GST Weekly Case Laws Newsletter | 31 August to 05 September 2026

In Karnataka Residential Educational Institutions Society v. Sweet Home Constructions and Anr., (2026) taxcode.in 1378 HC, the Karnataka High Court considered an appeal against a writ order directing reimbursement of differential GST claimed by a contractor on a hostel construction contract.

The Court noted that the tender was invited in 2017, the successful bid was accepted, and the agreement was executed on 28.02.2018, with no work done before 01.07.2017 when GST was introduced. It held that the Single Judge had allowed the writ petition only by relying on Sri Chandrashekaraiah and connected cases without examining these facts. On that basis, the Court rejected the contractor’s attempt to extend that precedent to a wholly post-GST contract. It further held that the dispute over reimbursement of GST paid under the contract was a contractual dispute between the parties and that the impugned order did not show any adjudication of such a dispute. The Court also noted that the controversy was not suitable for examination under Article 226.

The appeal was allowed and the writ order was set aside. The Court rejected the argument that an earlier appellate order in W.A. No.718/2025 precluded the employer from challenging reimbursement directions, explaining that the earlier order only clarified the employer-contractor character of the dispute. The Court left the parties free to pursue any substantive remedies available in law.

In Advance Engineering Farms and Equipments v. State of Assam and Ors., (2026) taxcode.in 1397 HC, the Gauhati High Court dealt with a challenge to a rectification order that rejected input tax credit and raised a demand against the purchasing dealer.

The Court found that the petitioner had purchased generators in 2017-18 from respondent No.4, paid CGST and SGST of Rs.72,000 each, and relied on the tax invoice-cum-delivery challan. The State’s stand was that ITC was denied because respondent No.4 had not filed returns, and respondent No.4 admitted receipt of the tax amount while also admitting non-filing of returns. Relying on National Plasto Moulding and the proposition accepted from On Quest Merchandising India Private Limited, the Court held that a bona fide purchasing dealer who has received a valid tax invoice and made payment cannot be denied ITC merely because the selling dealer defaulted in depositing or reporting tax. The Department’s remedy lies against the defaulting seller, not the purchaser, absent collusion.

The Court quashed the rectification order dated 10.04.2024 insofar as it demanded CGST and SGST from the petitioner. It left the authorities free to initiate recovery proceedings against respondent No.4 under the CGST and Assam GST Acts and disposed of the writ petition without costs.

In North East Petrochemicals v. Union of India and Othrs, (2026) taxcode.in 1396 HC, the Gauhati High Court considered a writ petition challenging an Order-in-Original confirming tax, interest, and penalty for the financial years 2018-19 to 2022-23.

The petitioner’s principal jurisdictional objection was that a consolidated show cause notice and a consolidated adjudication order covering multiple financial years were impermissible under the CGST Act, 2017. The Court rejected that premise by following its earlier decision in M/S Tata Projects Limited v. Union of India & Others, which had held that there is no bar to issuing a consolidated notice under Section 73 or Section 74, and no bar to passing a consolidated order for different financial years. Applying that ruling, the Court held that the Proper Officer had jurisdiction to issue and adjudicate the consolidated proceedings in the present case. It expressly clarified that it had not examined the merits of the tax demand.

The writ petition was not entertained on the jurisdictional challenge. The Court granted liberty to file an appeal under Section 107 within 30 days, directed that limitation not be insisted on if so filed, and continued earlier interim protection until the stay application was decided by the Appellate Authority. No costs were awarded.

In Hotel Red Fort and Anr. v. Union of India and Ors., (2026) taxcode.in 1395 HC, the Rajasthan High Court examined whether a show cause notice and Order-in-Original were validly served when they had merely been uploaded on the GST portal.

The petitioners said they had no formal service, no knowledge of the proceedings, and no chance to file a reply or seek a hearing until they were told to look at the “Additional Notices and Orders” tab on the portal. The respondents relied on Section 169 of the RGST Act and argued that portal upload was sufficient communication. The Court, however, held that the reply effectively amounted to an admission that the notice had been placed under the wrong tab or folder. On that footing, it concluded that the petitioners had no real occasion to notice the notice or gain knowledge of it, so there was no valid service within Section 169. Their absence therefore resulted in denial of personal hearing before the demand was confirmed.

The Court quashed both the show cause notice dated 01.08.2024 and the Order-in-Original dated 22.01.2025, while granting liberty to the respondents to issue a fresh notice and pass fresh orders after giving an opportunity of hearing in accordance with law. All pending applications were disposed of.

In Sanjana Enterprises v. Commercial Tax Officer and Ors., (2026) taxcode.in 1374 HC, the Karnataka High Court considered a challenge to an adjudication order dated 25.02.2025 confirming a GST demand.

The dispute arose from proceedings initiated on verification of transactions reflected on a third-party website and from an allegation that outward supplies to Grama Panchayats had not been declared in GSTR-3B. The adjudication order stated that the taxpayer’s response relied on invoices for stationery items, while the proceedings concerned building materials such as sand, soil, boulders, cement, jelly, gravel, bricks, iron and steel, pipes, and paint supplied under the MGNREGA scheme. The petitioner disowned the stationery invoices referred to in the order. The Court observed that there could be an error in the adjudication process because the materials and documents did not appear to correspond, and it considered it appropriate to give the petitioner another opportunity to place all relevant documents and additional grounds before the authority.

The adjudication order dated 25.02.2025 was quashed subject to conditions, and the proceedings were restored to the first respondent for reconsideration. The petitioner was permitted to file documents with a certified copy of the order by 20.08.2026, and the authority was directed to decide the matter by a reasoned order. The writ petition was allowed.

In Karnataka Residential Educational Institutions Society v. Sweet Home Constructions and Anr., (2026) taxcode.in 1372 HC, the Karnataka High Court considered a contractor’s claim for differential GST arising from works executed under a construction contract entered after 01.07.2017.

