BackgroundAuto parts supplied under two e-invoices were intercepted on 18.04.2022 without an e-way bill. MOV-07 was issued the same day and the goods were released on bank guarantee, but the MOV-09 order confirming penalty of Rs. 1,38,706 was passed only on 04.06.2022. The First Appellate Authority upheld the penalty. Before the Tribunal the appellant raised limitation under Section 129(3); the department objected that the ground was new and caused no prejudice.Final VerdictThe Tribunal rejected the department’s objection, holding that the dates of MOV-07 and MOV-09 were undeniable facts on record, noted by the First Appellate Authority itself, so the limitation plea was not a new ground. On merits, it held that the use of “shall” in Section 129(3), both for issuing notice within seven days and for passing the order within seven days of service, shows that the timelines are mandatory; a fiscal statute is strictly construed, and the absence of a stated consequence does not make them directory, following Mohd Hazzak Lohar (J&K & Ladakh HC), Allcargo Logistics and Khatu Enterprises (Guj HC), Deepam Roadways (Mad HC), Pawan Carrying Corporation (Pat HC) and K.P. Sugandh (Ori HC). It also found no mens rea, since the e-invoices auto-populated GSTR-1 and tax was paid in the April 2022 return. Holding that MOV-09 issued 47 days after MOV-07 is illegal and without jurisdiction, the Tribunal set aside the Order-in-Appeal, allowed the appeal with consequential relief and directed immediate release of the bank guarantee.
SIDDHI VINAYAK AUTOMOBILES v. COMMISSIONER OF KERALA STATE GST, THIRUVANANTHAPURAM 14-08-2026
BackgroundAuto parts supplied under two e-invoices were intercepted on 18.04.2022 without an e-way bill. MOV-07 was issued the same day and the goods were released on bank guarantee, but the MOV-09 order confirming penalty of Rs. 1,38,706 was passed only on 04.06.2022. The First Appellate Authority upheld the penalty. Before the Tribunal the appellant raised limitation under Section 129(3); the department objected that the ground was new and caused no prejudice.Final VerdictThe Tribunal rejected the department’s objection, holding that the dates of MOV-07 and MOV-09 were undeniable facts on record, noted by the First Appellate Authority itself, so the limitation plea was not a new ground. On merits, it held that the use of “shall” in Section 129(3), both for issuing notice within seven days and for passing the order within seven days of service, shows that the timelines are mandatory; a fiscal statute is strictly construed, and the absence of a stated consequence does not make them directory, following Mohd Hazzak Lohar (J&K & Ladakh HC), Allcargo Logistics and Khatu Enterprises (Guj HC), Deepam Roadways (Mad HC), Pawan Carrying Corporation (Pat HC) and K.P. Sugandh (Ori HC). It also found no mens rea, since the e-invoices auto-populated GSTR-1 and tax was paid in the April 2022 return. Holding that MOV-09 issued 47 days after MOV-07 is illegal and without jurisdiction, the Tribunal set aside the Order-in-Appeal, allowed the appeal with consequential relief and directed immediate release of the bank guarantee.
