In this News Letter 2nd Edition of April 2026 you’ll find:
1. RATIO OF LATEST JUDGEMENTS ON GST
2. GST UPDATES
3. DUE DATES – GST COMPLIANCES IN MAY 2026
RATIO OF LATEST JUDGEMENTS ON GST
GB MANPOWER MANAGEMENT SERVICES VS. STATE OF U.P. & ANR WRIT TAX NO. 2131 OF 2026 (Allahabad High Court)
The Petitioner herein, challenged the self-conflicting order dated 23.03.2022, wherein the registration of the Petitioner was cancelled by the Respondent after making the following conflicting observation that “This has reference to your reply dated 01/04/2022 in response to the notice to show cause dated 23/03/2022 Whereas no reply to notice to show cause has been submitted”. It was also observed that the petitioner had been filing its returns regularly from financial year 2017-18 till 2025.
The Hon’ble Allahabad High Court even observed that once the petitioner has filed its reply dated 1.4.2022, that reply had to be considered on merits before the registration may have been cancelled. The Proper Officer thereafter cannot maintain that no reply had been submitted by the petitioner. The High Hon’ble Court while entertaining the writ, prima facie on the basis of the facts has stated that no useful purpose would be served in keeping writ petition pending and calling for a counter affidavit.
The Hon’ble Allahabad High Court set aside the impugned order and remitted the matter to the Proper Officer to pass a fresh order, strictly in accordance with law. For that purpose, the authority may issue further notice to the petitioner confronting it with all adverse material that may be relied against it within a period of two weeks from today. The petitioner shall have two weeks thereafter to file its reply. Thereafter date for hearing may be fixed by the Proper Officer with at least 15 days advance notice to the petitioner. Hon’ble High Court directed the petitioner to cooperate in the proceedings and not seek any adjournment. Thereupon the fresh order may be passed within a period of two weeks.
VALMET FLOW CONTROL PVT. LTD. VS. UNION OF INDIA & ANR. WRIT PETITION NO. 14685 OF 2025 (Bombay High Court)
The petitioner herein filed a refund application for August 2022 amounting to Rs. 1,10,52,474/-. The Assistant Commissioner of GST rejected the claim on April 3, 2025 arguing that the claim was not maintainable because the Petitioner had already filed and received a refund for the larger period of July 2022 to September 2022. The officer held that a second application for an “intervening period” (August 2022) already covered by a prior application was impermissible under CBIC circulars. The Petitioner herein admitted they inadvertently missed including specific invoices for August 2022 in their first application but filed the second one within the legal two-year limit.
The Petitioner herein argued that Section 54(1) of the CGST Act has no bar against filing more than one refund application for the same period if an error occurred. They cited the Gujarat High Court decision in Shree Renuka Sugars Limited, which allowed supplementary claims for left-out amounts due to errors. The Respondents on the other hand did not dispute that the application was filed within the two-year limitation or that the law doesn’t explicitly bar a second application. However, they defended the officer’s decision based on existing administrative circulars and instructions.
The Hon’ble Bombay High Court observed that Section 54(1) of the CGST Act does not prohibit a party from filing multiple refund applications, especially in cases of inadvertent mistakes or lapses. Moreover, the High Court emphasized that the technical error or the limitations of an electronic system should not defeat a substantive right to a refund if all other legal conditions are met, furthermore the decisions from other High Courts on “all-India statutes” (like the CGST Act) should be followed by department officers to ensure uniformity and avoid “judicial chaos,” citing the Shree Renuka Sugars and Maneklal Chunilal cases. The Court further stated that the principle of res judicata (where a matter is already judged and cannot be relitigated) does not apply to distinct refund applications for missed claims within the limitation period. The Hon’ble Bombay High Court quashed the rejection order dated April 3, 2025. The refund application dated August 9, 2024, is restored to the Assistant Commissioner for a fresh decision on its merits, with the authorities to mandatorily grant the Petitioner a hearing and decide the claim in accordance with the law.