The Court noted that the Single Judge had allowed the writ petition by relying on an earlier VAT-to-GST transition decision without examining the parties’ rival contentions. It held that the earlier precedent was materially different, because that case involved work partly executed before and partly after GST rollout, whereas here both the agreement and the entire works were after 01.07.2017. The Court also noted that the contractor’s own pleadings showed the dispute turned on billing particulars, the rate structure applied in successive bills, and the contractual basis for claiming reimbursement. The employer seriously disputed liability under the agreement.

The appeal was allowed. The impugned order was set aside, and the Court held that the controversy was essentially contractual and not apt for adjudication under Article 226. It clarified that the contractor was free to pursue alternate remedies in accordance with law.

In M.Ashok Mootha v. Securities and Exchange Board of India and Anr., (2026) taxcode.in 1379 HC, the Madras High Court examined a writ petition challenging both a show cause notice and a recovery certificate issued by the regulatory authority.

The Court read the show cause notice as one proposing cancellation of registration, while the recovery certificate related independently to non-payment of turnover fees, interest and GST under the relevant securities legislation. On that basis, it held that the recovery certificate had nothing to do with the show cause notice and that no final cancellation order had yet been shown to exist. The Court therefore granted the petitioner 10 days to file a reply to the show cause notice, which the authority was directed to consider. As to the recovery certificate, the Court noted that the petitioner ought to have challenged the determination itself and that a statutory appeal was available before the Tribunal.

The writ petition was disposed of on those terms. Liberty was preserved for the petitioner to approach the appropriate Tribunal in relation to the recovery certificate, if maintainable in law, and the connected miscellaneous petitions were closed.

In Adinath Rice Mill and Anr. v. Union of India and Ors., (2026) taxcode.in 1404 HC, the Gujarat High Court considered whether Notification No. 53/2023-Central Tax dated 02.11.2023 could aid an appeal filed under Section 107 of the CGST Act.

The Court examined the GST Council background and held that the notification was intended to address appeals affected by limitation, including certain appeals already rejected and appeals that could be filed up to 31.01.2024. It rejected the Revenue’s restrictive reading that the notification applied only where an appeal had already been rejected before the notification issued. The Court reasoned that a taxpayer who filed an appeal on 28.12.2023 and satisfied the prescribed payment conditions could not be placed on a lower footing than those whose appeals had already been rejected but were later covered by the notification. The appellate authority had failed to consider the notification at all.

The writ petition succeeded. The impugned notice and order dated 11.06.2024 were quashed, and the matter was remanded to the appellate authority to decide the appeal on merits within twelve weeks.

In Raghuvir Developers and Builders v. Assistant Commissioner CGST and CE Division-II Surat, (2026) taxcode.in 1407 HC, the Gujarat High Court dealt with a GST demand arising from alleged barter supply of excavated soil in a construction project.

The show cause notice had proceeded on Rule 28(a) of the CGST Rules for valuing the supply, but the adjudicating authority later stated that Rule 28(a) had been incorrectly invoked and instead confirmed the demand under Rule 27(c) on a different valuation basis. The Court recorded that this shift was undisputed. It held that the petitioner had never been given an opportunity to meet the case under Rule 27(c), causing grave prejudice. The petitioner had also objected in its reply that Rule 28(a) was inapplicable and that the notice did not even allege supply to a related person.

The Court quashed both the impugned order and the show cause notice, while reserving liberty for the Revenue to initiate fresh proceedings by issuing a new notice.

In Advik Enterprise v. Union of India and Ors., (2026) taxcode.in 1405 HC, the Gujarat High Court considered a challenge to seizure memos issued by the Directorate of Revenue Intelligence in relation to imported industrial oil.

The Court noted that an earlier judgment had already examined the issue arising from MRPL-tested samples of the declared product. The petitioner’s additional affidavit raised a fresh objection that the first sampling had not been conducted in the presence of a duly authorised representative, although it was fairly admitted that the same representative was present at the second sampling. The Court held that the dispute over presence at the first sampling was a disputed question of fact, not suitable for determination under Article 226. It also noted that the second MRPL report did not support the petitioner’s declaration of the goods as industrial oil and that the same parameters had already been considered in the earlier decision.

The Court declined to interfere and rejected the writ petition, leaving the seizure action undisturbed.

In Faiz Enterprise v. State Tax Officer Unit-67 Surat and Anr., (2026) taxcode.in 1406 HC, the Gujarat High Court considered a challenge to a GST cancellation and consequential appellate and revocation orders after the petitioner alleged that the adjudicating officer had relied on case law generated through artificial intelligence which either did not exist or had no bearing on the issue decided.

The Court took serious note of the officer’s affidavit tendering an unconditional apology, acknowledging use of AI, inexperience as a probationary officer, and citation of irrelevant or non-existent judgments. It also recorded departmental steps, including training and detailed instructions requiring AI only as an aid, independent verification from primary sources, consideration of taxpayer authorities, human oversight, and independent legal reasoning. The Court directed strict compliance with those instructions and observed that violation would amount to contempt.

Accepting the departmental stand that the impugned orders would be revised under Section 108 of the GST Act, the Court quashed the show cause notice, cancellation order, order rejecting revocation, and appellate order. It directed issuance of a fresh notice, full cooperation by the petitioner, and fresh adjudication by a reasoned order in accordance with law, while leaving all rights and contentions open.

In N. R. Builders v. Commissioner of commercial taxes Karnataka, (2026) taxcode.in 104 GSTAT, the GSTAT Bengaluru Bench dealt with a demand under Section 73 based on mismatch between ITC claimed in GSTR-3B and ITC reflected in GSTR-2A for April 2018 to March 2019, which had been confirmed by the proper officer and the first appellate authority.

