This weekly round-up analytically summarizes the key stories related to the Supreme Court and High Court reported at Taxscan.in from July 6, 2024 to July 12, 2024.
SUPREME COURT
In a significant development, the Supreme Court of India has dismissed a Special Leave Petition ( SLP ) against order of the Bombay High Court, which had set aside the invocation of Section 438 of the Criminal Procedure Code ( currently Section 482 of BNSS ) against a Summons under Section 60 of the Central Goods and Services Tax ( GST ) Act, 2017
The Supreme Court disposed of the Special Leave Petition and any pending applications associated with the case. The courtâs decision reaffirms the legal position regarding the non-applicability of anticipatory bail in cases involving summons under Section 69 of the CGST Act, 2017.
The matter was heard by a Vacation Bench of Justice J.B. Pardiwala and Justice Ujjal Bhuyan.
The Supreme Court of India, after a long vacation of 50 days, has taken up the petition of Newclick against the income tax demand. The apex court issued notice to the income tax department.
The Delhi High Court bench of Justices Yashwant Varma and Purushaindra Kumar observed that âAs we go through the same, we find that the ITAT has duly applied its mind to the issue of a prima facie case.â Thus, the court dismissed the writ petition and thus, the stay of income tax demand was also dismissed.
HIGH COURTS
The High Court of Delhi dismissed the petitions filed by M/s. Aryan Cargo Express Private Limited and its parent company M/s. Aryan Cargo and Express Logistics Private Limited, directing them to pay the requisite late fees for the filing of belated annual returns and balance sheets. The court held that the companies must comply with the prescribed fees to restore their names in the Registrar of Companies.
The single bench of Justice Subramonium Prasad emphasised that the courtâs previous orders did not extend the benefit of the condonation schemes to the Petitioners. The bench noted that while the court had restored the companiesâ names, it had explicitly required the payment of requisite fees for filing overdue documents.
In a recent case, the Karnataka High Court upheld the interest allowed on refund of excessively paid sales tax. The Court rejected the petition as there was no merit in any of the contentions raised by the petitioner.
A division bench of Justice S G Pandit and Justice G Basavaraja observed that no question of law would arise for consideration in terms of Section 23(1) of the Act. Under Section 23(1) of the Act, it is open for the petitioner to prefer petition to the High Court against the order of the Tribunal on the ground that the Tribunal has either failed to decide or decided erroneously any question of law.
In a recent case, the Calcutta High Court allowed writ petition as temporary respite to taxpayers awaiting the operationalization of Goods and Service tax ( GST ) Appellate Tribunal.
The single bench of Justice Raja Basu Chowdhury viewed that justice would be sub-served if the petitioner is directed to deposit with the GST authorities the sum equal to 5 % of the remaining amount of tax in dispute, in addition to the deposit already made under sub-section (6) of Section 107 of the said Act. Since the parties agree that the writ petition can be disposed of based on the records available before the Appellate Authority, the court directed the petitioner to enclose all documents filed before the Appellate Authority in a compilation, in the form of a paper book.
The Kerala High Court has viewed that the doctrine âhe who heard must decide or he who decides must hearâ applies to statutory authorities. The court held that if the income tax officer who hears the case does not render the decision which is gross violation of the principles of natural justice.
The single bench of Justice Murali Purushothaman has observed that Section 148A of the Income Tax Act provides for the opportunity to be heard by the assessee. The court quashed the order, which was not passed by the officer who heard the petitionerâs order.
In a significant ruling, the Kerala High Court held that the time limit for furnishing Goods and Services Tax ( GST ) returns for September month to be treated as 30th November in each financial year with effect from 1.07.2017. Further viewed that in respect of the petitioners who had filed their returns for September on or before 30th November, their claim for ITC should be processed, if they are otherwise eligible for ITC.
In light of precedent, the Single bench of Justice Dinesh Kumar Singh held that the time limit for furnishing the return for September is to be treated as 30th November in each financial year with effect from 01.07.2017, in respect of the petitioners who had filed their returns for September on or before 30th November, and their claim for ITC should be processed, if they are otherwise eligible for ITC.
