Goods and Services Tax

Impugned order quashed for non-application of mind; fresh hearing ordered under natural justice principles
Case-Laws
GST
The HC quashed the impugned order due to non-application of mind and violation of natural justice principles. The petitioner had deposited 10% of the disputed tax and recovered over 25% during proceedings. The matter was remanded to the respondents to pass fresh orders on merits and in accordance with law after affording the petitioner a hearing within three months. The petitioner is directed to file a reply to the show cause notice, treating the impugned order as an addendum, within 30 days of receiving this order. The petition was disposed of by remand.
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Supply of Stationery Without Payment Not a Taxable Supply Under Section 7 CGST Act, 2017
Case-Laws
GST
The AAR held that supply of stationery items without consideration does not constitute a supply under Section 7 of the CGST Act, 2017, as it is not made for consideration and thus falls outside the scope of business under Section 2(17). Supply of stationery or repair services for consideration qualifies as a taxable supply. Recovery of fines or penalties for loss or breach does not constitute a supply unless linked to contractual obligations, which are taxable per Schedule II. Disposal of waste or scrap and sale of tender forms or used vehicles are taxable supplies under Section 7. The applicant must apportion and reverse input tax credit on exempt supplies per Rule 42/43. Classification and exemption applicability could not be ruled on due to insufficient information.
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Writ Petition Dismissed on ITC Ineligibility; Natural Justice Followed, Alternative Remedies Available
Case-Laws
GST
The HC dismissed the writ petition challenging the impugned order regarding ineligible ITC availed and utilized. The court found that the proper officer had complied with principles of natural justice by granting a hearing and considering the petitioner's contentions. The petitioner admitted wrongful availment of ITC for April to December 2020, which was subsequently reversed. The authority noted the absence of evidence for receipt of goods or services and corresponding payment. The petitioner's claim that certain documents were not fully considered did not justify invoking extraordinary jurisdiction, especially given the availability of effective alternative statutory remedies. The petitioner was granted liberty to pursue such remedies in accordance with law.
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Garlic peeled, chopped, and packed classified under HSN 07032000; no GST liability as per Section 97(2)(a) CGST Act
Case-Laws
GST
The AAR declined to rule on whether peeling, chopping, and packing garlic constitutes manufacturing, as this issue is not within its jurisdiction under section 97(2)(a) CGST Act, 2017. However, it held that peeled, chopped, and packed garlic falls under tariff heading 07032000, covering fresh or chilled alliaceous vegetables, including garlic in various prepared forms such as peeled or chopped. The absence of evidence to show the product is preserved otherwise excluded it from heading 20055900. Consequently, the product is classified under HSN 07032000, and the applicant is not liable to pay GST on the said goods.
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No GST Exemption for Student Transportation and Catering Services Under Notification 12/2017-CT Rate
Case-Laws
GST
The AAR held that the applicant is ineligible for exemption under serial no. 66(b)(i) & (ii) of notification No. 12/2017-CT (Rate) for transportation and catering services provided directly to students, as the consideration was received from students and not from the educational institution. Consequently, the services are not deemed to be provided to the school, failing the primary condition for exemption. The authority further declined to address the question of refund of tax paid on such services in earlier years, as it falls outside the scope of subsection 97(2). Therefore, the applicant cannot claim exemption or refund under the specified notification for the impugned services.
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Job work on metallic film rolls not classified as textiles; GST rate fixed at 12% under serial No. 26(id)
Case-Laws
GST
The AAR held that job work involving cutting of metallic film rolls used for zari/metallic yarn does not qualify as textile or textile products under chapters 50 to 63 of the CTA '75, as the applicant failed to prove the classification. Consequently, the benefit of concessional GST at 5% under serial No. 26(i)(b) was denied. The job work falls under serial No. 26(id), attracting GST at 12%. The applicant's invoicing at 12% GST aligns with this classification, and the higher rate under general job work category at 18% is inapplicable since the clients are registered persons under GST. Thus, the correct GST rate for the service is 12%.
