Background of the Case

The petitioner challenged a GST assessment order issued in Form GST DRC-07 for FY 2022-23 along with consequential recovery proceedings initiated through Form GST DRC-16. The dispute primarily related to levy of GST at the rate of 18% on works contract services executed for a State Government department. However, the petitioner questioned the very validity of the assessment order on the ground that the DRC-07 order dated 25.07.2023 did not bear the signature of the Proper Officer. The Revenue contended that the order had already been served by uploading it on the GST portal and that the writ petition had been filed with considerable delay. The matter was therefore placed before the Andhra Pradesh High Court to determine whether an unsigned assessment order could survive in law and whether the delay in approaching the Court would disentitle the petitioner from relief.

Arguments by the Appellant (Taxpayer)

The petitioner contended that the impugned DRC-07 order was void and unenforceable as it lacked the signature of the Proper Officer. Reliance was placed on earlier decisions of the Andhra Pradesh High Court, including A.V. Bhanoji Row, SRK Enterprises and SRS Traders, wherein the Court had consistently held that an assessment order without a valid signature is legally defective and cannot be sustained. The petitioner further submitted that the assessment order had not been served through conventional means and was merely uploaded on the GST portal. It was argued that the petitioner became aware of the proceedings only subsequently and therefore the delay in approaching the Court ought not to defeat a challenge against an order suffering from a patent legal defect.

Respondent’s Response (Revenue Department)

The Revenue opposed the writ petition on the ground of delay and submitted that the petitioner had failed to explain the prolonged period between issuance of the assessment order and filing of the writ petition. The department further argued that Section 169(1)(d) of the CGST Act specifically recognizes uploading of notices and orders on the GST portal as a valid mode of service upon a registered person. Accordingly, the department contended that the petitioner could not avoid the consequences of the assessment merely by claiming lack of knowledge of the order. The Revenue therefore sought dismissal of the writ petition while defending the validity of the assessment proceedings.

Court Findings and Decision

The Andhra Pradesh High Court held that the issue was squarely covered by its earlier judgments which had categorically ruled that the absence of the Proper Officer’s signature renders an assessment order invalid and that such a defect cannot be cured under Sections 160 or 169 of the GST Act. While the Court acknowledged the department’s objection regarding delay and recognized that uploading of orders on the GST portal is generally treated as a valid mode of service, it also took note of the practical difficulties faced by taxpayers under the GST regime and the recurring disputes relating to access and awareness of portal-based communications. Balancing the interests of both parties, the Court set aside the unsigned DRC-07 assessment order and remanded the matter to the Proper Officer for fresh adjudication after providing an opportunity of hearing to the petitioner. However, the relief was made subject to the condition that the petitioner deposits 20% of the disputed tax within six weeks. The Court further directed that the period during which the writ petition remained pending shall be excluded for limitation purposes and left all issues open for reconsideration by the Proper Officer.

To download official order, Click Here

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship. The information on this site is not intended to be a substitute for professional advice.”

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Background of the Case

The present writ petition before the Bombay High Court (Aurangabad Bench) arose from a GST demand challenged by Pagariya Auto Private Limited. The petitioner approached the High Court contending that the issue involved in the matter was squarely covered by the earlier judgment of the Bombay High Court in Star Engineers (I) Pvt. Ltd. v. Union of India, wherein relief had been granted in cases involving bona fide and inadvertent errors under the GST regime.

During the course of hearing, the Revenue argued that although the GST Appellate Tribunal had not yet been constituted, the Government had already issued notifications and circulars providing that taxpayers intending to challenge appellate orders must deposit an additional 10% of the disputed tax amount over and above the earlier statutory pre-deposit made before the First Appellate Authority. The department further submitted that upon such deposit, coercive recovery proceedings would remain stayed.

