This weekly round-up analytically summarises the key stories related to the Supreme Court and High Court reported at Taxscan.in during the previous week from February 27 to March 4, 2023.
In Chief Commissioner of CGST vs M/s Safari Retreats Pvt Ltd, likely to be listed on March 22, 2023, the Supreme Court is set to decide the constitutional validity of Goods and Services Tax (GST ) Input Tax Credit ( ITC ) restrictions on immovable property.
In a significant move earlier, the Supreme Court had admitted the appeal filed by the GST department against the order of the Odisha High Court wherein the High Court held that input tax credit is available in respect of GST paid while constructing the immovable property intending to let out for rent.
In a significant case Calcutta high court held that section 50C of Income Tax Act 1961 was not applicable on compulsory acquisition of land.
The transfer of the land was not on account of the agreement between the parties, but it was the case of the compulsory acquisition under the provisions of the Right to Fair Compensation and ReSettlement Act 2013. Therefore, the transaction could not be treated to be a transaction between two private parties where there may be room to suspect the correct valuation and the apparent sale consideration which was reflected in the sale documents.
The Madhya Pradesh High Court has provided respite to M/s Space Enclave Private Limited by halting the ongoing income tax reassessment proceedings against them. In addition, the division bench comprising Justice S A Dharmadhikari and Justice Prakash Chandra Gupta has admitted the case for final hearing.
The Madhya Pradesh High Court Bench of Justice S A Dharmadhikari and Justice Prakash Chandra Gupta also issued an interim stay of the order passed under Section 148A(d) of the Act as well as consequential notice under Section 148 of the Income Tax Act, until further orders.
While dealing with the Writ Petition Department of Revenue was instructed to abide by the directive issued by the Central Board of Indirect Taxes and Customs (CBIC) by the Orissa High Court (HC), which was presided over by Chief Justice Dr. S. Muralidhar and Justice M.S. Raman.
The bench observed the circular issued on 6th July 2022 by the CBIC that it was incumbent on the CT and GST Officer to accept the payment of tax by using the ECL. The disputed ruling dated March 29, 2022 was annulled after the division bench took the circular into consideration. The issue was also returned to the CT and GST officer in Jaipur for them to provide a new ruling after taking into account the aforementioned circular issued by the GST Policy Wing.
The Madras High Court quashed the assessment order for not conducting search under Section 132 of the Income Tax Act, 1961.
The Single Bench of Justice Abdul Quddus observed that “Since search under Section 132 of the Income Tax Act has not been conducted on the petitioner in accordance with law, the impugned assessment orders have to be necessarily quashed and the Writ Petitions will have to be allowed.”
The Madras High Court ruled that the principles of natural justice should not be adhered to when there is no enhancement of assessment or penalty for orders passed under Section 84 of the Tamil Nadu Value Added Tax Act, 2006.
The Bench of Justice Abdul Quddhose noted that “In the case on hand also, in the impugned orders passed under section 84 of the Tamil Nadu Value Added Tax Act, 2006, there is no enhancement of assessment or penalty and therefore, there is no necessity for the respondent to adhere to the principles of natural justice as claimed by the petitioner in these writ petitions.”
The Delhi High Court confirmed the cancellation of GST Registration against MS Koenig Solutions Pvt Limited, the petitioner.
The Court of Justice Vibhu Bakhru and Amit Mahajan observed that “The petitioner’s grievance insofar as suspension / cancellation of its registration is concerned, stands addressed. Since the said grievances are addressed, we do not consider it appropriate to consider the challenge to Sub-Section (2) of Section 29 of Act and Rule 21 & Rule 21A of the GST Rules.”
The Single Bench of the Madras High Court ordered retest to determine presence of Polyurethane for imposing Anti-dumping duty.
The Court noted that no prejudice would be caused to any of the parties if the test about the imported goods of the petitioner vizLining materials is conducted once again by a reputed laboratory engaged by the respondents to find out whether the imported goods contain Polyurethane or not and the cost for the same will have to be necessarily borne by the petitioner.
