Goods and Services Tax

Contractors Cannot Claim Additional GST Beyond Quoted Rates When Tender Terms Specify “GST-Inclusive” Pricing
Case-Laws
GST
HC held that a contractor cannot claim GST payment beyond rates quoted in government contracts where tender explicitly states “rates inclusive of GST & other taxes.” The court dismissed petitions challenging this interpretation, emphasizing that allowing additional GST claims would undermine tender process integrity. Using an illustrative example, if a contractor quotes Rs. 100 with GST-inclusive terms, they cannot later demand Rs. 118 (additional 18% GST), as other bidders might have quoted higher base rates (e.g., Rs. 105) accounting for inclusive GST. The court found circulars cited by petitioner pertained to estimate preparation, not final tendering, and were inapplicable where agreements explicitly specified GST-inclusive rates. Petitions dismissed in limine.
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Powers to Arrest Under Customs Act and GST Laws Valid with New Safeguards: Right to Counsel During Interrogation Limited
Case-Laws
GST
SC upheld constitutional validity of arrest powers under Customs Act and GST Acts while establishing key procedural safeguards. Person arrested has right to meet advocate during interrogation but not throughout. Officers must have material evidence and “reasons to believe” before arrest, documented in writing. Arrest powers subject to judicial review both pre and post prosecution. Section 41-D of CrPC applies to Customs Act arrests. Officers must inform arrestee of grounds and comply with Section 50A notification requirements. GST arrest provisions under Sections 69-70 deemed valid under Article 246-A. Court mandated balance between individual rights and statutory objectives, emphasizing arrests must not be arbitrary and must satisfy prescribed monetary thresholds. Judicial review available but limited to cases of manifest arbitrariness or statutory non-compliance.
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GST Order Valid Despite Unsigned DRC-07 Summary; Petition Dismissed for Not Exhausting Statutory Appeals Within Time Limit
Case-Laws
GST
HC dismissed petition challenging GST order validity based on unsigned Form DRC-07 summary and time-barred filing. Court held that petitioner failed to pursue available statutory appeal remedies within prescribed limitation period. Following SC precedent in Glaxo Smith Kline, HC found petition non-maintainable as entertaining it would contravene statutory scheme. Original order contained proper signature and was issued within extended limitation period until 30.04.2024. Absence of signature on DRC-07, being merely a summary document, caused no prejudice. Petitioner retains right to pursue statutory remedies if permissible under law.
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Tax Evasion Through Fraudulent ITC Claims: Petition Dismissed Despite Meeting Tax Liability Via Supplier Invoices
Case-Laws
GST
HC dismissed the petition challenging GST demand for AY 2017-2020. Petitioner allegedly facilitated tax evasion by passing ineligible Input Tax Credit (ITC). While petitioner claimed discharge of tax liability through ITC from supplier invoices, court found prima facie evidence of petitioner acting as accessory in passing ineligible ITC. Following precedent set in Sahyadri Industries Limited case, HC held that despite tax liability being met through ITC without cash payment, the transaction indicated fraudulent ITC passing scheme under CGST Act 2017 and TNGST Act 2017, warranting dismissal of relief sought.
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GST Assessment Orders Invalidated: Missing Officer Signature and DIN Number Violate Mandatory Requirements Under CGST Act
Case-Laws
GST
HC set aside GST assessment orders due to procedural defects including missing signature of assessing officer and absence of DIN number. Following established precedents, particularly A.V. Bhanoji Row case, the court held that officer's signature on assessment orders cannot be dispensed with, and such defect cannot be rectified under Sections 160 & 169 of CGST Act, 2017. The court emphasized that these procedural requirements are mandatory and their omission renders the assessment orders invalid. Consequently, the impugned assessment orders in Form GST DRC-07 dated 30.04.2024 and Form GST DRC-08 dated 18.01.2022 were set aside, and the petition was allowed.
