GST on BOT Annuity Project: High Court Refuses Writ Relief, Directs Assessee to Statutory Appeal under CGST Act

ISSUE: Whether GST is payable on annuity payments received by a concessionaire under a BOT (Annuity) highway project; whether the GST authorities lacked jurisdiction to issue the Show Cause Notice and adjudication order under Section 74 of the CGST Act; whether Entry 23A of the exemption notification exempted the annuity receipts from GST; and whether the writ petition was maintainable despite the statutory appellate remedy available under the CGST Act.

FACTS: NHAI awarded the Jorabat–Shillong four-laning highway project to a consortium, which incorporated the petitioner company and entered into a Concession Agreement dated 16.07.2010 on a BOT (Annuity) basis. The petitioner received annuity payments from NHAI after commercial operations commenced. GST authorities issued a Show Cause Notice and later an Order-in-Original demanding GST, interest, and penalty on annuity receipts of approximately Rs. 864.12 crores for July 2017 to December 2022, raising a tax demand of about Rs. 112.39 crores. The petitioner challenged the demand, contending that annuity receipts were exempt under Entry 23A, that the services were classifiable under SAC 9967 (access to road/bridge) rather than SAC 9954 (works contract services), and that the officers issuing the notice and order lacked jurisdiction.

HELD: The High Court dismissed the writ petition. It held that the Additional Director, DGGI, and the Additional Commissioner, CGST, were validly empowered as “Proper Officers” under the CGST framework through the relevant notifications and circulars. The Court found that the dispute primarily concerned classification of services, interpretation of exemption notifications, contractual obligations, and taxability of annuity payments—issues requiring adjudication within the statutory appellate mechanism. It held that none of the recognized exceptions to the rule of alternative remedy (lack of jurisdiction, violation of natural justice, constitutional infirmity, etc.) were established. Accordingly, the Court declined to exercise jurisdiction under Article 226, dismissed the writ petition, and granted liberty to the petitioner to file an appeal under Section 107 of the CGST Act within four weeks.

Appellate order rejecting GST appeal on limitation set aside; appeal held to be within Section 107 period and directed to be decided on merits.

Issue: The petitioner challenged two proceedings—an appellate order rejecting the appeal on limitation in W.P.No.17333 of 2026 and the original order dated 31.10.2025 in W.P.No.17342 of 2026—contending that the appeal was wrongly treated as time-barred despite being filed within the prescribed period.

Fact: The petitioner withdrew W.P.No.17342 of 2026. In W.P.No.17333 of 2026, it was shown that the original order dated 31.10.2025 was followed by filing of appeal on 31.01.2026, which falls within the three-month limitation under Section 107 of the GST enactment. The appellate authority had, however, rejected the appeal on the ground of limitation. The Government counsel appeared for the respondents and opposed the challenge.

Held: The court held that the appeal was filed within the statutory limitation period of three months under Section 107 of the GST law, and therefore the rejection of the appeal as time-barred was unsustainable. The appellate order dated 12.02.2026 was set aside, and the appellate authority was directed to consider and dispose of the statutory appeal on merits within three months from receipt of the order. W.P.No.17342 of 2026 was dismissed as withdrawn, and all connected miscellaneous petitions were closed without costs.

Writ petition disposed of with liberty to file statutory appeal before GST Appellate Tribunal within 30 days, to be decided on merits.

Issue: The petitioner challenged the original order dated 21.03.2023 and the appellate order dated 21.03.2024 passed by the appellate authority under GST proceedings.

Fact: The writ petition was filed at a time when the GST Appellate Tribunal was not functional. Subsequently, the Tribunal became operational, and the court noted that the statutory appellate remedy before the Tribunal is now available.

Held: The court disposed of the writ petition with liberty to the petitioner to file a statutory appeal before the GST Appellate Tribunal within 30 days from receipt of the order, directing that if such appeal is filed within time, it shall be entertained and decided on merits, with no order as to costs.

GST Registration Restoration Allowed Subject to Filing Pending Returns and Payment of Dues Under Rule 22(4) CGST Rules

Issue: Whether the cancellation of the petitioner’s GST registration for non-filing of GST returns for a continuous period of six months, and the subsequent dismissal of his appeal, should be sustained when the petitioner expressed willingness to comply with the requirements under the proviso to Rule 22(4) of the CGST Rules, 2017 and sought restoration of registration.

Facts: The petitioner, proprietor of M/s Rainbow Enterprise, was engaged in works contract services and held a valid GST registration. Due to burn injuries suffered in an LPG cylinder blast, he failed to file GST returns for six consecutive months. A show-cause notice dated 14.05.2024 was issued, and his registration was suspended. As no reply was submitted, the Superintendent, CGST, cancelled the registration on 05.08.2024. The petitioner’s appeal was rejected on 10.04.2026. He contended that his failure to comply was due to medical circumstances, that he had updated GST returns up to April–June 2024, and that he was ready to furnish all pending returns and pay the outstanding tax, interest, penalty, and late fees. He relied upon the earlier decision in Dhirghat Hardware Stores v. Union of India, involving similar facts.

