GST Daily Updates
09 September 2026
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GST Laws
High Courts
1. S.O.R New Motors v. Deputy State Tax Officer – 1 (FAC) – (2026) taxcode.in 1439 HC
Retrospective GST registration cancellation does not erase liability for disputed period without proof of closure or tax payment
The Madras High Court held that retrospective cancellation of GST registration did not by itself absolve the petitioner of liability for the disputed period. Since the petitioner could not answer queries on the relevant return, tax payment for the third quarter of 2019-20, or the point of business closure, the Court found the assessment could not stand as confirmed. At the same time, the Court noted uncertainty about the period of business activity and the alleged ineligible input tax credit. It therefore quashed the order and remitted the matter for fresh determination on a best judgment basis, with a direction to hear the petitioner and recover ineligible credit if availed and utilized.
2. SPL Steel Processors Pvt. Ltd. v. Commissioner of Revenue Directorate of Commercial Taxes and Ors. – (2026) taxcode.in 1463 HC
Blocking of electronic credit ledger under Rule 86A upheld prima facie, with post-decisional hearing ordered
The Calcutta High Court found no prima facie infirmity in the blocking of the petitioner’s electronic credit ledger under Rule 86A, noting recorded reasons to believe that the suppliers were non-existent and their registrations had been cancelled. However, to balance equities and in light of audi alteram partem, the Court directed a post-decisional hearing. The petitioner was asked to file a detailed representation with supporting documents for the relevant financial years and tax period, and the authority was directed to pass a reasoned order after personal hearing within the stipulated time. The Court did not set aside the blocking order at this stage.
3. Nualco Pvt. Ltd. v. Office of the Assistant Commissioner (ST) – (2026) taxcode.in 1445 HC
Rule 86A blocking bars credit use for appellate pre-deposit until unblocking request is decided
The Madras High Court held that Section 49(4) does not confer an absolute right to use electronic credit ledger balances, because such use is subject to prescribed conditions and restrictions. Reading Sections 49 and 107 with Rule 86A, the Court held that while available credit may ordinarily be used for statutory liabilities, that use is impermissible once a blocking order is in force. Since the petitioner had already sought unblocking, the Court directed expeditious consideration of that request and required a speaking order if rejection was proposed. The writ petition was disposed of without disturbing the blocking notice.
4. Gita Rani Pan v. Union of India and Ors. – (2026) taxcode.in 1461 HC
Proceedings against deceased proprietor under GST are void unless legal heirs receive fresh show-cause notice
The Calcutta High Court held that a show-cause notice issued in the name of a deceased person is a nullity and cannot sustain tax determination. Construing Section 93(1)(b), the Court ruled that liability of legal representatives can be fastened only after a fresh notice is issued to them in their own names and their replies are considered under the machinery provisions in Sections 73 and 74. The Court quashed the notice, adjudication order and recovery notice, and directed issuance of a fresh show-cause notice to the legal heirs, followed by hearing and a reasoned order. The Court emphasized that the department cannot proceed against a dead person and then expect heirs to answer that notice.
5. Assam Rifles Group Insurance Scheme v. Additional Director General (Adjudication) Directorate General of GST Intelligence and Ors. – (2026) taxcode.in 1457 HC
Unexplained eight-year delay in service tax adjudication violated statutory timeline and rendered order arbitrary
The Meghalaya High Court set aside a service tax adjudication order that was passed nearly 8.5 years after the show-cause notice. The Court held that once the extended period under Section 73(1) was invoked, Section 73(4B)(b) required completion of adjudication within the prescribed timeframe, absent justified reasons. Rejecting the Revenue’s explanation based on pending documents and the petitioner’s representations, the Court found no valid cause for the extraordinary delay. It held the order arbitrary and bad in law, and declined to examine the other substantive challenges. The writ petition was allowed on the delay ground alone.
6. IBM India Pvt. Ltd. v. Union of India and Ors. – (2026) taxcode.in 1458 HC
Refund of pre-deposit becomes payable once appellate relief attains finality for dropped demand portion
The Bombay High Court held that the petitioner was entitled to refund of the pre-deposit corresponding to the demand dropped by the first appellate authority. The Court found that the department had not challenged the portion of the appellate order deleting demand of Rs.31,45,84,219/-, and therefore the proceedings had attained finality to that extent. It rejected the Revenue’s view that the refund claim was premature merely because the petitioner intended to challenge the adverse part of the appellate order before the Tribunal. Treating the pre-deposit as a security amount rather than tax, the Court directed refund of Rs.3,14,58,422/- with interest and held continued retention unauthorized.
7. Baba Traders v. State of Haryana and Ors. – (2026) taxcode.in 1456 HC
Clerical error in GST cancellation date warranted correction where tax returns and bona fides were undisputed
The Punjab and Haryana High Court held that a voluntary cancellation application under Section 29 read with Rule 20 could not be rejected on a hyper-technical basis when the wrong effective date was entered by clerical mistake. The petitioner had filed returns up to April 2021, and the Court noted that those facts and the absence of tax dues were not disputed. It found that the appellate authority had relied only on portal limitations and the fact that the date was mentioned by the petitioner itself, without any finding of mala fides. The Court set aside both orders and allowed the petitioner to seek correction of the cancellation date, directing a fresh decision within three weeks.
