Retrospective GST Registration Cancellation Set Aside for Want of Notice and Reasons; Registration Restored with Compliance Directions

ISSUE: Whether the appellate authority was justified in dismissing the Petitioner’s appeal solely on the ground of limitation, and whether the retrospective cancellation of GST registration dated 27th May, 2023 was legally sustainable when such retrospective effect was neither contemplated in the show cause notice nor supported by reasons in the cancellation order.

FACTS: The Petitioner, M/s Modi Packers, a sole proprietorship registered under GST with effect from 1st July, 2017, was issued a show cause notice dated 5th April, 2023 proposing cancellation of registration on allegations of fraud and suppression of facts. The Petitioner replied on 12th April, 2023, disclosing its updated address, pursuant to which an amended registration certificate had already been issued on 28th March, 2023. Without conducting inspection at the new address and without dealing with the reply, the Proper Officer passed an order dated 27th May, 2023 cancelling the GST registration retrospectively from 3rd July, 2017. The appeal filed against this order was dismissed by the appellate authority on 9th June, 2025 on the ground of limitation alone, leading to the present writ petition.

HELD: The Court held that the retrospective cancellation of GST registration was unsustainable as the show cause notice did not propose retrospective cancellation and the cancellation order contained no reasons justifying such retrospective effect or addressing the Petitioner’s reply. Relying on consistent precedents, the Court set aside the cancellation order dated 27th May, 2023, restored the Petitioner’s GST registration, and directed that access to the GST portal be granted within one week, subject to filing of all pending returns with applicable late fees and penalties by 15th January, 2026, while granting liberty to the Department to initiate fresh action in accordance with law, if warranted.

GST registration cancellation quashed for breach of Rule 21A(2A) procedure and denial of 30 days’ opportunity under Rule 10A

ISSUE: Whether the cancellation of the petitioner’s GST registration for alleged violation of Rule 10A read with Rule 21(d) of the CGST Rules, 2017 was valid when the Show-Cause Notice was issued in an incorrect form, granted only seven days instead of the statutorily prescribed thirty days to respond, and the cancellation order was passed before expiry of the said statutory period, thereby violating principles of natural justice.

FACTS: The petitioner, a proprietor of a printing press registered under the CGST Act, 2017 on 26.06.2023, was issued a Show-Cause Notice dated 10.06.2024 proposing cancellation of registration for non-furnishing of bank details under Rule 10A. The notice, uploaded on the portal in Form GST REG-17, allowed only seven days for reply and simultaneously suspended the registration. Allegedly unaware of the notice, the petitioner did not respond, leading to an order dated 04.07.2024 cancelling the registration. Subsequent attempts by the petitioner to upload bank details and seek revocation failed due to portal limitations and expiry of limitation, compelling the petitioner to approach the High Court by writ petition.

HELD: The Court held that for violation of Rule 10A, the procedure prescribed under Rule 21A(2A) is mandatory, requiring issuance of notice in Form GST REG-31 and grant of thirty days’ time to explain. Issuance of notice in Form GST REG-17, allowance of only seven days, and passing of the cancellation order before expiry of thirty days were contrary to statutory mandate and principles of natural justice. Consequently, the Show-Cause Notice dated 10.06.2024 and the cancellation order dated 04.07.2024 were quashed, and the petitioner’s GST registration was directed to be restored, with no order as to costs.

Bail Granted in GST Fraud Case: Prolonged Custody Unjustified Where Investigation Complete, Evidence Documentary, and Accused Cooperative; Article 21 and Presumption of Innocence Prevail

ISSUE: Whether the petitioner, arrested under Sections 132(1)(b), (c), (e), (l) and (i) of the CGST Act, 2017 and corresponding provisions of the Punjab SGST Act read with the IGST Act, is entitled to the grant of regular bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023, in light of the nature of allegations, period of custody, completion of investigation, alleged voluntary tax payments, and settled principles governing bail in economic offences.

FACTS: Pursuant to a search conducted on 07.01.2025 under Section 67 of the CGST Act at the petitioner’s business premises, alleged incriminating material was recovered relating to bogus invoices, wrongful availment of ITC, and fraudulent refund claims aggregating to substantial amounts. The petitioner was arrested on 08.07.2025 when he appeared in response to summons under Section 70 of the CGST Act. The prosecution alleged non-cooperation, creation of false documents, deletion of electronic data, and evasion involving refunds of Rs.8.74 crores and bogus invoices of Rs.133.22 crores. The petitioner contended that he cooperated throughout, appeared on every summons, made voluntary payments through DRC-03 aggregating to over Rs.2.20 crores without admission of guilt, had no criminal antecedents, and that the investigation stood completed with no further recovery pending.

