Author: admin_gst

Tax Fraud Kingpins Caught: Massive Rs. 11.97 Crore ITC Scam Exposes Systematic Revenue Manipulation Under CGST Sections
Case-Laws
GST
HC denied bail in tax fraud case involving fraudulent Input Tax Credit (ITC) exceeding Rs. 11.97 crore. Despite petitioners' claims of being permanent residents, the court found substantial evidence of systematic tax evasion under CGST Act Sections 132(1)(b), 132(1)(c), and 132(1)(f). The court emphasized the potential risk to investigation process beyond physical disappearance, noting the ability to manipulate evidence and procedural systems. Given the significant public revenue implications and prima facie documentary evidence of fraudulent practices, the bail applications were dismissed, prioritizing the integrity of the ongoing financial investigation.
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High-Stakes Tax Dispute: Fraudulent Input Tax Credit Challenge Rejected, Statutory Appeal Path Remains Open Under Section 107
Case-Laws
GST
HC dismissed writ petition challenging tax authority's show cause notice (SCN) for fraudulent Input Tax Credit (ITC) availment. The court held that allegations of ITC fraud require detailed factual investigation and are not suitable for writ jurisdiction. Statutory appeal under Section 107 of CGST Act, 2017 remains available to the petitioner. The court emphasized that consolidated SCN across multiple financial years does not inherently invalidate proceedings, and future appeals can address specific procedural challenges. Dismissal was based on lack of exceptional circumstances and availability of alternative statutory remedy.
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Foreign Affiliate Service Valuation Upheld: GST Refund Claim Validated Under CBIC Circular No. 210/4/2024 Guidelines
Case-Laws
GST
HC adjudicated a GST refund claim involving services rendered by a foreign affiliate to a domestic related entity. The court referenced precedential judgments in Thales India Pvt. Ltd. and Metal One Corporation Pvt. Ltd., which addressed similar legal controversies regarding service valuation under CBIC Circular No. 210/4/2024. The Department conceded no challenge to the prior order, resulting in the court directing full refund processing of Rs. 8,99,61,147/- to be credited within two months. The petition was consequently disposed of, affirming the petitioner's entitlement to the claimed refund amount.
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High Court Orders Reopening of Advance Ruling Proceedings Under CGST Act, Directs Fresh Evaluation with New Evidence
Case-Laws
GST
HC remanded the matter to the Authority for Advance Ruling following the Supreme Court's decision in Safari Retreats Pvt. Ltd. and subsequent retrospective amendments to the CGST Act. The impugned orders dated 24 May 2019 and 6 November 2019 were set aside. Both parties were granted permission to submit additional evidence within four weeks. The Petitioner was directed to appear before the Authority on 14 July 2025, with the Authority instructed to expedite the decision-making process. The petition was disposed of, effectively reopening the advance ruling proceedings for fresh consideration in light of recent legal developments.
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Tender Notification Challenged: GST Waived for Human Hair Auction Participants, Mandatory 18% Tax Requirement Struck Down
Case-Laws
GST
HC adjudicated a challenge to a tender notification's GST condition. The petitioner contested the mandatory 18% GST requirement for auction participants of human hair. The HC determined that based on central government notifications and departmental circulars, human hair collection does not attract GST. Consequently, the court modified clause 23 of the tender notification, prohibiting the respondent from mandating 18% GST from auction participants. The writ petition was disposed of, effectively invalidating the GST imposition and providing relief to potential tender participants.
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Tax Credit Dispute Resolved: Technical Errors Cannot Invalidate Input Tax Claims Under CGST Provisions
Case-Laws
GST
HC allowed the petition challenging tax demand under CGST Act for assessment year 2017-2018. The court referenced a prior Division Bench judgment which emphasized that technical errors in tax documentation, such as omitting IGST figures in GSTR 3A, do not constitute substantive tax credit misuse. The court directed reconsideration of the original assessment order, focusing on whether alleged irregularities genuinely impacted input tax credit availability. The impugned order was set aside, effectively providing relief to the petitioner based on procedural and technical grounds.
