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Category: GST

  • Supreme Court Quashes GST Show Cause Notice Against Tata Steel: Clarifies Limitation and Allegations of Suppression

    Supreme Court Quashes GST Show Cause Notice Against Tata Steel: Clarifies Limitation and Allegations of Suppression

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 26.08.2026

    Supreme Court Quashes GST Show Cause Notice Against Tata Steel: Clarifies Limitation and Allegations of Suppression

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Supreme Court of India has delivered a significant judgment in the case involving Tata Steel Limited and the Union of India, addressing the validity of a show cause notice (SCN) issued under the Goods and Services Tax (GST) law. This decision clarifies crucial aspects of limitation periods and the requirements for invoking extended limitation due to allegations of fraud or suppression.

    Background

    Tata Steel Limited received a show cause notice for the financial years 2018-2019 to 2020-2021, following audit objections regarding mismatches in input tax credit (ITC) and short payment of tax. The notice was issued under Section 74 of the Central GST Act, which allows for an extended five-year limitation period in cases involving fraud, willful misstatement, or suppression of facts. Tata Steel challenged the notice, arguing that there were no such allegations or foundational facts to justify invoking Section 74.

    Key Issues Examined

    1. Limitation Periods Under GST Law
      • Section 73 of the CGST Act provides a three-year limitation for issuing notices where there is no fraud or suppression, while Section 74 extends this to five years if such allegations exist.
      • The Court noted that due to COVID-19, the limitation period was further extended by judicial orders, pushing the deadlines for the relevant years to as late as February 28, 2025.
    2. Requirement of Foundational Facts for Extended Limitation
      • The Supreme Court emphasized that merely using terms like “suppression” or “fraud” in the notice is insufficient. The notice must contain specific foundational facts that demonstrate deliberate evasion or misrepresentation.
      • In Tata Steel’s case, the SCN only made bland statements without detailing any factual basis for the allegations.
    3. Procedural Lapses by the Department
      • The Court observed that the assessing officer had not independently satisfied himself regarding the audit objections before issuing the notice.
      • The SCN was initially kept in abeyance and later revived as a “protective measure,” a concept not recognized under the GST regime.

    Supreme Court’s Decision

    • The Court set aside both the show cause notice and the consequential order, holding that the Department failed to provide the necessary foundational facts to justify the extended limitation under Section 74.
    • However, the Court clarified that the Department still has time (until February 28, 2027) to issue a fresh notice with proper factual grounds, should it choose to do so.

    Implications

    This judgment reinforces the principle that tax authorities must strictly adhere to statutory requirements when invoking extended limitation periods. Notices must be based on clear, specific facts rather than generic allegations. The decision provides greater clarity and protection for taxpayers facing similar proceedings under GST law.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Supreme Court

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    Ravi Shekhar Jha – Advocate, Bar Council of Delhi

  • Reverse Charge Mechanism under Section 9(3) of the CGST Act, 2017

    Reverse Charge Mechanism under Section 9(3) of the CGST Act, 2017

    Aadrikaa Legal Services (ALS) – IDT Tax I Arbitration I Litigation

    Date: 12.06.2026

    Reverse Charge Mechanism under Section 9(3) of the CGST Act, 2017

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Central Goods and Services Tax (CGST) regime in India has undergone several amendments since its inception, particularly concerning tax rates and the classification of services and goods. This article provides a detailed overview of key notifications and changes issued by the Government of India, focusing on the reverse charge mechanism (RCM) and related provisions.

    Understanding the Reverse Charge Mechanism (RCM)

    Under the CGST Act, the reverse charge mechanism shifts the liability to pay tax from the supplier to the recipient of goods or services. This is primarily invoked for specific categories of supplies, as notified by the government.

    Key Amendments and Notifications

    1. Goods Transport Agency (GTA) Services

    • Notification No. 22/2017 clarified that RCM applies only to GTAs who have not paid central tax at the rate of 6%.
    • Explanatory Addition: Limited Liability Partnerships (LLPs) are now considered as partnership firms for the purpose of RCM.

