In a benevolent decision the Delhi High Court allowed a Prevention of Money Laundering Act,2002 (PMLA) accused to travel abroad for son’s admission and observed that the Court will not deny moment of togetherness to family and son. Allowing the accused to travel abroad the Court further stated that “Thus, as a parent, the petitioner’s presence, assistance and support is a precious right as well as moment for the parent, the child and the family, which should be allowed to the petitioner, in the absence of anything reflecting violation of any condition in the past or the petitioner not returning back to the country. This Court will not deny this moment of togetherness to the family and the son and the father at the time of his admission in a university of his choice.”
In a recent decision the Delhi High Court observed that goodwill is intangible asset and claim of depreciation under Section 32(1) of the Income Tax Act, 1961 is allowable. A Division Bench comprising Justices Yashwant Varma and Dharmesh Sharma observed that “It is well settled that a transfer in terms of a scheme of amalgamation which is sanctioned is accomplished by operation of law as opposed to an act of parties. It is in that backdrop that the decision in Smifs assumes significance. The judgment rendered by the Supreme Court in Smifs clearly recognises goodwill to be an intangible asset and on which depreciation can clearly be claimed in terms of Section 32(1) of the Income Tax Act.”
In a recent decision a Division Bench of the Gujarat High Court quashed an assessment notice issued against non-existent company observed that amalgamating entity ceases to exist upon approved scheme of amalgamation. “The ratio laid down in those judgements would squarely apply and since the notices for the assessment years 2014-15 to assessment years 2017-18 have been issued to the non-existing entity viz. Satyasarthi Estate Organisers Private Limited, such notices are quashed and set aside” the Court concluded.
The Calcutta High Court dismissed a writ petition as no objection filed before the Assessing Officer (AO) against an assessment order passed under Section147 of Income Tax Act, 1961. The Court further noted that as such the respondent Income Tax Authority cannot be faulted since neither any adjournment petition nor any objection was filed before the assessing officer on 17th May, 2023 which was the time granted to the petitioner. “In view of the facts and circumstances of the case, I am not inclined to interfere with the impugned assessment order under Section 147 of the Income Tax Act and accordingly this writ petition is dismissed on the ground of availability of alternative remedy by way of appeal.”
In a significant case, the Gujarat High Court directed the Director General of Goods and Service Tax (GST) intelligence Wing to transfer documents to GST authority as an investigation had already been initiated on the same matter. Further directed the petitioner to co-operate with respondent no.4 and produce necessary/required documents demanded by respondent no.4 for investigation/inquiry and thereafter, it is open for respondent no.4 to pass an appropriate order/take appropriate action by the law.
The Delhi High Court has held that the power to order the attachment of bank accounts under the Central Goods and Service Tax (CGST) Act, 2017 is only on the commissioner. A division bench comprising Justice Vibhu Bakhru and Justice Mr Amit Mahajan set aside the impugned communication to the extent that it seeks to place a debit freeze on the petitioner’s account. Further, the respondents are required to act by the statutory provisions.
The Orissa High Court in the absence of the constitution of the Goods and Service Tax Appellate Tribunal (GSTAT) has held that directed to deposit the entire tax demand within the period of fifteen days. The division bench comprising Dr Justice B R Sarangi and Justice Murahari Sri Raman held that “Since the petitioner wants to avail the remedy under the provisions of law by approaching 2nd appellate tribunal, which has not yet been constituted, as an interim measure subject to the Petitioner depositing entire tax demand within a period of fifteen days from today, the rest of the demand shall remain stayed during the pendency of the writ petition.”
The Delhi High Court held that issuance of notice after the expiry of the period prescribed under section 28(9) of Customs Act, 1962 doesn’t survive. A division bench comprising Justice Vibhu Bakhru and Mr Justice Amit Mahajan observed that there is no material to show that the proper Officer couldn’t determine the amount of duty within the prescribed period. The mention of the words, “where it is not possible to do so”, in our opinion, does not enable the Department to defer the determination of the notices for an indeterminate period. “In the absence of any ground that the officer couldn’t determine the amount of duty within the prescribed period, the impugned SCN has lapsed and cannot be adjudicated.” The court held while allowing the writ petition.
In a recent judgement, the Orissa High Court held that a pre-deposit under Goods and Service Tax (GST) appeal can be made through Electronic Cash Ledger (ECL). “The appeal will now be listed before the 1st appellate authority i.e., the Additional Commissioner of CT & GST on 11th September, 2023. The Petitioner will appear on that date before the appellate authority along with a downloaded copy of this order. The appeal thereafter be disposed of afresh after hearing the Petitioner and the Department within a period of three months thereafter.”, the Court comprising Dr. Justice B R Sarangi and Justice Murahari Sri Raman held.
The Allahabad High Court condoned the three days delay in depositing tax arrears due to sickness. A coram comprising of Justice Siddhartha Varma and Justice Arun Kumar Singh Deshwal observed that “a delay of three days in depositing the arrears of tax of Rs. 8,67,137/- deserves to be condoned, and the amount balance tax deposited by the petitioner be accepted by the respondents treating the same well within time as per the scheme of Act, 2020 and also the impugned order /letter dated 25.8.2022, passed by Central Board of Direct Tax, is hereby quashed.” Ami Tandon, Abhinav Gaur, Advocate, Vibhu Rai appeared for the petitioner and Counsel for the respondent Naveen Chandra Gupta.
On a Goods and Service Tax (GST) recovery in the absence of the Goods and Service Tax Appellate Tribunal (GSTAT), the Orissa High Court directed to pay 20% disputed tax. “Since Mr Diganta Dash, Addl. Standing counsel for the Department accepts notice for the Opposite parties, let the required number of copies of the writ petition be served on him within three working days. Reply be filed within two weeks and rejoinder thereto, if any, be filed before the next date.”, Dr Justice B R Sarangi and Mr Justice Murahari Sri Raman held.
