The Court Grants Nishant Garg Limited Period Anticipatory Bail in CGST Case Amid Covid-19, Stresses Arrest as Last Resort

The court heard an anticipatory bail application filed by Nishant Garg in a case related to alleged violations u/s 132(1)(a)-(d) of the CGST Act, 2017. The case is being heard virtually due to Covid-19 precautions.

The applicant fears arrest despite no charge sheet being filed yet. The government opposed bail citing serious allegations and lack of concrete grounds for fear of arrest. The court acknowledged the possibility of arrest anytime after FIR registration but emphasized that arrest should be a last resort, citing Supreme Court guidelines against arbitrary arrests.

Considering the applicant’s clean record, ongoing investigation, and Covid-19 pandemic risks, the court granted anticipatory bail for a limited period until cognizance is taken by the court, subject to conditions like furnishing a bond, cooperation with police, no tampering with evidence or witnesses, and restricted travel.

The police were directed to complete the investigation promptly and independently, and violation of bail conditions may lead to cancellation of bail. The applicant must produce a copy of this order to authorities within 10 days.

SC Allows Exemption Application but Dismisses Special Leave Petition, Upholds High Court Order

Allahabad HC Dismisses Writ Petition Challenging Award of Cattle Feed Supply Tender to Experienced Firm M/s Arohi Enterprises

The petitioner sought to quash a tender awarded to respondent No. 5 by the Kanpur Nagar Nigam for the supply of cattle feed, alleging the firm was ineligible due to recent GST and PAN registrations. However, the Court found that respondent No. 5, M/s Arohi Enterprises, was originally a proprietorship firm established in 2022 and later converted to a partnership in 2023 without altering its operations or assets. The Court noted the firm had prior experience supplying cattle feed and had performed satisfactorily. Concluding the petition lacked merit and was based on technicalities without substantive grounds, the Court dismissed it.

High Court Sets Aside Rejection of Glenmark's Budgetary Support Claim; Orders Reconsideration Based on Monthly GST Refund Computation Rationale

The appellant, Glenmark Pharmaceuticals Ltd., challenged the dismissal of its writ petition by a single judge of the Sikkim High Court concerning the denial of budgetary support for July–September 2017. The respondent had rejected the claim, citing procedural lapses and negative input tax credit, relying on Circulars dated 27-11-2017 and 10-01-2019. The appellant argued that the statutory Notification dated 05-10-2017 took precedence over procedural Circulars and that month-wise tax filings justified monthly claim calculations, referencing a Jammu & Kashmir High Court ruling in Coromandel International Ltd. supporting such an approach. The appellate court agreed, emphasizing judicial comity and finding the rejection and the single judge’s ruling legally unsustainable. It noted that although reimbursement is on a quarterly basis, calculation based on monthly GST returns is reasonable. The judgment and impugned order were thus set aside, and respondent No. 3 was directed to re-evaluate the appellant’s claim in light of the principles established in the Coromandel case. The appeal was allowed accordingly.

Redemption Fine Under Section 130 of OGST Act Can Be Imposed Without Physical Confiscation of Goods; Voluntary Payment Without Protest Bars Challenge — High Court Dismisses Writ Petition

Issue: Whether a redemption fine under Section 130 of the OGST Act, 2017 can be imposed when the goods in question (MS Billet) were not physically available for confiscation. The petitioner challenges the legality of the show cause notice and the demand order on this basis.

Facts:

• On 22nd March 2023, a search at the petitioner’s premises revealed a shortage of 341.360 MT of MS Billet, valued at Rs.1.53 crores.

• A show cause notice dated 27th March 2023 was issued under Sections 130 and 122 of the OGST Act proposing confiscation and penalties.

• The petitioner admitted the shortage and paid Rs.27.65 lakhs as penalty and Rs.79.87 lakhs as redemption fine, leading to release of seized documents.

• A demand order was issued on 29th March 2023.

• The petitioner filed an appeal only on 7th February 2025, which was dismissed on 28th February 2025 as time-barred.

• The petitioner then filed a writ petition challenging the show cause notice, demand order, and the appellate order, arguing that the goods were not available for confiscation, making the imposition of a redemption fine illegal.

Held:

• The High Court held that there was no complete lack of jurisdiction in the proper officer’s actions.

• It observed that under Section 130, confiscation and the option of redemption fine are permissible even in the absence of physical goods, if the statutory framework supports such an action.