Arguments by the Appellant (Taxpayer)

The petitioner submitted that the issue involved in the present matter was fully covered by the decision of the Coordinate Bench in Star Engineers (I) Pvt. Ltd., which had consistently been followed by various Benches of the Bombay High Court. It was argued that the alleged discrepancy arose due to a bona fide and inadvertent mistake and therefore the petitioner should not be compelled to deposit an additional 10% amount merely because the GST Appellate Tribunal had not yet become operational.

The petitioner further contended that insistence on further pre-deposit despite settled judicial precedents would impose an unjust financial burden upon taxpayers, particularly when the demand itself was disputed on substantial legal grounds.

Respondent’s Response (Revenue Department)

The Revenue opposed the grant of interim relief and relied upon various judicial precedents as well as Government notifications and circulars issued in view of the non-constitution of the GST Appellate Tribunal. The department submitted that in such circumstances taxpayers desirous of challenging appellate orders are required to deposit an additional 10% of the disputed tax amount in addition to the earlier statutory deposit already made before the Commissioner (Appeals).

The department argued that once such additional deposit is made, the taxpayer would become entitled to protection from coercive recovery proceedings during pendency of the dispute.

Court Findings and Decision

The Bombay High Court was not impressed with the submissions advanced by the Revenue and prima facie accepted the petitioner’s contention that the matter was covered by the judgment in Star Engineers (I) Pvt. Ltd. The Court observed that where the alleged discrepancy arises out of a bona fide and inadvertent mistake, the taxpayer should not be compelled to make an additional 10% pre-deposit merely because the GST Appellate Tribunal has not yet been constituted.

Accordingly, the High Court issued notice in the writ petition and granted ad-interim relief in favour of the petitioner by staying coercive action against the assessee without insisting upon the additional 10% deposit sought by the department. The ruling provides significant interim relief to taxpayers facing similar demands in absence of a functional GST Appellate Tribunal.

To download official order, Click Here

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship. The information on this site is not intended to be a substitute for professional advice.”

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Background of the Case

The present writ petition before the Allahabad High Court arose from criminal proceedings initiated against an Advocate practicing in indirect taxes and corporate laws. The petitioner, an Advocate enrolled with the Bar Council of Uttar Pradesh and also an Advocate-on-Record before the Allahabad High Court, had been engaged by his client to file statutory GST appeals under Section 107 of the CGST/SGST Act against assessment orders passed under Section 74 of the GST Act involving substantial tax demands for FY 2021-22, 2022-23 and 2023-24. While filing the appeals, the petitioner utilized the assessee’s Electronic Credit Ledger and Input Tax Credit for payment of the mandatory 10% pre-deposit requirement in accordance with CBIC Circular dated 06.07.2022 and relying upon the Gujarat High Court judgment in Yasho Industries Ltd., which had also been upheld by the Supreme Court.

However, the Appellate Authority rejected the appeals on the ground that payment of pre-deposit through Electronic Credit Ledger was not maintainable. Subsequently, instead of proceeding merely against the assessee, the GST Department lodged an FIR against both the assessee and the Advocate alleging criminal conspiracy, tax evasion and financial loss to the State Exchequer. During pendency of the writ petition, a charge-sheet and cognizance order were also passed against the Advocate, which were additionally challenged before the High Court.

Arguments by the Appellant (Advocate)

The petitioner contended that he had acted purely in his professional capacity while advising and filing the statutory appeals on behalf of his client. It was argued that utilization of Input Tax Credit for payment of mandatory pre-deposit was based on a bona fide interpretation of law supported by the CBIC Circular and the judicial precedents of the Gujarat High Court and the Supreme Court in Yasho Industries Ltd.

The petitioner further submitted that even assuming the legal interpretation adopted by him was erroneous, the same could never constitute a criminal offence or conspiracy with the client. It was emphasized that the petitioner had no business connection with the assessee and merely discharged his professional obligations as an Advocate. The petitioner argued that criminal prosecution of an Advocate for legal advice or procedural actions taken during representation of a client would strike at the very independence of the legal profession and adversely affect the constitutional right of citizens to obtain legal assistance.

