Advisory on Impersonation of GST Officers
Authority: CGST Bengaluru Zone – Trade Notice No. 02/2026
The CGST Bengaluru Zone, through Trade Notice No. 02/2026, has issued an advisory cautioning taxpayers against fraudulent activities involving impersonation of GST officers.
Instances have been reported where individuals pose as GST officer and attempt to obtain sensitive information such as GSTIN details, bank credentials, or one-time passwords (OTPs). The advisory clarifies that official communication from GST authorities is conducted only through the GST portal (notices/orders), registered email IDs or official written correspondence.
Taxpayers are warned that any communication demanding immediate payment or threatening legal action outside these official channels is not valid. They are advised to remain vigilant and report any suspicious calls or messages to the nearest GST office or through official helplines.
This initiative is intended to raise awareness among taxpayers and safeguard them against potential fraud and misuse of confidential information.
GSTN Advisory on Pre-deposit for Appeals
The GST Network (GSTN), through Advisory No. 652, has issued important clarifications regarding the treatment of payments made through Form DRC-03 in the context of appeal filings.
It has been clarified that payments made using DRC-03 are not automatically linked to demand orders in the system. As a result, such payments may not be considered as valid pre-deposit for the purpose of filing an appeal unless they are properly tagged.
To address this issue, taxpayers are required to file Form DRC-03A to ensure that the payment is correctly linked to the relevant demand order. Once appropriately tagged, the payment will be reflected in the Electronic Liability Register.
This clarification is crucial for ensuring compliance with pre-deposit requirements and for avoiding procedural issues during the appeal process.
HSNS Cess – Advisory on Return Filing and Compliance
The Central Board of Indirect Taxes and Customs (CBIC) has issued an advisory clarifying the compliance requirements for taxpayers liable under the Health Security and National Security (HSNS) Cess mechanism.
As part of the compliance framework, taxpayers falling within the ambit of HSNS Cess are required to obtain registration and file returns through the designated portal developed specifically for this purpose. The advisory provides a detailed procedure for filing returns and making payment of the applicable cess.
Further, the CBIC has clarified the timelines for compliance and reporting obligations to ensure that taxpayers adhere to the prescribed schedule. Additional guidance has also been issued to facilitate smooth implementation of HSNS provisions and to address practical challenges faced by taxpayers during the initial phase.
This advisory is aimed at ensuring better compliance, streamlining reporting procedures, and enabling taxpayers to meet their obligations efficiently under the newly introduced cess regime.
Customs – Waiver of Fees in Case of Force Majeure
The CBIC has issued a circular granting relief to exporters who are unable to comply with procedural requirements due to force majeure events such as natural disasters or other unforeseen disruptions.
Under this circular, exporters are permitted to seek amendments to export documents where such documents have been impacted by circumstances beyond their control. In genuine hardship cases, the authorities may also grant a waiver of applicable fees associated with such amendments.
However, exporters are required to provide adequate justification along with supporting documentation to substantiate their claims. The measure is intended to facilitate trade by reducing the compliance burden during periods of disruption and ensuring that exporters are not penalised for circumstances beyond their control.
Customs – Procedure for Handling Returned Export Cargo
In light of ongoing global disruptions, the CBIC has prescribed a detailed procedure for handling export cargo that is returned to India.
The procedure allows for the re-import of export cargo at ports different from the original port of export, thereby providing flexibility to exporters facing logistical constraints. The circular also clarifies the documentation and verification requirements that must be fulfilled for such re-imports.
These measures are designed to ease operational challenges, ensure smooth customs clearance and minimise delays in processing returned goods, thereby supporting exporters affected by international supply chain disruptions.
Case Laws
1. No Recovery on GSTR-1 vs GSTR-3B Mismatch as Self-Assessed Tax u/s 75(12)
Case: M/s ITI Ltd. v. Union of India & Ors. – Gauhati High Court (Kohima Bench)
The case involved recovery proceedings initiated solely on account of mismatch between GSTR-1 and GSTR-3B returns, treating such discrepancy as self-assessed tax under Section 75(12) of the CGST Act.
The High Court examined the legality of recovery proceedings initiated solely on the basis of mismatch between GSTR-1 and GSTR-3B returns. The department treated such mismatch as self-assessed tax under Section 75(12) and proceeded with recovery without adjudication.
The Court held that a mere discrepancy between returns does not automatically constitute a self-assessed liability and cannot justify recovery without following due process. It emphasized that self-assessed tax refers to liability explicitly admitted by the taxpayer and not inferred from system-generated differences.