BackgroundThe refund application was initially rejected by the Adjudicating Authority on 16.12.2019. An appeal against that rejection was allowed on 08.10.2020 because the order had been passed without granting an opportunity of hearing, and the matter was remanded for fresh adjudication. After a fresh notice and reply, the refund claim was again rejected by order dated 03.10.2022.Against the fresh rejection, a rectification application under Section 161 of the GST Act was filed on 02.01.2023, within the prescribed period of 90 days. The rectification application was rejected by a reasoned order dated 14.09.2023. Thereafter, an appeal was filed on 11.01.2024 challenging both the original order and the rectification order. The Appellate Authority rejected the appeal solely on limitation by calculating the limitation period from the original order dated 03.10.2022.Court ObservationThe Court held that the filing of the rectification application under Section 161 within the prescribed statutory period was a vital aspect directly affecting calculation of limitation under Section 107. Since the rectification application was duly considered and decided by a reasoned order dated 14.09.2023, the Appellate Authority was required to consider the limitation period from that date rather than mechanically calculating it from the original adjudication order dated 03.10.2022.The Court further observed that if, after calculating limitation from the date of the rectification order, the appeal was still found to be barred by limitation, the Appellate Authority could reject it on that ground. However, it was not permissible to reject the appeal by calculating limitation from the original adjudication order where a rectification application had been filed within the prescribed period and had subsequently been decided by the Adjudicating Authority.Final VerdictThe group of petitions succeeded. The High Court quashed and set aside the impugned orders of the Appellate Authority which had rejected the appeals on limitation.The matters were remanded to the Appellate Authority to decide the appeals afresh on merits and in accordance with law, after providing an opportunity of hearing, within 12 weeks from the date of receipt of the judgment. The Rule was made absolute.Case Referred by CourtNew Kailash Suppliers v. State of Gujarat & Ors.Gujarat High Court — 29.01.2026Special Civil Application No. 9540 of 2025
KANAN INTERNATIONAL PVT. LTD. & ANR. v. UNION OF INDIA & ORS. 13-08-2026
BackgroundThe refund application was initially rejected by the Adjudicating Authority on 16.12.2019. An appeal against that rejection was allowed on 08.10.2020 because the order had been passed without granting an opportunity of hearing, and the matter was remanded for fresh adjudication. After a fresh notice and reply, the refund claim was again rejected by order dated 03.10.2022.Against the fresh rejection, a rectification application under Section 161 of the GST Act was filed on 02.01.2023, within the prescribed period of 90 days. The rectification application was rejected by a reasoned order dated 14.09.2023. Thereafter, an appeal was filed on 11.01.2024 challenging both the original order and the rectification order. The Appellate Authority rejected the appeal solely on limitation by calculating the limitation period from the original order dated 03.10.2022.Court ObservationThe Court held that the filing of the rectification application under Section 161 within the prescribed statutory period was a vital aspect directly affecting calculation of limitation under Section 107. Since the rectification application was duly considered and decided by a reasoned order dated 14.09.2023, the Appellate Authority was required to consider the limitation period from that date rather than mechanically calculating it from the original adjudication order dated 03.10.2022.The Court further observed that if, after calculating limitation from the date of the rectification order, the appeal was still found to be barred by limitation, the Appellate Authority could reject it on that ground. However, it was not permissible to reject the appeal by calculating limitation from the original adjudication order where a rectification application had been filed within the prescribed period and had subsequently been decided by the Adjudicating Authority.Final VerdictThe group of petitions succeeded. The High Court quashed and set aside the impugned orders of the Appellate Authority which had rejected the appeals on limitation.The matters were remanded to the Appellate Authority to decide the appeals afresh on merits and in accordance with law, after providing an opportunity of hearing, within 12 weeks from the date of receipt of the judgment. The Rule was made absolute.Case Referred by CourtNew Kailash Suppliers v. State of Gujarat & Ors.Gujarat High Court — 29.01.2026Special Civil Application No. 9540 of 2025
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.
BackgroundThe respondent exported bitumen and steel bars and claimed refunds of accumulated ITC of Rs. 11,41,828 (January 2025) and Rs. 27,65,697 (February 2025). The refunds were rejected because toll data showed the supplier’s vehicles never crossed West Bengal, and because its supplier, KS Metals, had bought from two dealers whose registrations were cancelled ab initio. The Appellate Authority allowed the refunds, and Revenue appealed, adding new grounds (Customs letters, a DGGI probe of a group unit, and bitumen licensing).Final VerdictThe Tribunal noted that tax payment, verification of RFD-01, the exports and bank realisation were all undisputed. The goods moved under a “bill-to ship-to” model to LCS Jogbani, and no provision of GST law requires goods to start from the supplier’s registered place, nor are toll-plaza receipts a mandatory condition for ITC (Raghuvansh Agro Farms, All HC). The respondent had satisfied Section 16(2)(a)–(d) through invoices, e-way bills, bilty, shipping bills, EGM, a transporter’s certificate and banking records, none of which Revenue disputed. Its direct supplier was validly registered, and a recipient cannot be denied refund for irregularities of second-line suppliers with whom it has no nexus. The new grounds were outside the SCNs and unsupported by any document, and could not be entertained in view of Rule 45(1) of the GSTAT (Procedure) Rules, 2025 and Rule 112(1) of the CGST Rules. Revenue’s appeals were dismissed and the Orders-in-Appeal upheld.
