GST ALERT
JUNE 2025
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ADVOCATE & TAX CONSULTANT
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This Tax Alert is only for the purpose of information and does not constitute or
purport to be an advice or opinion in any manner. The information provided is
not intended to create an attorney-client relationship and is not for advertising
or soliciting. K. Vaitheeswaran & Co. do not intend in any manner to solicit
work through this Alert. The Tax Alert is only to share information.
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this Alert or for any action taken or not taken based on the contents of this
Alert. It is advisable to refer the legislation and the Notifications issued by the
Government or take the views of subject matter experts before taking any
decision or action.
When an appeal is filed in GST there is a mandatory requirement of pre-deposit
of a specified percentage of tax.
This can be done either through payment by cash or by using the balance
available in ITC (electronic credit ledger).
Some appellate authorities refused to recognize pre-deposit made through ITC.
The Gujarat High Court in the case of Yasho Industries vs. UOI & Anr (TS-708-
HC(GUJ)-2024-GST) had held that the payment of Pre-Deposit using balances
available in the Electronic Credit Ledger was ‘sufficient compliance’ under
Section 107 (6) of the CGST Act,2017.
Recently, the Supreme Court in the case of UOI vs. Yasho industries Ltd (TS-415-
SC-2025-GST) has dismissed the SLP filed by the Revenue thereby affirming the
decision of the Gujarat High Court.
The Madras High Court in the case of L & T Geostructure LLP Vs Union of
India an Ors (TS-441-HC(MAD)-2025-GST) has upheld the validity of Rule
36(4) of the CGST Rules,2017. The Court has held that
▪ The mechanism allowing restricted availment of Input Tax Credit (ITC) at
20%, thereafter at 10% and later at 5% was intended to benefit the
recipient by ensuring that at least a portion of the Input Tax Credit (ITC)
was available pending furnishing of the documents with regard to return
by the supplier of goods or service and the same was rightly phased out
with the advent of auto-population of available ITC in GSTR-2A.
▪ Restrictions were intended to implement the laudable object of allowing
only legitimate / eligible Input Tax Credit (ITC).
▪ Credit auto-populated in Form GSTR-2A was also available to the
taxpayer only on a provisional basis and the same may be demanded
back in the event of violations by the supplier or recipient.
The Petitioners were before the Jharkhand HC on being aggrieved by the fact that the
mechanism for calculating refund as per the explanation inserted to Rule 89(4) was
being applied retrospectively to their case by relying on Para 47 of Circular
No.125/44/2019-GST dated 18.11.2019.
The Jharkhand High Court in the case of Tata Steel Ltd. Vs. UOI (TS-422-HC(JHAR)-
2023-GST) held that an amendment can be done only under the Act and not through a
Circular. The amendment to Rule 89(4) is prospective.
The Supreme Court in the case 0f UOI & Ors. vs. Tata Steel Ltd. [TS-431-SC-2025-
GST] ,while affirming the decision of the Jharkhand High Court has remanded the
matter back to the High Court for the limited purposes of deciding on the legality of
Circular No.125/44/2019-GST dated 18.11.2019.
Para 47 of Circular No.125/44/2019-GST dated 18.11.2019 provided that in case of a
difference between the value of the goods declared in the GST invoice and the value
in the corresponding shipping bill / bill of export at the time of processing of the
refund claim , the lower of the two values should be taken into account while
calculating the eligible amount of refund.
The Gujarat High Court in the case of Addwrap Packaging Pvt. Ltd. & Anr. vs
UOI & ors (TS-525-HC(GUJ)-2025-GST) held that Notification No.20/2024 dated
08.10.2024 omitting Rule 96(10) of the CGST Rules,2017,depsite having a
prospective effect would act as a bar on all further actions in pending
proceedings from the date of such omission and thereby set aside the impugned
Show Cause Notices and Orders. The Petitioners are entitled to maintain refund
claim for IGST paid for export of goods as per Rule 96.
A similar view was taken by the Uttarakhand High Court in the case of M/s Sri Sai
Vishwas Polymers Vs UOI (TS-320-HC(UTT)-2025-GST).
Writs Pending before the Madras High Court.
The Allahabad High Court in the case of M/s. Gopal Trading Company Vs State Of
UP(TS-371-HC(ALL)-2025-GST) held that proceedings under Section 130 of the
CGST Act,2017 read with Rule 120 of the CGST Rules,2017 could not be initiated in
cases where excess stock is detected by authorities at the time of inspection/search
under Section 67 of the CGST Act,2017.
A similar view was taken by the Allahabad High Court in the case of M/s Vijay
Trading Company Vs. Additional Commissioner & Another WT No. 1278/2024 to
the effect that only proceedings under Section 73 or 74 of the CGST Act,2017 could
be initiated in cases where excess stock is detected. This has been affirmed by the
Supreme Court in Additional Commissioner, Grade - 2 & Another Vs. M/s Vijay
Trading Company (TS-350-SC-2025-GST).
D and D Construction & Developers Co. Vs. Additional Commissioner (TS-411-
HC(ALL)-2025-GST) – Allahabad High Court.
▪ Proceedings under Section 129 of the CGST Act,2017 were initiated on the
transfer of machinery from the Petitioner’s Head Quarters in Rajasthan to its
Branch unit in Uttar Pradesh on the basis of a delivery challan, for use in
completion of works, on the ground that the same were being transported
without any invoice / bill and E-way Bill.
▪ The Petitioner was aggrieved by the fact that the demand was confirmed
despite the production of the necessary documents before the seizure as well
as penalty Order could be passed.
▪ The High Court applied the law laid down in M/s Vacmet India Ltd. Vs.
