LATEST GST CASE LAWS: 10.07.2025
🔥📛 Delhi HC to decide scope of ‘taxable-person’ for penalty u/s 122 (1A); Stays recovery vis-a-vis Director
➡️ The Delhi High Court directed that no coercive measures be taken against the Petitioner-Director who is challenging the penalty notice issued under Section 122(1A) of the CGST Act, 2017.
➡️ The Court noted that the company, where the petitioner serves as Director, has already challenged the Show Cause Notice (SCN). As a result, the individual case was not treated in isolation but linked to broader proceedings on similar issues.
➡️ The Court ordered the current matter to be heard along with other petitions where the key issue under examination is the definition and scope of a “taxable person” under Section 122 of the CGST Act.
➡️ The petitioner relied on the Bombay High Court’s judgment in Amit Manilal Haria, where a substantial penalty (approx. ₹133 crore) imposed on a CEO was stayed due to concerns over the retrospective application of Section 122(1A). This precedent was used to support the plea for similar interim relief.
➡️ The Delhi High Court has issued notice and posted the matter for further hearing on July 18, 2025, maintaining the interim protection granted to the petitioner.
✔️ Delhi HC – Parag Garg v/s The Common Adjudicating Authority, Additional Commissioner of Central Tax, CGST, Delhi West and Anr [W.P.(C) 5643/2025]
🔥📛 Delhi HC to examine validity of bank-attachment pending appeal against underlying AO
➡️ The Petitioner relied on the Delhi HC ruling in Unity Traders, asserting that once an appeal is filed against an Assessment Order under GST law, an automatic stay on the recovery of demand is triggered. This forms the central basis for challenging the provisional attachment.
➡️ The Petitioner had complied with the mandatory 10% pre-deposit of the disputed tax demand as required under Section 107(6) of the CGST Act, thereby reinforcing the right to a stay and underscoring that coercive recovery (including bank account attachment) is unwarranted at this stage.
➡️ The Petitioner contested the provisional attachment of its ICICI Bank account under Section 83 of the CGST Act, arguing that such action is improper while the statutory appellate remedy is actively being pursued and the pre-deposit condition is fulfilled.
➡️ The Court indicated concern over the Revenue’s action to attach the account despite the appeal being pending, directing ICICI Bank to report the current balance in the Petitioner’s account. This suggests judicial emphasis on balancing enforcement powers with procedural fairness.
➡️ The matter has been listed for further hearing, with the Court keeping the issue open pending additional submissions and factual clarification, especially regarding the status and impact of the account attachment during the pendency of the appellate process.
✔️ Delhi HC – MJ Bizcrafts LLP v/s CGST, Delhi South Commissionerate and Ors [W.P.(C) 9061/2025]
🔥📛 HC: Quashes assessment where notices were served on email id not registered with GST portal
➡️ The assessee did not receive the assessment notice as its email ID was not linked with the GST portal, raising issues regarding valid service of notice under the GST framework.
➡️ The High Court emphasized that under the GST Act, authorities are obligated to serve notices through both electronic means and registered post with acknowledgment, especially where communication through email is uncertain.
➡️ The Court acknowledged that the assessment order was passed without affording the assessee an effective hearing, violating principles of natural justice due to improper notice delivery.
➡️ Although the Department claimed it sent the notice and reminders via email, the Court held that this alone was insufficient when the email was not officially linked, rendering the ex-parte assessment untenable.
➡️ The High Court set aside the assessment order and remanded the case back to the proper authority, directing a fresh hearing to ensure the assessee gets a fair opportunity to present its case.
✔️ Patna HC – Mother India Construction Private Limited vs. The State of Bihar [Civil Writ Jurisdiction Case No. 12858 of 2024]
🔥📛 HC: Overlooking lapses in replying SCN on medical ground, grants chance to dispute wrongful ITC allegation
➡️ The Calcutta High Court granted the Assessee a fresh opportunity to respond to the Show Cause Notice (SCN), acknowledging the Assessee’s bed-ridden condition as a valid medical ground for prior non-compliance.