• Based on precedent (e.g., Weston Components Ltd.), the Court held that goods need not be physically present if they were released on bond or admission of discrepancy occurred.

• The Court found the petitioner’s payment was made without a recorded protest and hence refused to interfere under Article 226, citing that the petitioner waived his right by accepting the demand voluntarily and filing the appeal well beyond the statutory limit.

Conclusion: The writ petition was dismissed. The Court upheld the demand order and the imposition of the redemption fine, emphasizing that voluntary payment without protest bars retrospective challenge and that physical availability of goods is not a strict requirement for imposing redemption fine under the OGST Act.

Jurisdictional Validity of Attachment Order Under GST Act Challenged; Matter Adjourned to May 16, 2025

The petitioner’s advocate presented Notification No. 2 of 2017 issued by the Ministry of Finance, which defines the jurisdiction and powers of Central Tax Officers under the Central Goods and Services Tax Act, 2017. It was argued that the Principal Commissioner in the case, based on territorial jurisdiction specified in the notification, does not have authority to issue an attachment order against persons located outside their territorial jurisdiction under Section 83 of the Act. The court heard the parties on this jurisdictional issue and called upon the State’s advocate for submissions. The matter was adjourned for further consideration on May 16, 2025.

The Court Disposes Writ by Batra Brother Pvt. Ltd. Challenging Vehicle and Goods Detention, Grants Liberty to Seek Restoration if Appeal Not Decided Promptly

M/s Batra Brother Private Limited filed a writ petition challenging the detention of its vehicle and goods on 13.07.2022 and the imposition of tax and penalty amounting to ?13,69,748/-, claiming that the order was passed without a proper hearing and violated principles of natural justice. The petitioner also sought a direction for release of the seized goods.

Despite filing an appeal on 26.07.2022 and depositing 25% of the penalty, the appeal and a related application for release of goods remain undecided. The respondents failed to file a reply, but their counsel submitted that the matter is now listed for hearing on 22.05.2025 and would be decided on that date or within two weeks thereafter.

In view of this assurance, the court disposed of the petition without issuing any formal directions but granted liberty to the petitioner to seek restoration if the matter is not decided as stated.

The Court Grants Interim Stay on Tax Demand Amid CGST/WBGST Dispute; Orders 10% Deposit of Balance Tax

The court has taken the affidavit of service on record and is hearing a writ petition challenging an appellate order dated December 9, 2024, under the CGST/WBGST Act, 2017. Since the Appellate Tribunal is not yet constituted, the court decided to hear the petition. Finding a prima facie case, the court directed the petitioner to deposit 10% of the remaining disputed tax amount, in addition to the amount already paid. An unconditional stay on the tax demand is granted for four weeks. If the petitioner makes the deposit within this period, the interim stay will continue until the writ petition is disposed of or further orders are passed. Affidavit-in-opposition and replies are to be filed within specified timelines, and liberty to mention is granted after the affidavit exchange. Parties may rely on the court’s official website copy of this order.

The Court Quashes GST Assessment and Appellate Orders for Non-Compliance with Mandatory Notice and Reasoning Requirements

The petitioner challenged the GST assessment order dated 27.08.2019 passed under Section 62 of the GST Act, and the dismissal of their appeal on 29.01.2025 due to limitation. The petitioner argued that no notice under Section 46 was served, no opportunity for hearing was given, and the order lacked reasoning or material basis. The State argued the order was valid and the appeal was rightly dismissed. The Court found that service of notice under Section 46 and use of relevant material are prerequisites for invoking Section 62. Since these conditions were not met, both orders were quashed. The matter was remanded to the Assessing Authority to pass a fresh order after due notice and hearing. The petition was allowed.

The Orissa High Court Quashes Ex Parte GST Assessment Order for Denial of Fair Hearing on ITC Claim

This writ petition was filed under Articles 226 and 227 of the Constitution of India to challenge an ex parte assessment order dated 28.08.2024 passed by the Assistant Commissioner, GST & Central Excise, Cuttack-I, under Section 73 of the CGST Act. The order raised a demand of Rs. 42.45 lakhs (CGST + SGST) along with interest and penalty, by disallowing Input Tax Credit (ITC) claimed by the petitioner for the Financial Year 2019–20.

The petitioner, a licensed wholesaler of Superior Kerosene Oil under the Public Distribution System (PDS), claimed that he was not given a fair opportunity to present his case or submit documents. He argued that all kerosene was procured only from Indian Oil Corporation Ltd., as per a government allotment, and sold at government-fixed prices, and that ITC was claimed accordingly.

