This Annual Case Digest analytically summarizes the key stories related to Tax judgements of various High Courts in India reported in Taxscan.in during the year 2023. These stories include judgements and observations of High Courts related to Income Tax, Goods and Service Tax(GST), Excise Duty, Service Tax, Customs Duty, etc.
The High Court of Rajasthan sought responses from the GST department in a case of an illegal demand for Goods and Service Tax (GST) and granted time for filing the reply for the petition.
A Coram comprising Justice Vijay Bishnoi and Justice Kuldeep Mathurgranted time to Mr Hemant Dutt to file a reply to the writ petition. The petitioner was directed to deposit further 10% of the disputed tax amount and furnishing security, other than cash and bank guarantee for the remaining 80%, to the satisfaction of the Assessing Authority.
The Court held that “no coercive steps shall be taken against the petitioner to recover any amount under the impugned assessment order dated 25.02.2021 and appellate order dated 31.01.2023.”
In a recent decision, the Calcutta High Court directed the petitioner, S & ID Management Services Private Limited, to file an application under Section 80 of the West Bengal Goods and Service Tax (WBGST) Act, relating to granting of instalment in payment of revenue dues.
The Court of Justice Md Nizamuddin directed the petitioner to make an application under Section 80 of the WBGST Act before the Commissioner concerned within a period of two weeks from date and if such application is filed by the petitioner within the time stipulated herein, in that event Commissioner concerned shall consider and dispose of the aforesaid application under Section 80 of the Act for grant of instalments in accordance with law within a period of four weeks from the date of receipt of such application.
While staying deposit of balance tax amount the High Court of Patna held that non-constitution of Goods and Service Tax appellate tribunal should not deprive assesee’s statutory benefit under section 112(9) of the Bihar Goods and Services Tax Act, 2017.
The bench of the Justice Madhuresh Prasad observed that,“ If the petitioner makes a deposit of a sum equal to 20 percent of the remaining amount of tax in dispute, in addition to the amount deposited earlier under Sub-Section (6) of Section 107 of the B.G.S.T. Act, then the petitioner must be extended the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act, for he could not be deprived of the benefit, due to non constitution of the Tribunal by the respondents themselves”.
The Kerala High Court has recently observed that authorities under the act are misinformed of their powers and the limits of their jurisdiction and the court slamed the GST department for seizure of cash without show cause notice.
The division bench of the high court observed that seizure of cash from the premises of the appellants was wholly uncalled for and unwarranted. Further the respondent has retained the seized cash for more than six months and is yet to issue a show cause notice to the appellants in connection with the investigation, there can be no justification for a continued retention of the said amount with the respondent.
Therefore the division bench consisting A.K. Jayasankaran Nambiar, (Judge) and Mohammed Nias C.P. (Judge) allowed the appeal by directing the first respondent to forthwith release to the appellant the cash seized from the premises, against a receipt to be obtained from him.
In a recent judgment, the Patna High Court bench comprising of Acting Chief Justice Chakradhari Sharan Singh and Justice Madhuresh Prasad observed that the non-constitution of GST Appellate tribunal deprives Life Insurance Corporation of India’s right to appeal under BGST and directed to file an appeal under section 112 of the Bihar Goods and Services Tax Act ( B.G.S.T. Act), 2017.
A two-member bench comprising of Chakradhari Sharan Singh, ACJ and Madhuresh Prasad J observed that non-constitution of the Appellate Tribunal caused deprivation to the petitioner’s statutory right to appeal under Section 112(8)(9) and held that 20 per cent of the remaining tax in dispute is required to be deposited by the petitioner with due diligence if he is genuinely desirous of availing the remedy of appeal within four (4) weeks.
The Punjab and Haryana High Court has recently upheld the maintenance order based on the filed Income Tax Returns (ITR) and balance sheets of the family court in a revision petition filed by the assessee-husband.
The Single Bench of Punjab and Haryana High Court observed that, “The amount of interim maintenance has been granted by the Family Court by taking into account, the income tax returns filed by the petitioner as also the balance-sheets of the firm which are admittedly in his proprietorship, i.e., M/s. Surjit Diesel Service, Gandarpur, Cuttack, Orissa.
It was considered that in the ‘Affidavit of Income, Assets and Expenditure’, the petitioner has himself mentioned his monthly income to be ₹1,50,000. The Family Court has also considered that the respondent wife is earning only an amount of ₹14,000 per month as admitted by her, and not ₹50,000 as alleged by the petitioner.”
The Bombay High Court quashed reassessment notice on the ground that there was non-application of mind by Assistant Commissioner of Income Tax without considering relevant documents. The Coram comprising Justices Dhiraj Singh Thakur and Valmiki Sa Menezes observed that “The impugned notice under Section 148 appears to suffer from total non-application of mind, in that, respondent No.1, Assistant Commissioner of Income Tax, has not considered all the documents furnished by the petitioner along with its reply / objections to the reopening notice, wherein its valuation report of all the details of calculation and disclosures made in the earlier scrutiny proceedings had been produced.”
The Bombay High Court upheld the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Order deleting Service Tax Levy on Fee Collected from Entities, thereby granting relief to The Securities and Exchange Board of India (SEBI), the respondent. The Coram comprising Justices Dhiraj Singh Thakur and Valmiki Sa Menezes observed that “The CESTAT noticed that the issue of tax on the fees charged by the respondent was laid down in the correspondence with the Tax Administration as well as with various Government Authorities within a few months of the transition to the Negative List regime. “
The Bombay High Court on Tuesday dismissed a Public Interest Litigation (PIL) seeking Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) investigation into the alleged disproportionate assets of the Ex-Chief Minister of Maharashtra and Shiv Sena Leader Uddhav Thackeray, his wife and two sons.
