In this News Letter 1st Edition of June 2025, you’ll find:
1. Ratio of Latest Judgements
2.Latest Circulars Issued By CBIC
3. GST News & Update
4. GST Compliances Due Dates
RATIO OF LATEST JUDGEMENTS ON GST
- Tata Hitachi Construction Machinery Company Private Limited v State of UP
Citation: (2025) 30 Centax 469 (All.)
Material Facts:
The case involved movement of goods without filling Part-B of the e-way bill, for which the Department imposed penalty under Section 129 of the CGST Act. The Revenue alleged violation of Rule 138 of GST Rules 2017, however, there was no evidence presented regarding any intent to evade tax on the part of the Assessee.
Legal Issue:
The primary legal issue before the court was whether penalty under Section 129 can be imposed for non-filling of Part-B of e-way bill without establishing intent to evade tax.
Ratio Decidendi:
The Hon’ble Allahabad High Court established the fundamental legal principle that penalty under Section 129 of CGST Act cannot be imposed merely for procedural violation of Rule 138, specifically non-filling of Part-B of e-way bill, without establishing the essential ingredient of “intent to evade tax.” The court reasoned that Rule 138 violation alone is insufficient for penalty imposition, as intent to evade tax constitutes an essential element under Section 129. The judgment emphasizes that procedural non-compliance without mens rea does not attract penalty provisions, and the Revenue must establish both the violation and the intent elements. This precedent protects genuine taxpayers from arbitrary penalties based solely on procedural lapses without establishing fraudulent intent.
- Shubh Corporation v State of Maharashtra
Citation: (2025) 30 Centax 513 (Bom.)
Material Facts:
The case arose when the bank account of the assessee was seized by the Revenue through communication dated 27th January 2025 in Form GST DRC-22, directing provisional attachment of the petitioner’s bank account. The petitioner contended that no reasons were furnished for the attachment, and even after search and seizure operations conducted under Section 67, no show-cause notice had been issued. The attachment was imposed without following due process requirements.
Legal Issue:
The court was required to determine whether provisional attachment of bank account can be ordered without providing reasons and following due process requirements under GST law.
Ratio Decidendi:
The Hon’ble Bombay High Court held that the power of provisional attachment of bank accounts under GST law is drastic in nature and must be exercised with circumspection, requiring the authority to be satisfied that government revenue needs protection and attachment is necessary to prevent revenue loss. The court emphasized that attachment power is drastic as it can bring business operations to a grinding halt, necessitating careful exercise of such powers by authorities. The judgment established that the authority must act with circumspection to avoid misuse of powers, and satisfaction regarding revenue protection is a prerequisite for such attachment. Additionally, there must be reasonable belief that revenue cannot be recovered without attachment and due process must be followed before imposing any attachment order. This precedent establishes crucial procedural safeguards for taxpayers against arbitrary attachment orders and emphasizes the need for reasoned decisions in provisional attachment cases.
- Fair Deal Cars Private Limited v Commissioner
Citation: (2025) 30 Centax 463 (Del.)
Material Facts:
The petitioner challenged the show-cause notice and consequential order-in-original on the ground that the Department failed to issue a mandatory pre-consultation notice in Form GST DRC-01A as contemplated under Rule 142(1A) of Central Goods and Services Tax Rules, 2017. Due to this procedural defect, the petitioner neither filed a reply nor attended any personal hearing, contending that the entire proceeding was vitiated from the inception.
Legal Issue:
The legal issue was whether a show-cause notice is valid without issuing the mandatory pre-consultation notice in Form GST DRC-01A as required under the GST Rules.
Ratio Decidendi:
The Hon’ble Delhi High Court established that pre-consultation notice in Form GST DRC-01A under Rule 142(1A) of CGST Rules 2017 is a mandatory prerequisite for issuing show-cause notice, and failure to comply with this requirement renders the entire proceedings invalid. The court reasoned that Rule 142(1A) mandates pre-consultation notice before issuing show-cause notice, and such procedural compliance is mandatory rather than directory in nature. The judgment emphasized that non-compliance with pre-consultation requirements invalidates subsequent proceedings, as due process requires proper sequential compliance with all procedural requirements. Consequently, the entire proceedings were set aside and relegated to the adjudicating authority to be heard afresh on merits. This precedent establishes that procedural requirements in GST assessment proceedings are mandatory and non-compliance vitiates the entire proceedings, thereby ensuring protection of taxpayer rights through proper procedural compliance.
