Supreme Court and High Court Weekly Round-Up

This weekly round-up analytically summarises the key stories related to the Supreme Court and High Court reported at Taxscan.in during the previous week from April 17 to April 21, 2023. Penalty u/s 45 of Gujarat Sales Tax Act is statutory and Mandatory, Commissioner/AO has no Discretionary Powers: Supreme Court-State of Gujarat and Anr vs M/s Saw Pipes Ltd CITATION: 2023 TAXSCAN (SC) 155 The Supreme Court in its recent judgement has held that the Commissioner or Assessing Officer has no discretionary powers on levying of penalty and interest leviable under Sections 45(6) and 47(4A) of the Gujarat Sales Tax Act, 1969 since those are statutory and mandatory sections. The two-judge bench of Justices M.R. Shah and B.V. Nagarathna held that the court cannot read anything into a statutory provision which is plain and unambiguous and on a strict interpretation of Section 45 and Section 47 of the Act, 1969, the only conclusion would be that the penalty and interest leviable under Section 45 and 47(4A) of the Act, 1969 are statutory and mandatory and there is no discretion vested in the Commissioner/Assessing Officer to levy or not to levy the penalty and interest other than as mentioned in Section 45(6) and Section 47 of the Act, 1969. Madras HC Orders to Conduct Special Audit for ICAI in Three Months Upon Finding Irregularities-V.Venkata Siva Kumar vs Union of India CITATION: 2023 TAXSCAN (HC) 726 The Madras High Court has ordered a Special Audit for the Institute of Chartered Accountants of India (ICAI) in three months after considering the allegations raised by a Chartered Accountant. In view of the facts and circumstances, the petitioner is at liberty to submit his detailed objections or otherwise, to the Central Council of Institute of Chartered Accountants of India, within a period of four weeks from the date of receipt of a copy of this order. In the event of submitting any such objection by the petitioner or by any other member of the Institute, the Central Council of the Institute of Chartered Accountants of India shall consider the objections and if there is any irregularity, doubt, falsehood or otherwise, then conduct Special Audit into the allegations or otherwise raised and thereafter communicate the result to the petitioner, within a period of three months from the date of submission of the objections by the petitioner. Madras HC Allows Initiation of Proceedings Against Then ICAI Presidents for Alleged Corruption-V.Venkata Siva Kumar vs Institute of Chartered Accountants of India CITATION: 2023 TAXSCAN (HC) 725 In a petition filed by a Chartered Accountant, the Madras High Court has allowed to initiate corruption cases against the then Presidents of the Institute of Chartered Accountants of India (ICAI) in several serious allegations against the then President and the manner in which the decisions are taken by the Institute at the instance of the President of the Institute. Justice S.M. Subramaniam observed that “As far as the interim orders are concerned, this Court is of an opinion that even in the case, prima facie, the case has been established by the petitioner, the law must be set in motion for the purpose of conducting a proper investigation in the manner known to law. The High Court cannot conduct an elaborate enquiry into the allegations, which all are more technical and more so, it requires adjudication of documents and evidence. The petitioner raises several omissions and commissions committed by the Chartered Accountant Institute, more specifically by the then President of the Institute.” 