Collector of Stamps’ Order Including GST in Stamp Duty on Residential Lease Quashed; Court Directs Refund of Rs. 2,58,700 to Petitioner

Issue: Whether the Collector of Stamps was justified in directing the petitioner to pay deficit stamp duty and penalty on the lease deed by including GST in the computation of stamp duty.

Facts: The petitioner executed a residential lease deed dated 01.07.2020 with Optimum Therapeutics Pvt. Ltd. for property at Vasant Vihar, New Delhi, meant solely for residential use. The Sub-Registrar impounded the deed alleging deficient stamp duty due to inclusion of GST in rent for stamp duty purposes. The Collector of Stamps ordered payment of Rs. 51,740 as deficient duty and Rs. 2,06,960 as penalty. The petitioner, while contesting the order, deposited Rs. 2,58,700 to enable registration. The petitioner relied on Entry No. 12 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and Circular No. 3759/01/2015-2 (24.05.2019) from the Inspector General of Registration, Chennai, clarifying that GST is not part of lease rent for stamp duty purposes.

Held: The Court held that as per Notification No. 12/2017-Central Tax (Rate), renting of residential property for use as residence is exempt from GST. Hence, inclusion of GST in stamp duty computation was erroneous. Circular No. 3759/01/2015-2 further clarified that GST payable by the lessee cannot be treated as part of rent under the Indian Stamp Act, 1899. Consequently, the Collector’s order dated 19.10.2020 was quashed, and the respondent was directed to refund Rs. 2,58,700 (deficit duty and penalty) to the petitioner within six weeks.

No violation of Section 171 of CGST Act found as no additional ITC benefit accrued in Ireo Grace Realtech’s “Gurgaon Hills” and “Grand Hyatt Gurgaon Residences” projects.

Issue: Whether the Respondent, M/s Ireo Grace Realtech Pvt. Ltd., had violated the provisions of Section 171 of the CGST Act, 2017, by not passing on the benefit of Input Tax Credit (ITC) or any reduction in the rate of tax to buyers in its projects “Gurgaon Hills” and “Grand Hyatt Gurgaon Residences.”

Fact: The investigation was initiated based on Order No. 14/2019 by the National Anti-Profiteering Authority directing the DGAP to examine all projects of the Respondent for alleged profiteering. The DGAP conducted investigations and submitted its report. Following the Delhi High Court’s judgment in Reckitt Benckiser India Pvt. Ltd. v. Union of India (2024), the DGAP reinvestigated the matter using a project-wise approach focusing on ITC-to-purchase ratio instead of turnover. For the “Gurgaon Hills” project, the ITC ratio reduced from 2.96% (pre-GST) to 1.95% (post-GST), indicating no additional benefit under GST. The “Grand Hyatt Gurgaon Residences” project was scrapped and later transferred to Oberoi Realty Ltd., where the new project was ineligible for ITC under Notification No. 03/2019-CT (Rate).

Held: The tribunal held that there was no reduction in tax rate or additional ITC benefit post-GST in either project. Since no benefit accrued, there was no obligation under Section 171 of the CGST Act to pass on any ITC or rate reduction to buyers. Hence, the provisions of Section 171 were not attracted, and proceedings against the Respondent were dropped.

SCN Quashed for Breach of Natural Justice; Audit Report Held Within Limitation under Section 65 of CGST Act

Issue: The main issues before the Court were whether the audit report issued by the Department was beyond the limitation prescribed under Section 65 of the CGST Act, 2017, and whether the Show Cause Notice (SCN) dated 27th November, 2024, was valid when issued before the expiry of time granted to the Petitioner to reply to the pre-SCN.

Facts: An audit was initiated against the Petitioner for FY 2017–18 to FY 2022–23 through a notice dated 11th January, 2024. The Petitioner furnished all required documents and replies on various dates, including 22nd February, 2024, and 11th October, 2024. A pre-SCN was issued on 25th November, 2024, granting three days for a reply, but the Department issued the SCN prematurely on 27th November, 2024. The Petitioner filed two writ petitions—one against the SCN and another against the final audit report dated 13th February, 2025. The Petitioner contended that the audit report was time-barred and that the SCN violated natural justice. The Department argued that the audit was completed within the permissible period and properly communicated.

