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2026-VIL-103-SC | Supreme Court VAT

M.P. Commercial Tax Act, 1994 - Taxable event and relevance of form of goods at the time of sale - Classification on form of good and not end use – Respondent-assessee manufactured and marketed powder and biscuit products, which the Appellants-Department sought to classify as non-alcoholic drinks and beverages on the ground that the packaging required the consumer to dilute the product with milk or water, while the Respondent contended that, being sold across the counter as powder and biscuit, the goods fell under the residuary entry - High Court upheld classification under the residuary entry - Whether the taxing authorities are required to levy tax based on the form of the good at the time of sale or on the end product - HELD - Taxing statutes are strictly construed and nothing can be read in or implied beyond the plain language. The taxable event is the act of supply and the incidence of taxation is determined by the nature of the good in the form in which it is sold. The tax authorities are bound to look at what is supplied and not at its end use, and the subsequent use by the consumer in mixing the powder with water or milk does not alter the taxable event, as liability is determined at the point of supply. Classification must be based on the form of the good at the time of sale and not on the manner in which the consumer may later choose to use it, as a powder mix is taxed as a powder while a ready-to-drink beverage is taxed as a beverage - The authorities must levy tax on the basis of the form of the good at the time of sale - Classification of ‘GRD Powder’ and ‘GRD Mix’ under entry for non-alcoholic drinks and beverages or residuary entry - Whether the goods can be classified as non-alcoholic drinks and beverages or fall in the residuary entry - Appellants relied on common parlance, functional character and basic nature tests, the use of the word "including" in the entry, and decisions on powders and tea, while the Respondent relied on the plain language of the charging provision and the absence of any reference to use in the entry - HELD - The expression "beverages" is followed by syrups, cordials, distilled juice, ark and essences, all of which denote liquids or liquid preparations, and under the rule of ejusdem generis the general word derives its meaning from the class constituted by the associated words and cannot be interpreted to encompass goods of a different physical form. The entry makes no reference to end use but classifies goods by physical characteristic and form, and the common parlance, functional or basic nature tests cannot be applied to import the end use concept to override clear and unambiguous language - The expression "including" cannot be taken to mean all encompassing. The decisions relied on by the Revenue are distinguishable - Goods which do not answer the description of a specific entry must fall within the residuary entry and cannot be forced into an inapposite specific entry merely to attract a higher rate of tax - At the time of the taxable event the goods exist in the form of powder and biscuit and do not fall within the expression beverage. While it is possible that the goods may ultimately be used to make a beverage or a solid preparation, at the point of taxable event, they remain in powder form. Consequently, they do not fall within the expression ‘beverage’ - The appeals are dismissed [Read less]

2026-VIL-1144-DEL | High Court SGST

GST - Limitation under Section 74(2) of the CGST Act, 2017 - Date of Form GST DRC-01 versus date of substantive show cause notice - Petitioner contended that the proceedings were initiated only on the date appearing on Form GST DRC-01, which was later than the last date for issuance of notice under Section 74(2), while the substantive show cause notices under Section 74(1) bore earlier dates within the period - Whether the date appearing on Form GST DRC-01 renders the substantive SCN barred by limitation under Section 74(2) - HELD - Section 74(2) requires the proper officer to issue the notice under Section 74(1) at least ... [Read more]

2026-VIL-1698-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

Central Excise - Cess on Tea paid under registration of sister unit - Cross-adjustment across distinct registrations - Appellant, a manufacturer of tea holding two Central Excise registrations, filed ER-1 returns for clearances from its expansion unit but, owing to an unintentional clerical error of its accountant, deposited the corresponding Cess on Tea under the registration of its sister unit - Department demanded the Cess under Section 11A under the registration of the expansion unit - Whether the Cess paid under the registration of the sister unit can be adjusted against the demand raised under the registration of the... [Read more]

2026-VIL-1697-CESTAT-ALH-CE | CESTAT CENTRAL EXCISE

Central Excise - Interest on refund of amount deposited during adjudication - Adjudicating Authority granted the refund with interest at 6% from three months after filing the refund claim, - Commissioner (Appeals) rejected the claim of interest at 12% from the date of deposit - Whether the Appellant is eligible for interest from the date of deposit to the date of refund - HELD - The Allahabad High Court has affirmed the view of the Tribunal that Section 11B of the CEA, 1944 would not be applicable where the applicant is not claiming refund of duty but refund of a revenue deposit - In case of refund of revenue deposit, wher... [Read more]

2026-VIL-1695-CESTAT-ALH-ST | CESTAT SERVICE TAX

Service Tax - Refund of service tax paid under mistake of law on Goods Transport Agency service - Applicability of Section 11B of the Central Excise Act, 1944 - Appellant, a manufacturer of yeast, paid service tax under reverse charge on Goods Transport Agency service, although it was eligible for exemption for food stuff under Notification No. 25/2012-ST as amended, and had not claimed the exemption in its returns - Commissioner (Appeals) rejected the refund on the ground that exemption was not claimed at the time of self-assessment and ignorance of law is no excuse - Whether the amount paid by the Appellant by mistake of law is refundable to the Appellant - HELD - The Commissioner (Appeals) did not dispute that the Appellant was entitled to exemption, so the service tax paid under reverse charge was not payable and was admittedly paid under mistake of law. An amount paid under mistaken notion of law does not take the colour of duty and remains only a deposit, Section 11B refers to claim for refund of duty only and not to other amounts collected without authority of law, and the provisions of Section 11B and its limitation are not attracted. The principle of unjust enrichment does not apply and the Revenue has no authority to retain the amount - The refund of the amount paid is admissible to the Appellant – The appeal is allowed - Service Tax - Interest on refund of amount paid under mistake of law - Rate of interest - Appellant sought interest from the date of respective deposit till the date of refund of the amount paid by mistake of law, which was treated as a deposit - Whether the Appellant is entitled to interest and, if so, at what rate - HELD - Since Section 11B is not applicable to the refund of an amount paid under mistake of law, Section 11BB and the notification prescribing the rate of interest thereunder are also not applicable. Following the decisions of the Tribunal granting interest at twelve per cent per annum on such refunds, the decisions of the High Court upheld by the Supreme Court, and the Tribunal's decision in the Appellant's own case granting interest at the same rate, the Appellant is eligible for interest at twelve per cent from the date of deposit till the date of payment of the refund - The impugned order is set aside, the Revenue is directed to refund the amount along with interest at twelve per cent per annum from the date of respective deposits. [Read less]

2026-VIL-1141-GUJ | High Court SGST

GST - Confiscation under Section 130 of the CGST Act, 207 - Rule 138B of the CGST Rules, 2017 - Petitioner challenged the show-cause notice in Form GST MOV-10 and the order in Form GST MOV-11 confiscating goods in transit, issued afresh after an earlier round of litigation in which the notices and orders were quashed and the matter remanded for reconsideration – Petitioner contention that Rule 138B was violated as the proper officer was not empowered by the Commissioner, and that the notice and the order were issued by the same proper officer who could not be the judge in his own case - Whether the notice and order are liable to be quashed for violation of Rule 138B of the CGST Rules - HELD - Rule 138B provides for verification of documents and conveyances by the Commissioner or a proper officer empowered by him. On examination of the documents on record, there is no violation of the said provision, as the physical verification of the conveyance was carried out by the proper officer authorised by the Commissioner - A similar contention under Rule 138B was examined in the earlier judgment, where the Court set aside the orders and directed fresh orders. Pursuant thereto the proper officer issued a fresh show-cause notice, supplied the documents of spot visit of the suppliers and the statement of the driver, and asked the Petitioner to remain present for a personal hearing, but the Petitioner chose to file a reply instead - After considering the reply, the authority passed the order after threadbare investigation, concluding that the dealers were carrying out illegal trading by receiving invoices from fake dealers without actual supply of goods, and the orders cancelling their registrations were also supplied to the Petitioner - No violation of Rule 138B is found and the contention is rejected - The orders in Forms GST MOV-04 and MOV-06 were supplied to the person in charge of the conveyance, Form GST MOV-10 was supplied to the Petitioner, and the documents relating to cancellation of registration of the party with whom the Petitioner was transacting business were also supplied - Mere dissatisfaction with the manner in which the adjudicating authority has dealt with the record cannot by itself furnish a ground to bypass the statutory remedy - The petitioner is relegated to the alternative remedy of appeal before the appellate authority – The writ petition is dismissed [Read less]