9-Judge Bench of Supreme Court to Decide Constitutionality of GST Levy on Rent/ Lease Payments-CHIEF COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX vs CHIEF COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX CITATION: 2023 TAXSCAN (SC) 154 A two-judge bench of the Supreme Court on Tuesday granted leave to a Special Leave Petition challenging a judgement delivered by the Orissa High Court on the issue of levy of GST on rental/ lease payments. Disposing the writ petition, the High Court held that if the assessee is required to pay GST on the rental income arising out of the investment on which he has paid GST, it is required to have the input credit on the GST, which is required to pay under Section 17(5)(d) of the CGST Act. Services Provided by Intermediaries to Persons Abroad Not Liable to CGST and MGST : Bombay HC Upholds Levy of IGST-Dharmendra M. Jani vs The Union of India CITATION: 2023 TAXSCAN (HC) 724 The Bombay High Court, on Tuesday, upheld the levy of IGST on liability on service provided by intermediaries to persons located abroad under section 13(8)(b) of the Integrated Goods and Services Tax Act, 2017. The Bombay High Court, on Tuesday, upheld the levy of IGST on liability on service provided by intermediaries to persons located abroad under section 13(8)(b) of the Integrated Goods and Services Tax Act, 2017. Central Excise Dept cannot Continue Adjudication Proceedings After Lapse of 13 Years: Delhi HC-NANU RAM GOYAL vs COMMISSIONER OF CGST AND CENTRAL EXCISE, DELHI & ORS. CITATION: 2023 TAXSCAN (HC) 723 A two-judge bench of the Delhi High Court has held that the central excise department can continue the proceedings for adjudication of the impugned show cause notice, after the lapse of almost thirteen years. Justice Vibhu Bakhru and Justice Amit Mahajan were hearing a petition filed by Mr. Nanu Ram Goyal claiming that such proceedings are barred by limitation as the central excise department had failed to conclude the proceedings within a reasonable period from the date of issuance of the impugned show cause notice. Question of whether Transactions constitute Works Contracts or Sales cannot be undertaken in Writ Jurisdiction: Madras HC relegates to Appellate Authority-M/s Orchid Designs Pvt Ltd vs The Commissioner of Commercial Taxes CITATION: 2023 TAXSCAN (HC) 722 The Madras High Court ruled that the question of whether transactions constitute works contracts or sales cannot be undertaken in writ jurisdiction and thereby relegated the matter to the Appellate Authority. The Bench further went on to state that “Reliance on the aforesaid judgement is misconceived for the reason that, in that judgement, the proposition laid down was that a Circular issued by a superior authority would bind an assessing officer and, in such circumstances, there is no point in remanding the matter to the file of the assessing authority to be redone.” Wrongful Availment of ITC: Gujarat HC Orders to Continue Provisional Attachment Till Conclusion of Adjudication Proceedings-MADHAV COPPER LIMITED vs STATE OF GUJARAT CITATION: 2023 TAXSCAN (HC) 719 In a case of wrongful availment of ITC, the Gujarat High Court ordered to continue provisional attachment till the conclusion of the adjudication proceedings. A two-judge bench comprising Justice N V Anjaria and Justice Devan M Desai directed the authorities to complete the adjudication proceedings within six weeks. Further directed the competent GST authorities to proceed to adjudicate the show cause notice after giving reasonable opportunity to the petitioner including filing a reply to defend its case, within a time-bound period. E-Way Bill: Allahabad HC allows assessee to Release Detained Goods on paying 200% of GST on Invoice Value-S.K. Trading Co vs Additional Commissioner Grade CITATION: 2023 TAXSCAN (HC) 721 The Allahabad High Court allowed the assessee to release detained goods without e-waybills after paying 200% of Goods and Services Tax on invoice value. A Single judge bench comprising of Justice Pankaj Bhatia observed that the petitioner has to be treated as the owner of the goods in view of the law laid down in the case of M/s Margo Brush India and held that the impugned insofar as it imposes the burden on the petitioner to get the goods released in terms of Section 129(1)(b) of the GST Act is bad in law. Jharkhand HC quashes Prosecution for illegal TDS deduction against Finance Advisor who is neither an employee of HEC Ltd-S.M. Jain @ Shetan Mal Jain vs The State of Jharkhand CITATION: 2023 TAXSCAN (HC) 720 The Jharkhand High Court quashed the prosecution for illegal TDS deduction against the finance advisor who is neither an employee of HEC Ltd. It was observed that the petitioner neither falls within the definition of “Assessee”, “Principal Officer” nor an “Employee”. He was also not part and parcel of the management of HEC. The Single