spare parts. On 20.01.2025, a vehicle carrying motorcycles was intercepted by the Mobile Squad at about 7:25 A.M. At the time of interception, the E-Way Bill had not been generated. However, an E-Way Bill was generated at about 7:34 A.M., approximately nine minutes after interception, and was produced before the inspecting authority.The appellant contended that the motorcycles were covered by genuine tax invoices, purchase invoices, challans, ledger accounts and bank records. It was also submitted that there was no discrepancy in quantity, value or classification and no suppression, fake documentation, unaccounted goods or other material indicating an intention to evade tax. Proceedings under Section 129 resulted in a penalty of Rs. 2,63,330/-, which was confirmed by the First Appellate Authority, leading to the present appeal.Court ObservationThe Tribunal observed that the E-Way Bill was admittedly generated after interception, which constituted a procedural lapse. However, the lapse occurred in the background of a genuine and fully identifiable transaction. The goods were motorcycles identifiable through engine and chassis numbers and were subject to RTO registration. The transaction was supported by invoices, challans, ledger accounts and bank records, and no discrepancy in quantity, value or classification was found.The Tribunal further observed that there was no independent material demonstrating suppression, clandestine movement, undervaluation, fake documentation or any other positive circumstance indicating tax evasion. The peculiar facts therefore showed a bona fide procedural lapse rather than an act forming part of an attempt to evade tax.Final VerdictThe Tribunal allowed the appeal. The order dated 04.02.2025 passed by the Proper Officer under Section 129(3) of the CGST/UPGST Act, 2017, imposing CGST penalty of Rs. 1,31,665/- and SGST penalty of Rs. 1,31,665/- (total Rs. 2,63,330/-), was set aside. The consequential order of the First Appellate Authority confirming the penalty was also set aside.The Tribunal directed that the Rs. 2,63,330/- deposited by the appellant be refunded, in accordance with law, subject to verification of payment and statutory requirements.
BackgroundThe appellant was engaged in the purchase and sale of motorcycles and spare parts. On 20.01.2025, a vehicle carrying motorcycles was intercepted by the Mobile Squad at about 7:25 A.M. At the time of interception, the E-Way Bill had not been generated. However, an E-Way Bill was generated at about 7:34 A.M., approximately nine minutes after interception, and was produced before the inspecting authority.The appellant contended that the motorcycles were covered by genuine tax invoices, purchase invoices, challans, ledger accounts and bank records. It was also submitted that there was no discrepancy in quantity, value or classification and no suppression, fake documentation, unaccounted goods or other material indicating an intention to evade tax. Proceedings under Section 129 resulted in a penalty of Rs. 2,63,330/-, which was confirmed by the First Appellate Authority, leading to the present appeal.Court ObservationThe Tribunal observed that the E-Way Bill was admittedly generated after interception, which constituted a procedural lapse. However, the lapse occurred in the background of a genuine and fully identifiable transaction. The goods were motorcycles identifiable through engine and chassis numbers and were subject to RTO registration. The transaction was supported by invoices, challans, ledger accounts and bank records, and no discrepancy in quantity, value or classification was found.The Tribunal further observed that there was no independent material demonstrating suppression, clandestine movement, undervaluation, fake documentation or any other positive circumstance indicating tax evasion. The peculiar facts therefore showed a bona fide procedural lapse rather than an act forming part of an attempt to evade tax.Final VerdictThe Tribunal allowed the appeal. The order dated 04.02.2025 passed by the Proper Officer under Section 129(3) of the CGST/UPGST Act, 2017, imposing CGST penalty of Rs. 1,31,665/- and SGST penalty of Rs. 1,31,665/- (total Rs. 2,63,330/-), was set aside. The consequential order of the First Appellate Authority confirming the penalty was also set aside.The Tribunal directed that the Rs. 2,63,330/- deposited by the appellant be refunded, in accordance with law, subject to verification of payment and statutory requirements.