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Penalty under Section 27(3) TNVAT Act for ITC reversal must follow latest Circulars and proper factors
Case-Laws
GST
The HC held that the penalty imposed under Section 27(3) of the TNVAT Act, 2006, for reversal of ITC due to mismatched returns was improperly determined without regard to relevant factors and applicable Circulars. The Tribunal erred by relying on an outdated Circular, failing to consider the subsequent Circular No.5/2021 issued pursuant to this Court's directive mandating a mechanism for return reconciliation. As the assessment and first appellate orders predated these developments, the HC found merit in remanding the matter to the assessing authority for fresh adjudication in accordance with the latest Circular. The question of law was resolved in favor of the State, endorsing the remand for reassessment consistent with current procedural guidelines.
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HC limits GST cancellation to Show Cause Notice date, overturns retrospective cancellation from 2017 under Section 29
Case-Laws
GST
The HC quashed the impugned final order of GST cancellation dated 6 September 2024, allowing the petition. The court held that since the taxpayer was found non-existent at the principal place of business during physical verification, retrospective cancellation from 1 July 2017 was inappropriate. Relying on precedent, the HC modified the cancellation date to 4 September 2021, the date of issuance of the Show Cause Notice, recognizing that the petitioner did not intend to continue business or registration. Consequently, the retrospective cancellation was set aside, and the GST registration cancellation was limited to the date of the Show Cause Notice.
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Demand orders set aside for violating natural justice; fresh reply allowed under GST rules 16(4)
Case-Laws
GST
The HC set aside the impugned demand orders and remanded the matter to the Adjudicating Authority due to violation of natural justice principles. The Court held that the SCN, issued prior to changes in the GST portal making the 'Additional Notices Tab' visible, was not properly communicated to the Petitioner, depriving them of a fair opportunity to respond. Consequently, no reply was filed by the Petitioner. The matter was remitted for fresh consideration, allowing the Petitioner thirty days to file a reply to the SCN, ensuring compliance with procedural fairness. The petition was disposed of accordingly.
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Order quashed for defective service of Show Cause Notice under Section 169 CGST Act; natural justice principles upheld
Case-Laws
GST
The HC quashed the impugned order due to defective service of the Show Cause Notice (SCN), which was only uploaded on the GST Portal without physical service, depriving the petitioner of an opportunity to reply. The Court held that mere upload on the portal does not constitute effective service if no response is received, and the issuing officer must explore alternative modes of service as per Section 169 of the CGST Act, such as RPAD, to ensure compliance with natural justice. The impugned order was found to be passed without application of mind and violated natural justice principles. The matter was remanded to the respondent for fresh consideration without imposing any deposit condition on the petitioner.
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Regasification of Third-Party LNG as Job Work Under Section 2(68) CGST Act, Taxable at 12%
Case-Laws
GST
The AAR held that the service of regasification of LNG owned by a third party, provided through an intermediary under contractual arrangements, constitutes job work within the meaning of section 2(68) of the CGST Act, 2017. The applicant acts as a job worker for the owner of the goods, without holding ownership. The service is classifiable under serial no. 26(id) of notification No. 11/2017-CT (R) and is subject to GST at 12%. The ruling confirms that the activity is a back-to-back job work arrangement, and the applicable tax treatment aligns with the prescribed classification for such services.
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Interest and costs from arbitration awards before GST are not taxable under Schedule II, clause 5(e)
Case-Laws
GST
The AAR held that the amounts received as interest and costs awarded under arbitration do not constitute a supply liable to GST, as the transactions relate to the pre-GST period and fall outside the scope of Schedule II, clause 5(e). The work contract lacked any penalty, compensation, or interest recovery provisions for delayed payments. Consequently, the applicant is not obligated to remit GST on the arbitration-awarded interest and costs. Other related contentions were deemed inapplicable.
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HC defers ruling on Section 168A GST Act validity, awaiting Supreme Court decision on identical issues
Case-Laws
GST
The HC declined to adjudicate the constitutional validity of Section 7 of the Taxation and Other Laws (Relaxation and Amendment) Act, 2020, introducing Section 168A in the GST Act, and the related Notifications Nos. 9 and 56 of 2023, as identical issues are pending before the SC. Exercising judicial discipline, the HC refrained from expressing any opinion on the vires of Section 168A or the challenged notifications. The HC directed that the petition be governed by the forthcoming SC judgment, which shall be binding on the parties. Consequently, the petition was disposed of without a substantive ruling on the merits.