HELD: The Court held that continued incarceration of the petitioner was not justified, as the investigation was complete, the case rested primarily on documentary evidence, the petitioner had been in custody for over five months, had cooperated with the authorities, had no criminal antecedents, and there was no material to show likelihood of absconding or tampering with evidence. Applying the principles laid down by the Supreme Court in Vineet Jain, Radhika Agarwal, Sanjay Chandra, Dataram, and Satender Kumar Antil, and emphasizing the presumption of innocence and the right to speedy trial under Article 21, the Court allowed the bail petition. The petitioner was directed to be released on bail subject to conditions, including furnishing bonds, non-interference with witnesses, restriction on foreign travel, and submission of security equal to the disputed tax and penalty amount.

Provisional Attachment of Bank Account Substituted with Fixed Deposits; Adjudication to Be Completed Expeditiously

Issue: The issue before the Court was whether the provisional attachment of the Petitioner’s bank account under Section 83 of the MGST Act, 2017 should continue, despite the Petitioner offering fixed deposit receipts as alternative security, considering the severe impact of the attachment on the Petitioner’s day-to-day business operations.

Facts: The Petitioner challenged the provisional attachment of its HDFC Bank account at Pimpri, Pune, contending that it had paralysed business activities, including payment of salaries and expenses. During the hearing, the Petitioner offered two fixed deposit receipts with HDFC Bank aggregating to Rs.14,99,99,999 as security in lieu of the bank account, which was higher than the provisionally quantified alleged dues of Rs.13,69,20,610 for the period April 2019 to July 2025. The Petitioner further stated that if the adjudication proceedings were completed within a time-bound schedule, it would not press the challenge to the provisional attachment. The Respondents defended the legality of the attachment but agreed to justify it through affidavits.

Held: The Court held that the Petitioner’s without-prejudice offer was fair, reasonable, and proportionate, as the fixed deposits adequately covered the provisional liability. Accordingly, the Court permitted attachment of the two fixed deposit receipts in lieu of the bank account and directed that the attachment on the bank account should cease, allowing the Petitioner to operate it. The Court also directed the Respondents to complete the adjudication proceedings expeditiously and, in any event, before 30 May 2026, while clarifying that all merits were kept open and that the provisional attachment would not exceed the statutory period. The Petition was disposed of in these terms, without costs.

The Delhi High Court Sets Aside GST Order for Non-Compliance with Natural Justice, Grants Time to Petitioner to File Reply and Attend Hearing

Issue: Whether the impugned order passed against the Petitioner without granting an opportunity to file a reply to the show cause notice and attend personal hearing is liable to be set aside, and whether the challenge to Notifications Nos. 9/2023 and 56/2023 (Central and State Tax) can be considered at this stage.

Facts: The Petitioner, Neelmani Electricals, filed a writ petition challenging the show cause notice dated 16th December, 2023, and the order dated 5th April, 2024 issued for the tax period April 2018 to March 2019, along with the vires of Notifications Nos. 9/2023 and 56/2023 (Central and State Tax). The Petitioner had not filed any reply to the SCN nor attended personal hearings. An attachment order freezing bank accounts was issued on 9th September, 2025. Several High Courts had taken differing views on the validity of these notifications, and the matter is pending before the Supreme Court in S.L.P No. 4240/2025.

Held: The Court set aside the impugned order due to non-compliance with the principles of natural justice, granting the Petitioner time till 31st January, 2026 to file a reply to the SCN. The Adjudicating Authority shall issue a notice for personal hearing and consider the reply to pass a fresh reasoned order. The challenge to the validity of the notifications is left open pending Supreme Court and other High Court decisions. The Court lifted the freezing order on the condition that 25% of the balance in specified accounts be maintained and directed payment of Rs.10,000 towards Court welfare fund. All rights and remedies of the parties remain open.

Writ Petition Disposed Granting Liberty to File Appeal Before GST Appellate Tribunal Upon Its Functional Constitution

Issue: The issue before the Court was whether a writ petition under Article 226 of the Constitution of India was maintainable against the appellate order dated 18.08.2025 passed under Section 107 of the Chhattisgarh Goods and Services Tax Act, 2017, when the statutory remedy of second appeal before the Goods and Services Tax Appellate Tribunal existed but the Tribunal was not functional due to non-appointment of its President or Members.