2026-VIL-1138-ALH | High Court SGST

GST – Application for Anticipatory bail - Maintainability where only summons under Section 70 of the CGST Act, 2017 has been issued and no order of arrest under Section 69 has been passed - Applicant sought anticipatory bail in an investigation into alleged clandestine manufacture and clearance of goods without payment of GST - Respondent contending that the application is premature as only summons had been issued - Whether the application for anticipatory bail is premature merely because the Applicant has been summoned under Section 70 and no formal order of arrest exists - HELD - Section 69 deals with power of arrest, whereas Section 70 confers power to summon a person to give evidence or produce documents in an inquiry, and mere issuance of summons does not establish that the person is under arrest or that an order of arrest has been passed. However, the absence of an existing order of arrest is not an absolute bar to the exercise of jurisdiction for anticipatory bail where the applicant demonstrates a real, genuine and reasonable apprehension of arrest founded on the facts of the case - Searches had been conducted at several premises, machinery and material seized, the alleged revenue evasion quantified and the co-accused connected with the activity already arrested, so the apprehension cannot be characterised as fanciful or imaginary - The application cannot be rejected merely on the ground that no formal order of arrest has yet been placed on record - Grant of Anticipatory bail - Grant of extraordinary protection in alleged organised clandestine manufacture and clearance - Applicant, though not the principal person identified, was summoned on several occasions and allegedly did not cooperate, while the co-accused had been arrested - Whether the Applicant has made out a case for anticipatory bail - HELD - The existence of an apprehension of arrest is a condition for invoking the jurisdiction and is not by itself a sufficient ground for grant. The Court considers the nature and gravity of the allegations, the material collected, the role attributed, the stage and requirement of investigation, the possibility of influencing witnesses or tampering with evidence and the necessity of custodial interrogation - An undertaking to cooperate is a relevant circumstance but cannot foreclose the statutory authority to interrogate where necessary. The necessity of custodial interrogation, though not an end in itself, cannot at this stage be completely ruled out having regard to the nature of the allegations, the magnitude of the alleged evasion, the arrest of the co-accused and the alleged non-cooperation despite repeated summons. Personal liberty must be balanced against the legitimate requirement of investigation, and the Court is not required at this stage to record findings on guilt or innocence - The Applicant has failed to establish circumstances warranting anticipatory bail and the application is rejected. [Read less]

2026-VIL-1139-DEL | High Court SGST

GST - Withholding of refund under Section 54(11) of the CGST Act of an amount arising from an Order-in-Appeal - Petitioner, an exporter who paid IGST, succeeded before the Appellate Authority in respect of refund claims - Department reviewed the order and decided to appeal before the GSTAT, and the Commissioner thereafter withheld the refund under Section 54(11) relying on a pending anti-evasion investigation and findings of fraud and malfeasance - Whether the Commissioner rightly invoked Section 54(11) to withhold the refund in the absence of a pending appeal or a stay - HELD - Section 54(11) rests on two distinct, cumulative ingredients: first, the order giving rise to the refund must be the subject matter of an appeal, further proceedings or any other proceedings pending under the Act, and second, the Commissioner must independently form an opinion after hearing that grant of refund is likely to adversely affect the revenue on account of malfeasance or fraud - The expression ‘any other proceedings under this Act is pending’ is deliberately wide and is not confined to a formally instituted appeal. The provision is a self-contained safeguard for protection of revenue operating independently of any stay granted by a Court or Tribunal - The decisions holding that Revenue cannot withhold refund merely on the strength of a proposed or contemplated appeal turned on the singular fact that the case rested only on the first limb with no independent material of malfeasance or fraud. Here the anti-evasion investigation was already underway, the Commissioner examined the tier-wise supply chain, found suppliers non-existent or cancelled, and noted denial of movement of goods by transporters, so the opinion of fraud was based on contemporaneous material and not on a mere apprehension. The subsequent issuance of the show cause notice merely crystallised the allegations arising from the investigation - The challenge to the order withholding the refund cannot be sustained - The Writ Petition is dismissed - Order of the Commissioner under Section 54(11) - Whether appealable under Section 107 and effect on judicial review - Petitioner contended that the order was passed by the Commissioner in an administrative capacity and not by an Adjudicating Authority, so that no alternative remedy under Section 107 was available - Whether absence of appeal under Section 107 against an order under Section 54(11) bars judicial review - HELD - Section 54(11) expressly confers the power to withhold refund upon the Commissioner, which is distinct from the adjudicatory mechanism under Sections 73 and 74 and the appellate remedy under Section 107. The absence of an appeal under Section 107 does not exclude judicial review under Article 226. However, since it is an admitted position that an appeal against the Impugned Order already stands filed before the GSTAT, it is not appropriate or necessary in writ jurisdiction to adjudicate disputed questions concerning the genuineness of the suppliers, actual movement of goods or the correctness of the findings in the Impugned Order and the show cause notice - The Petitioner is left at liberty to raise all contentions before the GSTAT. [Read less]

2026-VIL-1137-DEL | High Court SGST

GST - Section 6(2)(b) of the CGST Act, 2017 - Bar on parallel proceedings on the same subject matter - Petitioner was proceeded against by the Central authorities under Section 74 for availing ITC on invoices without receipt of goods from a supplier, while the State authorities had earlier initiated separate proceedings under Section 73 for different financial years in respect of ITC from the same supplier - Whether the Central proceedings are without jurisdiction in view of Section 6(2)(b) of the CGST Act because the State authorities had earlier initiated proceedings concerning the same supplier - HELD - The bar under Section 6(2)(b) operates only where the subsequent proceedings are in respect of the same subject matter. The Supreme Court in in M/s Armour Security case has explained that the subject matter has to be identified with reference to the particular tax liability, deficiency or obligation arising from the alleged contravention. Whether two proceedings concern the same subject matter cannot be determined merely by identifying a common supplier or by observing that both relate to ITC, but requires examination of the tax period, the particular transactions and invoices, the precise ITC involved, the allegations in the respective notices and the liability each authority seeks to determine - The State proceedings were initiated separately for different financial years and under Section 73, whereas the Central proceedings were under Section 74 on allegations of fraud, wilful misstatement or suppression. The State proceedings initiated or concluded after the Central initiation cannot render the Central proceedings without jurisdiction. The exercise is essentially factual and requires examination of the respective notices, replies, orders and transaction-wise material, and the appellate authority is better placed to examine whether, to the extent of any particular liability, the bar is attracted - The contention that the Central proceedings are wholly barred by Section 6(2)(b) is not accepted, and the Petitioner is not precluded from raising the objection before the appellate authority - Writ jurisdiction under Article 226 against an Order-in-Original under Section 74 despite statutory appellate remedy - Petitioner challenged the Demand-cum-Show Cause Notice and the Order-in-Original confirming ITC demand, interest and penalty - Whether the High Court should interfere under Article 226 notwithstanding the availability of the statutory appellate remedy - HELD - The mere description of an objection as one of jurisdiction or natural justice does not by itself require the Court to exercise writ jurisdiction, and the Court must examine the substance of the objection and the nature of the adjudication. The order rests independently on the finding of non-receipt of goods and availment of ITC on goods-less invoices recorded with reference to Section 16(2)(b), and the invocation of Section 74(1) is based on the conclusion of fraud, wilful misstatement or suppression, so it is not established that the demand is founded on a new and unrelated ground - The order records that opportunities of personal hearing were granted and that replies were considered, and an apparent date discrepancy cannot by itself establish that no hearing was granted but at the highest calls for verification of the record – Further, clubbing of more than one financial year does not by itself render the proceedings void, and limitation and the sufficiency of material to establish the ingredients of Section 74 are matters for the appellate authority. Writ jurisdiction is not intended to substitute the statutory appellate examination of the merits - The challenge to the show cause notice cannot survive independently once a reasoned Order-in-Original has been passed - The Writ Petition is dismissed [Read less]

2026-VIL-175-AAR | Advance Ruling Authority SGST

GST - Transfer of business to a Private Limited Company without consideration, Scope of supply - Applicant, a partnership concern proposed to transfer its entire business as a going concern, with all assets, liabilities and employees, to a private limited company promoted by the same persons, without consideration, and thereafter to cease business and surrender its GST registration - Whether the transaction of transfer of business by way of merger of two registrations/distinct persons would constitute supply under the GST law - HELD - The concept of scope of supply under Section 7 of the CGST Act is an inclusive provision which goes beyond the expression 'all forms of supply of goods or services or both made for a consideration by a person in the course or furtherance of business'. Transfer of business is done neither in the usual course of business nor for furtherance of business, yet by virtue of the inclusive nature of the scope of supply, it can be regarded as supply - As per the proposed MoU, all rights, title, ownership, interest in the business, assets and customers, including liabilities, are transferred and employees continue in service. Such a transfer of business, even if without consideration and not in the usual course of business, is a supply under the CGST Act, 2017 - The question is answered in the affirmative - Nature of supply in transfer of business - Applicant proposed to transfer its entire business along with assets and liabilities to a private limited company - Whether the transaction would amount to supply of goods or supply of services - HELD - Entry 4(c) of Schedule II provides that where a person ceases to be a taxable person, goods forming part of the assets of the business are deemed to be supplied unless the business is transferred as a going concern to another person, which shows that transfer of business as a going concern does not amount to supply of goods - 'Services' under Section 2(102) means anything other than goods, money and securities, and activities or transactions featuring in Schedule II must be either a supply of goods or a supply of services. If transfer of business as a going concern to another person is not a supply of goods, it must be a supply of services - The transaction amounts to supply of services - Exemption to transfer of going concern under Serial No. 2 of Notification No. 12/2017-Central Tax (Rate) - Applicant proposed to transfer its business to a private limited company and claimed exemption for services by way of transfer of a going concern, as a whole or an independent part thereof - Whether the transaction would be covered under serial no. 2 of Notification No. 12/2017-Central Tax (Rate) - HELD - The GST Act does not define ‘going concern’; the concept must be understood in common parlance and financial standards, where a going concern is assumed to continue its operations and not be forced to liquidate its assets in the near future - The Applicant furnished no documentary evidence to prove that its business is a going concern, and merely stated that it has a running business and files GST returns regularly - The Authority was not in a position to determine whether the business qualifies as a going concern. However, if it is a going concern by all standards, the transfer of the business is covered by Entry No. 2 - The answer is in the affirmative, subject to the condition that the business qualifies as a going concern by all standards - Leviability of GST on transfer of closing stock and assets where business does not qualify as going concern - Applicant proposed to transfer its entire business, including closing stock and fixed assets, to a private limited company without consideration - Whether GST is leviable on the transfer of existing stock, assets and fixed assets if the transaction is not covered under serial no. 2 of Notification No. 12/2017-Central Tax (Rate) - HELD - If the Applicant's business fails to qualify as a going concern, the transfer of stock of goods, closing stock and assets will be considered as supply of goods by virtue of Entry No. 4(c) of Schedule II of the CGST Act and will be taxed as per the rate applicable for the respective goods. [Read less]

