GSTAT Ghaziabad: Departmental GST Appeal Below Monetary at Threshold for Breaching Rs. 20 Lakh Monetary Limit — Dismissed at Admission Stage

GST — Departmental appeal — Monetary limit — Maintainability — Exception to monetary threshold — Commissioner’s approval — Penalty of Rs. 88,074 — UPGST Act, 2017, Sections 112(3) and 120 — Departmental Circular prescribing Rs. 20,00,000 monetary limit for appeals before GSTAT — Whether departmental appeal involving penalty below prescribed threshold could be admitted.

ISSUE: Whether the departmental appeal involving penalty of Rs. 88,074 could be admitted and adjudicated on merits when the prescribed monetary limit for departmental appeals before GSTAT was Rs. 20,00,000, and whether the Revenue had established any recognised exception to the monetary-limit restriction.

FACTS: The appeal was preferred by the State Tax Department against the order of the First Appellate Authority in relation to a dispute concerning IGST and penalty arising from alleged violation of Rule 138 read with Section 68 of the GST Act. The disputed amount was a penalty of Rs. 88,074, which was admittedly below the prescribed monetary threshold of Rs. 20,00,000 under the departmental litigation policy. The Revenue had not specifically pleaded or established that the case fell within any of the recognised exceptions to the monetary limit. In particular, there was no material showing that the matter involved an ultra vires challenge, a recurring question requiring authoritative determination, adverse comments or costs against the Department, or a specific and reasoned exercise of the Commissioner's residual power to contest the matter in the interest of justice or revenue.

HELD: The Tribunal held in favour of the assessee that the departmental appeal could not be admitted for adjudication on merits. The mere approval or authorisation of the Commissioner to file an appeal does not, by itself, constitute an exception to the prescribed monetary limit; the Revenue must establish the specific exception relied upon and demonstrate the basis on which it applies. Since the disputed penalty of Rs. 88,074 was below Rs. 20,00,000 and no applicable exception was established, the appeal was dismissed at the threshold on the ground of the prescribed monetary limit and non-establishment of any applicable exception. The Tribunal expressly clarified that it had not examined or adjudicated the merits of the underlying tax dispute.

GST Writ Petitions Dismissed; Common Adjudicating Authority Held to Have Valid Jurisdiction and Impugned Circular Upheld

ISSUE: Whether the Common Adjudicating Authority had valid jurisdiction to adjudicate the composite SCN issued to multiple noticees across different Commissionerates, and whether Circular Nos. 169/2022-GST and 239/2024-GST, prescribing the “highest amount of demand” criterion for selecting the Common Adjudicating Authority, were legally valid.

FACTS: The eight Petitioners, comprising exporters/end-users and L-1 suppliers, challenged the SCNs and consequential OIO arising from an alleged fraudulent ITC and IGST refund racket involving goods-less invoices. They also challenged the Impugned Circulars on the ground that jurisdiction could not be conferred through a circular and that the “highest amount of demand” criterion was arbitrary. The Respondents contended that pan-India jurisdiction had already been conferred upon specified Additional/Joint Commissioners through Notification No. 2/2022, while the Impugned Circular merely provided an administrative mechanism to select one competent officer for common adjudication.

HELD: The Court held in favour of the Revenue and dismissed the writ petitions. It held that Notifications Nos. 2/2017 and 2/2022 validly conferred jurisdiction, while the Impugned Circular merely allocated a composite SCN amongst officers who were already competent to adjudicate and did not itself confer jurisdiction. The “highest amount of demand” criterion was held to be objective, quantifiable and rationally connected with securing consistent adjudication. The challenge to the jurisdiction and vires of the Impugned Circular therefore failed. The Petitioners were left at liberty to pursue statutory appeals under Section 107 against the OIO and raise their remaining contentions on merits.

Writ Petitions Dismissed; Petitioners Relegated to Statutory Appeal under Section 107 of CGST Act

ISSUE: Whether the Petitioners could bypass the statutory appellate remedy under Section 107 of the CGST Act and invoke writ jurisdiction to challenge the common adjudication order on the grounds of non-consideration of their reply, lack of DGGI jurisdiction, improper allocation of adjudication to Delhi North, and applicability of Circular No. 171/03/2022-GST.

FACTS: DGGI investigated an alleged chain of invoices without corresponding supplies and confirmed ITC demands against the Petitioner's Karnataka, Tamil Nadu and Telangana registrations aggregating to substantial amounts, along with interest and penalties. The Petitioners contended that the underlying construction work and subcontracting transactions were genuine and relied upon work orders, invoices, ledgers, bank records and other documents. They challenged the adjudication order on the ground that their reply and documents were not properly considered, that DGGI lacked jurisdiction over State-administered registrations, that adjudication should have been transferred to Chennai or Rangareddy, and that Circular No. 171/03/2022-GST precluded recovery under Section 74.