The Tribunal held that the authorities had not examined the appellant’s explanation that part of the disputed credit related to FY 2017–18 invoices availed in FY 2018–19 within the time allowed under Section 16(4). It noted that GSTR-2A was only a facilitation tool, not a statutory bar, and that CBIC Circular No. 183/15/2022-GST required verification of such claims rather than summary disallowance. The Tribunal also found a clear breach of natural justice because the show cause notice recorded the personal hearing as “NA” and no hearing had been granted before confirmation.

The Tribunal set aside both orders and remanded the matter for de novo adjudication. The proper officer was directed to undertake invoice-wise verification, consider the reconciliation with FY 2017–18 GSTR-2A, supplier GSTR-1, books and returns, grant a proper personal hearing, and pass a fresh speaking order within twelve weeks. Interest and penalty were held to follow the fresh determination of tax liability.

In Council For The Indian School Certificate Examinations v. CGST Delhi East Commissioner ITO and Ors., (2026) taxcode.in 105 GSTAT, the GSTAT Delhi Bench considered taxability of affiliation, annual registration, late registration and related fees charged by the educational society under a consolidated notice covering July 2017 to November 2023.

The Tribunal held that a common notice spanning multiple periods was not invalid merely because it invoked both Sections 73 and 74, since the Act used “for any period” and “for such periods” and did not prohibit consolidation where no prejudice was shown. On the merits, it held that the appellant’s fee-based, continuous and organised activities constituted “supply” by a society under Sections 7 and 2(17). Applying strict construction of exemptions, it ruled that Entry 66(b)(iv) covered only services directly relating to admission to or conduct of examination, not affiliation or preparatory registration functions. It upheld Circular No. 234/28/2024 as binding on departmental authorities, though it accepted cum-tax valuation under Rule 35 where tax had not been separately collected.

The Tribunal set aside invocation of Section 74 for July 2017 to August 2018 for want of fraud, wilful misstatement or suppression with intent to evade tax, and consequently removed tax, interest and penalty for that period. It upheld tax on affiliation charges from 18.06.2021 onwards and on annual and late registration charges for September 2018 to November 2023, subject to cum-tax recalculation, while also sustaining limited penalties and interest on the confirmed demands.

In Chiluka Ramchandra Reddy v. Union of India and Ors., (2026) taxcode.in 1433 HC, the Telangana High Court examined whether a later order-in-original and recovery steps could stand when they related to the same 2016-17 and 2017-18 period that had already been the subject of earlier adjudication and appellate relief.

The Court noted that the appellate authority in the earlier round had found the petitioner’s works to Government departments exempt, accepted availability of SSI exemption, held the turnover within threshold, and concluded that no taxable service had been rendered and no statutory return was required. Despite that, the Department issued another show cause notice and confirmed a fresh demand relying on income-tax data and Form 26AS, treating the receipts as consideration for taxable services. The Court found the Department unable to justify how independent proceedings for the same period could be initiated after the earlier appellate outcome and refund.

The Court held that the impugned order-in-original could not be sustained in law and quashed it, along with the consequential garnishee notice. The writ petition was allowed, and no order as to costs was made.

In Sri Tanishq Garments v. Assistant Commissioner of Central Tax Musheerabad Division and Ors., (2026) taxcode.in 1432 HC, the Telangana High Court was asked to quash an order-in-original, restrain recovery including bank attachment, and address issues concerning a rectification request and the validity of a time-limit notification.

During hearing, however, the petitioner sought liberty to pursue the statutory appeal against the order-in-original, and the Court accordingly refrained from entering into the merits of the disputes. It permitted the petitioner to file an appeal within two weeks with statutory pre-deposit and an application for condonation of delay, and left it open to the petitioner to raise all factual and legal grounds before the appellate authority. The Court also indicated that the appellate forum should consider delay in light of the circumstances mentioned before it.

To preserve the remedy, the Court directed that no coercive steps be taken pursuant to the garnishee notice during the two-week period allowed for filing the appeal. The writ petition was disposed of on that basis, with no order as to costs.

In K.V. Ranga Kiran Works Contractor v. State of Telangana and Ors., (2026) taxcode.in 1431 HC, the petitioner challenged an order passed under Section 73 of the Telangana Goods and Services Tax Act, 2017, contending that the show cause notice had not been notified on the GST common portal and that it had no knowledge of the proceedings until officials visited its premises.

After hearing both sides, the Court noted that the petitioner itself sought liberty to file an appeal and therefore declined to comment on the merits of the rival submissions. The State maintained that the notice had been uploaded on the GST portal, reminder notices had also been uploaded, and SMS and email intimation had been sent, but the Court confined itself to the appellate route once the petitioner opted for that course.

The writ petition was disposed of with liberty to prefer an appeal within two weeks, along with the statutory pre-deposit and an application for condonation of delay. The appellate authority was directed to consider the delay in light of the circumstances placed before the Court and, if satisfied, decide the appeal on merits in accordance with law. No order as to costs was made.

In Karan Kochhar v. Inspector (Anti-Evasion) of CGST Commissionerate, (2026) taxcode.in 1429 HC, the petitioner sought regular bail in a case alleging offences under Section 132 of the CGST Act and Section 20 of the IGST Act. He disputed the legality of the arrest process, denied the alleged fake-invoice ITC fraud, and relied on his custody and lack of antecedents.

The Court reviewed a series of authorities on bail, including principles that arrest must rest on reasons supported by material, that severity alone does not justify continued detention, that documentary evidence and the absence of tampering risk weigh in favour of bail, and that the right to speedy trial remains central. Applying those principles, it found that the petitioner had already spent about four months in custody, had clean antecedents, faced a maximum punishment of five years, and that the evidence was documentary and already substantially collected.

Holding that continued detention would serve no useful purpose and that there was nothing to show likely tampering, witness influence, or non-cooperation, the Court allowed the petition. The petitioner was ordered to be released on bail on furnishing personal and surety bonds, subject to conditions against inducement or threat, disclosure of address and changes, and travel restrictions without permission. The Court also stated that the observations were confined to bail and would not affect the merits.

