This weekly round-up analytically summarizes the key stories related to the High Court reported at Taxscan.in during the previous week from October 18 to October 23, 2021.
The Gujarat High Court Gujarat HC refused the Anticipatory Bail to Directors of Company allegedly involved in wrongfully availing ITC on the basis of fake bills. The single-judge bench of Justice Vipul M. Pancholi while refusing the anticipatory bail said that if the applicants are enlarged on anticipatory bail then, there are all chances that the applicants will tamper with the evidence and witnesses and at the time of trial, the applicants would not be available.
The Kerala High Court while granting the refund to the taxpayer ruled that all the technical glitches that may occur in between, shall not stand in the way of ultimate relief of the grant of refund to the petitioner.
The single-judge bench of Justice Bechu Kurian Thomas directed the respondent authority to refund the amount of Rs.12,26,064/-, due to the petitioner as a refund, within a period of 30 days from the date of receipt of a copy of this judgment. All the technical glitches that may occur in between, shall not stand in the way of ultimate relief of the grant of refund to the petitioner as otherwise the sanctity of the whole scheme of section 129 of the State Goods and Services Tax Act will lose the confidence of the assessees to deposit the amount as contemplated under section 129 of the State Goods and Services Tax Act, will be affected.
The Gujarat High Court made scathing remarks against the department for not implementing the judgment to allow the filing of Form Trans 1 for claiming transitional credit.
The division bench of Justice J.B.Pardiwala and Justice Vaibhavi D.Nanavati said, “We are disturbed by the fact that it has been more than two years but our directions have not been complied with. All that is required to be done is to open the portal and allow the original writ applicants to file a declaration in Form GST TRAN 1 and GST TRAN 2 so as to enable them to claim the transitional credit of the eligible duties in respect of the inputs held in stock on the appointed day in terms of Section 140(3) of the Act.”
The Bombay High Court has refused the refund of Value Added Tax (VAT) worth Rs. 95.42 Lakhs due to an unreasonable delay in filing the Petition.
The division bench headed by Chief Justice Dipankar Dutta and Justice M.S.Karnik held that as a general rule that if there has been unreasonable delay the court ought not ordinarily to lend its aid to a party by the extraordinary remedy of mandamus. Their Lordships then considered the following submission made by learned counsel ‘that assuming that the remedy of recovery by action in a civil court stood barred on the date these applications were made that there would be no reason to refuse relief under Article 226 of the Constitution.
The Madras High court held that proceedings of bank attachment will not stand in the way of the revenue taking resort to Section 83 of CGST Act which pertains to the Attachment of Property, yet again.
The single bench of Justice Anita Sumanth ruled that the opinion of the Senior Intelligence Officer, in this case, is far more cryptic, revealing total non-application of mind and merely repeating what Principal Additional Director General has stated in his request for sanction. The impugned order of attachment is set aside. The respondents will complete the process of assessment within a period of six weeks.
The Madras High Court held that the writ petition in High Court is not maintainable if Statutory Alternative Remedy is available under CGST Act.
The single-judge bench of Justice M.Sundar held that the argument that Section 19(4) reversal of ITC can be only for 5% and above of tax will not qualify as an excess of jurisdiction and it would at the highest quality only as an error. To be noted, this Court is not expressing any view as it is relegating the writ petitioner to the alternate remedy of revision/appeal. Even if this argument is to be accepted, it would only qualify as an error and it may not qualify as an excess of jurisdiction.
The Madras High Court quashed the order for cancellation of GST Registration as Show Cause Notice did not mention the date and time of the personal hearing.
The single bench of Justice M.Sundar ruled that the impugned order being order for cancellation of GST Registration d is set aside solely on the ground that SCN which preceded the same has not been issued in the prescribed template i.e., REG- 17 under Rule 22(1) of TN-GST Rules, as it does not mention the date and time of the personal hearing.
The Madras High Court directed the tobacco dealer to Appellate Authority as per the Rule of Alternate Remedy.
The single bench of Justice M.Sundar held that there is no disputation or disagreement that the impugned order is appealable. In other words, a statutory appeal qua impugned order is available to the writ petitioner, which will be under Section 51 of the TNVAT Act.
The Madras High Court directed the Sales Tax Authority to make a De novo Reassessment order after considering the objections of dealers.