Held: The Gauhati High Court held that the case was squarely covered by the decision in Dhirghat Hardware Stores. Referring to Section 29(2)(c) of the CGST Act and the proviso to Rule 22(4) of the CGST Rules, the Court observed that where a taxpayer is willing to furnish pending returns and clear all dues with applicable interest and late fees, restoration of GST registration may be considered. Accordingly, the Court directed the petitioner to approach the concerned authority within 60 days seeking restoration of GST registration. Upon compliance with the requirements under Rule 22(4), the authority was directed to consider restoration expeditiously in accordance with law. The petitioner was also directed to pay all arrears, including tax, penalty, interest, and late fees. The writ petition was disposed of with these directions.

GST Registration Restoration Allowed on Filing Pending Returns and Payment of Statutory Dues

Issue: Whether cancellation of the petitioner's GST registration for non-filing of returns for a continuous period of six months under Section 29(2)(c) of the CGST Act could be sustained when the petitioner had subsequently furnished pending returns and expressed willingness to pay all outstanding tax dues, interest, late fees, and penalties, and whether similar relief granted in earlier cases should be extended to the petitioner.

Fact: The petitioner, proprietor of M/S Arunachal Offset Enterprise, had his GST registration cancelled by order dated 06.03.2019 due to failure to file returns. The petitioner contended that he was unaware of the show cause notice because he lacked access to his GST portal login credentials and that the default was not intentional. He stated that all pending returns up to June 2021 had already been filed and that he was prepared to pay all applicable tax, interest, late fees, and penalties. The petitioner relied upon earlier decisions of the High Court in similar matters, while the respondents submitted that if the petitioner had complied with the statutory requirements and applied for restoration, the competent authority could consider the request in accordance with law.

Held: The High Court observed that similar matters had already been decided in favour of taxpayers who had subsequently complied with GST requirements and were willing to discharge their liabilities. Relying on its earlier decisions, particularly Dug Rade v. Union of India and Yamang Siram v. Union of India, the Court held that the petitioner was entitled to similar relief. The writ petition was disposed of with a direction to the petitioner to file an application for restoration of GST registration before the concerned authorities within 20 days. Upon receipt of the application, the authorities were directed to verify compliance with legal requirements and consider restoration of the GST registration in accordance with law within four weeks from receipt of a certified copy of the order.

Gujarat AAR: Fresh, Unprocessed Isabgol (Psyllium) Seeds Procured Through APMC and Supplied Without Processing Exempt from GST Under Entry 87 of Notification No. 10/2025-CT(R)

ISSUE: Whether Psyllium Seeds (Isabgol) purchased from farmers through APMC auctions and supplied in the same natural, raw, unprocessed condition (without drying, freezing, crushing, grading, polishing, or any other processing) qualify as “fresh” Isabgol seeds exempt under Entry 87, HSN 1211, Notification No. 10/2025-CT(R) dated 17.09.2025; and alternatively, whether they qualify as “goods of seed quality” exempt under Entry 77, Chapter 12 of the same notification.

FACTS: The applicant, M/s. Jigneshkumar Narayandas Patel (Akshar Traders), is engaged in trading Psyllium Seeds (Isabgol) purchased directly from farmers through APMC auctions. The seeds are obtained after harvesting and threshing by farmers, packed, brought to APMC, purchased by the applicant, stored in godowns, and supplied to Isabgol processing units without any processing, value addition, artificial drying, dehydration, freezing, grading, polishing, roasting, crushing, or chemical treatment. The product is classifiable under HSN 12119013 (Psyllium Seeds/Isabgol). The applicant contended that such seeds remain in their natural harvested condition and therefore qualify as “fresh” seeds exempt under Entry 87.

HELD: The Gujarat AAR held that Psyllium Seeds (Isabgol) classifiable under HSN 12119013, when supplied in their natural, raw and unprocessed form as procured through APMC auctions and without any drying, freezing, or other processing, qualify as “fresh” seeds. Since they are plants/parts of plants (seeds) primarily used in pharmacy and are supplied in fresh condition, they are specifically covered by Entry 87 of Notification No. 10/2025-CT(R) dated 17.09.2025 and are fully exempt from GST (Nil rate). The Authority further held that Entry 87 is the specific exemption applicable to the goods; therefore, the alternative claim under Entry 77 (“all goods of seed quality”) was not accepted in view of the finding under Entry 87.