Held: The Court held that the audit report was issued within the statutory period since the audit commenced on 12th October, 2024, and was concluded and communicated by 13th February, 2025, within the allowable time. However, the SCN was quashed as it was issued before the Petitioner’s reply period to the pre-SCN had expired, violating principles of natural justice. The matter was remanded to the pre-SCN stage, allowing the Petitioner to file a reply by 10th November, 2025. The authority was directed to decide on further proceedings in accordance with law, and the period during which the writ petitions were pending was excluded from limitation computation.

Grant of Regular Bail to Petitioner Accused of Rs. 6.09 Crore Fake ITC under CGST Act

Issue: Whether the petitioner accused under Section 132(1)(b)(c) of the CGST Act for availing and passing ineligible Input Tax Credit (ITC) worth Rs. 6.09 crores through fake invoicing is entitled to grant of regular bail under Section 483 of the BNSS, 2023.

Facts: The petitioner was alleged to have managed M/s Goel Electric Company and fraudulently availed ITC without actual movement of goods from M/s Shiv Enterprises and M/s New Vasan Electric Company. Investigation revealed use of non-existent suppliers and fake invoices, causing loss to the Government exchequer. He was arrested on 03.07.2025 and his earlier bail pleas were rejected. The petitioner contended he had made genuine purchases through proper channels, reversed a substantial part of ITC, and deposited Rs. 10 lakhs. He argued that the investigation was complete, complaint filed, offences were compoundable, maximum punishment was 5 years, and evidence was documentary in nature. The respondent opposed the bail citing seriousness of offence and risk of tampering.

Held: The Court observed that the alleged offences are punishable with a maximum of five years, are compoundable, and involve documentary and electronic evidence, reducing chances of tampering. The petitioner had already been in custody since July 2025, investigation was over, and trial would take time. Following Supreme Court precedents emphasizing bail as a rule and jail as an exception, the Court held that further detention was not justified. Accordingly, the petitioner was granted regular bail on furnishing bonds with conditions, including surrender of passport, cooperation in trial, and non-tampering with evidence.

Grant of Regular Bail in CGST Fake ITC Case Involving Rs. 7.46 Crores under Section 483 BNSS, 2023

Issue: Whether the petitioner, accused of fraudulently availing and utilizing Input Tax Credit (ITC) worth Rs. 7.46 crores through bogus invoices amounting to Rs. 48.92 crores under Sections 132(1)(c) and 132(1)(i) of the CGST Act, is entitled to grant of regular bail under Section 483 of the BNSS, 2023.

Facts: The petitioner, a partner in M/s Gauri Shankar Metal Industries and proprietor of M/s Shivansh Enterprises, was accused of availing fake ITC through non-existent firms created by one Baljinder Singh and his associates during 2017–2025. The investigation alleged tax evasion of Rs. 7.46 crores. The petitioner was arrested on 03.07.2025 after dismissal of bail by lower courts. He contended that he had been falsely implicated and had already made voluntary deposits of Rs. 1.72 crores and Rs. 76.66 lakhs under Section 74(5) of the CGST Act. He argued that the alleged ITC amounts were under adjudication and partly stayed by the High Court, that evidence was documentary, and that he had no criminal antecedents. The respondent opposed bail, citing the gravity of the offence and possibility of tampering with records.

Held: The Court observed that the offences under Section 132 of the CGST Act are punishable with a maximum of five years and are compoundable. It reiterated that bail is the rule and jail is the exception, especially when evidence is documentary and the accused has been in custody for long without custodial interrogation being sought. Considering that liability is yet to be adjudicated and the petitioner has been in custody since July 2025, the Court found no justification for further detention. The petition was allowed, and the petitioner was granted regular bail subject to conditions including surrender of passport, cooperation in trial, and non-tampering with evidence.

Bail Rejected for Accused in GST Fraud Case Involving Rs. 1.09 Crore Input Tax Credit

Issue: The issue in this case is whether the accused, Shri Harka Bahadur Sonar @ Sumit Sonar, should be granted bail in connection with an alleged fraudulent transaction involving the misuse of the complainant's GST ID and password, resulting in an Input Tax Credit (ITC) of Rs. 1,09,11,404/-.

Facts: The complainant, Shri Tajo Parang, reported that his GST ID and password were misused by the accused and co-accused for fraudulent transactions. He had provided his credentials to the accused for genuine business purposes, but later discovered that unauthorized transactions were made using his account. An FIR was lodged alleging fraudulent transactions, and the accused was arrested on 03.09.2025. The accused contends that the arrest was illegal and that he is being falsely implicated, as he had no involvement in the fraudulent activities. Additionally, the defense argues that proper procedures for arrest, including informing local police and obtaining transit remand, were not followed.

