The Court Sets Aside Order Due to Non-Supply of Compact Disk Containing Evidence, Remits Matter for Fresh Decision

The order dated 21.02.2025 passed by the Additional Commissioner, Central Excise and CGST Commissionerate, Jaipur. The petitioner’s grievance was that, despite receiving a show cause notice via email, the C.D. containing scanned images of the documents relied upon was not provided. The respondent’s counsel admitted this omission due to inadvertence. As a result, the court set aside the impugned order, allowing the writ petition and remitting the matter back to the Additional Commissioner for a fresh decision after providing the C.D. to the petitioner. The petitioner is instructed to appear before the Additional Commissioner on 28.04.2025 at 11:00 A.M. to expedite the process.

The Orissa High Court Overturns GST Demand Rejection, Orders Reconsideration of ITC Reversal Claims - Rectification of GST Demand – GSTR-9 ITC Reversal Ignored, Dated - 26-03-2025

Facts:

1. 20th Dec 2023: Dept. issued GST DRC-07 order raising a demand of Rs.25,718.05 (CGST) due to excess ITC claim.

2. Post-Assessment: Assessee filed a Rectification Application, citing that Rs.25,600.86 ITC was already reversed in GSTR-9.

3. 11th Sept 2024: Dept. rejected rectification without specifying what additional documents were needed.

4. 26th Mar 2025: HC quashed rejection & directed reconsideration.

The High Court Observations:

1. The GSTR-9 return already showed ITC reversal, yet the Dept. ignored it.

2. If further proof was needed, the Dept. should have requested specific documents instead of outright rejection.

3. Principles of natural justice violated – Assessee was not given a fair chance to prove compliance.

The Court Verdict:

1. Impugned rejection order quashed.

2. Assessee must submit a certified copy of this judgment to the Department by 9th April 2025.

3. After submission, Dept. must specify required documents.

4. Once documents are provided, rectification application to be reconsidered.

5. If the assessee fails to submit the court order by 9th April, the rejection will be automatically restored.

The Court Quashes Time-Barred Demand Order Under Uttar Pradesh GST Act for Assessment Year 2017-18

The petitioner challenged the ex-parte demand order and show cause notice for the assessment year 2017-18 issued under Section 73 of the Uttar Pradesh GST Act, 2017. The matter was covered by a previous judgment dated 06.02.2025, which ruled that such orders for the financial year 2017-18 should have been issued by 05.02.2023. Since the impugned order was issued on 14.12.2023, it was deemed time-barred. The court quashed the orders and applied the earlier ruling to this case, correcting a minor typographical error in the previous judgment.

GST Fraud: The Court Denies Bail to Chandan Sharma in Rs.59.80 Crore Fake Billing Case

Chandan Sharma was denied bail in a case involving GST fraud, specifically for orchestrating a fake billing racket that issued fraudulent tax invoices for copper scrap. He is accused of managing 10 non-existent or non-operational firms, facilitating the fraudulent transfer of around Rs.59.80 Crore in Input Tax Credit (ITC). Sharma admitted to these activities in statements recorded under Section 70 of the CGST Act 2017.

Evidence against him includes the recovery of multiple mobile phones, incriminating documents, his confessions, and data analysis showing fraudulent ITC transfers. Additionally, statements from individuals like Tushar Verma have implicated Sharma.

In his defense, Sharma's counsel argued he was falsely implicated, claiming his statements were coerced and that some firms were not owned by him. They asserted that proper procedures were not followed during his arrest and pointed to conflicting statements from Verma.

The prosecution, however, highlighted the seriousness of the economic offense and the substantial fraudulent ITC involved. They argued that Sharma was the mastermind behind the scheme and that his release could lead to evidence tampering and witness influence. They also maintained that the arrest was conducted lawfully.

Ultimately, the court rejected Sharma's bail application, citing the severity of the offense, the strength of the evidence, and the potential risk of obstructing the ongoing investigation. The court affirmed that the economic crime affected public interest and dismissed the defense's claims, stating that the investigation was ongoing and the evidence was substantial.