PR. COMMISSIONER, CGST & CX, SILIGURI COMMISSIONERATE v. AGARWALA’S BITUMEX PRIVATE LIMITED 08-08-2026
BackgroundThe respondent exported bitumen and steel bars and claimed refunds of accumulated ITC of Rs. 11,41,828 (January 2025) and Rs. 27,65,697 (February 2025). The refunds were rejected because toll data showed the supplier’s vehicles never crossed West Bengal, and because its supplier, KS Metals, had bought from two dealers whose registrations were cancelled ab initio. The Appellate Authority allowed the refunds, and Revenue appealed, adding new grounds (Customs letters, a DGGI probe of a group unit, and bitumen licensing).Final VerdictThe Tribunal noted that tax payment, verification of RFD-01, the exports and bank realisation were all undisputed. The goods moved under a “bill-to ship-to” model to LCS Jogbani, and no provision of GST law requires goods to start from the supplier’s registered place, nor are toll-plaza receipts a mandatory condition for ITC (Raghuvansh Agro Farms, All HC). The respondent had satisfied Section 16(2)(a)–(d) through invoices, e-way bills, bilty, shipping bills, EGM, a transporter’s certificate and banking records, none of which Revenue disputed. Its direct supplier was validly registered, and a recipient cannot be denied refund for irregularities of second-line suppliers with whom it has no nexus. The new grounds were outside the SCNs and unsupported by any document, and could not be entertained in view of Rule 45(1) of the GSTAT (Procedure) Rules, 2025 and Rule 112(1) of the CGST Rules. Revenue’s appeals were dismissed and the Orders-in-Appeal upheld.
BackgroundThe respondent, a manufacturer of electrical apparatus, also sold MEIS duty credit scrips (exempt from 13.10.2017). A Section 74 SCN required reversal of proportionate ITC of Rs. 74,75,604 under Section 17(2) and Rules 42/43 for FY 2017-18 to 2019-20, with interest and equal penalty, and this was confirmed. The First Appellate Authority set the demand aside, treating Notification 14/2022 (which excludes the value of scrips from exempt supplies) as clarificatory and beneficial, and so retrospective. Revenue appealed, and the respondent objected that the appeal was below the Rs. 20 lakh limit in Circular 207/1/2024-GST.Final VerdictThe Tribunal held that CBIC circulars do not bind the Tribunal, but on the circular’s own terms the appeal was maintainable, because the composite amount exceeded the limit and the issue was interpretational. On merits, Notification 14/2022 commences on its publication and the rule-maker, though empowered under Section 164(3), chose not to give it retrospective effect; the insertion of clause (d) is not clarificatory or curative but confers a fresh benefit prospectively from 05.07.2022, and ITC being a concession cannot be claimed retrospectively as a vested right (Sedco Forex, Sree Sankaracharya University). The appellate authority’s contrary view was therefore wrong. However, since the respondent filed all returns, disclosed the scrip sales and acted on a bona fide view known to both sides, no fraud, wilful misstatement or suppression was established and Section 74(1) could not be invoked (Anand Nishikawa; CBIC Instruction 05/2023-GST). Applying Section 75(2), the proper officer was directed to re-determine the liability as if under Section 73 after a hearing, and the appeals were disposed of accordingly.