Facts: The petitioner challenged the appellate order dated 18.08.2025 and sought quashing of the same on the ground that the Goods and Services Tax Appellate Tribunal, though notified in Chhattisgarh, was not functional. The petitioner relied upon a prior decision of the Co-ordinate Bench and the order dated 03.12.2019 issued by the Central Board of Indirect Taxes and Customs, which clarified that limitation for filing appeal under Section 112 would commence from the date the President or State President of the Tribunal enters office. The respondents did not oppose the prayer for disposal of the writ petition with liberty to avail the statutory appeal.

Held: The Court disposed of the writ petition by granting liberty to the petitioner to file an appeal before the Goods and Services Tax Appellate Tribunal as soon as the President or State President enters office, subject to statutory deposit. It was held that the appeal, if filed within limitation, shall be decided in accordance with law and statutory stay under Section 112(9) would continue till disposal of the appeal, failing which the State would be free to proceed with recovery in accordance with law.

Petitioner Directed to Approach Commissioner (Appeals), Gurugram for Challenge to ITC Demand; Objections on Jurisdiction and Notice Rejected

Issue: Whether the impugned order dated 14th February, 2025, raising demands on the Petitioner for alleged fraudulent availment of Input Tax Credit (ITC), suffers from jurisdictional or procedural infirmities, and whether the Petitioner can challenge the order before the appropriate appellate authority.

Facts: The Petitioner, proprietor of M/s. Bharat Facilities, was implicated in a multi-city racket allegedly run by Sh. Gagan Kumar involving fake firms and fraudulent ITC claims. The Petitioner contended that the show cause notice should have been issued by a higher DGGI authority due to the amount involved and raised confusion about the correct forum for filing an appeal, as the adjudication occurred in Faridabad while the notice was uploaded from South Delhi. Respondents clarified that the show cause notice was signed by the Joint Director, and circulars and notifications (Circular No. 250/07/2025-GST and Notification No. 02/2017-Central Tax) clarified that appeals against such orders lie with the Commissioner (Appeals), Gurugram, which exercises jurisdiction over Faridabad and Gurugram.

Held: The Court held that the Petitioner’s objections regarding jurisdiction and issuance of the show cause notice were not tenable. The correct appellate authority is the Commissioner (Appeals), Gurugram, and the Petitioner may file the appeal with the requisite pre-deposit by 31st January, 2026, which shall be heard on merits without being dismissed for limitation. The Petitioner was relegated to the appellate remedy, and the petition was disposed of accordingly.

Writ Petition Not Maintainable Where GST Appellate Tribunal Is Functional; Petitioner Directed to Comply with Section 112(8) Deposit and File Appeal Within Prescribed Timeline.

Issue: Whether the petitioner can approach the Writ Court against the order of the CT & GST Officer and Appellate Authority in the absence of a functional GST Appellate Tribunal (GSTAT) and without complying with the deposit requirement under Section 112(8) of the GST Act.

Facts: The petitioner challenged the order dated 18th June, 2022 of the CT & GST Officer, Balasore, for the tax period April 2017 to March 2018, which was affirmed by the Appellate Authority on 21st April, 2025. The petitioner contended that appeal before the GSTAT was not possible as the Tribunal was not constituted, rendering them remediable. The Department acknowledged non-functionality of GSTAT but submitted that statutory deposit under Section 112(8) is mandatory. Subsequently, the GSTAT was notified to be functional with a staggered timeline for filing appeals until 30th June, 2026.

Held: The Writ Court cannot entertain the petition where a statutory forum is provided and now made functional. The petitioner must comply with the deposit conditions under Section 112(8) and file the appeal within the timeline prescribed in the GSTAT e-Filing advisory. The writ petition was disposed of with directions to adhere to statutory requirements, and no opinion was expressed on the merits of the original order.

Delay in Seeking Revocation of GST Registration Condoned Subject to Payment of Statutory Dues; Cancellation Set Aside in Interest of Revenue

ISSUE: Whether cancellation of GST registration pursuant to a show cause notice dated 16 January 2023 and order dated 17 February 2023 should be interfered with, and whether delay in seeking revocation under Rule 23 of the applicable GST Rules can be condoned on the petitioner’s willingness to discharge all statutory dues.

FACTS: The petitioner challenged the show cause notice and consequential cancellation order under the Central Goods and Services Tax Act, 2017. Learned counsel for the petitioner submitted readiness and willingness to pay tax, interest, late fee, penalty, and all other amounts required for acceptance of returns, and relied upon the coordinate Bench decision in M/s. Mohanty Enterprises v. The Commissioner, CT & GST, Odisha (order dated 16 November 2022), contending that the relief sought, including condonation of delay, was covered thereby. The Department was represented by learned Additional Standing Counsel.