Respondent’s Response (GST Department/State)

The GST Department defended the FIR by alleging that the assessee had wrongfully utilized Input Tax Credit for payment of the statutory pre-deposit requirement and thereby attempted to evade tax liability. The department alleged that such actions caused financial loss to the State Exchequer and were undertaken in conspiracy between the assessee and the petitioner Advocate.

However, during the course of hearing, the learned Additional Advocate General and the Deputy Commissioner of GST were unable to satisfactorily explain the basis on which the petitioner Advocate had been implicated in the criminal proceedings merely for filing statutory appeals and adopting a particular legal interpretation regarding pre-deposit through Electronic Credit Ledger.

Court Findings and Decision

The Allahabad High Court strongly deprecated the action of the GST Department and held that the FIR, charge-sheet and cognizance proceedings against the Advocate were wholly unsustainable in law. The Court observed that an Advocate, by virtue of his profession, is entitled to represent and defend clients fearlessly and independently, irrespective of the allegations involved against such clients. Merely because an Advocate adopts a particular legal position or files proceedings on behalf of a client, he cannot be treated as a conspirator in the alleged acts of the client.

The Court further observed that criminal prosecution of Advocates for professional acts performed during legal representation would strike at the very foundation of the legal profession and undermine the constitutional protections available under Articles 14 and 21 of the Constitution. The High Court specifically held that even if the GST Department believed that pre-deposit through Electronic Credit Ledger was legally impermissible, the petitioner’s action was still a professional act based on a particular interpretation of law and could never amount to criminal conspiracy.

Accordingly, the Allahabad High Court quashed the FIR, charge-sheet and cognizance order against the petitioner Advocate and held that continuation of criminal proceedings in such circumstances would amount to gross abuse of the process of law.

To download official order, Click Here

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship. The information on this site is not intended to be a substitute for professional advice.”

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The GST Appellate Tribunal (GSTAT) has issued an important update for taxpayers and professionals filing appeals through the GSTAT Portal. Considering the practical difficulties being faced during the initial phase of portal-based appeal filing, the Principal Bench, GSTAT has extended the relaxed procedural guidelines till 31st December 2026.

Background of Earlier Orders

Earlier, the GSTAT had issued Office Order dated 20.01.2026 and Instructions dated 10.03.2026 providing temporary procedural relaxations and clarity regarding filing requirements on the GSTAT portal.

Now, vide latest Instructions dated 14.05.2026, the Tribunal has clarified that the same guidelines shall continue to remain applicable till 31st December 2026 for ease of filing appeals by appellants.

Key Relief for Taxpayers & Professionals

The latest instructions primarily focus on reducing unnecessary defects during scrutiny of appeals and simplifying procedural compliance during the transition phase of GSTAT operations.

The Registrar / Joint Registrar / Deputy Registrar / Assistant Registrar have been directed to verify whether Form APL-05 contains:

• Show Cause Notice (SCN)
• Order-in-Original (OIO)
• Order-in-Appeal (OIA)
• Statement of Facts
• Grounds of Appeal
• Proof of Pre-deposit and Court Fees wherever applicable

No Defect for Certified Scanned Copies

A significant practical relief has also been provided in cases where the appellant uploads scanned certified copies of OIO/OIA.

The instructions clarify that where the scrutiny officer is satisfied from the endorsement appearing on the uploaded copy that it is a certified copy issued by the concerned authority, no defect flag should be raised merely because a physical certified copy is not separately uploaded.

Authorization / Vakalatnama Mandatory

The taxpayer is also required to upload:

• Authorization in favour of the tax professional, or
• Vakalatnama executed in favour of the Advocate

Digital Verification Requirement

The instructions also clarify that:

• One Verification and
• Digital Signature of Appellant

Special Clarification for Departmental Appeals

For applications filed by the Revenue Department under Section 112(3), the following documents have been prescribed:

• Show Cause Notice
• Order-in-Original
• Order-in-Appeal
• Opinion of Commissioner authorizing filing
• Statement of Facts
• Grounds of Appeal

To download the official instructions, Click Here

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship. The information on this site is not intended to be a substitute for professional advice.”