HELD: The Court held in favour of the Revenue by declining to interfere in writ jurisdiction and relegating the Petitioners to the statutory remedy of appeal under Section 107 of the CGST Act. The Court held that DGGI had jurisdiction throughout India and that Delhi North was the designated adjudicating Commissionerate under the applicable notifications and circulars. The grievances regarding appreciation of the Petitioners' documents, applicability of Circular No. 171/03/2022-GST, ITC entitlement, interest and penalties involved factual and appellate examination and therefore did not justify bypassing the statutory remedy. The Petitioners were permitted to file appeals with the requisite pre-deposit within four weeks, which would be entertained on merits without objection on limitation; interim protection was continued for four weeks.

GSTAT Bengaluru: Penalty under Section 129 upheld for transporting goods without invoice and e-way bill; subsequent generation of documents cannot cure the contravention

ISSUE: Whether the revisional proceedings under Section 108(2)(b) of the KGST Act were barred by limitation, and whether the Revisional Authority was justified in reversing the Appellate Authority's order and restoring the penalty imposed under Section 129(1) for transportation of goods without the requisite tax invoice and e-way bill.

FACTS: The appellant, M/s. Heramb Enterprises, received plywood which, at the time of interception, was being unloaded at REC Flow Technology LLP, Belagavi. Although an invoice and e-way bill existed for transportation from Intercon Wood Industries, Kerala to the appellant's address, no invoice or e-way bill was available for the actual delivery to REC Flow Technology LLP. The proper officer consequently imposed tax and penalty under Section 129(1). The Appellate Authority reduced the penalty to Rs. 500 each under the CGST and KGST Acts, holding that the transaction was genuine and there was no intention to evade tax. The Revisional Authority reversed that order and restored the original penalty. The appellant also challenged the revisional order as time-barred under Section 108(2)(b).

HELD: The Tribunal held that the revisional proceedings were not barred by limitation, since the period from 15.03.2020 to 28.02.2022 excluded by the Supreme Court in Cognizance for Extension of Limitation was applicable to departmental proceedings as well, as subsequently confirmed in G.R. Infra Projects Ltd. v. State of Madhya Pradesh. On merits, the Tribunal held that the goods were being transported/unloaded without the requisite invoice and e-way bill at the time of interception, contrary to Section 68 and Rule 138. The appellant failed to substantiate its claim of technical glitches, and the e-way bill generated after interception was held to be an afterthought. The absence of statutory documents in the circumstances was treated as a wilful contravention with intention to evade payment of tax. Accordingly, the penalty under Section 129(1) was held to be legal and valid, the revisional order was confirmed, and the appeal was dismissed. Decision: in favour of Revenue.

The High Court of Jharkhand: Orders Passed Against Deceased Proprietor Quashed — Matter Held in Favour of Assessee

ISSUE: Whether orders passed against the earlier proprietor of the petitioner, who had expired before such orders were passed, could be sustained.

FACTS: The petitioner challenged orders dated 27.12.2021, 26.07.2022 and 28.08.2024. The parties agreed that the issue was covered by the Court’s earlier order dated 11.06.2026 in W.P.(T) No. 3862 of 2026 involving the same petitioner and identical reliefs.

HELD: Following its earlier decision, the Court quashed and set aside the impugned orders since they had been passed against Shibu Prasad Das, the erstwhile proprietor, after his death on 15.09.2020. However, liberty was granted to the respondents to pursue their claims against the petitioner in accordance with law. The writ petition was accordingly disposed of and the rule made absolute, in favour of the assessee.

Notice under Section 73(2) CGST/AGST Act dated 29.11.2024 held within limitation where three full calendar months remained before the statutory deadline

ISSUE: Whether the show cause notice dated 29.11.2024 issued under Section 73(1) of the CGST/AGST Act for FY 2020-21 was barred by Section 73(2), on the ground that it was not issued at least three months before the expiry of the period prescribed under Section 73(10), which expired on 28.02.2025.

FACTS: The appellant, a registered taxable person engaged in wholesale/distribution of cellular phones, was issued a show cause notice dated 29.11.2024 proposing a demand of Rs. 33,03,968/- along with interest and penalty on allegations including wrongful/excess availment of ITC from cancelled dealers, return defaulters and non-taxpayers. The appellant contended that since the order under Section 73(9) could be issued up to 28.02.2025, the notice ought to have been issued by 28.11.2024. The Revenue contended that, excluding the date of issuance, the notice left the calendar months of December 2024, January 2025 and February 2025 available and was therefore within time.

HELD: The appeal was dismissed and the notice dated 29.11.2024 was held to be within the period contemplated by Section 73(2). The Court held that “month” means a calendar month and that, on excluding the date of issuance, the appellant had the full intervening calendar months of December, January and February before the terminal date of 28.02.2025. Section 73(2) prescribes a minimum interval between initiation of proceedings and their culmination under Section 73(10), rather than an independent limitation period based on a corresponding date calculated backwards. Accordingly, the Single Judge was justified in holding the notice to be valid. However, since the order dated 28.02.2025 had been passed during pendency of the writ proceedings, the Court interfered with that order to give the appellant an opportunity to contest the notice. The appellant was permitted to file a reply within four weeks, after which the proceedings were to be completed within three months; failing such reply, the order dated 28.02.2025 would revive.