The Court found that the petitioner was not given a proper chance to justify his ITC claims, and that the Assessing Authority failed to verify readily available data on the government portal or consider the nature of the petitioner’s business.

Accordingly, the Court set aside the assessment order, allowing the petitioner a fresh opportunity to appear before the authority and substantiate his ITC claims with proper records.

GST Registration Cancellation Quashed by Division Bench Due to Invalid Show Cause Notice and Violation of Natural Justice

The appellant challenged the cancellation of GST registration (retrospectively from 1st July 2017) by the original and appellate authorities. The primary grounds were lack of jurisdiction and denial of natural justice due to a vague show cause notice (SCN) dated 15.12.2021, which lacked specific reasons and relied on an undisclosed inspection report dated 14.12.2021.

The writ court dismissed the appellant’s challenge. On appeal, the Division Bench found merit in the appellant’s claims, especially the flawed SCN and failure to consider the appellant's responses before cancellation on 22.12.2021. It held that the SCN was legally invalid and violated principles of natural justice.

Accordingly, the appellate court allowed the appeal, set aside the writ court’s order, quashed the SCN and subsequent orders, and remanded the matter to the original authority for fresh adjudication after serving a valid SCN with all relevant materials and granting the appellant a fair opportunity to be heard.

Anticipatory Bail Granted to Director of Rajnandini Metal Ltd. in Rs 75 Crore ITC Fraud Case under CGST Act

Issue: Whether the applicant/accused Het Ram Sharma, Director of M/s Rajnandini Metal Ltd., should be granted anticipatory bail in connection with an alleged case of fraudulent availing of ineligible ITC under the CGST Act, 2017.

Facts:

• Applicant is Director of M/s Rajnandini Metal Ltd., alleged to have fraudulently availed ineligible ITC of approx. Rs 75 crores via three intermediary paper firms.

• DGGI alleged these firms issued fake invoices without actual supply to pass on fraudulent ITC.

• On 14.02.2025, DGGI visited the applicant’s premises and took him for questioning; his statement was recorded on 15.02.2025.

• The applicant claims full cooperation with the investigation and fears arrest u/s 69 of the CGST Act.

• Applicant previously approached a court in Faridabad, which declined jurisdiction, leading to the present application in Delhi.

• DGGI opposed the bail, claiming the applicant is the ultimate beneficiary and evaded summons.

Held:

• The Court observed that the applicant appeared and cooperated in the investigation; his statement was recorded and not contradicted.

• Though DGGI claimed the applicant evaded summons, they did not dispute his appearance on 15.02.2025.

• The Court noted that the documentary nature of evidence and lack of extraordinary circumstances support granting bail, as per Vineet Jain v. UOI (2025).

• No concrete material was presented to show that the applicant would flee or tamper with evidence.

• Anticipatory bail was granted, subject to furnishing a bail bond of Rs 2,00,000 with one surety (blood relative) and compliance with specific conditions.

Conclusion:
Anticipatory bail was allowed to Het Ram Sharma, considering his cooperation, nature of evidence, and lack of extraordinary circumstances suggesting misuse of liberty.

The Jharkhand High Court Quashes ASMT-10 Notices Issued Under Section 61 for Pricing Discrepancies, Rules Scrutiny Should Be Limited to Return Discrepancies, Not Market Price Comparison, Dated - 09-05-2025

The High Court held that Section 61 allows officers only to verify and seek correction of discrepancies visible in GST returns. Comparing declared prices with an external market rate oversteps that power and must proceed, if at all, under audit or adjudicatory provisions. Consequently, all impugned ASMT-10 notices were quashed, reaffirming the primacy of transaction value in GST.

Issue 
Whether scrutiny under section 61 can hinge on comparing the transaction value in returns with an alleged market price difference?

Statutory Matrix:

Section: 61 (Scrutiny of Returns),  15 (Value of Supply), 73/74 (Adjudication).

Rule: R 99 JGST Rules (Form GST ASMT-10).

Judgment :
Reason: Section 61 empowers scrutiny of returns, not valuation audits; market-price comparison is ultra vires.

Conclusion: All ASMT-10 notices set aside; liberty reserved to issue fresh notices strictly on return-based discrepancies.

