This half-yearly round-up analytically summarizes the key Direct and Indirect Tax Judgments of the Supreme Court and all High Courts of India reported at Taxscan.in during the First half of 2024.
The Kerala High Court stated that delay or non-cooperation in proceedings before the Commissioner of Income Tax (Appeals) is not relevant for the Income Tax Appellate Tribunal’s consideration of a delay condonation application. The petitioner challenged a stay application filed in the appeal, citing grounds of delay.
The court noted that the delay or non-cooperation before the first appellate authority is not pertinent to the Tribunal’s consideration of delay condonation. The bench allowed the writ petition, quashing the true copy of the order passed by CIT (A), and condoned the delay of 156 days in filing. The case will be considered and disposed of on its merits after affording both parties an opportunity to be heard.
The Madras High Court held that the mere pendency of appellate proceedings does not prevent the initiation of prosecution proceedings under Section 276CC of the Income Tax Act, 1961. Vinayagam Sabarisanthanakrishnan filed a petition to quash proceedings against him for failing to file income tax returns for Assessment Year 2014-2015. The respondent initiated prosecution under Section 276CC after the petitioner failed to file returns despite a show cause notice. The petitioner argued that the delay was due to ill health and appealed against the assessment order, pending before the appellate authority. The Special Public Prosecutor argued that the petitioner’s non-filing was wilful. The Court ruled that pendency of appellate proceedings does not bar prosecution and refused to interfere, directing the lower court to complete the proceedings within three months.
The Kerala High Court directed the Income Tax authority to halt recovery proceedings until the stay petition against the Income Tax Assessment Order is decided. Baiju Lekshmanan, the petitioner, appealed against the assessment order and applied for a stay. The Income Tax Department noted a delay in filing the appeal.
A single bench, led by Justice Gopinath P, disposed of the writ petition by instructing the 2nd respondent to decide on the stay petition and delay condonation after hearing the petitioner. Recovery proceedings were to be suspended until then. The 2nd respondent was to consider the stay petition’s merits only if they decided to condone the appeal filing delay.
The Kerala High Court directed Alka Ventures Private Limited to deposit Rs. 2 crore as advance tax to maintain their appeal against the assessment order. The petitioner, engaged in real estate business, did not file a return of income for the assessment year 2016-17. An assessment order was issued under Section 147 r/w Section 144 and Section 144B of the Income Tax Act, assessing the petitioner at a higher rate of tax due to unexplained investments. Despite a previous writ petition challenging the assessment order being dismissed, the petitioner filed an appeal under the Faceless Appeal Scheme, 2021. The petitioner argued for exemption from advance tax payment citing Section 249 of the Income Tax Act, as subsequent years had loss returns accepted under Section 143(1). However, considering the substantial demand in the assessment order, the court directed the appeal to be heard on the condition that the petitioner deposits Rs. 12 crores against the demands.
The Bombay High Court upheld the Maharashtra Government’s authority to levy stamp duty on Delivery Orders (DO). The petitions challenged this imposition, claiming it infringed on the Union’s exclusive legislative competence regarding import and export across customs frontiers. The petitioner argued that DOs are redundant as goods are compulsorily unloaded for clearance, making them unnecessary. However, the court ruled that the state’s action falls within its legislative competence and does not encroach upon the Union’s domain.
The Kerala High Court remanded a GST case for re-adjudication after finding that the attachment of the petitioner’s bank account was done without considering their contention. The petitioner challenged a recovery notice for arrears of tax, claiming they had already paid for certain assessment years. The court, upon allowing the appeal, directed the State Tax Officer to reconsider the petitioner’s representation and issue fresh orders.
The Andhra Pradesh High Court directed the Municipal Corporation to refrain from taking coercive actions regarding a representation on waiver of interest on property tax arrears. The petitioner’s grievance stemmed from the non-consideration of their representation for the waiver of a penal amount. The court noted that the petitioner is entitled to a waiver by virtue of government orders and directed the Corporation to adjudicate on the matter along with the petitioner’s representation within four weeks from the receipt of the application made by the petitioner pursuant to the relevant government order.
The Delhi High Court directed the authorities to decide on the application for cancellation of Goods and Service Tax (GST) registration within two weeks, as mandated timelines were not adhered to. M/s Perfect Trader had filed the application for cancellation, but it remained pending beyond the stipulated 30-day period. The Court’s directive came in response to a petition filed by the petitioner, represented by Mr. Pranay Jain and Mr. Karan Singh, while the respondents were represented by Mr. Rajeev Aggarwal and Ms. Samridh Vats.