The Supreme Court: Permits Delayed GST Appeal Within Eight Weeks but Declines to Adjudicate Constitutional Challenge to Section 16(2)(c) CGST Act, Leaving ITC Dispute Open Before Appellate Forum, 29-05-2026

Supreme Court Permits Assessee to File Delayed GST Appeal Within Eight Weeks; Keeps Section 16(2) Challenge Open

ISSUE: Whether the Supreme Court should interfere with the impugned judgment/order challenged through the Special Leave Petition, and whether the petitioner could be permitted to pursue the statutory appellate remedy despite delay. The matter also involved issues concerning the validity of Section 16(2) of the Central Goods and Services Tax Act, 2017.

FACTS: The petitioner challenged the impugned judgment/order before the Supreme Court through a Special Leave Petition. During the hearing, the petitioner sought relief against the impugned decision. Counsel for the petitioner further submitted that the writ petition had raised issues relating to the validity of Section 16(2) of the Central Goods and Services Tax Act, 2017. The petitioner also sought an opportunity to file an appeal before the appropriate forum with the required pre-deposit.

HELD: The Supreme Court declined to interfere with the impugned judgment/order on the peculiar facts of the case. However, it left open all remedies available to the petitioner and permitted the petitioner to file an appeal with the necessary pre-deposits within eight weeks before the appropriate forum/authority. The Court directed that if such appeal is filed within the stipulated period, it shall not be dismissed on the ground of delay. The issues concerning the validity of Section 16(2) of the Central Goods and Services Tax Act, 2017 were also kept open for consideration before the appropriate forum/authority. Accordingly, the Special Leave Petition and all pending applications were disposed of.

Conclusion: Why was the constitutional challenge to Section 16(2)(c) not entertained by the Supreme Court despite notice being issued earlier vide order dated 22-05-2026 which had significantly raised hopes for a proper conclusion on this issue.  Section 16(2)(c) continues to cast an impossible burden on genuine taxpayers. A tax payer has no statutory mechanism to verify whether a supplier two or three links up the chain has actually paid tax. Yet, the revenue machinery routinely denies ITC on this ground, often in cases where the assessee had no reason to suspect any wrongdoing.

The Supreme Court had an opportunity to settle this contentious issue. Instead, the matter has been relegated back to the appellate forum, leaving taxpayers across the country without clarity on a provision that affects thousands of assessments and demands.

GST Appeals: Court Refuses Waiver of 5% Pre-Deposit, Permits Filing of Statutory Appeals Under Section 107 CGST Act

ISSUE: Whether the Court should modify its order dated 13.05.2026 by removing the requirement of a 5% pre-deposit for filing statutory GST appeals, permit appeals without pre-deposit, and/or quash the adjudication orders and remand the matters for fresh adjudication after granting a hearing opportunity.

FACTS: The applicant (original petitioner) filed Miscellaneous Application Nos. 1784/2026 and 1785/2026 seeking modification of the Court’s order dated 13.05.2026. The applicant requested waiver of the 5% pre-deposit condition, permission to file statutory appeals without such deposit against adjudication orders relating to various financial years, and alternatively sought quashing of the adjudication orders with remand for fresh adjudication after providing a reasonable opportunity of hearing.

HELD: The Court rejected the request to dispense with the 5% pre-deposit condition. However, it clarified that statutory appeals may be filed within the time period prescribed under Section 107 of the Central Goods and Services Tax Act, 2017. The Court left it open to the applicant to pursue statutory appeals or any other remedy available in law. Accordingly, the Miscellaneous Applications, Interlocutory Applications, and all pending applications were disposed of.

GST Registration Cancellation Revoked Subject to Payment of Outstanding Tax, Interest, Late Fee and Penalty Within Prescribed Time

Issue: Whether the petitioner, whose GST registration was cancelled for non-submission of GST returns for six consecutive months, should be granted an opportunity to restore the registration by clearing all statutory dues and completing the required formalities for revocation.

Fact: The petitioner's GST registration was cancelled due to failure to file returns for six consecutive months. Before the Court, the petitioner undertook to deposit the entire outstanding tax, interest, late fee, and penalty and to comply with all requirements for revocation of the cancellation. Pursuant to an earlier direction, the petitioner filed an additional affidavit containing such undertaking. The GST authorities submitted that upon production of the certified copy of the Court's order, the petitioner's GST portal access would be restored within seven days, enabling payment of all dues. The petitioner further undertook to make the required payments within seven days from restoration of portal access.

Held: The Court directed that upon production of the certified copy of the order before the Superintendent, Puri-II Range, CBIC, Odisha, the petitioner's GST portal shall be reopened within seven days. The petitioner must deposit the entire tax, interest, late fee, and penalty within seven days from reopening of the portal. Upon such payment within the stipulated period, the cancellation of the GST registration shall be revoked within seven days thereafter. The Court clarified that failure to comply with the undertaking would render the order ineffective. Accordingly, the writ petition was disposed of with the aforesaid directions.