The Court further noted that there is absolutely no evidence or live link between the alleged malpractices in the B.M.C. and private Respondents herein and thus Petitioners thus are attempting to seek a roving probe, monitored by this Court into the suspicions so entertained by the Petitioners based on nothing but bald allegations.
The Court concluded by stating that the petition is an abuse of the process of law and directed the petitioners to deposit Rupees Twenty-five thousand in the Advocates Welfare Fund within a period of two months.
In a recent ruling, the Karnataka High Court held that only the Central Government can make provision for prohibiting, restricting, or regulating the import or export of goods or services, or technology and not the Director General of Foreign Trade (DGFT) in relation to the Foreign Trade Policy ( FTP ), thereby granting relief to M/s Patanjali Foods Limited, the petitioner.
The Department contended that the DGFT is an authority constituted under the FTDR Act and is entitled to issue public notices prescribing the procedure.
The Bench of Justice SR Krishna Kumar observed that “Only the Central Government can formulate and announce the Foreign Trade Policy by ‘Notification’ in the Official Gazette and may also, in like manner, amend that policy. The power of the Central Government to formulate and amend the Foreign Trade Policy cannot be exercised by DGFT.”
In a significant case, the Delhi High Court (HC) has held that refund of Integrated Goods and Service Tax (IGST) on service provided to the overseas entity is not allowable for the intermediary and set aside the order rejecting the refund claim since the department failed to give the opportunity to assessee.
The Coram comprising of Justice Vibhu Bakhru and Justice Amit Mahajan observed that the petitioner was not allowed to meet the case and that it was not entitled to a refund as the services provided by it were as an intermediary.
Since the impugned order has been passed in violation of the principles of natural justice, the Court set aside the impugned order and remanded the matter to the Appellate Authority to decide the petitioner’s appeal afresh following the law after affording the petitioner an opportunity to be heard. To
The Bombay High Court held that the reopening of the assessment is not valid when there is no tangible information.
A two-member bench comprising Justices Dhiraj Singh Thakur and Justices Valmiki Sa Menezes observed that any information of the petitioner has not remained undisclosed about the income offered by him to tax for the relevant assessment year.
It was viewed that the impugned notice dated 31.03.2021, and the impugned order disposing of the objections dated 30.12.2021 filed by the petitioner are arbitrary and issued without the requisite jurisdiction under Section 148 of the Act. The Court quashed and set aside the impugned notice and the impugned order disposing of the petitioner’s objections.
A Single Bench of the Calcutta High Court observed that GST cannot be levied on ocean freight, thereby quashing a service tax demand of 28 crores. The key provision is relevant to determine whether the taxable event is services supplied by a person located in a non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India.
The Court allowed the appeal and set aside the order confirming demand of service tax. The High court followed judgment of the Supreme Court in the case of Mohit Minerals holding that no GST can be demanded on ocean freight.
The Madras High Court allowed to upload rectified Form GSTR 1 and noted that the rectification of inadvertent errors enables proper reporting of turnover.
The Court concluded by noting that where an expansive view of the issue is called for, are few and far between, as on date, that the Court is inclined to accept the prayer of the petitioner and issued the writ of mandamus to the respondents to do the needful to enable uploading of the rectified GSTR 1.
Be the First In a recent ruling, the Andhra Pradesh High Court division bench of Justice U. Durga Prasad Rao and Justice V. Gopala Krishna Rao overturned the assessment decision issued by the authorities with the condition that the petitioner deposit 50% of the tax component.
The division bench directed that the authorities must set a date for a personal hearing of the petitioner with regard to her objections to the proposed assessment upon the deposit of 50% of the tax component of Rs. 23,79,26,090 as mentioned in the challenged order within six (6) weeks of the date of receipt of a copy of this order. After hearing the petitioner, pass an appropriate Assessment Order in accordance with the governing law and rules expeditiously, stated the bench.
Allahabad High Court bench of Judge Pankaj Bhatia directed the Goods and Services Tax (GST) authorities to refund the GST Demand paid by the petitioner on reason that quantifying the goods on basis of eye is not in accordance with law.
The bench observed that in “Section 15 of the Central Goods and Services Tax Act (CGST Act) or the Rules framed thereunder, there was no prescriptions for valuation of the goods on the basis of eye estimation as has been done by the department and has been repelled by the appellate authority.” Additionally stated that the appellate authority erred in rejecting the valuation performed using an eye estimate, but went ahead and valued the goods at the appellate stage without following the instructions and procedures outlined in Section 15 read with the Rules, so the contested order is also unjustifiable on that count.
The Jharkhand High Court has recently quashed the Show Cause Notice ( SCN ) and Demand Order against the assessee as infructuous for the demand of penalty of 100% of Goods and Services Tax ( GST ) dues in the Form GST DRC-07.
The Division Bench of Justice Aparesh Kumar Singh and Justice Deepak Roshan observed that “Levy of the penalty of 100% of tax dues reflected in the Summary of the Order contained in Form GST DRC-07 vide Annexure-4 in the respective writ petitions are also in the teeth of the provisions of Section 73(9) of the Act of 2017, wherein while passing an adjudication order, the Proper Officer can levy penalty up to 10% of tax dues only. The above infirmity clearly shows non-application of mind on the part of the Deputy Commissioner, State Tax, Godda Circle, Godda.”
In a recent decision, Judge Ritu Bahri and Justice Manish Batra of the Punjab and Haryana High Court bench concluded that the respondent had forced the petitioner to deposit a Goods and Services Tax (GST) demand.
The HC mentioned in the judgment that if the tax is collected without legal authorization, this would amount to taking someone’s property without legal authorization and would violate that person’s right under Article 300A of the Constitution.