The Kerala High Court directed the consideration of a rectification application to rectify factual mistakes in an adjudication order within two months. M/S Bright Communications, the appellant, sought permission to rectify certain factual mistakes apparent in the adjudication order to reduce the total liability confirmed against them. The division bench comprising Dr. Justice A.K. Jayasankaran Nambiar and Justice Syam Kumar V.M. allowed the appeal, setting aside the Single Judge’s judgment to enable the Assistant Commissioner to consider the rectification application, waiving the period of limitation for consideration. Sri. Jose Jacob appeared for the appellant, and Smt. Preetha S. Nair appeared for the respondents.
The Delhi High Court directed the Competent Authority to dispose of the petition against provisional attachment under the CGST Act within two weeks. M/S Brijbihari Concast Pvt Ltd challenged the provisional attachment of their bank account under Section 83 of the CGST Act. Despite objections filed by the petitioner, the attachment was not disposed of. The court directed the Competent Authority to decide on the objections within two weeks and provide an opportunity for a personal hearing to the petitioner. The division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja disposed of the petition, allowing the petitioner to seek further remedies if aggrieved by any further order passed.
The Delhi High Court directed the adjudicating authority to dispose of the petition against the denial of Customs refund promptly, without considering the request to reassess the bill of entry. M/s Technology Next sought a refund of excess duty paid, but the Assessing Authority neither reassessed the bill nor issued a speaking order. Despite an appeal being allowed, the matter remained pending. The court directed the authority to expedite proceedings within six weeks and provide a personal hearing to the petitioner. The division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja disposed of the petition, allowing further remedies if the petitioner remains aggrieved.
The Delhi High Court dismissed charges of clandestine removal and under-valuation against KI, emphasising the need for tangible evidence rather than assumptions and presumptions. The Commissioner of Central Excise imposed a duty demand of Rs. 4,18,29,655, alleging clandestine removal and undervaluation of goods. The appeal was allowed by the Central Excise Service Tax Appellate Tribunal (CESTAT), prompting the Revenue to appeal under Section 35(G) of the Central Excise Act, 1944.
The Division Bench, comprising Justices Ravinder Dudeja and Yashwant Varma, emphasised the importance of concrete evidence, stating that charges cannot be sustained on assumptions alone. The decision prioritised justice and required the burden of proof to be met satisfactorily by the accusing party. The Court noted the absence of direct evidence linking the respondents to the alleged offences, emphasising the necessity of tangible evidence rather than assumptions.
The Madras High Court has allowed businesses to file returns for the period before the cancellation of GST Registration and settle tax dues with interest. Justice Anita Sumanth considered several writ petitions where businesses missed opportunities to restore cancelled registrations. The Court noted two options for restoration: filing under Section 30 within 30 days of cancellation or appealing to the Appellate Authority within three months. Referring to a previous order, the Court permitted the petitioners to file returns and settle dues within 45 days, reviving their registrations upon payment. The State was directed to instruct GSTN to facilitate these changes within the same timeframe.
The Orissa High Court stayed the tax demand pending the writ petition, provided the tax amount is deposited, due to the absence of the GST tribunal. M/s. Tushar Kanta Nayak challenged the 1st appellate order, contending they are not liable for tax and penalty. As the 2nd appellate tribunal is not yet constituted, the petitioner deposited 10% of the tax amount. The respondent argued against condoning the appeal delay. The court, chaired by Dr. Justice B R Sarangi and Justice M S Raman, ruled that the tax demand would be stayed during the writ’s pendency if the petitioner deposited the entire tax demand within four weeks.
The Delhi High Court directed the prospective cancellation of GST registration due to the absence of mention of retrospective effect in the Show Cause Notice (SCN). Aditya Polymers, a sole proprietorship, challenged the cancellation of its GST registration, effective from 01.07.2017. The SCN dated 11.12.2020 proposed cancellation due to non-filing of returns for six months, with suspension effective from the same date. The petitioner did not respond to the SCN. Subsequently, the registration was cancelled with retrospective effect from 01.07.2017. The petitioner appealed the order, arguing discontinuation of business from the Delhi location. However, the appeal was rejected as it was filed beyond the stipulated period. The petitioner contested the retrospective cancellation, citing lack of notice in the SCN. The court, composed of Justice Vibhu Bakhru and Justice Amit Mahajan, directed cancellation effective from 11.12.2020, not 01.07.2017.
The Madras High Court ruled that interest on late filing of GST Returns (GSTR-3B) is not applicable if GST is duly paid through Form GST PMT-06 on time. In the case involving Eicher Motors Limited, the court observed that GSTR-3B filing is not mandatory for GST payments, differing from other court judgments. Despite facing challenges in transitioning CENVAT credit to GST due to portal glitches, Eicher Motors ensured timely payment of GST dues into the Electronic Cash Ledger.
