GST Daily Updates
02 October 2026
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GST Laws
High Courts
1. Puneet Batra v. Union of India and Ors. – (2026) taxcode.in 1543 HC
Advocate-client privilege does not bar lawful search of office premises where prima facie material suggests personal involvement
The Delhi High Court upheld the search and seizure at Bass Legal’s premises, including the cabin used by the petitioner-advocate, holding that the authorisation under Section 67(2) of the CGST Act was valid. The Court distinguished between legality of the search and claims of advocate-client privilege, ruling that privilege protects client communications but does not create absolute immunity where material suggests the advocate may have been acting beyond professional advice and may himself be involved in the transactions under investigation. It also refused disclosure of sealed-cover investigative material at this stage and rejected challenges based on absence of show cause notice, alleged procedural departures, and the later board resolution. The writ petition was dismissed.
2. Rohit Garg v. Union of India and Ors. – (2026) taxcode.in 1494 HC
Writ petitions against GST adjudication were relegated to appeal; amended pre-deposit proviso held inapplicable retrospectively
The Delhi High Court declined to entertain the batch of writ petitions challenging GST penalties and adjudication orders, holding that the petitioners had an efficacious statutory remedy under Section 107 of the CGST Act. It accepted that the amended pre-deposit proviso in Section 107(6), effective from 01.10.2025, would not apply to appeals arising from show cause notices issued earlier. The Court left open the substantive question whether Section 122(1) applies to non-taxable persons, and also held that the competence objection against the issuing officer did not show a patent lack of jurisdiction warranting writ interference. All issues were left for the appellate authority.
3. IVRCL DRN Infra JV v. Commissioner of Central Tax Bengaluru South – (2026) taxcode.in 1477 HC
Service tax cannot be levied on goods component of works contract; irrigation project exempt and demands time-barred
The Karnataka High Court held that service tax could not be levied on the goods component of the petitioners’ works contracts, applying the statutory separation between goods and services and the principle that only the service portion of a works contract is taxable. It further held that the lift irrigation project in one petition qualified for exemption under Notification No. 25/2012-ST because the activity served economic and social development functions entrusted to municipalities under Article 243W. On limitation, the Court found that the extended period under Section 73 was unavailable because the facts showed, at most, an interpretational dispute and no wilful suppression, fraud or intent to evade tax. Both impugned demands were set aside.
4. Saroj Kumar Pandey v. State of Telangana – (2026) taxcode.in 1568 HC
Anticipatory bail granted in GST ITC fraud case where custodial interrogation was not shown indispensable
The Telangana High Court granted anticipatory bail to a director accused of allegedly facilitating fraudulent availment and utilisation of ITC worth about Rs.98.47 crores. The Court accepted that the allegations were serious and cognizable, but held that gravity alone does not justify arrest or denial of pre-arrest protection. It emphasised that the Department had to show a concrete need for custodial interrogation, especially where documentary and electronic material had already been seized and the petitioner claimed cooperation with the investigation. The Court also treated parity with the co-accused already granted bail and the petitioner’s protest deposit as relevant factors, while clarifying that the competent authority could still proceed in accordance with Sections 69 and 132 if later material justified arrest.
5. Microsoft Corporation (India) Pvt. Ltd. v. State of Maharashtra and Ors. – (2026) taxcode.in 1499 HC
Interest cannot be levied for compliant six-monthly returns where statute expressly permitted that return periodicity
The Bombay High Court set aside interest levied under Section 30(2) of the MVAT Act and the corresponding CST interest, holding that the petitioner was statutorily entitled to file six-monthly returns for the relevant year and had paid tax within the due dates prescribed by the Act and Rules. The Court rejected the department’s reasoning that the petitioner had unjustly enriched itself by deferring remittance of tax through a legally permitted return cycle. It held that the appellate authority had no jurisdiction to rewrite the periodicity fixed by statute or delegated legislation on the basis of perceived legislative intent or tax planning concerns. Since the challenge was confined to the interest demand, the writ petition was maintainable despite the alternative remedy objection.
6. Bhagya Kalita v. Union of India and Ors. – (2026) taxcode.in 1541 HC
Section 74 notice quashed where disclosed price-adjustment receipts showed no suppression or wilful misstatement
The Gauhati High Court quashed a show cause notice issued under Section 74(1) of the CGST Act for alleged non-payment of GST on price adjustment receipts under a pre-GST highway contract. The Court held that Section 74 requires fraud, wilful misstatement or suppression of facts with intent to evade tax, and that these jurisdictional preconditions were absent on the record. It found that the petitioner had disclosed the receipts in its balance sheet, income-tax filings, GST return and declaration before GST authorities, and that the treatment as exempt was based on a bona fide belief. The Court also held that the notice was issued in undue haste to save limitation and that the authorities had assumed excessive jurisdiction without lawful basis.
7. Dharma Productions Pvt. Ltd. v. State of Maharashtra and Ors. – (2026) taxcode.in 1542 HC
Film copyright licensing classified as original-film service, not software, and writ entertained despite alternate remedy
The Bombay High Court held that licensing of copyright in cinematographic films by the producer/original copyright holder for the period prior to 01.10.2021 fell under the entry for original films at 12%, not under the software entry at 18%. It found that the authorities had wrongly equated digital film content with information technology software, ignored the statutory definition and the separate service code for original films, and relied on an undisclosed statement without proper analysis. The Court also held that the writ petitions were maintainable because the dispute raised a pure question of law going to jurisdiction and did not turn on disputed facts. The impugned demands and appellate orders were therefore set aside.