➡️ Despite the Assessee’s failure to respond to earlier communications—namely the discrepancy notice in Form ASMT-10, pre-SCN in Form DRC-01A, and SCN in Form DRC-01—the Court did not treat this as a bar to granting relief.
➡️ The Court remanded the case to the proper officer, directing that a final opportunity be given to the Assessee to file a reply to the SCN.
➡️ The Assessee has been given a firm and non-extendable timeline to file the reply; the Court made it clear that no further extensions will be entertained.
➡️ The proper officer has been directed to follow Section 75(4) of the CGST Act, ensuring the Assessee is granted a personal hearing before finalizing the adjudication proceedings, regardless of whether a reply is submitted.
✔️ Calcutta HC – Sanjit Acharya Vs. Assistant Commissioner of Revenue, DGGI [WPA 7273 of 2024]
🔥📛 Summary of SCN and order cannot replace proper SCN and speaking order under sections 73(1) and 73(9): HC
➡️ Issuing only a summary of the show cause notice (Form DRC-01) does not fulfill the legal requirement under Section 73(1) to issue a detailed and proper show cause notice (SCN) by the proper officer.
➡️ A statement of tax determination under Section 73(3) cannot substitute the mandatory issuance of a show cause notice under Section 73(1); both are independent procedural requirements.
➡️ The proper officer must issue a valid SCN under Section 73(1), provide an opportunity for reply, and pass a reasoned order under Section 73(9). Mere summaries or statements do not suffice.
➡️ Summaries such as DRC-01 (SCN summary), DRC-02 (statement), or DRC-07 (order summary) are only supporting formats and do not replace the substantive legal documents required under the Act.
➡️ In the absence of a proper show cause notice and adjudication order as per Section 73, any demand raised or order passed is legally unsustainable and liable to be set aside.
✔️ Gauhati HC – Bitupon Doley v. State of Assam [WP(C) No. 1565 of 2025]
🔥📛 Proceedings under section 74 pending over a year on DRC-01A notice to be concluded; benefit of waiver scheme under section 128A to be considered: HC
➡️ The pre-show cause notice (DRC-01A), issued under Section 74 for the 2019–21 tax period, remained unacted upon for nearly a year. The court recognized this delay as prejudicial to the taxpayer’s statutory right to seek relief under the amnesty scheme (Section 128A).
➡️ The court directed the proper officer to promptly decide on the pre-show cause notice based on the taxpayer’s response. This was deemed necessary to prevent arbitrary delay and preserve the taxpayer’s legal rights.
➡️ The officer must either drop the proceedings if satisfied with the taxpayer’s reply or issue a formal notice under Section 73(1) or 74(1) without further delay, depending on whether fraud or misstatement is involved.
➡️ If proceedings are ultimately taken under Section 73(1) (non-fraud cases), the taxpayer shall be eligible to avail the benefits of the waiver/amnesty scheme under Section 128A, subject to compliance and filing within 48 hours of the notice.
➡️ The judgment underscores the importance of timely administrative action in tax proceedings to ensure procedural fairness and safeguard the taxpayer’s rights under beneficial schemes like Section 128A.
✔️ Calcutta HC – Synthroma Laboratories v. State of West Bengal [WP APPEAL NO. 4149 of 2025]
🔥📛 Fresh order to be passed as earlier SCN on same item was dropped but demand raised again by impugned order: HC
➡️ The case involved issuance of multiple show cause notices (SCNs) for the same adjudication period, raising concerns about duplication and procedural fairness.
➡️ The petitioner argued that one of the issues had already been addressed and dropped in a prior SCN; yet, the impugned order revived the same demand without justification.
➡️ The adjudicating authority failed to consider the earlier order dated 12-2-2025, which had bearing on the issue, thereby breaching the principles of natural justice.
➡️ The confirmation of demand on a previously settled issue was held to be legally unsustainable, as it disregarded past findings without adequate reasoning or fresh evidence.
➡️ The High Court set aside the impugned order and remitted the case back to the adjudicating authority with directions to re-examine the matter on merits, taking into account the earlier order.
✔️ Madras HC – Tvl. Honesty Autos v. State Tax Officer, Virudhunagar [W.P.(MD) No. 17168 of 2025]