Additional Commissioner, Grade -2 and others (Writ Tax No. 687 of 2019)
and held that in the absence of specific allegations of attempts to evade tax,
the proceedings were unsustainable.
The Allahabad High Court in the case of Tata Hitachi Construction Machinery
Company Private Limited Vs State of Uttar Pradesh (TS-378-HC(ALL)-2025-
GST) had occasion to consider a case where penalty was imposed for non-fililng
up of Part-B of E-way Bill.
The Court observed that the impugned Order contained no allegation of any
attempt to evade tax by the Petitioner and that the only basis for imposing
penalty was the violation of provisions of Rule 138 on account of non-filling up of
Part-B of E-way bill.
The Court set aside the impugned Order and held that that unless an attempt is
made to evade tax and a finding in that regard was recorded, mere non-filling of
part-B of E-way bill would not attract penalty under Section 129 of the CGST
Act,2017.
The Gauhati High Court in the case 0f Ranjit Dutta vs. The State of Assam and 2
Ors (TS-485-HC(GAUH)-2025-GST) set aside the impugned Summary of Show
Cause Notice and Summary of impugned Demand Order issued without
affording the Petitioner an opportunity of being heard.
The Petitioner was aggrieved by the fact that detailed Show Cause Notice and
Order were not issued .
The Court held that Summary of the Show Cause Notice in GST DRC-01 is not a
substitute to the Show Cause Notice to be issued in terms with Section 73 (1) of
the Central Act as well as the State Act and thereby set aside both the Summary
SCN and the Summary Order.
The Karnataka High Court in Columbia Sportswear India Sourcing Pvt. Ltd. Vs
UOI & ors (TS-421-HC(KAR)-2025-GST) held that the services rendered by the
Petitioner under a ‘“Buying Support Services Agreements” to an entity in USA
would qualify as ‘export of services’ and thus be eligible for a refund of the IGST
paid.
The Court observed that the there were only two parties to the agreement and
that the Petitioner rendered services on their own account to recipient and they
did not enable supply between the foreign recipient and the third parties.
Further, the Court found the acts of the petitioner to be that of an independent
contractor which did not represent or bind the foreign client in the course of
rendering the services.
The argument of the department in denying the refund of IGST paid by claiming
that the services would qualify as ‘intermediary services’ was rejected.
A Division Bench of the Jharkhand High Court in the case of Sri Ram Stone Works & Ors.
vs. State of Jharkhand (TS-384-HC(JHAR)-2025-GST) disposed a batch of Writ
Petitions as it found the impugned notices issued by comparing the particulars at
which Petitioners have sold their goods with that of prevalent market price, to be
wholly without jurisdiction and beyond the scope of Section 61 of the CGST/JGST
Act,2017.
The Court held that unless transactions of sale are shown to be sham transactions,
the mere fact that the goods were sold at a concessional rate/rate less than market
price would not entitle the Revenue to assess the difference between the market
price and the price paid by the purchaser as transaction value.
The Madras High Court (Single Judge) in the cases of Tvl Dee Dee Creations Vs The
Deputy State Tax officer WP No.16632 of 2025 and Namasivaya Auto Parts vs The
Deputy State Tax Officer I (TS-493-HC(MAD)-2025-GST) has set aside the impugned
Orders issued on the ‘view additional Notice and Orders’ tab of the GST portal.
The Court observed that while service through the portal was sufficient service the same
would however not be effective service, especially in view of the taxpayer not responding
to any of such communications issued.
The Court was of the view that when the taxpayers are un-responsive to the notices
communicated through the Portal, the Authority must explore other modes of service
prescribes under Section 169 of the CGST Act,2017 preferrable by way of RPAD.
It is pertinent to note that another Single Judge of the Madras High Court in a batch of
cases including Poomika Infra Developers vs State Tax Officer (2025) 29 Centax 394
(Mad.) had held Service by making it available in the common portal is a valid mode of
service in terms of section 169 of the GST Act. Service is complete when it enters the
common portal i.e., when it is made available in the common portal. The Court however
suggested that the Department may explore the possibility of simultaneously issuing an
alert SMS to the mobile number of the taxable persons and send an e-mail to the
registered email ID of the taxable persons independent of the email and SMS issued by
the GST Network as a facilitating measure.
The Sikkim High Court in the case of SICPA India Private Limited and Another
versus Union of India and Others (TS-513-HC(SIK)-2025-GST) permitted the
Petitioner’s claim of refund of the unutilized Input Tax Credit (ITC), lying in
Electronic Credit Ledger upon discontinuance of their business.
The Respondent Authority contended that Section 49(6) of the CGST Act did not
independently provide for refunds but was dependent on the conditions
stipulated under Section 54 of the CGST Act and that closure of business was not
recognized under the statute as an eligible ground for refund.
The Court permitted the refund claim of the Petitioner by observing that there
was no express prohibition in Section 49(6) read with Section 54 and 54(3) of the
CGST Act,2017 for claiming a refund of ITC on closure of business and that the
retention of tax was also not supported by the statute and therefore would be
without the authority of law.
Circular No.249/06/2025-GST dated 09.06.2025 clarifies that for
communications via common portal (incompliance with Section 169 of the CGST
Act, 2017) having verifiable Reference Number (RFN), quoting of Document
Identification Number (DIN) is not required and such communication bearing
RFN is to be treated as a valid communication.
The Circular also provides that Circular No. 122/41/2019- GST dated 05th
November2019 and 128/47/2019-GST dated 23.12.2019 issued by the Board
mandating the presence of DIN in communications issued to taxpayers is
modified to such extent.
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