1. No Hearing, No Order — It’s That Simple

Picture this. A small trading firm gets a notice one fine morning saying it owes lakhs in tax, interest, and penalty. No one ever sat the owner down and asked, “So, what actually happened here?” The order just… arrived. Final. Adverse. Life-altering.

Turns out, courts have had enough of this pattern.

Section 75(4) of the GST Act isn’t a suggestion — it’s a mandate. If a taxpayer asks for a personal hearing, or if the department is about to pass an order that goes against them, a hearing has to happen. Not a notice with “NA” typed into the hearing-date column. Not a hearing scheduled on the very same day the reply is due (yes, that’s happened, more than once). An actual, meaningful opportunity to be heard.

Courts have gone as far as quashing multi-crore demand orders over this single lapse, sometimes even slapping costs on the officers who ignored it. One bench put it bluntly: this cannot become a “practice” that the system tolerates.

Here’s the quiet takeaway for anyone dealing with tax authorities: procedure isn’t decoration. It’s the whole point. An order built on a shortcut, however “correct” the number crunching behind it, can collapse the moment someone points out that nobody was actually listened to. Natural justice isn’t a technicality lawyers hide behind — it’s the difference between a fair system and a rubber stamp.

2. Royalty and GST: A Fight That Refuses to Settle Down

If you’ve ever run a mining operation — sand, minor minerals, whatever it may be — you already know this headache: you pay royalty to the government for the right to mine, and then someone comes along and says, “Now pay GST on that royalty too.”

Wait, GST on a payment made to the government, for the government’s own resource? That double-take is exactly why this dispute has kept judges busy for years.

The core argument is almost philosophical: is royalty a “service” the government renders (in

which case GST could apply), or is it closer to a tax or a proprietary charge that shouldn’t attract another tax on top? Various benches have leaned different ways over time, and at one point demands were put on hold entirely while the bigger constitutional question worked its way up to a larger bench of the Supreme Court.

Even after that larger bench weighed in on the tax-versus-not-tax question for royalty generally, the GST angle specifically continues to generate fresh litigation, fresh notices, and fresh stays. It’s one of those areas where the law is still catching its breath.

If your business pays royalty on mined minerals and you’ve received a GST demand tied to it, the honest answer is: this is genuinely unsettled terrain, and the outcome can depend heavily on your specific facts and paperwork. Worth having someone actually look at your notice rather than assume it’s a lost cause — or a slam dunk.

3. You Can’t Charge Royalty on Sand You Never Dug Up

Here’s a scenario that sounds almost too obvious to need a court ruling: a builder digs a foundation, some earth comes out, and that same earth gets used right back on the same site — filling, levelling, whatever. No selling. No stockpiling. No profiting off it.

And yet, demand notices have landed on builders treating this as if they’d run a full-blown mining operation requiring royalty payment.

Courts have pushed back on this repeatedly. The logic is refreshingly common-sense: royalty is meant to apply to minerals actually “won” — meaning extracted for use or sale as a mineral — not to incidental earth movement that’s part of ordinary construction. Authorities have been told, in no uncertain terms, that they can’t just look at the fact that some digging happened and assume royalty is automatically due. They have to actually examine what the earth was used for.

There’s a broader principle tucked inside this: a charge tied to “excavation” or “extraction” needs there to actually be excavation or extraction in the sense the law intends — not just any disturbance of soil. If nothing was removed for commercial use, there’s nothing to charge royalty on in the first place.

For anyone in construction, real estate, or infrastructure who’s been slapped with an earth-royalty notice for their own foundation work, this line of reasoning is worth knowing cold before simply paying up.

4. Input Tax Credit Isn’t a Favour. It’s a Right.

There’s a persistent myth floating around that Input Tax Credit is something the government “allows” you to have, almost like a discount coupon that can be withdrawn whenever convenient. That’s not quite right.

ITC exists to solve a very real problem: tax being charged again and again at every stage of a supply chain until the final price becomes absurd. The credit mechanism prevents that pile-up. It’s baked into the design of GST, not bolted on as a courtesy.

That said, courts have also been clear this right comes with responsibilities attached. If a business wants to claim credit, it needs to be able to show the transaction actually happened — genuine invoices, real movement of goods, a supplier that actually exists.

Claims built on paper trails with nothing physical behind them don’t survive scrutiny, and rightly so.

But here’s the part that matters for honest businesses: even where credit gets blocked or frozen by the department — say, because a supplier further up the chain looks suspicious — the authorities still can’t just flip a switch without recording clear, written reasons. Courts have unblocked frozen credit precisely because the department treated a serious legal safeguard like a mere formality.

So the right cuts both ways. It protects genuine taxpayers from cascading tax and arbitrary freezes. It doesn’t protect fabricated paper trails. Knowing which side of that line your documentation falls on is, frankly, the whole game.

5. When a Family Fight Ends Up Wearing a Tax-Dispute Costume

Every so often, a matter lands in the tax or GST courtroom that, once you peel back a layer, isn’t really about tax at all. It’s a partnership gone sour, a property dispute dressed up in departmental language, or a business rivalry using regulatory machinery as a weapon.

Courts have started noticing this pattern and calling it out. Where the real dispute is essentially civil in nature — ownership, contractual rights, internal partnership disagreements — dragging it through tax proceedings or writ petitions isn’t the right forum, and pretending otherwise wastes everyone’s time, including the court’s.

In several such matters, relief has been granted not necessarily because the tax demand itself was wrong, but because the underlying fight needed to be untangled through the proper civil process first, rather than being decided as a side-effect of a tax order.

It’s a good reminder that choosing the right battlefield matters as much as having a good case. A dispute mislabelled and pushed through the wrong forum can waste years before

anyone gets to the actual issue. Sometimes the smartest legal move isn’t fighting harder — it’s fighting in the right room.

These notes reflect the general direction of recent judicial thinking and are meant to inform, not to serve as advice for any specific matter. Every case turns on its own facts.