Polypropylene Leno Bags Are Plastic, Not Textile Products For GST Classification: Calcutta High Court

The Calcutta High Court has recently dismissed Mega Flex Plastics Limited's challenge to a GST ruling that treated its polypropylene leno bags as plastic products rather than textile products. A Division Bench of Justice Debangsu Basak and Justice Md. Shabbar Rashidi upheld the order of the Appellate Authority for Advance Ruling (AAAR) and a Single Judge's decision refusing to interfere with it. At the heart of the case was the classification of polypropylene leno bags made by weaving...

Kerala High Court Holds Section 16(5) Overrides Section 16(4), Bars ITC Denial For Delayed Returns

The Kerala High Court on 19 May held that authorities cannot deny Input Tax Credit (ITC) to a registered taxpayer merely on the ground of delayed filing of returns under Section 16(4) of the CGST Act, where the taxpayer satisfies the conditions prescribed under Section 16(5), a subsequent relaxation provision. Justice Ziyad Rahman A.A. allowed a writ petition filed by We Match and quashed the assessment order passed under Section 73 of the CGST Act, which had disallowed ITC claims for the...

Gauhati High Court Holds DRC-01 Cannot Replace Statutory Show Cause Notice Under GST Act

The Gauhati High Court on 13 May held that GST authorities under the Assam GST Act cannot initiate and conclude proceedings under Section 73 solely on the basis of a Summary Show Cause Notice in Form GST DRC-01, reiterating that issuance of a proper statutory show cause notice is a mandatory precondition for raising a tax demand. Justice Manish Choudhury allowed the petition filed by Riyan Enterprises and set aside the adjudication order passed under Section 73 of the Assam GST Act for alleged...

Punjab & Haryana High Court Rules PLC Not Separately Taxable, Sets Aside DLF Advance Ruling Orders

The Punjab and Haryana High Court on 13 May held that Preferential Location Charges (PLC) collected by developers for offering a preferred location within a housing project form part of the composite construction service and cannot attract separate taxation. A Division Bench of Justices Deepak Sibal and Lapita Banerji allowed a writ petition filed by DLF Limited and quashed the Advance Ruling Authority order dated 28 August 2020 and the Appellate Authority for Advance Ruling order dated 28...

BOT Concessionaire Liable To Pay GST On Toll Rights Received As Consideration: Rajasthan High Court

The Rajasthan High Court on 22 May held that toll collection rights granted under a Build-Operate-Transfer (BOT) concession agreement constitute consideration for taxable works contract services and are not exempt from GST merely because toll collection itself enjoys exemption. A Division Bench of Justices Arun Monga and Sandeep Shah dismissed a writ petition filed by CG Tollway Ltd challenging orders of the GST authorities that had demanded Rs. 16.36 GST, interest and penalty on services...

Himachal Pradesh HC Quashes GST Show Cause Notice, Says Department Bound By Unchallenged Advance Ruling

The High Court of Himachal Pradesh has quashed a GST show cause notice issued to Amit Engineers after finding that the notice was issued despite an earlier Advance Ruling that had attained finality between the parties. A bench of Justice Vivek Singh Thakur and Justice Ranjan Sharma observed: “in view of the finality attached to the Advance Ruling between the parties, the show cause notice dated 14.02.2025 (Annexure P-6) was without foundation. In view of the finality of the advance ruling...

Delhi High Court Protects IndiGo From Coercive Action In ₹458 Crore GST Dispute

The Delhi High Court on Friday protected InterGlobe Aviation, which operates India's largest airline IndiGo, from coercive action over a ₹458.26 crore goods and services tax (GST) demand linked to compensation received from a foreign engine supplier. A division bench of Justices Nitin Wasudeo Sambre and Ajay Digpaul issued notice to the GST department and granted interim protection to the airline after observing that, prima facie, the amount received by IndiGo appeared to be “compensation”, and...

Revenue Must Rebut Taxpayer's Claimed Date Of GST Order Communication With Cogent Evidence: Allahabad High Court

The Allahabad High Court has reiterated that where a taxpayer discloses the actual date of communication of an order under the Uttar Pradesh Goods and Services Tax Act, 2017, the burden shifts to the Revenue to rebut that assertion with cogent material. It further held that the appellate authority is bound to give an independent finding on the date of communication of the order. Referring to the decisions of the division bench of the Allahabad High Court in Bambino Agro Industries Limited v....

Calcutta High Court Treats Polypropylene Sacks As Plastic, Not Textile Products In GST Dispute

The Calcutta High Court has held that polypropylene leno bags manufactured by Mega Flex Plastics Limited should be treated as plastic sacks, not textile products, for GST purposes. A Division Bench comprising Justice Debangsu Basak and Justice Md. Shabbar Rashidi observed that the company's bags were commonly known in the market as “plastic sacks” and not textile sacks. The court held, “The sacks manufactured by the appellant are commonly known in the market as plastic sacks. They are not...

Gujarat High Court Says GST Arrest Valid Though Verbatim Signed 'Reasons To Believe' Copy Was Not Supplied

The Gujarat High Court has upheld the arrest of a person accused in a fake Input Tax Credit (ITC) racket, holding that while an arrestee must be furnished the “reasons to believe” forming the basis of arrest to enable a legal challenge, failure to provide a verbatim signed copy of the Commissioner's internal note does not vitiate the arrest. "Therefore, this Court, is of the opinion that the 'reasons to believe' recorded by the Commissioner has been furnished to the petitioner, facilitating him...

Rajasthan High Court Stays Parallel GST Proceedings, Says Only One Officer Can Initiate Action on Same Matter

The Rajasthan High Court has stayed parallel GST proceedings and recovery action against a Jaipur-based exporter after finding prima facie that tax authorities may have initiated duplicate proceedings for the same financial year. A division bench of Acting Chief Justice Sanjeev Prakash Sharma and Justice Bipin Gupta issued notice to the department and observed that under the GST law, only one proper officer can initiate proceedings on the same subject matter. “Considering the provisions of...

GST Audit Completion Does Not Bar Further Tax Proceedings for Unpaid Tax: J&K and Ladakh High Court

The High Court of Jammu & Kashmir and Ladakh has recently held that completion of a GST audit does not prevent tax authorities from initiating further proceedings for unpaid or short-paid tax.Referring to section 65(7) of the CGST Act, the court observed, “A plain reading thereof makes it abundantly clear that where an audit conducted under sub-section (1) of Section 65 results in detection of tax not paid, short paid, erroneously refunded, or input tax credit wrongly availed or utilized,...