"Appeal Allowed: Court Remands Case for Fresh Consideration After Dismissal of Writ Petition Due to Non-Attendance"

The dismissal of a writ petition (W.P.A. 30434 of 2024) by the appellant, who had contested the order passed by the Additional Commissioner of Revenue on November 22, 2024. The appellant had failed to submit a reply or participate in the adjudication process, resulting in an order u/s 73(9) of the WBGST Act, 2017. While the appellant filed an appeal within the condonable period, they failed to attend three adjourned hearings, leading to the dismissal of the appeal.

The appellate authority's order lacked reasoning, simply rejecting the appeal due to non-appearance and failure to request an adjournment. The Court found the order insufficient and decided to remand the case for fresh consideration, directing the appellate authority to hear the appellant again, ensure a reasoned decision, and allow written submissions.

The appeal is allowed, the previous dismissal order is set aside, and the appellate authority is instructed to pass a speaking order based on the merits, with no costs awarded. The appellant is to attend the hearing and submit necessary documents.

GST Orders Set Aside Due to Violation of Natural Justice; Matter Remanded for Fresh Hearing

The petitioner challenged orders passed u/s 73 of the GST Act, contending that notices were only uploaded on the GST portal and remained unnoticed, leading to ex parte orders without an opportunity for a hearing. The Court found this to be a violation of natural justice and set aside the impugned orders. The matter was remanded for fresh consideration, with the petitioner voluntarily agreeing to deposit 25% of the disputed tax in one case. The petitioner must submit a reply within two weeks, and the respondent must provide a 14-day notice for a personal hearing before deciding the matter. The writ petitions were allowed accordingly.

The Court Denies Bail to Gaurav Gupta in Rs 54 Crore Fake ITC Scam Under CGST Act

The applicant, filed a bail application after being arrested for fraudulently managing 12 fake firms involved in the issuance of fake tax invoices under the CGST Act, 2017. The investigation revealed that Gupta had facilitated the passing of fake ITC amounting to over Rs 54 Crores, without actual goods supply. His statements u/s 70 of the CGST Act confirmed his involvement in these fraudulent activities. 

Despite Gupta's defense, claiming that he was falsely implicated and had no connection with the firms, the evidence presented by the prosecution, including statements from other individuals and the non-existence of the firms, strongly supported the allegations against him. The prosecution argued that Gupta was the mastermind behind the scheme, and his release on bail could hinder the ongoing investigation. 

The court, considering the gravity of the offense and the ongoing investigation, rejected the bail application, emphasizing the serious threat such economic offenses pose to public interests and the economy.

The Court Sets Aside Assessment and Rectification Orders, Directs Fresh Hearing with Conditions

The writ petitions challenge an assessment order dated 26.04.2024 and a subsequent rectification order dated 15.02.2025. The petitioner argues that despite submitting replies and requesting a hearing, the assessing authority passed the order without proper consideration, violating principles of natural justice. The respondent suggests remanding the matter upon partial tax payment. The court sets aside both orders, directing a fresh hearing with conditions: the petitioner must pay Rs. 5,00,000, file objections within two weeks, and be granted a personal hearing. The court also lifts any bank account attachment. The petitions are disposed of without costs.

The Court Quashes Dismissal of Appeal, Orders Fresh Hearing Over Authorized Signatory Dispute

The Writ Petition challenges an order dated 30th July 2024, which dismissed an appeal on the grounds that the appellant had not submitted a Board Resolution authorizing the signatory, Ms. Gracie Fernandes. The court found that a valid Board Resolution existed and that the Appellate Authority should have verified the authorization rather than dismissing the appeal.

The court quashed the impugned order and remanded the matter for fresh consideration, directing the Appellate Authority to grant a personal hearing with prior notice and issue a reasoned order. The appeal must be disposed of within 12 weeks, and all rights and contentions remain open. No costs were awarded, and the order will be digitally signed.

The High Court Quashes Duplicate GST Orders, Directs Reassessment and Amnesty Consideration

The petitioner challenges two adjudication orders issued by the 4th and 5th respondents (Commercial Tax Officers of Ramanagara and Channapatna) under Section 73 of the KGST Act for the tax period 2019-2020. The petitioner argues that both orders are identical and impermissible under the law. The High Court, agreeing with the petitioner, quashes both orders and remits the matter back to the 4th respondent for fresh reconsideration. The petitioner is directed to appear before the 4th respondent on 26.03.2025, with a final decision due by 28.03.2025. The petitioner is also granted the liberty to apply for benefits under the Amnesty Scheme as per Section 128(A) of the KGST Act.