In a major relief to the e-commerce giant Flipkart India, a two-judge bench of the Delhi High Court has quashed an order adjusting a sum of Rs. 10 crore of VAT refund and directed the VAT department to release a refund of Rs. 6.62 crores to the Company as the order was observed as illegal and arbitrary. The High Court observed that “the respondents clearly appear to have acted arbitrarily in making numerous adjustments post 31 May 2015 and thus illegally depriving the petitioner of the refund as claimed. The various adjustments clearly appear to have been made even though objections before the OHA had been duly lodged online by the petitioner. The respondents thus clearly appear to have acted contrary to the clear mandate of Section 38 of the DVAT Act.” Observing that the Vat Department “clearly acted in flagrant violation of the mandate of Section 38 of the DVAT Act,” the Court directed to refund the amount of Rs. 6,62,74,405/- to the Company, along with interest from the date it fell due. “The refund be effected within a period of three weeks from the date of this decision,” the Court added.
In a major decision the Patna High Court observed that Input Tax Credit (ITC) is not sustainable when the supplying dealer has not paid to the Government, despite collection of tax from the purchasing dealer. A Division Bench comprising Chief Justice K. Vinod Chandran and Justice Partha Sarthy observed that “It is clear that the literal nomenclature and the statutory language, mandates that there should be credit available in the credit ledger of the purchaser to claim Input Tax and otherwise the claim would be frustrated. On the above reasoning, we have to find that the claim of Input Tax Credit raised by the petitioner cannot be sustained when the supplying/selling dealer has not paid up the amounts to the Government; despite collection of tax from the purchasing dealer.”
The Madras High Court directed the Department to consider Representation by Steel Manufacturing Unit in the matter of the demand of interest and penalty provisions under the Central Excise Rules, 1994. A Single Bench of the Madras High Court comprising Justice S Srimathy observed that “The petitioner is a steel manufacturing unit and is covered by the said judgment. Therefore, the petitioner is seeking to consider and redetermine based on the judgment of Hon’ble Supreme Court. Therefore, this Court is directing the respondents to consider the petitioner’s representation in the light of the aforesaid judgment within a period of twelve weeks from the date of receipt of a copy of this order.”
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) held that Commissioner of Income Tax (Exemption) [CIT (E)] failed to comply with the direction of High Court (HC) in rejecting application for registration under Section 10(23C) of Income Tax Act,1961 and thus restored the mater to CIT(E) and directed for fresh adjudication. The tribunal Bench comprising of Amarjit Singh, Accountant Member and Sandeep Singh Karhail, Judicial Member observed that the CIT (E) without examining all the aspects, as directed by the High Court, has reiterated its findings and rejected the application. Since the directions of the High Court had not been complied with by the CIT(E), the appellate tribunal bench deemed it appropriate to restore this issue to the file of the CIT(E) for de novo adjudication as per the directions of the High Court, thus allowing the appeal of the assessee.
A Single Bench of the Madras High Court dismissed a writ petition on lifting of attachment of immovable property by the Sub Registrar. The Court of Justice C Saravanan observed that “Recording the above said submission made by the learned counsel for the petitioner, this Writ Petition is closed. Consequently, the connected Miscellaneous Petition is closed. No costs.”
The Allahabad High Court imposed costs of Rupees 10,000/- on the Income Tax Authority for violation of natural justice principles. The Court also noted that the writ petition is allowed with a cost of Rs. 10,000/-, which shall be deposited by the respondent concerned with the Allahabad High Court Legal Services Committee, Allahabad within a period of one month from today.
The Delhi High Court upheld the disallowance of Business Loss in the absence of necessary documents. Lastly, it was observed that the write off of Rs.1,59,36,508/- was carried out by SAL only in Financial Year (FY) 2014-15 [AY 2015-16], although, according to the appellant/revenue, the defect in the product and its usefulness was discovered way back in March-April 2010.
The Jammu and Kashmir and Ladakh High Court dismissed appeal filed by the GST Department with a delay of 1359 days in the matter of refund of educational cess and secondary & higher educational cess. A Division Bench of the High Court comprising Chief Justice N Kotiswar Singh and Justice Wasim Sadiq Nargal observed that “In view of the above, what has been said by the Division Bench of this Court in order dated 23.05.2022 passed in CEA No. 10/2020 and also upheld by the Supreme Court, same applies on all counts to the application on hand. Accordingly, the appeal bearing No. CEA No. 117/2023 is dismissed along with connected applications(s) being barred by limitation.”
The Madras High Court directed the Income Tax Department to refund excessively recovered amount over and above 20%. A Single Bench of Justice C Saravanan observed that “This amount shall be refunded to the petitioner by the respondents together with applicable rate of interest, within a period of six weeks from the date of receipt of a copy of this order. The Writ Petition stands disposed of with the above observations.”
In a recent case, the Himachal Pradesh High Court held that milk cream cannot be classified under the category of milk. The milk cream was entirely different from the milk and these two products had different purposes. Also, the Court upheld the demand for Value Added Tax (VAT) imposed on the assessee. The two-member bench comprising M.S. Ramachandra Rao and Ajay Mohan Goel upheld the demand for Value Added Tax (VAT) imposed on the assessee and dismissed the revision petition filed by the assessee.
The High Court of Gujarat has held that diamond testing & certification services provided by the Gemological Institute of America (GIA) USA is covered Under India-USA Double Taxation Avoidance Agreement (DTAA). In result, the Gujarat High Court ruled in favour of the respondent assessee, maintaining that the payments for diamond certification services provided by GIA USA were eligible for DTAA benefits between India and the United States. The Court upheld the factual findings and dismissed the Revenue’s appeal.
