Goods and Services Tax

GST writ challenges requiring factual ITC verification must proceed on appeal, while central enforcement may investigate State-assigned taxpayers.
Case-Laws
GST
GST writ challenges requiring factual verification of input tax credit claims should ordinarily proceed through the statutory appellate remedy. Where adjudication turns on correlating work orders, subcontracts, invoices, payments and evidence of actual execution, the appellate authority may examine both factual and legal questions, including the applicability of a relevant circular; non-reproduction of a reply alone does not establish non-consideration. Specified DGGI officers appointed as Central tax officers may investigate State-assigned taxpayers, particularly in alleged multi-State transaction chains. A common show-cause notice may be adjudicated by the Commissionerate allocated under applicable notifications and allocation criteria. The merits of input tax credit, interest and penalty demands remain open in appeal.
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Common GST adjudication jurisdiction permits notification-based allocation; highest-demand selection leaves merits issues to statutory appeal.
Case-Laws
GST
Pan-India jurisdiction of specified Additional and Joint Commissioners to adjudicate composite DGGI show cause notices rests on the governing notifications. A circular may operationalise that jurisdiction by selecting a common adjudicating authority from officers already competent, but cannot itself confer or enlarge jurisdiction. Selection based on the highest-demand criterion is objective, uniformly applicable and rationally connected to consistent single adjudication, rather than impermissible sub-delegation or arbitrary classification. The notified appellate forum corresponds to the Commissionerate of the common authority. Once a jurisdictional challenge fails, challenges on merits, evidence and natural justice must proceed through the statutory appeal, with merits remaining open.
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Electronic authentication of GST notices determines validity; unsigned adjudication orders lack legal existence, permitting writ relief despite appellate remedies.
Case-Laws
GST
Mandatory authentication under Rule 26(3) requires every electronic GST notice and adjudication order to bear a digital signature, e-signature, or another notified verification mode. An officer's portal login authenticates access only; it does not authenticate or attribute a document's contents. Electronic documents issued without a signature or notified authentication mode lack legal existence, and the defect is jurisdictional rather than curable. The unsigned show cause notice, adjudication order, and consequential recovery action were set aside, while fresh proceedings remained available in accordance with law. A statutory appeal does not bar writ jurisdiction where the challenged order lacks legal existence.
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GST show cause notice timing follows calendar-month intervals, while ex parte adjudication may permit a conditional reply opportunity.
Case-Laws
GST
GST show cause notices required at least three months before the outer deadline for adjudication are assessed by the minimum interval between notice and final determination, rather than by mechanically deriving an independent limitation date through backward counting. The intervening period is computed in calendar months, excluding the date of notice; this may render a notice timely before expiry of the adjudication deadline. Where an ex parte adjudication order is made while challenge proceedings and interim protection are pending, a conditional opportunity to reply may be granted, with merits left open; the order may revive if no reply is filed within the stipulated period.
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Adjustment of recovered electronic credit can satisfy GST appellate pre-deposit, restoring an appeal for merits determination.
Case-Laws
GST
Electronic credit already recovered from a taxpayer's electronic credit ledger may be adjusted against the mandatory GST appellate pre-deposit where the recovered balance exceeds the required pre-deposit and the taxpayer seeks adjustment rather than refund. On that basis, dismissal of the GST appeal for non-payment of pre-deposit was quashed and the appeal restored for merits determination. The adjustment was permitted on the particular facts, with all merits contentions left open and without precedential effect.
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Section 129(3) notice deadline: a one-day delay invalidates GST detention and penalty proceedings for breach of mandatory timeline.
Case-Laws
GST
Section 129(3)'s seven-day deadline for issuing notice after detention of goods and conveyance under GST is mandatory. The timeline limits coercive detention and seizure powers, protects against arbitrary or prolonged detention, and requires strict compliance because the provision uses “shall” and affects taxpayer rights. A delay of even one day in issuing the notice vitiates the resulting detention and penalty proceedings. Penalty orders issued or affirmed despite breach of this timeline are liable to be set aside, without preventing other proceedings permissible under the Act. Deposited penalty may be released following due verification.
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Parallel GST adjudication cannot continue under Section 74 after Section 73 adjudication, while ex parte orders require reconsideration.
Case-Laws
GST
Parallel GST adjudication under Sections 73 and 74 for the same financial period was treated as incongruous once adjudication under Section 73 had concluded; the show cause notice, adjudication order and summary order under Section 74 were quashed. The ex parte Section 73 adjudication was also quashed and restored for fresh consideration because the taxpayer asserted that exemption documents and a reply could substantiate its position on the alleged mismatch or erroneous declaration. Reconsideration must occur after receiving the taxpayer's reply and supporting documents, while the merits of the exemption claim remain open.
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Parallel GST proceedings are barred when State adjudication begins first; separate orders require a meaningful chance to respond.
Case-Laws
GST
Section 6(2)(b) of the CGST Act bars a Central Tax proper officer from initiating proceedings on a subject matter already taken up by a State GST proper officer. Subsequent Central Tax show-cause and adjudication proceedings on the same matter were therefore quashed. For street-light works contracts, the claimed exemption depended on demonstrating that the value of goods supplied remained below the prescribed proportion of the contract value. State Tax adjudication orders and consequential garnishee notices were quashed to permit responses and supporting material, subject to deposit of 10% of the tax demand; the exemption merits remain open.
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Input tax credit claims require proof of purchaser fraud or collusion; supplier default alone does not justify arrest.
Case-Laws
GST
Input tax credit of a registered purchaser cannot ordinarily be denied merely because the supplier later becomes non-existent or defaults, where the purchaser holds valid registration, invoices, banking-channel payment evidence and filed returns, unless fraud or collusion is established. Documentary proof of actual receipt of goods and absence of prima facie collusion ordinarily make custodial interrogation unnecessary. Arrest for cognizable CGST offences requires the Commissioner's recorded reasons to believe, based on material satisfying statutory conditions rather than suspicion alone. Anticipatory bail in alleged wrongful input tax credit availment was granted subject to cooperation, document production and other safeguards.