8. Welspring Universal v. Additional Commissioner of Central GST – (2026) taxcode.in 1548 HC
Earlier unchallenged refund orders could not survive later CESTAT ruling setting aside the appellate order
The Delhi High Court set aside the demand-cum-show cause notice and consequential order confirming recovery of refunded CENVAT credit, holding that the adjudicating authority relied on an appellate order which had already been set aside by CESTAT. The Court found that CESTAT had expressly upheld the petitioner’s entitlement to refund of Rs.76,72,000 under Rule 5 and had also decided limitation in the petitioner’s favour. Once that later appellate order existed and had been brought to the department’s notice, the Additional Commissioner could not proceed as though the earlier adverse appellate order still governed the matter. The Court also directed refund of the pre-deposit made before CESTAT with applicable interest.
9. P B Agro LLP v. Union of India and Ors. – (2026) taxcode.in 1549 HC
Delhi lacked territorial jurisdiction over Maharashtra food safety notice issued to brand ambassadors in Mumbai
The Delhi High Court dismissed the petition for want of territorial jurisdiction, holding that the impugned show cause notice was issued by FDA, Mumbai to brand ambassadors residing in Mumbai and concerned regulatory action in Maharashtra. The Court found no material showing that FSSAI or any Delhi-based authority had directed the notice, and held that impleading the Ministry, FSSAI or CCPA in Delhi could not by itself create jurisdiction. It rejected the argument that the petitioner’s Delhi office, payment trail or media awareness constituted a substantial part of the cause of action. The Court also held that, even assuming a remote Delhi nexus, Maharashtra was the more appropriate forum under the doctrine of forum conveniens.
10. Nxtify Technologies Pvt. Ltd. v. Union of India and Ors. – (2026) taxcode.in 1553 HC
Provisional attachment under Customs law requires written reasons and approval; unsupported debit freezes and extensions quashed
The Patna High Court held that provisional attachment and debit freeze of the petitioner’s bank accounts had to strictly satisfy Section 110(5) of the Customs Act, including prior approval of the Commissioner, a written order and recorded reasons. It found that some October 2025 debit freezes were effected without the required approval, and quashed those orders and their extensions. The Court also set aside extension orders because they were passed without pre-decisional hearing and without reasons, emphasising that post-decisional notice could not cure the defect. However, it upheld later written provisional attachment orders dated 07.01.2026 and 20.11.2025 on their face. The department was left free to proceed afresh in accordance with law.
Goods and Services Tax Appellate Tribunal (GSTAT)
11. Director General of Anti-Profiteering (DGAP) v. Mangalbela Real Estates Pvt. Ltd. – (2026) taxcode.in 199 GSTAT
Re-investigation after Reckitt Benckiser upheld; anti-profiteering benefit ordered to be passed on to homebuyers
The GST Appellate Tribunal upheld the re-investigation of the anti-profiteering complaint after the CCI remanded the matter to align it with the methodology approved by the Delhi High Court in Reckitt Benckiser. It rejected objections that the DGAP had become functus officio, that a fresh reference under Rule 128 was required, and that the proceedings were time-barred or violative of natural justice. On merits, the Tribunal accepted the DGAP’s reworked computation and held that the respondent had failed to produce any evidence showing commensurate reduction in price or passing on of additional ITC benefit. It found contravention of Section 171(1) and directed passing on of Rs.31,20,542 to 66 eligible homebuyers with 18% interest, while declining penalty under Section 171(3A).
12. Laldeo Rajak v. Global Health Strategies Emerging Economies Pvt. Ltd. – (2026) taxcode.in 210 GSTAT
Place-of-supply dispute belongs before Principal Bench, not State Bench, under GST Tribunal jurisdiction rules
The GST Appellate Tribunal at Delhi held that the appeal involved a dispute on place of supply because the parties differed on whether the respondent’s services fell under Section 13(2) or Section 13(5) of the IGST Act. Since Section 109(5) of the CGST Act requires appeals involving an issue relating to place of supply to be heard by the Principal Bench, the State Bench at Delhi lacked jurisdiction. The Tribunal noted that both sides, including the Department, accepted that the controversy turned on place of supply. It therefore ordered transfer of the appeal to the Principal Bench at New Delhi for hearing and disposal in accordance with law.
13. V.K. Brothers v. Sharad Kumar Shukla Additional Commissioner Grade-2 (Appeal) State Tax and Ors. – (2026) taxcode.in 196 GSTAT
Penalty upheld for transporting copper scrap without invoice and e-way bill at interception stage
The GST Appellate Tribunal at Varanasi dismissed the appeal, holding that a tax invoice and e-way bill must accompany goods before movement begins and cannot be generated after interception to cure a contravention. It found that the appellant’s vehicle was intercepted carrying copper scrap without the required documents, and that the invoice and e-way bill were generated only several hours later. On a combined reading of Section 31, Section 129 and Rules 138, 138A and 138B, the Tribunal held that detention and penalty were properly invoked. It rejected the appellant’s explanation as unsupported and distinguished the cases cited by it, concluding that the later preparation of documents did not rebut the inference of intent to evade tax.
14. Anant Decor v. Commissioner of State GST – (2026) taxcode.in 197 GSTAT
ITC mismatch claim failed because assessee did not prove supplier-side B2C error or discharge burden of proof
The GST Appellate Tribunal at Raipur upheld the denial of ITC, interest and penalty where the appellant failed to satisfactorily explain a mismatch between IGST credit claimed in GSTR-3B and credit reflected in GSTR-2A for FY 2018-19. The Tribunal held that while a GSTR-2A mismatch alone is not conclusive for that period, the claimant still had to satisfy Section 16 and discharge the burden under Section 155. It accepted that Circular No. 183/15/2022-GST could cover cases where a B2B invoice was wrongly reported as B2C, but found that the appellant did not prove the asserted reporting error on the facts, especially as it had not replied to notices, had not properly pursued the case before the lower authorities, and left part of the demand unexplained. The appeal was dismissed.