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Background of the Case

A batch of writ appeals and connected matters came before the Karnataka High Court involving a common legal issue under Sections 73 and 74 of the CGST Act, 2017. The dispute arose because GST authorities had issued consolidated show cause notices covering multiple financial years and tax periods in a single proceeding for alleged short payment of tax, wrongful availment of input tax credit, and related discrepancies. Various assessees challenged such notices contending that the GST framework under the CGST Act is fundamentally financial year specific and therefore separate show cause notices were mandatory for each tax period.

Several Single Bench decisions had granted relief to taxpayers by holding that separate proceedings should be initiated for separate financial years. Aggrieved by those orders, the Revenue preferred writ appeals before the Division Bench of the Karnataka High Court seeking clarity on whether consolidated notices under Sections 73 and 74 are legally permissible.

Arguments by the Appellant (Revenue)

The Revenue contended that neither Section 73 nor Section 74 of the CGST Act expressly prohibits issuance of consolidated show cause notices covering multiple tax periods. It was argued that the statute merely requires proper determination of tax not paid, short paid, or wrongly availed input tax credit and does not mandate separate proceedings for each financial year. The Department submitted that procedural forms and return mechanisms cannot override substantive statutory provisions. According to the Revenue, consolidated proceedings promote administrative efficiency, avoid multiplicity of litigation, and prevent duplication of adjudication where common issues and transactions are involved across several years.

It was further argued that as long as the taxpayer receives adequate opportunity of hearing and the notice clearly specifies the allegations and tax demands period-wise, such notices remain legally valid.

Respondent’s Response (Assessee)

The assessees argued that the entire GST scheme including filing of returns, reconciliation, annual returns, rectifications, maintenance of accounts, and assessment proceedings is structured around individual financial years and tax periods. It was contended that Form GST DRC-01 itself refers to a “tax period” and “financial year,” thereby indicating that proceedings under Sections 73 and 74 must also remain confined to a single financial year. The taxpayers further submitted that issuance of common notices for multiple years would create anomalies relating to limitation, adjudication, pecuniary jurisdiction, and applicability of Sections 73 and 74, particularly because Section 74 deals with fraud and suppression cases carrying different limitation periods.

Reliance was placed on several decisions of the Bombay, Kerala, Madras, Andhra Pradesh, and Karnataka High Courts where separate notices for different years were emphasized. It was also argued that consolidated notices could prejudice taxpayers by combining independent causes of action and extending limitation indirectly.

Court Findings and Decision

The Hon’ble Karnataka High Court answered the core issue in favour of the Revenue and held that consolidated or common show cause notices under Sections 73 and 74 of the CGST Act covering multiple financial years or tax periods are legally permissible. The Court observed that although various compliances under the GST regime may be linked to financial years or tax periods, the statute nowhere expressly restricts the issuance of a combined show cause notice. The Court held that procedural formats such as DRC-01 cannot control or curtail the substantive powers granted under the Act. It further observed that the object of Sections 73 and 74 is determination of tax liability and such determination can validly be undertaken through a consolidated proceeding when issues are interconnected.

The Division Bench accordingly held that common show cause notices do not become invalid merely because they cover multiple years, provided principles of natural justice are complied with and the demands are properly identifiable. Consequently, the Court upheld the validity of consolidated GST show cause notices and ruled in favour of the Revenue.

To download official order, Click Here

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship. The information on this site is not intended to be a substitute for professional advice.”

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Background of the Case

The appellant, Uber India Systems Private Limited, approached the High Court under Article 226 of the Constitution challenging a Show Cause Notice dated 12.06.2024 issued by the GST authorities. The impugned notice sought to demand tax and impose penalties for the financial years 2018–19, 2019–20 and 2020–21 through a single consolidated proceeding. Aggrieved by the clubbing of multiple tax periods in one notice, the appellant contended that such action was arbitrary and contrary to established legal principles. It was argued that each financial year constitutes a separate unit of assessment and cannot be combined into a single show cause proceeding. The appellant also sought interim protection restraining the department from proceeding with adjudication. The matter was heard by a Division Bench of the High Court at Amaravati.

