This weekly round-up analytically summarizes the key stories related to the High Court reported at Taxscan.in during the previous week from November 15 to November 20, 2021.
The Karnataka High Court allowed the adjustment of excess amount paid as pre-deposit under the SLVDR Scheme. The single bench of Justice S.R.Krishna Kumar ruled that merely because a separate declaration will have to be necessarily filed by the assessee for each case, in the absence of a specific bar/prohibition for consolidating/clubbing two cases and by making mutual adjustment of the disputed amounts deposited by the assessee either in the SVLDRS or its Rules, it cannot be said that mutual adjustment in respect of the very same assessee and in relation to the same subject matter and the same commodity, albeit for two different periods of time is impermissible, particularly having regard to the aims and objectives of the scheme, which is to provide amnesty to the assessee and resolution of disputes between the assessee and the department.
The Punjab and Haryana High Court granted Bail to persons accused of submitting fake documents on the GST online platform for falsely utilizing Input Tax Credit (ITC). “Without commenting on the case’s merits, given the investigation stage, the period of incarceration already undergone, and the circumstances peculiar to this case, the petitioners make a case for release on bail,” the single-judge bench of Justice Anoop Chitkara said.
The Calcutta High Court held that cancellation of GST registration of businesses on hyper-technical grounds adversely impacts employment and revenue. The single-judge bench of Justice Md. Nizamuddin noted that it is not a case of tax evasion or causing revenue loss to the Government rather petitioner’s activity of carrying on the business which cannot be called illegal is creating revenue for the State as well as in helping the State to solve the problem of unemployment a little bit and such type of drastic action in the facts and circumstances of the case by canceling the registration of the petitioner on such hyper technical ground will not help the State rather it will cause revenue loss to the State as well as aggravate unemployment problem in the State which will be a social problem in the society.
In a major relief to Swiggy, the Karnataka High Court allowed the GST Refund as payment made to the GST Department as a goodwill gesture during an investigation cannot be taken as self-ascertained tax. The single-judge bench of Justice Sunil Dutta Yadav held that a time limit could be prescribed for completion of the investigation and on failure to do so the court could consider a request for a refund. It must be noticed that the court does not desire to place any sort of fetter on the power of investigation and it would be unwise to impose any kind of time limit, for it is the authority which should be permitted to complete its investigation in a manner as may be desired by it as is permissible.
In a major relief to Celestial Aviation Trading, the Delhi High Court allowed the Nil rate of withholding tax under the India-Ireland Double Taxation Avoidance Agreement (DTAA) in respect of aircraft leased to Air India Limited (AIL).
The division bench of Justice Vipin Sanghi and Justice Jasmeet Singh held that which the Assessing Officer is obliged to take into consideration, while considering an application under Section 197 of the Act, have not at all been adverted to. The reasons proceed only on the basis of the liability, if any, which may, or may not, be fastened upon another group company, i.e. CAT-9. That, by itself, cannot be a justification for denying the “Nil” rate certificates to the petitioner. The reasons now brought out do not form part of the reasons contained in the impugned order and the respondents are precluded from citing those as reasons to justify the impugned order issued to the petitioner.
The Karnataka High Court while directing the recomputation of the Sales Tax held that the ‘Common Parlance Test, ‘Marketability Test; ‘Popular Meaning Test’ are tools for interpretation to arrive at a decision on the proper classification of tariff entry.
The Division Bench of Justice S. Sujatha and Justice Ravi V Hosmani observed that the ‘common parlance test, ‘marketability test; ‘popular meaning test’ are all tools for interpretation to arrive at a decision on the proper classification of a tariff entry. The test, as to what a common man viewing or dealing with the article will understand it to be, would be relevant.
The Orissa High Court while quashing the show cause notice ruled that the reopening of Income Tax Assessment for a mere change of opinion is invalid. The division bench headed by the Chief Justice Dr. S. Muralidhar and Justice A. K. Mohapatra ruled that the AO had applied his mind to the documents and records produced before him by the Assessee. This included the balance sheet, P & L Accounts, and other relevant documents. It is plain, therefore, that the reopening of the assessment was not based on any new material.
The Delhi High Court allowed the Income Tax Exemption to Charitable Society running printing presses and using the profit generated for charitable purposes. The division bench of Justice Manmohan and Justice Navin Chawla noted that the assessee/society is running a printing press and publishing a newspaper. The profit so generated is used for charitable purposes and apparently, there is no profit motive in the activities of the assessee. As such it cannot be said that the assessee is involved in any trade, commerce, or business. Consequently, the mischief of Proviso to Section 2(15) of the Act is not attractive.
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