THE COMMISSIONER, CGST & CX, KOLKATA NORTH COMMISSIONERATE v. POWER TECH GLOBAL PRIVATE LIMITED 05-08-2026
BackgroundThe respondent, a manufacturer of electrical apparatus, also sold MEIS duty credit scrips (exempt from 13.10.2017). A Section 74 SCN required reversal of proportionate ITC of Rs. 74,75,604 under Section 17(2) and Rules 42/43 for FY 2017-18 to 2019-20, with interest and equal penalty, and this was confirmed. The First Appellate Authority set the demand aside, treating Notification 14/2022 (which excludes the value of scrips from exempt supplies) as clarificatory and beneficial, and so retrospective. Revenue appealed, and the respondent objected that the appeal was below the Rs. 20 lakh limit in Circular 207/1/2024-GST.Final VerdictThe Tribunal held that CBIC circulars do not bind the Tribunal, but on the circular’s own terms the appeal was maintainable, because the composite amount exceeded the limit and the issue was interpretational. On merits, Notification 14/2022 commences on its publication and the rule-maker, though empowered under Section 164(3), chose not to give it retrospective effect; the insertion of clause (d) is not clarificatory or curative but confers a fresh benefit prospectively from 05.07.2022, and ITC being a concession cannot be claimed retrospectively as a vested right (Sedco Forex, Sree Sankaracharya University). The appellate authority’s contrary view was therefore wrong. However, since the respondent filed all returns, disclosed the scrip sales and acted on a bona fide view known to both sides, no fraud, wilful misstatement or suppression was established and Section 74(1) could not be invoked (Anand Nishikawa; CBIC Instruction 05/2023-GST). Applying Section 75(2), the proper officer was directed to re-determine the liability as if under Section 73 after a hearing, and the appeals were disposed of accordingly.
BackgroundAn SCN dated 25.06.2025 under Section 122(1A) proposed penalties on the petitioners as alleged key persons behind fictitious entities passing on ITC. The Order-in-Original dated 16.12.2025 imposed penalties aggregating Rs.346,55,18,856/- on each petitioner with no tax demand, so the substituted proviso would require about Rs.34.66 crore each as pre-deposit. The Appellate Authority (09.03.2026) declined waiver for want of power. The petitioners contended that the right of appeal vests on commencement of the lis (the SCN date), when no percentage-based pre-deposit existed for such orders (the earlier proviso covered only Section 129(3) orders at 25%). The Department argued that the right arose only on the adjudication order and that the words “no appeal shall be filed” make the filing date decisive.Final VerdictRelying on Hoosein Kasam Dada, Garikapati Veeraya and Videocon International, the Court held that the right of appeal is substantive, attaches to the lis at its commencement, and cannot be subjected to a more onerous condition except by express enactment or necessary intendment; here the lis commenced no later than 25.06.2025 and the substituted proviso diminishes the appellate package. Section 129 of the Finance Act, 2025 contains no such intention or transitional clause, the prohibitory words only fix the stage of compliance, and Hardeodas Jagannath, Surinder Singh Deswal and Chandra Sekhar Jha were distinguished. The Court agreed that the Appellate Authority has no power to waive an applicable pre-deposit, but that question did not arise.Held: the substituted proviso does not govern appeals arising from proceedings initiated by the SCN dated 25.06.2025; the appellate remedy is governed by Section 107(6) as it stood on that date, and no 10% penalty pre-deposit is required (subject to Section 107(6)(a) for admitted amounts). The period from 20.03.2026 to the judgment was excluded for limitation, appeals were to be filed within four weeks with no coercive steps meanwhile, and the constitutional challenge was left open. The writ petition was allowed.
Gaurav Jain & Anr. v. Joint Commissioner (Appeals-II), CGST Delhi Zone & Anr. 31-07-2026
BackgroundAn SCN dated 25.06.2025 under Section 122(1A) proposed penalties on the petitioners as alleged key persons behind fictitious entities passing on ITC. The Order-in-Original dated 16.12.2025 imposed penalties aggregating Rs.346,55,18,856/- on each petitioner with no tax demand, so the substituted proviso would require about Rs.34.66 crore each as pre-deposit. The Appellate Authority (09.03.2026) declined waiver for want of power. The petitioners contended that the right of appeal vests on commencement of the lis (the SCN date), when no percentage-based pre-deposit existed for such orders (the earlier proviso covered only Section 129(3) orders at 25%). The Department argued that the right arose only on the adjudication order and that the words “no appeal shall be filed” make the filing date decisive.Final VerdictRelying on Hoosein Kasam Dada, Garikapati Veeraya and Videocon International, the Court held that the right of appeal is substantive, attaches to the lis at its commencement, and cannot be subjected to a more onerous condition except by express enactment or necessary intendment; here the lis commenced no later than 25.06.2025 and the substituted proviso diminishes the appellate package. Section 129 of the Finance Act, 2025 contains no such intention or transitional clause, the prohibitory words only fix the stage of compliance, and Hardeodas Jagannath, Surinder Singh Deswal and Chandra Sekhar Jha were distinguished. The Court agreed that the Appellate Authority has no power to waive an applicable pre-deposit, but that question did not arise.Held: the substituted proviso does not govern appeals arising from proceedings initiated by the SCN dated 25.06.2025; the appellate remedy is governed by Section 107(6) as it stood on that date, and no 10% penalty pre-deposit is required (subject to Section 107(6)(a) for admitted amounts). The period from 20.03.2026 to the judgment was excluded for limitation, appeals were to be filed within four weeks with no coercive steps meanwhile, and the constitutional challenge was left open. The writ petition was allowed.