The court emphasized that tax payment via GST PMT-06 before the due date suffices, regardless of GSTR-3B filing. It ruled that interest only applies to amounts deposited after the due date. The court directed the cancellation of the petitioner’s GST registration from 11.12.2020, not retrospectively, quashing the recovery notice issued by the tax authorities.
The Delhi High Court instructed the Customs authorities to promptly decide on the petitioner’s request for the release or provisional release of seized goods. The petitioner claimed that despite multiple requests, the goods were not released. The respondents countered, stating the petitioner failed to appear after being summoned five times. The petitioner disputed receiving any summons and expressed willingness to appear before the authorities. The Division Bench directed the Competent Authority to decide on the request within ten days and instructed the petitioner and their counsel to appear before the Directorate General of Revenue Intelligence on 06.03.2024 at 03:00 PM.
The Delhi High Court upheld the Trial Court’s decision to frame charges against the petitioners in a case involving the seizure of containers containing contraband goods by the Directorate of Revenue Intelligence (DRI). The prosecution alleged that the petitioners were involved based on disclosure statements made by co-accused individuals. The first petitioner, a director of M/s Abetar Healthcare Pvt. Ltd., was accused of conspiring to import contraband goods into India. The second petitioner’s premises yielded documents related to M/s Goodlife Global, and WhatsApp conversations indicated involvement in discussing the consignment. Justice Navin Chawla affirmed the Trial Court’s decision, stating that charges were rightly framed against the petitioners based on the circumstances presented.
The Delhi High Court deemed the adjustment of a disputed tax demand against available refunds, without considering the application under Section 220(6) of the Income Tax Act, 1961, as arbitrary. The petitioner challenged the adjustment, stating that their rectification application for Assessment Year 2018-2019 had not been considered, and their stay application under Section 220(6) had not been addressed. The respondents argued that they were justified in making the adjustments, as the petitioner had not been declared as an “assessee in default.”
The Court observed that the respondents’ actions were arbitrary and unfair, as they had not considered the petitioner’s application under Section 220(6) before making the adjustments. They further noted that the respondents’ assumption about the application’s requirements was misconceived and untenable in law.
The Madras High Court directed the customs department to provisionally release areca nuts imported from Sri Lanka, seized under fraud suspicions. Vishwa Enterprise imported areca nuts from Sri Lanka but faced seizure despite complying with Indo-Sri Lanka Free Trade Agreement rules. The petitioner provided a certificate of origin and verification, but the goods weren’t released. The court noted the validity of the documents and lack of evidence linking the petitioner to fraud allegations. Hence, it ordered the provisional release of goods with certain safeguards: the petitioner must provide an indemnity bond covering 100% of duty payable if entitlement is disproved and a bank guarantee for 10% of duty from a nationalized bank, renewable annually until assessment conclusion. Upon compliance, the customs department must release the goods within one week.
The Madras High Court quashed a GST Assessment Order where authorities mistakenly debited Input Tax Credit (ITC) from the Electronic Credit Ledger (ECL) despite reversal in subsequent returns. The petitioner had erroneously claimed ITC for a car purchase but rectified it in the GSTR-3B return. However, the assessment order debited additional amounts from the ECL. The petitioner’s counsel highlighted the ITC reversal in the GSTR-3B return. The Government Advocate admitted the error.
After examining documents, the Court concluded the order was erroneous and remanded the matter for reconsideration. The petitioner was given two weeks to respond to the Show Cause Notice and provide relevant documents. The assessing officer was instructed to issue a fresh assessment order within two months of receiving the petitioner’s reply.
The Kerala High Court stayed recovery proceedings under an Income Tax Act assessment order until the final decision on the Cooperative Society’s application for stay against the ITAT order. Chirayinkeezhu Service Co-Operative Bank Ltd, the petitioner, faced an assessment order for the 2017-18 assessment year, with the appeal dismissed by the first Appellate Authority. The petitioner filed an appeal and a stay application before the ITAT, seeking to halt recovery of assessed amounts pending consideration of the delay petition and stay petition.
Justice Gopinath P directed the ITAT to decide on the stay and delay petitions within three months. Pending the outcome, any recovery proceedings against the petitioner were to be halted. Arjun Raghavan, T R Harikumar, and Pooja Pankaj represented the petitioner, while P G Jayashankar and Sri P G Jaya Shankar appeared for the respondent.
The Kerala High Court directed consideration of a stay petition against the denial of exemption under section 10(23C)(VI) of the Income Tax Act. The petitioner, Centre for Management Development, sought exemption but was denied due to delayed audit reports. Although the petitioner filed appeals for one assessment year, it hadn’t for others. The court instructed the respondent to promptly decide on the delay condonation application. It also allowed the petitioner to file appeals for other assessment years along with delay condonation and stay petitions. If the petitioner deposits 20% of the assessed amount and files the appeals, recovery will be halted until their disposal. Nitish Sathesh Shenoy and Sherry Samuel Oommen represented the petitioner, while Sri Jose Joseph appeared for the respondents.