Arguments by the Appellant

The appellant primarily contended that issuance of a common show cause notice for multiple taxation periods was legally unsustainable. It was submitted that assessments under GST are period-specific, and therefore, separate notices must be issued for each financial year. Reliance was placed on the earlier judgment of the High Court in S.J Constructions vs. The Assistant Commissioner, wherein it was held that different taxation periods cannot be clubbed in a single show cause notice. The appellant argued that the impugned notice violated this settled position of law. It was further submitted that such consolidation causes procedural prejudice and undermines fairness in adjudication. On these grounds, the appellant sought quashing of the notice while leaving liberty to the department to proceed in accordance with law.

Respondent’s Response

The departmental authorities opposed the writ petition and defended the issuance of the impugned show cause notice. It was submitted that the notice was issued within the statutory framework and called upon the appellant to explain why tax and penalties should not be imposed for the relevant periods. The respondents argued that interference at the stage of show cause notice should be limited. The department also sought vacating of the interim protection earlier granted to the appellant. It was contended that the adjudication process should be allowed to proceed in the normal course. However, the principal issue before the Court remained whether multiple financial years could be combined in a single notice.

Court Findings and Decision

The Andhra Pradesh High Court observed that the impugned notice admittedly covered more than one taxation period, namely from 2018–19 to 2020–21. Referring to its earlier decision in S.J Constructions, the Court reiterated that separate show cause notices must be issued for each taxation period or financial year. Following the binding precedent, the Court held that a common notice clubbing different periods is not permissible in law. Accordingly, the impugned show cause notice dated 12.06.2024 was set aside. However, the Court clarified that the authorities are at liberty to initiate fresh proceedings in accordance with law by issuing separate notices. The writ petition was allowed, and there was no order as to costs.

To download official order, Click Here

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship. The information on this site is not intended to be a substitute for professional advice.”

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The Central Board of Indirect Taxes and Customs (CBIC) has issued Circular No. 254/11/2025-GST dated 27th October 2025, to assign proper officers under key provisions of the Central Goods and Services Tax Act, 2017 (“CGST Act”). This move fills an important administrative gap by officially designating officers responsible for actions under the newly introduced Section 74A, Section 75(2), and Section 122, along with Rule 142(1A) of the CGST Rules, 2017.

Key Provisions Covered

Assignment of Proper Officers

CBIC, in exercise of its powers under Section 2(91) of the CGST Act and Section 20 of the IGST Act, has designated the following officers as “proper officers” for the said provisions:

Monetary Limits for Show Cause Notices and Orders

To ensure efficient workload distribution, the circular prescribes monetary thresholds for each officer level for issuance of SCNs and passing orders under Sections 74A and 122.

Note:

• Where both CGST and IGST are involved, the combined amount will determine the proper officer’s jurisdiction.

• Penalties are excluded when determining the officer for adjudication under Section 74A.

• If subsequent statements (for later periods) increase the total tax beyond the officer’s prescribed limit, the earlier SCN must be made answerable to a higher authority through a corrigendum.

• When an Audit Commissionerate issues an SCN, any follow-up statements will be made answerable to the jurisdictional adjudicating authority, not the audit officer.

Example:

If an Assistant Commissioner issues an SCN involving Rs.18 lakh CGST and Rs.25 lakh IGST (combined Rs.43 lakh), the matter exceeds Rs.20 lakh combined limit of the Superintendent, hence the Deputy/Assistant Commissioner will act as the proper officer.

Clarification for Section 75(2)

• Under Section 75(2), when a court or tribunal concludes that a fraud-based notice (u/s 74) was incorrectly issued, the matter must be re-determined as a non-fraud case (u/s 73).