HELD: Following the coordinate Bench decision, the Court condoned the delay in invoking the proviso to Rule 23 and directed that, subject to deposit of all dues and compliance with statutory formalities, the petitioner’s application for revocation of cancellation be considered in accordance with law. The writ petition was disposed of, granting relief in the interest of revenue.

Writ Petition Against GST Detention Relegated to Appeal; Provisional Release of Perishable Goods Directed on Partial Penalty and Bank Guarantee

ISSUE: Whether the writ petition challenging the detention order and penalty imposed under Section 129(1)(b) of the WBGST/CGST Act, 2017 was maintainable despite the availability of an alternative statutory remedy, and whether the petitioner was entitled to the benefit of Section 129(1)(a) as owner of the goods on the basis of invoices, e-way bills, and the CBIC Circular dated December 31, 2018.

FACTS: The petitioner’s consignment of areca nuts, allegedly transported from Assam to Delhi with valid invoices and e-way bills, was intercepted and detained in West Bengal. The GST authorities relied on RFID toll data, weighment slips, and timing discrepancies between two e-way bills to conclude that the goods were actually loaded within West Bengal and that the documents were fabricated to conceal the true supplier and evade tax. Consequently, penalty of Rs. 79,69,500/- was imposed under Section 129(1)(b). The petitioner contended that as owner of the goods, penalty could only be levied under Section 129(1)(a), that RFID data alone could not justify detention, and that the CBIC Circular mandated release. The State argued fraud, questioned genuineness of documents, and urged relegation to the appellate remedy under Section 107.

HELD: The Court declined to entertain the writ petition on merits, holding that no exceptional ground was made out to bypass the statutory appellate remedy, as there was no violation of natural justice or lack of jurisdiction and the impugned order involved detailed factual findings, including allegations of fraud. The CBIC Circular was held inapplicable where the underlying documents themselves were under serious doubt. However, considering the perishable nature of areca nuts, the Court directed provisional release of goods and conveyance upon payment of penalty calculated under Section 129(1)(a) and furnishing bank guarantee for the balance amount, while leaving all issues open for adjudication by the appellate authority.

Writ Petition Against GST Show Cause Notice Not Maintainable; Assessee Directed to Avail Statutory Remedy

ISSUE: Whether a writ petition is maintainable to challenge a Demand-cum-Show Cause Notice dated 17.09.2025 issued under Section 73 of the CGST/OGST Act, 2017, alleging wrongful availment of input tax credit due to non-filing of GSTR-3B by the supplier, on the grounds of arbitrariness and non-application of mind by the proper officer.

FACTS: The petitioner assailed the SCN issued by the Assistant Commissioner of GST & Central Excise, Bhubaneswar-1 Division for FY 2021-22, contending that denial of input tax credit under Section 16 of the GST Act was unjustified as the petitioner was a bona fide recipient of goods and services. It was argued that the clarification submitted on 29.05.2025 in response to Form GST ASMT-10 dated 30.04.2025 was not duly considered, rendering the SCN vitiated. The revenue opposed the writ petition on the ground that the proper officer had jurisdiction under Section 73 and that the petitioner had an efficacious alternative remedy by filing a reply to the SCN.

HELD: The Court declined to entertain the writ petition, holding that a challenge to a show cause notice issued for adjudication of liability under the GST Act is not maintainable when the proper officer has jurisdiction and the statutory process is yet to conclude, following settled precedents. Liberty was granted to the petitioner to submit a reply to the SCN within two weeks, with a direction that the proper officer shall consider the reply and evidence, if any, and pass a reasoned order after granting an opportunity of hearing. The writ petition and pending applications were accordingly disposed of.

Sections 129 and 130 CGST Act Operate Independently; Confiscation at Transit Stage Permissible Only on Clear Evidence of Intent to Evade Tax; MOV-10 Notices Remanded for Reconsideration

ISSUE: Whether, after the amendments to Sections 129 and 130 of the CGST Act with effect from 01.01.2022, the GST authorities are legally entitled to invoke confiscation proceedings under Section 130 directly or midway during detention/seizure proceedings under Section 129, particularly by issuing notices in Form GST MOV-10, without completing the procedure prescribed under Section 129, and whether the retention of the non-obstante clause in Section 129 excludes or restricts recourse to Section 130.