The Kerala High Court directed the CBDT to consider an application filed under Section 119(2)(b) of the Income Tax Act, 1961. The petitioner, Kerala State Co-operative Employee Pension Board, sought exemption from income tax on interest income, but it was denied due to filing returns late. C A Jojo and Swathy S represented the petitioner, while Sri Jose Joseph appeared for the respondent. The petitioner administers the Kerala Cooperative Societies Employees Financing Pension Scheme 1994. Their income, exempt under Section 10(23AAA), comprises interest from cooperative employees’ pension contributions. Despite filing appeals, the petitioner awaits a refund of Rs. 12,15,204. The court instructed the CBDT to expedite its decision on the application within two months, while directing the respondent to promptly decide on the appeals.
The Kerala High Court’s single bench dismissed Jinny Jaison’s writ petition challenging the assessment order under the Kerala Value Added Tax Act (KVAT Act), citing the availability of statutory remedy. Jaison, a jewellery business owner, participated in a gold ornaments auction conducted by M/s. Manappuram Finance Ltd. Upon issuance of a notice under Section 25(1) of the KVAT Act alleging unaccounted sales and purchases, an assessment order was completed on 30.07.2016. Jaison appealed to the Deputy Commissioner, then to the Tribunal, which remanded the matter for a fresh assessment order. Meanwhile, the State Goods and Services Tax Department initiated proceedings against the seller, leading to notices issued to Jaison for input tax demands. Despite replies, an order was passed by the 2nd respondent demanding input tax on differential turnover. Justice Dinesh Kumar Singh concluded that Jaison has an alternative remedy under Section 55 of the KVAT Act to appeal before the appellate authority. Therefore, the court dismissed the writ petition, allowing Jaison to approach the appellate authority. Santhosh P Abraham and M Raj Mohan represented the petitioner, while Smt Jasmin M M appeared for the respondent.
In a recent ruling, the Calcutta High Court division bench held that pharma companies are entitled to claim cenvat credit on service tax paid to commission agents for sales promotion. M/S. Himadri Speciality Chemical Limited, engaged in manufacturing various products, availed input credit of service tax against commission paid to service providers acting as commission agents. The Department contested this, arguing that commission agents’ role couldn’t be considered an input service. However, the court relied on precedent and noted that commission paid was included in the assessable value of goods, justifying the credit availed by the respondent. Justices T.S. Sivagnanam and Supratim Bhattacharya made this determination, highlighting the precedent’s persuasive value.
The Bombay High Court quashed an order under the Income Tax Act, 1961, emphasising that revenue officers are bound by appellate authorities’ decisions. M/s. OM Siddhakala Associates challenged an order rejecting their application under Section 264 of the Act. The court cited precedent, stating that revenue officers must adhere to appellate authorities’ rulings. Justices K R Shriram & Dr Neela Gokhale directed Respondent No. 3 to reconsider the matter in accordance with the ITAT’s decision.
The Kerala High Court directed to stay proceedings under the Income Tax Act, 1961 until the final order of appeal is passed. Pallathukadavil Ibrahimkutty Abdul Kabeer, the petitioner, had filed an appeal against a revision order under the Income Tax Act. After the Principal Commissioner of Income Tax set aside the assessment order and directed a de-novo assessment, the petitioner appealed. The court ordered that further proceedings be kept in abeyance until the appeal’s final orders are issued. Harisankar V Menon, Meera V Menon, R Sreejith, K Krishna, Achyuth Menon, Parvathy Menon, and Padmanathan K V appeared for the petitioner, while Sri Jose Joseph appeared for the respondent.
The Kerala High Court dismissed an appeal against an assessment order under the Central Goods and Service Tax Act (CGST Act), 2017, citing the availability of statutory remedy. Sunil Kumar K, the petitioner, challenged the assessment order but instead of approaching the Appellate Authority under Section 107 of the GST Act, he invoked public law remedy under Article 226 of the Constitution of India. The court found this approach inappropriate and dismissed the writ petition. Bobby John and S Ajayghosh Kumar appeared for the petitioner, while Thomas Mathew Nellimoottil and Reshmita Ramachandran appeared for the respondent.
The Delhi High Court upheld an Income Tax Demand Order issued under Section 148(A)(D) of the Income Tax Act, 1961, against an individual for depositing Rs. 53.55 lakh in a bank account. The petitioner, claiming to be an agriculturist, argued against the order, stating that no reply could be filed due to lack of show cause notice service, thus violating natural justice. However, the court found that the notice was duly served, and the requirement of natural justice was fulfilled. The bench held that there was no reason to entertain the writ petition and upheld the order but left it open for the petitioner to take appropriate recourse in accordance with the law.