BACKGROUNDThe Income Tax Appellate Tribunal had allowed the assessee's appeals for various assessment years and the Assessing Officer subsequently passed appeal-effect orders determining substantial amounts refundable. Despite these orders, the refunds were not released. The Department insisted upon Form 26B, and the forms were rejected by referring to outstanding demands relating to the assessee and sister TANs.The Department defended its action by relying upon its practice and an SOP issued by the Centralized Processing Cell (TDS), contending that outstanding demands against associated TANs prevented processing of the refund. The assessee contended that Sections 200A and 201 operated in different fields and that Form 26B was not applicable once refund had arisen pursuant to an assessment or appellate order.COURT OBSERVATIONSThe Court examined Sections 200A and 201, Rule 31A and Form 26B and held that Section 201 deals with assessment of TDS, whereas Section 200A concerns adjustment of TDS before assessment at the CPC level. Rule 31A and Form 26B relate to that adjustment mechanism.The Court held that once a competent Assessing Officer has made an assessment under Section 201, or an appellate authority has passed an order giving rise to a refund, the refund becomes a vested and crystallised right of the assessee, subject to the Department's right to challenge the order in accordance with law. Such refund does not become subordinate to Section 200A or Rule 31A.The Court further held that the Assessing Officer or CPC cannot compel the assessee to furnish Form 26B once the refund arises pursuant to an assessment under Section 201 or an appellate order. Any withholding or adjustment has to be supported by a legally passed order under Section 245.Since the Department could not produce any order under Section 245 authorising withholding or adjustment, the Court held that reliance on outstanding demands against the assessee's PAN or sister TANs was legally untenable. The action was held to be arbitrary and violative of Articles 14, 19(1)(g) and 300A of the Constitution.FINAL VERDICTThe writ petitions were allowed. The respondents were directed to pay ₹53,09,56,470/- along with applicable interest under Sections 244A and 244A(1A) on or before 30.09.2026. If the amount was not credited by that date, the entire amount would carry additional interest at 1% per month over and above the statutory interest.
Vodafone Idea Limited v. Assistant Commissioner of Income Tax, Circle 78(1), New Delhi & Ors. 18-08-2026
BACKGROUNDThe Income Tax Appellate Tribunal had allowed the assessee's appeals for various assessment years and the Assessing Officer subsequently passed appeal-effect orders determining substantial amounts refundable. Despite these orders, the refunds were not released. The Department insisted upon Form 26B, and the forms were rejected by referring to outstanding demands relating to the assessee and sister TANs.The Department defended its action by relying upon its practice and an SOP issued by the Centralized Processing Cell (TDS), contending that outstanding demands against associated TANs prevented processing of the refund. The assessee contended that Sections 200A and 201 operated in different fields and that Form 26B was not applicable once refund had arisen pursuant to an assessment or appellate order.COURT OBSERVATIONSThe Court examined Sections 200A and 201, Rule 31A and Form 26B and held that Section 201 deals with assessment of TDS, whereas Section 200A concerns adjustment of TDS before assessment at the CPC level. Rule 31A and Form 26B relate to that adjustment mechanism.The Court held that once a competent Assessing Officer has made an assessment under Section 201, or an appellate authority has passed an order giving rise to a refund, the refund becomes a vested and crystallised right of the assessee, subject to the Department's right to challenge the order in accordance with law. Such refund does not become subordinate to Section 200A or Rule 31A.The Court further held that the Assessing Officer or CPC cannot compel the assessee to furnish Form 26B once the refund arises pursuant to an assessment under Section 201 or an appellate order. Any withholding or adjustment has to be supported by a legally passed order under Section 245.Since the Department could not produce any order under Section 245 authorising withholding or adjustment, the Court held that reliance on outstanding demands against the assessee's PAN or sister TANs was legally untenable. The action was held to be arbitrary and violative of Articles 14, 19(1)(g) and 300A of the Constitution.FINAL VERDICTThe writ petitions were allowed. The respondents were directed to pay ₹53,09,56,470/- along with applicable interest under Sections 244A and 244A(1A) on or before 30.09.2026. If the amount was not credited by that date, the entire amount would carry additional interest at 1% per month over and above the statutory interest.
BACKGROUNDThe proceedings arose from an SCN under Section 73 alleging excess ITC for the financial years 2018-19 to 2020-21. The Revenue subsequently appropriated part of the amount already paid and disputed whether the remaining reversal could be mapped to the demand.The taxpayer had made reversals through the electronic ledgers and furnished reconciliation material. The first appellate authority accepted the reconciliation and held that the excess ITC had been reversed, but the Revenue challenged the order, particularly concerning the proof of reversal and liability for interest and penalty.COURT OBSERVATIONThe Tribunal found no reason to disagree with the first appellate authority's conclusion that the excess ITC had been reversed. The Revenue's objection that there was no proof linking the payments to the disputed liability was not accepted because the reversal had been acknowledged through DRC-04 and the reconciliation had been scrutinised by the appellate authority.However, the Tribunal found that the appellate authority had not properly considered the liability for interest and penalty. Since the demand was under Section 73 and the relevant period fell within Section 128A, the Tribunal held that the taxpayer was entitled to the benefit of Section 128A subject to compliance with its prescribed procedure.FINAL VERDICTThe matter was remanded to the first appellate authority under Section 113(1) for fresh computation of interest and penalty, if any, attributable to the taxpayer. The taxpayer was to be given an opportunity of hearing, and the instructions contained in Circular No. 192/04/2023-GST were to be considered.If any interest or penalty liability remained after fresh computation, the taxpayer was permitted to seek waiver under Section 128A, which was to be considered in accordance with the relevant provisions and Circular No. 238/32/2024-GST.