In Nizamudheen v. Deputy Commissioner Coorg District and Ors., (2026) taxcode.in 1409 HC, the petitioner challenged the deduction of 18% GST from compensation awarded for compulsory acquisition of land and structure for widening the Mysuru-Madikeri Highway, and sought reimbursement of the deducted amount with interest.

The Court held that immovable property, including buildings attached to land, cannot be treated as goods, and that compulsory acquisition in exercise of eminent domain is neither a supply of goods nor a supply of services. It rejected the respondents’ attempt to justify the deduction by referring generally to works contract or structural valuation, noting that they failed to point to any provision in the GST Act authorising levy on acquisition compensation.

The writ petition was allowed. The award notice was quashed insofar as it deducted GST, and the respondents were directed to refund Rs.29,34,252/- with interest at 15% per annum from the date of the award until payment. The Court further directed that the interest burden be recovered personally from respondent No.2 and awarded costs of Rs.50,000/- to the petitioner.

In Dayanand M.P. and Anr. v. Deputy Commissioner Coorg District and Ors., (2026) taxcode.in 1408 HC, the petitioners challenged the deduction of 18% GST from compensation paid for acquisition of their land and structure for widening the Mysuru-Madikeri Highway, contending that acquisition could not be treated as a sale of goods or provision of service.

The Court applied the same statutory analysis: immovable property includes structures attached to land, GST taxes supply of goods or services, and compulsory acquisition is an expropriation under statutory power rather than a consensual supply. It rejected the respondents’ reference to works contract or structure valuation because no specific GST provision was shown to authorise tax on acquisition compensation.

The Court quashed the award notice insofar as it deducted GST, and directed refund of Rs.26,30,320.16 with interest at 15% per annum from the date of the award until payment. It further ordered that the interest be recovered personally from respondent No.2 and awarded costs of Rs.50,000/- to the petitioners.

In Yashoda and Ors. v. Deputy Commissioner Coorg District and Ors., (2026) taxcode.in 1410 HC, the petitioners challenged deduction of Rs.7,49,946.20 as GST from compensation awarded for acquisition of land and buildings for highway widening, asserting that the transaction was not a supply of goods or services.

The Court held that, for GST purposes, compulsory acquisition of immovable property is not a taxable supply. It reiterated that immovable property includes structures attached to land and that the State’s exercise of eminent domain does not become a supply merely because compensation is assessed for land and buildings. The respondents again failed to identify any statutory provision authorising such deduction.

The award notice was quashed to the extent it deducted GST, and the respondents were directed to refund Rs.7,49,946.20 with interest at 15% per annum from the date of the award to payment. The Court ordered that the interest be recovered personally from respondent No.2 and directed payment of costs of Rs.50,000/- to the petitioners.

In GMV Interior Contractors v. Superintendent of Central Tax, (2026) taxcode.in 1412 HC, the petitioner challenged cancellation of its GST registration and rejection of its revocation request.

The Court held that Rule 23 of the Central Goods and Services Tax Rules required the respondent to elaborate the reasons for refusing revocation, rather than issuing a cryptic notice that merely referred to other reasons and called for documents. It also accepted that the petitioner had sought adjournment or rescheduling after service of the show cause notice, yet no effective opportunity was extended before the adverse decision was taken. The Court treated both defects as sufficient grounds for interference.

The writ petition was allowed. The show cause notice dated 28.04.2026, the cancellation order dated 13.02.2026, and the order rejecting revocation dated 11.05.2026 were quashed, while leaving it open to the authorities to proceed again if there was any infraction of the requirements.

In Addl. Commissioner of Income Tax Central Range -1 v. Nanda Feeds Pvt. Ltd., (2026) taxcode.in 1415 HC, the Revenue challenged the Single Judge’s decision setting aside penalty and demand notices issued under Section 271DA of the Income Tax Act on limitation grounds.

The Court noted the competing co-ordinate Bench views in K. Umesh Shetty and Ganesh Agarwal, but held that it was unnecessary to resolve that conflict because the admitted facts showed the proceedings were time-barred on either approach. It accepted that the assessment orders had been passed in March 2024 and that, even on the most favourable construction for the Revenue, the show cause notice issued on 12.12.2024 was beyond the permissible period. The Court therefore agreed that the action could not be sustained under Section 275(1)(c).

The writ appeals were dismissed. The penalty orders and demand notices dated 23.05.2025 and 26.05.2025 were not sustained.

In Atul Modi v. Directorate General of Goods and Service Tax Intelligence, (2026) taxcode.in 1416 HC, the petitioner sought renewal of his passport for ten years after a criminal prosecution under the CGST Act had led to earlier bail-related travel restrictions.

The Court observed that the petitioner was already bound by conditions requiring prior court permission before leaving India, and that additional safeguards had been imposed when the passport was earlier released. It held that those measures were sufficient to keep the petitioner under watch even if he held a valid passport, so the distinction between a three-year and a ten-year renewal was not material for protecting the proceedings. The Court also noted the petitioner’s family, residence, business, and immovable properties in India, which reduced the apprehension of absconding.

The petition was allowed. The impugned order dated 02.02.2026 was modified so that the passport would be renewed for the regular term of ten years, while all other conditions were left unchanged.

In Raj Kumar v. State (NCT of Delhi), (2026) taxcode.in 1417 HC, the applicant sought anticipatory bail in an FIR alleging cheating, forgery, and conspiracy in connection with fake GST firms.

The Court held that the material against the applicant was not limited to a co-accused’s disclosure statement. It relied on the status report’s technical investigation, including tracing of mobile numbers used for OTPs, linked email IDs, IP address data, and a recovery email tied to a mobile number registered in the applicant’s name. The Court treated the allegations of generating fake GST numbers, invoices, and e-way bills as serious, with wider economic consequences. It also accepted the State’s submission that the applicant had not joined investigation and that custodial interrogation was justified.

