GST Daily Updates
11 September 2026
—
GST Laws
High Courts
1. Aarem Insights Pvt. Ltd. v. Joint Commissioner of State Tax (Appeals)-VII and Ors. – (2026) taxcode.in 1495 HC
NCLT-approved resolution plan extinguishes past MVAT dues and requires refund of appeal pre-deposit
The Court held that once the Resolution Plan was approved by the NCLT on a clean slate basis under Section 31 of the IBC, all past tax claims not forming part of the plan stood extinguished and could not be pursued by the MVAT authorities. It found the appellate authority lacked jurisdiction to continue the pending appeal, confirm the assessment, or direct recovery for pre-approval dues. The Court also held that the statutory pre-deposit made for filing the appeal could not be retained once the underlying demand stood settled under the approved plan. The impugned appellate order and all consequential proceedings were set aside, and refund of the pre-deposit with applicable interest was directed.
2. CG Tollway Ltd. v. Union of India and Ors. – (2026) taxcode.in 1491 HC
BOT toll concession creates taxable works contract supply where toll rights operate as consideration for construction services
The Court dismissed the writ petition and upheld GST on the petitioner’s DBFOT BOT highway concession with NHAI. It held that the petitioner did not merely collect exempt toll, but undertook construction and maintenance obligations in return for valuable contractual rights, including toll collection, site licence, right of way and related entitlements. Those rights constituted consideration, and the arrangement fell within supply and works contract services under the GST law. The Court rejected the double taxation plea based on the sub-contractor’s tax payment, noting that the NHAI contract and the EPC contract were distinct and lacked privity. It also held that the toll exemption notification did not apply to construction services under the relevant heading, and the clarificatory circular supported the revenue’s view.
3. Metal Trade Incorporation v. State Tax Officer and Ors. – (2026) taxcode.in 1488 HC
ITC blockage under Rule 86A cannot continue beyond one year and must cease automatically
The Court directed immediate unblocking of the petitioner’s input tax credit and held that a restriction imposed under Rule 86A cannot survive beyond one year from the date of imposition. It recorded that the credit ledger had been blocked on 27 January 2023 and that the restriction had continued for more than two and a half years. The Court held that the later departmental communication could not extend the blockage, because Rule 86A(3) mandates automatic cessation after one year. It also observed that internal communications alone cannot justify continued denial of debit from the credit ledger, and that the proper course is to complete assessment and, if warranted, proceed under the regular recovery provisions.
4. Vinod Kumar v. State of H.P. and Anr. – (2026) taxcode.in 1467 HC
Alleged bogus GST invoice scheme disclosed prima facie cheating and conspiracy, so FIR was not quashed
The High Court refused to quash the FIR, holding that the dispute could not be treated as a mere civil or contractual disagreement. On the material before it, the Court found a prima facie case that the petitioner, acting in connivance with others, facilitated supplies through bogus or non-existent firms, furnished KYC and GST-related documents, and enabled fabricated invoices and e-way bills for wrongful ITC claims. It held that indemnity clauses in the agreements did not bar criminal proceedings where allegations disclosed cheating, forgery and conspiracy, and that civil remedies could coexist with criminal liability. The Court distinguished the cited precedent and concluded that the matter required full investigation and trial.
5. G.B. Ashwath v. Deputy Commissioner Coorg District and Ors. – (2026) taxcode.in 1468 HC
Compulsory land acquisition is not supply under GST, so tax deduction from compensation was unlawful
The Court quashed the award notice insofar as it deducted GST from compensation payable for acquisition of land and buildings for highway widening. It held that compulsory acquisition is an exercise of eminent domain and does not involve supply of goods or services. Immovable property cannot be treated as goods, and the landowner neither sold goods nor rendered services by parting with the property. The Court found no provision in the GST law authorising deduction of GST from compensation or from the structural component of the award. It therefore directed refund of the deducted amount with interest and costs, and ordered that the interest be recovered personally from the officer who made the deduction.
6. S Nagaraju v. Deputy Commissioner Mandya and Ors. – (2026) taxcode.in 1469 HC
GST cannot be deducted from compensation for compulsory acquisition of land and structures
The Court held that the deduction of GST from compensation paid for compulsory acquisition of the petitioner’s land and building was without authority. It reiterated that GST is a tax on supply of goods or services, whereas compulsory acquisition is an exercise of statutory power and not a supply transaction. The Court rejected the respondents’ attempt to justify the deduction on the basis of works contract or structure valuation, noting that no statutory provision was shown to support such levy on acquisition compensation. The award notice was quashed to that extent, refund of the deducted amount with interest at 15% per annum was directed, and costs were awarded. The Court also directed recovery of the interest burden from the concerned officer personally.
