LATEST GST CASE LAWS: 13.05.2025
🔥📛 Karnataka HC stays demand on water and electricity supplied by mall-owner alleging ‘composite supply’
➡️ The Karnataka High Court has stayed the operation of a demand that included water and electricity charges collected by a mall owner from commercial establishments within the mall.
➡️ The mall owner (petitioner) argues that they supplied these services as a pure agent without any margin and challenges the order that construes water and electricity supply as a composite supply under Section 8 of the CGST Act, 2017, with renting services as the principal supply.
➡️ The petitioner claims that the revenue department failed to follow Circular No. 206/18/2023-GST dated October 31, 2023, specifically Para 3.3, which introduces a deeming fiction to consider owners or developers as pure agents for amounts collected towards electrical energy and water.
➡️ By not following the binding circular, the petitioner asserts that the revenue department violated Section 168 of the CGST Act, 2017, acting contrary to the law and rendering the proceedings without jurisdiction.
➡️ The matter has been tagged with a similar issue, and notice has been issued to the revenue department.
✔️ Karnataka HC – Gopalan Enterprises (India) Pvt. Ltd vs The Joint Commissioner of Central Tax and Others [WP 12644/2025]
🔥📛 HC: ITC frauds a danger to GST framework; Dismisses audacious writ petition with costs
➡️ The Karnataka High Court has stayed the operation of a demand that included water and electricity charges collected by a mall owner from commercial establishments within the mall.
➡️ The mall owner (petitioner) argues that they supplied these services as a pure agent without any margin and challenges the order that construes water and electricity supply as a composite supply under Section 8 of the CGST Act, 2017, with renting services as the principal supply.
➡️ The petitioner claims that the revenue department failed to follow Circular No. 206/18/2023-GST dated October 31, 2023, specifically Para 3.3, which introduces a deeming fiction to consider owners or developers as pure agents for amounts collected towards electrical energy and water.
➡️ By not following the binding circular, the petitioner asserts that the revenue department violated Section 168 of the CGST Act, 2017, acting contrary to the law and rendering the proceedings without jurisdiction.
➡️ The matter has been tagged with a similar issue, and notice has been issued to the revenue department.
✔️ Delhi HC – Mahesh Fabrinox Pvt. Ltd Vs. Union of India & Anr. [W.P.(C) 6006/2025]
🔥📛 HC: Unimaginable to disallow ITC based on retrospective supplier’s registration certificate cancellation; Stays recovery
➡️ The Orissa High Court (HC) has granted interim relief to an assessee whose assessment was framed based on the disallowance of Input Tax Credit (ITC) due to the retrospective cancellation of the supplier’s registration certificate.
➡️ The assessee argued that the supplier’s registration was valid at the time of the transactions and the HC agreed, stating that it is unimaginable to disallow the already claimed ITC by the recipient when the supplier’s registration was valid during the transaction period.
➡️ The HC noted that the revenue authorities could not show any statutory provision that authorizes the assessing authority to disallow ITC on account of retrospective cancellation of the supplier’s registration certificate.
➡️ There was no dispute by the revenue that the assessee had deposited the tax collected with the State exchequer.
➡️ The HC stayed any coercive action and recovery in respect of the demand order till the next hearing date.
✔️ Orissa HC – Aditya Craft & Papers Pvt. Ltd. v. Principal Commissioner Central GST [W.P.(C) No.6441 of 2025]
🔥📛 HC: Quashes registration cancellation owing to revenue’s no objection to business continuity proof
➡️ The Orissa High Court (HC) has granted interim relief to an assessee whose assessment was framed based on the disallowance of Input Tax Credit (ITC) due to the retrospective cancellation of the supplier’s registration certificate.
➡️ The assessee argued that the supplier’s registration was valid at the time of the transactions and the HC agreed, stating that it is unimaginable to disallow the already claimed ITC by the recipient when the supplier’s registration was valid during the transaction period.