The division bench observed that “In the present case, no receipt was given by the Proper Officer after accepting the impugned amount. Thus, the amount deposited by the petitioner under protest were liable to be refunded in view of the above mentioned judgments, as the petitioner has been deprived of his right.”
In a significant case, the Telangana High Court (HC) held that observations made by the Commissioner while examining the objection raised to provisional attachment of bank accounts under section 83 of the Central Goods and Service Tax (CGST) Act will not influence the assessment proceedings.
A two-member bench comprising Chief Justice Ujjal Bhuyan and Justice N Tukaramji held that observations made by the Commissioner while passing the order dated 15.03.2023 was in the context of examining the objection raised by the petitioner to provisional attachment of bank accounts under Section 83 of the CGST Act and those would not influence the assessment proceedings that may be initiated against the petitioner.
The Delhi High Court set aside the Decision of the Arbitral Tribunal and ruled that the Revised returns or Chartered Accountant (CA) Certificate is relevant to decide whether typographical error crept in Value Added Tax (VAT) returns.
The Bench of Justices Vibhu Bakhru and Amit Mahajan observed that “This Court is unable to concur with the decision of the Arbitral Tribunal to disregard the revised returns or the chartered accountant certificate, which are undeniably relevant for deciding the question whether a typographical error had crept in the returns.”
The High Court of Delhi has held that no need to file fresh claims when a refund claim is embedded in return and directed the department to pay 6% interest.
The Court comprising Justice Rajiv Shakdher and Justice Tara VitastaGanju held that since the claim for a refund made by the assessee was embedded in its return, it did not arise out of an order passed by the Court or an authority constituted under the 2004 Act, the assessee was not required to file a fresh claim as contended by the revenue under DVAT 21.
In a significant case, the Delhi High Court (HC) has held that attachment of bank accounts is a draconian step and the attachment must be subject to condition under section 83 of the Goods and Service Tax Act(GST), 2017.
The Coram comprising of Justice Vibhu Bakhru and Justice Amit Mahajan observed that it was not open for the respondent to attach the bank accounts of other persons on a mere assumption that the funds therein are owned by any taxable person.
“The attachment of bank accounts is a draconian step and such action can only be taken in case conditions specified in Section 83 of the Act, are fully satisfied. The exercise of power under Section 83 of the Act must necessarily be confined within the limits of the aforesaid provision.” the Court held.
The Calcutta High Court (HC) quashed the order under section 148A(d) of the Income Tax Act,1961 passed with non-application of mind.
A single-member bench comprising Justice Md. Nizamuddin viewed that quashing the aforesaid impugned order under Section 148A(d) of the Act and all subsequent proceedings, will not be a bar on the part of the Assessing Officer to pass a fresh order under Section 148A(d) of the Act after considering the objection/ response of the petitioner dated 15th June 2022 by the law.
It was held that it would be by passing a reasoned and speaking order after giving an opportunity of hearing to the petitioner or his authorised representatives, within a period of eight weeks from the date of communication of the order.
The Karnataka High Court dismissed a writ petition challenging constitutional validity of Value Added Tax (VAT ) Notification by Authorities to track movement of goods to fix tax liability.
The Court of Justice MI Arun, observed that “I do not see any reason, as to why the impugned notification is to be struck down. The notices at Annexure – B and C to the writ petition are issued in pursuance of the impugned notification and they do not violate the said notification.
Hence, the said notices are also upheld.”
The Calcutta High Court allowed filing of fresh calculations to avail refund in the matter of GST Refund Claim in Transition Phase.
The Coram comprising of Justice Shampa Sarkar, noted that “As the claims were made at a transitional phase when GST had just been introduced, it is expected that some teething problems will be faced by the claimants.
As such, the executive heads of the respective divisions are expected to familiarize the claimants with the procedure and the calculations.” “Once the petitioner submits the calculations with the necessary corrections and documents, the same shall be processed by the WBSRDA as also by its counter-part in the centre, for refund of the GST claims” the Court observed.
The Andhra Pradesh High Court (HC) allowed the appeal on Goods and Service Tax (GST) registration cancellation in absence of a GST tribunal under section 109 of the Central Goods and Services Tax Act(CGST), 2017.
A two-member bench comprising Justice U Durga Prasad Rao and Justice V Gopala Krishna Rao observed that the GST Tribunal has not been constituted as per the provisions of the Act to enable the petitioner to pursue his further legal remedy.
The Court allowed the writ petition and the matter is remitted back to the preliminary authority i.e., the 4th respondent to consider the case of the petitioner and after verifying the returns submitted by the petitioner and after allowinga personal hearing pass an appropriate order by governing law and rules expeditiously but not later than two weeks.
In a recent ruling the Calcutta High Court observed that the Writ Court has no authority to adjust Municipal Taxes, Repair and Maintenance Charges in the absence of a Specific Agreement.
The Court of Justice Sabyasachi Bhattacharyya observed that “There is no scope of this Court adjusting such amount of Municipal Taxes and alleged repair and maintenance charges within the ambit of the present writ petition.”
The Court further went on to add that it is well-settled that unless there is a specific agreement between the lessor and lessee and/or landlord and tenant to the effect that repair and maintenance charges shall be adjusted from the rent, such adjustment cannot be claimed as a matter of right by the respondents/lessees.
The Calcutta High Court quashed an assessment order holding as classic example as to how assessment should not be made and observed that Standard Operating Procedure (SOP) should be followed in faceless assessment. The Court of Justices T. S. Sivagnanam and Hiranmay Bhattacharyya noted that “On a cursory perusal of the assessment order, one gets an impression that it is in compliance with the SOP as it contains requisite sub-headings but however, on a closure reading of the assessment order it is found that the assessing officer has acted in a most perverse manner in passing the assessment order.”