Held: The court rejected the bail application, noting that there was a prima facie case against the accused for being involved in the fraudulent transaction. Despite the defense's claim that arrest procedures were violated, the court found that the arresting authority had complied with the relevant legal provisions. The court also emphasized that the case involved multiple parties and required further investigation, making the accused not entitled to bail at this stage. Therefore, the bail application was denied, and the case was disposed of accordingly.

Competence of Principal Additional Director General, DGGI, to Order Provisional Attachment under Section 83 of CGST Act Challenged

Issue: Whether the Principal Additional Director General, Directorate General of GST Intelligence (DGGI), Headquarters, is competent under Section 83 of the CGST Act, 2017, to order provisional attachment of the Petitioner’s bank accounts.

Facts: The Petitioner, M/s GMG Tradelink Pvt. Ltd., filed a writ petition under Article 226 of the Constitution challenging the order dated 6th March, 2025, passed by the Principal Additional Director General, DGGI, Headquarters, which provisionally attached its bank accounts in ICICI Bank, Bhiwani Mandi Branch. The Petitioner contended that the said authority was not empowered under Section 83 of the CGST Act to pass such an order and that the power could only be exercised by the Commissioner. The Petitioner also submitted that objections against the attachment had already been filed before the Commissioner under Rule 159(5) of the CGST Rules.

Held: The Court issued notice to the Respondent. The Respondent’s counsel relied upon Notification No. 14/2017 dated 1st July, 2017, issued by the Ministry of Finance, which declares that the Principal Additional Director General, DGGI, is equivalent in rank to the Principal Commissioner, GST. Accordingly, the matter was taken on record for further consideration, and the exemption and stay applications were disposed of as per procedure.

Delay condoned – Supreme Court declines to exercise jurisdiction under Article 136 in view of findings in paragraph 21 of the impugned order; Special Leave Petition dismissed with question of law kept open and pending applications disposed of.

Validity of Public Notice restraining Container Freight Stations from collecting GST on auction of unclaimed cargo — Lack of jurisdiction of Customs authorities under the Customs Act vis-à-vis levy of GST under the CGST Act, 2017.

Issue: Whether the Public Notice dated 12.02.2021, issued by the Commissioner of Customs, directing Container Freight Stations (CFS) not to collect GST on the auction of uncleared or unclaimed cargo under Section 48 of the Customs Act, 1962, was valid in law or issued without jurisdiction, and whether such direction resulted in preventing the legitimate levy of GST under the CGST Act, 2017.

Facts: The petitioners, comprising a Company and an Association of Container Freight Stations, challenged the Public Notice and a consequential letter issued by Customs authorities. They argued that under Section 48 of the Customs Act, a CFS is authorised to auction unclaimed cargo after paying customs duty and IGST on import. The respondents contended that the bid amount was “cum-duty” and already included IGST, so imposing GST again would amount to double taxation. The petitioners maintained that the auction sale of goods constituted a fresh supply under Section 7(1) of the CGST Act, separate from import, and that they were liable to collect GST on such supply.

Held: The Court held that the Public Notice dated 12.02.2021 was issued wholly without jurisdiction, as the Customs authorities had no power under the Customs Act to regulate GST matters. It found that once customs duty and IGST are paid at the time of import, the auction sale by the CFS constitutes a separate taxable supply under the CGST Act. The CFS acts as a supplier of goods and is liable to collect and remit GST on such sales. The Public Notice was contrary to the CGST Act and relevant provisions of the Customs Act and was accordingly quashed, along with the consequential letter. All writ petitions were allowed without costs.

Court Upholds Tax Demand, Dismisses Petitioner's Appeal for Non-Compliance with GST Act Conditions

Issue: The petitioner challenged the impugned Order-in-Appeal No. 18/2025 passed by the Appellate Commissioner, which affirmed the Order-in-Original No. 18/2023-GST(JC) dated 30.03.2023, confirming a tax demand after the petitioner failed to pay the admitted interest liability and did not comply with the conditions under Section 107(6) of the GST Act.