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Taxpayer Given Two Weeks to File GST Registration Revocation Application Under Section 30(2) After Non-Filing of Returns
Case-Laws
GST
HC permitted petitioner to seek revocation of GST registration cancellation that occurred due to prolonged non-filing of returns. Petitioner expressed willingness to clear outstanding GST dues and penalties. Following precedent established in earlier matter, court allowed petitioner two weeks to file revocation application under Section 30(2) of CGST Act, 2017. Court disposed of petition based on mutual agreement between parties, directing that cancellation order's revocation be pursued through statutory remedy available under GST framework rather than through judicial intervention.
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SC upholds power of arrest of customs, GST authorities
GST
Dated:- 27-2-2025
PTI
New Delhi, Feb 27 (PTI) The Supreme Court on Thursday upheld the constitutional validity of the power of arrest under the amended laws of customs and the central goods and services tax (GST).
A bench of Chief Justice Sanjiv Khanna and Justices M M Sundresh and Bela M Trivedi said in appropriate cases, application for pre-arrest bail could be allowed and it was not essential for such pleas to be moved only after an FIR when facts were clear and a reasonable basis present to apprehend arrest.
About 280 pleas, including one of lead petitioner Radhika Agarwal in 2018, challenged the provisions of the Customs Act and the GST Act being “non compatible” with the CrPC and the Constitution.
Writing a 63-page judgement for himself and Justice Sundresh, the CJI held, “The challenge to the constitutional validity as also the right of the authorised officers under the Customs Act and the GST Act to ar

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tatutory authority to investigate and arrest offenders under the relevant laws.
The bench was dealing with the validity of the amended provisions of the Customs Act and the GST Act post its 2011 judgement in the case of Om Prakash v. Union of India.
The 2011 verdict held that offences under the Customs Act and the Central Excise Act, 1944 were non-cognisable and, therefore, even if the officers, who had the power to arrest, could do so only after obtaining a warrant from the magistrate under CrPC.
The amendments were later brought in Section 104 of the Customs Act which specified certain offences as cognisable offences and empowered the officers to effect arrest in certain cases.
“The amendments made to the Customs Act in 2012, 2013 and 2019 are substantive and were introduced to effectively modify the application of Om Prakash, which required a customs officer to obtain prior approval from a magistrate before making an arrest,” the top court said.
The CJI said the amendments

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the amendments as well as provisions of the Customs Act. Reliance placed by the petitioners on the decision of this court in Om Prakash is misconceived as the statutory provisions have undergone amendments to bring them in consonance with the law of the land. Moreover, the provisions themselves provide enough safeguards against arbitrary and wrongful arrests,” it said.
In the GST Act of 2017, the government provided the power of arrest in certain cases.
On the challenge to the GST Act provisions over power to arrest and summon, the bench did not agree to the submissions that the Centre lacked “legislative competence”.
It was argued that Article 246A of the Constitution while conferring legislative powers on Parliament and state legislatures to levy and collect GST, did not explicitly authorise the violations to be made criminal offences.
The bench disagreed and said, “Article 246A of the Constitution is a special provision defining the source of power and the field of legislati

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Persons can seek anticipatory bail in cases related to GST, Customs even in absence of FIR:SC
GST
Dated:- 27-2-2025
PTI
New Delhi, Feb 27 (PTI) In a significant verdict, the Supreme Court on Thursday held that the provision of anticipatory bail is applicable to the Goods and Services Act and customs law and persons can move courts for pre-arrest bail even if an FIR is not in place.
A bench comprising Chief Justice Sanjiv Khanna and Justices MM Sundresh and Bela M Trivedi had reserv

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Tax Assessment Orders Set Aside Due to Natural Justice Violation; Petitioner to Deposit 10% Amount Within 4 Weeks
Case-Laws
GST
HC found merit in petitioner's challenge regarding violation of natural justice principles and non-application of mind in the impugned orders. Court directed petitioner to deposit 10% of disputed tax amount within four weeks from order receipt, as mutually agreed by both parties' counsel. The impugned orders dated 24.08.2024 and 07.12.2024 were set aside. Matter remanded back to adjudicating authority, granting petitioner final opportunity to present objections. Petition disposed of with these directions, ensuring procedural fairness while safeguarding revenue interests through partial tax deposit requirement.