    2. Services to Reserve Bank of India

    • Notification No. 33/2017 introduced RCM for services supplied by members of the Overseeing Committee to the Reserve Bank of India.

    3. Renting of Immovable Property

    • Notification No. 3/2018 brought services supplied by government entities by way of renting immovable property to registered persons under RCM.
    • Definition Update: The term “insurance agent” was clarified as per the Insurance Act, 1938.

    4. Direct Selling Agents (DSAs) and Other Service Providers

    • Notification No. 15/2018 included services by individual DSAs (excluding body corporates, partnerships, or LLPs) to banks or NBFCs under RCM.
    • Definition Update: “Renting of immovable property” was elaborated to include various forms of access and use.

    5. Security Services and Business Facilitators

    • Notification No. 29/2018 added:
      • Services by business facilitators to banks
      • Agents of business correspondents to business correspondents
      • Security services (excluding body corporates) to registered persons, with certain exceptions
    • Clarification: Provisions applicable to Central and State Governments also apply to Parliament and State Legislatures.

    6. Real Estate Sector: Development Rights and Long-Term Lease

    • Notification No. 5/2019 introduced RCM for:
      • Transfer of development rights or Floor Space Index (FSI) for construction projects by promoters
      • Long-term lease of land (30 years or more) for construction projects by promoters
    • Definitions: Terms like “apartment,” “promoter,” “project,” “REP,” “RREP,” and “FSI” were defined as per the Real Estate (Regulation and Development) Act, 2016.

    7. Copyright and Intellectual Property Services

    • Notification No. 22/2019 updated RCM for:
      • Services by music composers, photographers, artists, etc., transferring copyright to music companies or producers
      • Services by authors transferring copyright to publishers, with an option for authors to pay tax under forward charge upon declaration
      • Renting of motor vehicles to body corporates and lending of securities under SEBI’s Securities Lending Scheme

    8. Motor Vehicle Rental Services

    • Notification No. 29/2019 clarified RCM for renting of motor vehicles (where fuel cost is included) to body corporates, provided the supplier is not a body corporate and does not charge central tax at 6%.

    Practical Implications for Businesses

    1. Compliance: Businesses must regularly review notifications to ensure correct application of RCM and avoid penalties.
    2. Documentation: Proper declarations and forms (such as those for authors opting for forward charge) are essential for compliance.
    3. Sector-Specific Impact: Real estate, banking, security, and creative industries are notably affected by these amendments.

    Conclusion

    The evolving landscape of CGST notifications requires businesses and professionals to stay updated on the latest amendments, especially regarding the reverse charge mechanism. Adhering to these changes ensures compliance and smooth functioning under the GST regime.

    Source: CBIC, Ministry of Finance, Govt. of India

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  • Madras High Court Declares GST Notifications Illegal

    Madras High Court Declares GST Notifications Illegal

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 23.12.2025

    Madras High Court Declares GST Notifications Illegal

    This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.comor on his Mobile +91-9999005379.

    On December 17, 2025, the Madurai Bench of the Madras High Court delivered a landmark judgment in favor of Tvl Voylla Fashions Private Limited, represented by its authorized signatory. The case, W.P. ​(MD) No. ​ 36017 of 2025, challenged the validity of two GST notifications issued by the Union of India: Notification No. 09/2023-Central Tax dated 31.03.2023 and Notification No. ​ 56/2023-Central Tax dated 28.12.2023. ​ The court ruled these notifications as vitiated and illegal, marking a significant victory for the petitioner. ​

    Background of the Case

    The petitioner, Tvl Voylla Fashions Private Limited, filed a writ petition under Article 226 of the Constitution of India, seeking a writ of certiorari to quash the impugned notifications and the consequential assessment order passed by the Assistant Commissioner (ST) (FAC) for the assessment year 2019-2020. The petitioner argued that the notifications violated several constitutional provisions, including Article 14, 246A, and 265, and were ultra vires Section 168A of the Central Goods and Services Tax Act, 2017. ​