- Gujarat State Police Housing Corporation Ltd. v Union of India
Citation: (2025) 30 Centax 229 (Guj.)
Material Facts:
The petitioner was awarded a tender for works contract by the Government and was availing input tax credit on goods and services, utilizing such ITC for discharge of output liability. The petitioner discharged GST liability on construction activities carried out during 2017-2018 using available ITC balance. Subsequently, the petitioner discovered that their activity was not taxable under Notification No.32/2017-Central Tax (Rate) dated 13.10.2017, leading them to file a refund application for GST paid under mistaken belief of law. However, the refund application was rejected by authorities on limitation grounds under Section 54(1) of the CGST Act
Legal Issue:
The court had to determine whether refund can be claimed for GST paid under mistaken belief of law and whether statutory limitation provisions apply to such refund claims.
Ratio Decidendi:
The Hon’ble Gujarat High Court established the fundamental constitutional principle that amount paid as tax under mistake or ignorance of law cannot be retained by revenue and must be refunded, as its retention violates Article 265 of the Constitution, which mandates that no tax shall be levied except by authority of law. The court reasoned that the constitutional mandate under Article 265 prohibits tax collection without legal authority, and revenue cannot retain amounts paid under mistaken belief of law. The judgment clarified that self-assessment payments made in error are refundable, and limitation provisions under Section 54(1) do not apply to payments made from electronic cash ledger under mistake of law. The court emphasized that revenue has a constitutional duty to refund illegally collected amounts, regardless of how such payments were made. This precedent establishes strong constitutional protection against illegal tax retention and clarifies that limitation provisions cannot defeat constitutional mandates regarding lawful tax collection, providing significant protection to taxpayers who have paid taxes under mistaken belief of law.
- IDP Education India Private Limited v Union of India
Citation: (2025) 30 Centax 391 (Bom.)
Material Facts:
The petitioner, a subsidiary of IDP Education Ltd. (an Australian company), was involved in providing assistance to students for recruitment in foreign universities. The parent company, IDP Australia, entered into agreements with various foreign universities and received student placement service fees as percentage of fees charged to students. The petitioner contended that it provided services to IDP Australia on a principal-to-principal basis under a bilateral contract, without any direct contractual obligation with universities or students, and without raising invoices or receiving consideration from end beneficiaries. The dispute centered on whether the petitioner qualified as an “intermediary” under GST law.
Legal Issue:
The court was required to determine whether an entity providing services to its parent company on principal-to-principal basis qualifies as “intermediary” under Section 13(8) read with Section 2(13) of the Integrated Goods and Services Tax Act, 2017.
Ratio Decidendi:
The Hon’ble Bombay High Court held that an entity providing services to its parent company on principal-to-principal basis under bilateral contract does not qualify as “intermediary” under GST law, particularly when there is no direct contractual relationship with ultimate beneficiaries. The court relied on the fact that the CESTAT order on similar facts had attained finality, preventing any different interpretation. The judgment was further supported by CBIC Circular dated 20.09.2021, which clarified that intermediary provisions under GST regime broadly remain the same as under the service tax regime. The court emphasized that principal-to-principal relationship negates intermediary status, and the absence of direct contractual obligation with end users is determinative of the relationship. The judgment established that consistent interpretation across different tax regimes is required unless specifically changed by legislation. This precedent clarifies the scope of “intermediary” provisions in international service transactions and establishes that bilateral principal-agent relationships do not automatically create intermediary status under GST law.
- Kishan Chand and Co v Additional Commissioner Grade-II Appeal
Citation: (2025) 30 Centax 340 (All.)
Material Facts:
A notice was issued to the petitioner under Section 73 of the GST Act regarding discrepancies in various GST returns including GSTR-3B, GSTR-9, GSTR-1 and GSTR-2A, following which an order was passed. The petitioner filed an appeal on 18.08.2021 through electronic mode, which was subsequently dismissed vide order dated 24.12.2024 on the sole ground that certified copy of the impugned order was not filed as required under Rule 108 of the GST Rules. The petitioner contended that the appeal was filed with all necessary documents and proper copy, questioning the mandatory nature of certified copy requirement.
Legal Issue:
The legal issue was whether filing of certified copy under Rule 108 is mandatory for a valid appeal or merely procedural in nature when the appeal is complete with all documents.