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Legal Notice Invalidated: Procedural Defect in Communication Renders Show Cause Order Unenforceable, Petitioner Granted Extended Response Time
Case-Laws
GST
HC held that the show cause notice (SCN) issued on 27th September, 2023, was not properly communicated to the petitioner, violating principles of natural justice. Following precedent in a similar case, the court remanded the matter back to the adjudicating authority. The impugned order was set aside, and the petitioner was granted time until 10th July 2025, to file a reply to the SCN. The court directed that hearing notices must be e-mailed to the petitioner and not merely uploaded on the portal, ensuring proper opportunity to be heard.
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Legal Victory: GST Tax Order Against Deceased Proprietor Invalidated Due to Procedural Defects in Section 93 Notice Requirements
Case-Laws
GST
HC allowed the petition challenging a tax order under GST Act, finding procedural irregularities in the proceedings against a deceased proprietor. The court held that Section 93 prohibits determination of tax liability against a deceased person without issuing a show cause notice to the legal representative. The tax department's order was deemed void ab initio as it failed to follow mandatory legal procedures for initiating proceedings against a deceased taxpayer's estate, thereby rendering the entire tax determination process invalid and unenforceable.
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GST Registration Cancellation Can Be Restored by Filing Pending Returns and Clearing Outstanding Tax Dues Within Two Months
Case-Laws
GST
HC held that GST registration cancellation under Section 29(2)(c) for non-filing of returns for six consecutive months can be remedied. The petitioner may approach the empowered officer within two months, submit all pending returns, pay full tax dues, applicable interest, and late fees. If compliance requirements are met, the authority shall expeditiously restore the GST registration in accordance with the proviso to sub-rule (4) of Rule 22 of CGST Rules, 2017. The court emphasized the serious civil consequences of registration cancellation and provided a remedial pathway for reinstatement.
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One held for Rs 14 crore GST refund fraud in Delhi
GST
Dated:- 15-6-2025
PTI
New Delhi, Jun 15 (PTI) The Delhi government's Department of Trade and Taxes uncovered a Rs 14 crore GST refund fraud, police said on Sunday. One of the key accused has been arrested in the case.
The investigation revealed a network of individuals who had created and operated four fictitious firms solely to illegitimately claim GST refunds under the guise of genuine business activities, they added.
They claimed that this was a first-of-its-kind operation by the department, where cutting-edge big data analytics and detailed chain analysis, including scrutiny of banking transactions, were employed to trace the flow of funds across multiple entities lo

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es located outside India, a detailed report is also being submitted to the Department of Revenue, Government of India, for necessary action.
Swift recovery efforts were launched following the detection of the fraud. So far, Rs 1.16 crore has been successfully recovered, and ongoing proceedings are underway to retrieve the remaining amount, he said.
The department has also frozen 45 bank accounts linked to 27 implicated entities, effectively preventing further movement or diversion of illegal funds, he added.
An FIR has been lodged with the Economic Offences Wing (EOW) of the Delhi Police. In a significant development, one of the key accused, the proprietor of one of the fraudulent firms, has been arrested from Delhi. He was produced be

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Service via Online Portal Deemed Valid Under Section 169(1)(d), Procedural Flexibility Affirmed for Notice and Appeal Timelines
Case-Laws
GST
HC held that service of notice by uploading on the portal constitutes valid service under Section 169(1)(d) of WBGST/CGST Act, 2017. The court rejected the contention that personal service was mandatory, finding that the petitioner was aware of the proceedings and had responded to the show-cause notice. The appellate authority's mechanical rejection of the appeal for delay was deemed incorrect, following precedent that allows condonation beyond the extended one-month period. Consequently, the impugned order was set aside, and the petition was disposed of, affirming a more flexible interpretation of service and delay condonation provisions.
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Tax Notifications N/N. 56/2023 Quashed Due to Procedural Unfairness and Inability to Access GST Portal for Responding
Case-Laws
GST
HC set aside the impugned order challenging tax notifications N/N. 56/2023-Central Tax and N/N. 56/2023-State Tax. The court found a violation of natural justice principles as the petitioner was unable to access the GST Portal due to registration cancellation, thereby preventing reply to the show cause notice. The matter was remanded to the Adjudicating Authority to provide the petitioner a proper opportunity to file a reply and attend a personal hearing, ensuring procedural fairness in the administrative proceedings.