ATANU MONDAL v. DIRECTOR, M/s D.R. STEEL CONSTRUCTION CO. PVT. LTD. 18-08-2026
BACKGROUNDThe proceedings arose from an SCN under Section 73 alleging excess ITC for the financial years 2018-19 to 2020-21. The Revenue subsequently appropriated part of the amount already paid and disputed whether the remaining reversal could be mapped to the demand.The taxpayer had made reversals through the electronic ledgers and furnished reconciliation material. The first appellate authority accepted the reconciliation and held that the excess ITC had been reversed, but the Revenue challenged the order, particularly concerning the proof of reversal and liability for interest and penalty.COURT OBSERVATIONThe Tribunal found no reason to disagree with the first appellate authority's conclusion that the excess ITC had been reversed. The Revenue's objection that there was no proof linking the payments to the disputed liability was not accepted because the reversal had been acknowledged through DRC-04 and the reconciliation had been scrutinised by the appellate authority.However, the Tribunal found that the appellate authority had not properly considered the liability for interest and penalty. Since the demand was under Section 73 and the relevant period fell within Section 128A, the Tribunal held that the taxpayer was entitled to the benefit of Section 128A subject to compliance with its prescribed procedure.FINAL VERDICTThe matter was remanded to the first appellate authority under Section 113(1) for fresh computation of interest and penalty, if any, attributable to the taxpayer. The taxpayer was to be given an opportunity of hearing, and the instructions contained in Circular No. 192/04/2023-GST were to be considered.If any interest or penalty liability remained after fresh computation, the taxpayer was permitted to seek waiver under Section 128A, which was to be considered in accordance with the relevant provisions and Circular No. 238/32/2024-GST.
BACKGROUNDThe petitioners, who had furnished corporate guarantees for subsidiaries, challenged the levy of GST on such guarantees and questioned the validity of Rule 28(2), Section 15(4) and the related CBIC Circulars. They contended that a corporate guarantee furnished without consideration did not constitute a taxable supply and challenged the deemed valuation mechanism of 1%.The Court examined the statutory framework governing supply, related-party transactions, business, valuation and corporate guarantees, including the effect of Schedule I and the amendments to Rule 28(2). The Court also examined separate proceedings initiated under Section 74 in relation to corporate guarantees.COURT OBSERVATIONThe Court held that the GST regime differs materially from the erstwhile service-tax regime because Section 7(1)(c) read with Schedule I contains a deeming mechanism for specified supplies between related persons even without consideration. The Court therefore did not accept the proposition that the absence of consideration by itself excludes corporate guarantees from GST.The Court examined the true nature of a corporate guarantee and held that its supply ultimately benefits the subsidiary, which can therefore constitute the recipient for GST purposes. The Court also examined the statutory meaning of guarantee and distinguished it from pledge and other forms of security.On valuation, the Court examined the GST Council's deliberation and the 1% benchmark incorporated in Rule 28(2). It ultimately held that Rule 28(2) was intra vires, but the expression “whichever is higher” had to be read down.Regarding Section 74, the Court held that invocation requires a strict showing of fraud, wilful misstatement or suppression. It examined whether the statutory controversy surrounding the taxability of corporate guarantees could itself establish the necessary mala fide intent.FINAL VERDICTThe Court held Rule 28(2) of the CGST Rules intra vires, subject to reading down the expression “whichever is higher.” It further held that levy of GST on corporate guarantees furnished prior to 26.10.2023 under Rule 28(2) violated Articles 14 and 19(1)(g), although levy could apply from that date where the guarantees continued. Section 15(4) was held intra vires.The actions of the Revenue under Section 74 were quashed and set aside, with provision for refund/adjustment of excess GST deposited. The impugned Circulars were also set aside to the extent they were contrary to the Court's observations and directions.CASE REFERRED BY COURTThe Court considered a substantial number of precedents. The principal cases actually discussed in its analysis include:Union of India & Anr. v. Mohit Minerals Pvt. Ltd. — Supreme CourtDirectorate General of GST Intelligence (HQS) v. Gameskraft Technologies (P.) Ltd. — Supreme Court — 2026Commissioner of CGST & Central Excise v. Edelweiss Financial Services Ltd. — Supreme CourtMaitreya Doshi v. Anand Rathi Global Finance Ltd. — Supreme Court — 2023,Infrastructure Leasing and Financial Services Ltd. v. HDFC Bank Ltd. & Anr. — Supreme Court — 2023,Govind Saran Ganga Saran v. Commissioner of Sales Tax — Supreme Court — 1985Ashok Leyland Ltd. v. State of T.N. — Supreme Court — 2004D.P. Jain & Co. Infrastructure Pvt. Ltd. v. Union of India & Ors. — Bombay High Court — 06.05.2026.Faridabad Iron & Steel Traders Association v. Union of India — Delhi High Court.Coca Cola India Pvt. Ltd. v. Commissioner of Central Excise, Pune-III — Bombay High Court 2009.Phoenix ARC Pvt. Ltd. — Supreme Court.Uniworth Textiles Ltd. v. Commissioner of Central Excise, Raipur — Supreme Court — 2013.