The Court further went on to observe that the impugned assessment order is a classic example as to how an assessment should not be made. The assessing officer has reduced the procedure to an empty formality, which has to be deprecated.
The Orissa High Court observed that the Interim order of the Supreme Court not “sufficient cause” for Non-Payment and thereby directed Shree Bharat Motors and other applicants to pay Balance Entry Tax with Interest.
The Court of Chief Justice Dr S Muralidhar and Justice Murahari Sri Raman noted that an analysis of Section 7(5) of the OET Act read with Rule 10 of the OET Rules transpires that interest is payable on tax due as discussed above, and the same is subject to fulfilment of the condition that on failure to pay the amount of tax due as per the return “without sufficient cause”
The Tripura High Court (HC) has held that the writ petition filed before attaining finality in the authorization for inspection and search issued by the Additional Commissioner of State Taxes amounts to Premature and not maintainable.
The petitioner submitted that seizing the vehicles of the petitioner and directing him to may payment of Rs. 1,28,37,517/- along with interest and penalty is wholly illegal and without jurisdiction. On the other hand, the respondent submitted that the memo dated 25.06.2021 and the notice dated 25.08.2021 passed within the ambit of law since the petitioner had not discharged his actual tax liability in filing Returns.
Further argued that the petitioner failed to produce any valid document regarding the mode of business operation of the petitioner and stated that without the outcome of the proceeding initiated by respondent no. 4, the petitioner had filed the instant writ petition which is at its premature stage.
A Coram comprising of Justice Arindam Lodh observed that the present writ petition which is filed by the petitioner is at the pre-mature stage, and is not maintainable. The appeal got dismissed
The Bombay High Court dismissed the rejection of declaration under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR) and commented that the petitioner, Avenue Supermarkets Ltd, is a victim of the lacuna in software governing the SVLDR scheme.
The Bench concluded by observing that “This being the position, we are of the opinion that the Petitioner is entitled to get his application / declaration SVLDRS-1 to be examined on merits as to whether the Petitioner is otherwise entitled to the benefit of the scheme.”
Chhattisgarh High Court rejected an Anticipatory Bail application of Businessman Sunil Kumar Aggarwal in association with the Chhattisgarh Coal Scam case.
Dismissing the application of anticipatory bail the Court of Justice P. Sam Koshy observed that “The manner of transaction made between the Applicant and the Firms belonging to Suryakant Tiwari, the timing of the transaction, the sale consideration made by the Applicant in the process of purchase of the Coal Washeries from the Firms belonging to Suryakant Tiwari, all establishes the nexus between the Applicant and Suryakant Tiwari and their involvement in the predicate offence.”
The Madras High Court quashes assessment order on the ground of non-issuance of pre-assessment notice. The Court of Dr Justice Anita Sumanth noted that “In light of the documentary evidence that has been produced which is a print out of the virtual summary of notices issued to the petitioner and this being the admitted position, the impugned order is liable to be set aside.”
The Andhra Pradesh High Court remanded back matter to primary authority on non-constitution of GST Tribunal in a matter relating to the restoration of GST Registration.
The Court of Justices U Durga Prasad Rao and V Gopala Krishnan Rao “In that view of the matter and as the GST Tribunal has not been constituted as per the provision of the Act so as to enable the petitioner to pursue his further legal remedies, in the interest of justice, we consider it apposite to allow the writ petition and remit the matter back to the primary authority.”
In a noteworthy ruling, the Delhi High Court has prohibited the Institute of Cost Accountants of India from using the acronym “ICAI,” which is a trademark registered in favour of the Institute of Chartered Accountants of India, for any of its services or institution.
The court observed that it was impossible to determine whether the use of the ICAI acronym referred to the Institute of Chartered Accountants of India or the Institute of Cost Accountants of India without additional evidence. It concluded that the defendant had prima facie infringed on the Institute of Chartered Accountants of India’s trademark by using the ICAI acronym to designate its institution.
The Delhi High Court Bench of Justice C Hari Shankar thereby restrained the Institute of Cost Accountants of India from using the ICAI acronym and has directed it to remove the acronym from all existing representations within three months.
In a recent judgment the Madras High Court observed that there is no Criminal Liability of Guarantor for failure to pay Arrears of Value Added Tax(VAT) and Goods and Service Tax (GST) as in Undertaking.
The Court of Justice R N Manjula, observed that “Unless the second petitioner is the assessee in the eyes of the Act he cannot be implicated as an accused for the default committed on the part of the first accused, who alone is the assessee.Since the complaint has been given against this petitioner by presuming culpability on his part for failing to pay the tax I feel there is no basis for this criminal case.”
The Orissa High Court directed the Revenue to lift the attachment under Section 79(1) (c) of the Central Goods and Services Tax (CGST) Act, 2017 as Service Tax relief approved under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019(SVLDR).
The Court of Justices S. Talapatra and Savitri Ratho observed that “Having appreciated the facts and the submission as advanced we think that in the interest of the revenue, the revenue shall lift the attachment temporarily in favour of the petitioner as the petitioner has undertaken to deposit the sum of Rs.9 lakhs.”
As a relief to Mount Everest Breweries, the Madhya Pradesh High Court (HC) has directed to refund pre-deposit with 6 % Interest since Special Leave Petition (SLP) was dismissed. The Court observed that the respondent was obliged to refund the amount so collected to the petitioner immediately after the dismissal of SLP. Further viewed that even though, there are no provisions of payment of interest on refund of amount so collected under the VAT Act, since the SLP was dismissed on 17.04.2017, the petitioner would be eligible for interest@6% per annum w.e.f. 17.04.2017 till the date of refund. The petition got allowed.