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Input Tax Credit Limited to 105% of Verified Invoices Under Rule 36(4) CGST Rules Upheld as Constitutional
Case-Laws
GST
HC upheld validity of Rule 36(4) of CGST Rules, dismissing constitutional challenge. Court determined Rule 36(4) derives authority from Section 16 of CGST Act and general rule-making powers under Section 164, not from unenforced Section 43A. Since Section 43A was never notified and later omitted by Finance Act 2022, it cannot be source of Rule 36(4)'s authority. Court also declined to examine specific orders challenged by petitioner due to available statutory appeal remedy. Ruling affirms Rule 36(4)'s legitimacy in governing input tax credit eligibility procedures under GST framework.
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Gold Dealer Faces Confiscation Under GST Act Section 130 for Rs.47.73 Crore Undocumented Sales Without Registration
Case-Laws
GST
HC dismissed petition challenging gold seizure under GST Act. Petitioner conducted unregistered sales of old gold worth Rs.47.73 Crores, with transactions lacking proper tax documentation. Time extension for investigation granted under Section 67 proviso nullified petitioner's limitation argument. Court found confiscation proceedings under Section 130 prima facie valid, directing petitioner to participate in proceedings. Petitioner retains right to seek provisional release of seized gold under Section 130(2) during confiscation proceedings. Investigation revealed unauthorized procurement and supply between entities without mandatory GST documentation. Dismissal upholds administrative authority's jurisdiction while preserving statutory remedies available to petitioner.
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GST Show Cause Notices Hidden in Portal's Additional Tab Violates Natural Justice; Section 73 Order Set Aside
Case-Laws
GST
HC held that uploading GST show cause notices solely in the 'Additional Notices and Orders' portal tab without clear navigation instructions constituted improper service. The taxpayer's unawareness of notices was justified as the portal's earlier scheme was confusing and vague regarding notice placement. The court found that absence of explicit directions on the main 'Notices and Orders' tab about checking additional tabs amounted to ineffective information dissemination. Given this procedural defect violated natural justice principles, the determination order under Section 73 was set aside. The petitioner was granted 30 days to respond to the notices, with the court emphasizing that proper service requires clear portal instructions for accessing statutory notices.
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Penalty Payment Under GST Section 129(1) Concludes Detention Proceedings Without Need for Formal MOV-09 Order
Case-Laws
GST
HC dismissed petition challenging non-issuance of GST MOV-09 order following detention of goods and payment of penalty. Per Section 129(5) of GST Act, payment of penalty amount under Section 129(1) automatically concludes proceedings initiated through detention notice under Section 129(3). Once petitioner paid calculated penalty following truck detention, proceedings stood concluded by operation of law. Court held adjudication on requirement of formal order under Section 129(3) post-penalty payment was unnecessary since statute deems matter concluded upon payment. Petition seeking mandatory order for issuance of Form GST MOV-09 rejected as legally untenable given statutory deeming provision.
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AAAR Reject Advance Ruling Application Under Section 98(2) Due to Ongoing DGGI Investigation into Same Matter
Case-Laws
GST
AAAR upheld rejection of advance ruling application due to pre-existing proceedings under CGST Act. The appellant filed for advance ruling on 30.12.2022, after receiving summons from DGGI on 30.11.2022 and 20.12.2022. The term “any proceedings” in first proviso to Section 98(2) was interpreted broadly to include all scrutiny, inquiry, investigation, and assessment activities. AAAR distinguished this case from Radha Krishan Industries, noting that Section 83's restrictive interpretation of “proceedings” did not apply here. Since DGGI investigation preceded advance ruling application and concerned identical issues, the application was correctly rejected under Section 98(2) of CGST/TNGST Acts, 2017. Appeal dismissed.
