GST Compliance Issues Must Go to Trial: Calcutta High Court Refuses Summary Judgment

The Calcutta High Court has dismissed an application seeking summary judgment in a high-value commercial dispute, observing that questions surrounding compliance with GST law raise triable issues that cannot be decided without a full trial. The judgment was delivered by Justice Aniruddha Roy on April 1, 2026. The bench of Justice Aniruddha Roy noted that the purpose of summary judgment is to dispose of cases where there is no real prospect of success. However, where questions such as whether goods were supplied, whether GST procedures were followed, and whether the transactions are legally enforceable remain contested, the matter must proceed to trial. The Court reiterated that a plaintiff has a vested right to have such disputes adjudicated through the established process of evidence and trial. The dispute arose from a commercial suit filed by M/s S. G. Karel and Sons Jewellers Private Limited, which sought recovery of ₹6.51 crore from M/s Madan Lal Agarwalla Jewellers and others. The plaintiff alleged that it had supplied goods to the defendants on credit over a period beginning February–March 2021. According to the plaint, the goods were delivered under multiple invoices and delivery challans, accepted without objection, and partially paid for, thereby acknowledging liability. However, the defendants allegedly failed to clear the outstanding dues despite repeated follow-ups. The defendants, in their application for summary judgment under Order XIII-A of the Code of Civil Procedure, argued that the plaintiff had no real prospect of succeeding. Their central defence revolved around alleged non-compliance with the Central Goods and Services Tax Act, 2017, contending that the goods in question were subject to GST but mandatory statutory procedures were not followed. They specifically pointed to the absence of compliance with Section 142(12) and related provisions, arguing that required documentation and time-bound filings were missing. On this basis, they claimed that a legal presumption arises that no valid supply of goods ever took place. Further, the defendants contended that none of the invoices were countersigned, and earlier financial records reflected only a minimal outstanding balance, contradicting the plaintiff’s claim. They argued that these factors, coupled with GST non-compliance, rendered the suit untenable and liable to be dismissed at the threshold. The plaintiff, however, strongly disputed these claims, maintaining that the goods were duly supplied and utilized by the defendants. It argued that the GST-related objections raised by the defendants involved disputed questions of fact and could not be adjudicated without evidence. According to the plaintiff, compliance issues, if any, must be established during trial through documentary proof and witness examination. The High Court agreed with the plaintiff’s position and held that GST compliance cannot be conclusively determined at the summary stage without a detailed factual inquiry. The Court observed that the defendants’ arguments regarding statutory non-compliance require examination in light of evidence and cannot be presumed to negate the transaction outright. It emphasized that once factual disputes arise—particularly concerning supply of goods and adherence to statutory requirements—they necessarily give rise to triable issues. The Court held that the defendants failed to satisfy the legal threshold required for summary judgment and dismissed the application. The suit will now proceed to trial, where issues relating to GST compliance and the underlying transaction will be examined in detail. Case Details Case Title: M/S. S. G. Karel And Sons Jewellers Private Limited Vs M/S Madan Lal Agarwalla Jewellers And Others Citation: JURISHOUR-672-HC-2026(CAL) Case No.: IA No. GA-COM/5/2025 Date: 01/04/2026 Counsel For Petitioner: Indranil Nandi, Adv. Counsel For Respondent: Chayan Gupta, Adv. Click Here To Read Order Read More: COVID-19 Limitation Exclusion Applies to GST Refund Claims: Andhra Pradesh High Court

GST Compliance Issues Must Go to Trial: Calcutta High Court Refuses Summary Judgment

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