The anticipatory bail application was dismissed. The Court also took into account the applicant’s involvement in other financial fraud cases, which it said weighed against relief.

In Sathiyanarayanan R V v. State Tax officer Kodambakkam Assessment Circle, (2026) taxcode.in 1418 HC, the petitioner challenged GST assessment orders passed against a private limited company that had earlier been converted into an LLP.

The Court noted that the conversion certificate showed the company had become Symbion Technology LLP on 19.04.2023, while the impugned proceedings against the erstwhile company were initiated only in 2025. Relying on the principle stated in Maruti Suzuki, the Court held that proceedings initiated after the entity had ceased to exist could not be sustained. It distinguished the respondent’s reliance on Section 85 by explaining that a transfer of business is different, because in that situation both transferor and transferee continue to exist, whereas in conversion only the resulting entity survives.

The writ petitions were allowed and the assessment orders dated 12.12.2025 and 27.12.2025 were set aside. The Court left it open to the respondent to proceed against the LLP in accordance with law, with all contentions reserved.

In Karthikeya Authentic Andhra Restaurant, (2026) taxcode.in 1419 HC, the Madras High Court considered a writ petition challenging an original order and the rejection of a rectification application, in the context of Section 128A of the GST enactments and Rule 164.

The Court held that the phrase “subject to such conditions as may be prescribed” in Section 128A(1) is qualificatory, and that its placement after a comma does not make the prescribed conditions merely directory. It noted that deciding whether the requirements are mandatory or directory required examination of Rule 164 itself, and referred to its earlier decision in Incompressible Fluid Control System, which treated the amnesty scheme as time-bound and the filing period as an essential requirement. The Court therefore rejected the petitioner’s contention that Rule 164(6) was only directory. At the same time, it recorded that the original order had been passed ex parte and that the entire tax demand had already been discharged.

Although the legal challenge to Rule 164(6) failed, the Court found that the revenue interest had been protected and that justice warranted another opportunity. It set aside the impugned original order, remanded the matter to the first respondent for reconsideration after giving reasonable opportunity, and directed a fresh order within five months. The writ petition was disposed of accordingly, with no order as to costs.

In Star Blue Metal, (2026) taxcode.in 1420 HC, the Madras High Court dealt with writ petitions questioning appellate orders that had rejected the petitioner’s GST appeals as time barred.

The petitioner argued that the original orders were contradictory on whether supplies of Rs.9,12,200/- were taxable or exempt, and relied on earlier decisions to say that limitation under Section 107(1) should run from communication of the rectification order rather than the original order. The Court rejected that approach. It stated that Section 107(1) permits an appeal against a decision or order within three months from the date of communication of that order, and referred to its earlier decision in E2E Supply Chain Solutions Ltd., which had held that SPK and Co. did not engage with the language of Section 107 and was not good law. The Court also found that the rectification applications merely repeated the replies to the show-cause notices and did not furnish any basis for rectification.

On the facts, the appeals had been filed beyond the condonable period, and there was no infirmity in the appellate orders. The writ petitions were disposed of without interference, though the petitioner was left free to challenge the original orders in accordance with law. No costs were awarded, and the connected miscellaneous petitions were closed.

In Kaizen Cold Formed Steel Pvt. Ltd., (2026) taxcode.in 1421 HC, the Madras High Court examined the rejection of a waiver application under Section 128A of the GST enactments, relating to interest on belated payment of self-assessed taxes.

The Court recorded the respondents’ submission that the matter was covered by its earlier judgment in Incompressible Fluid Control System. Proceeding on that basis, it reiterated that Section 128A does not exclude an application relating to belated payment of self-assessed taxes, provided the waiver application is made pursuant to initiation of proceedings under Section 73. On the facts, the Court noted that Section 73 proceedings had been initiated on 21.09.2023, that the waiver application was filed on 29.03.2025, and that the full amount of tax appeared to have been paid before the notified date of 31.03.2025.

In light of that factual position and the earlier precedent, the Court held that the rejection of the waiver application was untenable. It set aside the impugned order and directed the respondents to reconsider the application in the light of Incompressible Fluid Control System. The writ petition was disposed of on those terms, with no order as to costs and the connected writ miscellaneous petition closed.

In Managing Director Tamil Nadu State Marketing Corporation Ltd. and Ors. v. K.R. Subramanian, (2026) taxcode.in 1422 HC, the Madras High Court considered an intra-court appeal arising from a writ petition concerning a penalty imposed on an employee for shortage of liquor stock, together with GST and interest.

The appellants argued that Section 7 of the Central Goods and Services Tax Act, 2017, read with paragraph 5(e) of Schedule II, permitted collection of GST on the penalty. The Court held that paragraph 5(e) concerns an agreement involving an obligation to refrain from an act, tolerate an act or situation, or do an act, and must be understood in the context of a supply of services. It found that the relationship in the case was employer and employee, not supplier and recipient, and that the penalty imposed for alleged stock shortage could not by itself be treated as a supply of service. The Court also held that the provision could not be invoked merely to collect GST on a penalty imposed in the course of employment.

Finding no error in the Single Judge’s order, the Court dismissed the intra-court appeal. It held that GST was not recoverable on that penalty basis and made no order as to costs.

In Mahalakshmi Traders, (2026) taxcode.in 1423 HC, the Madras High Court examined an assessment order passed under Section 73 of the Tamil Nadu Goods and Services Tax Act, 2017, which had been confirmed on the footing that the taxpayer had earlier paid amounts through DRC-03 after intimation in DRC-01A.

The petitioner contended that payment made during inspection or interception, even if voluntary and without prejudice, does not prevent a taxpayer from contesting the matter after a show-cause notice and filing a detailed reply. The Court accepted that tax liability must be determined through the statutory procedure under Sections 73, 74, or 74A, and held that once a show-cause notice is issued, the taxpayer remains entitled to raise all legal and factual objections. It further held that payment through DRC-03 upon DRC-01A does not, by itself, amount to waiver or abandonment of those pleas. The Court found the assessing officer’s reasoning unsustainable because the impugned order rested solely on the earlier payment, despite the reply and the recorded note that the inspection officer had made a mistake in calculating stock difference.