COMFORT BATTERY VS. ADDITIONAL COMMISSIONER CGST, WRIT TAX NO. 2097 OF 2026 (Allahabad High Court)
In the present case, the adjudication order passed under section 74 of the CGST/UPGST Act for the F.Y. 2018-19 to 2022-23, along with the Show Cause Notice issued in DRC-01 was challenged by the Petitioner. In the detailed Show Cause Notice it was proposed to impose penalty equivalent to the tax demanded while the statutory Form GST DRC-01 as mandatorily required under Rule 142 mentioned the proposed penalty amount as “0”. However, the Adjudicating Authority in the final order imposed a penalty of ₹4,36,18,072/-. The petitioner contended that such imposition was beyond the scope of the notice and violated Section 75(7) of the Act, as the penalty was not specified in the statutory Form GST DRC-01. The Revenue argued that the detailed Show Cause Notice clearly contained a proposal for penalty and therefore the demand was valid.
The Hon’ble Allahabad High Court held that the statutory Form GST DRC-01 is a crucial and mandatory component of the Show Cause Notice mechanism under GST law and must clearly specify the complete demand including tax, interest and penalty. The Hon’ble High Court observed that allowing the Revenue to rely on details mentioned only in annexures, while the statutory form reflects a “nil” penalty, creates ambiguity and undermines the statutory scheme.
The Hon’ble Court emphasized that such ambiguity directly affects the taxpayer’s rights, particularly under Section 74(8) which provides an option to settle proceedings by paying reduced penalty within a prescribed time. For such rights to be meaningfully exercised the exact quantum of penalty must be clearly disclosed in the statutory form itself. Thus, the Hon’ble High Court held that non-specification of penalty in Form GST DRC-01 constitutes a procedural defect that vitiates the adjudication. The impugned order was set aside. However, the Court permitted the department to rectify the defect by issuing a fresh/rectified Show Cause Notice specifying the correct demand, granting the petitioner opportunity to reply and participate in fresh adjudication proceedings.
SUBHASH CHANDRA NARENDRA KUMAR NAHAR & ORS. VS. STATE OF MADHYA PRADESH & ORS. WRIT PETITION NO. 2510 OF 2026 & 2532 OF 2026 (Madhya Pradesh High Court at Indore)
The Petitioners (M/s Subhash Chandra Narendra Kumar Nahar and M/s Nahar Traders) herein sought to quash an order dated December 30, 2025 passed by respondent No. 4 (Assistant Commissioner of State Tax, Anti-Evasion Bureau, Indore). The Impugned order herein imposed a total tax liability of Rs. 7,01,61,092 on the petitioner in WP-2510/2026. It is pertinent to note that herein an investigation into another entity (M/s Dakshraj Enterprises) suggested a supply chain mechanism used for wrongful passing of Input Tax Credit (ITC). The petitioners, as recipients were accused of availing inadmissible ITC in violation of the M.P. GST Act, 2017.
The Petitioner argued that the Respondent No. 4 that is the adjudicating officer was not the proper officer herein as defined under section 2(91) of the CGST Act. The Petitioners herein relied upon the 2024 Commissioner’s Order, an Assistant Commissioner’s jurisdiction is capped at an annual turnover of Rs. 20 Crores. Matters involving higher turnovers vest solely with the Deputy Commissioner. The Respondent on the other hand, argued that the petition was not maintainable because the petitioner could have filed an appeal under Section 107 of the CGST Act. They Further, claimed that respondent No. 4 was authorized under Section 6(1) of the Union Territory GST Act, 2017.
The Hon’ble Madhya Pradesh High Court held that while an alternative remedy exists, it is not an absolute bar under Article 226 if the impugned order is passed without jurisdiction citing Whirlpool Corporation vs. Registrar of Trademark. Furthermore, as per Section 6(1) of the GST Act, State Tax officers can only be authorized as “Proper Officers” for Central/Union Territory tax purposes subject to conditions and recommendations of the GST Council. Even the State’s counsel admitted there was no such recommendation by the Council to notify Respondent No. 4 as the Proper Officer in this context. Thus, the Hon’ble High Court quashed the order dated December 30, 2025, on the grounds that it was passed by an incompetent Authority but the Court granted the Competent Authority the liberty to pass a fresh order in accordance with the law.