The Court Upholds ITC Claim: GST Authorities Cannot Deny Credit for Supplier's Later Non-Compliance

Issue: Denial of Input Tax Credit (ITC) under the GST Act due to the cancellation of the supplier's registration after the transaction.

Key Points:

Petitioner's Claim:

• Purchased scrap from a supplier who was registered at the time of the transaction (Dec 2018).

• The supplier filed GST returns, and the transaction appeared in the petitioner's GSTR-2A.

• Supplier’s registration was cancelled only from Jan 2020, not retrospectively.

• The petitioner argued they should not be penalized for the supplier’s later non-compliance.

Respondent’s Argument:

• The petitioner failed to prove the physical movement of goods and tax payment by the supplier.

• Cited case laws to justify ITC denial.

The Court's Decision:

• Held: If the seller was registered at the time of sale and the transaction appears on the GST portal, ITC cannot be denied due to later supplier issues.

• The GST authorities should have verified the supplier’s returns.

• Quashed the ITC denial orders and remanded for fresh adjudication.

• Any deposited amounts will depend on the new adjudication outcome.

This judgment reinforces that buyers should not be denied ITC solely because of later supplier non-compliance if the transaction was legitimate at the time.

The Supreme Court to Decide on Eligibility for Rectification of GSTR-1 Post Expiry of Time Limit Under Sections 37(3) & 39(9) - The High Court Allowed Assessee to Correct Bonafide Error; Revenue’s SLP Leads to Supreme Court Review with Amicus Curiae Appointment, Dated - 24-03-2025

The Supreme Court is set to decide whether rectification of GSTR-1 returns can be allowed after the expiry of the time limit prescribed under Sections 37(3) and 39(9) of the GST Act. The case arose when an assessee, who had made a bona fide clerical error in filing GSTR-1 for the period 2017-18, was denied rectification on the grounds that the statutory time limit had lapsed. The High Court, upon a writ petition, allowed the rectification, recognizing the error as a genuine mistake. However, the revenue challenged this decision through an SLP, arguing that rectification beyond the prescribed period was impermissible. The revenue acknowledged the clerical mistake but maintained that corrections were not allowed post-expiry. Given the complexities involved, the Supreme Court decided to list the matter and appoint an Amicus Curiae to assist in resolving the issue. The decision is partly in favour of the revenue, as the court has yet to rule on whether rectification should be permitted in such cases.

The Court Grants Anticipatory Bail to Businessman Accused of GST Fraud

The petitioner sought anticipatory bail under Section 482 of BNSS in connection with FIR No. 007, alleging GST fraud and financial loss to the state. The prosecution claimed that the petitioner, Sunil Kumar, proprietor of M/s Sunil Knitwears, caused a loss of ?3.15 crore by forging documents and evading tax.

The petitioner argued that he regularly filed GST returns, paid due taxes, and had no fraudulent intent. The court, considering his compliance and willingness to cooperate in the investigation, granted anticipatory bail, directing him to join the probe within a week. Failure to comply would lead to automatic cancellation of bail.

The Court Quashes Arbitrary GST Cancellation, Orders Immediate Restoration of Petitioner's Registration

The petitioner, a private limited company with two GST registrations for different business verticals, challenged the cancellation of its GST registration by the state tax authorities under the UPGST Act. The cancellation was initiated based on an alleged violation of Section 25(2) of the GST Act, 2017, without proper notice or an opportunity for a hearing.

The petitioner's revocation request was denied, and subsequent appeals were dismissed by the appellate authority on new grounds that were not previously communicated to the petitioner. The court found that the authorities failed to comply with Section 29 of the GST Act, which governs registration cancellation, and that the show cause notice was vague and procedurally flawed.

Citing precedents from various High Court rulings, the court held that the petitioner's right to a fair hearing was violated. The appellate authority had relied on undisclosed material and a new reasoning related to HSN/SAC codes, which was not part of the original proceedings.