judge bench Comprising Justice Gautam Kumar Choudhary quashed and set aside the impugned complaint since there is no material to summon the petitioner. No Sales Tax on Sim Cards, Recharges and other VAS by Telecos: Supreme Court The Supreme Court ruled on Tuesday that sim cards, recharge coupon vouchers, and value-added services such as ringtones, wallpapers, and music downloads cannot be subject to sales tax since they are not considered goods. The decision upholds a previous ruling by the Andhra Pradesh High Court in 2011, which stated that sharing infrastructure does not fall under the goods category and therefore cannot be taxed. Bombay HC rejects writ by Sales Tax Officer turned Resident District Collector for Correction of DOB after 22 Years in Service-Ramdas Mahadeo Khedekar vs State of Maharashtra & Ors CITATION: 2023 TAXSCAN (HC) 710 The Bombay High Court rejected the writ by the sales tax officer turned resident district collector for correction of dob after 22 years in service. A division bench comprising Justice S. V. Gangapurwala & Justice Sandeep V Marne observed that as per Rule 38(1) of the Maharashtra Civil Service (General Conditions) Rules 1981, an application ought to have been made within 5 (five) years of entering the service. In the seniority list maintained by the employer, the date of birth of the petitioner is recorded as 1st June 1971 and the petitioner has not objected at any material point of time before the filing of the writ petition. The Court refused to correct the date of birth and dismissed the petition. Relief to CPMA: SC directs Govt to levy Provisional Anti Dumping Duty on LDPE-CHEMICAL AND PETROCHEMICAL MANUFACTURER ASSOCIATION vs UNION OF INDIA & ANR. CITATION: 2023 TAXSCAN (SC) 153 As a relief to the Chemical and Petrochemical Manufacturer Association (CPMA), the Supreme Court of India directed the government to levy provisional anti-dumping duty on Low-Density Polyethylene (LDPE). A two-judge bench comprising Justice Krishna Murari and Justice Sanjay Karol observed that the petitioner is entitled to an interim order and directed the respondent to impose a provisional Anti Dumping Duty under Section 9A (2) of the Tariff Act at the rate determined by respondent No. 2 in its Final Finding vide Notification dated 31.03.2022 published in Extraordinary Gazette of India. The levy of such Anti Dumping Duty shall be subject to final adjudication in these proceedings. Bombay HC rejects writ by Sales Tax Officer turned Resident District Collector for Correction of DOB after 22 Years in Service-Ramdas Mahadeo Khedekar vs State of Maharashtra & Ors CITATION: 2023 TAXSCAN (HC) 710 The Bombay High Court rejected the writ by the sales tax officer turned resident district collector for correction of dob after 22 years in service. A division bench comprising Justice S. V. Gangapurwala & Justice Sandeep V Marne observed that as per Rule 38(1) of the Maharashtra Civil Service (General Conditions) Rules 1981, an application ought to have been made within 5 (five) years of entering the service. In the seniority list maintained by the employer, the date of birth of the petitioner is recorded as 1st June 1971 and the petitioner has not objected at any material point of time before the filing of the writ petition. The Court refused to correct the date of birth and dismissed the petition. Relief to CPMA: SC directs Govt to levy Provisional Anti Dumping Duty on LDPE-CHEMICAL AND PETROCHEMICAL MANUFACTURER ASSOCIATION vs UNION OF INDIA & ANR. CITATION: 2023 TAXSCAN (SC) 153 As a relief to the Chemical and Petrochemical Manufacturer Association (CPMA), the Supreme Court of India directed the government to levy provisional anti-dumping duty on Low-Density Polyethylene (LDPE). A two-judge bench comprising Justice Krishna Murari and Justice Sanjay Karol observed that the petitioner is entitled to an interim order and directed the respondent to impose a provisional Anti Dumping Duty under Section 9A (2) of the Tariff Act at the rate determined by respondent No. 2 in its Final Finding vide Notification dated 31.03.2022 published in Extraordinary Gazette of India. The levy of such Anti Dumping Duty shall be subject to final adjudication in these proceedings. GST: Madras