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Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

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GST update /2026-27/0053

Shyam Traders & Ors. v. State of West Bengal & Ors.

GST UPDATE

Hon’ble Court: Calcutta High Court
Case Title: Shyam Traders & Ors. v. State of West Bengal & Ors.
Petition No. & Citation: WPA 2357 of 2025
Hon’ble Judge(s)  
Date of Order 09.07.2026
Outcome Petition allowed by way of Remand
 

Brief Facts of the Case

The dispute originated from an ex parte Order-in-Original passed under Section 73(9), whereby tax, interest and penalty were confirmed on allegations of short payment of tax on outward supplies and excess availment of ITC. On Appeal, the Commissioner Appeals via Order-in-Appeal passed under Section 107 of the CGST/WBGST Act, the Appellate Authority directed them to appear before the Adjudicating Authority and produce documentary evidence for verification of admissible Input Tax Credit (ITC), despite recording findings favourable to them thereby remanding the matter. Aggrieved by the remand direction, the petitioners filed an application under Section 161 seeking rectification on the ground that Section 107(11) expressly prohibits the Appellate Authority from remanding a case to the Adjudicating Authority. The rectification application was rejected solely on the ground that it had been filed beyond the prescribed limitation period of six months, without examining the jurisdictional issue. Consequently, the petitioners approached the Calcutta High Court challenging both the remand direction contained in the appellate order and the subsequent order rejecting the rectification application.

Relevant Section

  • Section 107 of the CGST Act, 2017.
  • Section 161 of the CGST Act

Question before Hon’ble Court

  • Whether the Appellate Authority exercising powers under Section 107 can remand a matter to the Adjudicating Authority?

Brief Arguments by Petitioner

  • The petitioner submitted that Section 107(11) specifically empowers the Appellate Authority only to confirm, modify or annul the order appealed against and expressly prohibits the Appellate Authority from remanding the matter back.
 
  • It was argued that although the Appellate Authority accepted that admissible ITC could be allowed after verification, instead of modifying the demand it relegated the petitioner back to the adjudicating authority. Such remand was wholly without jurisdiction.

Brief Arguments by Respondent

  • The Revenue argued that since the petitioner had themselves filed a rectification application under Section 161 and the same was rejected on the grounds of limitation, the rectification order merged with the original appellate order. Accordingly, the petitioner should pursue the statutory appellate remedy against both orders instead of invoking writ jurisdiction. The Revenue submitted that interference with the Order-in-Appeal under Article 226 was therefore unwarranted.

Findings and Judgement

On reading of Section 107(11), the Court observed that the language of the provision is unequivocal. The Court held that the Appellate Authority while deciding an appeal can confirm the order; modify the order; or annul the order. It may conduct further inquiry wherever necessary; it cannot refer the case back to the adjudicating authority because the statute has expressly prohibited remand.
In the instant case, having already recorded findings favourable to the petitioner regarding reversal of excess ITC, it ought to have modified the demand instead of remitting the matter. Consequently, the direction of remand was a jurisdictional nullity.
The Court further held that rejection of the rectification application on limitation did not cure this defect. Jurisdictional errors remain open to judicial review notwithstanding the doctrine of merger or existence of an alternate remedy. Since the appellate authority had acted contrary to an express statutory prohibition, the writ petition was maintainable.
Accordingly, the Court directed the Appellate Authority to decide the appeal afresh on the basis of the findings already recorded and specifically directed that no remand be made to the Adjudicating Authority.

 

 

Opinion

Author’s Comment

The present judgment reiterates the legislative intent behind Section 107(11) of the CGST Act that the Appellate Authority cannot remand a case to the Adjudicating Authority. Once an appeal is preferred, the Appellate Authority is required to finally adjudicate the dispute by confirming, modifying or annulling the impugned order after making such inquiry as may be necessary. It cannot send the matter back to the adjudicating authority for a fresh decision.
At the same time, the judgment revives an important debate regarding the interplay between Sections 107(11) and 75(2) of the CGST Act. Section 75(2) provides that where an Appellate Authority, Appellate Tribunal or Court concludes that proceedings initiated under Section 74 fail because fraud, wilful misstatement or suppression of facts is not established, the proper officer shall redetermine the tax payable as if the notice had originally been issued under Section 73. On a literal reading, this appears to require the matter to go back to the proper officer, which resembles a remand prohibited under Section 107(11).
However, in our opinion, there is a strong basis to distinguish "remand" from "redetermination." The power of remand is much wider in nature, as it involves sending the entire matter back for fresh adjudication on all issues. In contrast, redetermination under Section 75(2) is not a general remand but a narrowly defined statutory exercise. The proper officer does not get a fresh opportunity to reopen the entire case; he is merely required to determine the tax liability within the limited framework created by Section 75(2), treating the proceedings as one under Section 73 instead of Section 74. Thus, while remand is generally prohibited under Section 107(11), redetermination is a specific statutory consequence expressly contemplated by Section 75(2). Viewed in this manner, Section 75(2) can be regarded as a limited exception to the general prohibition contained in Section 107(11).
Although the current judgement is concerned only with an impermissible remand for verification of Input Tax Credit and did not examine the scope of Section 75(2), this issue reamins interpretational. Whether redetermination under Section 75(2) should be treated as a statutory exception to the bar on remand under Section 107(11), or whether it still amounts to an impermissible remand, remains an important question that may ultimately require some clarity.

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