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GST Advance Ruling Application Rejected Due to Ongoing Investigation Under Section 98(2) of CGST Act
Case-Laws
GST
AAAR upheld rejection of advance ruling application filed by appellant on 28.06.2022 regarding taxability of fees collected. Prior investigation by DGGI commenced with summons issued on 12.04.2022, followed by recorded statements and incident report concerning non-payment of GST on collected charges. First proviso to Sec 98(2) of CGST/TNGST Acts prohibits advance ruling pronouncement when investigation on same issue is pending. Since investigation preceded advance ruling application and addressed identical subject matter of tax liability on fees, application was correctly rejected as proceedings were already initiated under CGST Act. Appeal dismissed as investigation constituted valid “proceeding” barring advance ruling.
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Natural Justice Challenge Dismissed: Court Grants 30-Day Window for Statutory Appeal Despite Hearing Opportunity Dispute
Case-Laws
GST
HC examined a challenge to an adjudication order allegedly issued without providing hearing opportunity. Despite claims of natural justice violation, the court found extensive documentation requiring detailed factual analysis. Determining this was not an exceptional case warranting bypass of statutory appeal mechanisms, HC dismissed the appeal. However, court granted appellant 30 days from judgment receipt to file statutory appeal, directing appellate authority to accept it without limitation period restrictions. Court emphasized need for thorough factual adjudication through proper appellate channels rather than direct judicial intervention.
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GST Show Cause Notice Invalid: Lack of Detailed Reasons and Hearing Denial Under Section 73 and 75(4)
Case-Laws
GST
HC set aside GST order due to procedural defects in show cause notice (SCN) issuance. Court held that merely attaching tax determination details to SCN summary in Form GST DRC-01 does not constitute valid proceedings under Section 73. A proper SCN must specifically detail reasons for action and allow adequate opportunity for representation. Additionally, violation of Section 75(4) occurred as petitioner was denied requested hearing opportunity. Court found authentication requirements under Rule 26(3) were not met. While quashing impugned order dated 28.04.2024, HC granted liberty to authorities to initiate fresh proceedings under Section 73 for relevant financial year if warranted.
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Penalty Payment Under Protest in GST Cannot Be Deemed Voluntary, Preserving Right to Appeal Section 129(3)
Case-Laws
GST
HC quashed rectification order concerning GST penalty u/s 129(3). Initial penalty of Rs. 22,37,220/- was imposed and paid by petitioner through DRC-03 under explicit protest. Authority subsequently attempted to rectify order making demand 'NIL' u/s 161. Court held that payment under protest cannot be deemed voluntary, and rectification cannot deprive appellant's statutory right to challenge original penalty order. Period between rectification order (08.10.2024) and present judgment excluded from limitation period for filing appeal against original order dated 06.10.2024. Rectification nullified, preserving petitioner's appellate rights against original penalty assessment.
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GST Department Must Issue Detailed Show Cause Notice Under Section 73(1), Summary Notice Alone Invalid
Case-Laws
GST
HC held that issuance of only a Summary Show Cause Notice (SCN) in Form GST DRC-01 violates natural justice principles and fails to comply with Section 73(1) of AGST Act, 2017. The court emphasized that a Summary SCN cannot substitute a proper SCN as mandated under Section 73(1). The proper officer must issue a detailed SCN, statement under Section 73(3), and order under Section 73(9). Compliance with subsections (1) to (8) and (10) to (11) of Section 73 and Rule 142(1) are prerequisite conditions for a valid order under Section 73(9). Consequently, the impugned order dated 21.08.2024 was quashed due to non-issuance of proper SCN.