GAIL (INDIA) LTD. VS. THE ADDITIONAL COMMISSIONER, OFFICE OF THE COMMISSIONER OF GST AND CENTRAL EXCISE W.P.(MD) NO. 13152 OF 2020 (Madras High Court – Madurai Bench)
The Petitioner herein operates under a specific internal compliance model due to the “hybrid” nature of Natural Gas taxation in India, as the Natural Gas is outside the scope of GST and subject to State VAT (5%). However, the transportation service (transmission) of that gas is a service subject to GST. To clarify this system, the Petitioner herein operates with two distinct GSTIN in the state of Tamil Nadu – 1st the Transmission Vertical billed the Trading Vertical for the Service and 2nd the Trading Vertical billed the End Customer. The Trading Vertical sells gas at a price inclusive of transmission charges & the end customer pay a single price. The Petitioner broke this down on the invoice to show “reimbursement of GST cost” to remain transparent. Crucially, the Transmission Vertical deposited the 12% GST into the government exchequer for every cubic meter of gas moved. The Respondent issued a Show Cause Notice (SCN) dated August 17, 2020, under Section 76(1) of the CGST Act, alleging that the Petitioner collected ₹14.63 crore as tax but failed to remit it, as the Trading Vertical (a “distinct person”) retained the amount.
The Petitioner herein argued that every penny collected from customers was accurately remitted to the government by the transmission vertical thus, there is no revenue loss. The petitioner even contended that Section 76 applies only when tax is collected and not paid. Since the tax was paid (albeit via a different internal registration), the SCN is without jurisdiction. The petitioner relied upon similar proceedings against GAIL in Gujarat were dropped on December 30, 2024 after finding the arrangement was a valid reimbursement. The Revenue on the other hand said that under Section 25(4) of the CGST Act separate registrations are treated as distinct persons. Thus, payment by one cannot be credited to the other. The Respondent went onto assert that Writ Petition should not be entertained against a mere SCN and the petitioner should respond to the adjudicating authority.
The Hon’ble Madras High Court herein noted that the Department’s own inquiry findings admitted that the amount collected by the Trading Vertical tallied exactly with the amount paid by the Transmission Vertical. The Court held that Section 76 is a “anti-profiteering” measure meant to ensure the government receives tax collected; it is not a “method to justify double taxation” or a tool to penalize technical accounting choices where no revenue loss exists. The Hon’ble High Court further noted that while Section 25(4) treats different registrations as distinct entities, the Court held that for the purpose of Section 76 which begins with a non-obstante clause (“Notwithstanding anything to the contrary…”) substance must prevail over technicality. Since both verticals belonged to the same legal entity (GAIL) petitioner herein and the money reached the government, the “distinct person” argument failed to justify a demand for a second payment.
The Hon’ble Court agreed with the Petitioner contention that the Show Cause Notice (SCN) was not an invitation to discuss, but a “pre-determined order” in disguise. The Court agreed, noting that because a detailed inquiry had already happened and the facts were undisputed, SCN’s refusal to acknowledge the prior payment made it legally flawed and susceptible to a Writ of Certiorari. The Court placing its resilience upon the December 2024 order from the Gujarat GST authorities. In an identical scenario, those authorities dropped the proceedings, recognizing that the “reimbursement” model was transparent and compliant. The Madras High Court noted that the Revenue had not appealed that Gujarat order for over a year, implying acceptance of that legal logic.
Thus, the Hon’ble Madras High Court allowed the Writ Petition and quashed the Show Cause Notice dated August 17, 2020 entirely. The Court held that since the tax was honestly and accurately paid to the government, invoking Section 76 was unwarranted despite the separate registration status.
GST UPDATES-
Two IMS (Invoice Management System) action points for FY26-27:
- When you report a credit note in GSTR-1, communicate with your customer immediately. A credit note rejected in IMS creates additional GSTR-3B liability for them, which affects your business relationship and the reconciliation cycle.
- Check all credit notes that your vendor has rejected up to date. Rejected vendor credit notes reduce your ITC and require corrective action.
DUE DATES – GST COMPLIANCES IN MAY 2026 | |||
Monthly | Quarterly | Other Due Dates | |
GSTR-3B (Apr, 2026) May 20th, 2026
| GSTR-3B (Apr-Jun, 2026) Jul 22nd, 24th, 2026
| GSTR-5 (Apr, 2026) May 13th, 2026
| GSTR-5A (Apr, 2026) May 20th, 2026
|
GSTR-1 (Apr, 2026) May 11th, 2026
| GSTR-1 (Apr-Jun, 2026) Jul 13th, 2026
| GSTR-6 (Apr, 2026) May 13th, 2026
| GSTR-7 (Apr, 2026) May 10th, 2026
|
IFF (Optional) (Apr,2026) May 13th, 2026
| CMP-08 (Apr-Jun, 2026) Jul 18th, 2026
| GSTR-8 (Apr, 2026) May 10th, 2026
| RFD-10 2 years from the last day of the quarter in which supply was received
|
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