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Section 74 CGST Act Misapplied Without Fraud; Interim Relief Granted for Prepaid GST Liability Dispute
Case-Laws
GST
The HC held that the authorities improperly invoked Section 74 of the CGST Act, 2017, as the petitioner had already discharged the GST liability with interest before the show-cause notice issuance. The court emphasized that Section 74 applies only in cases involving fraud, willful misstatement, or suppression of facts, which were not established here. Given the vacancy in the State Tribunal and ongoing similar disputes in other High Courts and the Supreme Court, the HC found sufficient grounds to grant interim relief to the petitioner. Consequently, the petition was admitted for hearing, acknowledging a prima facie case against the invocation of Section 74 under the present facts.
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Provisional Attachment Order Under Section 83(2) CGST Act Ceases After One Year, Bank Account Released
Case-Laws
GST
The HC held that the provisional attachment order issued under Section 83(2) of the CGST Act, 2017, ceased to have effect after one year from the date of the order under Section 83(1). Since more than one year had elapsed since the impugned order dated April 5, 2024, the attachment of the petitioner's bank account was no longer valid. Consequently, the HC quashed and set aside the provisional attachment order, allowing the petition and directing that the attachment on the petitioner's bank account shall not operate beyond the statutory one-year period.
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Section 161 CGST Order Set Aside for Lack of Hearing and Non-Speaking Reasons, Remanded for Fresh Consideration
Case-Laws
GST
The HC set aside the impugned rectification order under Section 161 of the CGST/DGST Act, finding it to be cryptic, non-speaking, and issued without affording the petitioner a hearing, thereby violating principles of natural justice. Although the Show Cause Notice and demand order were reasoned and a detailed reply was filed, the rectification order merely dismissed the application as “unsatisfactory” without reasons. The matter was remanded to the Adjudicating Authority for a de novo consideration of the rectification application, ensuring the petitioner is granted an opportunity for a proper hearing. The petition was disposed of accordingly.
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Writ Petition Under Article 226 Allowed Despite Alternative Remedy Due to Natural Justice Violation and Procedural Errors
Case-Laws
GST
The HC held that despite the availability of an alternative statutory remedy, the writ petition under Article 226 was maintainable due to violation of natural justice and non-application of mind in the impugned assessment order. The court found that the order ignored the petitioner's detailed reply and merely reiterated the show cause notice without proper consideration. Consequently, the impugned order and the related detailed order were set aside for being vitiated by procedural infirmities and lack of jurisdictional exercise. The petition was accordingly disposed of, affirming that exceptions to the rule of alternative remedy apply where there is an apparent error on the face of the record or a breach of natural justice.
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GST registration cancellation set aside; petitioner allowed to file returns and pay taxes with penalty under law
Case-Laws
GST
The HC set aside the cancellation of GST registration and declined to entertain the revocation application on the merits. The petitioner, having expressed willingness to file pending returns and pay applicable taxes with interest and penalty for specified financial years, was granted indulgence. The Court remitted the matter to the respondent authority for fresh reconsideration in accordance with law, allowing the petitioner an opportunity to regularize tax compliance. The petition was allowed by way of remand, thereby restoring the opportunity for the petitioner to rectify defaults before any adverse final action is taken.
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Kerala SGST Updates Delegation for Waiver Applications Under Section 128A from March 2025 Onward
Circulars
GST – States
The Kerala SGST Commissioner amended the delegation of functions under the Kerala State Goods and Services Tax Act, 2017, specifically concerning the waiver scheme under newly inserted Section 128A effective 01.11.2024. The proper officer for processing waiver applications relating to notices under Section 73 remains the officer authorized under that section, while applications relating to orders under Section 73 are assigned to officers delegated under Section 79. Pursuant to Instruction No. 06/2025, these functions are now assigned to Deputy State Tax Officers/Assistant State Tax Officers within the Taxpayer Services vertical to ensure timely processing within pecuniary limits. The amendment to Circular No. 5/2023 took effect from 15.03.2025, streamlining officer responsibilities for waiver applications.
