Efficacious alternate remedies by way of two levels of appeals in GST.

Prior to September 2025, before the GSTAT portal started accepting the second appeal with effect from 24/09/2025, the taxpayers who could not get desired relief under section 107 were forced to approach the High Courts by way of writs. Since October 2025, various high courts suggest to go for alternate remedy as GSTAT is functional now. As on date almost 78,000 second appeals have been filed so far and this may go up to one lakhs in 2026 itself. This being so, due to non -passing the required relief to the taxpayers by the first appellate authorities, several judgements are still coming out by way of admission of the writs. Decisions are also coming from Supreme Court on special leave petitions filed by taxpayer or GST Department. The month August 2026 has seen several orders, mostly in favor of the taxpayers from GSTAT, High Courts as well as Supreme Court.

Some issues are getting settled at Supreme Court. The best example is appropriate invocation of section 74 by the Supreme Court in two different cases. The crux of both the judgements, in my view is to invoke Section 74 only after establishing the ingredients such as fraud or willful-misstatement of suppression. As the onus is on Revenue to prove the same at the time of issuing the show cause notice itself, it is hoped that there could be substantial reduction in invocation of section 74 only for the sake of larger limitation period as well as to impose maximum penalty.

The benches of GSTAT have started passing the final orders. The Bengaluru division bench on 03/09/2026 in the matter of demand on account of differences between GSTR 2A and GSTR 3B during the year 2019-20 has put things to rest by passing necessary instructions to the proper officer. The Ernakulam bench on 08/09/2026 has dismissed the appeal of the GST authorities based on monetary limit which is less than 20,00,000/ for the department to file appeal before GSTAT. The same bench on the same day held in another appeal on refund as "An application for refund under section 54(3) of the CGST / KGST Act 2017 cannot be rejected on the grounds of ineligible Input Tax Credit, in the absence of an order under section 73 / 74 of the CGST / KGST Act determining that the said ITC was wrongly availed or utilized. In the instant case we find that the Revenue has not made any attempt to determine the correctness of ITC through proceedings under section 73 /74 and has sought to raise the ground of ineligibility of ITC only at then stage of processing of refund claim, which is clearly not permissible".

The High Courts are also disposing writs by way of admission even after one year from the setting up of the GSTAT due to poor quality of adjudication orders as well as orders at first appeal level. The Allahabad High Court on 21/08/2026 in a matter on sub section 7 of section 75 held that "7. Accordingly, no useful purpose may be served in keeping this petition pending or calling for a counter affidavit at this stage. The impugned order dated 13.07.2026 is set aside and the matter remitted to the adjudication authority to pass a fresh order. To the extent opportunity was earlier granted to the State to issue a fresh notice, no further indulgence may be granted on that account. If granted, that indulgence may only amount to granting the revenue authorities a second or a third innings to improve their case. No such indulgence is merited or warranted. Accordingly, the prayer made by the learned Standing Counsel on that count, is declined".

Various high courts have uniformly held that mere uploading of the show cause notice in the GST portal is not effective service and the con donation of delay in such cases must be entertained as the taxpayer has not noticed such uploading. The Madras High Court on 28/08/2026 held that ITC is available when the constructed property is not on his own account. In the instant case, the building was for letting out by way of lease.

All the cases referred above are covered exhaustively in my recent articles. Readers who are interested in exact citation may send me a mail at [email protected]

The idea of writing articles on a regular basis is to educate the tax officials on the recent developments in all the three FORA namely GSTAT, High Courts and the Supreme Court. Readers are encouraged to spend a minimum of 15 minutes to read all the latest developments in GST so as to keep them always updated on the law. In my considered view, during the tenth year of its journey, GST is expected to move smoothly by giving more revenue to Government with lesser burden on the taxpayer as the avoidable litigation is expected to come down in the coming periods. While the Superintendent of the department is in a position to quote case law using Artificial Intelligence, in case they start depending on actual pronouncements of various benches of GSTAT in a more appropriate manner, quality of adjudication is bound to improve whereas litigation is expected to come down. Even a marginal reduction in litigation is good for both the taxpayer as well as tax administrator.

Hence, it is hoped that from now onwards, the cases by way of writs reaching high courts and by way of special leave petitions reaching Supreme Court see reduction as the issues are settling as GSTAT Benches now.