The High Court of Rajasthan: Unsigned GST Notices and Orders Held Non Est; Recovery and Bank Attachment Quashed

ISSUE: Whether a show cause notice and an adjudication order under the CGST Act, bearing neither a physical nor a digital signature, can be sustained in law, and whether consequential recovery proceedings can survive.

FACTS: The petitioner, a real estate developer, challenged the show cause notice dated 23.09.2023 and Order-in-Original dated 19.12.2023, along with the recovery notice dated 27.03.2024 issued under Section 79 of the CGST Act. The impugned documents uploaded on the GST portal contained reference numbers but no physical or digital signatures. The respondents contended that uploading documents through the departmental portal itself established authentication because the officer had logged in using a digital signature. The petitioner contended that Rule 26(3) of the CGST Rules mandatorily requires notices and orders to be authenticated by digital signature, e-signature, or another notified mode of verification.

HELD: The High Court held in favour of the assessee that Rule 26(3) is mandatory and that electronic generation or uploading of a document does not substitute for authentication by signature. Login to the portal authenticates access by the officer but does not authenticate the contents of the document. An unsigned show cause notice and adjudication order are therefore non est in law, and the defect is jurisdictional rather than a curable procedural irregularity. Consequently, the show cause notice dated 23.09.2023 and Order-in-Original dated 19.12.2023 were quashed, along with the Section 79 recovery notice and consequential bank attachment. The competent authority was granted liberty to initiate fresh proceedings in accordance with law, subject to proper physical or digital authentication under Rule 26(3).

Ex Parte GST Order Set Aside for Violation of Principles of Natural Justice; Matter Remanded for Personal Hearing

ISSUE: Whether the order dated 13.02.2025 passed under Section 73(9) of the Uttar Pradesh Goods and Service Tax Act, 2017 for FY 2020-21 could be sustained when the order was passed ex parte without being passed on the date fixed for hearing and without communicating the subsequent date of hearing to the petitioner.

FACTS: The petitioner challenged the ex parte order dated 13.02.2025 passed by the Commercial Tax Officer, State Tax, Sector-21, Lucknow. The Court found from the record that although a date was fixed for hearing, the order was not passed on that date and no notice was given to the petitioner regarding the subsequent date. The petitioner relied upon the coordinate Bench judgment in M/s Shubham Steel Traders v. State of U.P. and Another, (2024) 74 TLC (GST) 154, wherein it was held that where an authority fixes a date for hearing, it must either pass the order on that date or fix another date and communicate the same to the assessee.

HELD: Ex Parte GST Order Quashed for Violation of Natural Justice; Fresh Order to be Passed After Personal Hearing. The Court held that the facts were similar to M/s Shubham Steel Traders and that the assessing authority, by failing to pass the order on the date fixed and by not communicating the subsequent hearing date, had caused the proceedings to become ex parte. Accordingly, the impugned order dated 13.02.2025 was quashed and set aside in favour of the assessee, with a direction to the concerned authority to provide the petitioner an opportunity of personal hearing and thereafter pass a reasoned order in accordance with law. The writ petition was accordingly disposed of.

GSTAT Bengaluru: Section 74 Penalties Unsustainable in Absence of Positive Proof of Deliberate Suppression

ISSUE: Whether the First Appellate Authority was justified in imposing penalties under Section 74 of the CGST Act on Issues 1 and 3, despite the absence of positive evidence of fraud, wilful misstatement or suppression of facts with intent to evade tax, and despite the tax and interest having been paid before issuance of the SCN.

FACTS: The appellant had voluntarily deposited the agreed tax of Rs. 7,78,693 and applicable interest through Form GST DRC-03 before issuance of the SCN. The Adjudicating Authority confirmed the tax liabilities but dropped the Section 74 penalty on Issues 1 and 3, finding no deliberate suppression. However, the First Appellate Authority reversed these findings and imposed Section 74 penalties. The Tribunal noted that the relevant records, including GSTR-3B, GSTR-2A and TRAN-1, were available on the departmental portal and that no positive act of deliberate suppression or intentional misstatement had been established.

HELD: The appeal was allowed in favour of the assessee. The Tribunal held that Section 74 could not be invoked mechanically on the basis of audit discrepancies or mere recitation of statutory expressions such as “suppression” or “wilful misstatement”. In the absence of foundational facts establishing deliberate intent to evade tax, the Section 74 penalties imposed on Issues 1 and 3 were unsustainable. The impugned Order-in-Appeal dated 01.10.2024 was accordingly set aside, and the payments relating to Issues 1 and 3 were treated as payments under Section 73(5) of the CGST Act.

