LiveLawBiz Indirect Tax Weekly Round-Up: February 16 - February 22, 2026
Kapil Dhyani
23 Feb 2026 9:48 AM IST
SUPREME COURT
Case Title : Commissioner of Customs (Appeals) vs Jayanthah Trading Company
Case Number : CIVIL APPEAL Diary No(s). 2168/2026
The Supreme Court recently issued notice on an appeal filed by the Commissioner of Customs (Appeals) against a ruling of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi, which held that Customs officers cannot alter the Free on Board (FOB) value agreed upon between a buyer and seller. A Bench of Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe directed that the matter be heard along with a connected appeal.
HIGH COURTS
Andhra Pradesh HC
Case Title : A.P. United Forum for RTI Campaign Vs. The State of Andhra Pradesh
Case Number : WP(PIL) NO: 161 of 2024
CITATION : 2026 LLBiz HC(APH) 20
The Andhra Pradesh High Court has recently directed the State's Chief Secretary to constitute an Apex Committee to identify defaulters and recover unpaid conversion tax dues under the Andhra Pradesh Agricultural Land (Conversion for Non-Agricultural Purposes) Act, 2006. A Division Bench of Chief Justice Dhiraj Singh Thakur and Justice Challa Gunaranjan ordered, “… we feel that steps have to be taken for ensuring recovery of the outstanding tax. We, therefore, direct the Chief Secretary of the State of Andhra Pradesh to constitute an Apex Committee which would include the Principal Secretary of the Revenue department to draw a list of defaulters who have not paid the conversion tax based upon data from various Districts. Steps be then taken for recovering the tax by following the procedure as is otherwise prescribed under the Act of 2006 as also the Rules of 2018.”
Bombay HC
Bombay High Court Continues Stay On GST Notice Over 1/3rd Land Deduction Amid Pending Proceedings
Case Title : Khusharav Builders Pvt. Ltd. v. Additional Commissioner (A.E.), CGST & Central Excise, Mumbai East & Ors.
Case Number : WRIT PETITION (L) NO. 34439 OF 2025
CITATION : 2026 LLBiz HC(BOM) 82
The Bombay High Court on 4 February, continued its interim order staying further action on a show cause notice issued to Khusharav Builders Pvt. Ltd. under Section 74 of the CGST/MGST Act, observing that the core issue is whether the Department had jurisdiction to issue the notice in light of earlier High Court rulings striking down the mandatory one-third land deduction under GST. A Division Bench of Justice G.S. Kulkarni and Justice Aarti Sathe on 6 January, granted interim relief and directed the respondents to file a reply affidavit within two weeks on the preliminary issue of jurisdiction. The Court ordered that, “in the meantime, no further action under the impugned show cause notice shall be taken.”
Case Title : Agasti Sahakari Sakhar Karkhana Ltd. Vs State of Maharashtra Department of Goods and Service Tax, Mantralaya, Mumbai.
Case Number : WRIT PETITION NO.13990 OF 2024
CITATION : 2026 LLBiz HC(BOM) 83
The Bombay High Court at Aurangabad has recently held that under the First Phase of the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee Act, 2019, one hundred percent of undisputed tax must be paid and no waiver is available on such amount, dismissing a writ petition filed by a sugar manufacturing co-operative. A Division Bench of Justice Vibha Kankanwadi and Justice Hiten S. Venegavkar held, “for undisputed tax, amount to be paid is 100% of the amount in column B i.e. undisputed tax and the amount to be waived is nil.”
Case Title : Tuesonpower International Pvt. Ltd. & Anr. Vs Union of India & Anr.
Case Number : WRIT PETITION (L) NO. 40917 OF 2025
CITATION : 2026 LLBiz HC(BOM) 85
Taking note that a director of Tuesonpower International Pvt. Ltd. is undergoing treatment for cancer and has expressed willingness to cooperate with the investigation, the Bombay High Court permitted videography of summons proceedings under Section 70 of the Central Goods and Services Tax Act, 2017. It also allowed his advocate to remain present at a visible but not audible distance during recording of the statement.
Delhi HC
Case Title : Hira Singh v. Commissioner Of Customs (Preventive)
Case Number : CUSAA 7/2026 & CM APPL. 7007/2026
CITATION : 2026 LLBiz HC (DEL) 153
The Delhi High Court has recently held that once the market value of goods seized by the Customs is specified in a show cause notice, the burden lies on the one who recieved notice to disprove the valuation with cogent material, and a mere denial is insufficient to seek interference in appellate proceedings. A division bench of Justices Nitin Wasudeo Sambre and Ajay Digpaul was hearing an importer's appeal challenging concurrent findings of the Customs adjudicating authority and CESTAT, which had upheld confiscation and penalties in a case relating to smuggling of foreign-origin cigarettes.
