Facts of the Case

This batch of 25 writ petitions, led by Agriculture Insurance Company of India Ltd. vs Union of India, was filed by major general and health insurers — including Reliance General, Tata AIG, ICICI Lombard, SBI General, Bajaj Allianz, HDFC Ergo, New India Assurance, National Insurance, and others — before the Bombay High Court challenging GST demand orders passed against them. After the orders were passed, the CBIC issued Circular No. 236/30/2024-GST dated 11 October 2024 and Circular No. 244/01/2025-GST dated 28 January 2025, both issued under Section 168 of the CGST Act pursuant to the 54th GST Council meeting recommendation, which had a bearing on the very issues covered by the impugned orders.

Issues Involved

  1. Whether GST demand orders passed against the insurer-petitioners, prior to issuance of the two subsequent CBIC circulars addressing the same subject matter, could stand without reconsideration.
  2. Whether the matters should be set aside outright in the petitioners' favour or remanded for fresh adjudication in light of the circulars.

Petitioner's Arguments

  • Senior Counsel for the petitioners submitted that the writ petitions should be allowed outright based on the two CBIC circulars, which favourably clarified the position on the issues underlying the impugned demand orders.

Respondent's Arguments

  • Counsel for the Revenue agreed the circulars had a bearing on the impugned orders but submitted it would be appropriate to set the orders aside and remand the matters to the adjudicating authorities to examine the impact of the circulars and any other issues afresh, rather than the Court deciding the matter itself.

Court Order / Findings

  • The Court noted that both sides agreed the two post-decisional CBIC circulars, issued on GST Council recommendations, had a bearing on the impugned orders.
  • The Court set aside all the impugned orders across the 25 connected petitions and remanded the matters to the respective adjudicating authorities for fresh decision in light of the circulars and the GST Council's recommendations, to be completed within three months after giving full opportunity to the assessees.
  • All petitions were disposed of accordingly with no order as to costs.

Important Clarification

  • Where CBIC issues a clarificatory circular under Section 168 of the CGST Act pursuant to a GST Council recommendation after an assessment order has already been passed on the same issue, courts will typically remand the matter for the adjudicating authority to re-examine the demand in light of the circular, rather than adjudicate the substantive question themselves.
  • A remand of this nature is time-bound and requires the department to give the assessee a full opportunity of hearing before passing a fresh order.

Sections Involved

  • Section 168, CGST Act, 2017 – power to issue orders, instructions or directions for uniformity in implementation, under which CBIC circulars are issued.
  • CBIC Circular No. 236/30/2024-GST dated 11.10.2024 and Circular No. 244/01/2025-GST dated 28.01.2025 – clarificatory circulars issued pursuant to the 54th GST Council meeting.
  • Article 226, Constitution of India – writ jurisdiction under which the batch petitions were filed.

Decision – In Favour of

The decision is disposed of with directions, in part in favour of the insurer-petitioners — the impugned orders were set aside, but the matters were remanded for fresh adjudication rather than being decided finally in the assessees' favour.

Case Details

Court: High Court of Judicature at Bombay — Lead Case No.: Writ Petition No. 5225 of 2024 with 24 connected petitions — Coram: Justice M.S. Sonak and Justice Jitendra Jain — Date of Order: 30 June 2025.

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