In a major ruling the Kerala High Court observed that there is no Jurisdiction vested on Lok Ayukta to check Correctness of Order passed by Assessing Authority (AA) on Settlement of Tax Arrears under Amnesty Scheme.
The Bench of Chief Justice observed that “The Lok Ayukta has no jurisdiction to decide the correctness of the order rejecting the option for settling the arrears under the Amnesty Scheme-2020.”
The High Court (HC) of Gujarat quashed prosecution under the Income Tax Act, 1961 on undisclosed income in absence of a willful attempt to evade tax, penalty, or interest. A Single member comprising Justice Nikhil S Kariel observed that the fact of headson which income had not been disclosed was different and since there is not be of any material consequence.Consequently, the Court quashed and set aside the impugned Criminal Complaints. The applications are allowed accordingly.
In a significant ruling in favour of OYO, the High Court (HC) of Delhi has held that the refund claim of TDS can’t be withheld merely because of notice issued under section 143(2)of the Income Tax Act, 1961.
While withholding a refund, the AO is required to look into various factors about an Assessee, such as the amount of tax liability which a scrutiny assessment may eventually lead to (as is underway in this case) vis-a-vis the amount of tax refund due; the financial standing or credit worthiness of the Assessee, and whether there would be any doubts in the Revenue recovering amounts from the Assessee.
Merely because a notice has been issued under Section 143(2) of the Act, it is not sufficient ground to withhold the refund under the provisions of the Act.
The Court comprising Justice Rajiv Shakdher and Justice Tara Vitasta Ganju set aside the order(s) dated 07.06.2022/30.05.2022. Further held that the Respondents shall conduct a de novo exercise bearing in mind the provisions of Section 241A of the Act and principles articulated within six weeks.
A Division bench of the High Court of Tripura recently set aside the imposed penalty for expiry of GST E-way bills and observed that the same had expired during transit, and the assessee was unable to renew them with the competent authority.
The Bench of the Acting Chief Justice and Justice Arindam Lodh observed that, “the ‘e-Way bills’ had expired during the transit and the petitioner was not in a position to ask for its renewal to the competent authority when the vehicle entered into the territory of the State of Tripura.
It was thus opined that the order dated passed by the Appellate Authority is not just and proper and the same is liable to be set aside. The Tripura High Court, allowing the refund remarked that the petitioner was entitled to all consequential reliefs including the refund.
In the case of Oriental Insurance Company, the Delhi High Court (HC) has held that re-insurance services are not excluded from the definition of ‘input services’ under rule 2(l) of the CENVAT Credit Rules, 2004 (‘CCR’).
Justice Vibhu Bakhru and Justice Amit Mahajan observed that the show cause notice had proceeded on basis that the re-insurance services are not input services because they are received by OIC after the insurance services have been rendered; re-insurance services are not essential for providing insurance services; and re-insurance services are not directly or indirectly used for providing output services.
It was alleged that re-insurance services were specifically excluded from the scope of input services under an amendment to Rule 2(l) of the CCR introduced with effect from 01.04.2011 – that is, by the exclusion contained in Clause (B) of Rule 2(l) of the CCR –is not a grounds which was stated in the show cause notice.
In a recent ruling, the division bench of Delhi High Court (HC) presided by Justices Vibhu Bakhru and Amit Mahajan observed that from the date of the petitioner filing an application for revocation of its cancellation, he cannot be held responsible for not filing its returns during the period when the registration stood cancelled.
The bench observed that the order of the respondent authority rejecting the application of GSTIN registration is unsustainable as it does not provide any proper reason for the rejection.
In a significant ruling, the High Court (HC) of Delhi remanded the reassessment proceedings triggered based on Tax Evasion Petition (TEP) to Assessing Officer (AO). The Court comprising Justice Rajiv Shakdher and Justice Tara Vitasta Ganju observed that the petitioner has been remiss in not placing the bank statement before the AO. The AO proceeded based on the allegation made in the TEP. The record shows that the petitioner has taken the stand that he has purchased a half-share in an immovable property worth Rs. 45,00,000/-.
The Court remanded the matter to the AO to consider the stand of the petitioner about the allegation made in the TEP.
The Delhi High Court (HC) delayed filing applications under section 270AA of the Income Tax Act, 1961 due to technical glitches in the portal can be condoned. Justice Vibhu Bakhru and Justice Amit Mahajan observed that the petitioner has a valid explanation for the delay and the matter is remanded to the concerned officer (Respondent no.2) to consider the petitioner’s application under Section 270AA of the Act afresh.
The Court directed the petitioner to appear either personally or through an authorized representative before Respondent no.2 at 11.00 AM on 05.04.2023 to avail the opportunity of being heard.
The Delhi High Court (HC) directed to lift the block placed on the assessee’s bank a/c since the refund was sanctioned by the auditor. The Court observed that the blocking of the bank account is taken under Section 83 of the Act.
By sub-section (2) of Section 83 of the Act, the said order of attachment ceases to be operative on the expiry of a period of one year from the date of the order. Considering the averment that the auditor has already reviewed the petitioner’s case, the Court directed a refund for the sum of ₹38,786/-.
It was further directed to reconsider the petitioner’s request for lifting of the block placed on the petitioner’s bank account and continue the same only if it is satisfied that the conditions as specified in Section 83 of the Act continue to exist.
A Division Bench of the Delhi High Court allowed the refund claim of EY Ltd. India (assessee) on services rendered to EY Entities located outside India in terms of service agreement entered into between Head Office of EY Ltd. with the respective EY entities.