FACTS: Goods and conveyances of the petitioners were intercepted during transit and detained under Section 129 of the CGST Act for alleged discrepancies in documents/e-way bills. While proceedings under Section 129 were pending, the authorities issued notices in Form GST MOV-10 proposing confiscation under Section 130. The petitioners challenged this action, contending that post-amendment Section 129 is a self-contained code with overriding effect, that Sections 129 and 130 stand delinked, and that confiscation under Section 130 can be invoked only upon completion of Section 129 proceedings or after independent proceedings establishing intent to evade tax. The Revenue relied on earlier precedent, particularly Synergy Fertichem Pvt. Ltd., to argue that Sections 129 and 130 operate independently and that confiscation can be invoked at the threshold where intent to evade tax is apparent.

HELD: The Court held that Sections 129 and 130, even after the 01.01.2022 amendments, are independent and mutually exclusive provisions. Retention of the non-obstante clause in Section 129 does not bar invocation of Section 130 where there is material indicating intent to evade tax. Confiscation under Section 130 may be initiated even at the stage of detention/seizure under Section 129, but only in cases of grave and clear contraventions evidencing such intent; mere suspicion or minor discrepancies are insufficient. Since confiscation is a harsh measure, authorities must strictly adhere to statutory safeguards, jurisdictional competence, timelines, and the principles laid down in the judgment. All impugned MOV-10/MOV-11 notices were remanded for fresh examination in light of these principles, with directions for release under Section 129 where confiscation is not justified.

GST demands prior to 04 September 2019 quashed as resolution plan attained final approval only on that date; fresh notice permissible thereafter within extended limitation

Issue: The issue before the Court was whether GST demands could be raised against Patanjali Foods Limited for periods prior to the approval of the resolution plan under the Insolvency and Bankruptcy Code, 2016, and specifically whether the effective date of approval of the resolution plan was 24 July 2019 or 04 September 2019.

Facts: Ruchi Soya Industries Ltd. underwent insolvency proceedings before the NCLT, Mumbai, where a resolution plan submitted by the Patanjali Consortium was approved. Though the NCLT passed an order on 24 July 2019 approving the plan with modifications and subject to compliance, certain crucial aspects including source of funds and CIRP costs were kept pending. Final and unconditional approval was granted on 04 September 2019, after which the company was taken over on a clean slate basis and renamed Patanjali Foods Limited. Subsequently, GST authorities issued show cause notices and passed orders raising demands for periods prior to and subsequent to the resolution plan, leading to the present writ petition.

Held: The Court held that the final and effective approval of the resolution plan took place on 04 September 2019 and not on 24 July 2019, as earlier approval was conditional and subject to further compliance. Consequently, all GST demands relating to periods prior to 04 September 2019 stood extinguished and were liable to be set aside. The respondents were permitted to issue a fresh show cause notice only for the period after 04 September 2019, with exclusion of the pendency period of the writ petition for limitation purposes, and any such notice issued by 15 February 2026 was held to be within limitation.

Delay in Seeking Revocation of GST Registration Condoned Subject to Payment of Statutory Dues; Relief Granted in Interest of Revenue

Issue: Whether cancellation of GST registration pursuant to a show cause notice and order could be sustained when the petitioner expressed readiness to pay all pending tax, interest, late fee, penalty and sought condonation of delay in seeking revocation of cancellation by relying on an earlier coordinate Bench decision.

Facts: The petitioner challenged the show cause notice dated 11 June 2024 and the consequential order dated 3 December 2024 cancelling GST registration. The petitioner submitted willingness to discharge all statutory dues and requested restoration of registration by invoking the benefit of a coordinate Bench ruling in M/s. Mohanty Enterprises, which had condoned delay under Rule 23 of the OGST Rules subject to payment of dues. The Revenue was represented by the Standing Counsel and opposed the petition.

Held: The Court followed the coordinate Bench decision and condoned the delay in seeking revocation of cancellation, directing that upon payment of all taxes, interest, late fee, penalty and compliance with formalities, the petitioner’s application for revocation be considered in accordance with law. The writ petition was disposed of granting relief to the petitioner in the interest of revenue.

Rejection of GST Registration Cancellation Set Aside for Being Non-Speaking Order; Liberty Reserved for Ab Initio Cancellation Proceedings

Issue: The core issue before the Court was whether the respondent authority was justified in rejecting the petitioner’s application for cancellation of GST registration arising out of transfer of business, and whether the impugned order dated 30.11.2024 was passed in accordance with law or suffered from arbitrariness for being a non-speaking order.