TORRENT POWER LTD. v. UNION OF INDIA & ORS. 14-08-2026
BACKGROUNDThe petitioners, who had furnished corporate guarantees for subsidiaries, challenged the levy of GST on such guarantees and questioned the validity of Rule 28(2), Section 15(4) and the related CBIC Circulars. They contended that a corporate guarantee furnished without consideration did not constitute a taxable supply and challenged the deemed valuation mechanism of 1%.The Court examined the statutory framework governing supply, related-party transactions, business, valuation and corporate guarantees, including the effect of Schedule I and the amendments to Rule 28(2). The Court also examined separate proceedings initiated under Section 74 in relation to corporate guarantees.COURT OBSERVATIONThe Court held that the GST regime differs materially from the erstwhile service-tax regime because Section 7(1)(c) read with Schedule I contains a deeming mechanism for specified supplies between related persons even without consideration. The Court therefore did not accept the proposition that the absence of consideration by itself excludes corporate guarantees from GST.The Court examined the true nature of a corporate guarantee and held that its supply ultimately benefits the subsidiary, which can therefore constitute the recipient for GST purposes. The Court also examined the statutory meaning of guarantee and distinguished it from pledge and other forms of security.On valuation, the Court examined the GST Council's deliberation and the 1% benchmark incorporated in Rule 28(2). It ultimately held that Rule 28(2) was intra vires, but the expression “whichever is higher” had to be read down.Regarding Section 74, the Court held that invocation requires a strict showing of fraud, wilful misstatement or suppression. It examined whether the statutory controversy surrounding the taxability of corporate guarantees could itself establish the necessary mala fide intent.FINAL VERDICTThe Court held Rule 28(2) of the CGST Rules intra vires, subject to reading down the expression “whichever is higher.” It further held that levy of GST on corporate guarantees furnished prior to 26.10.2023 under Rule 28(2) violated Articles 14 and 19(1)(g), although levy could apply from that date where the guarantees continued. Section 15(4) was held intra vires.The actions of the Revenue under Section 74 were quashed and set aside, with provision for refund/adjustment of excess GST deposited. The impugned Circulars were also set aside to the extent they were contrary to the Court's observations and directions.CASE REFERRED BY COURTThe Court considered a substantial number of precedents. The principal cases actually discussed in its analysis include:Union of India & Anr. v. Mohit Minerals Pvt. Ltd. — Supreme CourtDirectorate General of GST Intelligence (HQS) v. Gameskraft Technologies (P.) Ltd. — Supreme Court — 2026Commissioner of CGST & Central Excise v. Edelweiss Financial Services Ltd. — Supreme CourtMaitreya Doshi v. Anand Rathi Global Finance Ltd. — Supreme Court — 2023,Infrastructure Leasing and Financial Services Ltd. v. HDFC Bank Ltd. & Anr. — Supreme Court — 2023,Govind Saran Ganga Saran v. Commissioner of Sales Tax — Supreme Court — 1985Ashok Leyland Ltd. v. State of T.N. — Supreme Court — 2004D.P. Jain & Co. Infrastructure Pvt. Ltd. v. Union of India & Ors. — Bombay High Court — 06.05.2026.Faridabad Iron & Steel Traders Association v. Union of India — Delhi High Court.Coca Cola India Pvt. Ltd. v. Commissioner of Central Excise, Pune-III — Bombay High Court 2009.Phoenix ARC Pvt. Ltd. — Supreme Court.Uniworth Textiles Ltd. v. Commissioner of Central Excise, Raipur — Supreme Court — 2013.
BACKGROUNDThe appeal arose from an order concerning alleged non-payment of IGST under reverse charge in respect of OIDAR services received from a supplier located outside India. The First Appellate Authority had dropped the demand, and the Revenue challenged that decision before the Tribunal.During hearing, both sides pointed out that the matter involved OIDAR services and therefore raised a question regarding the jurisdiction of the State Bench vis-à-vis the Principal Bench.COURT OBSERVATIONThe Tribunal examined Section 109(5) of the CGST Act, which provides for exclusive Principal Bench jurisdiction where the issue involves place of supply, together with the notification issued on 17.09.2025. It noted that Section 14 of the IGST Act specifically deals with OIDAR services.The Tribunal held that appeals involving OIDAR services fall exclusively within the jurisdiction of the Principal Bench, GSTAT, New Delhi, and that the State Bench therefore had no jurisdiction to entertain the appeal.FINAL VERDICTThe Registry was directed to transfer the appeal along with the complete record to the Principal Bench, GSTAT, New Delhi, for disposal in accordance with law. The parties were directed to appear before the Registrar of the Principal Bench on 21.08.2026.
