This weekly round-up analytically summarizes the key stories related to the Supreme Court and High Courts reported at Taxscan.in from June 15, 2024 to June 21, 2024.
HIGH COURTS
A Division Bench of the Bombay High Court held that assessment order under Maharashtra Value Added Tax Act having been passed after expiry of four years from the end of the year containing period to which return relates, is not a valid order and quashed the same.
The bench noted that, even though the order was passed within the period of limitation, the issue of non grant of personal hearing was to be given further consideration. In view of Covid period no personal hearing was given.
The Bombay High Court upheld the entertainment duty of Rs.71,87,500/- imposed on the Film & Television Producers Guild f India ( FPGI ) for APSARA Awards, 2006, deleting the 100% penalty imposed by the appellate authority.
The Division bench of Justices KR Shriram and Jitendra Jain observed that the petitioner’s contention revolves around the interpretation of various definitions within the Act, which raised legal questions rather than suggesting any intention to evade duties. Therefore, in the court’s view, it was held that this case does not warrant the imposition of a fine or penalty by the authorities.
In a recent case, the Kerala High Court set aside an order passed under section 148(A) of the Income Tax Act, 1961 without providing the opportunity for a hearing. It was observed that the opportunity for personal hearing is explicit in Section 148 A (b) of the Act.
A single bench Justice Murali Purushothaman observed that the opportunity of a personal hearing is explicit in Section 148 A(b) of the Income Tax Act and it was evident that the petitioner was not given an opportunity of hearing before passing the order
The Kerala High Court has held that the delay in approaching the revision authority under the Income Tax Act is not condonable when assessee fails to show sufficient reason.
The division bench of Justice A.K. Jayasankaran Nambiar and Justice Syam Kumar V.M. has observed that since the Department is prevented from re-opening those assessments only on account of a statutorily prescribed period of limitation, the appellant assessee cannot be conferred with an undue advantage by permitting it to revisit the assessments for the assessment years 2007–2008 and 2009–2010.
The Andhra Pradesh High Court has held that proceedings initiated under section 129 of the Central Goods and Service Tax ( CGST ) Act, 2017 without providing an opportunity to hear to the assessee is invalid.
A division bench of Justice Subba Reddy Satti and Justice Venkata Jyothirmai Pratapa disposed of the writ petition by giving liberty to the Respondent Nos.1 and 2 to initiate proceedings against the Petitioner under Section 129 of CGST/APGST Act, 2017 within two weeks from the date of receipt of a copy of the order and conduct enquiry by giving an opportunity of hearing to the Petitioner and pass appropriate orders in accordance with governing law and rules.
The Rajasthan High Court, while dismissing the appeal filed by the Income Tax Department under Section 260A of the Income Tax Act, 1961 challenging the order passed by the Income Tax Appellate Tribunal ( ITAT ), upheld the decision on deleting the addition made on Capital Gain from sale of shares.
The bench of Justices Avneesh Jhingan and Shubha Mehta noted that the Assessing Officer had failed to substantiate claims of irregularities or contradictory evidence against the respondent’s submissions.
In a recent case, the Calcutta High Court dismiss writ petition on availability of appeal under Income Tax Act, 1961. The Court viewed that since an efficacious remedy in the form of appeal is available, the petitioner is granted liberty to file an appeal from the order.
A single bench of Justice Raja Basu Chowdhury viewed that the petitioner cannot be entitled to the reliefs as prayed for. However, taking into consideration the fact that an efficacious remedy in the form of appeal is available, the Court viewed that justice would be subserved if the petitioner is granted liberty to file an appeal from the order dated 25th March 2024.
A Division Bench of the Bombay High Court quashed an order by the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) that rejected an application by HDFC Bank to rectify a mistake, for being non-speaking.
The bench noted that, “While rejecting the application, the Tribunal not only has gone into the merits of the case but the stand of the Tribunal was irrelevant facts and arguments need not be included in the order, and those which are not relevant for arriving at the decision should be avoided and also decision need not be loaded with unnecessary information and legal knowledge of the author of the judgment.”