Facts: The petitioner, a sole proprietorship engaged in manufacturing copper wire, claimed to have transferred its entire business to Copperwrx Tradelink Private Limited by an agreement dated 07.03.2024 and thereafter applied for cancellation of GST registration under Form GST REG-16. Despite submitting applications on 01.05.2024 and again on 19.10.2024 with supporting documents, the respondent rejected both applications, lastly by order dated 30.11.2024, without assigning clear reasons. The petitioner contended that all statutory requirements were complied with, while the respondent alleged bogus billing, lack of proper transfer documentation, mala fide intent, and initiated separate proceedings for cancellation of registration ab initio.

Held: The Court held that the impugned order dated 30.11.2024 was a non-speaking and cryptic order, merely stating that the reply was not satisfactory, without disclosing any reasons, and therefore could not be sustained in law. Consequently, the order was quashed and set aside. However, the Court clarified that it was not examining the merits of the subsequent proceedings initiated for cancellation of registration ab initio, and left it open to the petitioner to raise all contentions therein. The petition was allowed to the limited extent of quashing the impugned order, with no order as to costs.

Writ Petition Disposed of; Petitioner Relegated to Statutory Appellate Remedy with Extended Limitation, Subject to Outcome of Pending Supreme Court Challenge to GST Notifications

Issue: Whether the impugned assessment order dated 23.12.2023 raising substantial GST demand for F.Y. 2017–18 and the related Central and State notifications extending limitation could be interfered with in writ jurisdiction, or whether the petitioner should be relegated to the statutory appellate remedy, especially when the validity of such notifications is pending consideration before the Supreme Court.

Facts: The petitioner, I Money Wallet Private Limited, challenged the assessment order passed pursuant to a Show Cause Notice dated 23.09.2023, contending that the SCN and order were uploaded in the additional notices tab and hence not accessible, resulting in ex-parte adjudication and huge tax, interest and penalty demands. The petitioner also assailed Notifications Nos. 09/2023 and 56/2023 (Central and State Tax), whose validity is subject to conflicting High Court views and is presently pending before the Supreme Court. The Court noted belated filing of the writ, absence of reply to the SCN, non-attendance of personal hearing, and found the explanation offered to be not bona fide.

Held: The Court declined to examine the merits of the impugned order or the validity of the notifications at this stage and disposed of the writ petition by relegating the petitioner to the statutory appellate remedy under Section 107 of the CGST Act. Liberty was granted to file an appeal by 31.01.2026 with requisite pre-deposit, which shall not be treated as time-barred and shall be decided on merits. The decision of the Appellate Authority was directed to remain subject to the final outcome of the pending Supreme Court proceedings on the validity of the impugned notifications.

The Court Permits Release of Detained Areca Nuts on Payment of Penalty, Directs Appellate Authority to Decide Merits of Disputed Transaction

Issue: Whether the petitioner’s consignment of areca nuts, detained for alleged discrepancies in weight and dubious supplier credentials, can be released upon payment of penalty despite the petitioner’s challenge to the penalties imposed under Sections 129(1)(a) and 129(1)(b) of the WBGST/CGST Act, 2017, and whether the petitioner was denied principles of natural justice.

Facts: The petitioner, an areca nut dealer, sold 17,550 kgs of goods to a consignee in Nagpur. While the consignment was in transit, GST authorities intercepted it at Jalpaiguri and conducted physical verification, reporting an excess weight of 1300 kgs. A show cause notice was issued imposing penalties of Rs.3,57,200 under Section 129(1)(a) and Rs.35,72,000 under Section 129(1)(b). The petitioner submitted replies with supporting documents and appeared for personal hearing, which he alleged was not granted. Disputes arose regarding the genuineness of the supplier and discrepancies in invoices and e-way bills. The petitioner sought release of the perishable goods upon payment of penalty.

Held: The Court held that the writ petition could not bypass the statutory appellate remedy under Section 107, as factual disputes about supplier genuineness and discrepancies in weight required detailed examination. The Court allowed the release of goods and conveyance upon payment of the penalty under Section 129(1)(a) and furnishing of security under Section 129(1)(b), leaving all merits to be decided by the appellate authority within a specified timeframe. The Court clarified that the Circular of December 31, 2018, could not shield transactions where the genuineness of the consignment was in doubt.

MGMI Held to be a “Body Corporate” Under GST; Sponsorship Services Liable to Forward Charge GST

Issue: Whether The Mining, Geological & Metallurgical Institute of India (MGMI), a not-for-profit organization incorporated under the Indian Companies Act, 1882 and now governed by Section 8 of the Companies Act, 2013, qualifies as a “body corporate” for GST purposes, and whether the sponsorship services it provides are liable to GST under the forward or reverse charge mechanism after the amendment of 16.01.2025.