The Madras High Court invalidated a GST Assessment order citing discrepancies between GSTR-3B and GSTR 2A/2B, with the petitioner Subh Sri Agencies contesting the order. Despite the petitioner’s explanation regarding Input Tax Credit claims on customs duty, the tax demand was upheld. However, the court, acknowledging the petitioner’s plea and emphasizing fairness, quashed the order conditionally, requiring the petitioner to remit 10% of the disputed tax demand within two weeks. Additionally, the petitioner was granted the opportunity to provide necessary documents related to the Input Tax Credit claim, with the respondent directed to issue a fresh order within two months after verification.
The Madras High Court directed the Income Tax Officer (ITO) to grant access to the Income Tax Portal to Subramanian & Co, allowing them to upload necessary documents after their Chartered Accountant failed to inform them about income tax notices sent via email. The petitioner contested assessment orders for the assessment years 2018-2019 and 2019-2020, claiming unawareness of notices issued through the accountant-managed email. While the respondents argued the availability of an appeal, the Court, recognizing the petitioner’s lack of notice, remitted the issue for fresh adjudication. The respondents were instructed to open the portal for document upload within two weeks, followed by the completion of the reassessment within the same period. Consequently, the writ petitions were disposed of without any incurred costs, and connected miscellaneous petitions were closed.
The Madras High Court has granted relief to an agricultural society for filing Income Tax Returns (ITR) beyond the due date, citing delays in receiving the audit report and the impact of the COVID-19 pandemic. The Court addressed two writ petitions challenging the rejection of an application under Section 119(2)(b) of the Income Tax Act, 1961. The petitioner, an Agricultural Co-operative Credit Society, highlighted the mandatory statutory audit requirement under the Tamil Nadu Co-operative Societies Act, 1983. Despite completing the audit for the financial year 2018-2019 by September 30, 2019, the report was received only in December 2019, leading to a delay in filing the ITR until June 30, 2020. The Court, acknowledging the genuine hardships faced by the society, condoned the delay, citing precedents where similar leniency was shown. Consequently, the writ petitions were allowed, and the orders rejecting the application were quashed.
The Madras High Court recently voided an income tax assessment order issued amidst objections filed before the dispute resolution panel. Emphasizing that assessment orders shouldn’t be issued during panel proceedings, the court highlighted the case of a petitioner who filed objections after receiving a notice under Section 143(2) of the Income Tax Act. Despite objections filed, a draft assessment order was issued. The petitioner’s failure to inform the National Faceless Assessment Centre led to an impugned assessment order. However, the court noted the petitioner’s objections filed before the Dispute Resolution Panel and directed the assessing officer to await the panel’s decision before issuing a fresh assessment order.
The Delhi High Court Division Bench has reinstated the Goods and Services Tax (GST) registration of the petitioner, a partnership firm engaged in various businesses, after quashing an assessment order and show cause notice. The court found that the cancellation of registration retrospectively lacked adequate reasoning and violated principles of natural justice. It noted that such cancellations should be based on objective criteria and intended consequences, not merely due to non-filing of returns. The bench highlighted that retrospective cancellation would have prevented the petitioner from receiving the show cause notice, rendering the process unfair. Consequently, the court directed the Proper Officer to re-adjudicate the matter, providing the petitioner with a fair opportunity for a personal hearing.
The Bombay High Court ruled in favour of Gautam Hospitality Private Limited, declaring them eligible for benefits under the Sabka Vishwas (Legacy Dispute Resolution) Scheme. The petitioner’s eligibility was contested due to alleged non-quantification of their tax liability before the scheme’s cut-off date. However, the court found that the liability was indeed quantified based on documentary evidence provided by the petitioner. Declarations made on December 15, 2017, and March 26, 2019, admitted to the service tax liability, satisfying the scheme’s criteria. Justices G. S. Kulkarni and Firdosh P. Pooniwalla allowed the petitioner’s Writ Petition, quashing the Show Cause Notices issued by the revenue department and directing reconsideration of the petitioner’s application within six weeks.
The Delhi High Court Division Bench ruled that a photocopy of an agreement to sell cannot be used as a valid ground for adding to the assessee’s income. The case originated from an alleged agreement regarding land purchase. Despite the Assessing Officer’s reliance on the photocopy, the tribunal found the addition unsustainable. The High Court highlighted the lack of original documentation and the absence of supporting evidence. Considering the precedent that photocopies hold little evidentiary value, the court dismissed the revenue’s appeal, affirming that a photocopy alone cannot justify income tax additions.
