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TaxTMI 
TaxTMI 
TaxTMI 
There is always lack of clarity on this dicey issue especially with quasi- judicial officials under state taxes who strongly believe that none of the decisions are binding on them as they may differ on facts of the cases. However, the extant legal position is that any decision based on absolute facts by the jurisdictional high court is definitely binding over the entire jurisdiction which the high court has. The verdicts arising out of article 226 by way of writs before the jurisdictional high courts are mostly giving partial relief to the taxpayer by way of remanding the matter to jurisdictional tax officials for deciding the matter fresh based on the observations of the high court. As these verdicts are not final decisions based on the facts of the individual cases, generally these kind of verdicts are not binding on the GST officials.
1. There are several situations where the high court take the final call on the writ petition by going in depth to the facts of the cases and arrive at the conclusion before passing the order. These kind of orders are only a few but have binding nature on the lower authorities as the decision on how to handle that particular situation is already taken by the jurisdictional high court in that matter.
2. In this article, it is proposed to examine few case laws of different jurisdictional high courts wherein the decisions have become final and have a binding nature on all lower authorities administering GST Law in the respective jurisdiction. The fact that CBIC/UOI is before the Supreme Court on the same issue would not alter the situation till such time the Supreme Court passes an order which shall only have the binding nature all over India.
3. The first case if from the division bench of the Kerala High Court in the matter of Indian Medical Association, Kerala Versus Union Of India, State Of Kerala, GST Council, Additional Director General, Directorate General Of Gst Intelligence, Kochi, Deputy Director, Directorate General Of GST Intelligence, Kozhikode (Vice Versa). - 2025 (4) TMI 872 - KERALA HIGH COURT. In this case the high court has held in para 22 that that the principle of mutuality has survived the 46th amendment to the Constitution, so long as the said judgment holds sway as a binding precedent and/or the Constitution is not amended suitably to remove the concept of mutuality from the concepts of supply and service thereunder, the impugned amendment to the CGST/SGST Acts must necessarily fail the test of constitutionality. Accordingly, no GST is payable by RWA.
4. Unfortunately, the awareness of this verdict is very poor even amongst large resident welfare associations who pay huge GST to the Government every month. The verdict of High Court has held that to collect GST from the members of the association is UNCONSTITUTIONAL. This position is to be accepted by GST officials till such time the Supreme Court comes out with a contrary view.
5. The decision of the Tripura High Court in the matter of M/s. Sahil Enterprises Versus Union of India, through its Secretary, Government of India, Ministry of Finance, Department of Revenue, New Delhi., Commissioner, Central Goods & Services Tax, Tripura Assistant Commissioner, Tripura M/s. Sentu Dey, Represented by its Proprietor Sri Sentu Dey, Bairagi Bazar, Jumerdhepha. - 2026 (1) TMI 385 - TRIPURA HIGH COURT is also binding on all GST officials as the matter is not simply remanded but final decision has been taken by the High Court in para 57 of the order where the order passed by adjudicating GST officials dated 07/05/2022 is set aside and the GST official was also directed to allow the ITC as the same was denied earlier. The sum and substance of this order is that Section 16 (2) ( c ) of the GST Act 2017 is not to deny ITC to purchasers in a bona fide transaction.
6. Though Section 16 (2) ( c) was held as constitutionally valid, the same has been read down to the effect that the same is to be applied only for non bona fide transactions. Few other high courts also ruled on similar lines and in a bunch of writ petitions, the Gujarat High Court held on 01/05/2026 in Maruti Enterprise Through Its Authorized Partner, Jigneshbhai Bharatbhai Tarpara Versus Union Of India & Ors. - 2026 (5) TMI 127 - GUJARAT HIGH COURT that clause c and d of sub section 2 of section 16 to be applied only in cases where the transactions are non bona fide.
7. On identical matter, the Karnataka High Court on 09/02/2026 in the matter of M/s. Instakart Services Private Limited Versus The Union of India, The Central Board of Indirect Taxes and Customs New Delhi, The Goods and Service Tax Council, The Principal Commissioner of Central Tax Bengaluru, The State of Karnataka - 2026 (3) TMI 1674 - KARNATAKA HIGH COURT in para 18 that (ii) The impugned provisions contained in Section 16(2)(C) of the CGST / KGST Act and Rule 36(4) of the CGST / KGST Rules are hereby read down in a manner that allows the benefit of ITC to bona fide recipients such as the petitioner, which has complied with all other conditions under Section 16(2) of the CGST / KGST Act despite any fault / lapse or non-payment of tax to the government by the suppliers.
8. It may be concluded that based on the above discussions, in cases where GST is demanded from RWA as well as ITC is sought to be denied under section 16(2) (C), all concerned may take a stand that the demands are unsustainable as the decisions where final order has been dictated by a higher court based on the facts of the case, the same is binding on all lower authorities including quasi judicial GST officers.