In this News Letter 2nd Edition of March 2026 you’ll find:
1. RATIO OF LATEST JUDGEMENTS ON GST
2. GST UPDATES
3. DUE DATES – GST COMPLIANCES IN MARCH 2026
RATIO OF LATEST JUDGEMENTS ON GST
GOLDEN CRYO PVT. LTD. VS. UNION OF INDIA & ORS. WRIT PETITION NO. 1268 OF 2026 (Bombay High Court)
The Petitioner herein filed a refund application for ₹23,67,56,258 on 14 October 2025 regarding accumulated ITC on exports. Respondent No. 2 issued an SCN on 12 December 2025, alleging fake invoices and granting only seven days to respond, contrary to the statutory fifteen-day period. Despite the Petitioner emailing a preliminary reply on 19 December 2025, the Respondent passed a rejection order the very next day (20 December 2025) without considering the reply or providing a personal hearing.
The Petitioner contended that the mandate of Rule 92(3) was completely ignored. The haste in passing the order caused serious prejudice and generated unnecessary litigation. Whereas the Responded contended that that the Petitioner failed to file the reply online via FORM GST RFD-09 on the portal. Since no reply appeared on the portal, it was presumed the Petitioner had nothing to say and did not require a hearing.
The Hon’ble High Court held that the provisions of Rule 92(3) are mandatory. A proper officer cannot exercise discretion to shorten the statutory fifteen-day reply period to seven days. Furthermore, the proviso to Rule 92(3) explicitly prohibits rejecting a refund application without giving the applicant an opportunity to be heard. Thus, the Hon’ble High Court quashed and set aside the rejection order dated 20 December 2025. It directed Respondent No. 2 to issue a fresh notice following the mandate of Rule 92(3), allow a hearing, and pass a fresh order in accordance with the law.
AJAY KUMAR (DECEASED) VS. STATE OF U.P. AND ANOTHER WRIT TAX NO. 7959 OF 2025, (Allahabad High Court)
In the Present case the deceased petitioner was the sole proprietor registered under the UPGST Act, 2017. His registration was cancelled on 5th November 2020. He eventually passed away on 28th April 2021. Nearly 3 years after the death of the Petitioner, on 27th November 2023, the Adjudicating Authority issued a show cause notice under the Section 73 of the Act in the name of the deceased trade name. Pursuant to which an ex-parte adjudication order was passed on 9th February 2025, demanding tax, interest, & penalties. When recovery was pressed against his widow, Smt. Vimlesh Devi, she challenged the proceedings as being directed against a dead person.
The legal-heirs of the Petitioner argued that any proceeding against a dead person is a nullity. They cited the precedent Amit Kumar Sethia (Deceased) vs. State of U.P. (2025), which held that Section 93 does not authorize determination against a deceased person. Whereas, the respondent authority contended that the burden was on the legal representatives to inform the authorities of the death. They maintained that because some heirs continued the business, they inherited the liability and should have participated in the proceedings.
The Hon’ble High Court analyzed section 93 of the CGST Act which deals with the liability to pay (from the estate or by the heir continuing the business). However, it does not bypass the procedural requirement of a fair trial. The Hon’ble High Court further clarified that under Section 73(1), a notice is a pre-requisite for any demand. Under Section 75(4), an opportunity for a hearing is mandatory. The Hon’ble High Court ruled that issuing a notice in the name of a dead person is not a mere technicality; it is an incurable flaw that renders the entire proceeding without jurisdiction.
Thus, the Hon’ble Allahabad High Court quashed all the impugned adjudication orders and consequential demand notices in the batch of the petition. However, the Court granted the tax department liberty to issue fresh notices to the legal representatives via Registered Post (RPAD), provided the statute of limitations has not expired. The Court further noted that the revenue cannot use Section 74 (fraud/willful misstatement) solely to bypass an expired limitation period under Section 73. Furthermore, the Commissioner of State Tax, Lucknow, was directed to issue instructions to ensure all officers comply with this ruling to prevent similar future errors.