Fact: The petitioner was issued a Show Cause Notice on 31.03.2022, admitting liability to pay interest but seeking time under Section 80 of the CGST Act. Despite this, the petitioner did not make the payment, leading to the confirmation of the demand through the Order-in-Original dated 30.03.2023. The petitioner filed an appeal, paying a sum of Rs. 55,42,858/- as pre-deposit, but disputed the interest liability, claiming the order was erroneous. The respondents contended the admissions made by the petitioner in their reply.

Held: The court found no infirmity in the impugned order and upheld the dismissal of the petitioner’s appeal, citing non-compliance with Section 107(6) of the GST Act. However, the petitioner was granted liberty to pay the admitted liability within 90 days. The court directed the first respondent to reconsider the appeal within six months, subject to the petitioner depositing the balance interest liability. The writ petition was disposed of with no costs, and the connected miscellaneous petition was closed.

Court Quashes GST Orders, Remits Case for Fresh Decision on Appeal Rejection and IGST Issue.

Issue: The issue in this Writ Petition was whether the 2nd Respondent's rejection of the Petitioner's appeal, filed beyond the condonable period of limitation under Section 107 of the GST enactments, was justified. The Petitioner challenged the impugned Orders dated 25.02.2025 and 02.09.2025, particularly focusing on the IGST paid on imports.

Facts: The 1st Respondent passed an order on 25.02.2025 after giving notice to the Petitioner on 26.11.2024, to which the Petitioner responded on 24.02.2025. The Petitioner filed an appeal against the order on 29.08.2025, 66 days after the condonable period, which the 2nd Respondent rejected on 02.09.2025. Despite this, the Petitioner had pre-deposited 10% of the disputed tax amounting to Rs. 1,25,071/- as shown in the 2nd Respondent's order.

Held: The Court disposed of the Writ Petition by quashing the Orders dated 25.02.2025 and 02.09.2025, and remitted the matter to the 2nd Respondent for a fresh decision. The Court directed that the fresh order be passed after due notice to the Petitioner, considering the Division Bench's ruling in the case of M/s. L & T Geostructure LLP. The Petitioner's challenge was accepted in light of the evolving IT system and the restrictions under Rule 36(4) of the GST Rules.

"Petitioner Granted Liberty to Challenge GST Penalty Order Despite Payment Under Protest"

Issue: The issue in this case is whether the Petitioner, who paid the penalty under protest for the release of goods detained by authorities, can challenge the penalty order before an Appellate Authority, given that the payment was made before the impugned Order was passed.

Fact: The Petitioner, a dealer in TMT bars, raised an invoice to an unregistered dealer, leading to the detention of goods under Form GST MOV-06 on 25.01.2025. A Show Cause Notice was issued the same day, and the Petitioner opted to pay the penalty of Rs. 1,74,916/- (Rs. 87,458/- each towards SGST and CGST) to release the goods. The Petitioner contended that the payment was made under protest, seeking the liberty to challenge the penalty order. However, the Respondent argued that payment under Section 129(5) of the GST enactments would conclude the proceedings, barring any objections.

Held: The Court disposed of the Writ Petition, granting the Petitioner liberty to challenge the impugned Order before the Appellate Authority under Section 107 of the GST enactments within thirty days. The Appellate Authority was instructed to entertain the appeal without reference to limitation, given that the penalty had already been paid. If the Petitioner fails to file the appeal within the specified period, the Writ Petition will be considered dismissed.

The Court Remits GST Dispute for Fresh Consideration Subject to Deposit of 50% Tax by Petitioner

Issue: The Petitioner challenged the impugned GST Order dated 06.08.2024, which was preceded by a Show Cause Notice dated 11.01.2024, on the grounds of non-compliance with personal hearings and reminders, and sought relief despite the expiry of the limitation period for filing an appeal under Section 107 of the GST Act, 2017.

Facts: The Petitioner received multiple notices and reminders to file a reply and appear for personal hearings on 19.02.2024, 28.02.2024, and 12.07.2024 but failed to comply. The limitation for appeal had expired. The impugned order related to the Tax Period April 2020 to March 2021. The Petitioner had already paid Rs.5,77,575/- over time. The parties consented to disposal of the writ petition at the admission stage.

Held: The Court disposed of the Writ Petition by remitting the matter back to the Respondent to pass a fresh order on merits, subject to the Petitioner depositing 50% of the disputed tax within 30 days, with the amount already recovered to be adjusted. The Petitioner was directed to file a reply to the Show Cause Notice within the same period. The Respondent was instructed to pass the final order within three months, and failure by the Petitioner to comply would allow the Respondent to recover the tax as if the petition were dismissed. The Writ Petition was disposed of with no costs.