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Summary Show Cause Notice in Form GST DRC-01 Cannot Replace Proper Notice Under Section 73(1) GST Act
Case-Laws
GST
HC held that summary show cause notice (SCN) in Form GST DRC-01 cannot substitute proper SCN under Section 73(1) of AGST Act, 2017. The impugned order was quashed as it violated principles of natural justice by failing to issue proper prior SCN as mandated. Court emphasized that compliance with Section 73(1-8, 10-11) and Rule 142(1) are prerequisites for valid orders under Section 73(9). The proper officer must issue SCN, statement under Section 73(3), and final order under Section 73(9). Mere issuance of SCN summary and tax determination attachment without proper notice violates procedural requirements. Order dated 21.08.2024 set aside as legally unsustainable.
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Contractor Wins 6% GST Reimbursement Claim as Contract Mandates Full Tax Recovery from Principal Party
Case-Laws
GST
HC determined that the contractor was liable to pay GST at 18% on taxable turnover from works contract, while respondent had only reimbursed 12%. Based on contractual obligations requiring full GST reimbursement, which remained uncontested, respondent must pay the differential 6% GST amount. Court directed respondent to reimburse contractor for the difference between GST paid (18%) and amount already reimbursed (12%). Additionally, any interest charges levied by GST authorities for late payment must also be reimbursed by respondent. Writ petition disposed with directions for differential GST reimbursement.
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Late Fee Valid But General Penalty Struck Down For Delayed GST Annual Returns Under Section 47 And 125
Case-Laws
GST
HC partially allowed the petition challenging GST late fee and penalty impositions. Court upheld late fee under Section 47(2) of GST Act for delayed annual return filing, which mandates Rs.100 per day subject to maximum 0.25% of state turnover. However, HC struck down additional general penalty of Rs.50,000 each under Section 125 for CGST and SGST, ruling that when specific penalty provision exists as late fee under Section 47, imposing general penalty is improper. Court confirmed respondent authority's jurisdiction to initiate proceedings for non-filing but emphasized that penalty cannot be duplicated through both late fee and general penalty provisions.
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Taxpayer's GST Deregistration Valid Despite Supplier's Later Registration Cancellation if Taxes Were Paid During Transaction
Case-Laws
GST
HC determined that subsequent or retrospective cancellation of supplier registrations does not invalidate a taxpayer's request for voluntary GST deregistration, provided the supplies were obtained from validly registered vendors who had paid applicable taxes at the time of transaction. The petitioner was granted three weeks to submit documentation proving the legitimacy of input supplies and corresponding tax payments. The revenue authorities must evaluate the voluntary cancellation application based on verification of these submissions, focusing on the registration status of suppliers at the time of actual transactions rather than their current status. The matter was disposed with directions for administrative review of the deregistration request.
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Taxpayer Allowed to Transfer GST Demand Payment from DRC-03 to PMT-01 Through New DRC-03A Form Under Rule 142(2B)
Case-Laws
GST
HC addressed payment procedures for GST demands under rule 142. Petitioner paid demand through Form GST DRC-03 instead of required electronic liability register Form GST PMT-01. Following recent amendment via notification 12/24 introducing rule 142(2B), petitioner permitted to file Form GST DRC-03A electronically to transfer payment credit to electronic liability register. Court directed that if petitioner files refund application under Section 54, authorities must process and refund amount to electronic cash/credit ledger within two weeks. Petition disposed with directive to follow amended procedure for payment adjustment through proper forms.
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Delay in GST Appeal Filing Condoned After Taxpayer Shows Good Faith Through Partial Payment and Compliance
Case-Laws
GST
HC condoned a 35-day delay in filing GST appeal, emphasizing that procedural delays should not override substantive justice. The petitioner had demonstrated compliance by depositing 10% of tax liability and making additional payments toward disputed amount. Court found strict application of GST Act's limitation provisions unwarranted given circumstances. Matter remanded to second respondent for fresh consideration on merits, directing full examination of facts and circumstances. Decision underscores judicial preference for substantive resolution over procedural dismissal in tax matters where appellant shows good faith compliance efforts.
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