VISHAL CHAUDHARY v. DIRECTOR, BANGLA FOODS PRIVATE LIMITED 14-08-2026
BACKGROUNDThe appeal arose from an order concerning alleged non-payment of IGST under reverse charge in respect of OIDAR services received from a supplier located outside India. The First Appellate Authority had dropped the demand, and the Revenue challenged that decision before the Tribunal.During hearing, both sides pointed out that the matter involved OIDAR services and therefore raised a question regarding the jurisdiction of the State Bench vis-à-vis the Principal Bench.COURT OBSERVATIONThe Tribunal examined Section 109(5) of the CGST Act, which provides for exclusive Principal Bench jurisdiction where the issue involves place of supply, together with the notification issued on 17.09.2025. It noted that Section 14 of the IGST Act specifically deals with OIDAR services.The Tribunal held that appeals involving OIDAR services fall exclusively within the jurisdiction of the Principal Bench, GSTAT, New Delhi, and that the State Bench therefore had no jurisdiction to entertain the appeal.FINAL VERDICTThe Registry was directed to transfer the appeal along with the complete record to the Principal Bench, GSTAT, New Delhi, for disposal in accordance with law. The parties were directed to appear before the Registrar of the Principal Bench on 21.08.2026.
BACKGROUNDGoods were transported from one registered premises to another registered premises of the same registered person under a delivery challan. During transit, the goods were intercepted because no e-way bill was available, and penalty was imposed under Section 129(3), without any tax demand.The First Appellate Authority upheld the penalty. The dispute before the Tribunal was whether an internal stock transfer, which did not constitute a taxable supply, could attract penalty under Section 129 merely because the e-way bill was not generated.COURT OBSERVATIONThe Tribunal held that the movement involved only one registered person, with no second entity and no consideration. It therefore did not constitute a “supply” under Section 7. Consequently, Section 9 did not create any tax liability on the movement.Since Section 129(1) computes penalty with reference to “tax payable on such goods”, and there was no tax payable on the stock transfer, the Tribunal held that penalty under Section 129 was not leviable. The Tribunal also found that the appellate authority had not given any reason, other than absence of an e-way bill, for treating the transaction as non-genuine.The Tribunal applied the ratio of Fabricship Pvt. Ltd. and held that where the transaction does not involve two distinct entities and there is no consideration, it falls outside the charging provisions and consequently outside Section 129.FINAL VERDICTThe Tribunal answered the question of law in the negative, holding that penalty under Section 129 is not leviable for transport without an e-way bill when the movement is on account of stock transfer. The impugned Order-in-Appeal was set aside and the appeal was allowed with consequential relief.CASE REFERRED BY COURTFabricship Pvt. Ltd. v. Union of India — Bombay High Court Vacmet India Ltd. v. Additional Commissioner Grade-2 (Appeal) — Allahabad High Court — 17.10.2023.Goverdhan Oil Mill v. Additional Commissioner — Allahabad High Court — 10.04.2024.
M.S. STEELS v. THE COMMISSIONER OF KERALA STATE GST 14-08-2026
BACKGROUNDGoods were transported from one registered premises to another registered premises of the same registered person under a delivery challan. During transit, the goods were intercepted because no e-way bill was available, and penalty was imposed under Section 129(3), without any tax demand.The First Appellate Authority upheld the penalty. The dispute before the Tribunal was whether an internal stock transfer, which did not constitute a taxable supply, could attract penalty under Section 129 merely because the e-way bill was not generated.COURT OBSERVATIONThe Tribunal held that the movement involved only one registered person, with no second entity and no consideration. It therefore did not constitute a “supply” under Section 7. Consequently, Section 9 did not create any tax liability on the movement.Since Section 129(1) computes penalty with reference to “tax payable on such goods”, and there was no tax payable on the stock transfer, the Tribunal held that penalty under Section 129 was not leviable. The Tribunal also found that the appellate authority had not given any reason, other than absence of an e-way bill, for treating the transaction as non-genuine.The Tribunal applied the ratio of Fabricship Pvt. Ltd. and held that where the transaction does not involve two distinct entities and there is no consideration, it falls outside the charging provisions and consequently outside Section 129.FINAL VERDICTThe Tribunal answered the question of law in the negative, holding that penalty under Section 129 is not leviable for transport without an e-way bill when the movement is on account of stock transfer. The impugned Order-in-Appeal was set aside and the appeal was allowed with consequential relief.CASE REFERRED BY COURTFabricship Pvt. Ltd. v. Union of India — Bombay High Court Vacmet India Ltd. v. Additional Commissioner Grade-2 (Appeal) — Allahabad High Court — 17.10.2023.Goverdhan Oil Mill v. Additional Commissioner — Allahabad High Court — 10.04.2024.