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Mango Pulp GST Classification Confirmed at 12% Rate, Validating Circular No. 179/11/2022-GST Under Vimal Agro Precedent
Case-Laws
GST
HC determined mango pulp's GST classification, affirming the 12% tax rate from 01.07.2017 based on precedent in Vimal Agro. The court validated Circular No. 179/11/2022-GST, rejecting petitioner's challenge to classification. The ruling mandates GST payment at 12% for mango pulp between 01.07.2017 and 18.07.2022, upholding show cause notices for differential tax recovery. Petition partially allowed, establishing definitive tax treatment for mango pulp under existing GST regulations.
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Veterinary and Agricultural Services Taxed Differently: Marketing Commissions and Lab Tests Face GST, Healthcare Advice Exempted
Case-Laws
GST
AAR ruled on GST classification for veterinary and agricultural services. The ruling determined that commission charges for marketing and selling birds are not exempt under Service Accounting Code 9986, but classified under Heading 996111. Veterinary services provided by the company, including diagnostic and healthcare advice to livestock, qualify for GST exemption under Entry 46 of Notification 12/2017. Laboratory testing services were classified under SAC 998346 and do not receive GST exemption. The decision clarifies that the services are primarily commercial wholesale trade activities rather than direct agricultural support services, thus impacting their tax treatment.
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Two Appeals Allowed Under Section 107 CGST Act with Specified Pre-Deposit Conditions and Extended Filing Deadline
Case-Laws
GST
HC determined that the petitioner may file two appeals challenging orders dated 28th January 2025 and 1st February 2025 under Section 107 of CGST Act, 2017. Pre-deposit shall be made only for the total amount of Rs. 81,41,737/- from the Order-in-Original dated 28th January 2025, comprising Rs. 64,31,703/- and Rs. 17,10,034/-. No additional pre-deposit is required for the Order-in-Original dated 1st February 2025. Appeals must be filed by 15th July 2025, and shall not be dismissed on grounds of limitation or lack of pre-deposit, but adjudicated on merits.
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Tax Credit Denied: Dealer Fails to Prove Transaction Validity Under Section 74 GST Regulations
Case-Laws
GST
HC dismissed the writ petition challenging the assessment order under Section 74 of GST enactments. The court upheld the denial of Input Tax Credit due to the provisional nature of the credit and the supplier's failure to remit taxes to the government. The burden of proving the transaction's genuineness rests with the purchasing dealer. The court found no merit in the petitioner's arguments and conclusively rejected the challenge to the tax assessment, affirming the statutory provisions governing provisional credit and its reversal.
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LNG Pipeline Construction Denied Input Tax Credit Due to Infrastructure Classification Under CGST Section 17
Case-Laws
GST
The AAR ruled that the Tie-in pipeline, which transfers re-gasified LNG from FSRU to the National Grid, does not qualify as “plant and machinery” under Section 17 of the CGST Act. Despite using various technical systems and devices, the pipeline remains a structure laid outside factory premises. Consequently, the applicant is precluded from claiming Input Tax Credit (ITC) for GST paid on goods and services used in constructing the pipeline, as per Section 17(5)(c) and 17(5)(d) of the CGST Act, 2017, as amended by the Finance Act 2025.
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GST Registration Cancellation Order Invalidated Due to Procedural Lapses in Notice and Hearing Principles
Case-Laws
GST
HC ruled that GST registration cancellation order violated principles of natural justice by: (1) issuing show cause notice for one ground but cancelling registration on an undisclosed separate ground, (2) failing to provide petitioner opportunity of being heard, and (3) passing quasi-judicial order without applying mind to constitutional protections under Articles 14 and 19. The impugned order was deemed unsustainable in law. HC remanded matter to adjudicating authority with directive to issue fresh notice specifying proposed registration cancellation reasons within one week, thereby allowing the petition and safeguarding petitioner's procedural rights.