2026-VIL-176-AAR | Advance Ruling Authority SGST

GST - Classification of electric three-wheeler (e-rickshaw) supplied in Completely Knocked Down (CKD) form - Applicant, a manufacturer of battery-operated e-rickshaws, proposed to supply the vehicle to its authorised dealers in unassembled condition for assembly at the dealer's premises, as a single kit under a single invoice, composite price and consignment - Whether the supply of a complete set of components of an e-rickshaw in CKD form, necessary and sufficient for assembly of the finished vehicle, should be classified as the finished vehicle itself or as a set of parts, and the applicable rate of GST - HELD - An e-rick... [Read more]

2026-VIL-174-AAR | Advance Ruling Authority SGST

GST - Exemption under Serial No. 3A of Notification No. 12/2017-Central Tax (Rate) to composite supply of milling of food grains for distribution under Public Distribution System - Applicant was engaged in job work of crushing, fortifying and packing food grains supplied and owned by the State Government Food and Supplies Department into flour for distribution through the PDS, receiving cash consideration and non-cash consideration in the form of retention of bran, refractors and gunny bags - Whether the composite supply of service by way of milling of food grains into flour to the State Government for distribution under the Public Distribution System is eligible for exemption under entry No. 3A of Notification No. 12/2017-Central Tax (Rate) - HELD - The supply is a composite supply in which milling is the principal supply, while fortification and packaging are ancillary supplies bundled with it and supplied in conjunction with each other in the ordinary course of business. The value of supply is the transaction value, being the price agreed between the supplier and the recipient, which includes the notional value of the non-cash consideration retained by the Applicant irrespective of the actual price realised on its disposal - The value of goods, being the fortification and packing charges, constitutes less than 25% of the total value of supply. The phrase 'by way of any activity' widens the scope of entry 3A, so that activities related directly or indirectly to the PDS, which figures in the Eleventh Schedule under Article 243G of the Constitution, are covered, and the flour reaches the beneficiaries through that system. Relying on Circular No. 153/09/2021-GST, which requires case-to-case ascertainment of whether the value of goods is up to 25%, the supply fulfils all conditions of entry 3A - The composite supply is eligible for exemption so long as the value of goods does not exceed the threshold limit of 25% of the value of the composite supply - Ordered accordingly - Rate of tax on milling of food grains where exemption under Serial No. 3A of Notification No. 12/2017-Central Tax (Rate) is not available - Applicant was engaged in milling of food grains into flour for the State Government Food and Supplies Department for distribution under the Public Distribution System as a composite supply - What shall be the rate of GST on such milling if it does not fall in entry No. 3A - HELD - Where the condition of the notification is not fulfilled, that is, where the value of goods exceeds the threshold limit of 25% of the value of the composite supply, the supply fails to qualify for entry No. 3A and the benefit of exemption must be ascertained on a case-to-case basis - In such a case, GST is leviable at 5% on the total value of consideration under serial no. 26(i)(f) of Notification No. 11/2017-Central Tax (Rate). [Read less]

2026-VIL-177-AAR | Advance Ruling Authority SGST

GST - Exemption under Entry 66(a) of Notification No. 12/2017-Central Tax (Rate) to fees for diploma and certificate programmes of a statutory University - Applicant, a University, propose to introduce diploma and certificate programmes and charge fees from enrolled students - Whether the fees charged from students enrolling in such programmes form part of educational services provided by an educational institution to its students and are exempt under Entry 66(a) - HELD - An educational institution under clause 2(y)(ii) must provide education as a part of a curriculum for obtaining a qualification recognised by any law for... [Read more]

2026-VIL-154-GSTAT-GZB | Tribunal SGST

GST - Penalty under Section 129(3) for address discrepancy in tax invoices and e-way bills - Appellant dispatched goods in an inter-State supply accompanied by tax invoices, e-way bills and transporter's bilty, with IGST charged - Two tax invoices and the corresponding e-way bills showed the buyer's former VAT address instead of the updated GST-registered address. Proceedings under Section 129(3) were initiated and a penalty was imposed - Whether the use of the consignee's former address in two invoices and the corresponding e-way bills justifies penalty under Section 129 of the CGST Act, 2017 - HELD - Section 129 does not expressly require fraudulent intent in every case. The statutory conditions for a penalty must still be proved, and a documentary defect cannot be presumed to establish tax evasion without examining the explanation and evidence - The First Appellate Authority confused the rule about intent with the need to prove a breach that attracts the particular penalty. Tax invoices, e-way bills and bilty documents accompanied the goods, and physical verification showed that the goods matched - The explanation connecting the disputed entry to the buyer's former VAT address and old customer details retained in the ERP system was supported by the record. The Department did not identify a different purchaser, a fictitious transaction, any actual diversion of the goods, clandestine unloading or suppression of taxable value. The address mismatch alone cannot take the place of such evidence - Repetition of the same error in both invoices and e-way bills can be explained by use of the same customer data - A deliberate change of destination, an unidentified consignee or a material gap in the supporting documents may justify a different result - The error was bona fide and without any intention to evade tax. The penalty under Section 129 therefore cannot be sustained - The Order-in-Appeal and the Order-in-Original are set aside to the extent of the penalty, and any amount deposited towards it is to be refunded with interest wherever legally payable - The appeal is allowed [Read less]

High Court Order | High Court SGST

GST - Full Bench Order - Validity of show cause notices and orders without visible digital signature - Electronic authentication through common portal - Notices and orders under Sections 73 and 74 of the CGST Act, 2017 and their summaries in Forms DRC-01, DRC-01A and DRC-07 were made available on the common portal without any visible physical or digital signature - The petitioners contended that they were unsigned documents, a nullity, relying on Rule 26(3) and on the mandatory use of "shall" in Rule 142 and the Forms - Whether such notices and orders are unsigned documents within the meaning of the GST Acts read with the Information Technology Act, 2000 and are a nullity in law - HELD - Forms are subservient to the Rules and legislation and cannot supplant them, so the requirement of inscription of signature in the prescribed Forms cannot override the Rules under which they are prescribed. Rule 26(3), which falls under the Chapter on Registration, does not extend to Chapter XVIII, where the rule making authority has consciously provided for different modes of authentication under different Chapters - Notices and orders under Chapter XVIII are electronically authenticated through the common portal, where the officer is onboarded by means of a digital signature certificate protected by a PIN known only to the holder, registered against his identity, and the system generates a hash value through asymmetric cryptography, which satisfies Sections 3, 3A and 5 of the Information Technology Act and the Second Schedule, with legal recognition under Section 5. The common portal is a secure system accessible only to the proper officer and the registered taxpayer, so verification of the digital signature at the recipient end is not required - A presumption of regularity attaches to the electronic record and electronic signature under the evidence law, which the petitioners failed to rebut, and the absence of a visible digital signature on the PDF version does not render the document invalid. The admission of the State officers in some cases that documents bore no signature may be on account of ignorance of the working of the system, and the earlier decisions taking a contrary view did not have the benefit of the working of the GST system explained by the GST Network - The presence of a digital signature on the Forms is not a requirement on documents covered under Chapter XVIII, and show cause notices and orders electronically authenticated by the proper officer and uploaded on the common portal are valid documents in law, the contrary view not laying down the correct position of law - The Reference is answered accordingly - Service of show cause notice or order by upload on common portal - Additional Notices and Orders tab - Commencement of limitation - Section 169(1)(d) of the CGST Act, 2017 - Petitioners contended that uploading on the common portal cannot be construed as service as the taxpayer is not expected to keep looking at the portal; that limitation should run from actual retrieval, that notices placed in the Additional Notices tab were not seen, and that writ petitions were not barred by delay - Whether uploading of notices and orders on the common portal amounts to valid service and from what date limitation runs - HELD - Section 169(1) provides for service by any one of the methods prescribed, read disjunctively, and under Section 169(1)(d) making the notice or order available on the common portal amounts to service. Under Section 13(2) of the Information Technology Act, receipt occurs when the electronic record enters the designated computer resource, which is the common portal, so the date of upload is the date of receipt. The statute casts a duty of diligence on the taxpayer to make compliances through the common portal, including returns, refund claims and audit, failing which legal consequences follow - Where the portal carries a Note clarifying that notices and orders on adjudication and similar modules are available under the Additional Notices and Orders tab, a taxpayer cannot feign ignorance of service for notices issued after the Note, though the question for notices uploaded earlier was left open for the appropriate forum. Since the notices and orders are valid, the bar of limitation for approaching the writ court on the ground of availability of a statutory remedy is attracted - Uploading on the common portal is valid service, and limitation to avail statutory remedy or to make other compliances runs from the date of upload - The petitioners are allowed liberty to file statutory appeals within two weeks, raising such other grounds - The Reference is answered accordingly - Requirement of Document Identification Number or Reference Number on notices and orders - Petitioners contended that the impugned orders did not quote the Document Identification Number as required by the Board's circulars binding under Section 168, and that the later circular dispensing with it where the Reference Number is shown operates only prospectively - Whether notices and orders not quoting the Document Identification Number are invalid - HELD - The Circulars issued by the Board and adopted by the State are binding on the Revenue under Section 168, and orders which do not quote the Document Identification Number or the Reference Number are not fit to be relied upon. The later Circular clarifies that for communications through the common portal bearing a verifiable Reference Number, quoting of the DIN is not required. Nothing in it makes it prospective, so the document should reflect either number, failing which the order would not be valid in law. The Reference Number is a valid authentication mechanism, verifiable by the taxpayer on the portal - In the individual writ petitions either the Reference Number or the Document Identification Number was quoted in the notices and orders, and they cannot be held invalid on this ground - The Reference is answered accordingly - Maintainability of reference to Full Bench on conflicting Division Bench decisions - Writ petitions were referred to the Full Bench on the issue of unsigned show cause notices and orders, in view of conflicting decisions of coordinate Division Benches on the application of Rule 26(3) of the CGST Rules, 2017 - Petitioners questioned the reference on the ground that the referral order did not frame the questions or indicate any conflict and that the Chief Justice could not authorise a reference administratively - Whether the reference to the Full Bench is maintainable - HELD - Three coordinate Benches had taken conflicting views, one holding the contrary view to be per incuriam, and the earlier Benches did not have the benefit of the live demonstration of the working of the common portal by technical experts of the GST Network. Judicial discipline requires that if two Division Benches of the same High Court take different views, the matter should be referred to a larger Bench, and one Division Bench cannot ignore or refuse to follow an earlier Division Bench of the same Court - There is no infirmity in the referral order. [Read less]