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Kerala GST Department implements Section 74A procedural changes for streamlined tax adjudication across departmental verticals
Circulars
GST – States
The Kerala State GST Department issued Circular No. 14/2025 implementing procedural changes for adjudication under Section 74A of the KSGST Act, 2017. Section 74A, inserted through the Kerala Taxation Laws (Amendment) Act, 2024, standardizes timeframes for tax determination and penalty relief regardless of fraud or suppression circumstances, superseding Sections 73 and 74. All show cause notices under Section 74A must be adjudicated by jurisdictional authorities within the Taxpayer Services Vertical, shifting responsibility from Intelligence, Enforcement, and Audit verticals. The circular mandates uniform numbering formats for notices and orders consistent with existing Section 73/74 procedures, utilizing the same registers and documentation systems. These administrative restructuring instructions became effective November 1, 2024, streamlining GST adjudication processes across departmental verticals.
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GST demand order quashed for exceeding show-cause notice amount under Section 75(7)
Case-Laws
GST
HC quashed tax demand order dated April 27, 2024 for violating Section 75(7) of GST Act. Show-cause notice specified tax, interest and penalty amount of Rs. 4,80,527.36, but final demand raised Rs. 24,40,363.10, exceeding notice amount. Court held Section 75(7) mandates that tax, interest and penalty demanded in order cannot exceed amount specified in notice, and no demand shall be confirmed on grounds other than those specified in notice. Matter remanded to respondent authority to provide fresh hearing opportunity to petitioner and pass order in accordance with law. Petition allowed by way of remand.
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Petitioner's installment request must be considered within three weeks despite admitted liability of Rs.35,59,067
Case-Laws
GST
The HC disposed of the writ petition concerning attachment and short-payment of Rs.35,59,067. The petitioner admitted liability for the sum and requested monthly installments, but the second respondent failed to consider this representation dated 26.05.2025. The court declined to intervene against garnishee proceedings dated 15.04.2025 given the admitted liability. However, the HC directed the second respondent to consider and pass orders on the petitioner's representation for 24 equal monthly installments within three weeks from receipt of the order, recognizing the respondent's duty to consider such applications expeditiously and protect the petitioner's interests.
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Detenue held in illegal custody beyond 24-hour limit violating Article 22 fundamental rights
Case-Laws
GST
HC found that the detenue was held in illegal custody by respondents beyond the constitutionally mandated 24-hour period, violating Article 22 fundamental rights. The detenue was arrested at 12:02 PM on 04.06.2025 but produced before the jurisdictional Magistrate only at 9:25 PM on 05.06.2025. The court issued show cause notice to respondents for potential contempt proceedings regarding obstruction of the Warrant Officer's duties and snatching official papers. Additional Director General GST was directed to file affidavit detailing officials present at Central Revenue Building during specified hours and CCTV installation status. Matter adjourned to 18.07.2025 for further proceedings.
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GST appeal delay can be condoned under Section 5 of Limitation Act when sufficient cause shown
Case-Laws
GST
The HC set aside the appellate authority's order dismissing a GST appeal filed beyond the prescribed four-month limitation period under Section 107(4) of CGST Act, 2017. The Court held that Section 5 of the Limitation Act, 1963 applies for condonation of delay in GST appeals, as it has not been expressly or impliedly excluded by Section 107 of the CGST Act. Following established precedent, the Court ruled that the appellate authority was unjustified in rejecting the appeal solely on limitation grounds without considering condonation of delay. The matter was remanded to the appellate authority for fresh consideration of the condonation application.
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Bail granted to accused in CGST evasion case upheld after chargesheet filing constituted material change in circumstances
Case-Laws
GST
HC dismissed petition seeking recall of bail order granted to respondent charged with CGST evasion worth crores. Petitioner argued bail was granted merely one month after rejection of second application without changed circumstances. HC held filing of chargesheet constituted material change in circumstances, shifting considerations from investigation cooperation to triple test criteria including flight risk, witness influence, and evidence tampering. Court found documentary evidence unlikely to be tampered, no flight risk demonstrated, and no witness influence potential. CMM's discretion in granting bail was properly exercised with no abuse of liberty shown or trial hampering evidenced, warranting dismissal.
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