The assessment order dated 07.04.2026 was set aside and the matter was remanded for fresh consideration from the stage of personal hearing, with liberty to raise factual and legal grounds. The assessee was directed to appear and submit supporting materials, any bank account attachment was ordered to be raised, and the writ petition was disposed of with no costs.

In Atanu Mondal for the Commissioner CGST & CX v. Jay Technical Services, (2026) taxcode.in 106 GSTAT, the Tribunal considered a Revenue challenge to an appellate order that had reduced a GSTR-3B/GSTR-2A mismatch demand, sharply curtailed reverse-charge liability, and reclassified a large fake-invoice ITC demand from Section 74 to Section 73.

The Tribunal held that the first appellate authority could modify quantified tax under Section 75(8) and was not bound to remand. It upheld the mismatch and RCM reductions because the appellate authority had compared returns, ledgers and DRC-03 payments, found several items not taxable under RCM, and recorded no intention to evade. But on the Rs.43,44,046 ITC claim, the Tribunal found no proof of actual physical movement of goods, treated invoices and banking entries as insufficient under Section 155 and Ecom Gill, and accepted that the SCN contained foundational facts showing 13 non-existent suppliers. It also held that a consolidated SCN covering multiple years was permissible.

The Tribunal partly allowed the Revenue’s appeal, sustained the reduced mismatch demand of Rs.1,93,812 with interest and penalty under Section 73, sustained the reduced RCM demand of Rs.10,236 each under CGST and SGST under Section 73, and restored the adjudicating authority’s demand of Rs.43,44,046 with applicable interest and penalty under Section 74. It also directed expeditious disposal of any Section 128A application for the Section 73-confirmed demands.

In Mapaex Consumer Healthcare Pvt. Ltd. v. State of Gujarat and Ors., (2026) taxcode.in 1424 HC, the High Court examined the cancellation of a Gujarat GST registration that had been based solely on the petitioner’s nil turnover shown in GSTR-3B for several years, followed by rejection of revocation.

The Court held that nil turnover, by itself, did not mean business had ceased. Section 29 requires the proper officer to independently satisfy himself that one of the statutory grounds for cancellation exists, and that conclusion must rest on cogent and tangible evidence. The Court noted that the petitioner had produced material showing continuation of business and that the authority had not verified that material before cancelling registration merely because no reply was filed to the show-cause notice.

The writ petition was allowed. The Court quashed the cancellation and revocation orders, but reserved liberty to the authority to verify whether the petitioner’s business was in fact continuing and to proceed in accordance with law.

In Nageen Traders and Molding India Pvt. Ltd. v. State of U.P. and Ors., (2026) taxcode.in 1426 HC, the Court considered a challenge to a show-cause notice and consequential penalty order under Section 122(1)(ii) and Section 122(1)(vii) of the UPGST Act on the ground that the issuing officer lacked jurisdiction.

The Court relied on State circulars dated 11.12.2018 and 10.05.2022, which clarified that the proper officer for Section 122 proceedings would be the officer contemplated by Section 127 and that, in the relevant turnover band, the Deputy Commissioner had jurisdiction to issue the notice. It also noted that the petitioner had not objected at the notice stage, had participated on merits, and had challenged jurisdiction only after the adverse order, though the Court acknowledged that jurisdictional objections can generally be raised at any stage.

Finding no clear lack of jurisdiction and treating writ relief as discretionary, the Court relegated the petitioner to the statutory appellate remedy. It disposed of the petition with liberty to appeal and stated that the petitioner could seek the benefit of Section 14 of the Limitation Act for the period the writ had remained pending, subject to statutory requirements.

In NDN Constructions v. Chief Engineer (Civil) BSNL and Ors., (2026) taxcode.in 1427 HC, the Court dealt with petitions concerning release of admitted contractual dues for completed works, after earlier directions had already been issued to discharge the liability.

By the final hearing, the admitted principal amount had been released, but the petitioners complained that the GST component in the bills, though passed for release, had not been paid. The respondents stated that GST had been withheld only because proof of payment by the petitioners had not been shown, and that the amount would be released once such documents were produced. The petitioners responded that GST had already been deposited and were willing to produce supporting receipts.

The Court disposed of the petitions by permitting the petitioners to file proof of GST deposit within one week. It directed the respondents to verify that material and then release the withheld GST amount within two weeks thereafter, while reserving liberty for any further surviving grievance to be pursued in accordance with law.

In Zeneeda Information Technology Pvt. Ltd. v. Office of The Commissioner of State Tax, (2026) taxcode.in 107 GSTAT, the Tribunal considered a taxpayer’s challenge to confirmation of interest and penalty on alleged excess ITC under Section 73, after the taxpayer asserted that the entire excess credit had already been reversed before the show-cause notice.

The revenue itself admitted in cross-objection, and again before the Tribunal, that the exact excess ITC under CGST and SGST had been reversed in GSTR-3B for December 2020 before initiation of proceedings, and that interest had also been paid. The Tribunal proceeded on that admitted factual position and treated the taxpayer’s case as established. The first appellate authority’s reasoning, which had upheld interest and penalty on the footing that payment was not made within the Section 73 time-frame, was therefore not sustainable on the admitted record.

The Tribunal allowed the appeal on admission, set aside the appellate order, and directed the proper officer to issue an appropriation order, if necessary, within one month from communication of the decision. The matter was disposed of accordingly.

In Niranjan Das v. Poonam Choudhury and Ors., (2026) taxcode.in 110 GSTAT, the Tribunal considered an interim application in an appeal under section 112(1) of the OGST Act challenging recovery action taken while the appeal was pending.