DIRECTOR GENERAL OF ANTI-PROFITEERING VS. JYOTHI THEATRE NAPA/24/PB/2025 (GSTAT Delhi)
In the present case, the Director General of Anti-profiteering (DGAP) pursuant to the GST rate cut on movie-ticket with effective from January 1, 2019 vide Notification No. 27/2018-CT (Rate) dated 31.12.2018 (from 28% to 18% for high-value tickets and 18% to 12% for others) investigated whether the theatre passed this benefit to movie-goers. The respondent herein instead of lowering the ticket price, increased the base price of the ticket. For example, for a “Family Circle” ticket priced at Rs. 100, the base price was raised from Rs. 84.75 to Rs. 89.29 exactly when the tax rate dropped. The investigation covered January 1, 2019, to September 30, 2019, identifying a total profiteered amount of Rs. 19,86,640/-
The Respondent herein contended that running a “state-of-the-art” cinema at low prices was difficult and that the High Court of Telangana had previously permitted them to charge higher rates for specific blockbusters like Saaho and Maharshi. Respondent further claimed that as they operated within the caps set by the state’s Licensing Authority, they were in legal compliance.
Respondents even argued that “commensurate” reduction is a rebuttable presumption and that rising operational costs naturally offset the tax cut.
The DGAP on the other hand presented tables showing that the Respondent’s gross prices (the amount paid by the customer) remained identical before and after the tax cut, proving the tax benefit was pocketed by the theatre. DGAP further clarified that previous High Court orders cited by the theatre either referred to the pre-GST regime or merely set an upper limit, which does not prevent a theatre from lowering prices to comply with GST law.
The Tribunal held that Section 171 is an “anti-consumer-exploitation” measure. The moment a tax is cut; the price must drop automatically. There is no “exception carved out” for state-regulated industries. It further emphasized that while state law gives theatres the discretion to set prices below a ceiling, GST law turns that discretion into an obligation to reduce prices when taxes fall. Central law takes precedence over state procedural limits. The Respondent failed to provide “cogent and credible evidence” (such as audited books) showing that their costs increased exactly on Jan 1, 2019, by the same percentage as the tax cut.
The Tribunal held that the Respondent contravened section 171 and was ordered to pay Rs. 19,86,640/- into the Consumer Welfare Fund (split between Central and State) within 30 days. Furthermore, the jurisdictional Commissioners were directed to monitor compliance and report back within three months.
NARASUS SAARATHY ENTERPRISES PVT. LTD. V. ADDITIONAL COMMISSIONER OF GST & CENTRAL EXCISE W.P. NO. 6069 OF 2025 (Madras High Court)
The Petitioner in the present matter is a manufacturer of wheat products (Atta, Maida, Sooji) sold under registered brands like “Narasu’s” and “Narasu’s Power.” The petitioner claimed a tax exemption for certain sales, asserting they were “unbranded” goods in terms of Notification No. 2/2017-Central Tax (Rate). However, during an investigation the authorities found that the “unbranded” packaging used identical graphics (cartoon characters/farmers), fonts, watermarks, and batch number abbreviations as the registered branded products. An order dated 30.01.2025 confirmed a GST demand of ₹12,65,31,070 plus interest and equivalent penalty for the period July 2017 to July 2022.
The Madras High Court clarified the scope of GST exemption under Notification No. 2/2017–CT (Rate) and its amendment via Notification No. 28/2017–CT (Rate), holding that prior to 22.09.2017, exemption was denied only for goods bearing a “registered brand name”, while post-amendment, it extended to any brand name (registered or unregistered) having enforceable rights, subject to an exception where such rights are voluntarily
relinquished through an affidavit and disclaimer. within 15 days, directed the department to decide it within 7 days of receipt, and ordered that failure to do so would render the refund liable to 6% interest from the date of the original refund application until actual payment.
The Court held that the mere presence of common packaging elements such as colour schemes, pictorial graphics (e.g., farmer images), abbreviations, or corporate name does not automatically constitute a “brand name” unless there is a demonstrable intention to establish a trade connection backed by enforceable rights; thus, Revenue’s attempt to treat such features as branding was rejected. It was emphasized that statutory declarations mandated under the Food Safety and Standards Act and Legal Metrology laws—such as disclosure of manufacturer/packer name—are compliance requirements and cannot be equated with branding, as they do not indicate any claim of exclusivity or market identity in the nature of a brand.
The assessee’s conduct was found compliant, as it paid GST on products sold under registered brands while claiming exemption for unbranded goods, consistently disclosed transactions in returns, and, post-amendment, filed the prescribed affidavit relinquishing actionable rights over any brand name, thereby fulfilling the conditions for exemption.