The High Court of Madras: Impugned Service Tax Order Set Aside for Breach of Natural Justice; Matter Remanded After Verification of Tax Payment

ISSUE: Whether the service tax order dated 27.09.2023 imposing service tax, interest and penalty was liable to be set aside on the ground of violation of principles of natural justice, particularly when the petitioner claimed that the entire tax demand had already been discharged in instalments and was suffering from cancer.

FACTS: The petitioner challenged the impugned order on the ground that there was a breach of principles of natural justice. The petitioner produced multiple receipts evidencing payment towards the service tax demand and contended that the entire demand of Rs.33,47,623/- had been discharged in instalments. The respondent submitted that the petitioner had neither responded to the show cause notice nor participated in the proceedings. The petitioner also placed medical records on record showing that she was suffering from cancer.

HELD: The Court held that, subject to verification and confirmation that the entire tax demand of Rs.33,47,623/- had been discharged, the interest of justice required that the petitioner be given an opportunity to contest the matter on merits. Considering the prima facie medical evidence regarding the petitioner's cancer, the impugned order was set aside and the matter was remanded for reconsideration after providing a reasonable opportunity to the petitioner. A fresh order was directed to be passed within four months from the date of confirmation of the recovery. Subject to verification of the full payment, the bank attachment relating to the impugned order was directed to be raised. The writ petition was accordingly disposed of with no order as to costs.

The High Court of Calcutta: Omitted Rule 96(10) Cannot Sustain Pending Proceedings; Show Cause Notice and Consequential Orders Quashed.

ISSUE: Whether proceedings initiated under Rule 96(10) of the CGST/WBGST Rules, 2017 could be initiated or continued after the unconditional omission of the said Rule with effect from 8 October 2024, in the absence of any saving clause.

FACTS: The petitioners challenged the show cause notice dated 09.01.2024 issued under Section 74 of the CGST Act, 2017 for the period July 2017 to March 2021 and the consequential orders dated 30.01.2025, contending that the proceedings were founded solely upon Rule 96(10), which had subsequently been omitted without any saving clause. The petitioners relied upon the judgment of the Hon’ble Supreme Court in M/s Goodluck India Limited & Anr. v. Union of India & Ors., wherein, following the Constitution Bench decision in Kolhapur Canesugar Works Ltd. v. Union of India, it was held that an omitted provision ceases to exist unless there is a saving provision or legal fiction permitting continuation of proceedings. The Court also took judicial notice of the CBIC Office Memorandum dated 24.08.2026 directing field formations not to initiate or pursue proceedings based on the omitted Rule 96(10).

HELD: Following the law declared by the Hon’ble Supreme Court in M/s Goodluck India Limited & Anr., the High Court held that proceedings founded solely upon the omitted Rule 96(10) could not be sustained in the absence of a saving clause. Accordingly, the show cause notice dated 09.01.2024 and the consequential orders dated 30.01.2025 were quashed and set aside, and the writ petition was disposed of in favour of the assessee/petitioners.

GSTAT Lucknow: DRC-01 Cannot Substitute Statutory Show Cause Notice (SCN); ITC Demand Based Merely on GSTR-2A/3B Mismatch Unsustainable - SCN and cannot replace the statutory SCN required under Section 73(1) of the UPGST Act., 14-09-2026

ISSUE: Whether Form GST DRC-01, being only a summary of the Show Cause Notice, can substitute the mandatory SCN under Section 73(1) of the UPGST Act, and whether ITC can be denied merely on the basis of mismatch between GSTR-2A and GSTR-3B.

FACTS: The appellant, an IT services company, was proceeded against for alleged discrepancies in GST returns. Although DRC-01 was uploaded against the appellant, the SCN accompanying it was actually addressed to another taxpayer, M/s Sai Kripa Medical Store. The appellant therefore did not file a reply, and an order demanding tax of Rs. 67,180/-, interest of Rs. 60,463/- and penalty of Rs. 30,000/- was subsequently passed. The appellant also challenged the IGST demand of Rs. 20,250/- and the CGST and SGST ITC demands of Rs. 23,465/- each, contending that the latter were based merely on GSTR-2A and GSTR-3B mismatch. The Tribunal further noted that the procedure prescribed under Circular No. 183/15/2022-GST for verification of ITC was not followed.

HELD: The Tribunal held that DRC-01 is merely a summary of the SCN and cannot replace the statutory SCN required under Section 73(1) of the UPGST Act. Since the SCN accompanying DRC-01 was addressed to a different taxpayer and no proper SCN was served upon the appellant, the appellant was denied an opportunity to know and answer the allegations against it. The absence of a valid SCN rendered the entire proceedings invalid and void ab initio. The Tribunal also observed that mere mismatch between GSTR-2A and GSTR-3B cannot, by itself, justify denial of ITC, particularly when the verification procedure contemplated by Circular No. 183/15/2022-GST was not undertaken. Accordingly, the appeal was allowed and the entire proceedings were set aside.