In a recent case, the Tripura High Court has held that a plea for condonation of delay under the limitation act beyond the statutory period prescribed under section 107(4) of the Goods and Service Tax (GST) Act, 2017 is not accepted. A division bench comprising Chief Justice Mr Aparesh Kumar Singh and Justice Arindam Lodh observed that since the limitation for filing appeals is prescribed under Section 107(4) of the Tripura State Goods and Services Tax Act, 2017 being a special statute, the same would be governed thereby. Further held that any plea for condonation of delay relying upon the Limitation Act, 1963 beyond the statutory period prescribed under Section 107(4) of the Act of 2017 cannot be accepted. The Court dismissed the petition.
In a recent ruling, a Single bench of the Allahabad High Court noted that not informing the taxpayer or their legal representative, whether it’s an advocate or a tax expert, cannot be used as a reason to excuse a delay in filing an appeal when the petitioner doesn’t show how they became aware of the order and subsequently filed the appeal with a different advocate. The writ petition was rejected solely because the petitioner’s counsel did not provide any information regarding how the petitioner became aware of the order and subsequently filed the appeal with a different legal representative.
The Delhi High Court has held that rendering investment advisory services related to investment by non-resident group companies amounts to advisory service and directed to refund of Input Tax Credit (ITC). The Court set aside the impugned order and further observed that no material would even remotely suggest that the services rendered by the petitioner are not as claimed, that is, advisory services relating to investments in India. The Adjudicating Authority is directed to process the petitioner’s claim for refund as expeditiously as possible and preferably within eight weeks from today.
In a recent decision the Bombay High Court observed that providing Satellite derived 3D model services is “export of services” under Section 2(6) of the Integrated Goods and Services Tax Act, 2017 (IGST Act). A Division Bench comprising Justices Jitendra Jain and GS Kulkarni observed that “Further, the establishment of the petitioner (supplier of service) and the recipient of service (Emirates Defence Industries Co.) were not establishments of distinct person under Explanation 1 below Section 8. The petitioner had received consideration in convertible foreign exchange as seen from the copy of invoice as placed on record in regard to which there is no dispute. It is thus clear that the petitioner certainly qualified the requirement of Section 2(6) that it was dealing in export of services in relation to the Agreement in question.”
The High Court of Delhi has directed the release of excess tax adjustment by the Assessing Officer (AO) on the finding that the set-off of refund against the outstanding tax demands is limited to 20% of the disputed demand. The decision provides clarity on the limits and procedures for adjusting tax refunds against outstanding tax demands and underscores the importance of adhering to the provisions of the OM and the Income Tax Act while making such adjustments.
The Delhi High Court set aside the order cancelling Goods and Service Tax (GST) Registration without stating the reason. The division bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan set aside the order dated 10.06.2022 rejecting the petitioner’s application and remanded the matter to the concerned officer to consider afresh.
The Bombay High Court has held that payment towards output tax can be made by utilisation of the amount available in the Electronic Credit Ledger (ECL) of a registered person. A division bench comprising Justice K. R. Shriram & Justice A. S. Doctor held that since the amounts payable are towards output tax, the Petitioners may utilise the amount available in the Electronic Credit Ledger to pay the 10% of Tax in dispute as prescribed under Sub-section (6) of Section 107 of MGST Act. The Court quashed and set aside the impugned order and allowed the petition.
The Delhi High Court in a recent case warned the Income Tax Department on delay in filing an appeal under section 260 A of the Income Tax Act, 1961 and directed them to avoid snail pace work style even with a click of the mouse age. The Court viewed that the applicant failed to explain sufficient cause for a delay of 498 days in filing the appeal and dismissed the condonation application.
In a recent case, the Allahabad High Court while allowing a tax revision petition, held that treating a purchase from an unregistered dealer is valid when the dealer fails to prove actual physical movement of goods. The Tribunal has failed to appreciate this vital aspect of the matter that the actual physical movement of the goods could not be proved beyond doubt as claimed by the opposite party – the dealer. “The observation of the Tribunal in shifting the burden upon the Department contrary to the provisions of section 16 of the UP VAT Act, is beyond imagination and therefore, the same is perverse.”, Justice Piyush Agrawal held. Further held that “once the dealer has failed to prove the actual physical movement of goods, the presumption drawn by the assessing authority treating the purchases from an unregistered dealer is justified. Once the dealer has failed to prove its purchases from a registered dealer, the levy of entry tax treating the same to purchase from outside the local area and levying of entry tax on the HDEP bags is also justified.Both the revisions are allowed with a cost of Rs. 5,000/- each.
The Bombay High Court directed the Finance Ministry to take action against the officers who are involved in delaying the adjudication of the Show Cause Notices (SCN) and observed that they are playing with the Public Revenue. Relying upon the precedent set in the Coventry Estates Pvt. Ltd. case, the High Court invalidated both the show cause cum demand notice and the ongoing adjudication. Additionally, the division bench prohibited the GST officers from pursuing any subsequent actions or proceedings based on or stemming from the contested show cause cum demand notice, including the adjudication process.
The Bombay High Court detaining of CRGO strip without being any demand due is invalid. It was found that there isn’t any such provision that would empower the respondents in the facts of the present case, to detain the goods. A division bench comprising Justice G S Kulkarni and Justice Jitendra Jain observed that the respondents have contended that they have not seized the goods but they have only detained the goods. The court held that “the impugned action of the respondents in detaining the goods in question and attaching the bank account of the petitioner without there being any demand due from the petitioner or any proceedings pending is without jurisdiction and any authority of law.”
In a significant case, the Delhi High Court has held that Sanitary wares having Premium Aesthetic and sleek design would not fall in category of Artwork and quashed the order rejecting duty drawback under the Customs Act, 1962. A division bench comprising of Justice Yashwant Varma and Justice Dharmesh Sharma observed that the impugned order passed by the Revisionary Authority thereby approving the order-in-original No. 101/2013 dated 10 April 2013 by the ACC(E) cannot be sustained in law. While allowing the Writ Petition the impugned order was quashed, and thereby providing that the respondent shall consider the claim for duty drawback of the “subject goods‟ in terms of classification vide item No. 741802 as per tariff applicable for the year 2011-212.