2026-VIL-1696-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

Central Excise - Reliance on statements recorded under Section 14 without compliance with Section 9D of the Central Excise Act, 1944 - Revenue alleged that the Appellant availed and utilised CENVAT Credit on invoices of registered dealers without receipt of goods, relying principally on statements recorded under Section 14 of persons associated with the dealers, which the adjudicating authority used directly without examining the makers - Whether the statements recorded under Section 14 can be relied upon to prove the truth of their contents without following the procedure under Section 9D - HELD - Not every statement recorded during investigation automatically acquires substantive evidentiary value. Save in the exceptional circumstances in Section 9D(1)(a), the statement has to pass through the procedure under Section 9D(1)(b), requiring the examination of the maker as a witness before the adjudicating authority and a determination, for reasons recorded in writing, that the statement deserves to be admitted in evidence. The record did not disclose that this exercise was undertaken or that the case fell within any exceptional circumstance, and where the procedure is not followed the statements have to be eschewed from consideration as not relevant for proving the truth of their contents. The statement of the vehicle owner also cannot be admitted as substantive evidence without examination - The statements cannot be relied upon, and the case of the Revenue, constructed on a chain of statements of third parties, dealers and co-accused persons, fails - Central Excise - Admissibility of electronic data retrieved from hard disk seized from third party - Section 36B of the Central Excise Act, 1944 - Revenue relied on electronic data and digital RG-23 records retrieved from a hard disk seized from the premises of a third party dealer, which was not recovered from the Appellant, and no certificate was obtained or annexed at the time of seizure, extraction or reliance - Whether the electronic data retrieved from the hard disk is admissible as evidence against the Appellant - HELD - Section 36B, which is pari materia with Section 65B of the Indian Evidence Act, is a self-contained code under which a certificate identifying the electronic record, describing the manner in which it was produced and giving particulars of the device, signed by a person in a responsible official position, must be produced under Section 36B(4), and its mandatory nature has been consistently enforced. Mere recovery of a hard disk from a third party does not establish the authenticity, integrity or correctness of every entry or the Appellant's participation in the alleged paper transactions, and without certification the contents remain unauthenticated secondary hearsay evidence - The electronic data is legally inadmissible as substantive evidence against the Appellants, and the case built on uncertified digital extractions fails on this count - Central Excise - Denial of CENVAT Credit on allegation of non-receipt of goods - Evidence of non-transportation and upstream irregularities - Revenue alleged that goods were not transported and received, relying on sample checks of vehicle numbers on the VAHAN portal showing vehicles incapable of carrying the goods, a statement of a vehicle owner, a delayed search at the premises of the alleged non-existent manufacturer and the cancellation or irregularities of upstream suppliers, while the Appellant produced valid cenvatable invoices, made payment and recorded receipt and consumption in its statutory books - Whether the demand of CENVAT Credit, interest and penalty on the Appellant company is sustainable - HELD - Under trade practice the dealer arranges freight and delivery, and the law does not cast an unworkable burden on the manufacturing buyer to verify the registration credentials of transport vehicles, nor can it be penalised for clerical discrepancies in vehicle numbers recorded by upstream suppliers once goods are received and accounted for in the stock registers. The Department checked only a small sample of vehicles and was required to establish non-transportation with respect to each specific invoice, and data from public databases is susceptible to errors and cannot be irrebuttable proof dispensing with independent physical verification such as toll gate logs or factory entry registers. The condition of an upstream manufacturer's premises, searched more than two years after the invoices, cannot establish its status for the earlier period, and ignorance of an upstream supplier of subsequent dealings or cancellation of registration cannot by itself prove non-receipt of goods by the Appellant. The Revenue was required to establish a direct, unbroken evidentiary link connecting upstream defects to the specific consignments received, and cannot extend isolated suspicion to declare all transactions fictitious. In absence of admissible evidence establishing non-receipt of inputs, fraudulent collusive activity or cash flow back, the documentary evidence of the Appellant was not displaced - The demand of CENVAT Credit along with interest and equivalent penalty on the Appellant company is unsustainable and set aside - Central Excise - Penalty on Director under Rule 26 of the Central Excise Rules, 2002 - Personal penalty was imposed on the Director of the Appellant company on the allegation of involvement in the irregular availment of CENVAT Credit by procurement of fake invoices - Whether personal penalty under Rule 26 on the Director is sustainable - HELD - Vicarious personal liability cannot be automatically fastened upon a Director merely by virtue of his executive designation or corporate position. To invoke Rule 26, the Department carries a strict burden to prove mens rea, active personal participation and specific overt acts showing that the individual knowingly dealt with goods liable to confiscation or consciously arranged fraudulent transactions, requiring positive, transaction-specific proof of actual knowledge or reasonable belief that the goods were liable to confiscation. The Revenue failed to adduce any admissible evidence on this count, and the main demand against the company stands set aside - The personal penalty on the Director is wholly unsustainable and is set aside - Central Excise - Deposit made during investigation as admission of liability - Revenue sought to draw an adverse inference from the amount deposited by the Appellant during the course of investigation, treating it as an implicit admission of guilt, while the Appellants contended that the deposit and the averments of the Director were made under threat, coercion or duress - Whether the deposit made during investigation amounts to an admission of liability - HELD - An interim deposit or payment made by an assessee during search, seizure or investigative proceedings, often under duress or coercion or on apprehension of coercive penal action, cannot be elevated to the status of an unconditional admission of tax liability - The deposit made during the investigation cannot be equated to an admission of guilt or liability. [Read less]

