LATEST GST CASE LAWS: 11.07.2025
🔥📛 Karnataka HC stays order invoking notification extending time limit for adjudication; Issues notice
➡️ The petitioner contested the recovery proceedings based on Notification No. 56/2023 dated 28.12.2023, arguing that the extension of limitation period for issuing recovery orders is ultra vires as it was allegedly not based on GST Council’s recommendation, violating Section 168 of the CGST Act.
➡️ The entire adjudication was carried out ex-parte, with the petitioner claiming no prior knowledge of the show cause notice, which was only discovered after a postal endorsement suggesting use of the amnesty scheme under Section 128A.
➡️ The Revenue demanded recovery of ₹17.70 lakhs in differential tax, interest, and penalty under Section 122, citing an excess Input Tax Credit (ITC) claimed in GSTR-3B versus what was reflected in auto-populated GSTR-2A for FY 2018-19.
➡️ The petitioner relied on the Gauhati High Court judgment in Barkataki Print and Media Services, which held that extension of time limits under similar notifications, without Council recommendation, is not legally sustainable.
➡️ Taking note of the prima facie concerns, the Karnataka High Court issued notice to the Revenue and stayed the recovery proceedings, offering temporary relief to the petitioner pending further hearing.
✔️ Karnataka HC – Sri Basaveswara Transport Nandi Transport vs The Assistant Commissioner of Commercial Tax & Ors [WP No. 103989/2025]
🔥📛 SC: Dismisses Revenue’s SLP challenging refund of transitioned credit to Ford India; Imposes cost
➡️ The Supreme Court affirmed the Gujarat High Court’s decision allowing Ford India to claim refund of transitional credit filed via GST TRAN-1, reinforcing the eligibility of such refunds under Section 54 of the CGST Act.
➡️ The Court emphasized consistency by referencing its own January 2025 rulings upholding similar Gujarat High Court decisions in Intas Pharmaceuticals Ltd. and Torrent Pharmaceuticals Ltd., which also allowed refunds of transitional credit.
➡️ The SC strongly criticized the Revenue for filing the Special Leave Petition (SLP) in May 2025 despite being aware that the legal issue had already been conclusively settled by the apex court earlier that year.
➡️ The Revenue failed to disclose in its SLP that the cited High Court judgments had already been upheld by the Supreme Court—an omission viewed seriously by the bench.
➡️ To deter unnecessary and repetitive litigation, the Court dismissed the SLP with an order imposing a cost of ₹10,000, signaling a clear message against redundant appeals in settled matters.
✔️ SC – Union of India and Ors v/s M/S Ford India Private Limited [SPECIAL LEAVE PETITION (CIVIL) Diary No(s). 28563/2025]
🔥📛 Adjudication order can’t be passed without setting out relevant facts and basis of decision by proper officer: HC
➡️ An adjudication order under Section 75(6) of the CGST Act must detail the relevant facts and provide a clear basis for the decision, even if the taxpayer fails to respond to a show cause notice.
➡️ The mere absence of a reply to the notice under Section 73 does not absolve the adjudicating authority from its duty to issue a reasoned and self-contained order.
➡️ The impugned order only referenced the notice and the absence of a reply, without discussing the factual or legal basis for the demand, thereby violating the statutory requirement of Section 75(6).
➡️ It is a settled legal principle that adjudication orders must be ‘speaking orders’, meaning they should reflect thoughtful consideration and proper justification for the tax demand raised.
➡️ Due to the absence of a properly reasoned order, the court allowed the writ petition and set aside the adjudication order dated 13-08-2024, reinforcing the importance of procedural compliance in GST adjudication.
✔️ Allahabad HC – F K Fancy Zari Art v. Union of India [WRIT TAX No. 2869 of 2025]
🔥📛 Petition to recall bail rejected as all conditions for continued bail were satisfied and no fresh grounds were established: HC
➡️ At the investigation stage, bail decisions are guided by whether the accused will cooperate with authorities and not obstruct the investigation. Once the charge sheet is filed, these factors become secondary; the focus shifts to the gravity of the offence and the “triple test” – whether the accused is a flight risk, likely to influence witnesses, or capable of tampering with evidence.
➡️ Since the evidence in this GST-related case was primarily documentary, there was no realistic risk of the accused tampering with evidence post-bail. This reduced the justification for recalling the bail on grounds of investigation interference.
➡️ The authorities failed to present any material indicating that the accused posed a flight risk or was attempting to influence witnesses, both of which are essential grounds for revoking bail under the “triple test” framework.
➡️ The Court held that the Chief Metropolitan Magistrate (CMM) had exercised discretion judiciously while granting bail. There was no evidence showing that this discretion had been misused or that the accused had abused the liberty granted.
➡️ There was no indication that the ongoing trial had been hindered due to the bail, nor was there any misuse of the bail conditions by the respondent. Hence, there was no valid legal basis for recalling the bail order.
✔️ Delhi HC – Directorate General of GST Intelligence v. Rakesh Kumar Goyal [CRL.M.C. 631 of 2021]
