Half Yearly Tax Digest 2025: Supreme Court and High Court Cases [Part XII]
In this Half Yearly Tax Digest 2025, we decode key Supreme Court and High Court judgments that shaped income tax, GST, and compliance landscape. Each ruling comes with practical insights and legal references to help Indian taxpayers and professionals stay compliant and alert.
🔍 Why Tax Rulings Matter to You
Whether you’re a CA, tax consultant, or business owner, understanding how courts interpret tax laws helps avoid costly mistakes. From retrospective GST demands to input tax credit restrictions, this digest breaks down real judgments that may apply to your case tomorrow.
🧾 Key Supreme Court Judgments: Jan to June 2025
1. Gameskraft SC Order – Online Gaming under GST
- Issue: Whether online games like rummy and fantasy sports are games of skill or chance under GST
- Court: Supreme Court, Constitution Bench
- Status: Hearing resumed; interim stay on Karnataka HC judgment continues
- Impact:
- If SC rules it’s chance, 28% GST on full bet amount applies
- If skill, companies may get refunds and lower GST burden
Legal Angle: Ref: CGST Rule 31A(3) and Article 246A of the Constitution
Expert Tip: Gaming platforms should keep detailed classification memos and legal opinions ready for possible retrospective scrutiny.
2. M/s Canon India Ltd vs Commissioner of Customs
- Issue: Can DRI officers issue show cause notices under Customs Act?
- Court: Supreme Court reaffirmed earlier ruling in Canon India (2021)
- Update 2025: SC refused to stay Delhi HC’s application of Canon India to GST cases under Section 6 of CGST Act
Impact on GST: DRI’s power under GST is questionable unless proper delegation exists
Practical Angle:
Businesses receiving SCNs from DRI under GST should verify competent authority jurisdiction before responding.
⚖️ Key High Court Rulings: Jan to June 2025
3. Kerala HC on GST for Housing Society Charges
- Case: Residents Welfare Association vs UoI
- Issue: Whether GST applies on monthly charges above ₹7,500/month/unit
- Ruling: GST applies only on excess amount, not entire value
Clarification Backed by CBIC Circular No. 109/28/2019-GST
Impact: Relief for societies collecting ₹8,000–₹9,000 — GST payable only on ₹500–₹1,500
4. Madras HC: Limitation under Section 73(10) of CGST Act
- Case: TVL. SPS Petro Chem vs Assistant Commissioner
- Issue: Whether SCN issued beyond 3-year time limit is valid
- Ruling: Demand barred by limitation under Section 73(10)
Takeaway: Always check the date of cause of action vs SCN date
5. Bombay HC: No GST on Liquidated Damages
- Case: Maharashtra State Electricity Board vs GST Dept
- Issue: Is GST applicable on compensation for contract breach?
- Ruling: No GST — not a supply of service under Section 7 of CGST Act
Reference: Aligns with CBIC Circular No. 178/10/2022-GST
Practical Tip: Draft contracts clearly with ‘compensation clauses’ labeled as non-supply.
6. Calcutta HC: Input Tax Credit and Genuineness of Supplier
- Case: M/s Bansal Traders vs GST Authority
- Issue: Can buyer be denied ITC due to defaulting supplier?
- Ruling: If buyer acted in good faith and transactions were genuine, ITC cannot be denied
Legal Support: Reinforces Section 16 of CGST Act and SC’s Canon India spirit
📘 Summary Table – Digest at a Glance
| Court | Issue | Key Outcome |
|---|---|---|
| SC – Gameskraft | Gaming GST rate | Final ruling awaited; 28% may apply |
| SC – Canon India | DRI’s GST show cause | Jurisdiction questioned |
| Kerala HC | Society charges GST | GST only on excess over ₹7,500 |
| Madras HC | Limitation for SCN | SCNs beyond 3 yrs are invalid |
| Bombay HC | GST on damages | Liquidated damages not taxable |
| Calcutta HC | ITC denial for supplier fault | Good faith buyers protected |
✅ What Taxpayers Should Do
- Review all pending SCNs for jurisdiction and limitation
- Classify revenue and compensation receipts carefully
- Reconcile ITC with vendor filings regularly
- Keep records to prove transaction genuineness
FAQs – Half Yearly Tax Digest 2025
Q1. Does the ₹7,500 GST limit for housing societies still apply in 2025?
Yes. As per CBIC and Kerala HC, GST applies only on the amount exceeding ₹7,500/month/unit.
Q2. Can DRI issue GST notices?
Not without proper delegation. SC and HCs have questioned DRI’s jurisdiction under GST.
Q3. Are all online games liable for 28% GST now?
Not yet. Final SC decision on skill vs chance is awaited. Interim stay continues.
Final Thoughts
Half Yearly Tax Digest 2025 is a must-follow for consultants and taxpayers alike. Legal interpretations evolve fast — keeping track can save you from penalties, interest, and avoidable litigation.
👉 Need help handling GST notices or ITC mismatches?
Talk to our experts at Efiletax.in and get end-to-end legal and tax support for your business.
Summary
Half Yearly Tax Digest 2025 summarises key Supreme Court and High Court rulings impacting GST, income tax, and compliance. Includes Gameskraft, Canon India, housing society GST limits, SCN limitation, and ITC rulings. Ideal for Indian taxpayers, CAs, and consultants to stay legally informed and avoid penalties.