The Bombay High Court has nullified an assessment order issued by the Deputy Commissioner of State Tax, citing a serious breach of natural justice principles and denial of a fair personal hearing to Cowtown Software Design Pvt. Ltd. and its Associate General Manager, Milind Karnik. The petitioners argued that the order, issued on August 18, 2023, violated Section 75(4) of the Central Goods and Service Tax Act, 2017, as they were not given an opportunity for a personal hearing despite explicitly requesting one.
The court concurred, emphasising that denial of a fair personal hearing violates fundamental principles of natural justice. Citing relevant precedents, the bench comprising Justice G. S. Kulkarni and Justice Firdosh P. Pooniwalla ruled in favour of the petitioners, quashing the assessment order and directing the tax authorities to provide a fair personal hearing and reconsider the matter within four weeks.
The Supreme Court of India dismissed an appeal, affirming that services aiding in goods exportation are not “intermediary services.” The case involved M/s. SNQS International Socks Private Limited disputing a Service Tax demand. The Customs, Excise And Service Tax Appellate Tribunal had upheld the demand, arguing the services were classified as “intermediary” under tax rules.
However, the Court ruled otherwise, emphasizing the lack of a service provider-recipient relationship and absence of consideration from vendors developed by the appellant. Justices B V Nagarathna and Augustine George Masih concluded that the appellant’s activities did not fit within the definitions of ‘Business Auxiliary Service’ or ‘Intermediary’.
The Supreme Court upheld a CESTAT order exempting services related to container supply in Special Economic Zones (SEZ) from service tax. The case involved Arkay Logistics Ltd, which provided various taxable services, including inter-carting for M/s Essar Steel Ltd. Despite the revenue’s claim of classification under “Cargo Handling Services,” CESTAT ruled in favour of exemption for SEZ operations. Justices Abhay S Oka and Ujjal Bhuyan affirmed CESTAT’s decision, stating no grounds for interference were presented.
The Supreme Court ruled that no coercive action can be taken against the Indian National Congress (I) / All India Congress Committee (INC) for a demand of Rs. 3,500 crore under the Income Tax Act, 1961, pending the disposal of a civil appeal. The Solicitor General assured no steps would be taken until the next hearing, scheduled for the second week of July 2024, citing pending adjudication and upcoming elections. Justices B V Nagarathna and Augustine George Masih issued the directive, emphasising no coercive measures should be taken against the appellant(s) until the specified date.
The Supreme Court of India dismissed a civil appeal by the state revenue department due to a delay of 142 days, exceeding the allowable limit under Section 62 of the Insolvency and Bankruptcy Code 2016. The appeal stemmed from a decision by the National Company Law Appellate Tribunal (NCLAT) involving Zicom Saas Pvt Ltd & Anr. The appellant claimed an amount in a corporate insolvency resolution process, which was partially accepted by the Resolution Professional. The Tribunal upheld the decision, stating that treating the appellant as an operational creditor did not violate Section 30(2)(b). The three-judge bench, including Chief Justice Dr. Dhananjaya Y Chandrachud, found the delay excessive for condonation under the law.
The Supreme Court ruled that a resolution applicant cannot withdraw or modify a resolution plan once approved by the Committee of Creditors, citing legal precedent. The decision stemmed from cross-appeals filed under Section 62 of the Insolvency and Bankruptcy Code, 2016, involving Metalyst Forgings Ltd. The Court emphasised that post-approval by the Committee of Creditors, withdrawal or modification of the plan is impermissible, highlighting reasons including delay, uncertainty, and the binding nature of approved plans on all stakeholders. Justices Sanjiv Khanna and Dipankar Datta set aside the NCLAT’s judgment, upholding the NCLT’s order and approving the resolution plan submitted by Deccan Value Investors L.P. and DVI PE (Mauritius) Ltd.
The Madras High Court recently instructed a petitioner, who contested incorrect TDS deduction by their LLP employer under Section 194H of the Income Tax Act, to file a statutory appeal within two weeks, along with necessary pre-deposit. The petitioner, claiming to be an employee, challenged the TDS classification as an agent. The Court directed filing the appeal disregarding the limitation issue and ordered its disposal on merits. The writ petition was disposed accordingly.
The Delhi High Court directed the disposal of an application for cancellation of Goods and Service Tax (GST) registration, which faced delays. M/S Asian Traders, the petitioner, sought cancellation effective from 30.05.2023. Despite multiple applications and replies, the disposal was pending. Justices Sanjeev Sachdeva and Ravinder Dudeja instructed the respondent to dispose of the petitioner’s application within four weeks. The Court clarified it hadn’t commented on the case’s merits.
