GST Daily Updates
17 September 2026
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GST Laws
High Courts
1. Javed Akhtar v. Union of India – (2026) taxcode.in 1530 HC
Bail granted in GST ITC fraud case as investigation ended and no tampering risk was shown
The High Court allowed bail to the applicant accused of fraudulently availing input tax credit on invoices of non-existent firms under the CGST Act. It noted that investigation was complete, complaint had been filed, the offence was triable by a Magistrate and carried a maximum punishment of five years, and the applicant had remained in custody since 29.01.2026. The Court held that criminal antecedents alone could not justify continued detention when no material showed any likelihood of tampering with evidence, intimidating witnesses, or evading the process of law. Emphasising Article 21, presumption of innocence and the principle that bail is the rule, the Court directed release on conditions.
2. Wonder Enterprises v. State of U.P. and Anr. – (2026) taxcode.in 1536 HC
Second ex parte GST rectification order quashed for bypassing fresh hearing after replies were ignored
The High Court set aside the second ex parte order passed under Section 161 of the U.P. GST Act after finding that the authority had admitted non-consideration of the petitioner’s replies to the original show cause notice. It held that Section 161 permits rectification of apparent errors, but not a merits review through another ex parte demand order. Since the earlier adjudication was vitiated by complete failure to consider the replies, the proper course was to recall that order and issue fresh notice before deciding afresh. The Court rejected the Revenue’s argument that partial reduction in demand made the second order harmless, and remitted the matter for fresh adjudication after hearing.
3. Priya Medical Stores v. State of U.P. and Ors. – (2026) taxcode.in 1533 HC
Appeal rejection for delay set aside where GST appellate authority ignored condonation grounds
The High Court interfered with the appellate order rejecting the petitioner’s GST appeal as time-barred because the authority had not dealt with the specific grounds raised for condonation of delay. The petitioner had explained when it learnt of the demand, its prompt legal steps, the earlier writ petition, and the subsequent filing of appeal, but the appellate authority summarily held the appeal beyond limitation under Section 107. The Court found that none of the delay explanations were examined and described the order as mechanical. Holding that the right of appeal is statutory and the reasons for delay had to be considered, the Court set aside the rejection order, imposed costs, and restored the appeal for decision on the delay application.
4. Garg Enterprises v. Additional Commissioner and Anr. – (2026) taxcode.in 1500 HC
Writ against Section 74 GST order dismissed due to disputed facts and available statutory appeal
The High Court declined to entertain the writ petition challenging a Section 74 GST adjudication order, holding that the case turned on disputed factual issues and the petitioner had an adequate statutory remedy. It found that the objections regarding signatures on notices, alleged vagueness, clubbing of periods, and hearing before another officer were factual matters not suitable for writ scrutiny. The Court also noted that the petitioner had earlier withdrawn a challenge to the same notices and had only been granted liberty to respond, not to bypass the appellate scheme. Since the statutory framework provided a multi-tiered remedy with pre-deposit safeguards, and the petitioner refused to avail it, the Court dismissed the petition while leaving liberty to approach the proper forum.
Goods and Services Tax Appellate Tribunal (GSTAT)
5. Tiger Steels v. Commissioner of State Tax – (2026) taxcode.in 143 GSTAT
Penalty order under Section 129 held void for being passed far beyond mandatory seven-day limit
The Tribunal allowed the appeal after holding that the penalty order under Section 129(3) of the SGST/CGST Acts was passed in blatant breach of the mandatory seven-day timeline. It recorded that notice was issued on 28.06.2019, but the order for payment of penalty was passed only on 26.07.2019, well beyond the statutory period. Relying on the language of Section 129(3) and prior decisions, the Tribunal held that the time limit is mandatory and non-compliance renders the proceedings void ab initio. Since the original order itself was a nullity, the appellate order upholding it could not survive. The appeal was therefore allowed with consequential relief.
6. Heramb Enterprises v. C Pushpalatha Additional Commissioner of Commercial Taxes and Ors. – (2026) taxcode.in 142 GSTAT
Revision under GST held within limitation and penalty sustained for absence of documents during interception
The Tribunal upheld the revisional order and the detention-based penalty after holding that the proceedings were not barred by limitation and that the goods were moved without the required documents at the time of interception. It accepted the exclusion of the COVID period while computing limitation under Section 108(2)(b), following Supreme Court directions, and held the revisional order was timely. On merits, the Tribunal found that the consignment was being unloaded at a location not covered by the available invoice and e-way bill, and that no supporting material proved any technical glitch. It treated the later generation of documents as an afterthought and concluded that the facts showed an intention to evade tax, justifying penalty under Section 129(1).