It was further observed that, “even if it is accepted that the petitioner has rendered services on behalf of a third party, the same would not result in the petitioner falling within the definition of ‘intermediary’ under Section 2(13) of the IGST Act as it is the actual supplier of the professional services and has not arranged or facilitated the supply from any third party.”
The Bench of Justice Vibhu Bakhru and Justice Amit Mahajan pointed out that “There is no dispute that the recipient of Services – that is EY Entities – are located outside India. Thus, indisputably, the Services provided by the petitioner would fall within the scope of the definition of the term ‘export of service’ under Section 2(6) of the IGST Act”, consequently allowing the GST Input Tax Credit refund claim.
The Delhi High Court (HC) has held that the Income Tax notice issued under section 148A(b) of the Income Tax Act, 1961 on dissolved partnership is not valid.
The Court comprising Justice Rajiv Shakdher and Justice Tara Vitasta Ganj allowed the liberty to the Assessing Officer (AO) to issue to Ms Ragini Mohan, who is the Legal Representative (LR) of the deceased managing partner [i.e., Mr Keshav Mohan], fresh notice under Section 148A(b) of the Act.
Furthermore held that the AO will also accord a personal hearing to Ms Ragini Mohan and/or her authorized representative. The AO shall, thereafter, take the next steps, in law, as deemed fit.
A Division bench of the Bombay High Court recently held that the Customs authorities do not possess any power to seal the premises of a person alleged to be involved in smuggling of goods.
The bench observed that, “we find that there is no power available with the custom authorities to seal premises of any person, which are nothing but a form of immovable property. Under Section 110 or Section 121 of the Customs Act, 1962 what can be seized and confiscated is the “goods” or movable property”. It was further observed by the Bombay High Court bench that, “Section 110 and Section 121 respectively empower the customs authorities to seize the goods liable to confiscation and confiscate the sale proceeds of the smuggled goods, which are sold by the person, having knowledge or reasons to believe that the goods are smuggled goods.”
Gauhati High Court (HC) of bench Justice Susmita Phukan Khaund rejected the petition praying to quash FIR filed against the petitioner for evading tax payment from the government by smuggling coal to different states. The HC stated that they could not find any malice by the investigation agency.
The bench rejected all the submissions made by the petitioner and observed that “the petitioner is alleged with an offence of evading payment of taxes to the Government by smuggling coal to different states. I have considered the magnitude of the offence.
This is an offence against the society at large. The document submitted by the petitioner does not even substantiate his averments”.
Atlas Gold Township received respite when the Kerala High Court (HC) division bench, headed over by Justices A K Jayashankaran Nambiar and Viju Abraham, ordered officials to issue new assessment orders.
The bench noted that the appellant’s current limited request is for a directive akin to the sister company’s, which saw another Single Judge overturn the challenged assessment orders that were made without consulting the assessee and order the Assessing Officer to conduct a new assessment within a specific time frame.
The division bench decided to set aside the judgment of the single judge in the writ petition, as also the order in the Review Petition, to the limited extent that it does not set aside the assessment orders impugned in the Writ Petition.
The Patna High Court (HC) directed to file an appeal under section 112 of the Bihar goods and services tax act 2017 (BGST Act) since the order preventing the assessee from availing the benefit of stay the recovery of balance GST amount passed in absence of Tribunal by GST authorities.
A Coram comprising of Justice Madhuresh Prasad held that since the order is being passed due to non-constitution of the Tribunal by the respondent-Authorities, the petitioner would be required to present/file his appeal under Section 112 of the B.G.S.T. Act, once the Tribunal is constituted and made functional and the President or the State President may enter the office.
The appeal would be required to be filed observing the statutory requirements after coming into existence of the Tribunal, for facilitating consideration of the appeal.
The Calcutta High Court confirmed the fulfilment of obligation under Rule 6(2) of the Cenvat Credit Rules, 2004(CCR), by taking only 85% of credit on common input service, thereby granting relief to M/s Indian Oil Corporation Ltd, the petitioner.
The Court of Justices TS Sivagnanam and Hiranmay Bhattacharyya observed that “This would indirectly mean that the contest which was made before the Tribunal with regard to the Chartered Accountant’s certificate does not any longer survive and it is only the contents thereof, sufficiency or insufficiency of the material contained in the certificate which is now being pursued by the Department.
Therefore, technically we would not be wrong in observing that the revenue has accepted that portion of the order passed by the Tribunal.”
In a significant case, the Andhra Pradesh High Court (HC) directed fresh adjudication after depositing 50% of Service Tax since non-participation in proceedings due to ill health. A Coram comprising Justice U Durga Prasad Rao and Justice V Gopala Krishna Rao observed that the petitioner could not avail of the opportunity given her old age as she has aged 75 years and also due to her ill health.
The Court directed the 3rd respondent to afford a personal hearing to the petitioner and pass Assessment Order afresh by the law on suitable terms. Further, the Court set aside the impugned Assessment Order dated 10.11.2022 passed by the 3rd respondent on the condition of the petitioner depositing 50% of the tax component of Rs.23,79,26,090/- as mentioned in the impugned order dated 10.11.2022 within six (6) weeks.
The Bombay High Court on Thursday disposed of four tax petitions filed by actor Anushka Sharma and asked her to approach the appellate authority under the Maharashtra Value Added Tax Act for addressing the issue of demand of Sales Tax by the department.
“She is providing her services and earning income through contract for services and not through contract of services (Not employed with anybody). Therefore, under Section 17 of the Copyright Act 1957 she is first owner of Copyrights created in her artistic performances,” the affidavit stated.
Nevertheless, the Bombay High Court disposed of the petition granting the petitioner the liberty to file an appeal against the impugned order of sales tax demand.