The Gujarat High Court quashed the Income Tax reassessment proceedings initiated after 4 years on deduction claim under Section 80IA(4)(iv) of the Income Tax Act, 1961.
the division bench of Justices Bhargav D. Karia and Niral R. Mehta observed that the income tax notice for reopening issued beyond the period of 4 years cannot be sustained. It was added that âIn that view of the matter, it is not necessary to examine the rival contention with respect to validity or otherwise of the claim for deduction under section 80IA(4)(iv) of the Act.â Subsequently, the challenged income tax notice was set aside and quashed.
Capital Gain deduction under Section 54 of Income Tax Act was provided by the Gujarat High Court based on seized evidence despite non-disclosure of cash transactions. The court reversed the decision of the Interim Settlement Board ( previously Settlement Commission ).
The bench of Justices Bhargav D. Karia and Niral R. Mehta stated that the assessee is entitled to the deduction under Section 54 of the Income Tax provision for the cash transaction involved in the sale and purchase of the property. This entitlement holds valid even if the petitioner did not disclose the cash portion of the transaction in the income tax return or deposit the amount into a bank account.
The Allahabad High Court bar association has announced strike today due to the insulting remarks of the Judges on the lawyers. The Bar has decided to boycott the work today. It was conveyed through a letter to the Chief Justice of the Allahabad High Court.
The Bar decided to abstain from the judicial work on 10th July 2024. For further action, it was informed that the Executive Committee of HBA will again meet at 05:00 pm on July 10. The bar also clarified that the member of the advocate act contrary to the resolution passed by the bar will be canceled after giving him an opportunity by issuing a show cause notice.
In a recent ruling, the Madras High Court set aside the VAT ( Value Added Tax ) order issued after 9 years post Show Cause Notice ( SCN ) issued in the year 2015. The matter was remanded for reconsideration.
The bench of Justice Senthilkumar Ramamoorthy osberved that âThe documents on record indicate that no hearings or other developments took place between 2015 and 11.03.2024. Solely on this ground, re-consideration is necessary by providing a reasonable opportunity to the petitioner.
In a significant ruling, the Karnataka High Court directed authorities to refund an amount encashed from a petitioner, who is engaged in the manufacturing and trading of sports goods, due to the non-constitution of the Goods and Services Tax Appellate Tribunal (GSTAT).
It was held by the Single Bench of Justice S R Krishna Kumar that, âIn view of the aforesaid facts and circumstances, I deem it just and appropriate to dispose of this petition by directing the respondent to refund the aforesaid amount of Rs.11,21,840/- encashed by the respondent on 01.02.2024 within a period of one month from today.â It was further noted that, âimmediately upon the respondent refunding the aforesaid amount.
The Madras High Court allowed the prominent Cement company Ramco Cements against the GST orders issued on multiple issues including the taxability of the sale of second hand or old vehicles.
The bench of Justice Senthilkumar Ramamoorthy found that the show cause notice did not raise issues related to staff welfare expenses and ineligible ITC under sub-section 5 of Section 17 of the applicable GST laws. Consequently, the principles of natural justice were contravened. The show cause notice did address the non-reversal of ITC for exempted supplies, but the impugned order inconsistently concluded that the sale of old/used vehicles is taxable, which is contradictory as argued by the assessee-petitionerâs counsel.
The Allahabad High Court set aside a tax demand order against M/S Jain Medicals, citing the denial of an opportunity for an oral hearing as mandated under Section 75(4) of the U.P. GST Act, 2017.
The bench of Justices Saumitra Dayal Singh and Anish Kumar Gupta observed that âan 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.â
The Madras High Court directed customs to handle the re-export request of mishipped adult toys found in imported lab bottles. The writ petition sought disposal of representations for re-exporting the toys.
the bench of Justice Senthilkumar Ramamoorthy of the Madras High Court disposed of the matter directing the Customs Officers / Department to consider and dispose of the representation for re-export within eight weeks.
