OPTOTAX

The Andhra Pradesh High Court, in Jwala Energy Resources Private Limited, held that tax collected under a levy later declared unconstitutional amounts to an illegal extraction of money, void from the very beginning.

The Court clarified:

✦ Refund rights in such cases arise directly from the Constitution, not merely from GST statutes

✦ The State cannot rely on statutory waiting periods or limitation provisions to deny interest

✦ Taxpayers are entitled to interest from the date of deposit until actual refund

✦ Interest forms part of the taxpayer’s restitutionary compensation for unconstitutional collection

The ruling reinforces that when a levy itself is unconstitutional, the Government must restore the taxpayer to the original financial position, including payment of interest from day one.

[unconstitutional tax levy, GST refund interest, restitution principle tax, AP High Court ruling, illegal tax collection refund, interest on unconstitutional levy]

In the landmark case of Avik Televentures Private Limited, the Delhi High Court quashed a ₹26.72 crore GST demand order, reinforcing the principles of natural justice against bureaucratic overreach.

The Court clarified:

✦ Issuing a “Reminder-1” notice on a Friday evening, demanding extensive documentation by Monday, effectively gave the taxpayer less than one working day, rendering the opportunity to be heard “illusory” and a mere formality.

✦ The department’s “undue haste” in passing the heavy tax liability order on the same day the personal hearing concluded showed that the taxpayer’s submissions could not have been meaningfully or reasonably considered.

✦ Administrative efficiency and impending limitation dates cannot be used as an excuse to bypass real, fair, and effective opportunities for a taxpayer to defend themselves.

[GST Litigation, Natural Justice, GST Demand Order, Delhi High Court, Taxpayer Rights, GST Assessment, Personal Hearing, Due Process, GST Compliance]

GSTN has introduced a new voluntary e-way bill closure facility on the GST portal, effective from mid-June 2026, aimed at improving end-to-end tracking of goods movement under GST.

The update provides:

✦ Suppliers, recipients, transporters, and authorized drivers can voluntarily close e-way bills after delivery

✦ Closure can be done EWB-wise or date-wise through the GST portal or API-enabled ERP systems

✦ E-way bills can generally be closed on the same day or the next day of delivery

✦ “Ship-To GSTIN” is now mandatory in bill-to/ship-to transactions, with “URP” to be used for unregistered consignees

The move is expected to improve audit trails, strengthen invoice tracking, and reduce inactive or open e-way bills in the system.

[GSTN advisory 2026, e-way bill closure, Ship-To GSTIN mandatory, GST e-way bill update, bill-to ship-to GST compliance]

The government is planning to restrict manual editing in GSTR-3B once returns are fully auto-populated from GSTR-1 and GSTR-2B, with the proposal expected to be placed before the GST Council for approval.

The move aims to:
✦ Strengthen invoice matching and reduce reporting mismatches
✦ Improve monitoring of defaulting suppliers and ITC claims
✦ Minimise manual intervention in return filing
✦ Push greater automation and compliance accuracy under GST

Officials have indicated that taxpayers will still be able to amend liabilities and ITC through GSTR-1A and IMS, though experts have highlighted the need to balance stricter controls with genuine reconciliation challenges faced by businesses.

The proposal signals a shift toward tighter compliance checks and a more automated GST return system.

✦ Minimize manual intervention in return filing GSTR-1 and GSTR-2B matching, manual editing restriction GST, GST Council update]

Understanding Section 73 under GST is important for every business to avoid unnecessary notices, interest, and penalties.

From SCN timelines to penalty relief provisions, knowing the basics can help you respond to GST proceedings with more clarity and confidence.

Swipe through to understand the key parts of Section 73 and what they mean for your business.

[Section 73, GST, GST Notice, Tax Compliance, GST India, Indirect Tax, Finance Business Compliance]

The Gujarat High Court, in Maruti Enterprises, upheld the constitutional validity of Section 16(2)(c) of the CGST Act and ruled that a purchasing dealer cannot claim ITC unless the supplier has actually deposited the tax with the Government.

The Court clarified:

✦ ITC is a statutory benefit, not an absolute or vested right

✦ Eligibility for ITC is conditional upon actual tax payment by the supplier

✦ A bona fide purchaser cannot automatically claim ITC if the seller defaults

✦ The GST credit mechanism is linked to tax reaching the Government revenue

The ruling reinforces that ITC entitlement depends not only on purchase genuineness, but also on the supplier’s compliance with tax payment obligations.

[Section 16(2)(c) CGST, ITC denial GST, supplier default ITC, Gujarat High Court ruling, bona fide purchaser GST]

The Gauhati High Court, in Green Valley Diagnostics & Hospitals Private Limited, held that extended limitation cannot be invoked where all material facts are already disclosed to the tax authorities, including transactions reflected in Form 26AS.

The Court clarified:

✦ Extended limitation is not applicable when facts are fully disclosed

✦ A bona fide belief in tax exemption does not amount to suppression

✦ Disclosure of financial data in returns negates any intent to evade tax

✦ Authorities cannot claim ignorance when information is already available in Form 26AS

Since the entire demand was based on disclosed records, the Court held the show cause notice to be time-barred and liable to be quashed.

[extended limitation GST, Form 26AS GST case, suppression of facts GST, Gauhati High Court ruling, time-barred SCN GST]