BackgroundOn the basis of data received from DGA (Central), Lucknow, an SCN dated 12.07.2024 under Section 74 proposed GST of Rs.5,10,00,146/- (CGST and SGST Rs.2,55,00,073/- each) for July 2017–March 2018 for alleged false declaration of taxable value. After reply dated 07.08.2024 and a hearing, the order dated 13.11.2024 confirmed tax of Rs.2,91,39,160/- with interest and an equal penalty under Section 74(1) read with Section 122(2)(b), dropping Rs.2,18,60,986/-. The petitioner challenged Circulars No. 3/3/2017-GST, 31/05/2018-GST and 169/01/2022-GST as beyond the Board’s power (relying on Canon India), and also the SCN/order for want of digital signature, personal hearing, ASMT-10, the Section 74 pre-conditions and limitation.Final VerdictNoting that the Bombay HC decision in Fomento Resorts & Hotels is under appeal but no Supreme Court direction restrains High Courts, the Court agreed with that view that Canon India is distinguishable, since the officers concerned are admittedly central tax officers appointed under Section 3 read with Section 5 via the notification dated 19.06.2017, and held that the pleas questioning the three circulars have no basis to stand. Finding that the order was passed after considering the reply and granting a personal hearing, and that none of the Chhabil Dass Agarwal exceptions applied, the Court declined to act as a fact-finding body and relegated the petitioner to the statutory appeal. Liberty was granted to appeal within 30 days; since the writ was filed on 07.03.2025, within 30 days after expiry of the three-month appeal period, the Appellate Authority would not oust the petitioner on limitation. The writ was disposed of accordingly.  

BackgroundThe respondent’s registration was cancelled from 12.11.2020 for not filing GSTR-3B for six months. Finding that all returns had been filed after the show cause notice, the First Appellate Authority revoked the cancellation and directed the proper officer to verify the filing of returns and payment of tax. The department appealed, contending that interest, late fee and penalty also had to be paid under Rule 23(1). The respondent did not appear despite three opportunities.Final VerdictThe Tribunal held that the liability under returns extends to interest, late fee and penalty, and that by not applying the proviso to Rule 23(1), the First Appellate Authority committed a jurisdictional and substantive error. It also observed that admitted dues are recoverable through Section 79, which the department ought to invoke before seeking the Tribunal’s aid for collection. Reading the appellate order as intending recovery of the Rule 23 amounts, it held that the department was free to collect interest under Section 50 and late fee under Section 47, and imposed a penalty of Rs. 10,000 under Rule 23, modifying the order to that extent. Since the revocation of cancellation was left intact and only ancillary dues and penalty were added, the outcome is neutral (partly in favour of each side).

BackgroundThe respondent buys fabric and pre-stitched garments (5%) and chemicals and packing materials (12–18%), and supplies finished apparel at 5% after bleaching, dyeing, printing, stitching, branding and packing. Its inverted duty refunds of Rs. 34,47,623 (March 2024) and Rs. 7,86,037 (February 2024) were rejected on the ground that input and output fall under the same HSN. The First Appellate Authority allowed them, and Revenue appealed, also alleging non-verification of capital-goods invoices, GSTR-2B mismatches, export ITC and annual (rather than period-wise) computation.Final VerdictThe Tribunal held that the concept of “manufacture” is no longer relevant under GST, since the levy under Section 9(1) is on supply, so refund eligibility does not depend on whether the claimant is a trader or a manufacturer. Para 3 of Circular 135/05/2020-GST, by its very heading, deals with accumulation due to a reduction in the GST rate, and para 3.2 applies only where the same goods attract different rates at different points of time; it has no application where there is no rate reduction. Following the Madras High Court in Vindhya Spinning Mills (14.07.2026), it held that Section 54(3)(ii) draws no distinction between principal and other inputs, so where higher-taxed chemicals and packing materials cause the accumulation, refund cannot be denied because one input shares the output’s rate or HSN. Computation had been period-specific under Rule 89(5), and the verification objections had already been examined by both lower authorities and were not rebutted by any evidence. Revenue’s appeals were dismissed.