The High Court of Rajasthan: Continued Incarceration Unwarranted Where Investigation Complete and No Custodial Interrogation Required; Bail Granted in Favour of Assessee/Accused

ISSUE: Whether the accused-petitioner, arrested under Section 69 of the CGST Act, 2017 for alleged offences under Section 132 involving wrongful availment and passing on of Input Tax Credit of approximately Rs.13.21 Crores, is entitled to bail under Section 483 of BNSS when the material evidence has already been seized, investigation has substantially progressed, no further custodial interrogation or recovery is required, and the alleged tax liability has not yet been finally adjudicated.

FACTS: The petitioner was arrested on 02.07.2026 in connection with an investigation conducted by the CGST Commissionerate, Alwar, following searches at M/s Bhagwati Trading Company and M/s Kanha Metal Industries. The Department alleged wrongful availment and passing on of Input Tax Credit and irregular refund under the inverted duty structure. Documentary and electronic records, including a mobile phone, had already been seized and examined, and the petitioner had been interrogated. The petitioner had no criminal antecedents, had cooperated with the investigation, and no Show Cause Notice or adjudication determining the alleged liability had been issued. The Department opposed bail on the ground of the seriousness of the GST offences.

HELD: Bail granted in favour of the assessee/accused as continued incarceration was held unwarranted where the petitioner had no criminal antecedents, the material investigation was substantially complete, relevant documentary and electronic evidence was already in the Department's possession, and no further custodial interrogation or recovery was required. The Court held that gravity of the allegation or quantum involved cannot by itself justify denial of bail, particularly when there was no demonstrated apprehension of absconding, tampering with evidence or influencing witnesses. The alleged pecuniary liability could be recovered through the statutory machinery after adjudication, and pre-trial detention could not be used to secure such liability. Considering that the offence carried a maximum sentence of five years and was triable by a Magistrate, the petitioner was directed to be released on bail on furnishing a personal bond of Rs.50,000/- with two sureties of Rs.25,000/- each.

The High Court of Allahabad: Penalty Exceeding Statutory Maximum Limit Quashed Where Taxpayer Had Filed Return and Paid Late Fees

ISSUE: Whether penalty of Rs.50,000/- imposed under Section 125 of the CGST Act, 2017 and the corresponding provisions of the UPGST Act, 2017, along with the consequential recovery proceedings through FORM GST DRC-13, was legally sustainable when the petitioner had already filed the return and paid the applicable late fees.

FACTS: The petitioner challenged the penalty order dated 21.11.2024, whereby penalty of Rs.25,000/- under the CGST Act and Rs.25,000/- under the UPGST Act, aggregating to Rs.50,000/-, was imposed. The petitioner had already filed his return and paid the late fees in accordance with law. The petitioner also challenged FORM GST DRC-13 dated 02.07.2025 issued to his bank for recovery of the said Rs.50,000/-. It was contended that the penalty imposed exceeded the maximum limit prescribed under the U.P. GST Act, 2017.

HELD: The High Court held that since the petitioner had already filed the return and paid the applicable late fees, and the penalty of Rs.50,000/- exceeded the maximum statutory limit prescribed under the U.P. GST Act, 2017, the impugned proceedings could not be sustained. Accordingly, the impugned show cause notice and penalty order were quashed and set aside, and the writ petition was disposed of in favour of the assessee.

GSTAT Lucknow: Incorrect ITC Claimed Under CGST/SGST Instead of IGST Head – Demand, Interest and Penalty Upheld; Appeal Dismissed – Held in favour of Revenue

ISSUE: Whether ITC claimed under CGST and SGST instead of the IGST head due to an alleged clerical/technical error could be allowed, and whether the consequential tax, interest and penalty were sustainable.

FACTS: The appellant had claimed ITC under different tax heads in GSTR-3B compared with the ITC reflected in GSTR-2A. The appellant contended that the discrepancy arose due to an inadvertent technical/clerical error, that the corresponding IGST credit was reflected in GSTR-2A, and that there was no revenue loss. The First Appellate Authority sustained reversal of CGST and SGST ITC amounting to Rs. 3,72,121.34, along with interest of Rs. 5,23,888.54 and penalty of Rs. 37,212.12. The appellant challenged the said findings before the Tribunal.

HELD: The Tribunal held that the appellant had failed to produce any new facts or records warranting interference with the order of the First Appellate Authority. The reversal of CGST and SGST ITC of Rs. 3,72,121.34, together with applicable interest and penalty, was upheld, and the precedents relied upon by the appellant were held to be distinguishable. Accordingly, the appeal was dismissed and the order of the First Appellate Authority was confirmed, in favour of Revenue.