The applicant said its GST liability for 2018–19 had already been fully discharged and that proceedings under section 74, confirming penalty and interest, were initiated without fraud, suppression, or wilful misstatement. It also stated that the earlier section 107 appeal had been rejected on limitation without consideration of the merits, and that recovery was being pursued from amounts receivable from works authorities, causing serious prejudice to its business. The Tribunal noted that the appeal before it was still under scrutiny and had not yet been admitted, so it would be premature to examine the substantive challenge to section 74 at the interim stage. It also recorded that the respondent confirmed full discharge of GST liability and did not oppose interim stay.

The Tribunal held that recovery should be stayed. It noted the statutory protection under section 112(9), the applicant’s apparent compliance with section 112(8), and the risk that continued recovery would defeat the purpose of the appeal and cause irreparable damage. By order under section 113 read with Rule 29, it stayed the operation of the section 107 rejection order until disposal of the Tribunal appeal and directed the respondent and other officers to desist from recovering the disputed demand in the meantime.

In Lux Industries Ltd. v. Commissioner State Tax and Ors., (2026) taxcode.in 112 GSTAT, the Tribunal considered 21 interlocutory applications seeking early hearing of 21 pending appeals under section 112(1) of the CGST Act, 2017.

The applicants submitted that the appeals concerned refund claims involving substantial amounts and that delay would prejudice their financial interests. The respondent had no objection to early hearing if the Tribunal considered it appropriate, while reserving its right to contest the appeals on merits. The Tribunal noted that each application was supported by affidavit and contained the information prescribed in GSTAT Form-01 under Rule 29 of the GSTAT (Procedure) Rules, 2025. It also noted the applicants’ case that the refund denial was legally untenable and that judicial decisions on the issue had been cited. Having considered the facts, submissions, and record, the Tribunal found that the applicants had made out a good case for priority hearing.

The Tribunal allowed the interlocutory applications and directed that all 21 appeals, numbered APL/140/KLK/2026 to APL/160/KLK/2026, be listed together after three weeks for hearing. The order turned on the combination of procedural compliance, the scale of the refund dispute, and the absence of objection from the respondent to an early hearing order.

In Lucknow Test House v. Shashi Bhushan Singh Additional Commissioner Grade -II State Tax Lucknow and Ors., (2026) taxcode.in 111 GSTAT, the Tribunal dealt with a second appeal arising from a section 73 proceeding concerning alleged excess input tax credit for April 2020 to March 2021.

The appellant’s case was that the alleged excess arose only from allocation or reporting of credit between IGST, CGST and SGST heads, not from any real excess over eligible entitlement. It argued that IGST credit could lawfully be utilised toward CGST and SGST liabilities, that the discrepancy was clerical or accounting in nature, and that no fraud, wilful misstatement, or suppression had been alleged. The Tribunal accepted that the short issue was whether the amount of Rs. 2,00,816 could be treated as excess availment when the appellant said equivalent credit was available under IGST. Relying on the reasoning in Rejimon Padickapparambil Alex, it treated the electronic credit ledger as a combined pool and held that total availability, not compartmental mismatch alone, was relevant.

The Tribunal held that the department had not established actual excess availment beyond the appellant’s aggregate entitlement. It found the dispute to be one of technical classification rather than substantive ineligibility, and held that the demand could not stand merely because credit was reflected under the wrong head. Interest and penalty also failed once the principal demand failed. The appeal was allowed, and the proper officer was directed to verify the availability of unclaimed IGST credit and drop the demand if the appellant had sufficient eligible credit under that head, with consequential relief to follow in accordance with law.

In Director General of Anti-Profiteering (DGAP) v. Sane Retails Pvt. Ltd., (2026) taxcode.in 109 GSTAT, the Tribunal examined whether the respondent had passed on the benefit of GST rate reduction from 28% to 18% on a television product under section 171 of the CGST Act, 2017.

The DGAP had investigated the complaint, computed profiteering, and later revised its figure after accepting credit notes for cancelled or returned transactions. The core dispute then became whether electronic gift vouchers credited to customers’ wallets constituted a valid mode of passing on the rate-cut benefit. The Tribunal found that the EGVs were credited without expiry, were not tied to a particular future purchase, and were usable on the platform without restriction. It held that section 171 requires the benefit to reach the consumer, but does not prescribe a single mandatory mode of transfer. The Tribunal also rejected the objection based on the system-generated description “Offers and cash back,” holding that substance, not nomenclature, controlled where the credits were traceable to specific transactions.

The Tribunal held that EGVs could validly pass on the benefit and that the respondent had substantially complied through credit notes and EGVs. However, it found that Rs. 10,241 could not be traced to any identifiable customer or invoice, so that amount was not shown to have been passed on and had to be deposited in the Central Consumer Welfare Fund with 18% interest. No penalty under section 171(3A) was imposed because the relevant period predated that provision. The matter was disposed of on that limited basis.

In Director General of Anti-Profiteering (DGAP) v. Vertex Homes Pvt. Ltd., (2026) taxcode.in 108 GSTAT, the Tribunal considered a section 171 complaint that the respondent had not passed on the benefit of additional input tax credit in its project “Vertex Panache.”

The DGAP’s original report had computed profiteering, but the respondent then produced a Chartered Accountant’s certificate and supporting records showing substantial escalation in the cost of major construction inputs such as RMC, sand, and bricks. On verification, the DGAP accepted the cost-escalation claim and revised the computation by deducting the verified increase in costs from the savings attributed to additional ITC, resulting in negative net savings and nil profiteering. The Tribunal noted that the respondent’s actual expenditure exceeded the budgeted cost by a significant margin and that the revised approach accorded with the principle recognised in Reckitt Benckiser that genuine commercial factors, including cost escalation, may be taken into account.

Accepting the DGAP’s clarification, the Tribunal held that the respondent had not contravened section 171. It found that the cost escalation was genuine, verifiable, and sufficient to offset the ITC-related savings, leaving no profiteering for determination. The order accepted the revised report, recorded that no contravention was made out, and disposed of the matter accordingly.

