State of Karnataka v. Sudhanva Engineers and Builders
In favour of the revenue
The ruling in brief
The Karnataka High Court Division Bench (10 June 2026, Writ Appeal No. 275 of 2025) allowed the State’s appeal against a Single Judge order that had directed relaxed penalty, interest or limitation for Sudhanva Engineers and Builders, a works contractor, to file or amend GST returns based on a reimbursement clause in its government contract. The contractor argued the employer would reimburse GST consequences, but the revenue contended courts cannot soften statutory fiscal obligations by contract. Under Sections 39, 37, 50, 128 and 168A, contractual reimbursement cannot override mandatory GST statutory liability for returns, interest and penalty; nor can writ courts direct relaxation of statutory limitation or condonation in the absence of valid statutory power. Outcome: in favour of the revenue—the impugned assessee-favourable relief was unsustainable. Not legal advice.
For information only — not legal advice. Read the full judgment and applicable law before relying on this summary.
Provisions considered
- CGST S.39 — Furnishing of returns by registered persons.
- CGST S.37 — Section 37 of the Central Goods and Services Tax Act, 2017.
- CGST S.50 — Interest on delayed payment of tax.
- CGST S.128 — Section 128 of the Central Goods and Services Tax Act, 2017.
- CGST S.168A — Power of Government to extend time limits in special circumstances.
Source documents
Similar rulings
See the decision
Chandan Kumar Giri v. State of West Bengal
Chandan Kumar Giri filed writ before the Calcutta High Court (8 September 2026, WPA No. 23778 of 2026) after his GST portal access was blocked, preventing filing of GSTR-1, amid registration-related anomalies following a field inspection and ongoing proceedings against his registration. The Court did not finally adjudicate allegations of bogus registration or tax evasion on writ. Instead it directed the petitioner to file a comprehensive representation rebutting allegations with documents, and remanded the matter for administrative verification and personal hearing. Portal access was to be restored if, after hearing, the authorities found the assessee bona fide, under Sections 37, 146 and Rule 59. Outcome: remanded for administrative decision—the headnote outcome is see the decision. Procedural roadmap when returns are blocked pending verification. Not legal advice.
In favour of the assessee; matter remanded
Umen Chandra Roy v. Union of India
Umen Chandra Roy succeeded in part before the Calcutta High Court (17 August 2026, WPA No. 1360 of 2026) where a rectification application seeking correction of input tax credit in returns was rejected because it was filed beyond a six-month period stated in departmental circulars, even though Section 16(5) of the CGST Act does not prescribe a limitation for availing ITC subject to other conditions. The petitioner invoked Article 226, arguing executive instructions under Section 168 cannot curtailed substantive statutory rights. The Court held rejection based solely on circular delay was unsustainable and remanded the rectification application for consideration on merits, leaving scope to reject only if delay was shown to be unexplained or exceptional on facts. Outcome: assessee-favourable remand under Article 226. Relevant for ITC rectification beyond internal departmental timelines. Not legal advice.
In favour of the assessee
Assistant Commissioner of CGST & Central Excise v. Akshaya Building Solution
In a writ appeal before the Madras High Court (18 June 2026, W.A. No. 3577 of 2024), Akshaya Building Solution sought rectification of clerical and arithmetical errors in GSTR-1 for early GST periods so that outward supply details and input tax credit would flow correctly to its customers’ ledgers. The Assistant Commissioner resisted on grounds of delay and because the portal did not permit online amendment for those periods. Under Section 39 and Rule 59, the appellate bench held rectification of genuine clerical and arithmetical mistakes could not be denied merely on delay or transient portal limitations when the error frustrated the statutory chain of ITC. Corrected returns or manual rectification as permitted by law had to be allowed. Outcome: in favour of the assessee. Important for legacy return correction and ITC pass-through in construction supplies. Not legal advice.
In favour of the revenue
Commissioner of Central Tax v. Sadguru Infratech (P.) Ltd
The Commissioner of Central Tax appealed before the High Court of Karnataka (Writ Appeal No. 1076 of 2023, decided 10 June 2026) against a Single Judge order favouring Sadguru Infratech (P) Ltd. A sub-contractor had filed GST returns belatedly; garnishee action under Section 79 sought recovery of interest on delayed tax payment under Sections 39 and 50. The Single Judge had permitted filing or amendments of returns post 1 July 2017 without insisting on interest, penalty, or limitation and had restrained recovery. The Division Bench held that interest liability arises by statutory mandate under Section 9 read with Section 50 and cannot be waived or reduced in the absence of a specific enabling provision; Section 128 did not apply. The appeal was allowed in favour of the revenue.
In favour of the assessee
Zach Rubber (P.) Ltd. v. State Tax Officer
Zach Rubber (P.) Ltd. filed WP(C) No. 20131 of 2026 before the Kerala High Court; judgment 14 July 2026. The State Tax Officer denied input tax credit after the company filed its March 2020 return on 17 November 2020, treating the claim as barred under Section 16(4). The assessee relied on Section 16(5), which permits ITC where the return for the period is filed on or before 30 November 2021, and on Section 168A where relevant for timeline computation. The court held rejection as purely time-barred was unsustainable and directed reconsideration if the assessee was otherwise eligible. Outcome: in favour of the assessee. This aligns with other High Courts on post-amendment ITC relief. Not legal advice. Officers must apply Section 16(5) prospectively to March 2020 and similar periods when returns precede the November 2021 cutoff.