Issue No. October/2025/02

RATIO OF LATEST JUDGEMENTS ON GST

SREI EQUIPMENT FINANCE LTD. V.   ASSISTANT COMMISSIONER, CGST & C.EX., NAVI MUMBAI & ORS. [WRIT PETITION NO. 2220 OF 2025] [BOMBAY HIGH COURT]

 A Corporate Debtor went through the Corporate Insolvency Resolution Process (CIRP). After the NCLT approved a resolution plan for the company, the State Tax Authority issued a GST demand notice for a period covered by the CIRP. The Hon’ble Bombay High Court found the GST demand impermissible as a resolution plan, once approved under Section 31(1) of the IBC, is binding on all stakeholders, including the government and its tax authorities. Any claim not part of the approved plan is considered extinguished. Further the court reiterated that the IBC has an overriding effect on other laws. Since the tax authorities failed to raise their claim during the CIRP, they cannot do so after the plan has been approved. Thus, the court declared the GST demand notice as null and void, thereby quashing and setting aside the demand.

NATIONAL ASSOCIATION OF CONTAINER FREIGHT STATIONS V. THE JOINT COMMISSIONER OF CUSTOMS, CHENNAI W.P. NO. 11222, 149, & 152 OF 2022 TS-875-HC(MAD)-2025-GST (MADRAS HIGH COURT)

 The Respondent herein, in February 2021, issued a Public Notice directing CFSs not to collect GST on the sale of uncleared cargo through auctions. The Respondent’s reasoned that GST should not be charged again because the IGST was already paid as part of the overall customs duty and that collecting it again would constitute double taxation. Aggrieved by the same the petitioner approached the Hon’ble High Court, challenging the notice on the grounds that Customs had no jurisdiction over GST matters. They argued that the auction of goods by a CFS was a separate “supply” under the CGST Act.

The Madras High Court, clarified that IGST on the import of goods and GST on their subsequent auction are distinct transactions. The court found that the Customs Department exceeded its authority by issuing a directive on GST collection via a Public Notice under the Customs Act, which should only cover customs procedures. The ruling designated the CFS as the “supplier” and the bidder as the “recipient” in the auction, making it a taxable supply under the CGST Act. The court stated that after the Bill of Entry is filed and customs duties (including IGST) are paid, Customs has no further jurisdiction; the CFS is responsible for collecting GST on the final bid amount. Consequently, the court quashed the Public Notice and the related letter for being issued without jurisdiction.

VINEET POLYFAB PVT. LTD. & ANR. VERSUS UNION OF INDIA & ORS.  – 2025 (10) TMI 103 – GUJARAT HIGH COURT.

The Petitioner is a manufacturer-exporter of polyester yarn, having filed multiple shipping bills at Hazira Port in March 2020 after paying IGST of ₹7.53 lakh. Even though the export was successful and the ICEGATE system showed a success status (SB000), the refund was not processed due to a technical error. The Petitioner repeatedly represented for redress, and by court intervention, the Principal Commissioner, Ahmedabad, manually sanctioned the refund—admitting the technical glitch and Petitioner’s eligibility. The Respondent declined to pay statutory interest, alleging the delay stemmed from errors in the Petitioner’s shipping bills and returns. The Petitioner contended the refund delay was attributable solely to a system error for which there was official acknowledgement, and no specific fault was recorded against the Petitioner’s documentation. The Petitioner sought statutory interest under Section 56 for such delayed refund. The Respondent contended the system processes IGST refunds automatically via the ICEGATE-EDI platform after validating shipping bills and GST returns. They deflected responsibility for the delay to possible Petitioner errors but admitted in official affidavits and orders that the failure was from technical integration issues. Aggrieved by the non-payment of interest, the Petitioner approached the Gujarat High Court by filing a writ petition under Article 226.

The Hon’ble Gujrat High Court held that as per Section 56 of the CGST Act, delayed refund beyond 60 days from application receipt must always attract mandatory interest; the interest is mandatory and not discretionary. The Hon’ble Court further stressed on the fact that the Petitioner’s refund delay was attributable to a technical glitch, not to any proven documentation in-accuracy or taxpayer omission. The Court relying on PANJI ENGINEERING PRIVATE LIMITED Versus UNION OF INDIA – 2023 (7) TMI 533 reiterated the mandatory nature of such interest and directed the respondents to grant interest, as per Section 56, on the delayed refund, within 12 weeks of the order. 

STARK PHOTO BOOK VS. THE ASSISTANT COMMISSIONER, WP(C) NOS.16709/2024 [KERALA HIGH COURT]

The main issue before the Hon’ble Kerala High Court was to determine whether the activity of converting customer-supplied digital content into a physical print format (e.g. photo books, brochures) was a “supply of goods” (taxable at 12% under HSN 4911) or a “supply of services” (taxable at 18% under SAC 998386).

The Hon’ble Court observed that the transaction involves both the supply of goods (paper and ink) and services (the printing activity). Applying the “principal supply” test, the court concluded that the service component is predominant. Customers approach the printer for the specialized service of transforming their unique digital content into a tangible form, not merely to purchase paper. The title/ownership of the content remains with the customer, a

key factor indicating the transaction is a service. The use of modern digital printing technology (without negatives) was found to be irrelevant to the classification, as the relevant service code (SAC 998386) explicitly mentions “printing of images from digital media”.

Therefore, the Hon’ble High Court Held that printing digital images or letters on paper where the customer provides the content, constitutes a composite supply with the predominant element being service and is thus subject to 18% GST. This classification falls under Service Accounting Code (SAC) 998386, which covers photographic and video graphic processing services.

MILROC GOOD EARTH DEVELOPERS V. UNION OF INDIA [TS-871-HC(BOM)-2025-GST] [BOMBAY HIGH COURT]

That the taxpayer, Milroc Good Earth Developers, was issued a single, consolidated SCN (Show Cause Notice) by the GST authorities for multiple financial years, alleging a tax demand. The Petitioner challenged the SCN via a writ petition, arguing that GST liability and assessment must be determined on a tax-period (financial year) basis.

The Hon’ble Bombay High Court ruled that the revenue department cannot issue a single, consolidated show-cause notice (SCN) for multiple financial years under the GST Act. The court held this practice to be legally impermissible and an instance of “jurisdictional overreach” by the tax authorities. The Court reasoned that the Central Goods and Services Tax (CGST) Act and its relevant sections (like 73 and 74) mandate that assessment and determination of tax liability are linked to a specific “tax period,” which is typically a financial year. The High Court further stated that each financial year has its own distinct limitation period for issuing SCNs and passing orders. Clubbing multiple years into one notice distorts this statutory framework and the procedural rights of the assessee to provide year-specific rebuttals. The Hon’ble Court also explained that consolidating periods prevents taxpayers from raising defences specific to each year or accessing potential year-specific remedies like compounding or amnesty schemes, thus violating principles of natural justice. The Hon’ble High Court clarified that the phrase “any period” in Sections 73 and 74 must be interpreted in conjunction with the definition of “tax period” in Section 2(106) of the Act, meaning a specific, defined period (e.g., monthly or annual return period), not an arbitrary collection of multiple years.

Thus, the Court quashed the consolidated SCN, declaring it to be issued without jurisdiction. The Hon’ble High Court granted the revenue department liberty to initiate fresh and separate proceedings for each financial year, strictly in accordance with the law and applicable limitation periods.