8. Super Enterprises v. Union of India and Ors. – (2026) taxcode.in 1453 HC
Personal hearing fixed before reply period expired was treated as empty formality in registration cancellation case
The Patna High Court set aside the appellate order dismissing the petitioner’s challenge to GST registration cancellation on limitation and granted liberty to seek revocation. The Court held that the personal hearing fixed before expiry of the 30-day period for reply amounted to an empty formality, contrary to Section 75(4) of the BGST Act. It also noted that the petitioner had later filed returns and paid tax, late fee and penalty, showing compliance. Relying on its earlier view that permanent cancellation may cause civil death to livelihood, the Court directed the authority to consider any revocation application on merits and not reject it on limitation alone.
9. Ind Tech Lifts v. Deputy State Tax Officer – I Porur Assessment Circle – (2026) taxcode.in 1451 HC
Wrong GST head payment can be appropriated toward IGST liability without requiring double payment and refund cycle
The Madras High Court dealt with an inadvertent payment of tax under the CGST and SGST heads instead of IGST. It held that the case was not expressly covered by Section 77, but the principle underlying that provision applied because the petitioner had already discharged the tax liability within time. The Court rejected the Revenue’s stance that the petitioner must first pay IGST again and then seek refund of the mistaken payment. It directed the petitioner to seek appropriation of the amount already paid toward IGST liability, and permitted a refund application if procedurally necessary. The Court also held that interest was not justified on the facts.
10. Leben Laboratories Pvt. Ltd. v. Union of India and Ors. – (2026) taxcode.in 1465 HC
No interest could be levied on repayment of customs duties where repayment itself lacked legal authority
The Bombay High Court held that the petitioner was entitled to refund of interest paid on repayment of additional customs duties. Relying on its earlier decisions and the Supreme Court’s ruling that Rule 96(10) is deemed omitted since inception, the Court concluded that there was no legal obligation on the petitioner to repay the additional duties in 2022. Once the underlying repayment itself lacked statutory basis, the levy of interest on such repayment could not stand. The Court therefore allowed the writ petition and directed the authorities to process the petitioner’s refund application and refund the interest amount expeditiously.
Goods and Services Tax Appellate Tribunal (GSTAT)
11. Director General of Anti-Profiteering (DGAP) v. Bengal Emami Housing Ltd. – (2026) taxcode.in 120 GSTAT
Anti-profiteering on housing project confined to regulated HIG units where LIG and MIG prices were statutorily capped
The GST Appellate Tribunal held that although GST gave the respondent additional ITC benefit, profiteering could not be attributed to LIG and MIG units because their prices were fixed under a State notification and limited to direct costs. The Tribunal found that the pricing regime for those units left no discretion to load overheads, administrative expenses or tax components into sale price, making them materially different from HIG units. It therefore confined anti-profiteering computation to HIG units and determined a profiteered amount of Rs.70,58,488 inclusive of GST for that category. The Tribunal also held that interest at 18% per annum was payable and that penalty under Section 171(3A) was attracted, subject to statutory waiver.
12. Assistant Commissioner of GST & Central Excise v. Rockman Industries Ltd. – (2026) taxcode.in 119 GSTAT
Appeal involving statutory interpretation of ITC availment requires Division Bench under Section 109(8)
The GSTAT Chennai Bench held that the appeal involved a question of law and therefore had to be heard by a Division Bench. Although the dispute concerned disputed ITC of Rs.30,23,370/-, the Tribunal found that the Department’s own pleadings raised issues requiring interpretation of Sections 16(2), 18(3) and Rule 41, particularly in the context of merger or amalgamation. It rejected the argument that the matter was purely factual, holding that the legality and manner of availment of credit could not be resolved without statutory construction. The objection that no question of law was involved was rejected, and the appeal was directed to be listed before one Judicial Member and one Technical Member.
13. Adhunik Fire Appliances v. Himanshu and Ors. – (2026) taxcode.in 118 GSTAT
Urgent GSTAT listing allowed where cancellation of registration disabled business and livelihood pending appeal
The GSTAT Ghaziabad Bench allowed urgent hearing of the appellant’s appeal and exempted it, for that limited purpose, from awaiting completion of ordinary registry scrutiny. The appellant had shown that cancellation of GST registration had stopped its business operations entirely, affected its sole livelihood, and made delayed hearing potentially destructive of effective relief. Relying on the Tribunal’s procedural rules, the Bench held that sufficient cause existed for urgent listing and that procedural law should not frustrate substantial justice. The Tribunal clarified that the exemption did not waive any mandatory statutory requirement such as limitation, pre-deposit, fee or maintainability, all of which remained open for consideration by the appropriate Bench.
Authority for Advance Ruling (AAR)
14. In re: Feel Good Hospitality Pvt. Ltd. – (2026) taxcode.in 149 AARGST
Hotel booking facilitator failed pure agent conditions, so entire consideration remained taxable supply value
The West Bengal Authority for Advance Ruling held that the applicant’s proposed hotel booking model did not satisfy the conditions of a pure agent under Rule 33. Although the applicant could fit within the broader concept of an agent, the Authority found no contractual authorization from the customer permitting it to incur expenditure in the course of supply on the customer’s behalf. It also noted that the third-party invoice would be in the applicant’s name, meaning the applicant received the service in its own capacity and used it for its own interest. As a result, the hotel booking service was classified under SAC 998552 and held taxable at 9% CGST plus 9% SGST on the entire consideration.