BackgroundThe appellant, which operates the TataCliQ e-commerce platform, transitioned credit of about Rs. 32.81 crore through TRAN-1: CENVAT credit of Rs. 31,83,93,390 under Sections 140(1)/(5), KKC of Rs. 74,67,109 (later reversed under protest) and VAT credit of Rs. 22,14,479 under Section 140(6). By SCN dated 18.01.2022 under Section 74, the department alleged that eligibility had not been proved through invoices and registers; the demand with interest and 100% penalty was confirmed by both lower authorities.Final VerdictThe Tribunal noted the admitted position that no proceedings were ever initiated under the erstwhile law questioning the credit when it was availed. Reading Sections 142(6)(a) and 174(2)(e) and following Usha Martin and SAIL (Jhar HC) and Kunjal Synergies (Cal HC), it held that the admissibility of credit availed under the erstwhile law can be questioned only under that law; officers under the CGST Act have no jurisdiction to reassess it through Section 74. Clause (i) of the proviso to Section 140(1) bars transition only of credit not admissible as ITC under the GST law and does not permit reassessment of pre-GST credits; moreover, a closing balance cannot be correlated to specific invoices. On KKC, following Godrej & Boyce (Bom HC) and Circular 87/06/2019-GST, Explanation 3 cannot operate without notification of Explanations 1 and 2, and the pending SLP, with no stay, did not affect this. The VAT credit was denied without any finding, and Section 74 was unjustified since the basis was the appellant’s own TRAN-1 disclosures. The transitional credit was held eligible in full, and the appeal was allowed with consequential relief.d
TATA UNISTORE LIMITED v. COMMISSIONER, CGST & CENTRAL EXCISE, NAVI MUMBAI COMMISSIONERATE 31-07-2026
BackgroundThe appellant, which operates the TataCliQ e-commerce platform, transitioned credit of about Rs. 32.81 crore through TRAN-1: CENVAT credit of Rs. 31,83,93,390 under Sections 140(1)/(5), KKC of Rs. 74,67,109 (later reversed under protest) and VAT credit of Rs. 22,14,479 under Section 140(6). By SCN dated 18.01.2022 under Section 74, the department alleged that eligibility had not been proved through invoices and registers; the demand with interest and 100% penalty was confirmed by both lower authorities.Final VerdictThe Tribunal noted the admitted position that no proceedings were ever initiated under the erstwhile law questioning the credit when it was availed. Reading Sections 142(6)(a) and 174(2)(e) and following Usha Martin and SAIL (Jhar HC) and Kunjal Synergies (Cal HC), it held that the admissibility of credit availed under the erstwhile law can be questioned only under that law; officers under the CGST Act have no jurisdiction to reassess it through Section 74. Clause (i) of the proviso to Section 140(1) bars transition only of credit not admissible as ITC under the GST law and does not permit reassessment of pre-GST credits; moreover, a closing balance cannot be correlated to specific invoices. On KKC, following Godrej & Boyce (Bom HC) and Circular 87/06/2019-GST, Explanation 3 cannot operate without notification of Explanations 1 and 2, and the pending SLP, with no stay, did not affect this. The VAT credit was denied without any finding, and Section 74 was unjustified since the basis was the appellant’s own TRAN-1 disclosures. The transitional credit was held eligible in full, and the appeal was allowed with consequential relief.d
BackgroundThe batch of writ petitions arose from appeals that had been rejected as time-barred after the respective taxpayers had first pursued rectification proceedings under Section 161. The petitioners contended that they had bona fide pursued the rectification remedy and that the period spent in those proceedings should be excluded while computing the three-month limitation under Section 107. The Revenue opposed this, arguing that GST is a self-contained code, that limitation under Section 107 begins from communication of the original order, and that filing a rectification petition does not stop or suspend the limitation period.In the case of E2E Supply Chain Solutions Limited, the rectification petition was primarily based on the non-consideration of credit notes that had been submitted before the order-in-original. The petitioner had also relied upon the earlier decision of the Madras High Court in SPK and Co. while pursuing the matter. On examination, the Court found that there was a genuine basis for pursuing rectification and that the requirements of good faith and due diligence were satisfied.Court ObservationThe Limitation Act, as such, does not apply to quasi-judicial authorities, including