7. Commissioner CGST & CX v. Santosh Fragrance – (2026) taxcode.in 141 GSTAT
Inverted duty refund allowed where higher tax on distinct inputs led to accumulated ITC
The Tribunal dismissed the Revenue’s appeal and upheld refund of accumulated input tax credit under Section 54(3)(ii), holding that the taxpayer’s inputs were distinct goods used in manufacturing Agarbati and were taxed at higher rates than the output supply. It found that the refund arose from an inverted duty structure because perfumes, chemicals, packaging materials and similar inputs attracted GST at 12% to 18%, while the finished product was taxed at 5%. The Tribunal held that the CBIC circular relied on by the Revenue did not bar the claim, since the restriction discussed there concerned cases where input and output supplies were the same goods. It also noted that such circulars are not binding on the Tribunal. The sanction of refund was therefore sustained.
8. GMG Electric v. Commissioner of State Tax – (2026) taxcode.in 144 GSTAT
Delay of 445 days in Section 129 penalty order vitiated entire detention proceedings as nullity
The Tribunal allowed the appeal after holding that the penalty order under Section 129(3) was passed 445 days after the notice, in clear violation of the mandatory seven-day time limit. It reiterated that the provision requires the proper officer to issue notice within seven days of detention and then pass the penalty order within seven days from service of that notice. Since the order was passed far beyond that period, the Tribunal held it to be void ab initio and a nullity in law. Relying on earlier GSTAT and High Court decisions, it observed that such delay vitiates the entire proceeding. As the original order itself could not stand, the appellate order confirming it was also set aside with consequential relief.
Authority for Advance Ruling (AAR)
9. In re: Revathi Enterprises (Prop. Rama Naik Harjayanaik Dileep Kumar) – (2026) taxcode.in 157 AARGST
Advance ruling application rejected for non-payment of prescribed fee despite repeated opportunities
The Authority for Advance Ruling rejected the application by Revathi Enterprises without examining the merits, holding that the application was not maintainable because the prescribed fee under Section 97(1) read with Rule 104 had not been fully paid. The applicant had sought a ruling on whether diesel supplied free by the service recipient should form part of the value of GTA service, but the Authority found that the statutory fee requirement is mandatory. It noted that multiple opportunities were given to remit the balance fee, including personal hearing notices and follow-up communications, yet the applicant neither appeared nor complied. On that basis, the application was dismissed as not maintainable and the substantive tax question was left undecided.
10. In re: Karnataka State Agriculture Marketing Board – (2026) taxcode.in 159 AARGST
Advance ruling plea rejected for fee default and failure to specify category of GST question
The Karnataka AAR rejected the application filed by the State Agriculture Marketing Board without going into the GST treatment of its corpus fund activity. It held that payment of the prescribed fee under Section 97(1) read with Rule 104 is mandatory for an advance ruling application, and that the applicant had not remitted the full fee despite repeated notices and hearing opportunities. The Authority also found a further defect: the applicant had not indicated in Form GST ARA-01 the category of question under Section 97(2). Because of these statutory non-compliances, the application was held non-maintainable and the Board’s questions on whether corpus fund collections from APMCs attracted GST were not examined on merits.
11. In re: Symphony Polymers Pvt. Ltd. – (2026) taxcode.in 141 AARGST
Compostable bags classified under Chapter 39 but denied concessional GST for lack of biodegradable certification
The Tamil Nadu AAR held that the applicant’s compostable bags and packing materials, made from PLA and PBAT, were classifiable under Chapter 39 and specifically under heading 3923 2990. However, it refused to extend the 5% concessional rate under Entry 319 of Notification No. 9/2025-CT(R), which covers paper sacks, bags and biodegradable bags, because the applicant had not produced the required certification for biodegradable plastics. The Authority distinguished compostable plastics certified under IS/ISO 17088 from biodegradable plastics governed by IS 17899 T:2022 and CPCB certification requirements. Since the applicant only had compostable certification and not the statutory biodegradable certification, the goods were held outside Entry 319. The application was answered accordingly.