    The petitioner contended that the notifications were issued retrospectively, curtailing the limitation period for assessment and adjudication under the CGST Act. ​ This, they argued, was contrary to the Supreme Court’s order dated January 10, 2022, which excluded the period from March 15, 2020, to February 28, 2022, for the purpose of calculating the limitation period under Section 73 of the CGST Act. ​

    Key Arguments and Court Observations

    During the hearing, the learned counsel for the petitioner and the Additional Government Pleader representing the respondents presented their arguments. ​ The court noted that the issue raised in this case had already been addressed in a previous judgment delivered on June 12, 2025, in W.P. ​ Nos. 17184 of 2024, where the court had categorically held that:

    1. The authorities under the CGST Act are entitled to exclude the period from March 15, 2020, to February 28, 2022, while calculating the limitation period under Section 73 of the CGST Act, as per the Supreme Court’s order under Article 142 of the Constitution. ​
    2. The impugned notifications were vitiated and illegal for several reasons:
      • They curtailed the limitation period contrary to the Supreme Court’s order under Article 142. ​
      • They were based on erroneous assumptions and misconceptions about the scope and effect of the Supreme Court’s order. ​
      • They arbitrarily extinguished the vested rights of action available to authorities under the CGST Act. ​
      • Notification No. 56/2023 was issued without the recommendations of the GST Council, violating the statutory mandate. ​

    The court also highlighted issues such as the violation of principles of natural justice, lack of jurisdiction, and errors apparent on the face of the record. ​

    The Court’s Decision

    After considering the submissions and referring to the earlier judgment, the Honorable Justice ruled in favor of the petitioner. The court declared the impugned notifications as vitiated and illegal and set aside the consequential assessment order dated August 28, 2024. The court directed the authorities to treat the impugned order as a show cause notice and allowed the petitioner to submit objections within 8 weeks. ​ The authorities were instructed to pass fresh orders after providing the petitioner an opportunity for a hearing. ​

    Implications of the Judgment

    This judgment is a significant victory for taxpayers and businesses, as it reinforces the importance of adhering to constitutional principles and statutory mandates while issuing notifications under the GST framework. The court’s decision highlights the following key points:

    1. Protection of Vested Rights: The judgment ensures that taxpayers’ rights are not arbitrarily curtailed by retrospective notifications that diminish the limitation period for assessment and adjudication. ​
    2. Adherence to Supreme Court Orders: The ruling underscores the importance of complying with the Supreme Court’s directives, particularly those issued under Article 142 of the Constitution. ​
    3. Role of the GST Council: The judgment reiterates the statutory requirement for the GST Council’s recommendations before issuing notifications, ensuring transparency and accountability in the decision-making process. ​

    Conclusion

    The Madurai Bench of the Madras High Court has once again demonstrated its commitment to upholding the rule of law and protecting the rights of taxpayers. The victory of Tvl Voylla Fashions Private Limited serves as a reminder to authorities to exercise their powers within the bounds of the law and constitutional principles. This case sets a precedent for future challenges to arbitrary and retrospective notifications, ensuring a fair and just taxation system for all stakeholders.

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    Source: Madras High Court

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  • High Court of Delhi Quashes Proceedings Under Rule 96(10) of CGST Rules

    High Court of Delhi Quashes Proceedings Under Rule 96(10) of CGST Rules

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 03.12.2025

    High Court of Delhi Quashes Proceedings Under Rule 96(10) of CGST Rules

    This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.  β€‹

    In a landmark judgment delivered on November 20, 2025, the High Court of Delhi addressed the constitutional validity and implications of Rule 96(10) of the Central Goods and Services Tax (CGST) Rules, 2017. ​ The judgment, authored by Justice, has significant ramifications for exporters seeking refunds under the Integrated Goods and Services Tax (IGST) framework. The Court quashed proceedings initiated under Rule 96(10) in three separate writ petitions, marking a pivotal moment in GST jurisprudence.