GST appellate authorities. However, the principles underlying Section 14 can apply to GST appellate proceedings.GST legislation does not expressly or impliedly exclude the principles underlying Section 14. The fact that Section 107 permits condonation only for a further period of one month does not mean that Section 14's principle of exclusion of time is also excluded.A rectification petition rejected because there is “no error apparent” can, in an appropriate case, constitute a bona fide mistaken remedy falling within “other cause of a like nature” under the principles of Section 14. Such rejection is not necessarily a full-fledged adjudication of the larger dispute.However, exclusion is not automatic merely because a rectification petition was filed. The proceedings must concern the same matter and parties, and the earlier proceeding must have been pursued with due diligence and in good faith. Good faith requires the Court to broadly examine whether there was some basis for filing the rectification petition, so that the provision is not abused merely to extend the appeal period.Where the requirements are satisfied, the entire period from filing of the rectification petition until its rejection is liable to be excluded. Thus, the taxpayer gets the prescribed three-month appeal period after such exclusion, subject to the further one-month period available under Section 107(4).The Court clarified that limitation under Section 107 ordinarily starts from communication of the specific order being appealed against. Therefore, an appeal against the original order runs from communication of that original order; filing rectification does not itself replace that starting point.Final VerdictIn the case of E2E Supply Chain Solutions Limited, the Court held that the petitioner had established good faith and due diligence because the rectification petition concerned non-consideration of credit notes submitted before the original order. Accordingly, the petitioner was entitled to exclusion of the time spent in the rectification proceedings.The Court ultimately set aside the impugned appellate order and directed the appellate authority to receive and dispose of the appeal on merits. W.P. No.2629 of 2026 was specifically included among the seven writ petitions allowed for this purpose.Case Referred by CourtThe Court considered, among others, the following authorities in arriving at its conclusions:M.P. Steel Corporation v. Commissioner of Central ExciseConsolidated Engineering Enterprises v. Principal SecretaryCCE v. Hongo India (P) Ltd..Commissioner of Sales Tax, U.P. v. Parson Tools and Plants.
BackgroundThe batch of writ petitions arose from appeals that had been rejected as time-barred after the respective taxpayers had first pursued rectification proceedings under Section 161. The petitioners contended that they had bona fide pursued the rectification remedy and that the period spent in those proceedings should be excluded while computing the three-month limitation under Section 107. The Revenue opposed this, arguing that GST is a self-contained code, that limitation under Section 107 begins from communication of the original order, and that filing a rectification petition does not stop or suspend the limitation period.In the case of E2E Supply Chain Solutions Limited, the rectification petition was primarily based on the non-consideration of credit notes that had been submitted before the order-in-original. The petitioner had also relied upon the earlier decision of the Madras High Court in SPK and Co. while pursuing the matter. On examination, the Court found that there was a genuine basis for pursuing rectification and that the requirements of good faith and due diligence were satisfied.Court ObservationThe Limitation Act, as such, does not apply to quasi-judicial authorities, including GST appellate authorities. However, the principles underlying Section 14 can apply to GST appellate proceedings.GST legislation does not expressly or impliedly exclude the principles underlying Section 14. The fact that Section 107 permits condonation only for a further period of one month does not mean that Section 14's principle of exclusion of time is also excluded.A rectification petition rejected because there is “no error apparent” can, in an appropriate case, constitute a bona fide mistaken remedy falling within “other cause of a like nature” under the principles of Section 14. Such rejection is not necessarily a full-fledged adjudication of the larger dispute.However, exclusion is not automatic merely because a rectification petition was filed. The proceedings must concern the same matter