Delhi High Court Quashes GST Demand Order For Failing To Consider IBC Moratorium Plea
Case Title : SREI Equipment Finance Limited v. Office Of The Assistant Commissioner
Case Number : W.P.(C) 1988/2026
CITATION : 2026 LLBiz HC (DEL) 154
The Delhi High Court has set aside a GST demand order passed against a Finance company, holding that the tax authorities failed to consider the company's specific plea that proceedings were barred due to a moratorium under the Insolvency and Bankruptcy Code, 2016 (IBC). A Division Bench of Justices Nitin Wasudeo Sambre and Ajay Digpaul quashed the order passed by the Assistant Commissioner of CGST, which had confirmed a demand of Rs. 67.5 lakh towards alleged ineligible input tax credit (ITC), along with interest and penalty.
Gujarat HC
GST Appeal Cannot Be Entertained Beyond Statutory Limit Of 120 Days: Gujarat High Court
Case Title : Rajanish Industries (Prop. Shah Om Jitendrakumar) vs. State of Gujarat & Ors.
Case Number : Special Civil Application No. 624 of 2026
CITATION : 2026 LLBiz HC (GUJ) 16
The Gujarat High Court has held that delay in filing an appeal against cancellation of GST registration cannot be condoned beyond the statutory maximum period of 120 days (3+1 months) prescribed under Section 107 of the CGST Act. A Bench of Justice A.S. Supehia and Justice Pranav Trivedi, in a judgment dated 22 January 2026, dismissed a writ petition filed by Rajesh Industries, a proprietorship firm, holding that writ jurisdiction under Article 226 cannot be invoked to override legislative timelines.
Case Title : Niket Bipinbhai Patel Through Power Of Attorney Holder vs. Bipinbhai Madhavbhai PATEL vs. Assistant Commissioner (A.E.) CGST-Central Excise Vadodara-II Commissionerate
Case Number : R/Special Civil Application No. 18068 of 2025
CITATION : 2026 LLBiz HC (GUJ) 18
The Gujarat High Court has held that Section 17(5)(d) of the Central Goods and Services Tax Act, 2017, which blocks input tax credit on goods or services used for construction of immovable property on one's own account, did not apply in a case where the taxpayer had only transferred leasehold rights and had undertaken no construction activity. A Division Bench of Justice A.S. Supehia and Justice Pranav Trivedi quashed a show cause notice issued under Section 74(1) of the Act and directed the department to unblock Rs. 98,11,678 lying in the electronic credit ledger of a Non Resident Indian engaged in transfer of leasehold rights.
Jharkhand HC
Case Title : Tata Chemicals Ltd. & Ors. v. State of Jharkhand & Ors.
Case Number : W.P.(T) No. 4397 of 2014
CITATION : 2026 LLBiz HC(Jhar) 4
The Jharkhand High Court has recently quashed reassessment proceedings initiated against Tata Chemicals Limited, Hindalco Industries Limited, Larsen and Toubro Ltd., Tata Steel Limited and several other taxpayers, holding that reopening of completed VAT assessments beyond the statutory period is barred by limitation. A Division Bench of Justice Rongon Mukhopadhyay and Justice Deepak Roshan observed that the issue was already settled and that “the law is set at rest.”
Kerala HC
Kerala High Court Quashes Composite GST Notices Issued to Actor Honey Rose
Case Title : Dhanlaxmi Bank Limited v. State Of Kerala & Others (with connected matters)
Case Number : WP(C) No. 15618 of 2025
CITATION : 2026 LLBiz HC (KER) 27
The Kerala High Court on Monday refused to set aside composite GST show cause notices and assessment orders issued to actor Honey Rose Varghese and several other taxpayers, holding that it was bound by earlier Division Bench rulings requiring separate proceedings for each assessment year. Allowing the batch of petitions, Justice Ziyad Rahman A.A. observed that there was no stay on the earlier orders of the court and was therefore bound by it. “In this case, evidently, no stay is also obtained against the judgment in Lakshmi Mobile (supra) or Tharayil Medicals (supra). Therefore, I am bound to follow the observations and principles laid down by the Division Bench of this Court in the aforesaid decisions."
Case Title : Authentic Metals v. Enforcement Officer & Ors.
Case Number : WP(C) No. 881 of 2026
CITATION : 2026 LLBiz HC (KER) 28
The Kerala High Court on Friday held that GST authorities cannot release seized goods during confiscation proceedings merely because the trader pays the fine proposed in a show cause notice. Justice Ziyad Rahman A.A. ruled that Section 130(2) of the Central Goods and Services Tax Act permits payment of a fine in lieu of confiscation only after a final confiscation order is passed. “Mere notice to initiate confiscation proceedings will not amount to authorisation for confiscation,” the court said.
