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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 /2026-27/0041

YOUNG MEN'S CHRISTIAN ASSOCIATION vs UNION OF INDIA & ORS.
Hon’ble Court: HIGH COURT OF GUJARAT AT AHMEDABAD
Case Title: YOUNG MEN'S CHRISTIAN ASSOCIATION vs UNION OF INDIA & ORS.
Petition No. & Citation: CIVIL APPLICATION NO. 19303 of 2015
Hon’ble Judge(s) JUSTICE A.S. SUPEHIA & JUSTICE VAIBHAVI D. NANAVATI
Date of Order 10/06/2026 
Outcome In favour of the Petitioner
 
Brief Facts of the Case
The petitioner, Young Men’s Christian Association (YMCA), challenged the refund order dated 09.09.2015 whereby the department rejected its refund claim relating to service tax paid during FY 2009-10 to FY 2012-13 collected on services provided by the club to its members. The refund application was filed after the levy of service tax on club-member transactions had been declared ultra vires by the Supreme Court in State of West Bengal v. Calcutta Club Limited. The said refund was rejected on the ground that the claim was time-barred under Section 11B of the Central Excise Act, 1944. Accordingly, the petitioner filed the writ petition challenging the refund rejection order.
Relevant Section 
• Sections 65(25a), 65(105)(zzze) and 66 of the Finance (No.2) Act, 1994
• Section 11B of the Central Excise Act, 1944
Question before Hon’ble Court 
• Whether limitation under Section 11B would apply where the levy and collection of service tax itself had been declared ultra vires?
Brief Arguments by Petitioner 
• Levy of Service Tax Already Declared Ultra Vires
The petitioner submitted that the issue was squarely covered by the Supreme Court judgment in State of West Bengal v. Calcutta Club Limited, which affirmed the Gujarat High Court judgment in Sports Club of Gujarat Limited v. Union of India. The Gujarat High Court had categorically declared Sections 65(25a), 65(105)(zzze) and 66 of the Finance Act, 1994, insofar as they sought to levy service tax on services provided by clubs to their members, as ultra vires.
 
• Refund Could Not Be Denied on Limitation
The petitioner contended that once the levy itself was held to be unconstitutional and ultra vires, the refund claim could not be defeated by invoking the limitation provisions under Section 11B.
 
Brief Arguments by Respondent
The department argued that:
• The refund application was filed only on 29.12.2014 and the Gujarat High Court judgment in Sports Club of Gujarat Limited had been delivered on 25.03.2013. Therefore, the refund claim for FY 2009-10 to FY 2012-13 was filed beyond the limitation period prescribed under Section 11B. 
• Reliance was placed upon the Constitution Bench decision in Mafatlal Industries Ltd. v. Union of India, 1997 (89) ELT 247 (SC), to support rejection of the claim as time-barred. 
Cases Relied Upon
Petitioner / Appellant Respondent
State of West Bengal Vs. Calcutta Club Limited 2019 (29) GSTL 545 (SC)
Sports Club of Gujarat Limited Vs. Union of India 2013 (31) STR 645 (Guj.)
Mafatlal Industries LTD. Vs. Union of India 1997 (89) ELT 247 (SC)
Abdul Samad Vs. Commissioner of C.Ex and Service Tax, Mangaluru 2019 (367) ELT 189 (Kar.)
vide 3E Infotech Vs. CESTAT, Chennai 2018 (18) GSTL 410 (Mad.)
Findings and Judgement 
• Levy of Service Tax on Club-Member Transactions Already Declared Ultra Vires
The Court noted that there was no dispute regarding the legal position that the levy of service tax on services provided by clubs to their members under Sections 65(25a), 65(105)(zzze) and 66 of the Finance Act, 1994 had already been declared ultra vires by the Gujarat High Court in Sports Club of Gujarat Ltd. v. Union of India. The Apex Court affirmed the view taken by the Gujarat High Court and held that from 2005 onwards, the Finance Act, 1994 did not contemplate levy of service tax on incorporated members’ clubs. Therefore, the very foundation for collection of service tax from incorporated clubs stood invalidated.
• Limitation Cannot Defeat Refund of Tax Collected Without Authority of Law
The Court held that once the levy and collection of service tax itself had been declared ultra vires, the refund claim could not be rejected merely on the ground of limitation.
• Refund of Tax Paid Under Mistake of Law Cannot Be Denied
Placing reliance on judicial precedents, the Court reiterated that refund of tax paid under a mistake of law cannot be frustrated on the ground of limitation, as retention of such amount by the State would be contrary to Article 265 of the Constitution of India. The department cannot retain an amount which it had no authority to levy or collect.
Accordingly, the Court remanded the matter to the respondent authorities for adjudication of the refund claim on merits and directed the authorities to also consider the petitioner's claim for interest on the refund amount.
CA PRADEEP JAIN
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