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Concurrent anticipatory-bail jurisdiction permits applications before either forum, while secured evidence may negate custodial interrogation in GST evasion.
Case-Laws
GST
For anticipatory bail, the expression “jurisdictional Court” includes both the High Court and the Court of Session, allowing applicants to choose either forum rather than requiring an approach to the Principal Sessions Court. In alleged GST evasion, custodial interrogation was not considered necessary where the maximum punishment was five years, the offences were compoundable, documentary and digital evidence was substantially secured by authorities, and the applicants had business roots and agreed to cooperate. Anticipatory bail was granted subject to conditions including deposit, passport surrender, reporting requirements, bonds, and continued cooperation with the investigation.
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GST transition in works contracts separates contractual reimbursement disputes from statutory assessment, recovery and enforcement obligations.
Case-Laws
GST
GST liability arising from works contracts spanning the pre-GST and GST regimes must be determined under the applicable statute, while reimbursement of any incremental GST burden depends on the contractor-employer contract. Contractual directions may govern work calculation, representations and GST adjustment, but cannot alter statutory assessment, recovery, interest, penalty, return limitations or enforcement by tax authorities. Assessment orders may be challenged through appropriate proceedings, with the time spent pursuing writ petitions excluded when calculating limitation.
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Rule 90 completeness scrutiny excludes merits-based refund objections, requiring refiled GST claims to proceed to substantive assessment.
Case-Laws
GST
Rule 90(2) limits scrutiny of a GST refund application to its completeness under Rule 89(2), (3) and (4); it does not permit a deficiency memo to decide merits. Objections concerning the correct refund category, required statutory statements, adequacy of foreign-remittance evidence, or limitation require substantive examination by the competent authority. An Advice of Foreign Inward Remittance cannot be rejected solely by its label without assessing whether its contents meet the purpose of a Bank Realisation Certificate or FIRC. Deficiency memos on those grounds were unsustainable, and refiled applications had to be accepted for merits consideration after the applicable opportunity.
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Input tax credit mismatch requires proven fraud or suppression before the extended demand-and-penalty route applies.
Case-Laws
GST
Input tax credit mismatches between Forms GSTR-3B and GSTR-2A may support tax determination under section 73, but do not by themselves justify section 74 proceedings or penalties. Section 74 requires clear evidence connecting wrongful credit availment with fraud, wilful misstatement, or suppression of facts intended to evade tax; merely reciting those terms is insufficient. Payment of tax and interest before notice, including after verification, falls within section 73(5) where no intent to evade is established. A supplier's default cannot automatically be attributed to the recipient as suppression.
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Section 74 Penalties Require Proven Intent to Evade; Pre-Notice Tax Payments Fall Under Voluntary Payment Mechanism
Case-Laws
GST
Section 74 penalties for excess input tax credit and irregular transitional credit require positive material proving fraud, wilful misstatement, or suppression with intent to evade tax; audit mismatches, record-based discrepancies, and mechanical allegations are insufficient. Where returns and credit declarations are available on the departmental portal and tax and interest are paid before a show cause notice without deliberate evasion, the payments fall within Section 73(5) read with Section 73(8). On those principles, the Section 74 penalties were deleted, and the pre-notice tax and interest payments were treated as voluntary payments. Departmental hierarchy alone also does not establish a real likelihood of institutional bias in statutory appellate proceedings.
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GST enforcement must respect statutory conditions, protect genuine input tax credit claims, and distinguish bona fide errors from fraud.
Articles
GST
GST enforcement must adhere to statutory conditions, constitutional fairness and the rule of law rather than revenue targets. Input tax credit requires a reliable evidentiary trail establishing actual physical movement of goods, while bona fide purchasers and genuine recipients should not bear the consequences of a supplier's tax-payment default. Demand proceedings for fraud or wilful suppression require the essential statutory elements; absent those elements, such proceedings are unsustainable. Tax demands must also remain within the statutory scope of supply. A valid levy requires certainty regarding the taxable event, person liable, rate and measure of tax; ambiguity in any of these elements defeats the levy. Administrative authorities should address bona fide compliance errors proportionately and act as faithful trustees of statutory integrity.
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Extended GST limitation requires prima facie material linking tax shortfall to fraud, wilful misstatement, or suppression.
Notes
GST
Section 74 CGST extended limitation applies only where available material permits a rational prima facie view that tax shortfall, erroneous refund or wrongful input tax credit arose by reason of fraud, wilful misstatement or suppression of facts to evade tax. Conclusive proof is not required at notice stage, but suspicion or a bare allegation is insufficient. Prior scrutiny, audit, inspection or pre-notice communications may supply the factual basis for a DRC-01 notice if they gave the taxpayer meaningful notice. Section 75 prevents confirmation on new grounds and permits treatment under the ordinary regime where the extended-period allegations are ultimately not established.
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Outright leasehold assignment: complete transfer of industrial plot rights falls outside GST, unlike original leasing or sub-leasing services.
Notes
GST
Outright assignment of an industrial lessee's entire leasehold estate, including the building, is distinguished from the original grant of a lease. Original leasing or renting is treated as a supply of services, but complete divestment without a retained reversionary interest transfers a proprietary benefit arising from land. Such a transfer falls within the Schedule III exclusion for land and specified building transactions, rather than service classification under Schedule II; GST charge therefore does not arise. Classification depends on the deed's substance, including rights retained, the assignee's assumption of lease covenants, and transferred structures. A sub-lease, licence, or continuing rental arrangement may be characterised differently. Approval charges collected by the industrial development corporation remain distinct from assignment consideration.
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CBIC commemorates 10 years of India’s Authorised Economic Operator (AEO) Programme; Outlines way forward and reaffirms commitment to trusted trade
GST
Dated:- 16-9-2026

