BackgroundThe petitioner was arrested on 31.10.2025 by GST Intelligence as the alleged mastermind of a fake billing racket involving fraudulent availment and passing on of Input Tax Credit, with GST evasion stated to exceed Rs. 5 crore (an offence treated as cognizable and non-bailable). He was remanded to judicial custody by the CJM, Meerut on 01.11.2025. Having first filed and withdrawn a Criminal Misc. Writ Petition on 08.05.2026, he then moved this habeas corpus petition seeking his release and quashing of the remand order, contending that the mandatory safeguards governing arrest were violated.FactsThe arrest memo dated 31.10.2025 did not annex the grounds of arrest, and there was no contemporaneous acknowledgment that the grounds were furnished as an annexure at the time of service. The grounds of arrest carried no Document Identification Number (DIN), which the Department's own circulars treat as rendering the document as never issued. Intimation to the petitioner's wife, Mrs. Parul Goel, was not served at the time of arrest — the arrest memo did not bear her signature, and she received the intimation only by post on 08.11.2025; even that intimation did not set out the grounds of arrest. The grounds also failed to disclose any necessity for arrest or custodial interrogation, merely reciting the amount involved and the "mastermind" label. No place of arrest was recorded in the arrest memo, and the "Jama-Talasi" memo was left blank as to what was recovered, with only a signature taken without endorsement of receipt. The petitioner argued parity with co-accused Hari Shankar Sharma, whose habeas corpus petition (HC WP No. 369 of 2026) had been allowed on identical infirmities. The Department contended that the grounds were part of the arrest memo, sharing the same DIN, and that remand was passed after due application of mind.Court's Observations (verbatim)"After hearing the rival submissions and considering averments made in the counter affidavit… we find that there is no mention of any annexure of 'grounds of arrest' in the 'arrest memo'. The 'grounds of arrest' has been separately filed in the counter affidavit with endorsement of the petitioner that he has received the same… However, in the present case, no DIN is mentioned on the grounds of arrest, nor it has been shown to be annexed with the arrest memo.""There is no place of arrest mentioned in the arrest memo issued by the CGST official while arresting the petitioner, which is in clear violation of the principles laid down by the Apex Court in the case of D.K. Basu… It does not bears any recital to the effect that the 'grounds of arrest' have been supplied to the petitioner as an annexure to the 'memo of arrest'.""Remand Magistrate has not considered anything and has only mentioned that there are allegations against the petitioner… The Remand Magistrate has not considered whether the 'grounds of arrest' were served on the petitioner by the respondents or not and has passed the order in most casual manner… once it is found that the remand order has been passed mechanically and without application of mind[,] [t]he habeas corpus writ petition becomes maintainable…"Final VerdictThe remand order dated 01.11.2025, and the detention and arrest of the petitioner, were held illegal and quashed. The petition was allowed and the petitioner ordered to be released forthwith, leaving it open to the respondents to proceed afresh in accordance with law. Cases Referred by the CourtRadhika Agarwal v. Union of India, (2025) 6 SCC 545Vihaan Kumar v. State of Haryana & Anr., 2025 SCC OnLine SC 269Arnesh Kumar v. State of BiharSatendra Kumar Antil v. Central Bureau of Investigation, 2026 SCC OnLine SC 162D.K. Basu v. State of West Bengal, 1997 SCC (Cri) 92Mihir Rajesh Shah v. State of Maharashtra, (2026) 1 SCC 500Gautam Navlakha v. NIA, AIR Online 2021 SC 246Pagariya Auto Private Limited vs. Union of India & Others 

BACKGROUNDThe petitioner, an individual employee, was subjected to imposition of penalty by the Revenue authorities under the GST Act. The petitioner challenged this imposition by way of a writ petition before the Bombay High Court, Nagpur Bench. The petitioner relied upon a binding precedent already settled by the Bombay High Court and confirmed by the Supreme Court, wherein an identical issue — of fastening GST penalty liability on an employee of a company under Section 122(1-A) and Section 137 of the CGST Act — had been conclusively decided in favour of the employee. CRUCIAL FACTSThe petitioner submitted before the Court that the issue raised in the present writ petition is squarely covered by the judgment of the Bombay High Court in Shantanu Sanjay Hundekari