BACKGROUNDAutomobile spare parts were transported under e-invoices, but the vehicle was intercepted without an e-way bill. Proceedings under Section 129 were initiated and penalty was imposed. The goods and conveyance were subsequently released on furnishing security, but the penalty order in MOV-09 was passed 47 days after the MOV-07 notice.The appellant contended that the supplies were covered by valid e-invoices, GST had been paid and there was no intention to evade tax. The Tribunal considered whether the seven-day period in Section 129(3) was mandatory and whether the delayed order was void.COURT OBSERVATIONThe Tribunal held that the word “shall” used in Section 129(3) demonstrated the legislative intent that the prescribed timelines were mandatory. The fiscal nature of the statute also required strict construction. The absence of an express consequence for non-compliance did not make the seven-day period directory.The Tribunal further found that the e-invoices had been generated electronically and the corresponding GST had been paid through returns. Therefore, there was no material showing mens rea to evade tax merely because the e-way bill had not been generated.FINAL VERDICTThe Tribunal held that the order under Section 129(3) had not been passed within the mandatory seven-day period. The MOV-09 order dated 04.06.2022, passed 47 days after the MOV-07 notice, was therefore illegal and without jurisdiction.The impugned Order-in-Appeal was set aside and the appeal was allowed with consequential relief. The respondent was directed to release the Bank Guarantee immediately.CASE REFERRED BY COURTMohd Hazzak Lohar & Others v. Commissioner of State Tax, J&K — High Court of Jammu & Kashmir and LadakhAllcargo Logistics Limited v. State of Gujarat — Gujarat High CourtKhatu Enterprises v. State of Gujarat — Gujarat High CourtDeepam Roadways v. Deputy State Tax Officer, Chennai — Madras HighUdhayam Steels (P.) Ltd. v. Deputy Tax Officer (Int.) — Madras High Court — 28.12.2022.D.K. Enterprises v. Assistant/Deputy Commissioner (ST) — Madras High Court — 29.08.2022.Pawan Carrying Corporation v. State of Bihar — Patna High CourtK.P. Sugandh Ltd. v. Chief Commissioner of CT & GST, Odisha
SIDDHI VINAYAK AUTOMOBILES v. COMMISSIONER OF KERALA STATE GST, THIRUVANANTHAPURAM 14-08-2026
BACKGROUNDAutomobile spare parts were transported under e-invoices, but the vehicle was intercepted without an e-way bill. Proceedings under Section 129 were initiated and penalty was imposed. The goods and conveyance were subsequently released on furnishing security, but the penalty order in MOV-09 was passed 47 days after the MOV-07 notice.The appellant contended that the supplies were covered by valid e-invoices, GST had been paid and there was no intention to evade tax. The Tribunal considered whether the seven-day period in Section 129(3) was mandatory and whether the delayed order was void.COURT OBSERVATIONThe Tribunal held that the word “shall” used in Section 129(3) demonstrated the legislative intent that the prescribed timelines were mandatory. The fiscal nature of the statute also required strict construction. The absence of an express consequence for non-compliance did not make the seven-day period directory.The Tribunal further found that the e-invoices had been generated electronically and the corresponding GST had been paid through returns. Therefore, there was no material showing mens rea to evade tax merely because the e-way bill had not been generated.FINAL VERDICTThe Tribunal held that the order under Section 129(3) had not been passed within the mandatory seven-day period. The MOV-09 order dated 04.06.2022, passed 47 days after the MOV-07 notice, was therefore illegal and without jurisdiction.The impugned Order-in-Appeal was set aside and the appeal was allowed with consequential relief. The respondent was directed to release the Bank Guarantee immediately.CASE REFERRED BY COURTMohd Hazzak Lohar & Others v. Commissioner of State Tax, J&K — High Court of Jammu & Kashmir and LadakhAllcargo Logistics Limited v. State of Gujarat — Gujarat High CourtKhatu Enterprises v. State of Gujarat — Gujarat High CourtDeepam Roadways v. Deputy State Tax Officer, Chennai — Madras HighUdhayam Steels (P.) Ltd. v. Deputy Tax Officer (Int.) — Madras High Court — 28.12.2022.D.K. Enterprises v. Assistant/Deputy Commissioner (ST) — Madras High Court — 29.08.2022.Pawan Carrying Corporation v. State of Bihar — Patna High CourtK.P. Sugandh Ltd. v. Chief Commissioner of CT & GST, Odisha
BACKGROUNDCommon adjudicatory proceedings concerned allegations that companies had fraudulently availed and utilised ITC on invoices without corresponding supply of goods. The individuals connected with those companies were proceeded against for penalties under Sections 74, 76(2) and 122(1), although no tax demand was proposed against them in their individual capacities.The petitioners challenged the adjudication order and also raised issues concerning the requirement of pre-deposit for pursuing statutory appeals. The SCNs had been issued in 2020, whereas the proviso to Section 107(6) was substituted with effect from 01.10.2025.COURT OBSERVATIONThe Court held that an appeal under Section 107 was maintainable against the impugned order and that the appellate remedy was governed by Section 107(6) as it stood when the respective SCNs were issued, since the adjudicatory proceedings had commenced before the amendment effective from 01.10.2025.On the question of Section 122(1), the Court noted that its applicability to a person who is not a taxable person was pending before the Supreme Court. Therefore, judicial propriety required the Court not to express an opinion on that issue; the remaining factual and legal grounds could appropriately be examined in statutory appeal.FINAL VERDICTThe writ petitions were disposed of by relegating the petitioners to the statutory appellate remedy under Section 107. All grounds were left open before the Appellate Authority. The pre-deposit requirement was directed to be governed by Section 107(6) as it stood on the dates of issuance of the respective SCNs. CASE REFERRED BY COURTGaurav Jain & Anr. v. Joint Commissioner (Appeals-II), CGST Delhi Zone & Anr. — High Court of Delhi — 31.07.2026.Mukesh Kumar Garg v. Union of India & Ors. — Supreme Court of India — 04.08.2025.