AEO Programme is pivotal in transforming India's customs administration into a modern, trusted and facilitative system aligned with the World Customs Organisation's SAFE Framework of Standards: CBIC Chairman

CBIC Member (Customs) noted transformation of Customs from a transaction-centric approach to a risk-based and trust-oriented model of administration since the introduction of the current AEO framework

The Central Board of Indirect Taxes and Customs (CBIC) today celebrated a decade of India's Authorised Economic Operator (AEO) Programme with a commemorative event titled “AEO@10: Accelerating Growth, Enhancing Trust, Optimizing Trade” in New Delhi.

The event brought together policymakers, industry leaders, logistics stakeholders, WCO experts and Authorised Economic Operators to reflect on the p

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eholder-centric reforms, the Chairman announced the launch of a structured feedback response form on the AEO portal to enable continuous and systematic inputs from AEO entities and other stakeholders.

Drawing on Pillar 2 of the WCO SAFE Framework and the CBIC Citizens' Charter, he emphasised that trade is an equal partner in building a trusted ecosystem and that feedback must be continuous. He also referred to the Eligible Manufacturer Importer (EMI) Scheme, highlighted by the Union Finance Minister's in the Union Budget speech, as an important stepping stone that rewards early compliance and creates a natural pathway to higher AEO tiers.

In his address, Member (Customs), CBIC, recalled the transformation of Customs from a transaction-centric approach to a risk-based and trust-oriented model of administration since the introduction of the current AEO framework through Circular No. 33/2016-Customs. He underlined that voluntary compliance promotes good governance, reduces supply-ch

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26-Customs dated 3rd September 2026, bringing down the documents to be uploaded from ten to three, with effect from 15th September 2026.

The event marked the launch of the commemorative publication “A Decade of AEO in India: Celebrating Trusted Trade Partnerships”, documenting the evolution, milestones and impact of India's AEO Programme over the past ten years, and incorporating contributions from CBIC officers, international partners, trade and industry. A stakeholder feedback survey on the AEO Programme was also announced to obtain structured inputs from industry for guiding future reforms. In addition, new AEO certificates were presented to select businesses, recognising their commitment to secure and compliant international trade.