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Municipal Services Deemed Labour, Not Core Constitutional Functions, Disqualifying Tax Exemption Under Notification 12/2017
Case-Laws
GST
The AAR determined that the applicant's services to municipal councils, including property survey, numbering, measurement, and data digitalization, constitute pure labour services not directly related to constitutional functions under Articles 243G or 243W. While facilitating property tax assessment is essential for municipal operations, these specific services do not fall within the mandated municipal functions enumerated in the Twelfth Schedule. Consequently, the applicant is not eligible for the tax exemption under Notification No. 12/2017-CT (Rate), and standard tax provisions will apply to the services provided.
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Infrastructure Service Payments: Interest in Deferred Installments Now Taxable Under GST Section 15(2)(d)
Case-Laws
GST
AAR held that interest receivable on deferred payment in Equated Yearly Installment under Annuity Model is subject to GST. Pursuant to Section 15(2)(d) of CGST Act, the interest component shall be includible in taxable value. The classification and GST rate for such interest shall mirror the original taxable supply of road construction and maintenance services. The ruling confirms that interest payments are integral to the total consideration and therefore taxable, ensuring comprehensive tax coverage for infrastructure project payments.
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Diagnostic Medical Equipment Classified Differently: Infantometer at 12% GST, Stadiometer at 18% Based on Specific Design and Use
Case-Laws
GST
AAR ruled on classification of diagnostic medical equipment. For infantometer, the authority determined it qualifies as a diagnostic medical instrument under Heading 9018, primarily used by pediatricians to measure infant length and assess growth/malnutrition, thus attracting 12% GST. Conversely, stadiometer was classified under Heading 9017 as a general measuring instrument for height, not exclusively medical in nature, and therefore subject to 18% GST. The key distinguishing factor was the specific design, intended use, and professional context of each measuring device, with infantometer serving a diagnostic purpose while stadiometer remained a general measuring tool.
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Specialized Fruit Protection Bags Classified as Sacks Under Tariff Heading 48194000 with Unique Protective Coating Properties
Case-Laws
GST
AAR ruled that fruit protection bags manufactured from coated kraft paper with specialized protective properties are classifiable under Tariff Heading 48194000 for sacks and bags, not under Tariff Heading 4805. The bags, sealed on three sides and designed to fully enclose fruits, possess characteristics beyond standard paper products. The chemical coating and specific functional design distinguish them from uncoated paper, rendering them a specialized packaging item. Consequently, the product is subject to 18% taxation under the identified tariff classification.
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Maharashtra State Electricity Transmission Company Limited Wins GST Exemption for Penalty Recoveries and Financial Adjustments Under Rule 2(102)
Case-Laws
GST
AAR held that various financial transactions by MSETCL, including liquidated damages, forfeiture of security deposits, penalty recoveries, and write-back of unclaimed balances, do not constitute taxable supply under GST. The recoveries are primarily punitive measures to discourage non-serious contractors or accounting adjustments without consideration for services. Consequently, these transactions fall outside GST's purview, as they lack the essential elements of a supply, specifically the consideration for goods or services. The ruling emphasizes that such financial mechanisms are procedural safeguards rather than taxable commercial exchanges.
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Testing and Commissioning of Rail Tracks Classified as Pure Construction Service Under GST, Taxed at 18% Rate
Case-Laws
GST
AAR determined that the testing and commissioning service for rail tracks does not qualify as a composite works contract under Sl. No. 3(vi)(a) of Notification 11/2017-Central Tax (Rate). The service constitutes a pure construction service under Chapter heading 9954, classified specifically under Sr. No. 3(xii) of the notification. Consequently, the service is chargeable to GST at 18%, as the materials were supplied by a separate entity and the applicant merely provided erection and commissioning services without transferring property in goods.
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Shot Blasting Service on Customer Castings Classified as Job Work Under Section 2(68) CGST Act, Attracting 12% GST Rate
Case-Laws
GST
AAR determined that shot blasting service performed by the applicant on customer's castings within customer's premises constitutes a job work service under SAC 9988. The service meets definitional criteria of job work as per section 2(68) of CGST Act, 2017, involving processing of goods belonging to a registered person. Ownership of goods remains unchanged during processing. Consequently, the service is classified under Sr. No. 26(id) of Notification No. 11/2017-CT(R) and attracts 12% GST rate, validating the applicant's service classification and tax treatment.
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