The Madras High Court ruled that the GST ( Goods and Services Tax ) assessment orders cannot be sustained. Thus, the court set aside the order leaving it to open for the department to initiate proceedings against the legal heirs of the deceased.
Taking into account the irrefutable evidence of the death certificate and the legal implications thereof, the High Court ruled that the impugned assessment orders could not be sustained. The court set aside these orders, leaving open the option for the respondent- The Deputy Commercial Tax Officer to initiate proceedings against the legal heirs of the late Mr. Munusamy Nagabushanam.
In a recent ruling, the Madras High Court set aside and ordered the reconsideration of a GST ( Goods and Services Tax ) assessment involving unreported e-way bills in the GSTR-1 ( Goods and Services Tax Returns ) statement. The petitioner agreed to remit an additional 5% pre-deposit, supplementing the 10% already paid
The bench of Justice Senthilkumar Ramamoorthy noted that the impugned order related to two e-way bills that were not reported in the GSTR 1 statements. Given the petitioner’s submission of unawareness regarding the proceedings, the court found it just to provide another opportunity to contest the tax demand, subject to certain conditions.
The Allahabad High Court has quashed an order dated February 22, 2023, and a subsequent appeal order dated January 16, 2023, both issued under Section 74 of the Uttar Pradesh Goods and Services Tax ( UPGST ) Act, 2017.
Justice Shekhar B. Saraf, upon examining the material on record, agreed with the petitioner’s argument. The bench referenced the case of M/s Shree Sai Palace v. State of U.P., wherein it was held that any adverse order under Section 74 of the Act necessitates a mandatory hearing under Section 75(4). This case also reinforced that the use of “or” in Section 75(4) implies a fundamental requirement to provide an opportunity for a personal hearing, ensuring procedural fairness and natural justice.
The Allahabad High Court has upheld the decision of the Income Tax Appellate Tribunal ( ITAT ) to delete additions made under Section 14A of the Income Tax Act. The court dismissed the appeal filed by the Commissioner of Income Tax-II, Kanpur, against the U.P. State Industrial Development Corporation Ltd. The appeal was based on three questions of law.
The bench of Justices Saumitra Dayal Singh and Donadi Ramesh concurred with the ITAT’s findings. The court specifically referred to the decision of the Supreme Court in Commissioner of Income Tax, Mumbai vs. Essar Teleholdings Ltd., to answer the first question in the negative.
The Madras High Court ruled that the GST ( Goods and Services Tax ) order without stating clear reasons for the rejection of the taxpayer’s reply cannot be sustained. The court stated that the order is ‘unreasoned’.
The bench of Justice Senthilkumar Ramamoorthy observed that the impugned order lacked any reasoned explanation and merely stated that the petitioner’s replies were not accepted. Therefore, the court concluded that such an unreasoned order could not be upheld.
The Madras High Court set aside the GST ( Goods and Services Tax ) order ignoring the reply submitted by the petitioner with regards to the 8 defects found during the GST inspection. The court remanded the matter for reconsideration.
The bench of Justice Senthilkumar Ramamoorthy specifically observed that the petitioner had provided comprehensive explanations, such as addressing discrepancies between their GSTR 3B and GSTR 1 statements, yet the orders merely stated the replies were inadequate without substantive discussion. Consequently, due to the failure to sufficiently consider and justify the rejection of the petitioner’s responses, the court concluded that the impugned orders could not be upheld.
The Himachal Pradesh High Court has reversed the rejection of manual GST refund applications for the financial years 2017-2018, 2018-2019, and 2020-2021 and mandated a fresh consideration under Rule 97A of the Goods and Services Tax (GST) Rules. The court’s decision came in response to a writ petition challenging the refusal to consider GST refund claims for the financial years in question.
The division bench of Chief Justice M.S. Ramachandra Rao and Justice Satyen Vaidya observed that the department could not disregard the provisions of Rule 97A of the Central Goods and Services Tax Rules. This rule clearly allows for the manual filing of refund applications. The court further held that departmental circulars cannot supersede statutory rules framed by competent authorities.
The Kerala High Court stayed the order imposing 5% GST (Goods and Services Tax) on ‘Malabar Porota’ for next two months. A division bench of the High Court stayed the order of the single bench.