The Bombay High Court deemed a Central Board of Direct Taxes (CBDT) notification invalid for extending beyond the Income Tax Act, 1961’s provisions. The petitioner challenged the Department of Revenue’s circular dated 28th September 2021, which restricted settlement commission applications to assessees eligible as of 31st January 2021. The Court, comprising Justices Dr. Neela Gokhale and KR Shriram, emphasized that retrospective legislation cannot affect vested rights. They noted that while the CBDT extended deadlines, it cannot introduce new eligibility criteria contrary to the Act. Additionally, they highlighted that retrospective provisions can only take effect after receiving the President’s assent.
The Delhi High Court stated that income tax additions concerning unsubstantiated share capital are eligible for deduction under Section 80-IC of the Income Tax Act, 1961. The petitioner-assessee challenged the Income Tax Settlement Commission’s order, focusing on additions related to share capital infusion by certain entities and the denial of Section 80IC deductions on income of INR 24.99 crores. The Division Bench of Justices Yashwant Varma and Purushaindra Kumar Kaurav held that the surrendered income doesn’t fall under Section 115BBE, as this provision didn’t exist during the assessment years in question. Therefore, the Court refused to grant reliefs sought by the Department to set aside the ITSC’s order granting immunity and allowing the petitioner’s claims related to share capital infusion and deductions under Section 80IC.
The Kerala High Court dismissed a writ petition challenging orders of a Tamil Nadu assessing authority due to lack of territorial jurisdiction. The petitioner sought to lift the attachment on a bank account in Kerala, but the Single Judge found it not maintainable as the assessing authority was in Tamil Nadu. The Division Bench upheld this decision, citing precedent and dismissing the writ appeal.
The Allahabad High Court criticized the Enforcement Directorate (ED) for not providing substance of accusation to summoned individuals, stating it’s not inclined to endorse sealed covers in judicial proceedings. The petitioner raised concerns about abuse of authority and violation of law in the investigation process, alleging it’s more for propaganda than genuine inquiry. The Court emphasized the need for accused persons to receive the substance of accusations for adequate preparation. Justice Mohd. Faiz Alam Khan stated that interference at this stage is unwarranted, as the petitioner’s status isn’t clear and no formal accusation has been made by the ED.
The Bombay High Court deemed the provisional attachment of bank accounts under the Customs Act illegal due to procedural lapses. Three gold bullion trading firms challenged the attachment, arguing it lacked a written order as mandated by Section 110(5) of the Customs Act. The court emphasized the necessity of a written order based on tangible evidence before attachment and declared the action unlawful. It directed banks to unfreeze the accounts, highlighting the importance of procedural compliance and valid grounds for such coercive actions. The court rejected the argument that no written order was necessary and underscored the need for adherence to statutory requirements. While allowing provisional attachment if done lawfully, the court emphasized strict compliance with due process.
The Delhi High Court directed the re-adjudication of an order rejecting Input Tax Credit (ITC) claim due to lack of consideration of the assessee’s reply. Ruchika Jain challenged a demand raised against her under Section 73 of the CGST Act, 2017. Despite furnishing detailed replies, the impugned order disregarded them. The Court held the order unsustainable, remitting the matter to the Proper Officer for re-adjudication. The Officer is instructed to provide necessary details/documents to the petitioner, who must furnish explanations. A fresh speaking order is to be passed after a personal hearing, in accordance with the law, within the prescribed period under Section 75(3) of the Act.
In a recent case, the Delhi High Court directed re-adjudication on an order demanding tax and penalty under the GST Act, citing an ‘unsatisfactory reply’. The court found the Proper Officer’s decision lacking proper consideration of the petitioner’s response and noted procedural irregularities. The petitioner, Knowledge Infrastructure Systems Pvt Ltd, challenged the order, highlighting that their detailed reply was disregarded. The court set aside the order and instructed the Proper Officer to re-adjudicate the matter, emphasizing the need for a thorough consideration of the petitioner’s submission and compliance with statutory requirements.
The Delhi High Court overturned the order denying Input Tax Credit (ITC) claim, citing it as unclear and unsatisfactory, directing re-adjudication. Tim Delhi Airport Advertising Private Limited challenged the order proposing a demand of Rs. 2,18,73,860.00 under the CGST Act, 2017. The court noted procedural defects and lack of consideration of the petitioner’s detailed reply. The Proper Officer’s decision was deemed inadequate, as it did not reflect proper consideration of the petitioner’s response. The court remitted the matter to the Proper Officer for re-adjudication, emphasizing the need for a thorough review of the petitioner’s submission and compliance with procedural requirements.
The Chhattisgarh High Court ruled that ice cream is not a luxury item and directed the GST Council to reconsider its decision to exclude small-scale ice cream manufacturers from the composition scheme. The court responded to a petition by the Small Scale Ice Cream Manufacturer Association, criticizing the decision as arbitrary and discriminatory. It noted the lack of reasoning for the exclusion and emphasized the socio-economic impact. The GST Council must review its decision within three months.