The Bombay High Court (HC), presided over by Justices Abhay Ahuja and Nitin Jamdar, reinstated the petitioner’s refund claim, which had been denied on the grounds that the Central Goods and Services Tax (CGST) Act of 2017’s statute of limitations had expired.
The division bench overturned the disputed order and returned the petitioner’s reimbursement claim to the Assistant Commissioner’s file after taking into account the supreme court rulings and the arguments of the counsels. Additionally, in accordance with these findings, the Assistant Commissioner will reexamine the Petitioner’s case on the merits as well as the grounds of limitation.
A Single Bench of the Allahabad High Court has recently dismissed the writ petition against the Goods and Services Tax (GST) notice and order under Section 129(3) of the U P Goods and Service Tax Act, 2017 for transporting goods 10 days after the generation of e-way bill.
The Single Bench of Rohit Ranjan Agarwal observed that there has been a complete misuse of statutory provision of the Act and Rules by the dealer. It was thus held, while dismissing the petition, that the inference drawn by the taxing authorities after interception of goods needs no interference by the Court.
A Single Bench of the Calcutta High Court recently disposed of a writ petition against cancellation of mutation of property by misinterpretation of order and remanded it for re-adjudication.
The Single Bench of Justice Amrita Sinha held that the said order will not create any equity in favour of any of the parties to the pending suit. The Court below should decide the suit on merits without being influenced by the mutation that has been effected in favour of a party. The writ petition was thereby disposed of.
In the case of Keenara Industries Private Limited v. ITO and other 256 cases Gujarat High Court set aside Notices under section 148 of Income Tax Act, 1961 and impugned orders under section 148A(d) on the ground of limitation.
The Court of Justice Mauna M Bhatt observed that “Notices under section 148 of the Income Tax Act and impugned orders under section 148A(d) of the Income Tax Act are quashed and set aside on the ground of limitation.”
The Patna High Court granted bail under the Customs Act, 1962 on the ground that the value of gold biscuits recovered less than Rs 1 Crore and also taking into consideration the period of custody.
The Court of Justice Sunil Kumar Panwar observed that “Considering the fact that recovery of gold Biscuits/Bullions from the individual possession of the petitioners are less than Rs. One Crore and the period under custody, let the petitioners, above named, be released on bail on furnishing bail bonds of Rs. 10,000/-.”
A Division Bench of the Delhi High Court has instructed the Commissioner of Income Tax (CIT) to grant a personal hearing to OYO Hotels and Homes Private Limited (OYO) to decide on the stay on their income tax demand of Rs. 1,140 crores.
The Delhi High Court’s decision is a significant development for OYO in their ongoing tax dispute. The court’s directive to provide a personal hearing to OYO’s authorised representative and to allow the submission of written arguments will enable OYO to present their case effectively.
In a recent case, the High Court (HC)of Jharkhand has held that the penalty under section 40 (2) of the Jharkhand Value Added Tax Act,2005 (JVAT) can’t be invoked in absence of deliberate filing of an Incorrect return.
The Court quashed and set aside the order passed by Commercial Taxes Tribunal, Jharkhand. Further, held that the amount of the alleged penalty of Rs.17,35,000/- already released from the bank accounts of Petitioner is to be refunded to the Petitioner after deducting Rs.25000/- taking resort of Section 30 (4) of the JVAT Act which prescribes a maximum penalty of Rs.25000/-
The Uttarakhand High Court (HC) in its recent judgement, has held that denial of the right to file submission against intimation in Form GST DRC -01A amounts to violation of natural justice principle.
While allowing the writ petition, the Court remanded the matter back to the Competent Authority. Further held that the “Petitioner may file his reply to the intimation in Form GST DRC-01A, within two weeks from today. The Competent Authority shall consider the reply, if filed within the stipulated time, within two weeks thereafter.” To Read the full text of the Order CLICK HERE
The Orissa High Court ( HC), has held that the demise of the counsel is not a valid reason for the condonation of delay of 2569 days for the Sales Tax appeal.