• The circular clarifies that the same adjudicating officer who handled the original notice will also handle the fresh determination, maintaining continuity and preventing duplication or jurisdictional overlap.

Practical Implications

• Uniform Implementation: The circular eliminates ambiguity regarding the authority of officers under the new and existing provisions.

• Clarity in Adjudication: Monetary thresholds now guide officers in issuing SCNs and adjudicating orders, ensuring consistency.

• Alignment with FY 2024–25 onwards: Section 74A becomes operative from FY 2024–25, marking a clear shift in GST enforcement.

• Reduced Litigation: Clear designation of officers may prevent procedural disputes regarding jurisdiction.

Conclusion

This circular is a significant administrative step towards strengthening GST compliance and enforcement under the revised adjudication framework introduced by Finance (No. 2) Act, 2024. Businesses and practitioners should take note of the monetary limits, officer jurisdictions, and the applicability of Section 74A from FY 2024–25.

To download official circular, Click Here

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship. The information on this site is not intended to be a substitute for professional advice.”

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In Supreme Court of India

Union of India vs. M/S Yasho Industries Ltd [Special Leave Petition (Civil) Diary No. 17547 of 2025]

Background of the Case

The legal dispute between the Union of India and Yasho Industries Limited originated from conflicting interpretations of Section 107(6)(b) of the CGST Act, 2017, which governs pre-deposit requirements for filing GST appeals. Yasho Industries, a manufacturer and exporter of specialty chemicals, had deposited Rs. 3.36 crore as a mandatory pre-deposit using its Electronic Credit Ledger while challenging a GST demand. However, tax authorities rejected this method, insisting the payment be made through the Electronic Cash Ledger.

The Gujarat High Court, in its October 2024 judgment, ruled in favor of Yasho Industries, holding that the Electronic Credit Ledger payment complied with the law. The Union of India, dissatisfied with this decision, appealed to the Supreme Court, seeking reversal on grounds of statutory misinterpretation.

Arguments by the Appellant (Union of India)

The Union of India contended that the Section 107(6)(b) implicitly required pre-deposits to be made in cash, not through input tax credits, to ensure revenue certainty. They argued that permitting Electronic Credit Ledger payments for pre-deposits could lead to potential misuse, as credit ledgers might contain disputed or unverified claims. Additionally, the appellant highlighted that similar cases filed by taxpayers were pending before the Supreme Court and urged the Court to tag this case with those matters for a consolidated ruling. The department maintained that the High Court’s interpretation conflicted with the legislative intent of safeguarding tax collection mechanisms.

Respondent’s Response (M/S Yasho Industries Limited)

Yasho Industries countered the appellant claims by emphasizing the Bombay High Court’s precedent in Oasis Realty and a 2022 CBIC circular, both of which explicitly allowed pre-deposits via the Electronic Credit Ledger. The respondent argued that the deletion of Rule 96(10) of the CGST Rules in 2024 had already resolved the underlying dispute, rendering the department’s appeal redundant. The respondent further pointed out that the pending cases cited by the Union were filed by taxpayers, not the Revenue, making them irrelevant to this appeal. The respondent asserted that the High Court’s decision aligned with GST laws and that the department’s insistence on cash payments imposed an unjust financial burden on businesses.

Court Findings and Decision

The Supreme Court upheld the Gujarat High Court’s judgment and dismissed the Union’s appeal. The Court ruled that the pre-deposit through the Electronic Credit Ledger was legally valid, as Section 107(6)(b) did not explicitly mandate cash payments. It noted that the pending cases referenced by the Revenue were materially distinct, as they involved challenges by taxpayers rather than the department. The bench also observed that the deletion of Rule 96(10) had eliminated the core controversy, making further intervention unnecessary. The judgment reinforced taxpayer-friendly interpretations of GST procedures and curtailed arbitrary revenue demands, providing clarity for similar disputes.

GST Appeal Pre-Deposit via Electronic Credit Ledger:

To download official order of Gujarat High Court, Click Here and for Supreme Court order, Click Here.“

The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship. The information on this site is not intended to be a substitute for professional advice.”