Arrest and Detention under CGST Act Declared Illegal for Non-Compliance with Arrest Procedures and CBIC-DIN Requirements; Petitioner Ordered to be Released

ISSUE: Whether the petitioner’s arrest, detention, and remand under Sections 132(1)(a), 132(1)(f), and 132(1)(i) of the CGST Act, 2017 were illegal due to non-supply of proper grounds of arrest, non-compliance with departmental circulars, and violation of safeguards laid down in D.K. Basu v. State of West Bengal.

FACTS: The petitioner challenged his arrest and detention through a writ of habeas corpus. He contended that the arrest memo neither contained specific grounds of arrest nor showed that such grounds were supplied as an annexure, contrary to CGST Circular No. 02/2022-2023. The arrest memo merely stated that the grounds were explained. Certain columns in the personal search memo (jama talashi) were left blank. The Court found that the arrest memo did not mention the place of arrest, violating D.K. Basu guidelines. It also noted that the grounds of arrest dated 10.12.2025 did not bear a CBIC-DIN, despite the requirement under the departmental circular. The respondents failed to effectively rebut these allegations or produce material justifying compliance with the legal requirements.

HELD: The High Court held that the petitioner’s arrest and detention were illegal as they were carried out in violation of statutory and procedural safeguards, including the requirement of CBIC-DIN and the principles laid down in D.K. Basu. Accordingly, the Court directed the immediate release of the petitioner and allowed the writ petition. However, it clarified that the authorities were at liberty to initiate fresh proceedings against the petitioner strictly in accordance with law.

Writ petition allowed; GST adjudication order set aside for non-supply of RUDs and matter remanded for fresh adjudication with full disclosure and hearing.

Issue: The petitioner challenged an order dated 24.03.2026 passed under Section 74 of the CGST Act, 2017, alleging that the adjudicating authority confirmed demand without supplying copies of relied upon documents (RUDs), despite a specific request dated 16.01.2026, and also failed to consider explanations regarding alleged double entries in accounts.

Fact: The Court observed that denial of RUDs before adjudication can impair the assessee’s ability to effectively reply to a show cause notice. Since no satisfactory instruction was produced by the revenue to show that RUDs had been supplied, the Court inferred that the petitioner was not provided the documents before confirmation of demand. It also noted that such documents are ordinarily required to be shared unless exceptional circumstances exist.

Held: The writ petition was disposed of by setting aside the impugned order dated 24.03.2026 and remitting the matter back to the adjudicating authority with directions to supply the show cause notice, RUDs, and list of non-RUDs, allow further document requests, consider cross-examination where statements are relied upon, and conclude proceedings afresh within six months while ensuring proper opportunity of hearing.

Section 73 Exoneration Does Not Bar Section 74 Proceedings; Writ Petition Dismissed Due to Availability of Statutory Appeal

Issue: Whether the writ petition challenging the Order in Original dated 30 March 2026 was maintainable when a statutory appellate remedy was available under the CGST Act, 2017, and whether proceedings initiated by the Central GST Authorities under Section 74 were barred because the State GST Authorities had already closed proceedings under Section 73 on the basis of the same documents and evidence.

Fact: The petitioner contended that the State GST Authorities had closed proceedings under Section 73 after considering the documents furnished by it, and therefore the Central GST Authorities could not initiate or continue proceedings under Section 74 on the same material. The petitioner further alleged discrimination, violation of Article 14, inadequate opportunity of hearing, refusal to consider relevant documents, and improper appreciation of evidence. The respondents raised a preliminary objection regarding maintainability, arguing that Sections 73 and 74 operate in different fields and that issues relating to appreciation or re-appreciation of evidence should be examined by the appellate authority under the statutory scheme.

Held: The Court held that Sections 73 and 74 of the CGST Act operate in different arenas and that exoneration in proceedings under Section 73 does not automatically bar proceedings under Section 74. Questions relating to appreciation of evidence, re-appreciation of evidence, and production of additional documents fall within the jurisdiction of the appellate authority. The existence of a statutory pre-deposit requirement does not justify bypassing the statutory appellate remedy. Since an effective alternative remedy of appeal was available, the Court declined to exercise its writ jurisdiction and dismissed the writ petition, leaving it open to the petitioner to pursue an appeal on its own merits.

Interim Pre-Arrest Bail Granted in GST Evasion Investigation Subject to Cooperation with DGGI Inquiry

Issue: Whether the applicant, who apprehended arrest pursuant to a summons issued under Section 70 of the CGST Act, 2017 in connection with an investigation involving alleged GST evasion exceeding Rs.5 crores, was entitled to interim pre-arrest bail pending investigation.