The Court Rules Pre-GST Services Cannot Be Taxed Under GST, Directs Refund With Interest

ISSUE: Whether GST was payable on the amount of Rs. 19,91,148/- for deployment of technical personnel for repair and maintenance of electrical feeder lines, where the services were rendered during 01.01.2015 to 31.12.2015, but post-facto approval was granted on 26.02.2018 and the bills were submitted on 22.02.2019.

FACT: The petitioner had undertaken the work for WBSEDCL during 2015. Although the work was subsequently granted post-facto approval on 26.02.2018, the actual services had already been completed before the GST regime came into force on 01.07.2017. The respondents withheld payment on the ground that the petitioner had not completed GST formalities and that GST liability arose on the amount. The Court considered Section 13 and Section 142(11)(b) of the GST Act and the clarification issued by the West Bengal Finance Department, which provided that services supplied before 01.07.2017, but billed subsequently after the prescribed period, would be governed by the erstwhile Service Tax regime and not CGST/WBGST.

HELD: The Court held in favour of the assessee that the completed services rendered during 2015 could not be brought within the GST regime merely because post-facto approval was granted in 2018 or the bill was submitted in 2019. Section 142(11)(b) specifically protected such pre-GST services from GST liability to the extent tax was leviable under the erstwhile Service Tax regime. The respondents were directed to release Rs. 19,91,148/- with interest at 8% per annum from 22.02.2019 until actual payment, after deducting any applicable pre-GST tax, within four weeks.

The High Court of Delhi: Dismisses Writ Petition Challenging Maharashtra FDA Show Cause Notice for Want of Territorial Jurisdiction; Maharashtra Courts Held to Be Forum Conveniens

ISSUE: Whether the Delhi High Court could exercise writ jurisdiction under Article 226 of the Constitution to entertain a challenge to a show cause notice issued by the Food and Drug Administration, Mumbai, merely because the petitioner was based in Delhi and certain authorities, including FSSAI and CCPA, were situated in Delhi.

FACTS: P.B. Agro LLP, the Master Licensee for VIMAL Elaichi and Pan Masala not containing tobacco, challenged a show cause notice dated 11.08.2026 issued by FDA, Mumbai to three brand ambassadors of its VIMAL Elaichi product. The petitioner contended that the advertising campaign was managed from Delhi, payments to the brand ambassadors were made from Delhi, and FSSAI and CCPA were situated in Delhi. It therefore claimed territorial jurisdiction under Articles 226(1) and 226(2). The respondents opposed the petition, contending that the impugned notice was independently issued by FDA, Mumbai under the Maharashtra State authorities, was addressed to Mumbai-resident brand ambassadors, and concerned alleged activities in Maharashtra. The Court noted that neither the petitioner had itself been issued a show cause notice nor had any order or direction of the Ministry, FSSAI or CCPA been challenged.

HELD: The Delhi High Court held that the petition was non-maintainable for want of territorial jurisdiction and dismissed it without examining the merits of the challenge. The Court held that the mere location of the petitioner’s office, business operations, advertising management, payments, or the apex authorities such as FSSAI and CCPA in Delhi could not constitute a material or integral part of the cause of action when the impugned notice emanated independently from FDA, Mumbai, was addressed to persons residing in Maharashtra, and concerned alleged activities and statutory violations in Maharashtra. Relying upon Alchemist Ltd., ONGC v. Utpal Kumar Basu, Aligarh Muslim University, State of Rajasthan v. Swaika Properties, Union of India v. Adani Exports, Kusum Ingots & Alloys and State of Goa v. Summit Online Trade Solutions, the Court further held that even assuming some incidental cause of action arose in Delhi, the doctrine of forum conveniens required the dispute to be adjudicated in Maharashtra, which was the natural and convenient forum. The Court distinguished Bakshish Ahmad v. Union of India on its specific statutory and administrative facts.

Delhi High Court Grants GST Assessee Opportunity to Restore Registration Subject to Payment of Dues and Filing of Returns

ISSUE: Whether the cancellation of the Petitioner’s GST registration for failure to file returns could be set aside where the Petitioner, citing business difficulties during COVID-19, was willing to file the pending returns and pay all tax liabilities, penalty and interest, despite the Respondent’s objection regarding delay in approaching the Court.

FACT: The Petitioner, a proprietorship concern, had his GST registration cancelled by an order dated 17.04.2023 on the ground of non-filing of returns. The Petitioner submitted that he could not continue his business during the COVID-19 period and expressed his readiness to file the pending returns and discharge all tax liabilities along with applicable penalty and interest if an opportunity was granted. The Revenue opposed the petition on the ground that it had been filed after a considerable delay. The Court noted that the Petitioner was willing to comply with his tax obligations and intended to resume his business.

HELD: The Delhi High Court set aside the order dated 17.04.2023 cancelling the GST registration, subject to the condition that the Petitioner files the pending returns within one month and pays all tax liabilities along with applicable penalty and interest. The Court observed that during COVID-19 everyone suffered, particularly businessmen, and found no sufficient reason to deny the Petitioner an opportunity to regularise his position. The petition was accordingly disposed of, while clarifying that the order would not prevent the Revenue from initiating proceedings against the Petitioner for any other default. Held in favour of the assessee.