2026-VIL-1134-MAD-CU | High Court CUSTOMS

Customs - Removal of known encumbrance from encumbrance certificate after sale - Rule 9(6) to 9(10) of the Security Interest (Enforcement) Rules, 2002 - Sale certificate was issued by the Authorised Officer of the Appellant bank disclosing the known encumbrances, including the attachment effected by the Central Excise Department, the sale was on "as is where is" basis with the purchaser to clear statutory liability, and neither the bank nor the auction purchaser discharged the dues of the Department - Appellant bank sought a mandamus to remove the attachment from the encumbrance certificate to enable registration of the sale certificate, and the Single Judge dismissed the writ petition - Whether the Appellant bank has a legal right to demand the registration department to remove the encumbrances from the encumbrance certificate without settling the dues payable under those encumbrances, when the sale certificate discloses the known encumbrances - HELD - The sale notice and sale certificate under Rule 9 are based on the principle of caveat venditor, requiring the bank to disclose known encumbrances, while the auction purchaser must also be vigilant, and ignorance of Rule 9(7) does not excuse the purchaser from depositing the amount payable towards the dues of the known encumbrances - Rule 9(6) to 9(10) are mandatory and have to be strictly adhered to, and the sale to the purchaser is only subject to the known encumbrances disclosed in the sale certificate. The property can be delivered free from encumbrances only on deposit of money under Rule 9(7). Directing the registration department to remove the encumbrance would indirectly set aside the disclosures made in the sale notice and sale certificate and amount to achieving what could not be done directly, and the purchaser having participated in the auction with eyes wide open cannot seek removal without discharging the dues. There is no estoppel against law on the part of the Department - The primary issue is held against the Appellant and the auction purchaser, the writ appeal is dismissed - Maintainability of writ petition by bank after issue of sale certificate - Functus officio - Sale certificate was issued in favour of the auction purchaser and registered by the Sub Registrar, and the Department contended that the Appellant bank had become functus officio and the writ petition was not maintainable - Whether the Appellant bank has become functus officio after issuance and registration of the sale certificate and whether the writ petition filed by the bank is maintainable - HELD - The bank becomes functus officio only after the debt payable to it is fully recovered and its statutory right to hold or further enforce security against the remaining properties or assets of the borrower completely ceases. The bank had not recovered its entire dues and the proceedings before the Debts Recovery Tribunal for recovery of the outstanding dues were still pending - The contention that the bank has become functus officio and is not entitled to file the writ petition is untenable at this stage - Priority of secured creditor over Government dues - Section 26E and Section 35 of the SARFAESI Act, Section 31B of the Recovery of Debts and Bankruptcy Act, Section 142A of the Customs Act and Section 11E of the Central Excise Act - Appellant bank and auction purchaser relied on the priority of secured creditors over Crown dues to seek removal of the Department's encumbrance - Whether Section 26E, Section 35 of the SARFAESI Act and Section 31B of the Recovery of Debts and Bankruptcy Act grant priority to secured creditors over government dues, and whether the statutory first charge under Section 11E of the Central Excise Act, pari materia with Section 142A of the Customs Act, is subject to such priority - HELD - The law is well settled that registered secured creditors have priority over Central, State and local government dues, including taxes and revenues, and the dues of the bank rank ahead of the dues of the Department. However, Section 26E of the SARFAESI Act only states that the secured creditor's debt must be paid in priority after registering the security interest, and Section 31B of the Recovery of Debts and Bankruptcy Act only confers overriding powers to realise secured debts ahead of government dues. Neither provision overrides Rule 9(6) to 9(10) of the Security Interest (Enforcement) Rules, which are mandatory, and no legal authority was produced to show otherwise. These provisions cannot be interpreted in isolation without taking into consideration Rule 9, and have no bearing where the purchaser has not deposited the dues of the known encumbrances as required by Rule 9(7) - Priority of the secured creditor does not entitle the bank or the purchaser to a direction for removal of the known encumbrance without compliance with Rule 9 - Attachment by Department, whether an encumbrance - Section 100 of the Transfer of Property Act, 1882 - Appellant bank and auction purchaser contended that the attachment reflected in the encumbrance certificate is different from the encumbrance referred to in the Security Interest (Enforcement) Rules, while the Department contended there is no difference - Whether attachment effected by the Department over the property is an encumbrance - HELD - An encumbrance places a burden or claim on the property by operation of law or a court order, which prevents the owner from selling, transferring or creating further mortgages or charges, and appears on the encumbrance certificate giving notice to the public and potential buyer that the title is restricted. The attachment reflected in the encumbrance certificate prevents the owner from selling, transferring or creating further mortgages or charges, and by virtue of Section 100 of the Transfer of Property Act the right of alienation is restricted. The attachment satisfies the ingredients required for treating it as an encumbrance - The purchaser, having purchased the property knowing about the encumbrance, cannot escape liability to pay the dues of the Department under Rule 9(7), and the contention that the attachment is not an encumbrance is rejected. [Read less]

2026-VIL-1693-CESTAT-KOL-CU | CESTAT CUSTOMS

Customs – Validity of seizure of gold under Section 110(1) of the Customs Act, 1962 – Reasonable belief – Gold biscuits were seized by the Government Railway Police Service from a person travelling by train on information that he was carrying smuggled gold, and were later handed over to the Customs Officers, who prepared the seizure inventory under Section 110 - Seizure list did not indicate any foreign marking on the gold and the samples were not sent to the Customs Revenue Control Laboratory - Adjudicating authority absolutely confiscated the gold under Sections 111(b) and 111(d) and imposed penalties under Section 112(a) and (b) - Whether the seizure of the gold was based on a "reasonable belief" as required under Section 110(1) - HELD - The gold was seized by the personnel of the Railway Police and later handed over to Customs, and the Customs Officer did not act on his independent belief but merely accepted the seizure done by another agency. The authority effecting the seizure must demonstrate a subjective satisfaction based on objective material, failing which the seizure is invalid. The seizure inventory failed to disclose any material evidence justifying a reasonable belief, there being no foreign marking on the gold, and the marking on one item does not indicate that the gold is of foreign origin. Mere finding of gold does not render it liable for seizure unless there is cogent and positive evidence proving its foreign origin, and mere suspicion is not sufficient. The recovery solely on suspicion and acceptance of the presumption created by the other agency without independent verification or due diligence renders the seizure arbitrary and legally unsustainable - There was no reasonable belief for seizure under Section 110(1) and the gold cannot be held liable for confiscation - The impugned order is set aside and the appeals are allowed - Customs – Burden of proof under Section 123 of the Customs Act, 1962 – Confiscation and penalty – Appellant claimed ownership of the seized gold and produced purchase invoices for gold ornaments bought from a finance company, which were melted into gold pieces, along with bank statement and income tax return, and the invoices were not disputed by the Revenue - Whether the Appellant discharged the burden under Section 123 and whether the gold is liable for confiscation and the Appellants are liable to penalty under Section 112 - HELD - The documents produced by the Appellant, which were not discarded by the Revenue, are admissible as evidence. The Appellant discharged the burden cast on him under Section 123, and the onus then shifted to the Revenue to prove that the gold in question is smuggled, which the Revenue failed to do. As the gold is not liable for confiscation, it is to be released to the Appellant and no penalties are imposable on the Appellants - The impugned order is set aside and the appeals are allowed [Read less]

2026-VIL-1694-CESTAT-BLR-ST | CESTAT SERVICE TAX

Service Tax – Commercial Training or Coaching Services provided to a local corporation – Extended period of limitation and penalty - Appellant provided taxable services classifiable under Commercial Training or Coaching Services and did not discharge service tax on services provided to the corporation, claiming them to be exempted - Commissioner confirmed the demand for the entire period with interest and imposed penalties under Sections 76, 77 and 78 of the Finance Act, 1994, a part of the demand having been collected from the clients and paid - Whether the Appellant is liable to pay service tax on the services render... [Read more]

2026-VIL-1699-CESTAT-MUM-CE | CESTAT CENTRAL EXCISE

Central Excise - CENVAT credit of service tax paid on Business Support Services received from group company - Appellant availed CENVAT credit of service tax paid on Business Support Services for common facilities provided by a group company, which apportioned its expenses among group companies and issued invoices with service tax paid by it - Department denied the credit under Rule 14 read with Section 11A and imposed penalty on the ground that no services were received and the Appellant merely bore cost - Whether the Appellant is eligible for CENVAT credit of service tax paid on input services of Business Support Services... [Read more]

2026-VIL-153-GSTAT-SRT | Tribunal SGST

GST - Refund of IGST paid on ocean freight under Reverse Charge Mechanism, Whether utilisation of IGST credit bars refund and amounts to unjust enrichment - Respondent paid IGST under RCM on ocean freight on import of goods under notifications later declared ultra vires. Respondent filed refund claims after the Supreme Court judgment - The adjudicating authority rejected the claims on the ground that the credit was availed and utilised. The Appellate Authority allowed the assessee appeal - Whether the Revenue can raise the ground of utilisation of IGST credit when it was not specified in the order of the Commissioner under Section 112(3), and whether refund is barred because the IGST credit was availed and utilised - HELD - The authority of the officer to file an application before the Tribunal flows from the order of the Commissioner and is confined to the points specified by the Commissioner in his order. The Commissioner did not dispute the Appellate Authority's finding on utilisation of IGST, so there was no sanction of appeal on that point. A ground considered and dropped by the Commissioner cannot be raised by the Authorised Representative - In any case, the judgment relied upon by the Revenue did not hold that refund is disallowed if IGST has been utilised. In that case the IGST credit had been reversed by utilising the balance of State GST, and refund was allowed. Here also the IGST had been utilised and the balance remained in CGST and SGST. Holding a combined unutilised balance of CGST and SGST equal to the refund amount and debiting it from the credit ledger amounts to non-utilisation of the credit in substance. No double benefit arises, so the bar of unjust enrichment does not apply merely because the IGST equivalent to the refund amount is debited by utilising CGST or SGST or both - The contention of the Revenue is rejected - The appeals filed by the Department are dismissed, the order of the Appellate Authority is upheld and the department is directed to process the refund claims and pay the refund and interest under Section 56 for the period of delay beyond 60 days from the date of the original application – The Revenue appeal is dismissed - Refund of IGST paid on ocean freight under RCM - Retrospective effect of Supreme Court judgment declaring notifications ultra vires - Whether the judgment in Mohit Mineral declaring the notifications ultra vires and unconstitutional operates only prospectively so as to deny refund of tax paid before the date of the judgment - HELD - Unless otherwise specified, all laws are prospective and all judgments are retrospective. A legal provision or notification cannot be given retrospective effect unless specifically mentioned therein, but the converse is true for judgments, which apply with retrospective effect unless the Court expressly makes them prospective. Courts interpret and declare the law and do not legislate or amend it - When the levy is declared ultra vires and unconstitutional, it was always so, and the levy did not become ultra vires or unconstitutional due to the judgment. The doctrine of prospective overruling is an exception that applies only when the Court itself declares the judgment to be prospective. There was no such declaration in the Supreme Court judgment - The decision on prospective application of a Constitutional amendment also does not declare that judgments operate prospectively, and it reinforces that where the Court wants its judgment to be prospective, it directs so - Refund cannot be rejected on the ground that the judgment does not state that it has retrospective effect - Department contended that the Respondent was not a party to the Supreme Court judgment declaring the levy unconstitutional - Whether a taxpayer who was not a party to the judgment can claim refund of tax collected under a levy declared ultra vires and unconstitutional, and whether the judgment is the order contemplated by Rule 89(2) - HELD - Under Article 265, no tax shall be levied or collected except by authority of law. Where the levy itself is declared ultra vires and unconstitutional, the collection of tax is without authority of law from the inception. The levy stood equally and ab initio void against a taxpayer who was a party to the judgment and one who was not. Following the decision of the Supreme Court in Mafatlal case, where the levy is held unconstitutional, the claimant is not fettered by the provisions of the taxing statute except the bar of unjust enrichment. The limitation under the statute does not apply, and the period under Section 17(1)(c) of the Limitation Act, 1963 is available. The refund is not barred merely because the claimant was not a party to the judgment - The only exception is a person who himself unsuccessfully challenged the same provision and allowed the adverse decision to attain finality. The Respondent did not challenge the levy and lose, and it simply paid tax under a levy since declared void ab initio. The declaration by the court that the levy was ab initio void is itself the legal foundation for entitlement to refund. No further order in the name of the claimant is required, and the objection that the judgment is not an order contemplated by Rule 89(2) is rejected. [Read less]