The court quashed the cancellation orders, directed immediate restoration of the petitioner's GST registration, and criticized the authorities for arbitrary actions that hinder business operations.

The Court Sets Aside GST Order Due to Lack of Proper Notice and Natural Justice Violation

The court observed that the petitioner's GST registration was suspended on January 3, 2024, and was never revived. Since no physical or offline notice was served, the petitioner was not obligated to check the GST portal for any electronic notices. Given the lack of proper service and the violation of natural justice principles, the court set aside the adjudication order dated August 20, 2024. The petitioner was allowed to treat the order as a notice and submit a reply within four weeks, after which a fresh order should be passed with an opportunity for a personal hearing. The writ petition was accordingly disposed of.

The Court Finds Violation of Right to Hearing, Remands Case for Fresh Decision

The court quashed the impugned orders passed u/s 73 of the GST Act and the dismissal of the appeal due to limitation, as no hearing was granted to the petitioner. It found this to be a violation of Section 75(4) of the GST Act and Article 14 of the Constitution. The matter has been remanded for a fresh decision after providing the petitioner an opportunity for a hearing. The writ petition is allowed.

The Court Grants Bail to Petitioner Accused of Rs.33 Crore Tax Evasion Under CGST Act

The petitioner sought regular bail in a case under Section 132(1) of the CGST Act, 2017, for alleged tax evasion involving fake invoices and e-way bills, causing a revenue loss of Rs.33 crores. The prosecution claimed the petitioner operated fraudulent firms and managed transactions via WhatsApp. The petitioner argued wrongful implication, lack of tax evasion, and procedural lapses in the arrest. The court, considering legal provisions, past Supreme Court observations on unjustified arrests, and the absence of compelling reasons for detention, granted bail on furnishing a bond of Rs.10,000 with two sureties.

The Supreme Court Restores Bail of Lovkesh Kumar, Sets Aside High Court's Order

The appellant, Lovkesh Kumar, was accused u/s 132(1)(c) and 132(1)(f) of the CGST Act in connection with a case registered by DGGI Jaipur. He was granted bail by the Additional Sessions Judge on 05.04.2024. However, the Union of India sought cancellation of his bail u/s 483(3) of the BNSS, and the High Court canceled the bail on 10.02.2025. 

The appellant challenged this cancellation before the Supreme Court, arguing that a similar case (Gautam Garg v. Union of India) had resulted in bail being granted. The Union of India opposed, stating that Lovkesh Kumar was the main accused and proprietor of multiple firms.

The Supreme Court, after considering the facts, ruled in favour of the appellant, setting aside the High Court’s order and restoring the trial court's bail order. The appellant was granted bail under specified conditions, including cooperation in the investigation, non-tampering with witnesses, and a travel restriction.

Delhi HC Grants 30-Day GST Portal Access to Mansura Brush Works to Respond to SCN

The hearing was conducted in a hybrid mode. The petitioner, Mansura Brush Works, through its proprietor Mohammad Hashim, filed a writ petition under Article 226 of the Constitution, challenging the SCN dated 28th November 2024, issued by the Sales Tax Officer (Respondent No. 3), which suspended the petitioner’s GST registration. The SCN alleged that the petitioner was not conducting business from the declared place of business under Rule 21A of the CGST Rules, 2017.

Instead of filing a reply within the stipulated seven days, the petitioner requested a reinspection of the business premises on 23rd December 2024. The petitioner now seeks a writ to quash the SCN and restore the GST registration.

The respondent argued that the registration was only suspended due to the petitioner’s failure to file a reply and was not canceled. The petitioner contended that they were unable to access the GST portal to submit a response.

The court directed that access to the GST portal be granted for 30 days to allow the petitioner to file a reply. The concerned department was instructed to decide on the suspension within 30 days thereafter. The petition was disposed of accordingly.

The Court Sets Aside GST Demand Order Due to Lack of Proper Notice, Directs Fresh Hearing

The supplementary affidavit on record and heard both parties. The petitioner challenged the order dated 24.12.2023 issued u/s 73 of the UP/CGST Act, 2017, for the tax period July 2017 to March 2018, seeking its quashing and a prohibition on its enforcement. The court noted that while the show cause notice was issued when the petitioner had GST registration, the final order was passed after the registration had lapsed. Moreover, the petitioner was not served with a notice of hearing, denying them an opportunity to present their case. The court held that the order should have been served via email or registered post. Consequently, the impugned order was set aside, and the department was directed to grant a fresh hearing and pass a reasoned order after due opportunity. The writ petition was disposed of accordingly.