BackgroundThe proceedings arose from a GST investigation concerning allegations of issuance of invoices without actual supply of goods, wrongful availment or passing on of Input Tax Credit and allied contraventions under the CGST Act. The investigation involved search proceedings and reliance by the Department on statements, electronic material and handwritten records. The Petitioners disputed the allegations and contended that the material relied upon did not independently establish their involvement in the alleged transactions.SCNs were issued under Section 122 proposing penalties under various provisions of Section 122. The Petitioners challenged the consequential adjudication orders on several grounds, including lack of jurisdiction of the officer issuing the SCNs, non-supply of relied-upon documents, denial of effective personal hearing and cross-examination, reliance on untested statements/electronic material, multiplication of penalties under different clauses of Section 122(1), and alleged inconsistencies in findings arising from the same investigation.Court ObservationThe Court held that Section 122(1) predicates liability upon a person being a “taxable person”, whereas Section 122(1A) is differently worded and operates upon “any person” in the specified circumstances. However, whether a particular person satisfies the statutory description and the precise role attributed to that person are intertwined with the factual material. The Court therefore left the question of applicability of Section 122(1) to a person who is not a taxable person open, as the issue is pending before the Supreme Court.Regarding the competence of the officer issuing the SCN, the Court observed that the expression “proper officer” under Section 2(91) is function-specific and that merely being an officer of central tax does not automatically make an officer the proper officer for every statutory function. At the same time, the Court noted that Notification Nos. 02/2017 and 14/2017 had to be considered along with Sections 3 and 5 of the CGST Act.The Court was unable to hold that absence of a specific assignment under Section 2(91), by itself, rendered the concerned central tax officer legally without authority. Notification No.14/2017 invested DGGI officers with powers corresponding to officers of the relevant rank, while Notification No.02/2017 assigned specified functions. Therefore, the question of competence could not be determined merely by relying upon the subsequent Circular dated 27.10.2025.The Court further observed that the objection regarding officer competence was not a patent or self-evident absence of jurisdiction warranting interference under Article 226. It involved interpretation of the statutory scheme, notifications, the subsequent Circular and the relationship between proceedings under Sections 73/74 and consequential penalties under Section 122. These issues could be examined by the statutory Appellate Authority under Section 107.The Court also found that the remaining challenges—relating to replies, relied-upon documents, personal hearing, cross-examination, evidentiary material, multiplication of penalties, clubbing of financial years and alleged inconsistent findings—required detailed examination of the underlying record and factual position of the respective noticees.Importantly, the Court held that the amended pre-deposit requirement under Section 107(6), effective from 01.10.2025, would not apply to appeals arising from SCNs issued before that date. Such appeals would be governed by Section 107(6) as it stood on the date on which the respective adjudicatory proceedings commenced.Final VerdictThe High Court disposed of the writ petitions on the ground that an efficacious statutory remedy was available under Section 107 of the CGST Act. The Court declined to exercise its extraordinary jurisdiction under Article 226 and permitted the Petitioners to pursue statutory appeals. The Appellate Authority was directed to examine all grounds, including the issues left open by the judgment, independently and uninfluenced by the observations made by the High Court.The Court specifically directed that appeals arising from SCNs issued before 01.10.2025 would be governed by the Section 107(6) pre-deposit provision applicable on the respective dates of issuance of the SCNs and could not be rejected merely because the Orders-in-Original were passed after 01.10.2025. The Petitioners were also permitted to seek exclusion of the period during which the writ petitions remained pending for limitation purposes.Cases Referred by CourtGaurav Jain & Anr. v. Joint Commissioner (Appeals-II), CGST Delhi Zone & Anr. — 2026:DHC:6124-DB.Considered on the applicability of the amended Section 107(6) pre-deposit requirement.Mukesh Kumar Garg v. Union of India & Ors. — SLP(C) No.18178/2025.The issue concerning applicability of Section 122(1) to a person who is not a “taxable person” was pending before the Supreme Court.Arun Kumar Jain v. Additional Commissioner, CGST, Delhi West & Ors. — 2026:DHC:6609-DB.Considered regarding applicability of Section 122(1) to a person who is not a taxable person.Devender Singh v. Additional Commissioner, CGST, Delhi West — 2025:DHC:9881-DB.Considered on the competence of the Additional Commissioner/officer to issue SCNs under Section 122.Sunil Chauhan, Proprietor of Shree Chem India v. Principal Commissioner of CGST, Delhi North & Ors. — 2026:DHC:5477-DB.Considered regarding the relationship between proceedings under Sections 73/74 and consequential penalties under Section 122.Alokadei Holdings Pvt. Ltd. v. Commissioner of Central Tax — W.P. No.4426/2026.Considered on the competence of the officer and the relationship between the statutory adjudication and Section 122 penalty proceedings.Patanjali Ayurved Ltd. v. Union of India & Ors. — [2025] 99 GSTL 7 (Allahabad).Considered on whether consequential Section 122 penalty forms part of the adjudicatory exercise under Sections 73/74; the Court noted that the decision was under challenge before the Supreme Court.Assistant Commissioner of State Tax & Ors. v. Commercial Steel Limited — (2022) 16 SCC 447.Referred to on the principles governing exercise of writ jurisdiction where an alternative statutory remedy exists.Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh & Ors. — 1953 SCC OnLine SC 33.Referred to in the context of the contention concerning the substantive/vested nature of the right of appeal and the applicable pre-deposit requirement.Amit Manilal Haria & Ors. v. Joint Commissioner, CGST & Central Excise & Ors. — W.P. No.5001/2025 (Bombay High Court).Referred to concerning the contention against retrospective application of Section 122(1A).Paramvir Singh Saini v. Baljit Singh & Ors. — SLP(Crl.) No.3543/2020.Referred to in relation to the safeguards concerning statements recorded under Section 70 of the CGST Act.  