ARUN KUMAR JAIN & ORS. v. ADDITIONAL COMMISSIONER, CGST DELHI WEST COMMISSIONERATE & ORS. 13-08-2026
BACKGROUNDCommon adjudicatory proceedings concerned allegations that companies had fraudulently availed and utilised ITC on invoices without corresponding supply of goods. The individuals connected with those companies were proceeded against for penalties under Sections 74, 76(2) and 122(1), although no tax demand was proposed against them in their individual capacities.The petitioners challenged the adjudication order and also raised issues concerning the requirement of pre-deposit for pursuing statutory appeals. The SCNs had been issued in 2020, whereas the proviso to Section 107(6) was substituted with effect from 01.10.2025.COURT OBSERVATIONThe Court held that an appeal under Section 107 was maintainable against the impugned order and that the appellate remedy was governed by Section 107(6) as it stood when the respective SCNs were issued, since the adjudicatory proceedings had commenced before the amendment effective from 01.10.2025.On the question of Section 122(1), the Court noted that its applicability to a person who is not a taxable person was pending before the Supreme Court. Therefore, judicial propriety required the Court not to express an opinion on that issue; the remaining factual and legal grounds could appropriately be examined in statutory appeal.FINAL VERDICTThe writ petitions were disposed of by relegating the petitioners to the statutory appellate remedy under Section 107. All grounds were left open before the Appellate Authority. The pre-deposit requirement was directed to be governed by Section 107(6) as it stood on the dates of issuance of the respective SCNs. CASE REFERRED BY COURTGaurav Jain & Anr. v. Joint Commissioner (Appeals-II), CGST Delhi Zone & Anr. — High Court of Delhi — 31.07.2026.Mukesh Kumar Garg v. Union of India & Ors. — Supreme Court of India — 04.08.2025.
BACKGROUNDThe assessee had sold a residential property and claimed exemption under Section 54F on the basis that the sale consideration had been reinvested in acquisition of another residential property in the name of his wife. The claim was initially disclosed in the return but was later questioned through reassessment proceedings, resulting in denial of exemption. The CIT(A) and ITAT also rejected the claim.Before the High Court, the assessee contended that Section 54F did not require the new residential property to be registered exclusively in his own name and relied upon judgments including Jangpal Singh Tanwar, Gurnam Singh and Kamal Wahal. The Revenue relied upon decisions of the Punjab and Haryana High Court holding that the new property must be purchased in the assessee's own name.COURT OBSERVATIONSThe Court first found that both the original asset and the new asset were residential properties. Consequently, Section 54F was not the applicable provision; Section 54 governed the transaction. The Court specifically noted that this distinction had not been noticed by the Assessing Officer, CIT(A) or ITAT.The Court then held that exemption under Section 54 could be claimed only where the sale of the original residential property and purchase of the new residential property were transactions executed by the same assessee. Husband and wife are distinct legal entities, and the two transactions could not be clubbed merely because the husband had provided the funds.The Court relied particularly upon Jai Narayan and Dinesh Verma, holding that where the statutory provision refers to purchase by the “assessee”, purchase of the new property in the name of another person, including the spouse, does not satisfy the statutory requirement.The Court also considered and disagreed with the approach in Kamal Wahal, V. Natarajan and Mrs. Jennifer Bhide. It agreed with the reasoning in Kamal Kant Kamboj and held that Gurnam Singh was distinguishable because that case concerned property purchased jointly in the names of the assessee and his son, whereas the property in the present case stood solely in the wife's name.The Court further observed that Bahadur Singh had followed Dinesh Verma and that the SLP against Bahadur Singh had been dismissed by the Supreme Court on 29.08.2023. The Court held that the questions raised by the assessee therefore stood conclusively decided against him.Finally, Jangpal Singh Tanwar was distinguished because in that case the reinvestment was jointly in the names of the assessee, his wife and his son, and the other joint owners had also contributed to the investment. The Court also noted that Jangpal Singh Tanwar had not noticed the earlier decisions in Dinesh Verma and Bahadur Singh.FINAL VERDICTThe High Court held that the questions of law raised by the assessee stood conclusively decided against him and that the investment in property solely in the wife's name did not qualify for the exemption under the applicable provision. The appeal was therefore dismissed, with no order as to costs.CASE REFERRED BY COURTJai Narayan v. Income Tax Officer — Punjab and Haryana High Court — 2007.Commissioner of Income Tax, Faridabad v. Dinesh Verma — Punjab and Haryana High Court — 06.07.2015.Kamal Kant Kamboj v. Income Tax Officer, Ward-3, Haryana — Punjab and Haryana High Court — 2017Bahadur Singh v. Commissioner of Income Tax (Appeals) — Punjab and Haryana High Court — 2023Bahadur Singh SLP, SLP (Civil) Diary No.31033 of 2022 — Supreme Court of India — 29.08.2023Commissioner of Income Tax v. Gurnam Singh — Punjab and Haryana High Court — 2010 Commissioner of Income Tax v. Kamal Wahal — Delhi High Court — 2013.Commissioner of Income Tax v. V. Natarajan — Madras High Court — 2006.Mrs. Jennifer Bhide — Karnataka High Court — 2011.CIT v. Vegetable Products Ltd. — Supreme Court of India — 1973.