A Coram comprising Justice M S Raman viewed that what was expressed in the context of the Land Acquisition proceedings cannot ipso facto be extrapolated to proceedings like the present one which arises under the Sales Tax legislation. The Assessee is fully aware of the requirement of having to file returns and proceedings within time.
The High Court (HC) Orissa held the revisional Jurisdiction cannot be invoked when the remedy of appeal under section 78 of the Orissa Value Added Tax Act, 2004 (OVAT) Act is available.
Justice M S Raman observed that in the case of M/s. Sarala Project Works Pvt. Ltd. v. Additional Commissioner of Sales Tax, Cuttack & Others, it was held that “the specific averment of the Petitioner that the very purpose of which notice under Section 79(4) of the OVAT Act was issued by the Commissioner was already the subject matter of the appeal before the JCST, and that the Department itself could have gone in appeal against the said order under Section 78 of the OVAT Act has remained uncontroverted. In terms of Section 79(4)(b) read with Section 79(5) of the OVAT Act there is a clear statutory bar to the Commissioner exercising suo motu revisional power in such circumstances.”
The High Court (HC) Orissa in its recent judgement has observed that obtaining conversion by assessee will increase chance of recovery by revenue and held that the State cannot oppose the claim for conversion.
A Coram comprising Justice Arindam Sinha and Justice Sanjay Kumar Mishra observed that the leasehold is likely to have restrictions on assignment and transfer of the interest. Further, in the event petitioners obtain a conversion, there will be a better chance of recovery by revenue on proceeding with the attachment of land that would then be owned by the estate.
In a significant case, the Orissa High Court (HC) held that a Show Cause Notice ( SCN ) issued after 10 years about Non-payment of service tax by providing port service is not valid.
A single-member bench comprising Justice M S Raman, in light of the case of Aspinwall and Co. Ltd. v. Commissioner of Central Excise, quashed the impugned notice dated 23rd April 2007 and further letter dated 30th October 2017 issued by the Department to the Petitioner.
Recently Madras High Court (HC) held that Assessment under section 153A of the Income Tax Act, 1961 in absence of incriminating material from the search.
A single-member bench consisting of Justice Abdul Quddhose observed that since a search under Section 132 of the Income Tax Act has not been conducted on the petitioner by the law, the impugned assessment orders have to be necessarily quashed and the Writ Petitions will have to be allowed. The Court, while allowing the appeal, quashed the impugned assessment orders.
The Allahabad High Court recently overturned an order that imposed tax and a corresponding penalty under Section 129(3) of the Central Goods and Services Tax Act, 2017 due to an error in the vehicle number entered on the e-way bill.
The impugned order of detention and demand of Goods and Services Tax (GST) and penalty were resultantly quashed and set aside by the Single Bench of Allahabad High Court.
The disputed order and notice requesting the refund of the Input Tax Credit (ITC) with penalty and interest were annulled by the Jharkhand High Court (HC) panel composed of Acting Chief Justice Aparesh Kumar Singh and Justice Deepak Roshan.
The bench observed that the action of respondent authority denying the migration of TDS amount and consequently, levying interest and penalty thereupon is not sustainable in the eye of law.
A Single Bench of the Madras High Court confirmed the Auction Notice on the ground that the rectification petition was filed after 5 years from date of assessment order without filing statutory appeal.
The Court of Justice Abdul Quddhose observed that “the petitioner seeking for rectification of the assessment orders cannot be entertained under any circumstances whatsoever. This Court does not find any infirmity in the observation after seeing the conduct of the petitioner, which will reveal that only to protract the inevitable, the Rectification Petitions have been filed.”
The Andhra Pradesh High Court, while hearing a writ petition has held that the taxability of property can’t be challenged when the title to property is under dispute.
The Writ Petition was dismissed by the Court as being not maintainable and the parties had been given liberty to work out their remedies in respect of the possession and title of the said property in the civil Court, which is pending now.