Fact: The applicant filed an application under Section 482 of the Bharatiya Nagarik Suraksha Sanhita seeking pre-arrest bail after receiving a summons from the DGGI requiring his appearance for investigation. The applicant contended that he was innocent, denied involvement in the alleged offence, and expressed willingness to cooperate with the investigation and appear before the investigating authority. The department submitted that the purpose of the summons was to secure the applicant’s presence for recording his statement and clarification, and it did not seriously oppose grant of interim protection provided he cooperated with the investigation.

Held: The Court disposed of the application by directing the applicant to appear before the Investigating Officer within ten days and fully cooperate with the investigation. It further ordered that, in the event of arrest, the applicant be produced before the competent court on the same day and be released on interim pre-arrest bail upon furnishing a bail bond of Rs.1,00,000 with one surety of the like amount. The protection was made subject to conditions requiring cooperation with the investigation, non-interference with witnesses or evidence, and compliance with the legal process. Accordingly, interim relief was granted to the applicant, making the outcome favourable to the assessee.

Ex parte GST order set aside for violation of natural justice; matter remanded for fresh hearing with personal opportunity and reasoned decision.

Issue: The petitioner challenged an order dated 22.12.2025 passed under Section 73 of the GST Act for the financial year 2021-22 on the ground that it was passed ex parte without proper hearing and without issuance of notice for the subsequent date of hearing.

Fact: The Court noted that the order was not passed on the scheduled date of hearing and no further date was communicated to the petitioner, thereby violating principles of natural justice. Reliance was placed on the judgment in M/s Shubham Steel Traders Vs. State of U.P. and Another, where it was held that passing an ex parte order without proper communication of hearing dates is impermissible and contrary to fair procedure requirements.

Held: The Court held that since the impugned order suffered from violation of natural justice, it could not be sustained. Accordingly, the order dated 22.12.2025 was quashed and the matter was remitted back to the authority with a direction to grant a personal hearing to the petitioner and thereafter pass a reasoned order in accordance with law.

The Supreme Court upholds GST on stake-based online gaming; the judgment concerns the taxability of online gaming, fantasy sports, casinos, and betting/gambling-related actionable claims.

ISSUE: Whether online gaming platforms (including rummy, fantasy sports and similar stake-based games) were liable to GST on the entire amount staked by players as actionable claims arising from “betting and gambling”; whether Rule 31A and the 2023 GST amendments were valid; and whether GST was payable only on platform fees/commission or on the full stake value.

FACTS: The Revenue issued massive GST demands against Gameskraft and other online gaming operators alleging that stake-based online games constituted betting and gambling and involved supply of actionable claims. The assessees contended that rummy and fantasy sports are games of skill, that they merely provided platform services, and that GST was payable only on platform fees. They challenged the validity of Sections 2(31), 2(52), 7, 9 and 15 of the CGST Act, Rule 31A, and later amendments introducing Rules 31B and 31C. The Karnataka High Court had quashed the show cause notices issued to Gameskraft, leading to appeals before the Supreme Court.

HELD: The Supreme Court upheld the GST levy on actionable claims arising from betting and gambling transactions, held that organised online gaming activities (including fantasy sports and similar stake-based formats) give rise to taxable actionable-claim supplies, and rejected challenges to the validity of the relevant CGST provisions, Rules 31A, 31B and related notifications. The Court held that the 2023 amendments are clarificatory and retrospective in nature. All writ petitions and transferred cases were dismissed, pending show cause notices were directed to be decided in accordance with the judgment, and the Karnataka High Court judgment in favour of Gameskraft was set aside.

The Supreme Court Holds Staking Money on Uncertain Outcomes in Online and Skill-Based Games Constitutes Betting and Gambling; Rejects ‘Betting on Gambling Only’ Interpretation of Entry 34 and Clarifies That Games of Skill Played for Stakes Are Not Immune from Betting Laws

ISSUE: Whether the States of Tamil Nadu and Karnataka had legislative competence under Entry 34 of List II (“betting and gambling”) and other State List entries to prohibit or regulate online gaming played with stakes, including games such as rummy and poker; and whether the impugned amendments and the Tamil Nadu Online Gambling Act could validly treat online skill-based games played for stakes as betting/gambling.

FACTS: Tamil Nadu amended the Tamil Nadu Gaming Act, 1930 through the 2021 Amendment Act to prohibit wagering or betting in cyberspace, including on rummy, poker and other games, and removed the statutory protection earlier available to games of skill played with stakes. Karnataka similarly amended the Karnataka Police Act, 1963 to bring online gaming platforms, apps and virtual gaming activities within the definition of gaming and to penalise wagering or betting, including on games of skill. The Madras High Court and Karnataka High Court struck down substantial portions of these enactments, holding that games of skill do not become gambling merely because they are played online or for stakes, and that Entry 34 does not extend to such activities. The States appealed to the Supreme Court.