The Delhi High Court has held that no Tax Deductible at Source (TDS ) under section 195 of the Income Tax Act when no income chargeable to tax arose on non-resident and upheld the order of the Income Tax Appellate Tribunal (ITAT). A division bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia observed that the CIT(A) has correctly deleted the disallowance on account of depreciation on electrical fittings holding them part of the plant and machinery and not furniture and fixtures as claimed by the AO. Further, depreciation on the computer peripherals was also allowed at @60 %relying upon the decision of the Delhi High Court in the case of BSEC Rajdhani Power Ltd.
The Delhi High Court has held that reassessment proceedings commenced after 3 years are time-barred and given leeway to file a Return Of Income (ROI) since it has not been filed under the consequential notice issued under Section 148 of the Income Tax Act, 1961. A division Bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia disposed of the Writ Petition by giving the petitioner leeway to file the ROI within the next thirty (30) days.
The Delhi High Court in its recent judgement had set aside Order Cancelling Goods and Service Tax (GST) Registration without stating the reason. A division bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan observed that there was a clear case of violation of the principles of natural justice and set aside the impugned show-cause notice as well as the impugned order.
The Madras High Court (HC) has held that no credit notes were issued under section 34 of the Central Goods and Service Tax Act, 2017 when goods were returned without even having received by the recipient. As per Section 34 of the CGST Act, 2017 Purpose of Credit Note / Debit Note is applicable only when the return of goods is due to unfructified sales/refusal of the consignee to take delivery of goods. Since the buyer refused to take delivery of the goods the subject goods were re-transported to the factory of the petitioner. Justice C Saravanan held that “The petitioner has to merely declare the details of the Credit Note in the monthly return during which the Credit Note is issued for adjustment of tax liability. The question of issuing Credit Notes also will arise only by the supplier and not by the recipient.” The court allowed the Writ Petition and set aside the impugned notice of the first respondent.
The Himachal Pradesh High Court dismissed the writ petition (WP) which challenged the transfer order as there is no material evidence to show malafide intention of Government in transferring of State Tax and Excise Commissioner.
The Court observed that even the transfer policy adopted by the State Government does not reserve any privilege of being not transferred before a minimum period of time for Class I, Gazetted officer(s). The Court observed that the petitioner has not been able to make out a case for himself and dismissed the petition.
In the case of reversal of deletion of addition on unexplained cash credit, the Delhi High Court directed the Income Tax Appellate Tribunal (ITAT) to state valid reason for the reversal.
The bench of Justice Rajiv Shakdher and Justice Girish Kathpalia observed that the reversal of the CIT(A)’s order has taken place, without the Tribunal discussing as to what part of the order was unsustainable. Further held that the Tribunal will have to deliberate on the matter afresh and articulate in the order its reasoning, if it chooses not to agree with the order of the CIT(A). While allowing the appeal, the Court set aside the impugned order.
In a recent case the Bombay High Court quashed the Show Cause Notice (SCN) which was issued by Goods and Service Tax (GST) Commissioner which was without following statutory time mandate under section 73(4)(B) of Central Goods and Service Tax (CGST Act), 2017.
A division bench comprising Justice G S Kulkarni and Justice Jitendra Jain observed that “even in absence of the provisions of sub-section (4)(B) of Section 73, respondent no.2 could not have acted oblivious to the settled principle of law, that a show cause notice would be required to be adjudicated within a reasonable time depending the facts of each case. However, as observed by us in our decision in Coventry Estates Pvt. Ltd. Versus The Joint Commissioner CGST and Central Excise & Anr. (supra), reasonable time would not be an
egregious, unjustified and unexplained inordinate delay. Having perused the reply affidavit, we find that no justification whatsoever is given by the Deputy Commissioner in Commissioner not adjudicating the show cause notice.”
The Allahabad High Court upheld the regular assessment order which alleged the shortage of chemical though they are registered in the stock register as there was no record brought by the asseese to show that there was findings on the same in the provisional assessment.
The Court viewed that the revisionist has failed to show any finding or detailed decision on merit, which was recorded by any of the competent authority in his favour to justify the shortage of chemical found at the time of survey dated 13.5.2015, though the same was mentioned in the stock register. Since no interference is called , the Court dismissed the revision.
In a significant case, the Madras High Court dismissed the writ petition against Goods and Service Tax (GST) registration cancellation as government notifies amnesty scheme to consider revocation application under Tamil Nadu Goods and Service Tax (TNGST) Act, 2017.
Considering the single judge bench comprising Justice C Saravanan closed the Writ petition by giving liberty to the petitioner to approach the authorities in terms of the above notification.
The Delhi High Court in a recent case quashed the income tax notice as the department failed to note the disclosure made in the Income Tax Return (ITR) prior to the issuance of Income Tx notice under section 148A(b) of the Income Tax Act,1961.
A division bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia held that “it is a clear case of non-application of mind by the Assessing Officer and consequently, the notice under Section 148A(b) of the Act, coupled with its corrigendum and followed by the consequent order under Section 148A(d) and notice under Section 148 of the Act cannot survive, so the same are hereby set aside.”
A Division Bench of the Patna High Court has imposed a penalty of Rs. 5,000 on officials for arbitrarily conducting a tax recovery in gross violation of Goods and Services Tax regulations.
In cases involving bank accounts, prior notice must be given to the assessee before any funds are withdrawn, granting them an opportunity to present their case or seek legal remedies.
In a significant ruling the Allahabad High Court observed that “Departmental Inquiry against Government Servant not Casual Exercise” and thereby quashed the suspension of Assistant Commissioner of State Tax made without merit.