Grant of Pre-Arrest Bail to Accused in Large-Scale GST Fraud Case Under BNSS, 2023

Issue: Whether the accused/applicant, Shri Faiz Ahmed, who apprehended arrest in connection with a large-scale GST fraud case, was entitled to the privilege of pre-arrest bail under Section 482 of the BNSS, 2023.

Facts: An FIR was lodged by Inspector Sourav Kumar Pandey alleging that a fictitious firm, M/S Siddhi Vinayak Trade Merchants, fraudulently obtained a GST registration using forged documents and raised fake invoices amounting to about Rs. 658.88 Crores, thereby defrauding the government of approximately Rs. 99.31 Crores. The main accused, Ashutosh Kumar Jha, was found to be operating the firm. The applicant, Faiz Ahmed, was summoned as he had communication and financial transactions with the main accused. He contended that he was only a small businessman, had engaged a Chartered Accountant for tax matters, and had no role in the fraudulent activities. He joined the investigation, his statement was recorded, and he cooperated with authorities. The prosecution confirmed that his custodial interrogation was not necessary and that the main accused was already on bail due to the lapse of the statutory period for filing the charge sheet.

Held: The Court held that since the applicant had cooperated with the investigation, appeared before the Investigating Officer, and his custodial interrogation was not required, he was entitled to the privilege of pre-arrest bail. Accordingly, the interim bail granted earlier was made absolute on the same terms and conditions, and the application for anticipatory bail was allowed.

Restoration of GST Registration Permitted Where Assessee Filed Pending Returns and Paid Dues — Gauhati High Court Invokes Proviso to Rule 22(4) of CGST Rules, 2017

Issue: The issue before the Court was whether the cancellation of the petitioner’s GST registration for non-filing of returns for six months without granting a proper hearing and despite subsequent compliance with tax dues could be sustained, and whether the registration could be restored under the proviso to Rule 22(4) of the CGST Rules, 2017.

Facts: The petitioner, proprietor of M/s Dhirghat Hardware Stores, had his GST registration cancelled by the Superintendent, Dhubri-1, Bongaigaon Division, under Section 29(2)(c) of the CGST/AGST Act for failure to file returns for six consecutive months. Though a show cause notice was issued, no date of hearing was provided. The petitioner, not well-versed in online procedures, failed to respond in time. Later, he cleared all pending returns and dues with interest and late fees, but the time limit to seek revocation had expired. His appeal was also dismissed, leading him to approach the High Court seeking restoration.

Held: The Gauhati High Court observed that under the proviso to Rule 22(4) of the CGST Rules, 2017, if the assessee furnishes all pending returns and pays tax dues with interest and late fees, the proper officer may drop the cancellation proceedings. Relying on its earlier decision in Sanjoy Nath v. Union of India (2023), the Court directed the petitioner to approach the proper officer within two months for restoration of registration. The authority was directed to consider the application and restore registration if all statutory requirements are met. The petition was accordingly disposed of without costs.

No Violation of Anti-Profiteering Provisions Found Against M/s Nirma Limited Under Section 171(1) of the CGST Act, 2017.

Issue: Whether M/s Nirma Limited failed to pass on the commensurate benefit of the reduction in the GST rate to recipients as required under Section 171(1) of the CGST Act, 2017, following Notification No. 41/2017 dated 14.11.2017.

Fact: Based on a reference from the Secretary, NAA dated 18.04.2019, the Standing Committee directed the DGAP to investigate the allegation that M/s Nirma Limited did not pass on the benefit of the tax rate reduction. The DGAP conducted multiple investigations and submitted reports dated 15.12.2021, 27.01.2023, and 23.05.2025, each time concluding that the Respondent had not contravened Section 171(1). The matter was remitted twice — first by NAA on 10.05.2022 for further verification and later by the CCI on 23.08.2024 for re-investigation following the Delhi High Court judgment in W.P. (C) No. 7743/2019. Pursuant to the re-investigation and in light of Notification No. 18/2024-Central Tax empowering the GSTAT (Principal Bench) to handle anti-profiteering matters, the DGAP once again confirmed that no violation was found.