The Gujarat High Court dismissed Time Barred Re-Assessment Notices and ruled that the Taxation and Other Laws (Relaxation & Amendment of Certain Provisions) Act (TOLA) cannot override the provisions of Finance Act, 2021.
The Bench of Justices NV Anjaria and Niral R Mehta, observed that “In view of the above, all the impugned notices in the respective petitions under section 148 of the Act relatable to Assessment year 2013-14 or the assessment year 2014-15, are beyond the permissible time limit, therefore, liable to be treated illegal.”
“The Taxation and Other Laws Act, 2020 is a secondary legislation and a secondary legislation would not override the principal legislation-the Finance Act, 2021” the Bench concluded.
In the instant case before Calcutta High Court, presided by the bench of Justices T.S. Sivagnanam and Hiranmay Bhattacharyya directed the Principal Chief Commissioner of Customs to appoint another officer of same rank to hear the suspension of license of the respondent of the writ petition (Custom Broker).
The bench has provided 30 days to comply with the order of the single bench. Added that the respondent/writ petitioner has already filed a separate writ petition asserting that the order suspending the customs broker licence beyond the time period specified by the regulation is invalid and that the licence should be resumed, so the direction extending the time limit will not harm them in any way.
In the matter of Input Tax Credit (ITC) Reversal and Disallowance, the Madras High Court directed the GST Department to reassess in the light of Supreme Court (SC) Decision.
The Court commented that while some of these directions have been complied with in the present cases, counsel concur on the position that there are other conditions that have been set out under Circular No.5 of 2021 dated 24.02.2021 that yet remain to be complied and hence, the impugned assessments are to be re-done in light of Circular No.5 of 2021.
In a recent decision the Madras High Court directed the petitioner to approach Appellate Authority by way of statutory appeals in the matter of Revocation of Input Tax Credit (ITC). The Court of Dr Justice Anita Sumanth observed that “There is no justification, let alone acceptable justification for the delay in the institution of the present Writ Petitions on 07.03.2023.
However and seeing as Amrita Dinanakaran, Government Advocate, who accepts notice for the respondent does not seriously object to the alternate relief that is sought for and is proposed to be granted by this Court, liberty is granted to the petitioner to approach the appellate authority by way of statutory appeals within a period of three (3) weeks from today.”
In a major ruling the Telangana High Court observed that the observations in the release of Provisional Attachment of Bank Accounts should not influence GST Proceedings.
The Coram comprising of Chief Justice Ujjal Bhuyan and Justice N Tukaramji, observed that “Needless to say, observations made by the Commissioner of Ranga Reddy GST Commissionerate while passing the order was in the context of examining the objection raised by the petitioner to provisional attachment of bank accounts under Section 83 of the CGST Act and certainly those would not influence the assessment proceedings that may be initiated against the petitioner, which will be done in accordance with law.”
The Telangana High Court ordered the provisional release of Bank account in the matter of GST refund sanction amount.
The Coram comprising of Chief Justice Ujjal Bhuyan and Justice N Tukaramji observed that “The refund sanction amount, as noticed above, is Rs.27.54 crores. Petitioners shall make a deposit of Rs.28.00 crores in a nationalised bank by way of fixed deposit.”
The Authorities acting as quasi judiciary authority by invoking the power under statute are expected to act judiciously, but they are not expected to work as money generating authority.”
The Division Bench of Acting Chief Justice T. Amarnath Goud and Justice Arindam Lodh observed that orders were passed by the authorities in an arbitrary manner, which was driving taxpayers to file appeals by depositing 50% of the disputed taxes. The Court also ruled that a taxpayer or dealer cannot be made to suffer as a result of the tax authorities lax approach and that the officers must be more vigilant and tax-friendly.
The Bombay High Court (HC) has held that CIDCO can decide the Technical Qualification of the Bidder based on the opinion of Maharashtra State Electricity Transmission Company Ltd. ( MSETCL ). The Court held that it cannot sit as an Appellate Authority over the decision of the respondents/CIDCO. The evaluating committee consists of experts.
They are the best judge to consider compliance with technical and financial conditions.
The Madras High Court quashed an assessment order on the ground that there was no proposal in pre-assessment notice for levy of interest or penalty.
The Bench of Dr. Justice Anita Sumanth observed that “Admittedly, there was no proposal in the preassessment notice either for levy of interest or penalty. To this extent the impugned order has travelled beyond the scope of the show cause notice.”
In a recent decision, the Delhi High Court observed that the Income Tax Officer cannot By-Pass the decision of the Supreme Court in ‘Engineering Analysis’ by a Review Petition filed by the Revenue Department.
The Bench observed that as long as the judgment of the Supreme Court in Engineering Analysis (2021) is in force, the concerned income tax authority could not have sidestepped the judgment on the ground that the revenue department has filed a review petition against the said judgment.
“It is not a healthy practice to keep the investigation pending till eternity and keep the sword handing over the heads of the petitioners”.
The Court of Justice Virender Singh observed that “When there is no evidence to show that any device, mobile phone, or server having MT-5 software belongs to the petitioners, when the seizure of the server manifestly violets the procedure prescribed by law, when the procedure to retrieve data from the server is not in conformity with the law and creates doubt, when the data provided for analysis is itself unreliable, then all reports based upon such data, which has been heavily relied upon by the prosecution are liable to be rejected at the threshold especially when the prosecution has nothing to say against an allegation of bias, arbitrariness, hi handedness and also against the conduct of the investigators.”
In a recent judgement, the Bombay High Court(HC) allowed a refund of IGST paid on the import of Capital Goods under the Export Promotion Capital Goods Scheme (EPCG Scheme).
Further held that the refund shall be processed and paid together with interest, if any, within four weeks of Petitioner reversing the entries of availing of the subject credit and debiting the said amount from the credit ledger.