vs. Union of India, which was subsequently confirmed by the Supreme Court in Union of India vs. Shantanu Sanjay Hundekari. In that precedent case, the Revenue had sought recovery of a massive demand from a person who was merely an employee of the company. The Bombay High Court had quashed the show cause notice against the employee holding that the basic jurisdictional requirements for invoking Section 74 of the CGST Act to invoke Section 122(1-A) and Section 137 against the petitioner-employee were not attracted. The Supreme Court, on appeal by Revenue, confirmed the Bombay High Court's ruling and recorded that the employee could not have been fastened with the company's liability. Counsel for the respondents in the present case sought time to seek instructions on the applicability of the said Supreme Court ruling. COURT OBSERVATIONS (Verbatim — Crucial)Bombay HC in Shantanu Hundekari (as reproduced and relied upon by the present Court):"For the aforesaid reasons, it is clear from the relevant contents of the show cause notice that the basic jurisdictional requirements/ingredients, are nor attracted for issuance of the show cause notice under Section 74 of the CGST Act so as to inter alia invoke Section 122(1-A) and Section 137 against the petitioner. Even otherwise, it is ill-conceivable to read and recognize into the provisions of Section 122 and Section 137, of the CGST Act any principle of vicarious liability being attracted. There could be none. Thus, Respondent no. 3 clearly lacks jurisdiction to adjudicate the show cause notice in its applicability to the petitioner. Thus qua the petitioner, the impugned show cause notice is rendered bad and illegal, deserving it to be quashed and set aside.""The foregoing discussion would also lead us to conclude that it is highly unconscionable and disproportionate for the concerned officer of the Revenue to demand from the petitioner an amount of Rs.3731 crores, which in fact is clearly alleged to be the liability of Maersk, as the contents of the show cause notice itself would demonstrate. The petitioner would not be incorrect in contending that the purpose of issuing the show cause notice to the petitioner who is merely an employee, was designed to threaten and pressurize the petitioner."Supreme Court in Union of India vs. Shantanu Sanjay Hundekari (as reproduced and relied upon by the present Court):"The issue before the High Court was one relating to the interpretation of Section 122(1-A) and Section 137 of the GST Act.""The High Court after assigning cogent reasons took the view that the respondent-herein was merely an employee of the Company and he could not have been fastened with the liability of Rs.3731 Crore."Present Court's Order:"We have gone through the said observations of the Hon'ble Apex Court.""In the meantime, no coercive action shall be taken by the Respondents to recover the amount towards the penalty till filing of the reply." FINAL VERDICTThe Court granted an interim stay on all coercive recovery action for penalty against the petitioner-employee. The matter is listed after Summer Vacation for further hearing. The Revenue counsel has been directed to seek instructions in view of the binding Supreme Court ruling.👍 THUMBS UP (In Favour of Assessee — Interim Protection Granted) 

BACKGROUNDThe Petitioner, D.P. Jain & Co. Infrastructure Pvt. Ltd., is engaged in construction of National and State Highways. The Petitioner executed three Corporate Guarantees in favour of State Bank of India and Bank of Maharashtra against term loans sanctioned to its subsidiary/group companies for highway projects in Tamil Nadu and Gujarat under NHAI HAM/TOT models. All three guarantee deeds specifically contained a clause that the Petitioner (guarantor) has not received and shall not receive any security, fee, commission, or any other consideration from the borrower for providing the guarantee. The guarantees were executed on 03.11.2020, 28.12.2021 and 08.08.2022 — all prior to 26.10.2023.The DGGI, Coimbatore Zonal Unit (Respondent No. 2) issued a Summons dated 20.07.2023 alleging non-payment of GST on corporate guarantees. Subsequently, the Ministry of Finance issued Circular No. 204/16/2023 dated 27.10.2023 declaring corporate guarantee as a taxable supply of service even without consideration. Rule 28 of CGST Rules was amended by inserting Sub-Rule (2) vide Notification No. 52/2023-CT dated 26.10.2023 (further amended retrospectively by Notification No. 12/2024-CT dated 10.07.2024), prescribing deemed valuation at 1% per annum of the guarantee amount. A Show Cause Notice No. 02/2025-GST dated 28.01.2025 was issued demanding GST on the corporate guarantees. State tax