The Orissa High Court (HC)held that the order u/s 270 passed under Income Tax Act, 1961 by Assessing Officer (AO) based on a wrong assumption is not valid when the assessee preferred for appeal.
The Court viewed that the impugned order dated 1st April 2022 is unsustainable in law since the appeal against the original assessment order is still pending. The Court set aside the order and held that “depending on the outcome of the appeal, it may be open to the Department to revive the proceedings under Section 270A of the Act.”
A single-member bench consisting of Justice Abdul Quddhose observed that since a search under Section 132 of the Income Tax Act has not been conducted on the petitioner by the law, the impugned assessment orders have to be necessarily quashed and the Writ Petitions will have to be allowed. The Court, while allowing the appeal, quashed the impugned assessment orders.
The Gujarat High Court (HC) held that the application for revocation of cancellation of GST registration without stating the reason is cryptic.
It was observed that certain statutory rules, which provided the prescribed limit, were disregarded and the Court acceded to the request of hearing the matter from the stage where it was left by giving the timeline for those stages to be completed. The respondent was granted liberty to initiate the action by giving a detailed fresh show-cause notice within two (02) weeks from the receipt of a copy of this order.
The Punjab and Haryana High Court recently directed the release of the petitioner in a Goods and Services Tax (GST) false Input Tax Credit (ITC) by generation of false invoices.
The Punjab and Haryana High Court said, “Resultantly, subject to the satisfaction of the CJM/Duty Magistrate, Gurugram, which shall include the condition of the deposit of the petitioner’s valid passport, if any, the petitioner is directed to be released on bail.”
The Orissa High Court ( HC ) in its recent judgement refused to condone the delay in filing a sales tax appeal Since the illness of the counsel was not supported by a Medical Certificate.
An expert Doctor’s opinion is to assist the Court, which in turn is only advisory in nature. But, the same is not binding on the witness or fact. After all, an ‘Expert Doctor’s Evidence’ is only a piece of evidence like any other evidence, which is to be assessed by the Tribunal, by a Court of Law or by oral documentary evidence on record in coming to a particular finding.
The Delhi High Court (HC) held that a Show Cause Notice (SCN) for cancellation of GST registration without stating any reason is void.
A two-member comprising Justice Vibhu Bakhru and Justice Amit Mahajan observed that the respondent’s procedure for cancellation of the registration is flawed. The impugned show cause notice cannot be considered a show cause notice at all. The Court set aside the impugned order dated 11.10.2022, cancelling the petitioner’s registration, which had been passed in violation of the principles of natural justice.
A Single Bench of the Madras High Court directed to consider revising GST Rates from 18%-12% on Works Contracts for National Highways.
The Court further directed the respondents to pass final orders, on merits and in accordance with law on the petitioner’s representation requesting the respondents to pay GST rates in respect of the bills raised by the petitioner at the rate of 18% instead of 12% pursuant to the recent revision of the GST rates within a period of eight weeks from the date of receipt of a copy of the order.
The Orissa High Court directed the Appropriate Authority to consider the difficulty faced by contractors due to change in the GST regime on works contracts.
The Court of Justice Dr. S. Muralidhar, Chief Justice and Justice M.S. Raman directed that the Petitioner shall make a comprehensive representation before the appropriate authority within four weeks from the date of judgement ventilating the grievance. If such a representation is filed, the authority should consider and dispose of the same, in the light of the aforesaid revised guidelines dated 10th December, 2018 issued by the Finance Department, Government of Odisha, as expeditiously as possible, preferably within a period of three months from the date of receipt of the certified copy of the order.
In a recent case, the High Court ( HC ) of Madras has held that the order passed under section 74 of GST, 2017 without considering the reply of the assessee is not valid.
A single-member bench comprising Justice Abdul Quddhose observed that the respondent failed to consider the reply of the petitioner. The Court quashed the impugned order, dated 05.04.2022 passed by the respondents and the matter was remanded back to the respondents for fresh consideration on merits and by law.