HELD: The Supreme Court held that “betting and gambling” under Entry 34 is not confined to “betting on gambling” and that the decisive element is the staking of money or money’s worth on an uncertain outcome. The Court clarified that betting may exist even where the underlying activity involves skill, chance, or a combination of both, and rejected the interpretation that Entry 34 excludes all skill-based games whenever stakes are involved. The distinction between games of skill and games of chance remains relevant only where a statute expressly grants protection to games of skill.

The Allahabad High Court Grants Bail to Alleged GST Fraud Accused, Holds Co-Accused Statements Alone Insufficient to Deny Bail After Filing of Charge-Sheet

Issue: Whether applicants Pradeep Goyal and Anchit Goyal were entitled to bail in three connected criminal cases alleging creation and operation of fraudulent GST firms through misuse of PAN and personal identification details, where their involvement was primarily sought to be established through the statements of co-accused persons and they were accused of being part of a syndicate engaged in fraudulent Input Tax Credit (ITC) claims.

Fact: Three FIRs were lodged by different informants alleging that unknown persons had fraudulently obtained GST registrations using their PAN details and personal information. During investigation, several accused persons were arrested, and their statements allegedly implicated Pradeep Goyal and Anchit Goyal as purchasers and beneficiaries of fake firms. The prosecution alleged that the syndicate had created about 2,600 bogus firms and claimed fraudulent ITC amounting to approximately Rs. 26,452,895,600/-. The applicants were not named in the FIRs, and no incriminating material was recovered from their residence. The prosecution relied mainly upon statements of co-accused persons. The applicants contended that they were businessmen residing and working in UAE, were falsely implicated, and sought parity with co-accused who had been granted bail by the Supreme Court. Charge-sheets had already been filed and the offences were triable by a Magistrate.

Held: The High Court allowed the bail applications and directed release of Pradeep Goyal and Anchit Goyal on bail. The Court held that the principal material against the applicants consisted of their alleged confessional statements and statements of co-accused persons. Relying upon the Supreme Court decision in P. Krishna Mohan Reddy v. State of Andhra Pradesh, the Court observed that statements of accused persons under Section 161 Cr.P.C. implicating co-accused have limited evidentiary value at the bail stage. Since charge-sheets had already been filed, the offences were Magistrate triable, and the evidence was primarily documentary in nature, the Court found that the applicants had made out a case for bail. Bail was granted subject to conditions that they would not tamper with evidence, engage in criminal activity, intimidate witnesses, and would regularly appear before the trial court.

GST Rate Reduction Benefit on Cinema Tickets Must Be Passed to Consumers; Profiteering of Rs.9.67 Lakh Confirmed Despite State-Permitted Fare Increase, No Penalty Leviable for Pre-2020 Period

Issue: Whether M/s ASR Cinemas LLP violated Section 171(1) of the CGST Act, 2017 by not passing on the benefit of reduction in GST rate on cinema admission tickets from 18% to 12% with effect from 01.01.2019, whether the increase in ticket base price could be justified on the basis of orders of the Telangana High Court permitting theatres to collect proposed fares, and whether the profiteered amount of Rs.9,67,589 along with interest was recoverable from the Respondent.

Fact: The Principal Commissioner, Hyderabad Commissionerate, filed an anti-profiteering complaint alleging that M/s ASR Cinemas LLP failed to pass on the benefit of GST rate reduction on cinema tickets priced at Rs.100 or less. The DGAP investigated the period from 01.01.2019 to 30.09.2019 and found that although GST was reduced from 18% to 12%, the Respondent increased the base ticket prices and maintained the same cum-tax selling price, thereby denying the tax benefit to consumers. Due to non-cooperation by the Respondent, the DGAP relied on available GSTR-1 and GSTR-3B data and determined profiteering of Rs.9,67,589, including GST. Despite repeated notices and hearing opportunities, the Respondent neither appeared nor filed any submissions, resulting in ex parte adjudication.

Held: The Authority held that Section 171 of the CGST Act mandates that any reduction in tax rate must be passed on to consumers through a commensurate reduction in prices. The Telangana High Court's orders permitting theatres to collect proposed fares did not override this statutory obligation. The Respondent's act of increasing base prices after the GST reduction amounted to profiteering. Accordingly, profiteering of Rs.9,67,589 was confirmed. Since recipients were unidentifiable, the Respondent was directed to deposit 50% of the amount in the Central Consumer Welfare Fund and 50% in the Telangana State Consumer Welfare Fund, along with interest at 18% per annum from 28.06.2019 until payment. However, penalty under Section 171(3A) was held not leviable because the profiteering period preceded the introduction of the penalty provision. The decision was in favour of the Revenue.