Ratio Decidendi:
The Hon’ble Allahabad High Court established that the requirement of filing certified copy under Rule 108 of GST Rules is procedural in nature rather than mandatory, and if an appeal is filed with all documents and proper copy, separate filing of certified copy is not required. The court reasoned that certified copy requirement is procedural rather than substantive, and complete appeal with all documents satisfies procedural requirements. The judgment emphasized that technical compliance should not defeat substantive rights of appellants, and appeals should be decided on merit rather than being dismissed on procedural technicalities. The court observed that procedural requirements should be read harmoniously with appeal rights to ensure justice is not defeated by technical compliance issues. Consequently, the impugned dismissal order was quashed. This precedent establishes that procedural requirements in GST appeals should not be used to defeat substantive appeal rights when the appeal is complete in all material respects, promoting substantive justice over technical compliance.
- Raj Kumar Mishra v Union of India
Citation: (2025) 30 Centax 440 (Gau.)
Material Facts:
An application was made under Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023 for grant of pre-arrest bail by the petitioner who was apprehending arrest in connection with GST investigation. During preliminary investigation and analysis of GST returns, it was found that the petitioner had filed ineligible input tax credit amounting to approximately Rs. 3.42 crores. The GST authorities had only issued notice under Section 70 of the CGST Act for obtaining relevant documents necessary for investigation purposes, and no other specific circumstances were brought forward by the petitioner to justify apprehension of arrest.
Legal Issue:
The court had to determine whether pre-arrest bail is necessary in GST cases involving input tax credit fraud below the Rs. 5 crores threshold and what circumstances justify such anticipatory bail applications.
Ratio Decidendi:
The Hon’ble Gauhati High Court established that in GST offences involving ineligible input tax credit below Rs. 5 crores, the case falls under bailable offence category, and pre-arrest bail applications are not warranted unless specific circumstances indicating arrest apprehension are established. The court reasoned that ITC fraud below Rs. 5 crores constitutes a bailable offence, and mere issuance of Section 70 notice for document production does not indicate intention to arrest. The judgment placed the burden on the applicant to demonstrate specific circumstances that create genuine apprehension of arrest, applying the proportionality principle to pre-arrest bail applications in tax matters. The court observed that investigation stage notices are normal procedure and do not constitute arrest indicators, and there cannot be any apprehension of arrest when the case admittedly falls under bailable offence category with the amount involved being less than the statutory threshold. This precedent establishes clear guidelines for determining when pre-arrest bail applications are justified in GST matters and clarifies that routine investigation procedures do not warrant anticipatory bail applications.
LATEST CIRCULARS ISSUED BY CBIC
CBIC CIRCULAR NO. 249/06/2025-GST DATED 09.06.2025
MODIFICATION OF COMMUNICATION REQUIREMENTS
Legal Effect: This Circular modifies CBIC Circulars No. 122/41/2019-GST and 128/47/2019-GST by establishing an alternative compliance mechanism for statutory communications under Section 169 of the CGST Act, 2017.
Key Provision: Communications transmitted through the common portal bearing a verifiable Reference Number (RFN) shall be deemed valid communications without requirement of Document Identification Number (DIN). Such RFN-bearing communications satisfy the statutory communication requirements under GST law.
Practical Implication: Taxpayers and authorities may rely on RFN-based communications as legally valid, eliminating DIN compliance burden for portal-mediated communications.
NEWS & UPDATE FROM GSTN
1.GSTR-3B AUTO-POPULATION AND AMENDMENT FRAMEWORK
GSTN ADVISORY DATED 07.06.2025
Legal Framework: With effect from July 2025 tax period (returns due August 2025), auto-populated tax liability in GSTR-3B derived from GSTR-1/GSTR-1A/IFF shall become non-editable, mandating amendment through GSTR-1A prior to GSTR-3B filing.
Procedural Requirement: Taxpayers must utilize GSTR-1A facility to correct erroneous outward supply declarations before GSTR-3B submission. Direct editing of auto-populated values in GSTR-3B shall be disabled.
Compliance Timeline: Amendment through GSTR-1A must be completed within the same tax period before GSTR-3B filing, ensuring data integrity across GST return ecosystem.
2.QRMP REFUND APPLICATION SYSTEM VALIDATION
GSTN ADVISORY DATED 10.06.2025
Statutory Basis: System validation implemented pursuant to Para 6 of Circular No. 125/44/2019-GST dated 18.11.2019, mandating filing of all due returns before refund application submission.
Technical Resolution: System errors affecting QRMP taxpayers regarding Invoice Furnishing Facility (IFF) recognition and inter-quarter return filing prompts have been rectified.