The High Court of Bombay: Clubbing of Multiple Financial Years in a Single GST Show Cause Notice Held Impermissible, 11-09-2026

ISSUE: Whether a single show cause notice issued under Section 73 of the CGST Act covering multiple financial years, namely FY 2019-20 to 2021-22, by clubbing different tax periods is legally permissible.

FACTS: The petitioner challenged the show cause notice dated 25.06.2025, alleging suppression of taxable value and short payment of Central and State GST for FY 2019-20 to 2021-22. The petitioner relied upon Milroc Good Earth Developers v. Union of India and Rite Water Solutions (India) Ltd. v. Joint Commissioner, CGST & Central Excise, wherein the Bombay High Court held that different financial years/tax periods cannot be consolidated in a single show cause notice. Though the respondents relied upon the contrary view of the Delhi High Court in Mathur Polymers v. Union of India, the Bombay High Court held that, within its jurisdiction, its subsequent decisions were binding, particularly as the Supreme Court had neither stayed nor overruled them.

HELD: In favour of the assessee. The Court held that the GST statutory scheme contemplates assessment and recovery with reference to separate financial years/tax periods, each having its own limitation period. Consolidating multiple financial years into a single show cause notice would aggregate different tax periods and limitation periods and is therefore impermissible. Accordingly, the show cause notice dated 25.06.2025 was quashed and set aside, with liberty to the respondents to issue fresh notice strictly in accordance with Section 74 of the CGST Act, subject to there being no other legal impediment.

GST Appeal Delay Condoned as High Court Holds Mandatory Pre-Deposit and Sufficient Cause Cannot Be Defeated by Hyper-Technical Limitation Approach

ISSUE: Whether the First Appellate Authority was justified in dismissing the appeal under Section 107 of the Central Goods and Services Tax Act, 2017, on the ground of limitation, despite the petitioner having made the mandatory pre-deposit under Section 107(6) and having demonstrated sufficient cause for the delay, and whether the delay could be condoned in such circumstances.

FACT: An order under Section 73 was passed on 13.03.2023 and communicated through the GST portal. The petitioner filed an appeal on 21.08.2023 challenging the interest charged. The First Appellate Authority dismissed the appeal on 29.11.2023, holding that it was filed beyond the period prescribed under Sections 107(1) and 107(4). The petitioner explained that the delay was caused by the serious illness of the person entrusted with handling the business affairs and relied upon medical documents to establish sufficient cause. The petitioner had also paid the mandatory pre-deposit under Section 107(6). The Revenue contended that the appellate authority had no power to condone delay beyond the statutory period.

HELD: The High Court held the appeal in favour of the assessee/petitioner, finding that sufficient cause for the delay had been demonstrated and that the mandatory pre-deposit had admittedly been paid. Dismissing the appeal solely on limitation without considering the sufficient cause and substantial compliance with Section 107(6) was held to be a hyper-technical approach that would render the appellate remedy illusory. The Court quashed the order dated 29.11.2023, condoned the delay and directed the First Appellate Authority to admit and decide the appeal on merits within three weeks after affording an opportunity of hearing.

The High Court of Punjab & Haryana: Retrospective GST Cancellation Quashed Where Show Cause Notice Did Not Propose Retrospective Effect — Matter Remanded with Liberty to Issue Fresh Notice.

ISSUE: Whether the retrospective cancellation of the petitioner’s GST registration with effect from 22.02.2022 was valid when the show cause notice preceding the cancellation order dated 24.10.2025 did not propose or refer to any retrospective cancellation.

FACTS: The petitioner’s GST registration was cancelled vide order dated 24.10.2025 with retrospective effect from 22.02.2022. The petitioner challenged the cancellation on the ground that the show cause notice did not contain any proposal for retrospective cancellation. Reliance was placed upon the Division Bench judgment in M/s Bansal Casting, S.K. Enterprises v. Union of India and M/s Shree Ram Industries v. State of Haryana, reported as (2026) 98 TLC (GST) 274, which covered the issue. The State counsel did not dispute the facts or the applicability of the said judgment.

HELD: The High Court held that the controversy was squarely covered by M/s Bansal Casting, S.K. Enterprises. Accordingly, the cancellation order dated 24.10.2025 was quashed and the writ petition was disposed of in terms of the said precedent. However, liberty was reserved to the respondents to issue a fresh show cause notice and proceed further in accordance with law. Decision was in favour of the assessee.

Retrospective GST Cancellation Without Notice Quashed; Revenue Given Liberty to Issue Fresh Notice

ISSUE: Whether the petitioner’s GST registration could be cancelled retrospectively from 24.08.2017 when the show cause notice preceding the cancellation order dated 30.03.2021 did not propose retrospective cancellation.