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Aalidhra Texcraft Engineers vs. Revenue [Special Civil Application No. 14554 of 2024]

Background of the Case

The appellant, M/s Aalidhra Texcraft Engineers, a textile machinery manufacturer registered under GST, inadvertently paid Rs. 40 lakhs in November 2020 through Form DRC-03, believing it to be excess Input Tax Credit (ITC) claimed due to a system mismatch in GSTR-2A and GSTR-3B returns. The payment was voluntary, with no tax demand from authorities. In March 2024, during a departmental scrutiny, it was confirmed that no such liability existed, prompting the appellant to file a refund claim. However, the GST authorities rejected the claim, citing the two-year limitation under Section 54(1) of the CGST Act, 2017.

Arguments by the Appellant

The appellant contended that the payment was a voluntary deposit under mistake, not a tax liability, and thus outside Section 54(1)’s limitation. Further the department’s own audit (via Form GST ASMT-10) confirmed that the payment was erroneous, making the refund a matter of natural justice. The appellant also relied on precedents (Joshi Technologies and Gujarat State Police Housing Corporation) where courts held that voluntary deposits mistakenly made are refundable without time limits.

Respondent’s Response

The respondent, Revenue argued that the refund claim (filed in March 2024) was time-barred as it exceeded two years from the payment date (November 2020). Further stated that Section 54(1) and Explanation 2(h) mandate that refunds must be claimed within two years of payment, irrespective of the nature of deposit. The appellant’s delay was inexcusable, as the mistake could have been discovered earlier through reconciliation.

Court Findings and Decision

The Gujarat High Court, ruled in favor of the appellant, holding that Voluntary payments mistaken as tax are not governed by Section 54(1). The two-year limit applies only to tax refunds, not deposits made erroneously. Further held that retention of mistakenly paid amounts violates Article 265 of the Constitution, which prohibits tax collection without legal authority.

The court directed the department to refund Rs. 40 lakhs within 12 weeks, though denied interest since the payment was the appellant’s own mistake.

Gujarat High Court GST Refund

To download official order, Click Here

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship. The information on this site is not intended to be a substitute for professional advice.”

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MRL Industrial Cooperative Service Society Ltd vs. Revenue [W.P. 3993 of 2025]

Background of the Case

The petitioner, MRL Industrial Cooperative Service Society Ltd., challenged three separate orders passed by the Revenue, under the GST laws. The orders in question were passed under section 73 and section 161 of the TN/CGST Act 2017 which related to FY 2018-19.

Arguments by the Appellant

The petitioner contended that all notices and communications leading to the impugned orders were uploaded only on the GST portal under the “View of additional notices and orders” column. The petitioner was unaware of these notices and, consequently, could not file a reply or appear for a personal hearing. As a result, the orders were passed ex-parte, violating the principles of natural justice.

The petitioner, a cooperative society providing manpower supply services, argued that the ex-parte orders caused severe hardship, as its bank account was attached, making it difficult to disburse salaries to employees.

The petitioner submitted that it was willing to deposit 10% of the disputed tax amount if the court set aside the impugned orders.

Respondent’s Response

The respondent, conceded that if the petitioner deposited 10% of the disputed tax, the court could consider the petitioner’s prayer.

Court Findings and Decision

The Madras High Court ruled in favor of the petitioner, holding that the impugned orders were passed without affording the petitioner an opportunity to be heard. The notices were not served physically but were merely uploaded on the GST portal, which the petitioner was unaware of. The court held that the orders were ex-parte and, therefore, unsustainable in law.

The court emphasized that the principles of natural justice were violated, as the petitioner was not given a fair chance to present its case. The court set aside the impugned orders and remanded the matters back to the Revenue for fresh consideration and the court directed the respondent to defreeze the petitioner’s bank account upon proof of payment of 10% of the disputed tax.

To download official order, Click Here

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship. The information on this site is not intended to be a substitute for professional advice.”

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