Facts: MGMI is a non-profit professional association established in 1909, promoting mining, geology, and metallurgy through conferences, workshops, publications, and student outreach programs. It derives income from membership fees, sponsorships, delegate fees, and publications, all applied solely toward its objectives. MGMI is registered under GST as “Society/Club/Trust/AOP” and seeks an advance ruling on whether it is a “body corporate” under the GST Act and the implications for GST liability on sponsorship services in light of Notifications 10/2017–IGST, 13/2017–CGST, and their amendments by Notification 07/2025. The applicant argued that as a Section 8 non-profit company, it should not be considered a “body corporate” for GST, relying on judicial precedents and the charitable nature of its activities.

Held: The authority held that MGMI qualifies as a “body corporate” under the Companies Act, 2013, and therefore, for the purpose of GST notifications, it is treated as a body corporate. Consequently, sponsorship services provided by MGMI are liable to GST on a forward charge basis, not under the reverse charge mechanism. All three questions posed by the applicant were answered in the affirmative, and the GST liability rests with MGMI as the supplier.

Supply of Aerated Beverages in Hotel Restaurant Classified as Composite Supply of Restaurant Service, Taxable at 9% CGST + 9% SGST

Issue: The applicant seeks clarification on the applicable GST rate for supply of aerated beverages (carbonated drinks) in their hotel restaurant, both when supplied independently and when supplied along with food as part of a composite supply. The contention is whether such supply should attract 28% GST as goods or 18%/9% GST as part of restaurant services.

Fact: The applicant operates a hotel with a restaurant offering food, beverages, and related services. Aerated beverages are served either independently or with food, prepared and presented by restaurant staff, often customized (e.g., Masala Coke, Fresh Lime Soda), and consumed on the premises. The hotel is a ‘specified premises’ under GST. The applicant previously charged 28% GST plus cess on aerated beverages, while customers claimed 18% GST applicable to restaurant services. The supply involves both goods and service components and is bundled with restaurant facilities and staff services.

Held: The supply of aerated beverages in the applicant’s restaurant, whether independently or along with food, constitutes a composite supply with restaurant service as the principal supply. Under Clause 6(b) of Schedule II and Notification No. 11/2017-Central Tax (Rate), the supply is taxable as a restaurant service. Therefore, 9% CGST + 9% SGST is applicable on such supply.

Authoritative-formula Medicaments Classified under HSN 30039014 / 30049014 with Uniform GST @ 2.5% CGST + 2.5% SGST Regardless of Single or Multiple Constituents

Issue: The issue was to determine the correct HSN classification and applicable GST rate for medicaments manufactured exclusively in accordance with formulae prescribed in authoritative books under the Drugs and Cosmetics Act, 1940 and recognised pharmacopoeias, where such medicaments consist either of a single constituent or of two or more constituents, and are supplied in different forms including retail and non-retail packings.

Fact: The applicant is engaged in manufacturing medicaments used in Ayurvedic, Unani, Siddha, Homoeopathic and Biochemic systems strictly as per authoritative texts and pharmacopoeias. The products include single-constituent medicaments as well as medicaments with two or more constituents mixed for therapeutic or prophylactic use, supplied either in measured doses or otherwise. The applicant sought advance ruling on the correct HSN code and GST rate applicable to these medicaments, stating that no proceedings on the same issue were pending or decided earlier.

Held: The Authority held that medicaments manufactured exclusively as per authoritative books are classifiable under Chapter 30. Medicaments consisting of a single constituent, and those put up in measured doses or retail packing, fall under HSN 30049014 and attract GST at 2.5% CGST + 2.5% SGST. Medicaments consisting of two or more constituents not put up in measured doses or retail packing fall under HSN 30039014, while those put up in measured doses or retail packing fall under HSN 30049014, and in all such cases the applicable GST rate is 2.5% CGST + 2.5% SGST, thus the ruling is in favour of uniform concessional taxation under Schedule I.

GST Exemption on Municipal O&M Services Allowed Partly: Pure Manpower Services Exempt; Machinery O&M Taxable Subject to 25% Goods Value Threshold

Issue: Whether operation and maintenance (O&M) services provided by the applicant to Municipalities and Municipal Corporations are exempt from GST under Notification No. 12/2017–Central Tax (Rate) either as pure services under Entry 3 or as composite supplies under Entry 3A when such services relate to functions entrusted to municipalities under Article 243W of the Constitution.

Facts: The applicant is engaged in O&M of municipal machinery and services relating to solid waste management, sewerage, drainage and public health for various Municipal Corporations and Municipalities. The services include manpower supply, operation and maintenance of vehicles and machinery, and preventive servicing, sometimes involving supply of spare parts. The applicant claimed exemption on the ground that the services are rendered to local authorities for statutory municipal functions. The Revenue contended that most contracts involve composite supplies with goods and therefore do not qualify as pure services.