and parties, and the earlier proceeding must have been pursued with due diligence and in good faith. Good faith requires the Court to broadly examine whether there was some basis for filing the rectification petition, so that the provision is not abused merely to extend the appeal period.Where the requirements are satisfied, the entire period from filing of the rectification petition until its rejection is liable to be excluded. Thus, the taxpayer gets the prescribed three-month appeal period after such exclusion, subject to the further one-month period available under Section 107(4).The Court clarified that limitation under Section 107 ordinarily starts from communication of the specific order being appealed against. Therefore, an appeal against the original order runs from communication of that original order; filing rectification does not itself replace that starting point.Final VerdictIn the case of E2E Supply Chain Solutions Limited, the Court held that the petitioner had established good faith and due diligence because the rectification petition concerned non-consideration of credit notes submitted before the original order. Accordingly, the petitioner was entitled to exclusion of the time spent in the rectification proceedings.The Court ultimately set aside the impugned appellate order and directed the appellate authority to receive and dispose of the appeal on merits. W.P. No.2629 of 2026 was specifically included among the seven writ petitions allowed for this purpose.Case Referred by CourtThe Court considered, among others, the following authorities in arriving at its conclusions:M.P. Steel Corporation v. Commissioner of Central ExciseConsolidated Engineering Enterprises v. Principal SecretaryCCE v. Hongo India (P) Ltd..Commissioner of Sales Tax, U.P. v. Parson Tools and Plants.
BACKGROUNDThe appeal arose from an order imposing penalties under Sections 122 and 125 read with Section 20 of the IGST Act. The Registry raised the issue of statutory pre-deposit for admission of the appeal.The SCN, original adjudication order and appellate order had all been issued before 01.10.2025, when the Finance Act, 2025 amendment introducing the additional pre-deposit for penalty-only orders came into force.COURT OBSERVATIONThe Tribunal noted that the amended proviso to Section 112(8) became effective only from 01.10.2025 and did not indicate retrospective application. Since the impugned appellate order was issued before the amendment, the Tribunal held that the amended pre-deposit condition could not be imposed on the appeal.FINAL VERDICTThe Tribunal held that no pre-deposit was required under Section 112 for the present appeal. It clarified that the order would not prejudice the merits and that, if at the final hearing the Tribunal concluded that the amended pre-deposit provision was applicable, the appellant would have to comply with that requirement. Notice was issued and the matter was directed to be listed after four weeks.CASE REFERRED BY COURTBarjinder Singh Kohli v. Assistant Commissioner & Others — Calcutta High Court — 03.11.2025. The Tribunal held that the decision squarely covered the issue of pre-deposit in a penalty-only matter where the proceedings commenced before 01.10.2025.
BACKGROUNDThe appeal arose from an order imposing penalties under Sections 122 and 125 read with Section 20 of the IGST Act. The Registry raised the issue of statutory pre-deposit for admission of the appeal.The SCN, original adjudication order and appellate order had all been issued before 01.10.2025, when the Finance Act, 2025 amendment introducing the additional pre-deposit for penalty-only orders came into force.COURT OBSERVATIONThe Tribunal noted that the amended proviso to Section 112(8) became effective only from 01.10.2025 and did not indicate retrospective application. Since the impugned appellate order was issued before the amendment, the Tribunal held that the amended pre-deposit condition could not be imposed on the appeal.FINAL VERDICTThe Tribunal held that no pre-deposit was required under Section 112 for the present appeal. It clarified that the order would not prejudice the merits and that, if at the final hearing the Tribunal concluded that the amended pre-deposit provision was applicable, the appellant would have to comply with that requirement. Notice was issued and the matter was directed to be listed after four weeks.CASE REFERRED BY COURTBarjinder Singh Kohli v. Assistant Commissioner & Others — Calcutta High Court — 03.11.2025. The Tribunal held that the decision squarely covered the issue of pre-deposit in a penalty-only matter where the proceedings commenced before 01.10.2025.