authorities (Respondent No. 5) had already conducted a detailed investigation for FY 2017-18 to 2022-23 and had not levied any GST on the corporate guarantees after examining all books and records. COURT OBSERVATIONS"It is nobody's case that Petitioner is doing the business of providing corporate guarantee on a regular basis. The corporate guarantee that was entered into by Petitioner is only for the limited purpose of securing the loans to its subsidiaries. Corporate guarantees are issued in order to safeguard the financial health of their associate enterprises and to provide it support... Corporate guarantee is actually an in-house guarantee and is not issued to customers generally." (Para 52)"Admittedly, all three corporate guarantees in the present case, wherein specific clause is 'the corporate guarantor hereby declares and agrees that the corporate guarantor has not received and shall not receive any security, fee, commission or any other consideration from the borrower for giving this deed so long as any monies remain due and payable by the borrower to the lender under the common loan agreement and the other finance documents'. This clause itself shows that, the supply was not for consideration." (Para 63)"Now the issue is covered under the judgment of the Hon'ble Apex Court in the case of Commissioner of CGST & Central Excise Vs. Edelweiss Financial Services Ltd., (supra), wherein in specific words the Hon'ble Apex Court has observed that, issuance of corporate guarantee to group companies without any consideration would not fall within the ambit of taxable service. Therefore, there is a substance in the contention of the learned Counsel for the Petitioner that execution of corporate guarantee is in the nature of contingent contract which becomes enforceable only at the instance of the bank/financial institution in the event of a default. There was no flow of consideration for the rendering of services. Therefore, taxability does not arise." (Para 68)"Thus, executing a corporate guarantee to its subsidiary is not in the nature of supply and supply of service taxable under Section 9 of the CGST Act, 2017." (Para 70)"In the light of the well settled legal position the impugned challenge made before us declaring Sub-Rule 2 of Rule 28 be declared as ultravires is not sustainable. There could be a valid reason administratively, economically etc., which goes in the decision making process before such Rule is amended." (Para 79) FINAL VERDICTThe Writ Petition was partly allowed. The Show Cause Notice No. 02/2025-GST dated 28.01.2025 and the Summons dated 20.07.2023 issued by DGGI were quashed and set aside. However, the prayers to declare the GST Circulars and Sub-Rule 28(2) as ultra vires were rejected.

BackgroundPursuant to an order of the NCLT dated 30 August 2018, Vodafone Mobile Services Ltd. and Vodafone India Limited merged with Idea Cellular Limited, resulting in the petitioner being the merged entity. The fact of the merger was intimated to the GST authorities at the time of amendment of the GST registration. Before the merger, one of the businesses of the amalgamating company was its tower business, which was transferred as a going concern on a slump-sale basis. The petitioner contended that the transfer of the entire business was not a supply in the course or furtherance of business and therefore was not declared in GST returns.Between March and July 2022, the DGGI sought documents from the petitioner. Thereafter, summons under Section 70 of the CGST Act were issued on 7 February 2024, followed by a show-cause notice dated 1 August 2024 demanding ₹363 crores under Section 74, along with penalty, on the ground that transfer of a going concern was an exempt supply and that ITC had been wrongly availed. Detailed replies were filed, but the impugned order dated 29 January 2025 was passed without considering the submissions concerning the merger.2. Court ObservationThe Court noted that the merger pursuant to the NCLT order was undisputed and that the GST authorities had been informed of the merger. The Court accepted the principle laid down in Principal Commissioner of Income Tax, New Delhi v. Maruti Suzuki India Ltd. that once an amalgamating entity ceases to exist pursuant to an approved scheme of amalgamation, proceedings initiated against that non-existent entity are void ab initio.The Court specifically examined Section 87 of the CGST Act and held that its provisions operate in relation to the intervening period between the effective date of merger and the date of the merger order, where transactions between the amalgamating companies have to be accounted for. Section 87 does not confer authority upon