KERALA STATE SELF-FINANCING B.PHARM COLLEGE MANAGEMENT ASSOCIATION (KSSBCMA) VS INTELLIGENCE OFFICER WP(C) NO. 9108 OF 2026 (Kerela High Court)
The Petitioner herein represents 36 self-financing pharmacy colleges. It manages the selection process for student admissions, excluding NRI seats and government-allotted seats. On February 9, 2026, the Intelligence Officer (IO) from the state GST department issued a single composite Show Cause Notice (SCN). The notice attempted to club multiple assessment years into one document and proposed the assessment of tax and imposition of penalties under Section 63 of the CGST/KGST Act. The IO alleged that the Association’s admission-related services were taxable and required GST registration, a claim the Association disputed based on statutory exemptions.
The Petitioner argued that entry 66(b)(iv) of Notification No. 12/2017 specifically exempts services provided by educational institutions relating to the conduct of examinations and admissions. The Petitioner even cited Circular No. 6 of 2021, which mandates that the proper jurisdictional authority—not the Intelligence Wing—should finalize such adjudications to ensure impartiality. They contended the notice was legally “prejudged,” meaning the officer had already decided they were guilty, violating the principles of Natural Justice.
The Respondents on the other hand contended that a writ petition against a mere “notice” is premature and that the petitioner should instead reply to the notice and participate in the departmental proceedings. The respondents even asserted that the intelligence wing has a regulatory duty to ensure registration where tax evasion is suspected.
The Hon’ble Kerala High Court emphasized that an SCN must remain a “proposal.” Relying on the Oryx Fisheries principle, the Court held that if a notice is issued with a “closed mind” or uses language indicating a final conclusion, it is fundamentally flawed and liable to be set aside. The Court further held that adjudication cannot be done in a “composite” or “staged” manner for different years in a single notice; each assessment year stands alone to prevent procedural confusion and incorrect interest calculations. Thus, the Hon’ble High Court quashed the SCN for being composite and prejudged. The department was given liberty to issue fresh, separate notices for each year, which must be adjudicated by the Proper Jurisdictional Officer after thoroughly considering the Association’s exemption claims.
HEMANG BIPIN VARAIYA VS THE STATE OF MAHARASHTRA & ORS. WRIT PETITION NO. 3444 OF 2026 (Bombay High Court)
The Petitioner filed a Writ Petition under Article 226 of the Constitution of India challenging the blocking of his Input Tax Credit. On July 17, 2025, Respondent No. 3 issued a Show Cause Notice (SCN) proposing to block ₹1.42 crores of the Petitioner’s ITC. On July 24, 2025 just one week later and before the Petitioner could even file a reply the respondent proceeded to block the credit without taking the SCN to its “logical conclusion”. Moreover, at the time the block was placed, the Petitioner’s electronic credit ledger reportedly had a negative balance, meaning there was no actual credit available to be blocked.
The Petitioner argued that that Rule 86A requires “reasons to believe” that credit was fraudulently availed or is ineligible, which were neither formed nor communicated. The Court even contended that the power to block utilization is strictly limited to the amount available in the ledger at that specific time. The petitioner relied upon the Rawman Metal & Alloys case (Bombay HC), which held that Rule 86A cannot be used for future credit, and Samay Alloys India (Gujarat HC), which ruled against blocking in the absence of a credit balance.
The Hon’ble Bombay High Court found the Respondent’s action of blocking the credit prior to adjudicating the SCN to be legally unsustainable. The Hon’ble Court stated that Rule 86A is confined to the credit currently available in the electronic credit ledger. It does not grant the department the power to block credit that may be received by the taxpayer in the future. The Court observed that if there is no credit balance, there is
nothing to “block.” Attempting to create a negative balance in the ledger is beyond the legal ambit of Rule 86A. Moreover, the admissibility of ITC must be verified through a proper show-cause notice and subsequent adjudication of liability, not through pre-emptive, summary blocking that ignores natural justice.
The Hon’ble High Court quashed the impugned actions and ordered the unblocking of the negative balance to the extent of Rs. 1.42 crores. The Court clarified that it had not examined other issues of the case. The authorities are free to take other actions against the petitioner, provided they follow the due process of law.
GST UPDATES
- The GSTAT Lucknow vide Public Notice No.01/2026 dated 03.2026 informed all stakeholders including taxpayers, competent departmental authorities, authorized representatives, and other concerned parties that the Lucknow Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) has commenced its operations from the following temporary address: “Ground Floor, A block, Apratyaksh Kar Bhawan, Vibhuti Khand, Gomti Nagar, Lucknow-226010”
The procedural framework for the institution of appeals is governed by Chapter III of the Goods and Services Tax Appellate Tribunal (Procedure) Rules, 2025. For the guidance of all concerned parties, the official e-filing Advisory, the Procedure Rules, and Presidential Orders have been duly published and remain accessible on the GSTAT Portal (https://efiling.gstat.gov.in) within the designated ‘Notice’ section.
