GST WEEKLY UPDATE :19/2026-27 (09.08.2026) By CA Vipul Khandhar

-CA Vipul Khandhar, 

1. GST Portal Update: Mandatory Email Verification Introduced for Application Access via TRN:

Executive Summary

In a move aimed at bolstering platform security and protecting applicant data, the Goods and Services Tax (GST) Portal has updated the access protocol for pending GST registration applications. Taxpayers, legal representatives, and tax professionals must now provide a verified email address alongside the Temporary Reference Number (TRN) to proceed with their applications.

Key Changes to Access Protocol

The primary shift involves introducing a multi-factor check prior to One-Time Password (OTP) generation:

• Previous Procedure: Access required only the TRN and CAPTCHA code.
• Revised Procedure: Access now strictly mandates the TRN, Registered Email Address, and CAPTCHA code.

[TRN] + [Captcha]  ──►  [Email Verification Required]  ──►  [TRN + Registered Email + Captcha]

    (Old Method)                                                (Revised Security Method)

Note: The email address entered must match the exact email address specified during the initial TRN generation stage.

Objective & Impact on Stakeholders

• Enhanced Security: Prevents unauthorized third parties from probing or accessing sensitive taxpayer details using exposed or sequential TRNs.
• Data Integrity: Ensures that updates, status checks, and form completions are executed solely by the designated applicant or authorized representative.
• Operational Advisory: Tax professionals and firms handling multiple registrations should ensure that the login parameters—specifically the exact email address associated with each specific TRN—are systematically logged in internal client management systems to prevent access delays or repeated authentication failures.

 Immediate Action Required

Practitioners and taxpayers accessing active or pending applications on the GST Portal should update their internal compliance checklists immediately to reflect this additional credential requirement.

2.    Important Judgements:

(i) GSTAT Hyderabad: Mandatory Pre-Deposit Under Section 112(8) Inapplicable to Penalty-Only Appeals Initiated Prior to 1 October 2025

Case Summary Digest

Fact Matrix

1. Background: The Revenue initiated proceedings and levied penalties on the assessee under Sections 122 and 125 of the CGST Act (read with Section 20 of the IGST Act) on allegations of issuing tax invoices without actual underlying supply of goods or services.
2. Registry Objection: The assessee preferred an appeal before the GSTAT against the order-in-appeal. However, the Tribunal Registry flagged the appeal as defective due to non-payment of the statutory pre-deposit prescribed under Section 112(8) of the CGST Act.
3. Assessee’s Contention: The assessee submitted that the Show Cause Notice (SCN), the original adjudication order, and the first appellate order were all issued prior to 1 October 2025. Relying on settled jurisprudence (Hoosein Kasam Dada, Barjinder Singh Kohli, and Anukul Bindal), the assessee argued that the right of appeal vests at the date of initiation of the original proceedings and cannot be fettered by a subsequent, burdensome pre-deposit condition unless explicitly made retrospective by Parliament.

 Key Issue

Whether the pre-deposit requirement introduced under Section 112(8) of the CGST Act applies retrospectively to appeals arising out of penalty-only proceedings initiated before 1 October 2025.

Held

• Prospective Operation: The Tribunal held that the statutory amendment introducing/modifying the pre-deposit condition for penalty-only appeals under Section 112(8) operates purely prospectively.
• Vested Right of Appeal: Following the decision of the Calcutta High Court in Barjinder Singh Kohli, the Tribunal affirmed that procedural conditions restricting an appeal cannot impair a right that accrued when the proceedings originated (prior to 1 October 2025).

Interim Admission: The appeal was formally admitted without insistence on pre-deposit, and notice was issued to the Revenue. The Tribunal clarified that this admission is strictly without prejudice to the merits and does not preclude a re-examination of the pre-deposit requirement at the final hearing stage if legally necessitated.

(ii) GST APPELLATE TRIBUNAL (HYDERABAD BENCH):Jafer Razikh Mohd v. Proprietor, Om Sree Sai Security and House Keeping Services: Appeal No. APL/165/HYD/2026

Statutory Provisions: Section 74, Section 122 of CGST Act, 2017; Section 20 of IGST Act, 2017:

Penalty — Multiplicity of Penalties — Legality of dual penalties under IGST Act in addition to penalties under Section 74 of CGST/SGST Act — Departmental appeal admitted by Tribunal questioning the sustainability of cumulative penalties under the IGST Act when penalties for identical underlying transactions/contraventions are already imposed under Section 74 of the CGST/SGST Act. Potential risk of double jeopardy and duplicate penalization highlighted. Revenue directed to clarify its legal stand and submit details of 53 similar appeals pending from Secunderabad Commissionerate to formulate a uniform departmental policy — Matter listed for hearing.