the Department to issue a show-cause notice against a non-existent entity after the merger. Post-merger, the amalgamating entity has no legal status and proceedings cannot be initiated against it.The Court therefore held that the ingredients of Section 87 could not be invoked to continue the proceedings contemplated by the show-cause notice. Since the show-cause notice itself was issued without jurisdiction, the proceedings were vitiated and void ab initio.3. Final VerdictThe Bombay High Court held that Section 87 of the CGST Act could not be invoked to continue the proceedings against the non-existent amalgamating entity. The show-cause notice dated 1 August 2024, having been issued without jurisdiction, and the proceedings arising from it, were held to be void ab initio.Accordingly, the Court held that the petition succeeded and was allowed in terms of prayer clause (a), thereby quashing the impugned order dated 29 January 2025.4. Cases Referred by CourtCaseCourtDate / CitationPrincipal Commissioner of Income Tax, New Delhi v. Maruti Suzuki India Ltd.Supreme Court of India[2019] 416 ITR 613; specific order date not stated in the PDFReliance Industries Limited v. P. L. RoongtaHigh Court of Bombay[2025] 479 ITR 770; specific order date not stated in the PDFHCL Infosystems Ltd. v. Commissioner of State Tax and AnotherHigh Court of Delhi2024 SCC OnLine Del 8287; specific order date not stated in the PDFThe Court relied particularly on Maruti Suzuki India Ltd. for the principle that proceedings initiated against an entity that had ceased to exist following amalgamation are void ab initio, and on Reliance Industries Ltd. v. P. L. Roongta for applying that principle to proceedings against a non-existent amalgamating entity.The Court also found support in HCL Infosystems Ltd. v. Commissioner of State Tax and Another, which interpreted Section 87 as preserving the tax treatment of transactions during the relevant period but not as authorising proceedings or an assessment against a non-existent amalgamating company.  

BackgroundSumukha Ventures, a partnership firm based in Bengaluru, was subjected to proceedings initiated by both the audit authority and the enforcement authority under GST. The Deputy Commissioner of Commercial Taxes (Audit)-3.7 issued a Show Cause Notice dated 30.09.2025 (Form GST DRC-01, Reference No. ZD290925221988K). Thereafter, an Order-in-Original (Annexure-B) was passed by the same officer who had conducted the audit proceedings. The petitioner filed a Writ Petition under Articles 226 and 227 of the Constitution of India before the High Court of Karnataka challenging both the Show Cause Notice and the Order-in-Original. Court Observations (Verbatim)"It is submitted that such action is impermissible and being in violation of principles of natural justice, insofar as the authority while conducting audit has expressed its opinion and findings are recorded at one stage. It is submitted that once again if the same officer were to conduct the assessment proceedings, the authority would be guided by the findings made in the audit report.""Taking note that this identical question is often raised by assessees, it would be appropriate that this aspect has the benefit of adjudication by the appropriate authority. By keeping open all contentions raised, the matter is remitted to respondent No.2.""The petitioner to take their stand before respondent No.2, regarding the aspect of jurisdiction as raised in the present petition. Upon such objection being raised, it is open for the authority to obtain necessary orders on the administrative side from the authority which assigns i.e., the Joint Commissioner of Commercial Taxes (Administration) - respondent No.1.""Taking note of the nature of objection raised, the authority to record a finding of their aspect of jurisdiction as per the procedure referred to above and only thereafter, consider the proceedings on merits.""Needless to state, no steps to be taken on merits till finding is recorded in terms of the observations made." Final VerdictThe Order-in-Original (Annexure-B) was set aside and the matter was remitted to Respondent No. 2 (Deputy Commissioner) to first decide the question of jurisdiction — specifically whether the same officer who conducted the audit can also pass the adjudication order — before proceeding on merits. The petition was disposed of accordingly. Citations / Circulars ReferredReferenceDetailsCircular No. 31/05/2018-GSTDated 09.02.2018 (Annexure-AB) — referred by Petitioner regarding impermissibility of same officer conducting audit and adjudicationCircular No. 169/01/2022-GSTDated 12.03.2022 (Annexure-AC) — referred by Petitioner on same issue