2026-VIL-155-GSTAT-VRN | Tribunal SGST

GST – Dismissal of appeal by State before Appellate Tribunal for non-removal of registry defects – Respondent-assessee succeeded before the First Appellate Authority, which set aside the order of the Adjudicating Authority, observing that minor discrepancies did not give reason to believe there was any intention to evade tax – Appellant-State filed the appeal before the Tribunal but did not remove the defects raised by the registry in spite of many opportunities, and the amount of tax and penalty in dispute was shown as below a stated figure - Whether the appeal filed by the Appellant State is liable to be dismissed ... [Read more]

2026-VIL-158-GSTAT-VRN | Tribunal SGST

GST - Penalty under Section 129(3) of the CGST Act, 2017 for transporting goods without tax invoice and e-way bill - Generation of documents after interception - Vehicle loaded with taxable goods was intercepted in transit and the driver had no bill, bilty or e-way bill, an order of detention under Section 129(1) was issued, and the Appellant's authorised person produced a tax invoice and e-way bill generated several hours after the interception, whereafter the penalty was paid for release of the goods - Appellant contended that the lapse was procedural, that the invoice and e-way bill pertained to the same date and were produced before the penalty order, that the goods matched the invoice - Revenue contended that the documents were generated after interception, that the Appellant's statements were contradictory, and that the Appellant had repeated the wrong - Whether preparation or generation of invoice and e-way bill after the interception of the vehicle validated the illegal act of the Appellant - HELD - Rule 138 of the CGST Rules, 2017 requires information to be furnished before commencement of movement of goods, and the word "and" in Rule 138A(1) makes both the carrying of the invoice and the e-way bill mandatory, which is strengthened by Rule 138B, so that an e-way bill and tax invoice are mandatory to be carried along with the consignment - Section 129 starts with a non-obstante clause and gets triggered at the very moment the conveyance leaves with the consignment in contravention of the Act and Rules. The e-way bill mechanism was introduced to track movement of goods and check tax evasion, and compliance is to be done before the goods are moved and not after interception. Where goods are not accompanied by the invoice and e-way bill, a presumption of intention to evade tax may be raised, which is rebuttable by a proper and reasonable explanation, and mere furnishing of documents subsequent to the interception is not a valid ground to show absence of such intention - The decisions relied upon by the Appellant were distinguished on facts, as the Appellant had again supplied goods and generated fresh documents after interception, and the explanation of a family function appeared to be a novel story set up to justify the illegal act - The Appellant failed to rebut the presumption, the penalty is sustained, and the appeal is dismissed [Read less]

2026-VIL-160-GSTAT-LCK | Tribunal SGST

GST - Penalty under Section 129 of the CGST Act, 2017 for expiry of validity of e-way bill - Appellant explained that the goods were transported over a long distance, that the e-way bill could not be extended due to inadvertence, non-availability of regular staff during the festive period and office closure - Whether the mere expiry of the validity of an e-way bill, without any independent evidence establishing an intention to evade tax, is sufficient to justify the imposition of penalty under Section 129, when the goods were accompanied by relevant transportation documents - HELD - Mere expiry of the e-way bill, by itself... [Read more]

2026-VIL-156-GSTAT-KLK | Tribunal SGST

GST – Invocation of Section 74(1) of the CGST Act, 2017 for delayed payment of tax, belated filing of return in Form GSTR-3B and short payment of interest – Show cause notice to the Respondent-assessee demanding tax paid beyond the due date along with interest and penalty under Section 74, although the Respondent had deposited the self assessed tax and interest and uploaded the return before the proceedings were drawn up. The short paid interest was also paid through Form DRC-03 before the notice - Adjudicating authority confirmed the demand and imposed penalty, but the first appellate authority set aside the order, ho... [Read more]

2026-VIL-159-GSTAT-VRN | Tribunal SGST

GST - Penalty under Section 129 for transporting goods contrary to description in invoice and e-way bill - Intention to evade tax - Vehicle was intercepted and goods of higher quantity and value, kept in bags and covered with loose goods of lesser quantity and value, were found contrary to the description mentioned in the invoice and e-way bill, and the goods and vehicle were taken into custody - Appellant contended that the goods were loaded by labourers due to bonafide mistake and relied on High Court decisions holding that penalty cannot be imposed for classification disputes or minor typographical errors, while the Revenue contended that the Appellant was a habitual evader since a connected appeal showed documents generated after interception - Whether the Appellant transported the goods placed in bags and covered with loose goods, contrary to the description in the invoice and e-way bill, with intention to evade tax - HELD - The decisions relied upon by the Appellant have no application, as the question of classification of goods or typographical error is not involved. The goods of much higher quantity and value had been concealed in the vehicle by covering them with goods of lesser quantity and value, both were separately identifiable, and no question of classification was involved. In the garb of invoice and e-way bill prepared for only the lesser valued goods, the Appellant tried to transport goods of much higher value, which clearly establishes intention to evade tax, as held in the High Court decisions where misdescription in transport papers permitted an entirely different and higher value commodity and in the decision where mixed scrap was transported without valid documents. Civil matters are decided on preponderance of probabilities, and repetition of such conduct as in the connected appeal enhances the degree of probability of dishonest and fraudulent intention. The version of confusion in the mind of labourers appears illusory - The appellant is liable to pay tax and penalty - The appeal is dismissed - Generation of fresh invoice and e-way bill after interception of vehicle - Whether preparation of fresh invoice and generation of e-way bill after interception of the vehicle converted the illegality caused by the Appellant into legality - Appellant submitted a fresh tax invoice and e-way bill after the interception and expressed willingness to deposit the tax and penalty, and the adjudicating authority imposed tax and penalty, which was upheld by the first appellate authority - HELD - Under the GST law, an illegal act cannot be validated at a subsequent stage. Generating documents after interception or detention is a post detection remedy that cannot cure earlier non-compliance, and in absence of statutory provision the subsequent preparation of documents to convert illegality into legality is impermissible. Goods must be supplied only with valid invoice and e-way bill, and where goods are not accompanied by proper documents a presumption of intention to evade tax may be raised, which the Appellant failed to rebut - The impugned orders are lawful and justified, the statute does not permit such rectification, and the appeal is dismissed. [Read less]

2026-VIL-1136-DEL | High Court SGST

GST - Constitutional validity of Section 16(2)(c) of the CGST Act - Petitioner challenge to order under Section 74 confirming demand of input tax credit with interest and equivalent penalty, and sought that Section 16(2)(c) be struck down or read down so as to exclude bona fide recipients who have undertaken genuine transactions with duly registered suppliers, where the supplier has failed to discharge its tax liability - HELD - The issue no longer survives in view of the judgment of the Division Bench of the Gujarat High Court in Maruti Enterprises case, which was considered by the Supreme Court and not interfered with. The Supreme Court examined the distinction between the scheme under the Delhi VAT Act and the CGST Act, noticing that there is no parity between a purchasing dealer under the CGST Act and a purported bona fide purchasing dealer under the Delhi VAT Act where the supplier fails to pay the requisite tax, and took note of Section 41 and Sections 73 and 74 of the CGST Act concerning re-availment of reversed ITC upon discharge of tax liability by the supplier. The Supreme Court held that no grounds were made out for declaring Section 16(2)(c) unconstitutional or for reading it down - The challenge to the constitutional validity of Section 16(2)(c) cannot be accepted and the reliefs seeking striking down or reading down of the provision are declined - GST - Validity of adjudication order under Section 74 of the CGST Act confirming ITC demand on retrospective cancellation of supplier registrations - Whether the order passed under Section 74 discloses the necessary factual and statutory foundation for fastening tax, interest and penalty liability on the Petitioner - HELD - Where an authority invokes Section 74, the adjudication order must disclose the factual basis on which the statutory ingredients of fraud, wilful misstatement or suppression of facts to evade tax are said to be satisfied, and mere reproduction of the statutory language without particulars does not demonstrate the application of mind necessary to sustain the order - The audit objection made only a general assertion. The order did not disclose the names or GSTINs of the suppliers, the supplier-wise invoice dates, the dates from which registrations were cancelled. These omissions are not a mere technical defect, as they are the factual foundation of the demand and their absence deprives the Petitioner of an effective opportunity to meet the case - The order also records no specific finding on how the Petitioner committed fraud, made wilful misstatement or suppressed any material fact, and does not show that the Petitioner's defence was considered - The conclusion on the Constitutional challenge to Section 16(2)(c) does not dispense with the requirement that the adjudicating authority invoking Section 74 must satisfy itself that the statutory conditions are met in the facts of the particular case. The deficiencies go to the root of the adjudication - The O-in-O and consequential proceedings are set aside and the matter is remanded for fresh adjudication after opportunity of hearing, with specific findings identifying the suppliers and transactions and an independent examination of the requirements of Section 74 - The Petition is disposed of [Read less]

