The Daily Tax Law Briefing – 24 July 2026 highlights the latest judicial developments under the Goods and Services Tax (GST) and Income-tax laws. This edition analyses nine significant judicial pronouncements, comprising five GST judgments and four Income Tax decisions, delivered by the Supreme Court of India, Karnataka High Court, Madras High Court, Uttarakhand High Court, Gauhati High Court and various Benches of the Income Tax Appellate Tribunal. The decisions address important issues relating to GST appeal limitation, club mutuality, reassessment proceedings, scrutiny notices, fresh allotment of shares and search assessments.
The GST section is led by several important rulings on appellate remedies and pending constitutional issues. The Uttarakhand High Court reaffirmed that Section 107 of the CGST/SGST Act constitutes a complete code governing limitation for filing GST appeals. The Court held that the statutory period of three months, together with the additional condonable period of one month, exhausts the appellate authority’s jurisdiction and that Section 5 of the Limitation Act cannot be invoked to condone delay beyond the statutory limit. The Court, however, directed that individual writ petitions be examined separately to determine whether extraordinary writ jurisdiction should nevertheless be exercised on their own facts.
Another significant development concerns the levy of GST on clubs and associations. The Karnataka High Court, while considering the challenge filed by The Koramangala Club, took note of the interim protection granted by the Supreme Court in matters arising from the Indian Medical Association judgment concerning the doctrine of mutuality. Following the Supreme Court’s interim order, the High Court granted protection against recovery and directed the matter to be listed for further hearing. The Supreme Court also dealt with connected GST matters involving Jorabat Shillong Expressway Ltd. and the Gujarat Chamber of Commerce and Industry, where notices were issued in one matter while the other batch of Special Leave Petitions was dismissed following earlier orders on the same issue. The Madras High Court, in the Dalmia Cement Bharat Ltd. matter, merely directed filing of counter affidavits without adjudicating the merits of the dispute.
The Income Tax section analyses four noteworthy judicial pronouncements on reassessment, search assessments and procedural compliance. The ITAT Visakhapatnam held that Section 56(2)(vii)(c)(ii) does not apply to the fresh allotment of shares, as a fresh allotment merely creates new shares and does not amount to receipt of property from another person. Consequently, the addition made by the Assessing Officer on account of alleged undervaluation of shares was held to be unsustainable.
A Special Bench of the ITAT Bengaluru clarified the legal position regarding notices issued under Section 143(2). The Tribunal held that neither the Income-tax Act nor the Income-tax Rules prescribe any statutory format for such notices and that the CBDT Instruction prescribing notice formats is merely administrative in nature. A notice issued by the competent authority within the prescribed limitation period remains valid notwithstanding deviations from the prescribed format, unless actual prejudice or violation of a statutory condition is established.
The briefing further includes significant decisions concerning reassessment proceedings. The Gauhati High Court restored a writ petition challenging reassessment proceedings after noting that the Supreme Court had set aside earlier High Court judgments dealing with the competence of jurisdictional Assessing Officers following legislative amendments introduced in 2026. The ITAT Mumbai also held that where reassessment is founded entirely upon documents seized during a third-party search, the Department must invoke the special procedure prescribed under Section 153C rather than the general reassessment provisions under Sections 147 and 148. Since the reassessment was initiated without following the mandatory statutory procedure, the Tribunal quashed the reassessment proceedings.
The Daily Tax Law Briefing – 24 July 2026 serves as an important resource for advocates, chartered accountants, company secretaries, tax consultants, businesses and corporate tax teams seeking concise updates on the latest judicial developments. The briefing provides valuable insights into evolving jurisprudence relating to GST litigation, reassessment proceedings, statutory interpretation and procedural safeguards under India’s indirect and direct tax laws.
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