The Court concluded by noting that they are inclined to allow the present petition and set-aside the impugned order of the learned Tribunal. Since the learned Tribunal having called upon to adjudicate the matter in its right perspective has failed to determine and return any findings on the various grounds and issue raised by the petitioner as can be borne out from the claim petition itself filed before the Tribunal.
On a petition challenging the Goods and Service Tax (GST) Council power to change the classification of a commodity and increasing the GST rate, the Allahabad High Court stayed the effect and operation of Central Board Of Indirect Taxes & Customs (CBIC) Circular and notice as an interim relief.
A division bench comprising Chief Justice Pritinker Diwaker and Justice Ashutosh Srivastava held that “the effect and operation of the Circular dated 6.10.2021 (Annexure 2 to the writ petition), impugned show cause notices shall remain stayed provided the petitioner deposits a sum of Rs.10 crores with the respondents within three weeks from today which shall be kept in a separate account and submits a bank guarantee of the balance amount other than cash within the same period. It is clarified that the adjudication proceedings may go on but shall not be given effect without the leave of the Court.”
The Bombay High Court, while granting relief to the Indian Humes Pipe Co. Ltd. has observed that the test of applying the test of commercial expediency for determining whether an expenditure was wholly and exclusively laid out for the purpose of the business, reasonableness of the expenditure has to be adjudged from the businessman’s point of view and not from the Revenue’s perspective.
The bench observed that it is a settled position that the Revenue cannot sit in judgment over the assessee to come to a conclusion, how much payment should be made for the services received by the appellant-assessee. Therefore, in the view of the Division bench, the Tribunal was not justified in confirming the disallowance of 2/3rd as made by the AO and allowing the relief of only 1/3rd of the expenses.
The Madras High Court condoned delay of 455 Days in filing Service Tax Appeal on the ground of non-receipt of Service Tax Order due to the lack of communication between husband and wife.
A Single Bench comprising Justice S Srimathy observed that “Therefore, considering the facts and circumstances of the case, this Court is inclined to allow this Writ Petition. The petitioner is directed to file an appeal within a period of four (4) weeks from the date of receipt of a copy of this order. The respondents are directed to take the petitioner’s appeal on file and consider the appeal on merits. As far as the delay is concerned, the petitioner is directed to pay Rs.5,000/- (Rupees Five Thousand only) to the respondents to condone the delay.”
In a major relief to M/s. Novartis Healthcare Pvt. Ltd, the appellant, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai Bench, ruled that Information Technology Software Services are taxable services under Section 65(105) of the Finance Act,1994.
A Two-Member Bench comprising Dr. Suvendu Kumar Pati, Member (Judicial) and Anil G. Shakkarwar, Member (Technical)observed that “The services rendered by the Appellant are defined as taxable services under 65(105) of the Finance Act, 1994 but for the purpose of export only they were allowed to export the same without payment of Service Tax but that by itself would not put the services under the category of unentitled service, so as to deny Cenvat Credit and consequential refund to the Appellant.”
The Madras High Court quashed an order denying duty drawback on the ground of non-consideration of the uploaded Bank Realization Statement in its portal.
A Single Bench of Justice S Srimathy observed that “In view of the foregoing reasons, this Court is of the considered opinion that the petitioner is entitled to the relief based on the statement of Bank realization.” “Accordingly, the impugned order, dated 22.09.2020 is hereby quashed. The respondents shall issue notice to the petitioner and grant personal hearing to the petitioner. The petitioner shall submit the bank realization statement before the respondents and thereafter, the respondents shall pass order” the Bench noted. B.Vijay Karthikeyan, the Counsel, appeared for the petitioner, and R.Nandakumar, the Senior Standing Counsel, appeared for the respondents and perused the material documents available on record.
In a recent decision, a Division bench of the Calcutta High Court confirmed the observation of the Single bench of the same court, which stated that the High Court, when exercising its Writ Jurisdiction, cannot assume the role of an Assessing Officer (AO) to examine the facts and evidence, and replace them with its own opinion.
The division bench, in the light of the findings recorded by the assessing officer, observed that the order passed under clause (d) of Section 148 is a non speaking order nor the order to be branded as outcome of non-application of mind. To test the correctness of the order, it is necessary that the disputed question of facts have to be thoroughly analyzed. Further stated that there are several stakeholders in the entire process which requires deeper probe into the matter and such an exercise cannot be done in exercise of writ jurisdiction. Therefore, it was held that the single bench was fully justified in not entertaining the writ petition and leaving it upon to the appellant to agitate all issues in the reopening proceedings for which notice under Section 148 of Income Tax Act.
The Income Tax Appellate Tribunal (ITAT) Delhi bench held that the Income from sub licensing software for the healthcare business in India should not be taxed under Business Income due to absence of Permanent Establishment (PE) under India -USA Double Taxation Avoidance Agreement (DTAA).
After considering the facts submitted by both parties, the two member bench of G.S. Pannu, (President) and Saktijit Dey, (Vice President) held that the Due to the absence of a Permanent Establishment, the income from sub licensing software for healthcare business should not be taxed as business Income.
A Division Bench of the Bombay High Court confirmed the reversal of credit to input services on usage for manufacture of dutiable and exempted goods and thereby granting major relief to Larsen & Toubro Limited (HED).
The Court of Justices Jitendra Jain and GS Kulkarni observed that “The benefit of reversing the proportionate credit was extended with retrospective effect in cases where common input and input services were used for dutiable and exempted products. This permitted the respondent to proportionately reverse the credit attributable to input / input services used for manufacture of exempted goods, in a case where common inputs or input services were used for manufacture of both dutiable and exempted goods.” “It is rightly observed by the CESTAT that when for such period the dispute has arisen only in such event, a show cause notice was issued and hence, the case of the respondent for the period 2007-08 was covered by the amendment made by way of insertion of subrule (7) of Rule 6 of CCR,2004 by the 2010 Amendment” the Bench noted.