FACTS: The petitioner challenged the cancellation of its GST registration vide order dated 30.03.2021, whereby the registration was cancelled with retrospective effect from 24.08.2017. The petitioner relied upon the Division Bench judgment in M/s Bansal Casting, S.K. Enterprises Vs. Union of India and Another, (2026) 98 TLC(GST) 274 and M/s Shree Ram Industries Vs. State of Haryana and Another, 2026:PHHC:027747-DB. The State did not dispute the facts or the applicability of the law laid down in M/s Bansal Casting, S.K. Enterprises.

HELD: The High Court held that the controversy was squarely covered by M/s Bansal Casting, S.K. Enterprises. Accordingly, the cancellation order dated 30.03.2021 was quashed, as retrospective cancellation had not been proposed in the show cause notice. However, liberty was reserved to the respondents to issue a fresh show cause notice and proceed against the petitioner in accordance with law. Thus, the matter was decided in favour of the assessee, subject to the Revenue’s liberty to initiate fresh proceedings.

GST Cash Seizure Under Section 67 Held Illegal; Court Directs Interest Payment and Return of Seized Articles

ISSUE: Whether cash seized during search proceedings under Section 67 of the Central Goods and Services Tax Act could legally be seized and retained by the GST authorities, and whether the other seized articles, namely mobile phones, pen drives and a bank card, could be retained after issuance of the show cause notice.

FACT: The authorities seized Rs. 11 lakhs in cash, two mobile phones, three pen drives and an ICICI Bank card from the petitioner during search proceedings. The cash was subsequently returned on 19.08.2026. The petitioner contended that cash is not covered by the expression "things" under Section 67(2) and that, after issuance of the show cause notice dated 30.06.2026, there was no justification for retaining the other seized articles. The Department submitted that the articles were required in connection with further proceedings.

HELD: The Court held the seizure of Rs. 11 lakhs in cash to be illegal, following the views of the Delhi and Karnataka High Courts that cash, currency and money do not fall within "things" under Section 67(2) of the CGST Act. Since the cash had been illegally withheld from 05.06.2025 to 19.08.2026, the petitioner was held entitled to interest, to be calculated and paid within six weeks. The Court further directed the Department to forthwith return the two mobile phones, three pen drives and bank card since the show cause notice had already been issued. The decision was thus in favour of the assessee/petitioner.

GST Adjudication Order Quashed for Natural Justice Violation; Fresh Hearing Directed

ISSUE: Whether the adjudication order dated 18.12.2023 demanding tax, interest and penalty was legally sustainable when the show cause notice in Form DRC 01 was uploaded only under the GST portal tab “Additional Notice and Orders”, without separate intimation or effective opportunity of personal hearing to the petitioner.

FACT: A show cause notice dated 08.09.2023 was issued to the petitioner and uploaded on the GST portal under the “Additional Notice and Orders” tab. The petitioner submitted that it came to know of the adjudication order dated 18.12.2023 only after it had been passed and that no personal hearing was afforded, with the relevant column showing “NA”. The State contended that the petitioner had received a hard copy of the show cause notice and had been given adequate opportunities to defend the case. The Court, however, found that the show cause notice and adjudication order had been uploaded only under the specified portal tab without separate intimation, resulting in the petitioner being unable to effectively respond.

HELD: The Court held in favour of the assessee, finding a prima facie violation of the principles of natural justice. The order in original dated 18.12.2023 was quashed and set aside. The adjudicating authority was directed to provide the petitioner an opportunity of personal hearing and thereafter pass a fresh reasoned and speaking order in accordance with law within 12 weeks, with communication of the decision within a further week.

GSTAT Delhi: Restores anti-profiteering proceedings after condoning delay and recalling ex-parte order due to failure of effective service of notice

ISSUE: Whether sufficient cause was shown for the Applicant’s non-appearance and the 24-day delay in filing the restoration application under Rule 22 of the Methodology Rules.

FACTS: Mumbai Port Authority filed an application seeking recall of the ex-parte Order dated 05.05.2026 and restoration of proceedings in NAPA/237/PB/2025. The Applicant contended that notices and the DGAP Investigation Report were sent to a non-functional email address, despite its correct functional email address being available on record, and that the order was received only on 08.05.2026. The Respondent opposed restoration on limitation and other procedural grounds. The Tribunal found lapses on the part of the Applicant, DGAP and Registry, but noted that the Applicant had been deprived of a reasonable opportunity of being heard.

HELD: The Tribunal held in favour of the Applicant/Mumbai Port Authority, finding sufficient cause for its non-appearance and the delay in filing the restoration application. Relying on the principles of natural justice and the Supreme Court’s decision in G.P. Srivastava v. R.K. Raizada & Ors., the Tribunal condoned the delay, recalled and set aside the ex-parte Order dated 05.05.2026, and restored the proceedings in NAPA/237/PB/2025.