GST Order Set Aside for Breach of Natural Justice Due to Denial of Effective Personal Hearing; Matter Remanded for Fresh Adjudication

Issue: The petitioner challenged the order dated 01.12.2023 passed under Section 73 of the U.P. Goods and Services Tax Act, 2017 on the ground that no proper opportunity of personal hearing was granted, and the notice and hearing date were the same, thereby violating principles of natural justice.

Fact: The Court noted reliance on the Division Bench judgment in Mahaveer Trading Company v. Deputy Commissioner, State Tax, wherein it was held that granting a meaningful opportunity of personal hearing is mandatory under Section 75(4) of the GST Act. The Court found that the procedural requirement of hearing was not properly complied with, as the assessee was not given an effective chance to present its case before the adverse order was passed.

Held: The Court held that the impugned order dated 01.12.2023 could not be sustained due to violation of the requirement of personal hearing. The order was quashed and the matter was remanded back to the assessing authority to pass a fresh order after granting proper opportunity of hearing to the petitioner.

The Supreme Court Directs Transfer of Rs. 11.96 Lakh Deposited Amount to CGST Authority for Disbursal to Petitioners

ISSUE: Whether the amount of Rs. 11,96,000/- (Rs. 5,98,000/- deposited by each petitioner pursuant to the Supreme Court’s interim order dated 11.08.2025) lying with the Registry, after dismissal of the Special Leave Petitions on 10.12.2025, should be retained by the Registry or transferred and disbursed through the concerned CGST and Central Excise authority.

FACTS: By order dated 11.08.2025, the petitioners were directed to deposit Rs. 5,98,000/- each with the Registry, being the penalty amount, and auction of the goods was stayed. The petitioners deposited the amounts accordingly. Subsequently, on 10.12.2025, the Special Leave Petitions were dismissed. Thereafter, the Registry sought clarification regarding the amount lying deposited with it. Pursuant to the Court’s order dated 15.05.2026, the persons claiming to be owners of the company appeared before the Court.

HELD: The Supreme Court directed the Registry, as a measure of abundant caution, to transfer the entire amount of Rs. 11,96,000/- together with accrued interest, if any, to the account of the ACAO, CGST and Central Excise, Siliguri Commissionerate. After receipt of the amount, the concerned officer was directed to verify the identity of the petitioners and disburse the amount to them within one week of the transfer. The Miscellaneous Applications were accordingly closed.

The Kerala High Court Quashes Composite GST Show Cause Notice and Order Covering Multiple Assessment Years; Permits Fresh Separate Proceedings

Issue: Whether a consolidated Show Cause Notice (Ext.P1) and Order-in-Original (Ext.P4) covering multiple financial years from 2018-19 to 2022-23 under the GST law were legally sustainable, particularly in light of earlier decisions of the Kerala High Court holding that composite proceedings for multiple assessment years are impermissible.

Fact: The petitioner challenged Ext.P1 consolidated Show Cause Notice and Ext.P4 Order-in-Original issued by the respondents for the financial years 2018-19 to 2022-23. The petitioner contended that a single notice and order covering multiple assessment years were contrary to the law laid down by the Kerala High Court in Jt. Commissioner (Intelligence & Enforcement) v. Lakshmi Mobiles Accessories and Tharayil Medicals v. Dy. Commissioner, SGST Department, Thrissur. The respondents opposed the petition, but the Court considered the binding effect of the earlier Division Bench decisions.

Held: The Kerala High Court accepted the petitioner’s contention and held that consolidated show cause notices and orders covering multiple assessment years are not legally sustainable. Accordingly, Ext.P1 Show Cause Notice and Ext.P4 Order-in-Original were quashed. The respondents were granted liberty to issue separate notices for the respective assessment years. The Court further directed that the period from the date of issuance of the original Show Cause Notice until receipt of the certified copy of the judgment shall be excluded for computing limitation for fresh proceedings. All other contentions were left open.

GST ORDER QUASHED FOR VIOLATION OF NATURAL JUSTICE DUE TO IMPROPER SERVICE OF NOTICE; DEPARTMENT ALLOWED TO REISSUE NOTICE AND PROCEED UNDER SECTION 73 OF UPGST ACT, 2017

Issue: The petitioner challenged an order passed under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017 on the ground that the demand was raised without valid service of notice, as the GST registration had already been cancelled and notices were only uploaded on the GST portal.

Fact: The High Court noted that once registration was cancelled on 22.10.2021, the petitioner was not expected to regularly check the GST portal, and therefore service of the show cause notice only through the portal was not sufficient. Relying on the principle laid down in M/s Katyal Industries v. State of U.P. (Neutral Citation No. 2024:AHC:23697-DB), the Court held that alternative modes of service were required to satisfy procedural fairness.