The single-judge bench of Justice M.Sundar held that the impugned orders being orders are set aside solely on the ground that it proceeds on the basis that writ petitioner/dealer has not filed objections, whereas objections in fact have been filed and the same have been duly acknowledged by the respondent. “The respondent shall now de novo do revision/reassessment under Section 27 of TNVAT Act by considering the objections of writ petitioner/dealer and make an order as expeditiously as possible i.e., as expeditiously as the official business of respondent would permit and in any event, within three weeks from today i.e., on or before 27.10.2021; De novo order i.e., revision/reassessment order made in an aforesaid manner shall be duly communicated to writ petitioner under due acknowledgment within five working days from the date of the order,” the court-ordered.
The Karnataka High Court directed the Good and Service Tax (GST) Authority to permit the filing of TRAN-1 either electronically or manually within 30 days.
The Jharkhand High Court quashed the Show Cause Notice in respect of wrongful availment of Input Tax Credit (ITC) as it was vague and lacked details.
The division bench of Justice Aparesh Kumar Singh and Justice Anubha Rawat Choudhary noted that the impugned show-cause notice does not fulfill the ingredients of proper show-cause notice and thus amounts to a violation of principles of natural justice, the challenge is entertainable in the exercise of writ jurisdiction of this Court.
The Uttarakhand High Court quashed the Order of cancellation of GST Registration due to the non-providing opportunity of Hearing and remitted the matter back to GST Authority.
The single bench of Justice Sharad Kumar Sharma ruled that even if the impugned order of 12th July 2021, is taken into consideration, there is not even a single whisper that after the expiry of 30 days, as provided under Sub-rule (3) Rule 22, when the cancellation was being resorted to, though apart from the fact that the officer concerned has become functus officio after the expiry of 30 days, even if at all, the cancellation was required, in that eventuality, then the petitioner ought to have been heard.
The Bombay High Court directed the GST Authority to process the application for an IGST refund and pass a reasoned order as no order was passed.
The division bench headed by Chief Justice Dipankar Dutta and Justice M.S.Karnik held that there is no order or decision on record on the application claiming a refund. In this view of the matter, it would be appropriate to direct the respondent to process the application made by the petitioner for a refund and pass a reasoned order upon hearing the petitioner. The claim for refund be decided as expeditiously as possible on its own merits and preferably within a period of eight weeks from today. The petitioner is to appear before the Competent Authority on October 21, 2021, at 11.00 a.m.
The Gujarat High Court quashed the attachment of personal property of the Director for the realization of Sales Tax Dues as it is illegal and bad in law. The division bench of Justice Sonia Gokani and Justice Rajendra M.Sareen while allowing the petition, relied on the decision of Division Bench of this Court rendered in Special Civil Application No.243 of 1991 with Special Civil Application No.3103 of 1991and Special Civil Application No.7578 of 1991 in the case of Mr.Choksi Vs. The state of Gujarat has allowed the said petition and quashed and set aside the impugned notification by holding that the auction of the residential property in question as illegal and bad in law and restrained the respondents from attaching or selling any private property of the Managing Director of the Company for the realization of the aforesaid dues.
In a major relief to Ceebros Hotels, the Madras High Court deleted disallowance as substantial activities done to show property purchased is put to use.
The court held that the attempt to apply the proviso to the case of the assessee would lead to wrong interpretation of the law and therefore, the reasons given by the Assessing Officer to disallow the interest expenditure by applying the provisions of Section 36(1)(iii) is not in accordance with the law. Further, the Tribunal noted that the assessee is into the business of Real Estate Development and in the process of executing two projects at different places and the Assessing Officer was not justified in treating the two projects on a stand-alone basis and also that the property in MRC Nagar was not put to use. Further, the Tribunal observed that the purchase of inventory in the course of carrying on business should be reckoned as the continuation of the same business activity in the normal course and cannot be equated or termed as an extension of business activity. Furthermore, the Tribunal noted that the assessee has offered substantial income from the Atlantic project and the attempt to apply the Matching Concept principle is misconceived.
The Bombay High Court while coming down heavily on the Tax Official, imposed the substantial costs on AO and quashed the Faceless Assessment orders passed without application of mind.
The HC says it is compelled to set aside the impugned order passed on 8 June 2021 and also the consequential notices issued by the tax authorities. “Sub-section 9 of section 144B of the Income Tax Act provides that any assessment made shall be non-est (the return of a writ or process) if such assessment is not made in accordance with the procedure laid down under this section.
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