The Court Sets Aside Silchar Municipal Board's GST Cancellation After Compliance

The Silchar Municipal Board's GST registration was canceled on 17.10.2019 due to non-filing of returns for six months, following a Show Cause Notice dated 16.04.2019. The Court, recognizing the Board’s constitutional duties, suspended the cancellation via an interim order on 13.05.2022, allowing the Board to pay pending dues and directing the GST Department to facilitate compliance. Since the Board has since cleared all dues and continues timely payments, the Court has set aside the cancellation order and made the interim order absolute. The writ petition is allowed with no costs.

The Court condoned the delay but Dismisses CBIC's Special Leave Petition, Urges Re-examination of Error Correction Provisions

The Supreme court addressed a case where the CBIC sought special leave regarding certain provisions for correcting bona fide errors. The Court condoned the delay but dismissed the special leave petition, noting that the impugned judgment was just and fair, with no loss of revenue. The court emphasized the need for the CBIC to re-examine the provisions and timelines for correcting errors, suggesting they should be realistic since mistakes can occur in business transactions. It highlighted that purchasers who pay taxes should not suffer due to clerical or arithmetical errors, and the right to correct such mistakes should be upheld unless there is a valid reason to deny the correction.

The court also stated that software limitations should not justify denying corrections, as software is designed to facilitate compliance. The decisions referenced from the High Courts in previous cases were considered not to establish good law and may need further examination in future cases. Any pending applications related to this matter were also disposed of.

The Court Grants Relief to Petitioner, Quashes CGST Order and Directs Reconsideration for Multiple Financial Years

The petitioner challenged an order dated 28.12.2023 issued by Respondent No. 3 under Section 73 of the CGST Act, covering multiple financial years from 2017-18 to 2023. The petitioner sought to quash the order and prevent further proceedings, arguing eligibility for the Amnesty Scheme under Section 128(A) of the CGST Act for the years 2017-18, 2018-19, and 2019-20. The Court allowed the petition, set aside the impugned order, and directed Respondent No. 3 to reconsider the matter by issuing separate orders for each financial period by 28.03.2025. The petitioner was granted the benefit of the Amnesty Scheme for eligible years, while retaining the right to pursue legal remedies for later periods.

Delayed Adjudication in Excise Case: Court Examines Legitimacy of 11-Year Delay in Tax Proceedings

The case concerns a set of writ petitions challenging Orders-in-Original (OsIO) dated 30.12.2022 and 02.03.2023, which resulted in the confiscation of goods and the imposition of penalties under Rule 25 of the Central Excise Rules, 2002. The dispute originates from a search conducted on 29.04.2011 by the Anti-Evasion Wing of the Central Excise, Delhi-1, leading to seizures at firms owned by Parmod Kumar Jain and his son. A SCN was issued on 25.10.2011, but adjudication was delayed for over 11 years.

The petitioners argue that the prolonged delay violates principles of timely adjudication, citing legal precedents. The Respondents counter that administrative restructuring due to GST implementation, COVID-19, and delays from the petitioners themselves contributed to the delay. The court analyzed Section 11A of the Central Excise Act and past rulings, highlighting that excessive delay without justifiable reasons can invalidate proceedings. The case underscores the importance of expeditious adjudication in tax matters and challenges the legitimacy of long-pending actions against businesses.

Bombay HC Grants Interim Relief, Stays GST Order Citing Lack of Council Recommendation

The Court has issued an interim relief in favour of the Petitioner, staying the operation of the impugned order dated April 29, 2024, and restraining the Respondents from enforcing it. The Petitioner challenged two GST-related notifications through an amended Writ Petition, citing similar cases where the Court had granted relief. The Court found merit in the Petitioner’s arguments, noting that such notifications required GST Council recommendations. Consequently, Rule was issued, interim relief was granted, and the case was tagged with related petitions. The Petitioner’s 20% tax payment under protest will remain on deposit until further orders.