The Court set aside the recovery proceedings and reiterated the importance of adjudication and adherence to principles of natural justice. This judgment is particularly relevant in the context of automated notices and recovery actions under GST, providing relief to taxpayers facing reconciliation-related disputes.
2. ISD Credit Can Be Distributed in the Same Month
Case: Reliance Jio Infocomm Ltd. v. Union of India-Madras High Court
the Madras High Court examined the issue relating to the timing of distribution of Input Tax Credit (ITC) by an Input Service Distributor (ISD). The department had issued show cause notices alleging that the taxpayer failed to distribute ITC within the same month as the invoice, as required under Rule 39(1)(a) of the CGST Rules.
The Court, however, clarified that ITC does not arise merely upon receipt of an invoice but only after fulfilment of the conditions prescribed under Section 16(2) of the CGST Act, including receipt of services, payment of tax by the supplier, and reporting in returns. It held that the expression “input tax credit available for distribution” must be interpreted in line with these statutory conditions and not mechanically linked to the invoice date.
Further, the Court observed that delegated legislation cannot override the parent statute and that, prior to the amendment effective April 2025, there was no statutory mandate requiring distribution within a specific time.
Accordingly, the matter was remanded for fresh consideration. This judgment provides significant relief to large organisations operating ISD structures by clarifying that timing mismatches cannot be the sole basis for denial or recovery of ITC.
3. Cash Cannot Be Seized under Section 67 of CGST Act
Case: Smurti Waghdhare v. Joint Director & Ors. – Bombay High Court
The Bombay High Court dealt with the question of whether cash can be seized during search proceedings under Section 67 of the CGST Act.
The authorities had seized cash on the assumption that it constituted part of proceeds related to tax evasion. The Court held that Section 67 permits seizure of goods, documents, and books relevant to proceedings, but does not explicitly authorise seizure of cash.
It emphasized that powers of search and seizure must be strictly interpreted and cannot be expanded through implication. In the absence of specific statutory authority, seizure of cash was held to be unlawful and was accordingly quashed.
This ruling serves as an important safeguard against excessive use of enforcement powers by tax authorities.
4. LUT/Bond Non-Furnishing Treated as Procedural Lapse
Case: Prime Perfumery Works vs Assistant Commissioner (GSTAT)
The Karnataka High Court dealt with the denial of refund on account of non-furnishing of Letter of Undertaking (LUT) prior to export. The taxpayer had exported goods and subsequently filed for refund, which was rejected by the department on the ground that the procedural requirement under Rule 96A was not complied with.
The Court held that furnishing of LUT or bond prior to export is a procedural requirement and not a substantive condition, especially when exports are undisputed and genuine. It placed reliance on the CBIC Circular dated March 15, 2018, which permits condonation of delay and allows furnishing of LUT on an ex post facto basis.
The Court emphasized that GST being a destination-based tax, exports must remain zero-rated and free from tax burden, and procedural lapses should not defeat substantive benefits. Accordingly, the rejection order was set aside and the matter remanded for reconsideration.
This ruling reinforces the principle that technical non-compliance should not result in denial of legitimate export benefits.
5. Section 125 Penalty Not Leviable Where Late Fee Imposed
Case: Kandan Hardware Mart v. Assistant Commissioner (GSTAT)
the Tribunal examined whether penalty under Section 125 of the CGST Act could be imposed in addition to late fee already levied under Section 47 for delay in filing returns. The Tribunal held that such dual imposition is not legally sustainable as it amounts to double penalisation for the same default.
It was observed that Section 47 specifically provides for levy of late fee for delayed filing of returns, thereby covering the particular non-compliance in question. Once a specific consequence is prescribed under the statute, resorting to the general penalty provision under Section 125 for the same lapse is unwarranted.
The Tribunal emphasized that general penalty provisions are meant to apply only in cases where no specific penalty is provided under the Act. It further reiterated the principle that penal provisions must be strictly construed and cannot be applied in an overlapping or excessive manner.
The ruling also aligns with the broader jurisprudence that taxation statutes should not impose disproportionate burdens on taxpayers, especially in cases of procedural defaults without any element of fraud, suppression, or revenue loss. Accordingly, the Tribunal set aside the additional penalty, providing relief to the taxpayer.