The Gujarat High Court dismissed the appeal filed by the revenue citing that there is no base for initiating proceedings under Section 153C of the Income Tax Act. The court stated that an unsigned excel sheet without corroborative evidence fails as evidence. The bench of Chief Justice Sunita Agarwal and Justice Aniruddha P. Mayee observed that the Income Tax Assessing Officer failed to clarify the documentâs nature while initiating action under Section 153C of the IT Act of 1961, disregarding the lack of disclosure of statements from persons referenced in the search related to seized materials, thus rendering the proceedings invalid
In a recent ruling, the Allahabad High Court, in a petition seeking to quash the House Tax Bill directed to file a representation before the UPMC ( Uttar Pradesh Municipal Corporation ) Zonal officer.
The High Court, with Justices Brij Raj Singh and Vivek Chaudhary, allowed the petitioner to submit a detailed representation to respondent no.4, Zonal Officer, Zone II, Municipal Corporation, Aishbagh, Lucknow, including all grievances, along with a copy of the writ petition, annexures, and supporting documents, within one week. Additionally, a certified copy of the court order should accompany the submission.
The Gujarat High Court has ruled that admission fees paid to a charitable educational trust can be considered a corpus donation and are thus eligible for exemption under Section 11(1)(d) of the Income Tax Act, 1961, if there is no evidence to suggest it was a capitation fee.
After examining the case, the bench of Justices Bhargav D. Karia and Niral R. Mehta found that the Tribunalâs decision lacked a detailed analysis of the facts and the trustâs previous practices.
The delay tactics of the GST payer- Resort company was criticised by the Allahabad High Court. After hearing the submissions of the respondentâs counsel, the court had made strong disapproval on the time-buying nature of the assessee.
From the reading of the order, the High Court bench of Justices Shree Prakash Singh and Mrs. Sangeeta Chandra observed that the petitioner was initially issued a notice under Section 73(8) for the deposit of an amount based on wrongly claimed Input Tax Credit ( ITC ).
A Division Bench of the Bombay High Court has deleted the penalty against the Film & Television Producers Guild of India ( FPGI ), while holding that no intention is attributable to evasion of tax, when the issues are debated.
The Bombay High Court Division Bench of Justices Jitendra Jain and K R Shriram deleted the Fine / Penalty of Rs.71,87,500/- confirmed by the Appellate Authority. However, the High Court also upheld the entertainment duty while deleting the penalty due to lack of proper statutory reference for the penalty in the original order and the debatable nature of the issue; further, no evidence suggested that the FPGI intentionally evaded tax.
The Allahabad High Court allowed the company to contest the DGGIâs bank account attachment under Section 83 of the GST Act granting a two â week time to file the objections, where it was alleged that department only served the Form GST DRC-22 to the bank and not to the assessee.
The High Court bench of Justices Arun Kumar Singh Deshwal and Alok Mathur noted that the counsel received a copy of order dated 08.03.2024 from respondent no. 4 and permitted to file objections which may be decided in terms of Rule 159(5) of the GST Rules.
The Delhi High Court has ruled that the Income Tax Settlement Commission ( ITSC ) is not devoid of jurisdiction to make an addition during settlement proceedings, as clearly stated in the settlement terms.
Justices Yashwant Varma and Purushaindra Kumar Kaurav noted that the settlement provisions aim to balance voluntary income disclosure by the assessee with the assessment of income that has escaped.
In a recent case, the Calcutta High Court held that in the absence of a cross-border insolvency framework, Indian courts do not recognize or enforce foreign insolvency judgements from non-reciprocating countries, such as the U.S., and thus are not obligated to stay ongoing suits due to such foreign proceedings.
The single bench of Justice Shampa Sarkar concluded that only orders from reciprocating countries like the UK are executable in India under Section 44-A of the CPC. Further, it was held that the application filed under Section 45 of the Arbitration Act was at the stage of hearing and an injunction was not issued by the Trial Court yet.Â
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