Held: The GST Appellate Tribunal accepted the DGAP’s final report dated 23.05.2025, holding that M/s Nirma Limited had not contravened Section 171(1) of the CGST Act, 2017. The proceedings were thus closed, and the record was consigned, with copies of the order directed to the Respondent and concerned CGST/SGST authorities for necessary action.

No contravention of Section 171 of the CGST Act found as DGAP confirms no additional ITC benefit accrued to M/s Ireo Grace Residency Pvt. Ltd. after GST implementation.

Issue: The issue in this case was whether M/s Ireo Grace Residency Pvt. Ltd. and its associated entities had contravened the provisions of Section 171 of the CGST Act, 2017, by not passing on the benefit of additional Input Tax Credit (ITC) to homebuyers after the implementation of GST.

Fact: Based on the recommendation of the NAA, further investigation was directed against other projects of the Respondent. The Respondent stated that only two projects—“Gurgaon Hills” and “Grand Hyatt Residency”—had accrued the benefit of additional ITC. For the projects “Victory Valley” and “Ireo Waterfront,” the Respondent had received occupancy certificates post-GST but did not claim any ITC benefit. The DGAP, after investigation for the period 31.07.2017 to 31.12.2020, found that the “Victory Valley” project was nearly completed before GST and no additional ITC benefit accrued post-GST. The NAA directed reinvestigation on certain discrepancies regarding EWS units, turnover of retail units, and ITC reversal. After further investigations under directions from NAA and later from the CCI in light of the Delhi High Court’s judgment, the DGAP consistently concluded that no contravention of Section 171(1) had occurred.

Held: The authority accepted the DGAP’s final report dated 23.05.2025, concluding that the Respondent had not violated Section 171(1) of the CGST Act, 2017, as no additional ITC benefit accrued during the relevant period. The proceedings were thus closed, and the record was consigned.

Unsigned and Improper Summary of Show Cause Notice in Form GST DRC-01 Held Invalid; Order Passed Without Hearing Violates Section 75(4) and Principles of Natural Justice.

Issue: The main issue before the Court was whether the Summary of the Show Cause Notice (SCN) issued in Form GST DRC-01 without a duly signed and authenticated SCN could be treated as a valid notice under Section 73 of the CGST/State GST Acts, and whether the impugned order passed without granting a personal hearing violated Section 75(4) and the principles of natural justice.

Facts: The petitioner was issued a Summary of Show Cause Notice dated 27.09.2023 in Form GST DRC-01 for the period July 2017–March 2018, followed by an order dated 27.12.2023 in Form GST DRC-07. The petitioner contended that no proper SCN was issued, and the attachments to DRC-01 and DRC-07 were not digitally signed by the Proper Officer as required under Rule 26(3) of the CGST Rules, 2017. It was also argued that no opportunity of personal hearing was granted as mandated under Section 75(4). The respondent authorities claimed that the attached tax determination formed part of the SCN and that authentication was done electronically.

Held: The Court held that the Summary of SCN in Form GST DRC-01 cannot substitute the proper SCN required under Section 73(1). Issuing a valid and duly authenticated SCN is a mandatory requirement, and attachments without authentication by the Proper Officer are invalid under Rule 26(3). The Court further held that failure to provide an opportunity of hearing when an adverse decision was contemplated violated Section 75(4) and the principles of natural justice. Consequently, the impugned order dated 27.12.2023 was set aside. However, liberty was granted to the department to initiate fresh proceedings under Section 73, with the period betw

Anticipatory Bail Denied to Petitioner Accused of Assaulting Public Servant on Duty

Issue: Whether the petitioner, accused of assaulting and threatening a public servant performing official duty, is entitled to the grant of anticipatory bail under Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023.

Fact: The petitioner, Deepak Singla, was named in FIR No. 182 dated 14.09.2025 registered at Police Station Bhikhi, District Mansa, for offences under Sections 132, 221, 351(1) and 3(5) of the BNS, 2023. The complainant, an ETO Mobile Wing In-charge, alleged that the petitioner and his brother followed, abused, and physically assaulted him while he was on official duty checking vehicles for GST violations. The petitioner claimed false implication, stating that the complainant was the aggressor and that CCTV footage from Daawat Dhaba would support his innocence. The State opposed bail, contending that the offence was serious, involving assault on a public servant, and custodial interrogation was necessary for effective investigation.