Case Digest & Facts

1. Departmental Appeal: The Revenue preferred an appeal following a departmental review of an order-in-appeal passed by the appellate authority concerning the determination of tax liabilities and imposition of penalties under the IGST Act.
2. Issue of Cumulative Penalization: During proceedings, the Tribunal observed that penalties under the IGST Act were being sought in addition to penalties already levied under Section 74 of the CGST/SGST Act for corresponding tax liabilities arising out of the same set of transactions.
3. Legal Question Raised: The Tribunal suo motu raised the legal issue of whether imposing separate, concurrent penalties across IGST, CGST, and SGST for the same alleged contravention amounts to impermissible duplication of penalties under statutory interpretation principles.
4. Wider Administrative Impact: The Revenue submitted that nearly 53 similar appeals had been filed by the Secunderabad Commissionerate alone, demonstrating a recurring systemic issue across the zone requiring institutional clarity.

Held / Directions

• Admission & Notice: The Revenue’s appeal was admitted, and notice was issued to the respondent-assessee.
• Direction to Revenue: The Tribunal directed the Revenue to submit a comprehensive clarification outlining its official legal position regarding the permissibility of cumulative IGST and CGST/SGST penalties.
• Consolidation of Similar Matters: Revenue was instructed to furnish full details of all ~53 identical appeals pending before the Tribunal to enable a uniform decision on this issue.
• Listing: Matter ordered to be listed for hearing after four weeks.

(iii) GST APPELLATE TRIBUNAL (THANE BENCH): Tata Unistore Limited v. Commissioner CGST & Ex. Navi Mumbai Commissionerate: Appeal No.: APL/8/THN/2026 Decided on: July 31, 2026

Statutory Provisions: Sections 74, 140, 142(6)(a), and 174(2)(e) of the CGST Act, 2017; CENVAT Credit Rules, 2004; Finance Act, 1994:

Transitional Input Tax Credit — Pre-GST CENVAT/VAT Credit — Jurisdiction under Section 74 — Reassessment or recovery of CENVAT credit or VAT credit transitioned into GST under Section 140 of the CGST Act, 2017 cannot be initiated under Section 74 of the CGST Act where such credits were validly reflected in returns and never disputed by the Revenue under the pre-GST regime. GST authorities lack jurisdiction to re-examine the eligibility or correctness of credits accrued under repealed laws; any proceeding or recovery relating to pre-GST credit must strictly be pursued under the relevant erstwhile statutes pursuant to Sections 142 and 174 of the CGST Act. Transition of Krishi Kalyan Cess (KKC) and VAT credit on stock-in-trade upheld — Invocation of Section 74 and imposition of 100% penalty held legally unsustainable — Appeal allowed.

Case Digest & Facts

1. Background:The appellant (Tata Unistore Limited), operating an e-commerce platform (TataCLiQ), carried forward accumulated CENVAT credit and VAT credit into the GST regime via Form GST TRAN-1 under Section 140 of the CGST Act.These credit balances were duly disclosed in the pre-GST Service Tax and VAT returns and remained undisputed during the erstwhile regime.
2. Impugned Proceedings: Revenue issued a Show Cause Notice under Section 74 of the CGST Act, alleging wrongful availment and transition of credit on the grounds that the appellant failed to produce invoice-wise linkages, credit registers, and payment records years after the transition.Demands, interest, and equal penalties were confirmed by lower authorities.
3. Appellant’s Arguments: The appellant submitted that transitional credit represents the composite closing balance in pre-GST returns. Under Sections 140, 142(6)(a), and 174(2)(e) of the CGST Act, GST officers cannot re-adjudicate or reassess the admissibility of pre-GST credit. Relying on High Court decisions (Usha Martin, Steel Authority of India, Kunjal Synergies) and Godrej & Boyce (for KKC credit), the appellant urged that any challenge to pre-GST credit lies solely under the repealed laws.

Held

• Lack of Jurisdiction under Section 74: The Tribunal held that Section 74 of the CGST Act cannot be invoked to test or reassess the eligibility of CENVAT or VAT credit that accrued under repealed statutes and remained undisputed prior to 1 July 2017. Reassessment, if any, can only be conducted under the erstwhile Finance Act, 1994 or VAT laws by virtue of savings provisions in Sections 142 and 174.
• No Invoice-Wise Correlation at Transition Stage: Closing balance in pre-GST returns is a composite cumulative figure; demanding individual invoice-level verification or credit registers years later to disallow transitioned credit is legally unsustainable.
• Transition of KKC Credit: Transition of Krishi Kalyan Cess credit was upheld, following CBIC Circular No. 87/06/2019-GST and the ruling in Godrej & Boyce Manufacturing Co. , noting that Explanation 3 to Section 140 could not operate without the corresponding operationalization of Explanations 1 and 2.
• Transition of VAT Credit:Transition of VAT paid on stock-in-trade under Section 140(6) was allowed as the appellant furnished stock details and no specific adverse findings were recorded by the lower authorities.

Set Aside of Penalty: Imposition of penalty under Section 74 was declared wholly unjustified, as disclosure made via statutory TRAN-1 returns negates any allegation of fraud, suppression, or wilful misstatement.

Disclaimer:

This publication contains information for general guidance only. It is not intended to address the circumstances of any particular individual or entity. Although the best of endeavour has been made to provide the provisions in a simpler and accurate form, there is no substitute to detailed research with regard to the specific situation of a particular individual or entity. We do not accept any responsibility for loss incurred by any person for acting or refraining to act as a result of any matter in this publication.

(The author is a well known Chartered Accountant practicing at Ahmedabad)