The Court Quashes GST Orders Passed Without Hearing; Matter Remanded for Fresh Adjudication

The petitioner challenged two orders — one dated 20.05.2022 u/s 74 of the GST Act and an appellate order dated 27.02.2023 — on the ground that both were passed without providing an opportunity of hearing. The petitioner argued that the hearing notice was uploaded in an incorrect tab, and thus, he was unaware of the scheduled date. The State Counsel did not dispute this claim. Considering the procedural lapse, the Court quashed both orders and remanded the matter to the assessing authority to pass a fresh order after affording the petitioner a proper hearing. The petition was accordingly allowed.

Penalty for Non-Filling of E-Way Bill Part-B Set Aside by High Court Absent Tax Evasion Intent

The petitioner challenged a penalty order dated 28.04.2025 passed u/s 129(3) of the U.P. GST Act, 2017 for transporting goods without filling Part-B of the e-way bill. The petitioner argued that the lapse was a technical breach without any intent to evade tax, and no such finding was recorded by the authority. Citing the High Court’s consistent view, including the Precision Tools India case, the Court held that mere non-filling of Part-B, without any finding of tax evasion, does not warrant a penalty u/s 129. Accordingly, the penalty order was quashed, and the petitioner’s bank guarantee is to be returned within two weeks.

"Delay Condoned; No Ground for Interference under Article 136—Special Leave Petitions Dismissed, Alternative Remedies Remain Open"

"The Supreme Court Condones Delay, Declines to Interfere with Impugned Judgment; Special Leave Petition Dismissed Along with Pending Applications"

Delhi HC Dismisses Writ Petition Challenging CGST Penalty; Upholds Department’s Jurisdiction and Due Process

The present writ petition, filed by Mr. Mukesh Kumar Garg under Articles 226 and 227 of the Constitution, challenges a CGST adjudication order dated 30 January 2025. The order imposes penalties based on allegations that Mr. Garg and his son, Anuj Garg, established 28 firms to fraudulently avail over Rs. 115 crore in ITC without actual supply of goods or services. Mr. Garg contests the penalties, arguing he was not a taxable person nor an authorized signatory. The Court, noting the seriousness of the allegations and existence of an appellate remedy u/s 107 of the CGST Act, declined to entertain the petition, dismissing it with costs of Rs. 50,000.

The Supreme Court Upholds Refund of Pre-18.07.2022 Input Tax Credit Under Inverted Duty Structure; Strikes Down Retrospective Restriction in GST Circular

The petitioners, involved in manufacturing and distributing edible oils and specialty fats in India, operated under an inverted duty structure, where the GST on input materials was higher than the GST on final products. Under Section 54 of the CGST/APGST Act, they filed for refund of unutilized Input Tax Credit (ITC) for periods prior to 18.07.2022.

However, the revenue authorities rejected the refund claims, relying on Circular No. 181/13/2022-GST, which interpreted Notification No. 9/2022-Central Tax (Rate) (dated 13.07.2022) to deny refunds for applications filed on or after 18.07.2022, regardless of when the ITC accrued.

The High Court held that the notification explicitly stated it comes into effect only from 18.07.2022, thus ITC accrued before that date remains eligible for refund under Section 54. The Court found the circular ultra vires to the extent it imposed a retrospective restriction and struck it down partially. Consequently, the rejection of the refund claims was set aside.

The Supreme Court dismissed the Special Leave Petition (SLP) against the High Court's order, thereby ruling in favour of the assessee.

The High Court Sets Aside GST Appeal Rejection, Allows Refiling Despite Procedural Lapse

The petitioner, a registered civil works contractor under the TNGST/CGST Act, filed a writ petition challenging the rejection of their GST appeal by the second respondent on technical grounds. The appeal, relating to tax demands for FY 2019–2020, was filed beyond 90 days but within the 30-day condonable period under Section 107 of the GST Act. However, it was dismissed due to the absence of a condonation of delay application. The High Court, citing a precedent (Indian Potash Ltd. case), held that procedural errors should not defeat substantive rights. The Court set aside the rejection order and directed the petitioner to refile the appeal with the necessary application. The respondent must then entertain the appeal, treating the original filing date for limitation purposes. The writ petition was accordingly allowed.

Levy of 160% Compensation Cess on Export of Branded Chewing Tobacco Put on Hold; GST Council to Decide on Exemption Parity with Zero-Rated Supplies

The levy of Compensation Cess at 160% on the export of branded (scented/flavoured) chewing tobacco products by manufacturers to merchant exporters. The petitioners challenged the levy, arguing that such exports should be treated on par with other zero-rated exports that benefit from GST/IGST exemptions (under Notifications No. 40/2017 and 41/2017), which allow tax payment at only 0.1%.