2026-VIL-1701-CESTAT-BLR-CE | CESTAT CENTRAL EXCISE

Central Excise - Rule 6(6)(vii) of the CENVAT Credit Rules, 2004 - Clearances to expansion of power project - Partial exemption from customs duty - Appellant cleared goods without payment of duty for expansion of a mega power project supplied under international competitive bidding - Department denied the benefit of Rule 6(6)(vii) and demanded an amount under Rule 6 on the ground that goods required for such expansion attract basic customs duty at a concessional rate on import, and are therefore not exempt from duties of customs - Whether the goods supplied towards expansion of an existing power project are covered under R... [Read more]

2026-VIL-1700-CESTAT-KOL-ST | CESTAT SERVICE TAX

Service Tax - Grants-in-aid received from Central and State Governments - Whether consideration for taxable service - Appellant, a body representing trade and commerce, received grants-in-aid from Governments, and the department demanded service tax under Business Exhibition Service on the grants, contending that the Appellant is not a charitable organisation - Whether service tax is leviable on grants-in-aid received from Governments - HELD - Only consideration can be made liable to service tax, and for a taxable service there must be a service provider, a service receiver and consideration. The grant was conditional, the agreements required utilisation certificates and made the Appellant responsible for proper spending and certification, whereas in a normal client and service provider relationship no account is given for the amount received, so the grant is more in the nature of reimbursement than consideration - The Revenue brought no evidence that the Appellant provided Business Exhibition Service or raised any invoice and received consideration, and the agreements did not specify any such work. Following the Supreme Court, service tax is to be paid only on services actually provided and valuation cannot exceed consideration paid as quid pro quo for such service. The Tribunal decisions holding that there is no service provider-client relationship in case of grants-in-aid are squarely applicable - The confirmed demand on the grants is set aside on merits – The appeal is allowed - Extended period of limitation on non-payment of service tax on grants-in-aid - Appellant, a registered service tax payer, accounted for the grants and the expenditure in its books of account and audited accounts, on the basis of which the demand was quantified, and the extended period was invoked - Whether the extended period of limitation can be invoked - HELD - The Appellant had been paying service tax on various services, had accounted for receipt of the grants and the expenditure in its books, and the Revenue failed to consider the expenditure incurred, so the Appellant cannot be said to have indulged in suppression with intent to evade service tax. Since the very nature of the grant is that of reimbursement, the Appellant could have entertained a bona fide belief that no service tax is payable, which is fortified by the case laws cited, and no case is made out to fasten liability for the extended period - The demand is also set aside on account of time bar - Demand under reverse charge mechanism where tax was paid under other headings - Revenue neutrality and extended period - Revenue alleged non-payment of service tax on reverse charge basis, whereas the Appellant contended that the tax had been paid under different headings due to mismatch between services while filing returns and that excess tax was paid overall, as shown in reconciliation statements - Whether the demand under reverse charge mechanism and the extended period can be sustained - HELD - Although it is not possible for the Tribunal to verify the figures individually, service tax payable on reverse charge basis would be available to the Appellant as CENVAT credit, resulting in a revenue neutral situation, and all the entries are properly recorded in the books of account, so no case of suppression can be alleged. Where credit is available making the situation revenue neutral the extended period cannot be invoked - The confirmed demand under reverse charge is set aside on account of time bar and the appeal is allowed. [Read less]

2026-VIL-1702-CESTAT-ALH-CU | CESTAT CUSTOMS

Customs - Enhancement of declared value on written acceptance by importer - Right to appeal and requirement of speaking order under Section 17(5) of the Customs Act, 1962 – Appellant accepted in writing the enhancement of value proposed by the department after its requests for clearance on provisional basis were not acted upon and it was asked to submit letters of consent, and the Commissioner (Appeals) rejected the appeals holding that acceptance in writing dispensed with a speaking order and bound the Appellant - Whether written acceptance of the enhanced value precludes the importer from challenging the enhancement in appeal - HELD - Following the Delhi High Court, Section 17(5) speaks of the concession only with reference to reassessment under Section 17(4) and relieves the proper officer of the obligation to pass a speaking order, so the waiver is at best confined to the speaking order. Rule 12(2) of the Customs Valuation Rules, 2007 contemplates no waiver, and the concession made in respect of the opinion of the proper officer cannot detract from or deprive the importer of the right to question the decision in accordance with law, as the right to question the correctness of the decision, whether on formation of opinion or on merits, is protected by statute and is not abandoned - The letters of acceptance also did not mention the details of the alleged contemporaneous import data and cannot be taken on their face value - The acceptance letters do not preclude the Appellant from challenging the enhancement - The Orders-in-Appeal are set aside and the appeals are allowed - Rejection of declared transaction value - Rule 12 of the Customs Valuation Rules, 2007 and reliance on import data - Department rejected the declared value on comparison with contemporaneous import data, without intimating in writing the grounds for doubting its truth or accuracy, and re-determined the value - Whether the declared transaction value can be rejected and enhanced without following Section 14 of the Customs Act read with Rule 12 of the Valuation Rules - HELD - The Supreme Court in Century Metal Recycling case has held that the mandate of Rule 12(2) to intimate the importer in writing the grounds for doubting the truth or accuracy of the declared value cannot be ignored or waived - The formation of opinion regarding reasonable doubt and communication of the grounds to the importer is mandatory, any subterfuge to bypass the statutory mandate being unacceptable – Further, the Delhi High Court has held that a valuation addition based solely on import data is unwarranted and any reassessment must be shored up by independent and cogent evidence, as mere reliance on external data without corroborative evidence or clear justification fails the tests under the Valuation Rules, and a deviation from declared values must be founded on tangible and justiciable material - The Commissioner (Appeals) failed to take into account the ratio of the Supreme Court's judgment in entirety - The impugned orders are set aside and the appeals are allowed. [Read less]

2026-VIL-1143-CAL | High Court SGST

GST - Insolvency and Bankruptcy Code, 2016 - Extinguishment of GST dues not claimed in the Corporate Insolvency Resolution process upon approval of the resolution plan - Petitioner was admitted into the corporate insolvency resolution process, the resolution plan was approved by the Adjudicating Authority and attained finality - More than two years after the Effective Date the Respondent issued notice and confirmed demand of IGST ITC with interest and penalty for a period prior to the Effective Date on the footing that the cause of action arose after the moratorium - Whether the dues pertaining to a period prior to the Effective Date, for which no claim was lodged, stood extinguished on approval of the resolution plan - HELD - Section 31(1) of the Code, as amended, makes the approved resolution plan binding on the Central Government, any State Government or any local authority to whom statutory dues are owed, and the CGST authorities are included. Once a plan is approved, claims not forming part of it stand extinguished and no proceeding in respect of them can be initiated or continued - A successful resolution applicant cannot be faced with undecided claims. The tax period fell wholly before the Effective Date and no claim was lodged, so the demand stood extinguished and both the show cause notice, being the very initiation of a proceeding under Section 73, and the Order-in-Original, being its culmination, are proceedings in respect of an extinguished claim - The finding that the cause of action arose after the moratorium does not help, as the portion arising during the process was equally required to be brought to the notice of the Resolution Professional. The plan itself, by its clause on treatment of Government authorities, extinguishes all pre-Effective Date claims, whether assessed or unassessed, known or unknown - Further, the Board's own circular and instruction record that claims not submitted or submitted belatedly stand extinguished upon approval of the plan - The dues for the financial year, with interest and penalty, stood extinguished on approval of the plan - The show cause notice, the Order-in-Original, the summary in Form GST DRC-07, all proceedings thereunder and the notice demanding interest for delayed filing of returns are quashed and set aside - The writ petition is maintainable and is allowed [Read less]