BackgroundThe petitioners were proprietors of registered firms dealing in steel and scrap materials. They had purchased aluminium scrap from certain supplier firms. The authorities subsequently conducted raids at the premises of the suppliers and arrested their proprietors. Thereafter, summons were issued to the petitioners under Section 70 of the CGST Act, requiring them to appear and produce supporting documents concerning the purchases. The petitioners apprehended arrest and approached the Court after their applications for anticipatory bail before the Sessions Court were dismissed.The prosecution alleged that the suppliers had issued concocted invoices without actual supply of goods and that the petitioners had availed ITC on the basis of such invoices, with the tax amounts allegedly being encashed through hawala transactions. The petitioners, on the other hand, maintained that they had paid the invoice value and GST through banking transactions, had periodically filed their returns and were willing to produce documents such as e-way bills, transport records, weighbridge receipts and stock/sale records to establish actual receipt of goods.Court ObservationThe Court observed that ITC cannot ordinarily be denied to a purchaser merely because the supplier's registration is subsequently cancelled or the supplier ceases to exist after the transaction. Where the supplier was registered and active at the time of the transaction, the purchaser had paid the invoice value and GST through banking channels and had filed returns, recovery would ordinarily be against the defaulting supplier unless fraud and collusion are proved or exceptional circumstances exist.The Court further held that actual receipt of goods can be established through documentary evidence such as e-way bills, transport vehicle receipts, weighbridge receipts and stock and sale records. In a genuine transaction, where the purchaser has paid the invoice value and GST and regularly filed returns, custodial interrogation would normally not be necessary merely to verify receipt of goods, unless there is prima facie material showing collusion with the supplier.The Court emphasised that arrest under Section 69 read with Section 132 cannot be based merely on suspicion. The Commissioner must have a belief supported by material and evidence satisfying the statutory conditions. The Court also noted that, for the purpose of Section 132, the supplier is the principal offender in the circumstances considered in the case.The Court also considered the petitioners' cooperation, absence of similar antecedents, payment through banking channels and undertaking to produce documents. It relied upon the principle that where an accused has joined investigation, is cooperating and is not likely to abscond, custodial interrogation should be avoided.Final VerdictThe High Court allowed all three petitions and granted anticipatory bail. The respondents/authorities were directed to release the petitioners in the event of their arrest in connection with the proceedings under Section 132(1) of the CGST Act, subject to specified conditions.The petitioners were directed to appear before the authorities on 10.08.2026 and could be taken into custody for interrogation if necessary, but were to be released on the same day after interrogation, subject to execution of a ₹5 lakh personal bond with two sureties of the like amount. They were also required to cooperate with the investigation, avoid influencing witnesses, keep their mobile numbers operational, provide their location through Google Maps, surrender their passports and not leave India without permission.Cases Referred by the CourtCaseCourt Radhika Agarwal v. Union of IndiaSupreme Court of India Akram Pasha v. Senior Intelligence Officer, DGGIHigh Court of Karnataka Tarun Jain v. Directorate General of GST Intelligence (DGGI)High Court of Delhi Siddharam Satlingappa Mhetre v. State of Maharashtra & Ors.Supreme Court of India Shailesh Rajpal v. CommissionerHigh Court of Madhya Pradesh GST Intelligence Directorate v. Chaman GoelHigh Court of Delhi  The Court distinguished Shailesh Rajpal and Chaman Goel because those cases involved different factual circumstances concerning the suppliers and tax/ITC allegations, whereas the present case concerned purchasers who claimed payment of invoice value and GST through banking channels and were willing to establish actual receipt of goods.The Court particularly relied upon Radhika Agarwal, Akram Pasha, Tarun Jain and Siddharam Satlingappa Mhetre while assessing the legality and necessity of arrest/custodial interrogation.