Held: The Court held that serious allegations of assault and threats against a public servant performing official duties were made out against the petitioner. At the stage of investigation, claims of false implication or allegations of misconduct by the complainant could not be adjudicated. Considering the gravity of the offence, potential influence over witnesses, and need for custodial interrogation, anticipatory bail was not justified. Accordingly, the petition was dismissed, with an observation that the findings would not affect the merits of the ongoing investigation.

Cotton Seed De-oiled Cake Exempt from GST Irrespective of Use or Supply Channel

Issue: Whether cotton seed de-oiled cake (HSN 23061020), used as animal or fish feed, attracts GST at the rate of 5%, or is exempt under Entry No. 102 of Notification No. 2/2017-Central Tax (Rate). The applicant also sought clarity on entitlement to Input Tax Credit (ITC) if GST is applicable and whether GST must be charged on onward sale of the said goods.

Fact: The applicant, engaged in trading of animal feed products, procures cotton seed de-oiled cake and sells it as feed to customers. Confusion arose as some suppliers charged 5% GST while others claimed full exemption. The applicant referred to Notification No. 2/2017 and to the Gujarat High Court judgment in Dharti Industries vs. Office of Commissioner (Appeal) which held that cotton seed oil cake is exempt when used as cattle feed. Examination of the tariff and notifications showed that from 01.07.2017 to 21.09.2017, exemption depended on its use as feed; but from 22.09.2017 onwards, cotton seed de-oiled cake was fully exempt from GST, irrespective of end use.

Held: The Authority ruled that cotton seed de-oiled cake (HSN 23061020) is exempt from GST irrespective of its use or supply channel. Consequently, no GST is payable on its sale, and therefore, the question of claiming Input Tax Credit does not arise. The ruling aligns with the subsequent amendments and judicial interpretation confirming full exemption of cotton seed de-oiled cake under the GST regime.

Classification of “Palladina” Service Apartment Project under GST – Whether Residential or Commercial Construction Services

Issue: Whether the construction of the project “Palladina,” consisting of B+G+31 storey Service Apartment Building, should be classified under “construction services of multi-storey residential buildings” or “construction services of commercial buildings” under Notification No. 11/2017-Central Tax (Rate) dated 28 June 2017, as amended by Notification No. 03/2019-Central Tax (Rate) dated 29 March 2019, for the purpose of determining the applicable GST rate.

Fact: The applicant, SRIPSK Developers LLP, undertook the development of the project “Palladina” at 27, Matheshwartala Road, Kolkata, on land purchased by PS Group Realty Ltd. from Park Leather Company, with a condition imposed by Kolkata Municipal Corporation (KMC) that the land be used only for commercial ventures such as hotel or convention centre and not for residential purposes. The project received KMC sanction as “Service Apartments,” while the West Bengal Real Estate Regulatory Authority (WBRERA) registered it as a “Residential Project” due to absence of a “Service Apartment” category. The applicant sought an advance ruling to avoid classification disputes, as GST liability differs—5% for residential and 12% for commercial projects.

Held: The Authority held that “Service Apartments,” though partially similar to residential apartments, are commercial in nature as they are intended for short- or long-term accommodation with hotel-like facilities. Considering that KMC, being a competent authority under law, sanctioned the project as “Service Apartments” on land restricted for commercial use, the project “Palladina” qualifies as construction of commercial apartments. Therefore, the construction services rendered by the applicant fall under “construction services of commercial buildings” liable to GST at 12%.

Interest on Refund of Unconstitutional IGST on Ocean Freight – Sections 54 & 56 Inapplicable When Tax Collected Without Authority of Law

Issue: Whether the Petitioner was entitled to interest of Rs. 71,31,225/- on the refund of IGST paid under reverse charge on ocean freight, which was later declared unconstitutional by the Supreme Court and this Court.

Facts : The Petitioner, engaged in the import of palm oil, had paid IGST of Rs. 2,62,37,558/- under reverse charge on ocean freight pursuant to Notifications No. 8/2017 and 10/2017-IGST (Rate). These notifications were later held unconstitutional by the Supreme Court in Union of India v. Mohit Minerals Pvt. Ltd. and by this Court in the Petitioner’s own earlier writ (WP No. 8318/2019), directing refund with applicable interest. The Department refunded the principal amount but rejected the claim for interest of Rs. 71,31,225/- by order dated 31.01.2023, contending that refund was made within 60 days under Sections 54 and 56 of the CGST Act.