Held: The Court held that there was violation of natural justice due to improper service of notice, quashed the impugned order dated 10.12.2025 passed under Section 73 of the Act, and permitted the Department to issue a fresh notice and proceed in accordance with law.

Detention of Goods and Vehicle Quashed for Lack of Legal Justification; Release Directed Forthwith.

Issue: The writ petition under Article 226 of the Constitution of India challenged the legality of the detention notice in Form GST MOV-07 dated 24.04.2026 and the consequential order in Form GST MOV-09 dated 30.04.2026 issued by the State Tax Authority, along with the continued detention of the petitioner’s vehicle bearing registration No. RJ02GB7528 and the goods being transported therein, seeking quashing of these actions and release of the vehicle and goods.

Fact: The petitioner contended that all mandatory documents required for transportation were duly available at the time of interception and detention of the vehicle. The respondents justified the detention through the impugned proceedings; however, upon examination of records and hearing both sides, it was found that the statutory compliances were in order and no valid justification existed for the detention, indicating that the action was based on extraneous considerations.

Held: The Court held that the detention and consequential orders were unsustainable in law as the required documents were present at the time of interception. Accordingly, the impugned notice dated 24.04.2026 and order dated 30.04.2026 were quashed and set aside, and the respondents were directed to release the vehicle along with goods forthwith, with all consequential reliefs to follow, thereby disposing of the writ petition.

The High Court: Article 226 Cannot Be Used to Bypass GST Appellate Limitation; Writ Dismissed for Alternate Remedy and Delay

Issue: The writ petitioner challenged an assessment order dated 04.06.2025 and notice dated 17.03.2025 under Article 226 of the Constitution of India, alleging lack of jurisdiction and seeking quashing of both, along with a restraint on coercive recovery under the UP GST regime.

Fact: The Court found that the petitioner had already replied to the show cause notice and was granted a hearing, and no violation of natural justice or jurisdictional error was established. The Court further noted that the petitioner approached the writ jurisdiction after a significant delay, despite having an alternative statutory remedy of appeal under Section 107 of the GST Act, which prescribes a strict limitation period. Reliance was placed on Supreme Court rulings including Singh Enterprises v. C.C.E., Jamshedpur and Commissioner of Customs v. Hongo India Pvt. Ltd., to emphasize that statutory appellate limitation cannot be extended beyond what is expressly provided. The Court also observed that the petitioner had earlier withdrawn a similar writ petition and attempted to bypass the limitation for filing appeal.

Held: The Court held that writ jurisdiction under Article 226 cannot be used to circumvent the statutory appeal mechanism or defeat prescribed limitation under the GST law, especially in absence of any patent illegality or breach of natural justice. Accordingly, the writ petition was dismissed, with liberty granted to the petitioner to pursue statutory appellate remedies in accordance with law.

Tribunal Drops Fresh Anti-Profiteering Proceedings Against M/s. SJP Hotels & Resorts Pvt. Ltd.; Holds Complaint Not Maintainable, Applies Res Judicata, Notes Complaint Withdrawal and Prior NAA Adjudication Affirmed by Delhi High Court, Directs No Fresh DGAP Investigation in Migsun Wynn Project

ISSUE: Whether a fresh anti-profiteering investigation could be initiated against M/s. SJP Hotels & Resorts Pvt. Ltd. in respect of its “Migsun Wynn” project on the basis of a complaint filed by Shri Navnit Kumar, when the same project, period, and profiteering allegations had already been investigated by the DGAP, adjudicated by the erstwhile National Anti-Profiteering Authority (NAA), and affirmed by the Delhi High Court.

FACTS: The DGAP forwarded the complaint of Shri Navnit Kumar to the Tribunal after the Standing Committee recommended investigation. The records revealed that the DGAP had already investigated the Respondent for the same project and determined profiteering of Rs. 6,87,58,685/- (inclusive of GST) for the period 01.07.2017 to 31.12.2019. The NAA confirmed the findings by order dated 26.07.2022, and the Delhi High Court dismissed the Respondent’s challenge. The Respondent further produced a Settlement Deed dated 03.01.2025 and an email showing that the Complainant had unconditionally withdrawn his complaint after receiving possession of his flat. The profiteered amount attributable to the Complainant had already been included in the earlier proceedings.

HELD: The Tribunal held that the issue had already attained finality and could not be reopened through a fresh complaint concerning the same project, period, and cause of action. Applying the principle of res judicata, it ruled that permitting another investigation would amount to duplication of proceedings and abuse of process. Since the complaint had also been unconditionally withdrawn and the disputes stood settled, no fresh investigation was required. The proceedings were held to be not maintainable and were accordingly dropped, with directions that the DGAP take no further action on the complaint.