This decision is significant as it can be relied upon to challenge instances where authorities invoke residuary penalty provisions despite the existence of specific statutory consequences, and it reinforces the principle that compliance failures should not be subjected to multiple penal actions for the same cause.
6. Clerical Errors in GSTR-1 – No SCN Without Revenue Loss
Case: Hindustan Construction Company Ltd. v. Union of India-Karnataka High Court
The Karnataka High Court dealt with the issue of initiation of proceedings on account of clerical errors in GSTR-1 despite the taxpayer having correctly discharged its tax liability.
The Court observed that the discrepancies were purely inadvertent and arose due to bona fide clerical or reporting mistakes, with no allegation of suppression, fraud, or intent to evade tax.
It was noted that there was no revenue loss to the exchequer since the correct tax had already been paid through GSTR-3B. In this background, the Court held that issuance of show cause notice and initiation of penal proceedings in such cases is unjustified and contrary to the principles of natural justice.
The Court emphasized that GST compliance, being largely system-driven, is prone to human and technical errors, and such minor discrepancies should be addressed through rectification mechanisms rather than punitive action.
It further highlighted that the objective of the law is to ensure proper tax collection and not to penalise taxpayers for genuine mistakes that do not impact revenue. The ruling reinforces the distinction between substantive non-compliance and procedural lapses, and supports a pragmatic approach in tax administration.
This decision is particularly significant for large taxpayers handling high transaction volumes, as it provides a strong defence against unnecessary litigation arising from clerical errors and strengthens the argument that enforcement actions must be proportionate and based on material revenue implications rather than mere technical deviations.
7. Uploading Order on Portal ≠ Valid Communication
Case: Bambino Agro Industries Ltd. v. State of UP- Allahabad High Court
The Allahabad High Court examined whether mere uploading of an order on the GST portal constitutes valid service under Section 169 of the CGST Act.
The Court held that proper communication must be affected through prescribed modes and mere availability of an order on the portal does not ensure that the taxpayer has been duly informed.
It observed that effective service is essential to enable the taxpayer to exercise the right to appeal and defend their case.
Failure to properly communicate the order was held to be a violation of principles of natural justice, rendering the order invalid. This judgment is crucial in determining limitation periods and validity of proceedings.
8. No Service Tax on Legal Services by Advocate
Case: Manisha Rajiv Shroff v. Union of India- Bombay High Court
The Court examined the applicability of service tax on legal services rendered by an advocate, where the department sought to levy tax despite the existence of specific exemption notifications.
The Court held that legal services provided by an advocate are clearly covered under the exemption framework prescribed under Notification Nos. 25/2012-ST and 30/2012-ST and therefore no service tax liability can be fastened in such cases.
It was observed that exemption notifications issued under the statute carry binding force and cannot be overridden by administrative interpretations or departmental positions. The Court further emphasized that tax liability must arise strictly in accordance with law and any ambiguity in interpretation must be resolved in favour of the taxpayer, particularly where exemptions are clearly provided.
It also reiterated that in the case of legal services, the statutory scheme itself contemplates a specific treatment, including reverse charge mechanisms where applicable and hence any attempt to impose tax contrary to such framework is unsustainable. Accordingly, the demand and recovery proceedings were quashed.
This ruling reinforces the principle that statutory exemptions must be honoured in letter and spirit and provides significant clarity and protection to professionals and businesses availing legal services.
It also serves as an important precedent to challenge unwarranted demands arising from misinterpretation of exemption notifications and underscores the necessity for authorities to adhere strictly to the legislative scheme.
9. Relief to Exporters in Procedural Non-Compliance Due to Genuine Hardship
Case: Midas Treads (India) Pvt Ltd vs. Commissioner of Customs
In this case, the issue pertained to procedural non-compliance arising due to unavoidable circumstances faced by the taxpayer.
The Court observed that substantive benefits should not be denied merely on account of procedural lapses, especially where the taxpayer has acted in good faith. Emphasising the principle of natural justice, the Court granted relief to the taxpayer, subject to verification of bona fide intent.
This ruling reinforces the approach that procedural requirements should not override substantive rights where there is no mala fide intention.
The ruling strengthens the distinction between procedural vs. substantive compliance under tax laws. It highlights that genuine hardship (e.g., logistics, system issues) can be a valid ground for relief. Authorities are expected to adopt a liberal interpretation in export-related matters, given the policy intent to promote exports. Taxpayers should maintain proper documentation to prove bona fide intent, as relief is fact-dependent.