The Calcutta High Court has held that the Central Goods and Service Tax (CGST) Superintendent has no jurisdiction to issue a show cause notice (SCN) under section 61 of the Central Goods and Service Tax Act, 2017( CGST Act).
While allowing the appeal, the Court comprising Chief Justice T S Sivagnanam and Justice Hiranmay Bhattacharyya held that “the notice issued by the Superintendent, CGST & Central Excise, L-1, Circle-III, Durgapur 1 Division, Durgapur dated 17.04.2023 shall remain stayed till the disposal of the writ petition being WPA 10506 of 2023. The respondent is directed to file the affidavit-in-opposition in the writ petition after which the writ petition will be heard and disposed of on merits and by law.
In a major decision, a Single Bench of the Jharkhand High Court observed that setting aside penalty order leads to automatic quashing of prosecution under Section 276C (1) of the Income Tax Act, 1961. The Court of Justice Sanjay Kumar Dwivedi observed that “The Court comes to the conclusion that once penalty order is set aside, it will be presumed that there is no concealment and quashing of prosecution under Section 276C(1) of the Income Tax Act is automatic. The petitioner cannot be allowed to suffer and to face criminal trial and the same cannot sustain in the eyes of law.” “There is no doubt that penalty proceeding and prosecution can go simultaneously in the facts and circumstances of the cases, however, in the case in hand, the penalty proceeding has already been set aside in view of the appellate order. Further, if the penalty proceeding has been set aside, mens rea is one of the essential ingredients of a criminal offence” the Bench concluded.
The Delhi High Court recently observed that the possession of liquor as purchaser by the same manufacturer under different company names is with intention to evade excise duty. A Single Bench of Justice Subramonium Prasad observed that “The Director of M/s Tilak Nagar Industries Private Limited and the Petitioner herein are one and the same person. The modus operandi of the Petitioner was to sell liquor belonging to one group under different names and avail the benefit of the excise duty under the garb of stock transfer.”
In a recent judgment, the Delhi High Court noted that the undisclosed income in question, which is the matter of the current dispute, has already been subjected to taxation in the accounts of the primary company. Therefore, it cannot be taxed once more when used as share capital in another company.
After considering the facts and submissions, the bench of Justice Girish Kathpalia and Justice Rajiv Shakdher ruled that “since the undisclosed income which is subject matter of the present dispute had already been taxed in the hands of the flagship company Surya Food & Agro Ltd., it cannot be again subjected to tax in the hands of the respondents/assessee companies in the form of application of the said income as their share capital.” Accordingly, the question as framed above was answered against the appellant/revenue and in favour of the respondent/assessee.
The High Court of Andhra Pradesh has clarified that proceedings initiated under Section 130 of the Goods and Services Tax (GST) Act against a third party are insufficient grounds for detaining vehicles and goods in transit. The court emphasised the independent nature of Sections 129 and 130 of the GST Act and highlighted that they serve distinct purposes.
The division bench comprising Justice U. Durga Prasad Rao and Justice Venkata Jyothirmai Pratapa directed the authorities to release the detained goods in favour of the 1st petitioner, subject to the 1st petitioner depositing 25% of their value and executing a personal bond for the balance. The court also instructed the release of the vehicles in favour of the second petitioner upon their execution of personal security bonds for the determined value as per the Road Transport Authority. The bench thus clearly distinguished Sections 129 and 130 of the GST Act when dealing with the detention and confiscation of goods and conveyances in transit and highlighted the need for authorities to initiate separate proceedings against the purchaser/owner of the goods under Section 129 when detaining goods while they are in transit.
The High Court of Andhra Pradesh has clarified that a bonafide purchaser cannot be held liable for the Goods and Services Tax (GST) irregularities of the seller. The court clarified that the responsibility of the purchaser is limited to proving the genuineness of the transaction and ensuring compliance with the GST Act. The division bench comprising Justice U. Durga Prasad Rao and Justice Venkata Jyothirmai Pratapa clarified that a bonafide purchaser like the 1st petitioner cannot be held responsible for the irregularities of the seller, the 4th respondent. The purchaser’s responsibility is confined to proving the genuineness of the transaction, including providing evidence of the GST registration, mode of payment and authenticity of the documents.
The High Court of Andhra Pradesh has declared the detention of vehicle and goods in transit by tax authorities as unlawful when proceedings were not initiated against the owner under Section 129 of the Goods and Services Tax (GST) Act, 2017. The division bench comprising Justice U. Durga Prasad Rao and Justice Venkata Jyothirmai Pratapa held that the tax authorities can initiate proceedings against the petitioners under Section 129 of the GST Act, allowing the petitioners an opportunity to present their case and prove the legitimacy of their transaction. The bench directed the release of the detained goods upon the 1st petitioner’s deposit of 25% of their value and the execution of a personal bond for the balance. The vehicles were also to be released upon the execution of personal security bonds for their determined value by the Road Transport Authority. The ruling aims at ensuring that owners are not unduly penalised when they have legitimate transactions and documentation in place, while also allowing tax authorities to take appropriate action against those in violation of the law.
The High Court of Andhra Pradesh has ruled against the detention of goods in transit by tax authorities solely on the basis of suspicions regarding the credentials of the seller. The court emphasised the importance of adhering to proper legal procedures and ensuring that the taxpayers are given a fair opportunity to establish the legitimacy of their contentions. The bench highlighted the importance of adhering to proper legal procedures and ensuring that taxpayers are given a fair opportunity to establish their innocence, even in cases where doubts exist regarding the credentials of other parties involved in a transaction.
In a recent ruling, the Delhi High Court instructed the Goods and Services Tax Authorities to reinstate the GST registration of the petitioner and pointed out that the taxpayer’s incapacity to submit the necessary form to update their address should not be considered as a valid reason for denying the restoration of GST registration. The bench set aside the impugned orders and directed the authorities to restore the GST registration. It was also clarified that the respondents are not precluded from taking such steps, albeit, in accordance with law, if they are of the view that the petitioner’s registration is required to be cancelled or any other measures are required to be taken.