In her welcome address earlier, Dr. Kavita Bhatnagar, Principal Commissioner and National AEO Programme Manager, highlighted the remarkable growth of the programme since its inception and emphasised the importance of continued collaboration between

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CGST Delhi South Commissionerate busts firm for fraudulent availment of ITC of over Rs. 15.78 crore; arrests partner of firm
GST
Dated:- 16-9-2026

As part of its ongoing enforcement drive against fraudulent Input Tax Credit (ITC) claims, the officers of Anti-Evasion Branch of the Central Goods & Services Tax (CGST), Delhi South Commissionerate, have arrested a partner of the firm engaged in trading of iron and steel goods in a case involving fraudulent availment, utilisation and passing on of inadmissible ITC aggregating to over Rs. 15.78 crore through bogus invoices of approximately Rs. 87.67 crore.

Investigation revealed that the firm had availed inadmissible ITC on the basis of invoices issued by multiple firms, several o

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Rectification of apparent GST record errors may correct inconsistent portal recitals without creating a fresh adjudication.
Case-Laws
GST
GST adjudication orders that expressly incorporate annexures must be read as composite instruments. A digitally signed portal-generated order can validly authenticate an accompanying annexure containing the reasons, input tax credit determination and consequential liability; an inconsistent portal recital that proceedings were dropped does not sever or invalidate the incorporated annexure. Rectification may correct an error apparent from the record to reflect the decision actually made, but cannot reopen merits or create a fresh adjudication. No further hearing is required where the correction does not adversely alter the taxpayer's original position. FORM GST DRC-07 is a statutory summary rather than the adjudication itself, but DRC-07 and corresponding DRC-08 must be made available within a reasonable time to permit appeal and demand enforcement.
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Unconditional omission of GST refund restriction invalidates proceedings based solely on the deleted rule after its removal.
Case-Laws
GST
Unconditional omission of Rule 96(10) of the CGST/WBGST Rules, 2017, without a saving clause, rendered the rule nonexistent for proceedings founded solely on it. Applying Supreme Court law on the effect of such omission, the High Court found that the impugned proceedings had no independent statutory basis. The show-cause notice and consequential orders concerning July 2017 to March 2021 were therefore quashed, and the writ petition was disposed of.
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Pre-GST service completion governs taxability despite later approval and billing, preventing GST-based withholding of payment for manpower services.
Case-Laws
GST
Services rendered and completed before the GST appointed day remain subject, if taxable, to the erstwhile Service Tax regime even where work approval and billing occur after GST commenced. Post-facto approval and subsequent invoices do not alter the date of supply or bring an already completed manpower service within the WBGST Act. Payment cannot be withheld solely for non-compliance with GST formalities; the payable amount may be released after deduction of applicable pre-GST tax. Where a genuine taxability dispute and pending civil proceedings contribute to delayed payment, interest may be set at the prevailing banking rate; interest at 8% per annum was directed from bill submission until payment.
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Year-wise GST tax periods make composite show cause notices impermissible, requiring separate proceedings despite contrary non-jurisdictional precedent.
Case-Laws
GST
GST treats each financial year as a separate tax period for assessment, annual returns, demand limitation and recovery. A composite show cause notice covering multiple financial years improperly combines distinct periods with different due dates, limitation requirements, grounds and response obligations, and is therefore impermissible. Jurisdictional High Court precedent requiring year-wise notices remains binding on authorities notwithstanding a contrary High Court view and an in-limine dismissal of a special leave petition against that view, which does not trigger merger. The composite notice was quashed, with liberty to issue a fresh notice under the CGST Act if legally permissible.
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Assignment of GIDC leasehold rights falls outside GST supply, defeating blocked credit demands and fraud-based proceedings.
Case-Laws
GST
Assignment or transfer of leasehold rights in a GIDC industrial plot is characterised as a transfer of benefits arising from immovable property, not a taxable GST supply. GST charged on that transfer therefore lacks legal basis, and input tax credit reversal and interest premised on the assumed levy cannot stand. The blocked-credit restriction for goods or services used in construction of immovable property does not apply where no construction activity occurred. As the underlying transaction is not taxable and the blocked-credit premise fails, allegations of wrongful credit, fraud, wilful misstatement or suppression for section 74 proceedings, including consequential penalty, cannot be sustained. The adjudication and appellate demands were quashed, with refund of tax and interest directed.
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Separation of GST audit and adjudication functions requires fresh determination by an officer other than the audit officer.
Case-Laws
GST
GST audit and adjudication should not be undertaken by the same officer where the adjudication order is issued under Section 73(9). The High Court, following a co-ordinate Bench ruling, quashed an order passed by the officer who had conducted the audit. Fresh adjudication was directed from the stage of the reply to the show-cause notice, to be undertaken by a proper officer other than the audit officer after providing an adequate hearing opportunity.
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