Subh Karan Yadav v. Income Tax Officer, Rewari, Haryana 12-08-2026
BACKGROUNDThe assessee had sold a residential property and claimed exemption under Section 54F on the basis that the sale consideration had been reinvested in acquisition of another residential property in the name of his wife. The claim was initially disclosed in the return but was later questioned through reassessment proceedings, resulting in denial of exemption. The CIT(A) and ITAT also rejected the claim.Before the High Court, the assessee contended that Section 54F did not require the new residential property to be registered exclusively in his own name and relied upon judgments including Jangpal Singh Tanwar, Gurnam Singh and Kamal Wahal. The Revenue relied upon decisions of the Punjab and Haryana High Court holding that the new property must be purchased in the assessee's own name.COURT OBSERVATIONSThe Court first found that both the original asset and the new asset were residential properties. Consequently, Section 54F was not the applicable provision; Section 54 governed the transaction. The Court specifically noted that this distinction had not been noticed by the Assessing Officer, CIT(A) or ITAT.The Court then held that exemption under Section 54 could be claimed only where the sale of the original residential property and purchase of the new residential property were transactions executed by the same assessee. Husband and wife are distinct legal entities, and the two transactions could not be clubbed merely because the husband had provided the funds.The Court relied particularly upon Jai Narayan and Dinesh Verma, holding that where the statutory provision refers to purchase by the “assessee”, purchase of the new property in the name of another person, including the spouse, does not satisfy the statutory requirement.The Court also considered and disagreed with the approach in Kamal Wahal, V. Natarajan and Mrs. Jennifer Bhide. It agreed with the reasoning in Kamal Kant Kamboj and held that Gurnam Singh was distinguishable because that case concerned property purchased jointly in the names of the assessee and his son, whereas the property in the present case stood solely in the wife's name.The Court further observed that Bahadur Singh had followed Dinesh Verma and that the SLP against Bahadur Singh had been dismissed by the Supreme Court on 29.08.2023. The Court held that the questions raised by the assessee therefore stood conclusively decided against him.Finally, Jangpal Singh Tanwar was distinguished because in that case the reinvestment was jointly in the names of the assessee, his wife and his son, and the other joint owners had also contributed to the investment. The Court also noted that Jangpal Singh Tanwar had not noticed the earlier decisions in Dinesh Verma and Bahadur Singh.FINAL VERDICTThe High Court held that the questions of law raised by the assessee stood conclusively decided against him and that the investment in property solely in the wife's name did not qualify for the exemption under the applicable provision. The appeal was therefore dismissed, with no order as to costs.CASE REFERRED BY COURTJai Narayan v. Income Tax Officer — Punjab and Haryana High Court — 2007.Commissioner of Income Tax, Faridabad v. Dinesh Verma — Punjab and Haryana High Court — 06.07.2015.Kamal Kant Kamboj v. Income Tax Officer, Ward-3, Haryana — Punjab and Haryana High Court — 2017Bahadur Singh v. Commissioner of Income Tax (Appeals) — Punjab and Haryana High Court — 2023Bahadur Singh SLP, SLP (Civil) Diary No.31033 of 2022 — Supreme Court of India — 29.08.2023Commissioner of Income Tax v. Gurnam Singh — Punjab and Haryana High Court — 2010 Commissioner of Income Tax v. Kamal Wahal — Delhi High Court — 2013.Commissioner of Income Tax v. V. Natarajan — Madras High Court — 2006.Mrs. Jennifer Bhide — Karnataka High Court — 2011.CIT v. Vegetable Products Ltd. — Supreme Court of India — 1973.