Held : The Bombay High Court held that Sections 54 and 56 of the CGST Act do not apply where the tax itself was collected without authority of law. Since the IGST on ocean freight was unconstitutional, the Government was bound to refund the amount along with interest from the date of deposit until refund, in accordance with the constitutional mandate under Article 265 and the doctrine of restitution. Reliance was placed on Mohit Minerals Pvt. Ltd., Ranbaxy Laboratories Ltd. v. UOI, and Mafatlal Industries Ltd. v. UOI. The Court directed the Department to pay the Petitioner interest of Rs. 71,31,225/- within four weeks, making the rule absolute.

Court Grants Regular Bail to Director Accused of Availing Fake ITC of Rs.23.06 Crores under SGST Act, 2017

Issue: Whether the applicant, Ankit Singh, accused of offences under Section 132(1)(b) and (c) of the SGST Act, 2017 for allegedly availing fake Input Tax Credit of Rs.23.06 crores through multiple companies, is entitled to regular bail.

Facts: The applicant, Director of M/s Mahavir Moulds India Pvt. Ltd., is alleged to have managed several companies that claimed ineligible or fake ITC from non-existent or registration-cancelled entities. The investigation is complete, complaint filed, but no statutory notice or assessment under the SGST Act, 2017 has been conducted. The applicant has been in custody since 20.08.2025 and has cooperated fully during investigation.

Held: Considering that the primary object of the Act is revenue recovery, not punitive incarceration, the complaint is filed, investigation is complete, and no assessment has been done, the Court granted regular bail to the applicant on furnishing a personal bond of Rs.1,00,000 with one solvent surety, until disposal of the case.

The Court Quashes GST Orders for Lack of Personal Hearing, Remands Case for Fresh Adjudication.

Issue: The petitioner challenges the order dated 31.12.2023 under Section 73 of the U.P. Goods and Services Tax Act, 2017, and the order dated 23.09.2025, dismissing their appeal as time-barred. The petitioner contends that no opportunity for a personal hearing was granted before passing the order under Section 73, which they argue is a violation of procedural law.

Fact: The Division Bench of this Court, in Mahaveer Trading Company vs. Deputy Commissioner, State Tax, emphasized that a personal hearing is a mandatory requirement under the GST Act before passing an adverse order. The petitioner had appeared on multiple occasions but was not granted an opportunity for a personal hearing. The Standing Counsel confirmed that no date for a personal hearing was fixed, and the assessment was made without this procedural step.

Held: The Court found that the failure to provide an opportunity for a personal hearing contravened the procedural law, as established in Mahaveer Trading Company. Accordingly, the orders dated 31.12.2023 and 23.09.2025 were quashed. The case was remanded to the assessing authority to pass a fresh order after providing the petitioner an opportunity for a personal hearing. The petition was thus allowed.

Ex-parte GST Orders Set Aside; Matter Remitted Pending Supreme Court Decision on Limitation Notifications

Issue: Whether the proceedings initiated under Section 73 of the CGST/KGST Act, 2017 pursuant to the show cause notice dated 30.05.2024 were without jurisdiction and barred by limitation, and whether the ex-parte adjudication and appellate orders passed against the petitioner required interference.

Facts: The petitioner was subjected to audit proceedings under Section 65 of the CGST/KGST Act for the financial year 2019–20, culminating in an audit report dated 15.05.2024. Based on this, a show cause notice dated 30.05.2024 under Section 73(1) was issued, followed by reminders, but the petitioner failed to reply, resulting in an ex-parte Order-in-Original on 06.08.2024. The petitioner’s appeal filed under Section 107 was rejected as time-barred on 14.05.2025. The petitioner contended that the notices were not received, the proceedings were barred by limitation, and that the validity of the notifications extending limitation under Section 168A was pending before the Supreme Court.

Held: The High Court held that since the validity of the notifications extending limitation is sub judice before the Supreme Court in SLP (C) No. 4240/2025, and to prevent conflicting decisions, the petitioner deserved another opportunity. The Court set aside the ex-parte adjudication and appellate orders, remitted the matter to the adjudicating authority for fresh consideration after disposal of the SLP, and directed the petitioner to pay Rs. 10,000/- as costs to the Karnataka High Court Legal Services Authority. The period between the impugned order and disposal of the SLP was excluded for limitation purposes.