    Background

    Rule 96(10) of the CGST Rules imposed restrictions on exporters claiming IGST refunds, creating complications for businesses availing exemptions under specific notifications. ​ The rule was challenged by various petitioners, including M/s Vinayak International Housewares Pvt Ltd, M/s Ashish Foils Pvt Ltd, and M/s Mayedass International, who argued that the rule was unconstitutional and contrary to Section 16 of the IGST Act, 2017.

    The GST Council, in its 54th meeting, recommended the omission of Rule 96(10), citing its unnecessary complexity and lack of intended benefits. ​ Subsequently, Notification No. ​ 20/2024 was issued on October 8, 2024, officially omitting the rule. ​ However, the omission was deemed prospective, leading to disputes over its applicability to pending proceedings. ​

    Key Observations by the Court ​

    1. Constitutional Validity of Rule 96(10): ​ The Court referred to the Kerala High Court’s decision in Sance Laboratories Pvt. ​ Ltd. vs. Union of India, which declared Rule 96(10) unconstitutional for imposing restrictions not contemplated under Section 16 of the IGST Act. ​ The Delhi High Court concurred, emphasizing that the rule created arbitrary constraints on IGST refunds.
    2. Impact of Omission: ​ The Court relied on precedents, including the Supreme Court’s judgment in Kolhapur Canesugar Works Ltd., to conclude that the omission of Rule 96(10) applies to all pending proceedings. ​ It held that unless transactions are “past and closed,” the benefit of the rule’s omission must extend to ongoing cases. ​
    3. Quashing of Proceedings: ​
      • In W.P.(C) 3154/2023, the Court quashed summons issued to M/s Vinayak International Housewares Pvt Ltd, ruling that no proceedings could continue under the omitted rule. ​
      • In W.P.(C) 10687/2023, the Court quashed show cause notices (SCNs) and subsequent orders against M/s Ashish Foils Pvt Ltd. ​
      • In W.P.(C) 3165/2023, the Court quashed SCNs and proceedings against M/s Mayedass International. ​

    Implications for Exporters ​

    This judgment is a significant relief for exporters who faced hurdles in claiming IGST refunds due to Rule 96(10). ​ The Court’s decision ensures that the omission of the rule applies retrospectively to all pending proceedings, including SCNs, orders, and appeals. ​ Exporters can now claim refunds without the constraints imposed by the rule, simplifying the refund process and aligning it with the intent of the GST framework. ​

    Conclusion

    The Delhi High Court’s judgment underscores the importance of judicial scrutiny in ensuring that tax regulations do not impose arbitrary restrictions on businesses. By quashing proceedings under Rule 96(10), the Court has upheld the principles of fairness and simplicity in the GST regime. This decision is a welcome development for exporters and sets a precedent for similar cases across the country.

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    Source: Delhi High Court

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  • Gujarat High Court allows IGST Refund against Advance Authorization Exports says Rule 96(10) removed for good

    Gujarat High Court allows IGST Refund against Advance Authorization Exports says Rule 96(10) removed for good

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 21.08.2025

    Gujarat High Court allows IGST Refund against Advance Authorization Exports says Rule 96(10) removed for good ​ ​ ​ ​ ​ ​

    The Gujarat High Court recently delivered a significant judgment addressing the omission of Rule 96(10) of the Central Goods and Services Tax (CGST) Rules, 2017, and its implications for exporters seeking refunds of Integrated Goods and Services Tax (IGST) paid on exports. This ruling has far-reaching consequences for businesses engaged in international trade and clarifies the legal position on pending refund claims.

    Background of Rule 96(10)

    Rule 96(10) of the CGST Rules was introduced to restrict exporters from claiming refunds of IGST paid on exports if they availed benefits under certain exemption notifications for duty-free procurement of inputs. ​ This rule aimed to prevent exporters from enjoying “double benefits”β€”duty-free procurement and IGST refunds. ​ However, exporters faced significant challenges due to this restriction, especially when only a small portion of their inputs were procured duty-free.

    This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

    Source: Gujarat High Court

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