7. Wipro Ltd. v. Assistant Commissioner Sholinganallur Division – (2026) taxcode.in 1443 HC
SEZ unit exporting services through ISD credit entitled to refund; supplier-only reading of Rule 89 rejected
The Court set aside the rejection of the petitioner SEZ unit’s refund claims and held that it was entitled to refund under Section 16(3)(b) of the IGST Act read with Section 54 of the CGST Act. It accepted that the petitioner exported services after utilising input tax credit distributed through its Head Office acting as an Input Service Distributor, and held that there is no prohibition on an SEZ unit availing such credit or claiming refund merely because it is an SEZ unit. The Court rejected the respondent’s reading of the proviso to Rule 89(1) as limiting refund only to the supplier, noting that the supplier could not itself apply where credit was distributed through ISD. It also held that the declaration under Rule 89(2)(f) was inapplicable on these facts.
8. Blink Fix Pvt. Ltd. v. Global India Services and Anr. – (2026) taxcode.in 1437 HC
Reimbursement claim for GST paid under contract is prima facie arbitrable despite tax law objections
The Court appointed a sole arbitrator and held that the petitioner’s claim for reimbursement of GST-related sums was, prima facie, an inter se contractual dispute rather than a non-arbitrable tax dispute. It noted that in Section 11 proceedings its enquiry was limited to the prima facie existence of an arbitration agreement, which was admitted. The dispute arose from invoices issued under the Letter of Engagement, payment of the GST component, reversal of input tax credit, and the petitioner’s demand for indemnification after paying the tax authorities. The Court held that questions about which party must ultimately bear the tax burden under the contract can be decided in arbitration and do not determine the State’s taxing power. Jurisdictional and arbitrability objections were left open for the tribunal under Section 16.
Goods and Services Tax Appellate Tribunal (GSTAT)
9. Venshiv Chemicals Pvt. Ltd. v. N. J. Kumaresh Principal Commissioner of Central Tax and Ors. – (2026) taxcode.in 132 GSTAT
Belated tax payment through GSTR-3B is admitted liability and cannot count as GSTAT pre-deposit
The Tribunal held that the amount of Rs. 83,43,942 paid during investigation and later appropriated in the original order was an admitted self-assessed tax liability, not a disputed amount paid under protest. It noted that the appellant had accepted tax and interest liability in earlier proceedings and had consistently described the payment as voluntary through belated GSTR-3B returns. On that basis, the amount could not be treated as statutory pre-deposit for admission of the GSTAT appeal. The Tribunal held that compliance with Sections 107(6) and 112(8) is mandatory and that the earlier payment could not be adjusted towards the appeal deposit. It granted time to make the required pre-deposits before the appeal could be admitted.
10. Commissioner of CGST & CE v. Surya Business Combines – (2026) taxcode.in 129 GSTAT
Revenue appeal on interest demand dismissed as below GSTAT monetary limit under litigation policy
The Tribunal dismissed the Revenue’s appeals as not maintainable because the dispute involved only interest and the disputed interest amount was below the monetary threshold fixed for departmental appeals. It applied CBIC Circular No. 207/1/2024-GST, which prescribes a Rs. 20 lakh limit for appeals before GSTAT and specifically provides that where only interest is in dispute, the disputed interest amount alone must be considered. Since the interest under challenge was Rs. 7,35,714, the appeal fell below the limit. The Tribunal also found that the case did not fall within any exclusion category in the circular. As a result, the appeals were held to be beyond jurisdiction and were dismissed under the National Litigation Policy framework.
11. Augustan Textile Colours (Unit of Augustan Knitwear Pvt. Ltd.) v. Commissioner of State Tax – (2026) taxcode.in 130 GSTAT
Refund of inverted duty ITC cannot be denied for alleged ineligibility without prior Section 73 or 74 determination
The Tribunal allowed the appeal and held that refund under Section 54(3) could not be rejected on the ground of ineligible input tax credit unless such ineligibility had first been determined under Sections 73 or 74. It found the show cause notice vague because it gave only a consolidated figure without invoice-wise particulars, basis of ineligibility or proper computation, and held the original order equally non-speaking. The First Appellate Authority further erred by introducing a new ground that the inputs were not used in furtherance of business, which had never been stated in the notice. The Tribunal relied on the statutory scheme and departmental circular to hold that refund proceedings cannot be used to collaterally adjudicate ITC eligibility. The rejection of refund to the extent of Rs. 7,07,173 was therefore set aside.