The Single bench ruled that Malabar ‘Parota’ should be classified as ‘bread’ and fall under Heading 1905 for taxation purposes. This decision goes against the earlier rulings of the Authority for Advance Ruling ( AAR ) and Appellate Authority for Advance Ruling ( AAAR ).
Recently, a Division Bench of the Jharkhand High Court has ruled that Goods and Services Tax officers should not compel individuals summoned under the Goods and Services Tax (GST) Act to give statements after office hours.
The division bench, including Acting Chief Justice Shree Chandrashekhar and Justice Navneet Kumar, stated, “In our opinion, the proper officer under the Goods and Services Tax should not be requiring or forcing or coercing a person so summoned to give a statement after the office hours.”
The Madras High Court has remanded a GST order for reconsideration due to the absence of a mandatory personal hearing, as required by Section 75(4) of the Goods and Services Tax ( GST ) Act.
Justice Senthilkumar Ramamoorthy emphasised the mandatory nature of personal hearings under Section 75(4) of the GST Act. The court noted that the absence of a personal hearing in cases where an adverse order against the taxpayer is proposed violates procedural fairness.
The High Court of Kerala issued a direction for the expeditious consideration of delay condonation and a stay petition in an income tax appeal, effectively halting recovery proceedings.
Justice Murali Purushothaman mandated that the entire exercise be completed within a period of two months from the date of receipt of a copy of this judgment.
The Delhi High Court has directed the proper officer to expedite the processing of the GST refund under Section 54 of Central Goods and Service Tax Act, ( CGST ) 2017, due to delays in its issuance.
The division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja referred to Section 54, subsection (7), which mandates that a proper officer shall pass an order within 60 days from the date of receipt of an application complete in all respects.
The Kerala High Court has set aside an order passed under Section 73 of the Goods and Services Tax ( GST ) Act, directing the department to pass fresh orders after affording an opportunity of hearing to the petitioner.
The Single Bench of Murali Purushothaman further observed that “Section 75(4) of the KGST/CGST Act provides that an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person. The object of the provision is to ensure a fair determination of tax.”
The Kerala High Court has remanded an order due to a violation of natural justice, citing the non-receipt of notices under Section 250 of the Income Tax Act, 1961, which were sent to the wrong email ID.
The Single Bench of Justice Murali Purushothaman, concurred with the petitioner’s argument that the order was issued without prior notice to the petitioner. Consequently, the order was set aside, with a directive to the Commissioner of Income Tax ( Appeals ) to review the appeal after providing proper notice to the petitioner via email.
The Income Tax Commissioner (Appeals) has taken technical view in dismissing the application to condone the delay and in consequently dismissing the appeal. The Kerala High Court stayed the income tax recovery proceedings during the pendency of the appeal, citing sufficient reasons recorded in the delay condonation application.
the single member bench of Kerala High Court Comprising Murali Purushothaman found that the petitioner has stated sufficient reason in the application for condonation of delay.
In a case involving the 20-days delay in filing the appeal, the Madras High Court directed the GST ( Goods and Services Tax ) authorities to condone the delay of 20 days. The court set aside and remanded the order rejecting the appeal.
After reviewing the appellate order and considering the submissions, the bench of Justice Senthilkumar Ramamoorthy found merit in the petitioner’s contention regarding the slight delay in filing the appeal. Recognizing the interest of justice, the Madras High Court set aside the appellate order and remanded the matter to the appellate authority.
The Karnataka High Court ruled that the income tax dues pending against borrowers is not a bar for registering property purchased in an auction conducted by the Canara Bank. The court directed the sub-registrar to issue the sale certificate. The high court heavily criticised the sub-registrar and directed the state government to issue a circular with regards to this issue.
Justice M. Nagaprasanna observed that the Sub-Registrar cannot refuse to register a document unless there is a violation under Rule 171 of the Rules. Therefore, the State Government needs to issue a circular based on Rule 171 and the Apex Court’s decision to ensure that people are not unfairly denied document registration. The actions of some Sub-Registrars are causing unnecessary court cases. If a document meets legal requirements, any delay in registration is the fault of the Sub-Registrars, who may face penalties when such cases come before the Court.
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