The Delhi High Court invalidated the assessment order made by the Income Tax authorities, neglecting the request to postpone the response to the Show Cause Notice (SCN) and passed the order violating the principles of natural justice. The High Court further instructed that the Assessing Officer (AO) should make sure that the petitioner is granted access to the portal for uploading their response, as the petitioner’s legal representative indicated that they would submit their reply within three weeks. Moreover, the petitioner is granted the right to send a copy of their response to the Jurisdictional Assessing Officer (JAO) via email. Following this, the AO will send a notice to the petitioner for a face-to-face meeting, specifying the date and time for the hearing.
The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) held that the Tax Deducted at Source (TDS) deducted in the hands of the transferor company shall belong to the transferrer company when the amalgamation scheme is approved by the High Court. The Two-member bench comprising of Rajesh Kumar (Accountant member) and Sonjoy Sarma (Judicial member) examined the Form 26AS of the amalgamating companies and found that TDS is deducted in the name of transferee companies but that is immaterial when the scheme is approved by the High Court as post the appointed date, the TDS deducted in the hands of the transferor company shall belong to the transferee company. Therefore, the order of the Commissioner of Income Tax (Appeal) [CIT(A)] was set aside and the Assessing Officer was directed to allow the credit of Rs, 3,31,880/- to the assessee. Thus, the appeal of the assessee was allowed.
A Division Bench of the Delhi High Court ruled that Rule 8 of Chewing Tobacco and Unmanufactured Tobacco Packing Machine (Capacity Determination and Collection of Duty) Rules 2010 (CTUT) not ultravires to Section 3A of the Central Excise Act, 1944 (CEA).
A Division Bench comprising Justices Yashwant Varma and Dharmesh Sharma observed that “The principal part of Rule 9 requires that the monthly duty be deposited by the fifth day of the same month. If the Rule were to stop at this point, there would clearly be a vacuum in case an additional packing machine were to be added to the production line after the fifth day of the said month. The Third Proviso to Rule 9 consequently cannot possibly be read as diluted the deeming fiction which stands embodied in Rule 8.” “Accordingly, and for all the aforesaid reasons, we find ourselves unable to hold Rule 8 as being ultra vires Section 3A nor do we find any error in the view as expressed by the Tribunal while passing the order impugned” the Bench concluded.
A Division Bench of the Delhi High Court directed to dispose of Rectification Application within 4 weeks and observed that “Repeated representations to AO and grievances sought cannot explain delay of 7 years”. The Court of Justices Rajiv Shakdher and Girish Kathpalia observed that “That said, we find it difficult to understand why the petitioner did not approach the Court within a reasonable period. Repeated representations to the Assessing Officer (AO) and grievances sought cannot explain, in our view, the delay and laches in approaching the Court. The period involved is more than seven (7) years.” The Court made the following direction that “The concerned officer will dispose of the rectification application within four (4) weeks of receipt of a copy of the judgment.” The Court also directed the AO to bear in mind that the first representation to the respondent was made on 09.10.2019 and opined that the interest between the period after the expiry of six months from when the rectification application was filed and 09.10.2019 in the facts of this case, ought not to be paid to the petitioner.
A Division Bench of the Delhi High Court quashed an order issued under Section 127 of the Income Tax Act, 1961 as the objection filed by the petitioner, Samson Healthcare Pvt Ltd, was not considered. The Court of Justice Rajiv Shakdher and Justice Girish Kathpalia observed that “Therefore, according to us, the best way forward would be to set aside the impugned order dated 25.07.2023, with liberty to the Assessing Officer (AO) to pass a fresh order, albeit, as per law. The AO, before passing a fresh order, will accord a personal hearing to the authorized representative of the petitioner. For this purpose, the AO will issue a notice indicating the date and time of the hearing to the petitioner.”
The Delhi High Court quashed assessment order passed without considering the delay in filing reply to income tax notice due to incorrect login password.A Division Bench of Justices Girish Kathpalia and Rajiv Shakdher concluded that “In view of above discussion, all these four writ petitions are allowed and accordingly, the draft assessment orders dated 26.07.2022, final Assessment Orders dated 10.09.2022, the demand notices dated 10.09.2022 and the Penalty Orders dated30.03.2023 are set aside, remanding the matters back to the Assessing Officer with the directions to afford a fair hearing to the petitioner/assessee in accordance with law after issuing fresh notices under Section 142(1) of the Act.”
The Allahabad High Court directed the GST Department to allow the assessee to upload Form ITC-01 to claim Input Tax Credit (ITC). A Division Bench of Justice Ashutosh Srivastava and Pritinker Diwaker noted that “The writ petition is disposed of by directing the respondents to do the needful and ensure that the writ petitioner is permitted to upload the Form ITC-01 so as to enable him to claim the Input Tax Credit worth Rs. 31,18,718/- as stated in para 13 of the writ petition) under Section 18 (1) (c) of the Act. Let the exercise be done within 4 weeks from the date of service of certified copy of the order of this Court upon the concerned respondents.”
The Kerala High Court in a significant ruling observed that the execution of contract for delivery of goods is taxable event in contract for transfer of right to use goods under the Kerala Value Added Tax Act, 2003 (KVAT Act).A Division Bench of Justice Dr AK Jayasankaran Nambiar and Justice Mohammed Nias CP, noted that “In the light of the above, it has to be held that in a contract for the transfer of the right to use the goods, the taxable event is the execution of the contract for delivery of the goods, and if that has taken place, it was immaterial whether the transfer was exclusively or to the exclusion of all others. In the instant case, the transferee obtained a legal right to use the goods for the period during which he had such legal rights, which had to be to the exclusion of the transferor.”