The Delhi High Court upheld the disqualification of a bid in an IRCTC tender due to discrepancies in UDIN certificates provided by the petitioner’s Chartered Accountant. The court dismissed the petition, stating that the discrepancies warranted bid rejection and that UDIN certificates are essential for verifying the authenticity of CA certificates. The bench noted that the petitioner failed to explain discrepancies in the UDIN certificates, leading to doubts about their accuracy.
The Bombay High Court ruled that writ jurisdiction cannot address grievances regarding alleged coercion by the GST Department to deposit tax amounts. The petitioner claimed coercion to deposit Rs. 2.5 crores at 3:30 a.m. on October 13, 2022, during a search and seizure action. However, the court found the claim unsubstantiated. The bench observed that determining coercion is a disputed question of fact not suitable for Article 226 proceedings. Consequently, the court declined to convert the writ petition into a civil suit and left the matter for consideration by the appropriate tax authority.
The Bombay High Court recently ruled that levying IGST on transportation services provided by a shipping line to an Indian importer is violative of Section 8 of the GST Act. The petitioner argued that such a levy was arbitrary and illegal. The court held that the levy on the importer, who is neither the service provider nor the receiver, contradicted the principles of ‘composite supply.’ This decision aligns with the Supreme Court’s ruling in Union of India Vs. Mohit Minerals Pvt. Ltd.
The Bombay High Court ruled that the Customs Department’s decision to withhold clearance of goods based on non-conformance with an opinion by the Customs Authority for Advance Ruling (CAAR) is unsustainable. The petitioner sought classification of the goods from CAAR, which confirmed it. Despite clearance from the Food Safety and Standards Authority of India (FSSAI), the Customs Department sought further analysis. The court observed that such actions undermined CAAR’s ruling and other clearances, deeming them unjustifiable.
The Kerala High Court Division Bench ruled that the Customs Department must collaborate with the assessee to draw samples from the imported urea consignment for testing in laboratories. The appeal was filed against the dismissal of a writ petition seeking provisional release of a consignment found non-compliant with urea content requirements. The court upheld the Single Judge’s decision, emphasizing its lack of expertise in disputing the Chemical Examiner’s report. The court directed the Customs Department to jointly draw samples with the appellant and send them to the Central Fertilizer Quality Control Unit, Faridabad, for analysis within a month.
The Punjab and Haryana High Court ruled that the assessee cannot be expected to constantly monitor the Income Tax Department’s e-portal for updates. In a case where a show cause notice was only posted on the Department’s e-portal without being sent to the petitioner’s email or otherwise, the court emphasized the importance of proper communication. The court stated that communication of notices must adhere to prescribed provisions, and notices cannot be presumed to be received simply by being posted on the e-portal. The court emphasized the need for adherence to principles of natural justice and granted the petitioner the opportunity to respond to the notice under Section 12A(1)(ac)(iii) of the Income Tax Act.
The High Court of Kerala granted a stay on Goods and Services Tax (GST) recovery proceedings against the Bar Council of Kerala in response to a petition filed by the council’s Honorary Secretary, Joseph John. Despite the council’s contention of being a statutory body exempt from tax payment, the Additional Commissioner issued an assessment order for tax recovery. The court, after considering arguments by Anil D Nair, Advocate, along with Aditya Unnikrishnan, and hearing from Advocate Sreelal Warrier, learned Senior Standing counsel for the Central Board of Excise, granted a stay on coercive steps until the next date of posting in response to the show cause notice and assessment order.
The Delhi High Court directed a reevaluation in a recent case due to a procedural error by the petitioner’s office, leading to missing documents regarding GST invoices and payment proof. Electra Power Transmission Systems appealed against the order disposing of their Show Cause Notice, citing errors in recording their appearance and uploading necessary annexures. Justices Sanjeev Sachdeva and Ravinder Dudeja set aside the order and instructed the petitioner to submit all relevant documents within two weeks for reevaluation. Advocates Rakesh Kumar, P.K. Gambhir, and Akul Mangal represented the petitioner, while Rajeev Aggarwal, ASC, along with other counsels, appeared for the respondent.
The Delhi High Court directed the revocation of GST registration cancellation in a recent case where MD Mustafa Raza petitioned against the retrospective cancellation due to delays caused by his father’s demise and a change in chartered accountant. The court noted deficiencies in the show cause notice issued by the respondent and considered the petitioner’s circumstances. Anurag Rajput, counsel for the petitioner, explained the delay due to the father’s death, while Harpreet Singh, counsel for the respondent, mentioned pending queries. Justices Vibhu Bakru and Amit Mahajan directed the Proper Officer to decide on the revocation application within two weeks.
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