➡️ The HC noted that the revenue authorities could not show any statutory provision that authorizes the assessing authority to disallow ITC on account of retrospective cancellation of the supplier’s registration certificate.
➡️ There was no dispute by the revenue that the assessee had deposited the tax collected with the State exchequer.
➡️ The HC stayed any coercive action and recovery in respect of the demand order till the next hearing date.
✔️ Orrisa HC – Jay Jagannath Filling Station vs Commissioner of Sales Tax (CT & GST) [W.P.(C) No. 9586 of 2025]
🔥📛 Order to be set aside as it was uploaded on GST portal without informing assessee: HC
➡️ The taxpayer argued that the show cause notice and reminders were only uploaded on the GST portal without proper notification to them.
➡️ The appellate authority rejected the appeal based on the limitation period under Section 107 of the GST Act.
➡️ The court held that uploading notices on the portal without informing the taxpayer was not a fair procedure, and the state could not expect the taxpayer to continuously monitor the portal.
➡️ The principles of fairness and reasonableness of procedure were violated, leading to the setting aside of the appellate authority’s orders and the tax determination.
➡️ The taxpayer was directed to submit a detailed explanation within six weeks, and the authorities were instructed to pass fresh orders within two months thereafter, with the writ petition being allowed.
✔️ Patna HC – Maa Gaytri Distributor v. State of Bihar [Civil Writ Jurisdiction Case No. 9658 of 2024]
🔥📛 No blocking of ECL is permissible without providing a pre-decisional hearing to assessee and without stating reasons for such blocking: HC
➡️ The electronic credit ledger of the assessee was blocked under Rule 86A of the CGST Rules.
➡️ The assessee argued that no pre-decisional hearing was provided before the order was passed.
➡️ The order did not contain independent or cogent reasons for blocking the ledger, relying solely on enforcement authority reports.
➡️ This reliance on enforcement authority reports was deemed impermissible as it was based on borrowed satisfaction.
➡️ Consequently, the order was set aside due to the lack of a pre-decisional hearing and insufficient independent reasoning.
✔️ Karnataka HC – Safan Fasteners v. Assistant Commissioner [WRIT PETITION NO. 9359 OF 2025 (T-RES)]
🔥📛 Matter to be referred to GST Council to decide on exemption from Compensation Cess on supply of branded chewing tobacco products in line with GST relief: HC
➡️ The case involves the levy of a 160% Compensation Cess on the supply of branded (scented/flavoured) chewing tobacco products by manufacturers to merchant exporters for export. This cess is currently kept in abeyance.
➡️ The matter has been referred to the GST Council to decide whether an exemption should be granted for the Compensation Cess, similar to the exemptions provided for GST and IGST in excess of 0.1%, to allow manufacturers to claim input tax credit or refunds as per the relevant sections of the IGST and GST Acts.
➡️ Until the GST Council makes a decision, authorities are instructed not to initiate further proceedings, such as issuing show cause notices or passing adjudication orders, for the levy of Compensation Cess at the normal rate on goods supplied to merchant exporters for export. This is contingent on the manufacturers fulfilling conditions under Exemption Notifications No. 40/2017 and No. 41/2017 and filing an undertaking to deposit the cess if the Council recommends otherwise.
➡️ The case references Exemption Notifications No. 40/2017 and No. 41/2017, which were issued following the GST Council’s 22nd Meeting, recommending exemptions from GST and IGST in excess of 0.1% for certain supplies. The current case is considering whether a similar exemption should apply to the Compensation Cess.
➡️ The petitions related to this issue have been disposed of with the observation that the operation and implementation of the impugned orders are kept in abeyance until the GST Council reconsiders the issue of recommending exemption from the payment of Compensation Cess on products supplied by petitioners to merchant exporters for export.
✔️ Gujarat HC – Sopariwala Export (P.) Ltd. v. Joint Commissioner, CGST and Central Excise [R/SPECIAL CIVIL APPLICATION NO. 6701 and 7073 of 2023]