In a recent decision, the High Court of Delhi has modified its earlier order in the case of Amazon Web Services India Pvt Ltd & Anr. vs. Income Tax Officer & Anr. The case pertains to a dispute over the withholding tax deducted at source (TDS) on payments made by Amazon Web Services India (AWS India) to its U.S. counterpart,AWS USA. The Delhi High Court further clarified that the modified order applies for the limited period from 01.11.2022 to 31.03.2023, but it does not prevent the Revenue from taking any measures related to the period before November 1, 2022, based on the absence of a Section 195(2) application or assessment.
The High Court of Delhi has held that the seizure of cash by the Goods and Services Tax (GST) authorities under Section 67(2) of the Central Goods and Services Tax (CGST) Act, 2017 on the suspicion of it being black money is illegal. The court has ordered the immediate release of seized funds and has allowed the possibility of a refund. The division bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan concluded that the tax authorities cannot seize cash solely on the suspicion of it being unaccounted for without concrete evidence. The ruling also highlights the importance of due process and the rights of taxpayers in such cases.
In the issue of the restriction in utilization of cenvat credit during default period, the Bombay High Court listed the matter for further hearing since it was pending. A division bench comprising Justice G.S. Kulkarni and Justice Jitendra Jain listed the matter to hear the parties and pass appropriate orders on these proceedings.
The High Court of Bombay has held that the State Tax Officer (STO) does not have the jurisdiction to issue communication under Section 83 of the Maharastra Goods and Services Tax (MGST) Act, 2017. The STO voluntarily withdrew the communication and Bombay HC disposed the Writ Petition in consequent to the withdrawal. In result, the division bench comprising Justice G. S. Kulkarni and Justice Jitendra Jain disposed the Writ Petition filed by the appellant in consequent to the withdrawal of the Communication under Section 83 of the GST Act by the STO.
In a recent ruling, the Delhi High Court has denied the anticipatory bail filed by the Chartered Accountant (CA) accused of Forgery and Goods and Services Tax (GST) evasion through false invoices from non-existent entities he was allegedly operating. The bench ruled that the applicant must be provided with several documents and witness statements after taking into account the entire set of circumstances and the case’s context. It was further stated that there were no good grounds to grant anticipatory bail for the petitioner given the seriousness of the accusations against him, which involve forgery and GST evasion by fabricating invoices from fictitious companies. In result, the interim protection granted to the applicant CA on 14th March, 2023 was also vacated by the Delhi High Court.
The Madras High Court directed to reassess bill of entry as there is no suspension of preferential Tariff Treatment on Imported Areca Nut under section 28 DA of Customs Act, 1962. A single judge bench comprising Justice C Saravanan observed that there are no records to show that the petitioner was called for to furnish information, which the petitioner has failed to furnish. There is also no suspension of preferential tariff treatment of the imported goods in terms of Section 28 DA of the Customs Act, 1962. The Court directed the respondents to re-assess the Bill of Entry dated 15.06.2023 provisionally in accordance with the procedure prescribed under Section 28 DA of the Customs Act, 1962 and the rules made thereunder and thereafter allow clearance of the imported consignment of arecanut.
A Single Bench of the Delhi High Court directed the Restaurant Association to replace ‘Service Charge’ with ‘Staff Contribution’ and also to make sure that the Staff Contribution amount should not exceed 10% of the bill. The Court of Justice Prathiba M Singh directed the members of the Federation of Hotel and Restaurant Associations of India (FHRAI), who are collecting the charges, shall with immediate effect cease the usage of the term ‘Service Charge’ and only use the terminology ‘Staff Contribution’ for the amount being charged as ‘Service Charge’ currently and the said amount being charged as ‘Staff Contribution’ by members of FHRAI shall not be more than 10% of the total bill amount excluding the GST component.” “In case of establishments mentioned in the members of FHRAI, who are collecting the charges, the menu cards shall specify in bold that after the payment of ‘Staff Contribution’, no further tip is necessary to be paid to the establishment/servers/restaurant staff” the Court directed.
The Delhi High Court in a recent decision observed that clear reasons should be indicated in show cause notice (SCN) for which Goods and Service Tax (GST) registration cancellation is proposed.
A Division Bench of Justices Vibhu Bakhru and Amit Mahajan observed that “It is clear from the above that the impugned order is not informed by reason as it does not reflect any intelligible reason as to why the petitioner’s GST registration was cancelled. Further, the Show Cause Notice did not disclose that the petitioner’s GST Registration was proposed to be cancelled with retrospective effect. The impugned order for the cancellation of the GST registration also does not reflect any ground to support the decision to cancel the GST registration with retrospective effect.” “The present petition is allowed solely on the ground that the Show Cause Notice falls short on the standards required of a Show Cause Notice. At the least, the Show Cause Notice must clearly indicate the reasons for which an adverse order is proposed to be passed in order for the noticee to respond to the same” the Court concluded.
The Madras High Court in a significant ruling observed that the GST Audit under Section 65 of the Central Goods and Service Tax (CGST) Act, 2017 cannot be conducted after closure of business, can be conducted only on registered entities.
“When a Section provides for periodical audit, the respondent having failed to conduct audit for all these years, suddenly cannot wake up and conduct an audit. However, this will not preclude the respondent from initiating assessment proceedings for the said concern under Sections 73 and 74. Therefore, the said impugned order is liable to be quashed. Hence, the impugned order is quashed with liberty to the respondent to initiate assessment proceedings under Sections 73 and 74 of the Act” the Bench concluded.
In a significant case, the Madras High Court held that asseese cannot be punished for expecting a notice fixing date for hearing and set aside the assessment order passed under the Tamil Nadu Value Added Tax Act (TNVAT),2006 as it was passed after 15 days which was requested by the assessee to submit documents. The Court found that the assessment order impugned in the writ petition is in violation of the principles of natural justice and set aside the assessment order passed by the second respondent.
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