Held: The Authority held in favour of the applicant partly. Manpower-based activities such as supply of unskilled labour and drivers for cleanliness drives, cleaning and maintenance of municipal offices, and regular sweeping and park maintenance were held to be pure services and exempt under Entry 3. Other O&M contracts involving vehicles and machinery were held to be composite supplies; if the value of goods does not exceed 25% of the total value, exemption is available under Entry 3A, and if it exceeds 25%, the services are taxable at 9% CGST + 9% SGST.

GST Exemption Allowed for Security and Scavenging Services Provided to West Bengal Government Hospitals as Pure Services under Notification No. 12/2017

Issue: Whether security and scavenging services provided on contract basis to Government of West Bengal Medical Colleges and Hospitals qualify as “pure services” and are exempt from GST under Notification No. 12/2017–Central Tax (Rate) dated 28.06.2017, being activities in relation to functions entrusted to Panchayats or Municipalities under Articles 243G and 243W of the Constitution.

Facts: The applicant supplies security personnel and scavenging staff to various State Government Medical Colleges and Hospitals in West Bengal and raises monthly bills comprising wages, employer’s contribution to EPF and ESIC, and annual bonus, without any supply of goods, and had been charging GST at 18%. The application for advance ruling was filed under section 97 seeking clarification on exemption as pure services; the revenue did not express any contrary view.

Held: The services are pure services as they involve no supply of goods, are provided to the State Government through its hospitals, and are activities in relation to public health and sanitation functions under the Eleventh and Twelfth Schedules. All conditions of Entry 3 of Notification No. 12/2017 are satisfied; therefore, security and scavenging services provided to Government of West Bengal hospitals are exempt from GST, and the ruling is in favour of the applicant.

Interim Protection Granted on Ground of Consistency; No Coercive Recovery on Composite GST Show Cause Notices

Issue: Whether the revenue authorities could issue and adjudicate a combined demand-cum-show cause notice for multiple assessment years under Section 74 of the Central Goods and Services Tax Act, 2017, and whether recovery proceedings could continue when similar matters involving the same legal question were already pending and interim protection had been granted by coordinate Benches and other High Courts.

Facts: Multiple writ petitions involving identical questions of law were listed together, all arising from composite show cause notices covering several financial years. In some connected matters, coordinate Benches had already entertained the petitions and granted interim protection, staying recovery on the ground that composite notices appeared prima facie impermissible and contrary to principles of fairness. Other High Courts had also taken a view favouring the assessee, while the revenue relied on a contrary decision. In several connected writs, stay applications were still pending and no coercive protection had been granted earlier.

Held: The Court held that the matter required consideration and, applying the rule of consistency and judicial discipline, interim protection was warranted. Since a coordinate Bench had already granted a reasoned interim order and multiple High Courts had taken a similar view in favour of the assessee, a prima facie case for interim relief was made out. Accordingly, the matters were directed to be connected and listed together, and till the next date, no coercive measures or recovery pursuant to the impugned show cause notices were permitted against the petitioners.

The Supreme Court Declines Interference and Dismisses Special Leave Petitions

The Court Allows Restoration Route for Cancelled GST Registration Upon Filing Pending Returns and Payment of Dues

Issue: Whether cancellation of GST registration for non-filing of returns can be reconsidered and restored when the taxpayer has subsequently filed all pending returns and paid all dues, in light of the proviso to Rule 22(4) of the CGST Rules, 2017.

Facts: The petitioner, a Private Limited Company registered under CGST/AGST, failed to file GST returns for over six months. A show cause notice was issued, but due to lack of knowledge of the GST portal and miscommunication with the consultant, the petitioner could not reply. The registration was cancelled on 05.12.2024. The petitioner later filed all pending returns up to September 2024 and paid tax, interest and late fees, but could not apply for revocation as the portal showed expiry of the 270-day timeline. The appeal filed was dismissed as time-barred, leading to the present writ petition.

Held: The Court observed that under the proviso to Rule 22(4), if a taxpayer furnishes all pending returns and pays full tax dues with interest and late fees, the proper officer is empowered to drop the proceedings and restore registration. Considering the petitioner has complied and cancellation has serious consequences, the Court directed the petitioner to approach the authority within two months. If all requirements are fulfilled, the authority shall consider restoration of registration and pass orders within 60 days. Tax, interest, penalty and late fees remain payable as applicable.