A Division Bench of the Allahabad High Court has recently held that the time frame under the Taxation and Other Laws (Relaxation And Amendment of Certain Provisions) Act (TOLA), 2020 is not available to the Income Tax department and quashed the reassessment proceedings initiated with the notice under Section 148 (deemed to be notice under Section 148-A) in proceedings against the assessee.
The Gujarat High Court observed that non-granting of effective hearing is a gross violation of natural justice.
The Court also noted that at the time of issuance of notice, had referred to not granting of cross examination and pointed out that such action is violative of principles of natural justice. After hearing of petitioners, it was found by the Court that effective personal hearing was also not granted and therefore there is a complete denial of natural justice.
The Allahabad High Court remanded the matter to the Tribunal on the ground that the issue on merits not opened in Show Cause Notice ( SCN ).
The Court observed that “Prima facie, it cannot be disputed that the issue on which adjudication was sought to be made and the issue that has been adjudicated appear to be different. Insofar as the issue on merits had not been opened in the show cause notice, prima facie case is made out for grant of interim protection.”
The Supreme Court of India held that the conditions under Section 45 of the Prevention of Money Laundering Act, 2002 ( PMLA ) is applicable to Anticipatory Bail applications for Money Laundering Offence.
A Bench comprising Justices MR Shah and CT Ravikumar made the much relevant observation that conditions under Section 45 PMLA is applicable to Anticipatory Bail applications for Money Laundering Offence while setting aside an order of the Telangana High Court which observed that rigours of Section 45 PMLA are not applicable to anticipatory bail applications.
In a recent judgement, the Delhi High Court (HC) held that the order passed under section 148 of the Indian Constitution without considering a reply from the assessee is not valid.
Justice Rajiv Shakdher and Justice Tara Vitasta Ganju directed the Assessing Officer (AO) to carry out a de novo exercise, after giving due opportunity to the petitioner which would include furnishing to the petitioner the information/material available with the AO and the copies of approvals obtained under Section 151 of the Act.
The High Court ( HC ) of Ahmedabad has held that the dues of Secured Creditors would prevail over state tax department dues.
A two-member bench comprising Justice Sonia Gokani and Justice Sandeep N. Bhatt observed that without any assessment proceedings, the amount cannot be determined, and if the amount is yet to be determined, then before such determination there cannot be any transfer application. Therefore, the condition precedent is that the tax should become due and such tax which has become due shall be payable by a dealer.
The Supreme Court of India held that the conditions under Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA) is applicable to Anticipatory Bail applications for Money Laundering Offence.
A Bench comprising Justices MR Shah and CT Ravikumar made the much relevant observation that conditions under Section 45 of PMLA is applicable to Anticipatory Bail applications for Money Laundering Offence while setting aside an order of the Telangana High Court which observed that rigours of Section 45 PMLA are not applicable to anticipatory bail applications.
Gujarat High Court (HC) presided by Justice J.B. Pardiwala and Justice Nisha M. Thakore quashed the order of Joint Commissioner, CGST and Central Excise. Further, the court directed the authorities to adjudicate the same under 89(4B) of the Central Goods and Services Tax (CGST) Rules, 2017. .
The bench directed to adjudicate the claim of the writ applicants in accordance with Sub Rule (4B) of Rule 89 of the CGST Rules, but keeping in mind the formula of input / output ratio of the inputs / raw materials used in the manufacturing of the exported goods.
A Division bench of the Gujarat high Court has recently quashed the order of the appellate authority, remanding the GST matter where the GSTIN and duly filled form was subsequently revised by the petitioner after an appeal was preferred by the revenue challenging the order-in-original for lack of GSTIN in form and shipping bill.
Further observing that subsequently, at the request of the petitioner, the correct form was submitted by the Exporter to the authority and, therefore, this aspect was required to be considered by the Appellate Authority which is essentially not done in the present case”, the impugned order was quashed and set aside.
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