Current Position: QRMP taxpayers may file refund applications for invoices covered by filed GSTR-3B. Invoices declared through IFF without corresponding GSTR-3B filing must be excluded from refund applications.
Compliance Standard: All applicable returns due up to refund application date must be filed, with specific exemptions for composition taxpayers, non-resident taxable persons, and Input Service Distributors as per existing circular provisions.
3.SECTION 128A AMNESTY APPLICATION PROCESS
GSTN ADVISORIES DATED 11.06.2025 AND 12.06.2025
Statistical Update: As of 08.06.2025, 3,02,658 waiver applications filed through SPL-01/02 forms under Section 128A amnesty scheme.
Alternative Filing Mechanism: Taxpayers experiencing technical difficulties may utilize alternative filing procedures as detailed in GSTN tutorial documentation, with immediate escalation of unresolved issues to GST Self-service portal.
Payment Reconciliation Issues: Technical discrepancies in auto-population of payment details in Table 4 of SPL-01/SPL-02 forms, particularly affecting:
Payments made through “payment towards demand order” functionality
Pre-deposit amounts
GSTR-3B payments
Compliance Protocol: Applications may be filed despite payment-demand mismatches, with mandatory attachment of relevant payment documentation for jurisdictional officer verification.
4.E-WAY BILL 2.0 PORTAL IMPLEMENTATION
GSTN ADVISORY DATED 16.06.2025
Launch Date: E-Way Bill 2.0 portal (https://ewaybill2.gst.gov.in) operational from 01.07.2025, providing enhanced inter-operability with existing E-Way Bill 1.0 portal.
Inter-Operable Services: Cross-portal functionality enabling:
- E-Way Bill generation based on Part-A details
- Consolidated E-Way Bill generation and retrieval
- Validity extension and transporter detail updates
- Real-time data synchronization between portals
Business Continuity Framework: Dual-system architecture ensures uninterrupted E-Way Bill operations during technical exigencies, with cross-portal update capabilities and API integration for logistics operators.
Operational Benefit: Complete elimination of single-portal dependency through seamless data mirroring and cross-functional operability between E-Way Bill 1.0 and 2.0 systems.
5.THREE-YEAR LIMITATION ON GST RETURN FILING
GSTN ADVISORIES DATED 07.06.2025 AND 18.06.2025
Statutory Authority: Finance Act, 2023 amendment implemented through Notification No. 28/2023-Central Tax dated 31.07.2023, imposing three-year limitation on return filing under Sections 37, 39, 44, and 52 of CGST Act.
Implementation Timeline: Restriction effective from July 2025 tax period, barring filing of returns with due dates preceding three-year limitation period.
Affected Returns: GSTR-1, GSTR-1A, GSTR-3B, GSTR-4, GSTR-5, GSTR-5A, GSTR-6, GSTR-7, GSTR-8, GSTR-9, and GSTR-9C falling within limitation period
LIMITATION SCHEDULE (Effective 01.08.2025):
Return Type | Barred Period |
GSTR-1/IFF | June 2022 and prior |
GSTR-1Q | April-June 2022 and prior |
GSTR-3B/M | June 2022 and prior |
GSTR-3BQ | April-June 2022 and prior |
GSTR-4 | FY 2021-22 and prior |
GSTR-5/6/7/8 | June 2022 and prior |
GSTR-9/9C | FY 2020-21 and prior |
Compliance Advisory: Immediate reconciliation and filing of pending returns recommended to avoid permanent barring under statutory limitation provisions.
DUE DATES – GST COMPLIANCES IN JULY 2025 | |||
Monthly | Quarterly | Other Due Dates | |
GSTR-3B (Jun, 2025) Jul 20th, 2025
| GSTR-3B (Apr-Jun, 2025) Jul 22nd, 24th, 2025
| GSTR-5 (Jun, 2025) Jul 13th, 2025
| GSTR-5A (Jun, 2025) Jul 20th, 2025
|
GSTR-1 (Jun, 2025) Jul 11th, 2025 | GSTR-1 (Apr-Jun, 2025) Jul 13th, 2025
| GSTR-6 (Jun, 2025) Jul 13th, 2025
| GSTR-7 (Jun, 2025) Jul 10th, 2025
|
IFF (Optional) (Jun,2025) NA
| CMP-08 (Apr-Jun, 2025) Jul 18th, 2025
| GSTR-8 (Jun, 2025) Jul 10th, 2025
| RFD-10 2 years from the last day of the quarter in which supply was received |
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