The High Court held that:

• The matter of granting exemption from Compensation Cess on such supplies should be referred to the GST Council.

• No show cause notices or adjudication proceedings shall be initiated for levy of Compensation Cess at normal rates until the GST Council decides the issue.

• Petitioners must comply with the conditions under Notifications No. 40/2017 and 41/2017, and submit an undertaking to pay the cess if the GST Council later denies the exemption.

• Meanwhile, the impugned orders levying Compensation Cess are kept in abeyance.

This decision ensures temporary relief for exporters, maintaining parity with GST/IGST exemptions while awaiting the GST Council’s recommendation on Compensation Cess for exports.

The Court Grants Bail to Sri Aniket Sovasaria in Rs. 6.12 Crore GST Evasion Case Citing Non-Compliance with Mandatory Notice Procedure

Sri Aniket Sovasaria, partner of M/s Aadi Enterprises, sought bail in a GST evasion case involving alleged passing of ineligible ITC worth Rs. 6.12 crores. He was arrested and in custody for 98 days. The petitioner’s counsel argued that mandatory notice u/s 41(A) of BNSS, 2023 was not issued before arrest, making it illegal and arbitrary. The prosecution opposed bail, citing the petitioner’s involvement in GST fraud and previous arrest, and referred to Section 479(2) BNSS, which restricts bail if multiple cases are pending.

The court found that the mandatory notice u/s 41(A) was not issued and considered relevant Supreme Court precedents emphasizing compliance with arrest procedures. Despite multiple pending cases, since charge-sheet is filed and petitioner has been in custody for over three months, the court granted bail subject to conditions including sureties, restrictions on travel, and cooperation with the trial.

The bail is granted without prejudice to the merits of the case, and breach of conditions may lead to cancellation of bail. The application is disposed of accordingly.

The Court Sets Aside Retrospective GST Cancellation From 2017; Orders Cancellation Effective From May 2024 in Garg Candle Works Case

The petitioner, Garg Candle Works, challenged the cancellation of its GST registration, which was cancelled retrospectively from July 1, 2017. The petitioner had applied for cancellation in May 2023, but the application was rejected due to non-filing of profit/loss accounts, pending returns, and unpaid tax dues. Later, the GST department issued a Show Cause Notice in May 2024 for failure to file returns for six months and cancelled the registration retrospectively from 2017. The petitioner did not respond to this notice.

The court found that retrospective cancellation on the ground of non-filing of returns after the petitioner had already applied for cancellation was unsustainable. The court set aside the retrospective cancellation and ordered that the cancellation take effect only from May 14, 2024, clarifying that this would not affect any other GST proceedings related to the petitioner.

The petition was allowed accordingly.

Order Rejecting Rectification Application Set Aside for Lack of Reasoning and Violation of Natural Justice u/s 161 of CGST Act

The Writ Petition challenged the rejection of a Rectification Application related to a tax assessment order. The petitioner argued that the application was dismissed without reasons or an opportunity to be heard. The respondent claimed that no hearing or reasons were necessary if no apparent error existed. The Court found that the rejection lacked adequate reasoning and violated principles of natural justice u/s 161 of the CGST Act. Therefore, the Court set aside the impugned order and directed the respondent to reconsider the Rectification Application after giving the petitioner a proper hearing. The Writ Petition was allowed.

Anticipatory Bail Application Dismissed in GST Evasion Case Involving Alleged Ineligible ITC of Rs. 3.42 Crores

The petitioner sought pre-arrest bail u/s 482 of the BNSS, 2023, fearing arrest in connection with a GST investigation involving alleged fraudulent ITC claims of Rs. 3.42 crores. The petitioner argued that he had co-operated with the investigation and the offence is bailable under the CGST Act, as the alleged amount is below Rs. 5 crores. He relied on several judicial precedents emphasizing that anticipatory bail can be granted in such cases. The GST department opposed the plea, alleging incomplete cooperation and lack of full disclosure by the petitioner. The Court noted that since the alleged offence is bailable and no concrete apprehension of arrest exists, the anticipatory bail application is not maintainable. Hence, it was rejected, and the interim bail granted earlier was vacated, with a direction for the petitioner to fully cooperate in the ongoing investigation.