The following documents are required to file appeal before the GSTAT against the Revision Order
a) Form GST APL-05;
b) Statement of Facts and Grounds of Appeal;
c) Certified Copy of Form GST DRC-01A; (self-certified by the Proprietor/Managing Partner/ Director/Authorised Signatory);
d) Certified copy of reply to Form GST DRC-01A (self-certified by the Proprietor/Managing Partner/ Director/Authorised Signatory);
e) Certified Copy of DRC-01; (self-certified by the Proprietor/Managing Partner/ Director/Authorised Signatory);
f) Certified copy of reply to Form GST DRC-01 (self-certified by the Proprietor/Managing Partner/ Director/Authorised Signatory);
g) Certified Copy of summary of order passed by the Proper Officer/jurisdictional Proper Officer; (self-certified by the Proprietor/Managing Partner/ Director/Authorised Signatory);
h) Certified Copy of Form GST DRC-07 issued by the Proper Officer/jurisdictional Proper Officer; (self-certified by the Proprietor/Managing Partner/ Director/Authorised Signatory);
i) Certified Copy of Revision Show Cause Notice issued by the Revisional Authority under Section 108 (self-certified by the Proprietor/Managing Partner/ Director/Authorised Signatory);
j) Certified copy of reply to Revision show cause notice (self-certified by the Proprietor/Managing Partner/ Director/Authorised Signatory);
k) Certified Copy of the Order passed by the Revisional Authority in Form GST APL-04 self-certified by the Proprietor/Managing Partner/ Director/Authorised Signatory);
l) Form of Authorisation; (Vakalatnama in the case of Advocate);
m) Affidavit on a Non-judicial stamp paper or e-stamp paper seeking for the interim relief (duly notarized by the Notary Public)
n) Index should be conspicuously serially numbered.
Filing 1st Appeal against NIL Demand Orders
The GSTN portal vide its advisory dated 3rd April 2026 has suggested a solution to an issue which was being faced by taxpayers who have paid tax, interest, or penalty at the SCN stage without admitting liability (paid under protest). Such taxpayers are unable to file appeals on the GST portal since the adjudicating authority issued a demand order showing “NIL” demand, treating the prior payment as full settlement against the demand order. When the taxpayer tries to file an 1st Appeal (APL-01), the portal blocks it with an error: “Disputed amount cannot be more than demand amount itself”.
The GSTN advisory has stated that in such instances, the taxpayers should approach the adjudicating authority through rectification requests using the option available on the GST portal. Once the rectified order is issued showing the correct demand, they can proceed to file the appeal within the prescribed time limits.
DUE DATES – GST COMPLIANCES IN APRIL 2026 | |||
Monthly | Quarterly | Other Due Dates | |
GSTR-3B (Mar, 2026) Apr 20th, 2026 | GSTR-3B (Jan-Mar, 2026) Apr 22nd, 24th, 2026 | GSTR-5 (Mar, 2026) Apr 13th, 2026 | GSTR-5A (Mar, 2026) Apr 20th, 2026 |
GSTR-1 (Mar, 2026) Apr 11th, 2026 | GSTR-1 (Jan-Mar, 2026) Apr 13th, 2026 | GSTR-6 (Mar, 2026) Apr 13th, 2026 | GSTR-7 (Mar, 2026) Apr 10th, 2026 |
IFF (Optional) (Mar,2026) NA | CMP-08 (Jan-Mar, 2026) Apr 18th, 2026 | GSTR-8 (Mar, 2026) Apr 10th, 2026 | RFD-10 2 years from the last day of the quarter in which supply was received |
Disclaimer: Pursuant to the Bar Council of India rules, we are not permitted to solicit work and advertise. You, the reader acknowledges that there has been no advertisement, personal communication, solicitation, invitation or inducement of any sort whatsoever from us or any of our members to solicit any work through this newsletter. The information provided in this newsletter is solely available at your request and is for informational purposes only, it should not be interpreted as soliciting or advisement. We are not liable for any consequence of any action taken by the reader relying on material/ information provided in the newsletter. In cases where the reader has any legal issues, he/she must in all cases seek independent legal advice. Any information obtained or materials used from this newsletter is completely at the reader’s volition and any transmission, receptor use of the contents of this newsletter would not create any lawyer-client relationship.
© 1981-2026 Sharnam Legal, All rights reserved