Rajasthan HC
Case Title : Hazi A.p Bava and Company v. Commissioner, Central Excise And Goods And Service Tax
Case Number : D.B Civil Writ Petition No. 17744/ 2019
CITATION : 2026 LLBiz HC (RAJ) 7
The Rajasthan High Court has recently set aside a service tax demand raised nearly nine years after issuance of show cause notices, holding that revival of proceedings after prolonged administrative dormancy amounts to an arbitrary exercise of power and defeats the statutory discipline prescribed under the Finance Act. A Division Bench of Justice Arun Monga and Justice Yogendra Kumar Purohit quashed an order dated October 24, 2019 passed by the Joint Commissioner, Central Excise and Goods and Service Tax, Udaipur.
CESTAT
Case Title : N. Sundar v. Commissioner of GST and Central Excise
Case Number : Excise Appeal No. 41441 of 2014
CITATION : 2026 LLBiz CESTAT (CHE) 68
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that Cashew Shell Liquid (CNSL) is eligible for Small Scale Industry (SSI) exemption under Notification No. 8/2003-CE, as amended in 2006 and read with the Corrigendum dated February 28, 2006. The tribunal set aside a Rs. 3.22 lakh excise duty demand raised on the manufacturer for allegedly wrongfully availing SSI exemption on CNSL clearances.
Case Title : GE T&D India Ltd. v. Commissioner of GST and Central Excise
Case Number : Excise Appeal Nos. 42242 to 42245 of 2016
CITATION : 2026 LLBiz CESTAT (CHE) 70
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that companies cannot claim CENVAT credit on employee welfare services after April 1, 2011, following a statutory amendment that expressly excluded such benefits. A coram of Judicial Member P. Dinesha and Technical Member Vasa Seshagiri Rao was deciding appeals filed by GE T&D India Ltd., a manufacturer of electrical and transmission equipment. The dispute covered April 2010 to March 2015.
CESTAT Sets Aside Penalty On Customs Broker, Says CHALR Violation Alone Insufficient
Case Title : Cargo Placement & Shipping Agencies Pvt. Ltd. Vs Commissioner of Customs,
Case Number : CUSTOMS APPEAL No. 58485 of 2013
CITATION : 2026 LLBiz CESTAT(DEL) 71
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi, has set aside a penalty imposed on a Customs Broker under Section 112(a)(i) of the Customs Act, holding that mere violation of the Customs House Agents Licensing Regulations, 2004 (CHALR) cannot by itself justify penalty under the Act in the absence of specific allegations and material showing knowledge. A coram of President Justice Dilip Gupta and Technical Member P.V. Subba Rao allowed the appeal filed by Cargo Placement & Shipping Agencies Pvt. Ltd. and quashed the penalty imposed by the Commissioner of Customs, ICD Tughlakabad.
Case Title : Committed Logistics Pvt. Ltd. Vs Commissioner of Customs
Case Number : CUSTOMS APPEAL No. 58496 of 2013
CITATION : 2026 LLBiz CESTAT(DEL) 72
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) at Delhi has recently set aside penalties of Rs 25 lakh each imposed on Committed Logistics Pvt. Ltd. and its Director Vikas Chaudhary, holding that statements recorded by customs officers cannot be treated as relevant evidence unless the mandatory procedure under the law is followed. A coram of President Justice Dilip Gupta, and Member P.V. Subba Rao held that the penalties were imposed solely on the basis of statements recorded under Section 108 of the Customs Act without complying with Section 138B.
CESTAT Quashes Service Tax Demand Against IBM India On Warranty Expense Reimbursements
Case Title : M/s. IBM India Private Limited Vs. The Commissioner of Central Excise and Service Tax Large Taxpayers Unit
Case Number : Service Tax Appeal No. 26550 of 2013
CITATION : 2026 LLBiz CESTAT(DEL) 73
The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 6 February set aside service tax demands raised against IBM India Pvt. Ltd., holding that reimbursements received from overseas IBM entities towards warranty costs, in the absence of consideration for any service, cannot be taxed under “management, maintenance or repair” service. A Bench comprising Dr. D.M. Misra (Judicial Member) and Mrs. R. Bhagya Devi (Technical Member) passed the order allowing the appeals filed by IBM India.
Case Title : Lombardini India Private Limited vs. Commissioner of Central Excise And Service Tax, Aurangabad
Case Number : Excise Appeal No. 86157 of 2016
CITATION : 2026 LLBiz CESTAT (MUM) 75
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 5 February allowed Lombardini India to claim CENVAT credit of Rs. 56 lakhs in a case where it had entered into an agreement with Kohler India for certain services. A Bench comprising Judicial Member S.K. Mohanty and Technical Member M.M. Parthiban observed that once service tax has been collected by the service provider and accepted by the Department, the credit cannot be denied to the recipient. They held: “…once the tax liability has been discharged and accepted by the department, the consequential CENVAT credit cannot be denied at the recipient's side.”