2026-VIL-1132-BOM-CU | High Court CUSTOMS

Customs - Applicability of domestic regulatory regime to goods sold in Duty Free Shop - Petitioners operated Duty Free Shops in the Departure Terminal of an International Airport and sold imported nicotine pouches stored in a special warehouse under Section 58-A of the Customs Act, 1962, without any import licence or Registration Certificate under the Drugs and Cosmetics Act, 1940, contending that the product was meant only for outbound travellers and was a case of re-export - Authorities banned the sale on the ground that the product was a drug requiring licence - Whether all transactions conducted within a Duty Free Shop, beyond the customs barrier, enjoy absolute immunity from the domestic regulatory regime or whether such immunity is restricted solely to fiscal levies such as customs duty and indirect tax - HELD - The decisions relied upon by the Petitioners exclusively deal with the taxable events for assessing customs duty and sales tax/VAT and do not extend any blanket immunity to Duty Free Shop operators from the domestic regulatory or public health laws. Under Section 2(23), 2(25) and 2(27) of the Customs Act, goods are imported once they enter the territorial waters of India, even if not cleared for home consumption. By reason of the words "any other law for the time being in force" in Section 2(33), goods restricted or prohibited under any other law become prohibited goods, and the prohibition under Section 10 of the Drugs and Cosmetics Act applies to them - The coordinate Bench decision in Glamstone Cosmetics holding that import for the limited purpose of warehousing or re-export enjoys no immunity is a binding precedent. Import of goods into India, even for the limited purpose of warehousing or re-export, does not enjoy any immunity from domestic laws, and the exemption, if any, is limited to fiscal measures such as customs duty, tax and VAT - The first question is answered against the Petitioners and in favour of the Respondents - Drugs and Cosmetics Act, 1940 - Whether nicotine pouch is a "drug" under Section 3(b) - Ban on sale of nicotine pouches in Duty Free Shops by the Assistant Drug Controller on the ground that the product is a drug requiring import licence and Registration Certificate - Petitioners had not furnished product specification and the impugned communication did not indicate under which clause of Section 3(b) the product fell - Whether nicotine pouch falls within the definition of "drug" under Section 3(b), making import licence and registration mandatory even for dealing within the customs barrier of the International Departure Terminal - HELD - Section 3(b) contemplates four categories. Under clause (i) the substance must have intended use in diagnosis, treatment, mitigation or prevention of disease or disorder, and under clauses (ii) and (iv) the substance or device must be specified in a Central Government Notification, which is admittedly not available for nicotine pouch. Clause (iii) requires intended use as a component of a drug. A nicotine pouch marketed purely as a recreational product without therapeutic or cessation claims may not automatically be a drug merely because nicotine has physiological effects - The Drug Controller has jurisdiction to ban sale without licence only if the product is a drug, and the jurisdictional facts must be clearly established before invoking powers under the Act, which were completely missing in the impugned communication. Whether the product is a drug, or is covered by Schedule D or Schedule K exemptions, requires factual inquiry into composition and intended use, which cannot be adjudicated in a writ petition under Article 226, and the question is kept open. Since the Petitioners had not provided product specification, the impugned communication cannot be faulted for want of reasons - The Petitioners are at liberty to file representations with supporting material, to be disposed of by a reasoned order after personal hearing [Read less]

2026-VIL-157-GSTAT-GZB | Tribunal SGST

GST - Monetary threshold limit for filing appeal before the GSTAT - Whether departmental appeal for penalty amount below the prescribed monetary limit of Rs. 20 lakh can be admitted without establishing an applicable exception - HELD - A departmental appeal is governed by the monetary-limit framework prescribed for Departmental litigation. The right of appeal is a creature of statute and its exercise remains subject to the statutory and regulatory framework governing departmental litigation. The existence of an exception cannot be presumed merely because the Department desires to pursue the appeal - An exception is an exce... [Read more]

2026-VIL-1145-KAR | High Court SGST

GST - Limitation for Revenue's appeal against refund sanction orders under Section 107(2) of CGST Act, 2017 - Respondent was sanctioned refund of unutilised input tax credit on capital goods - Commissioner reviewed the sanction orders and directed filing of appeals before the Commissioner (Appeals), which allowed them, quashed the refund orders and directed recovery with interest – In the impugned order the Single Judge held the appeals were barred by limitation - Whether the appeals preferred by the Revenue before the Commissioner (Appeals) were barred by limitation under Section 107 of CGST Act and were rightly set aside - HELD - Section 107(2) circumscribes any direction to file an appeal with the requirement that it be filed within six months from the date of communication of the order and as per Section 107(4) the Appellate Authority can condone delay only for a further period of one month - The review orders were passed beyond one year from the dates of the sanction orders, so none could direct filing of appeals within six months. The date of audit or audit observations is not relevant, as limitation runs from the date of communication of the order - Following the Delhi High Court decision in Grapes Digital case, the expression 'communication of the decision or order' in the context of intra-departmental communication must be construed as the date of issue of the order. As per the CBIC Instruction, post-audit and review must be completed within three months from the issue of the refund order and review must be completed at least thirty days before the expiry of the appeal period - All refund orders are transmitted online to the review module, and under Section 169(1)(d) communication is by making the order available on the common portal, so the time for communication cannot be indeterminate or open-ended - The power to recover erroneously granted refund under Section 73 is not relevant for determining limitation, and the assumption that limitation under Section 107 stands extended by Sections 73 and 74 is ex facie erroneous - The Commissioner (Appeals) had no jurisdiction to condone delay beyond one month, and the delay far exceeded that period - The appeals were filed beyond the period of limitation. The Single Judge rightly set aside the appellate order - The appeal of the Revenue is dismissed [Read less]

2026-VIL-1140-ALH | High Court VAT

Entry Tax - Levy of Entry Tax on 'Commingled Crude Oil' - Crude oil defined under Section 14 of the Central Sales Tax Act, 1956 – Revisionist-assessee brought commingled crude oil into the local area and did not admit entry tax liability, contending that the goods are different from crude oil as defined in Section 14 of the CST Act while the State contended that the goods are crude oil - Whether commingled crude oil is covered under the category of crude oil as defined under Section 14 of the Central Sales Tax Act so as to attract Entry Tax - HELD - The revisionist has imported certain item in the nomenclature of ‘comm... [Read more]

2026-VIL-1133-KAR-ST | High Court SERVICE TAX

Service Tax - Levy on sale of goods component of works contract - Petitioners were engaged in execution of a works contract for lift irrigation works on turnkey basis and in supply and installation of pump sets to Government organisations, and the Department issued show cause notices based solely on income tax Form 26AS demanding service tax on the amounts reflected therein - Petitioners contended that sale of goods was taxed under the service tax law, that VAT/sales tax was paid on the sale value and service tax on the service value - Whether service tax can be levied on sale of goods component as indicated in the impugned orders - HELD - Section 65B(44) excludes from "service" the activity of sale of goods and transactions referred to in Article 366(29A) of the Constitution. Further, under Section 66E(h) only the service portion in the execution of a works contract is a declared service. Rule 2A(i) of the Valuation Rules specifically provides for exclusion of the value of goods transferred, to ensure that the value of goods, which is in the exclusive domain of the State, is not taxed. The scope of works in the works contract fell outside the purview of service tax, and where service was involved, the records, invoices, returns and reconciliation between ST-3 returns, VAT returns and Form 26AS showed payment of service tax, which the authorities had ignored even after remand - Point answered in favour of the Petitioners - Service Tax - Exemption Notification No. 25/2012-ST - Entitlement of works contract for lift irrigation project awarded by a Government company - Petitioner executed works of survey, design and construction of lift irrigation project for a Government company and claimed exemption for services by way of construction of canal, dam or other irrigation works provided to a Government, local authority or governmental authority - Respondent contended that the Government company was not a municipality and that exemption had to be read strictly - Whether the Petitioner is entitled to exemption from service tax - HELD - The definition of governmental authority covers a body established by Government with 90% or more participation or control to carry out any function entrusted to a municipality under Article 243W of the Constitution, and the Notification does not require the body to be a municipality as strictly defined. A lift irrigation project is meant to foster economic and social development of the area and falls within planning for economic development and social justice under Article 243W read with the Twelfth Schedule. An exemption notification, though construed strictly when determining whether the subject falls in it, calls for a wider and liberal construction once the subject falls within the notification, and a liberal interpretation includes lift irrigation as the project fulfils the objective of economic and social development - Point answered in favour of the Petitioner - Service Tax - Extended period of limitation under proviso to Section 73 of the Finance Act, 1994 - Show cause notices were issued for the financial years 2015-16 and 2016-17 invoking the extended period on the allegation of suppression of value of taxable services, based only on Form 26AS - Petitioners denied suppression and contended that claim of exemption was interpretational and that the remand proceedings left only the question of inclusion of value of goods - Whether the demands are barred by limitation under Section 73 of the Finance Act, 1994 - HELD - Suppression must be wilful and postulates a positive act with intent to evade payment of tax, and mere failure to pay or mere omission to give correct information is not suppression where facts are known to both parties, the burden being on the Revenue to prove suppression. Laying claim to an exemption is purely interpretational in nature and cannot be a matter of suppression of facts, fraud, collusion or wilful misstatement with intention to evade payment of tax. The proviso to Section 73 could not have been invoked, and the notice issued beyond thirty months from the date of the relevant returns was barred by time. In the other petition, since the notice was based only on Form 26AS and, after remand, the only question remaining was inclusion of the value of goods on which VAT was paid, which was already answered, the ingredients of suppression did not arise and the extended period could not have been invoked - Point answered in favour of the Petitioners; both writ petitions are allowed, the impugned Orders-in-Original are set aside and the impugned show cause notice is quashed. [Read less]

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