In Vijay Ghanshyam Gadiya v. Union of India and Anr., (2026) taxcode.in 57 SC, the Supreme Court considered a challenge to a customs penalty order that had been affirmed by the High Court, after the appellant alleged that the adjudicating authority had relied on judgments and articles generated through Artificial Intelligence.

The Court individually verified the cited material and found that some authorities were non-existent or carried fake citations, while others existed but did not support the propositions attributed to them, which the Court treated as AI hallucination. Referring to its earlier decision in Pooja Ramesh Singh v. Jammu & Kashmir Bank Ltd., the Court reiterated a zero-tolerance approach to the use, citation, or production of unverified AI-generated precedent material. It observed that AI may assist adjudication, but cannot replace it, and cautioned against entrusting AI with the role of decision-maker.

The Court held that the adjudicatory process was vitiated by reliance on dubious AI-generated material and that the penalty order could not be sustained. It set aside both the High Court order and the Order-in-Original, revived the proceedings before the customs authority for fresh adjudication, and directed that the matter be decided by an officer of the same rank other than the officer who passed the impugned order.

In Peekay Industries v. Commissioner of Commercial Taxes Karnataka, (2026) taxcode.in 113 GSTAT, the Tribunal examined a Section 73 demand arising from an alleged mismatch between ITC reflected in FORM GSTR-3B and FORM GSTR-2A for FY 2019-20.

The Tribunal found that the original scrutiny and show cause notices consistently proposed liability only under IGST, yet the final adjudication confirmed tax under CGST and SGST on the basis of a separate working that was not explained and was factually attributed to the appellant even though its reply dealt only with IGST reconciliation. It held that a mismatch can justify scrutiny, but not a final demand without proper verification of returns, books, invoices, ledger entries, and the appellant’s reconciliation. The Tribunal also held that Section 16(2)(aa) had no application to the relevant period, that Rule 36(4) had to be applied according to its actual phased operation, and that the circulars relied on by Revenue could not override the statute or be used outside their limited temporal scope.

The Tribunal set aside the adjudication and appellate orders and remanded the matter for fresh, reasoned decision confined to the original show cause notice, without enhancement of demand. It directed verification of the two conflicting computations, supplier compliance where necessary, and separate examination of the relevant periods, while holding that consequential interest and penalty would depend on the fresh determination.

In Pr. Commissioner CGST & CX Siliguri Commissionerate v. North Bengal Tea & Allied., (2026) taxcode.in 116 GSTAT, the Tribunal considered whether a tea business selling packaged tea could claim refund of accumulated ITC under Section 54(3)(ii) on the footing of inverted duty structure.

The Tribunal held that the statute permits refund where credit accumulates because the rate of tax on inputs is higher than the rate on output supplies, and that the legislature used the term “inputs” in the plural without excluding packing materials or distinguishing between principal and ancillary inputs. It treated packing materials, cartons, labels and containers as eligible inputs under Section 2(59), reinforced by the CBIC circular clarifying ITC on packing materials. The Revenue’s approach of comparing bulk tea purchases with packaged tea sales while ignoring higher-taxed packing materials was found to be factually unsound. The Tribunal further held that Circular No. 135/5/2020-GST concerned refund on account of reduction in GST rate on the same goods at different points in time, which was not the factual situation before it.

The appeal was dismissed. The Tribunal upheld the first appellate authority’s order and accepted that refund under Section 54(3)(ii) was available on the facts, with no basis to deny it merely because tea was also the commodity sold outwardly.

In Pr. Commissioner CGST & CX Siliguri Commissionerate v. Tea Linker, (2026) taxcode.in 115 GSTAT, the Tribunal addressed a Revenue challenge to a refund sanctioned under Section 54(3)(ii) in respect of packaged tea sold under a brand name.

The Tribunal reiterated that Section 54(3)(ii) allows refund where ITC accumulates because inputs are taxed higher than output supplies, and that the plural expression “inputs” covers more than one input without confining the inquiry to tea alone. It held that packing materials are goods used in the course of business, fall within the statutory definition of input, and are indispensable for marketing packaged tea. The Tribunal also relied on the Delhi High Court’s reasoning that a circular issued under Section 168(1) cannot add to or curtail the Act, and concluded that Circular No. 135/5/2020-GST applied only to reduction-in-rate cases involving the same goods at different times, not to this case where bulk tea and packaged tea were both taxed at 5%.

The Tribunal dismissed the Revenue’s appeal and upheld the refund sanction order as affirmed in appeal, holding that the respondent’s refund claim was not barred by the circular and that the packing-material ITC remained eligible for refund under the Act.

In Pr. Commissioner CGST & CX Siliguri Commissionerate v. Dalmia Tea Packaging Pvt. Ltd., (2026) taxcode.in 114 GSTAT, the Tribunal examined the Revenue’s challenge to refund granted under Section 54(3)(ii) for a tea packaging business that purchased bulk tea and packing materials and sold packaged tea.

The Tribunal held that the relevant statutory language permits refund where accumulated credit arises because input tax is higher than output tax, and that the use of “inputs” in the plural excludes a restriction to tea as a single principal input. It found the Revenue’s comparison of bulk tea purchases with packaged tea sales, while disregarding packing materials such as cartons, jars and plastics, to be factually flawed. The Tribunal further held that packing materials are inputs within Section 2(59), that they are eligible for ITC under the CBIC clarification, and that once goods are eligible for ITC they are also eligible for refund unless the statute specifically disallows it. It also found Circular No. 135/5/2020-GST inapplicable because it dealt with reduction in GST rate on the same goods over time, which was not the situation here.

The Tribunal dismissed the Revenue’s appeal and upheld the first appellate authority’s order, confirming that refund under Section 54(3)(ii) was admissible on the facts and that the circular could not be used to defeat the statutory entitlement.