CESTAT Kolkata Affirms CBEC Circular, Reiterates Sub-Contractor Independently Liable For Service Tax
Case Title : M/s. Rigtech Power v. Commissioner, Central Excise and Service Tax
Case Number : Service Tax Appeal No. 76246 of 2014
CITATION : 2026 LLBiz CESTAT(KOL) 74
The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) on 6 February clarified that after the issuance of CBEC Master Circular No. 96/7/2007-ST dated 23 August 2007, a sub-contractor is independently liable to pay Service Tax on the services rendered by it, even where the main contractor has already discharged the Service Tax liability on the same project. A Bench comprising Judicial Member Ashok Jindal and Technical Member K. Anpazhakan, was examining the legality of invoking the extended period of limitation in a service tax demand raised against Rigtech Power, the appellant.
CESTAT Mumbai Rules CENVAT Credit Cannot Be Denied Service Tax Paid By Grindwell Norton Supplier
Case Title : GRINDWELL NORTON LTD VS COMMISSIONER CENTRAL GOODS AND SERVICE TAX-THANE RURAL
Case Number : EXCISE APPEAL NO. 86880 OF 2022
CITATION : 2026 LLBiz CESTAT(DEL) 77
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 17 February set aside the denial of Cenvat Credit of Rs. 3,99,183 to Grindwell Norton Ltd., reiterating that once service tax has been paid by the service provider and accepted by the department, it cannot be questioned. A Single Member Bench comprising Dr. Suvendu Kumar Pati (Judicial Member) passed the Final Order, noting that the disputed invoices were raised by the job worker under a belief that the services were taxable.
CESTAT New Delhi Sets Aside Duty Demand Of Criticallog India, Holds BIS Not Required For Spare Parts
Case Title : Criticallog India Pvt. Ltd. v. Commissioner of Customs
Case Number : Customs Appeal No. 50356 of 2025
CITATION : 2026 LLBiz CESTAT(DEL) 76
On Wednesday 18 February, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, set aside the duty demand, confiscation, and penalties that the authorities imposed on Criticallog India Pvt. Ltd. for imported “Memory” and “Power Supply” items. The Tribunal held that a BIS registration does not apply to spare parts imported for warranty replacement. A Bench comprising President Justice Dilip Gupta and Technical Member Ms. Hemambika R. Priya, ruled that the appellate authority erred in treating the import as misdeclared and clarified that spare parts do not require BIS registration.
CESTAT Sets Aside Customs Broker Licence Revocation, Cites Contradictory Findings
Case Title : Fairdeal Shipping Agency Pvt. Ltd. v. Principal Commissioner of Customs (General), Mumbai
Case Number : Final Order No. A/85317/2026
CITATION : 2026 LLBiz CESTAT(MUM) 78
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) at Mumbai recently set aside the revocation of a Customs Broker licence after finding that the adjudicating authority recorded contradictory findings. A bench of Judicial Member S.K. Mohanty and Technical Member M.M. Parthiban allowed the appeal filed by Fairdeal Shipping Agency Pvt. Ltd. against the order of the Principal Commissioner of Customs (General), Mumbai.
GSTAT
Case Title : DGAP vs. AJ Enterprises
Case Number : NAPA/2/PB/2025
CITATION : 2026 LLBiz GSTAT (DEL) 8
Holding that the franchisee increased base prices on the very date the GST rate on restaurant services was reduced from 18 per cent to 5 per cent, the GST Appellate Tribunal at Delhi has upheld findings that a Pune-based Subway outlet at Amanora Mall profiteered ₹13,32,322 by neutralising the tax benefit meant for consumers. “The Respondent's action of increasing the base price on the very same date on which the notification reducing rate of tax came into force indicates that Respondent has willfully increased the basic price of the aforesaid items to maintain the same MRP that existed till 14.11.2017. Resultantly, the benefit of reduced tax rate could not be passed on to consumer,” Judicial Member Justice Mayank Kumar Jain held on Friday.
OTHER DEVELOPMENTS
GSTN Activates Withdrawal Facility For Small Taxpayers To Opt Out Of Simplified Registration Option
As of 21 February 2026, the Goods and Services Tax Network (GSTN) has activated the facility to file Form GST REG-32 for taxpayers who wish to opt out of registration under Rule 14A of the Central Goods and Services Tax (CGST) Rules. To mitigate compliance burdens, as part of the 'Next Generation GST Reforms', a Simplified GST Registration Scheme for Small and Low-Risk Businesses under Rule 14A was introduced in 2025.