The Andhra Pradesh High Court has held that the department or Proper Officer has no power under section 70 of the Goods and Service Tax Act, 2017 to summon of Party to stop all GST Payments.
A two-member bench comprising Justices Durga Prasad Rao & Justice V. Gopala Krishna Rao observed that the impugned notice was issued under Section 70 (1) of the GST Act but not in the exercise of powers conferred under Section 83 of the GST Act and further held such a direction as beyond the jurisdiction of the 3rd respondent.
In a recent judgement, the Madhya Pradesh High Court (HC) refuses to cancel bail under the Excise Act, 1915 in absence of supervening circumstances.
It was observed that for cancelling bail once granted, the Court must consider whether any supervening circumstances have arisen or the conduct of the accused post grant of bail demonstrates that it is no longer conducive to a fair trial to permit him to retain his freedom by enjoying the concession of bail during the trial.
In a recent judgement, the Madhya Pradesh High Court(HC) Petition under section 11(6) of the Arbitration and Conciliation Act, 1996 is not maintainable when there was agreement on procedure for appointing an arbitrator.
A Coram comprising Justice Vivek Rusia observed that since the applicant and respondents had agreed to the agreement on a procedure to be followed for appointing an arbitrator or arbitrators and if the aforesaid procedure fails only then the applicant can approach the Court by way of a petition under Section 11(6), therefore, the applicant is required to exhaust the remedy available under the aforesaid SAROD Arbitration Rules for affordable redressal of dispute. The petition was dismissed.
The Madras High Court upheld penalty on the ground of non-compliance of Statutory GST requirements.
The Court of Justice M Sundar, observed that “This writ Court deems it appropriate to leave it at that and say that interference is refused but it is made clear that it cannot be put against the writ petitioner that there is ‘suppression of facts to evade tax’ within the meaning of Section 74(1) and it is only a case of tax not being paid within the meaning of Section 73(1).”
The Delhi High Court (HC) has held that immediate re-blocking of the Goods and Service Tax ( GST ) Input Tax Credit ( ITC ) ledger after 1 year is prima facie overreach of Rule 86A(2) ) of the Central Goods and Services Tax Rules, 2017.
A two-bench member comprising Justice Vibhu Bakhru and Justice Amit Mahajan observed that the same would amount to overreaching the provisions of Rule 86A(2) of the Central Goods and Services Tax Rules, 2017.
The Allahabad High Court upheld the conviction of an Income Tax Officer and observed that Income Tax Returns are not proof of Source of Income in a Corruption Case. The accused-appellant in the present matter is Om Prakash Vimal, who was an Income Tax Officer.
The Court of Justice Dinesh Kumar Singh observed that “ Once the accused-appellant accepted the bribe amount and he kept it in the drawer of the office table, which was of the accused-appellant, the recovery from the drawer of the office table of the accused-appellant, is recovery from the accused-appellant himself.”
Rejecting the claim of Maharashtra Industrial Development Corporation (MIDC), on recovery of tax the Bombay High Court observed that a pending writ petition cannot possibly be a clog on the title.
The Bench further observed that the argument has no appeal because if there is a tax payable on the transaction that the Petitioner proposes, and we note that the Petitioner is proposing to take a larger property within MIDC itself, then undoubtedly that tax would have to be paid depending on where the incidence of tax falls.
The Gauhati High Court quashed zimma petition on the ground of absence of proof that the seized areca nuts will not be used for human consumption. The Bench of Justice Mitali Thakuria, observed that “I find that interference of this Court is necessary.
Accordingly, the said order of Zimma petition is set aside and quashed, with a direction to the respondent to collect report from the SP regards to genuineness of claim that the seized areca nuts will not be used for human consumption and after verification of relevant documents etc, the SP will submit a report before the Trial Court.”
The Bombay High Court dismissed a writ petition directing to avail statutory appeal and observed that an Adjudicating Officer has jurisdiction to decide whether a particular activity attracts service tax.
The Finance Act 1994 provided complete machinery to challenge the order of the assessment in appeals, the last one being before the Supreme Court. Further, even assuming that the first appeal would lie in this court and not the Supreme court, this is not a case where writ jurisdiction needs to be entertained when the petitioner has a remedy of a substantive appeal.
The Madras High Court quashed assessment order for violation to take due process where Authority proposes to take adverse view in the matter of Reversal of Input Tax Credit (ITC).
The Court of Dr Justice Anita Sumanth observed that “In this case, admittedly, there has been no opportunity granted to the petitioner prior to the passing of impugned order and this is a fatal flaw. Order dated 20.01.2023 is set aside.”
In a recent judgement, the Calcutta High Court (HC) has held thata notice under 148 of the Income Tax Act, 1961 issued to a non-existing company despite having knowledge about its amalgamation is not valid.
A Coram comprising of Md. Nizamuddin, Justice observed that “the impugned notice dated July 27, 2022, is not tenable in the eye of law and all further steps under the said impugned notice also are not tenable in the eye of law.”
In a recent judgement, the Bombay High Court (HC) has held that an application to Sabka Vishwas (Legacy Dispute Resolution) SVLDR Scheme under the arrears category is allowable even if tax is paid since it covers interest and penalty.
It was observed that in the facts of the case, the show cause notice demanding the interest amount was issued to Petitioner under Section 75 of the Finance Act, 1994 and which related to the service tax dues, which have admittedly been paid by Petitioner.
Just because the Petitioner has paid the principal amount, it cannot be said that when a show cause notice has been issued for interest on the said amount, the Petitioner is not entitled to make a declaration under SVLDRS. The interest relates to the service tax amount and the SVLDR Scheme covers not only tax but also interest, and penalty.
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