The Daily Tax Law Briefing dated 7 August 2026 presents important judicial developments under Goods and Services Tax (GST) and Income Tax, covering eight judgments from the Kerala, Delhi, Calcutta, Gujarat and Allahabad High Courts, as well as the Indore and Delhi Benches of the Income Tax Appellate Tribunal. The briefing focuses on significant issues concerning statutory appeals, retrospective cancellation of GST registration, refund limitation, jurisdiction, reassessment, property investment, DRP directions and principles of natural justice.
GST – Statutory Remedies, Registration, Refund and Jurisdiction
The GST section covers four judgments addressing important procedural and jurisdictional questions. The Kerala High Court considered the effect of the constitution of the GST Appellate Tribunal on writ proceedings filed when the Tribunal was unavailable. With the statutory appellate remedy under Section 112 of the CGST Act now available, the petitioner was relegated to the Tribunal with a direction to file the appeal within 60 days and comply with the prescribed pre-deposit requirement.
On retrospective cancellation of GST registration, the Delhi High Court held that registration cannot subsequently be cancelled retrospectively where the show cause notice itself does not propose retrospective cancellation. While setting aside the retrospective operation of the cancellation, the Court preserved the Department’s right to issue a fresh notice specifically proposing such action and to proceed after providing an opportunity of hearing.
The briefing also examines an important GST refund and limitation issue. The Kerala High Court held that Rule 97A permits manual filing as an additional mode and does not invalidate an electronic refund application. Where the online refund application had admittedly been filed and acknowledged within the prescribed limitation period, rejection merely because the subsequent hard-copy application was filed later was held to be illegal and arbitrary.
Another GST decision concerns ITC adjudication, jurisdiction and cross-empowerment. The Calcutta High Court recognised that the existence of an alternative appellate remedy does not prevent exercise of writ jurisdiction where the competence of the adjudicating authority is questioned on a pure question of law. The adjudication and appellate orders were set aside and the jurisdictional questions were remanded for consideration by the adjudicating authority as the first issue.
Income Tax – Reassessment, Investment, DRP Directions and Natural Justice
The Income Tax section similarly contains four significant decisions. In a reassessment dispute involving deemed dividend under Section 2(22)(e), the Gujarat High Court found that the statutory shareholding requirements were not satisfied. It further held that reopening beyond four years following an assessment under Section 143(3) was impermissible in the absence of failure by the assessee to fully and truly disclose material facts. The reassessment notice and consequential assessment and demand were accordingly quashed.
The ITAT Indore dealt with an addition arising from the purchase of immovable property. For the transaction concerned, the Tribunal held that the actual purchase consideration governed the investment because the provision taxing the difference between consideration and stamp-duty value under Section 56(2)(vii)(b) came into force only from 1 April 2014. It also accepted the evidence concerning agricultural holdings and agricultural income as the source of the assessee’s share of investment.
In another significant procedural ruling, the ITAT Delhi held that failure of the Assessing Officer to incorporate and follow binding DRP directions rendered the final assessment order contrary to Section 144C(13) and bad in law. A subsequent corrigendum could not cure the jurisdictional defect, particularly when issued after the prescribed period.
The briefing concludes with an Allahabad High Court ruling highlighting the importance of reasoned and speaking orders. In proceedings relating to stay of recovery of demands arising from penalties under Section 271C, the Court held that recording reasons is an essential requirement of natural justice applicable to judicial, quasi-judicial and administrative orders. The unreasoned rejection of the stay applications was therefore quashed and the matters were remanded for fresh consideration.
Why Read This Briefing?
This edition is particularly relevant for Advocates, Chartered Accountants, Company Secretaries, Tax Consultants, GST Practitioners, corporate tax teams and businesses dealing with tax litigation and compliance. The judgments highlight the continuing importance of statutory appellate remedies, properly framed show cause notices, electronic filing within limitation, jurisdictional competence, safeguards governing reassessment, compliance with binding DRP directions and the fundamental requirement that administrative and quasi-judicial decisions be supported by reasons.
Download the complete Daily Tax Law Briefing (7 August 2026)