HC sets aside Assessment Order passed violative of the Natural Justice Principle-EPMS Property Services Private Limited vs The State Tax Officer CITATION: 2023 TAXSCAN (HC) 709 The Madras High Court set aside the assessment order passed under the Goods and Services Tax Act, 2017 which was violative of the natural justice principle. A Single judge coram Comprising of Dr Justice Anita Sumanth observed that the orders of assessment suffer from violation of principles of natural justice. The exchange of correspondence between the parties establishes that the petitioner was cooperating with the proceedings for assessment. Relief to Tata Communications Payment Solutions: Bombay HC orders to release ATM machines seized during Property Tax Recovery-Tata Communications Payment Solutions Ltd. vs The State of Maharashtra & Ors. CITATION: 2023 TAXSCAN (HC) 714 In a major relief to Tata Communications Payment Solutions Ltd, the petitioners, the Bombay High Court ordered the release of the ATM machines seized during property tax recovery. The Bench also made note of the inaction from the side of the Municipal Corporation and stated that the concerned officers of the Municipal Corporation before taking such action in respect of movable property of a third party did not examine the leave and licence agreement. The Municipal Corporation did not have any authority to keep detained the equipment of the Petitioner who was merely a licensee of the premises and also under the leave and licence agreement, the liability to pay Municipal taxes and all other Government outgoings was that of the owner. Property Tax Demand: Madras HC directs Coimbatore Municipal Corporation to pay Rs. 10 Lakhs to Cancer Institute for Non-Compliance of Order for De-sealing and Restoration of Services-Cheran Properties Limited vs Commissioner CITATION: 2023 TAXSCAN (HC) 716 “This court is mystified as to how an Order could be incorporated without the officer having read the same in the first place” the Madras High Court Bench of Dr Justice Anita Sumanth commented while directing the Coimbatore Municipal Corporation to pay Rs. 10 Lakhs to Cancer Institute for Non-Compliance of Order for De-sealing and Restoration of Services in the matter of property tax demand. The Court held that “The respondent is hence put to terms and will remit a sum of Rs.10,000/- (Rupees Ten Thousand Only) to the Cancer Institute, Adayar, Chennai, within a week from today. The premises shall be de-sealed and water and sewerage connection restored within 24 hours from today.” Transportation charges separately shown is Deductible from GTO under Odisha Sales Tax Act: Orissa HC-Saraswati Stone Quarry vs State of Orissa CITATION: 2023 TAXSCAN (HC) 718 In a recent decision the Orissa High Court observed that the transportation charges separately shown are deductible from Goods transport operator(GTO) under Odisha Sales Tax Act. The Coram comprising Justices BR Sarangi and MS Raman observed that “This Court, on perusal of record, finds that the factual position obtained in D.K. Construction is identical to the present case and similar questions of law as posed in the present revision petition are decided in favour of the petitioner-assessee and against the revenue and that the revision petition succeeds and, therefore, all the orders were set aside.” GST Dept cannot Deprive the Benefit of Assessee due to Non-Constitution of Tribunal: Patna HC Directs to File Appeal u/s 112-Kumar Ram Ranjan Singh vs The State of Bihar through the Commissioner CITATION: 2023 TAXSCAN (HC) 711 The Patna High Court has held that the GST dep cannot deprive the benefit of the assessee due to non-constitution of the tribunal and directed to file an appeal under section 112 of the Bihar Goods and Services Tax Act (B.G.S.T. Act), 2017. The Court held that the petitioner cannot be deprived of the benefit, due to the non- constitution of the Tribunal by the respondents themselves. Since the order is being passed due to non-constitution of the Tribunal by the respondent authorities, the petitioner would be required to present/file his appeal under Section 112 of the B.G.S.T. Act, once the Tribunal is constituted and made functional and the President or the State President may enter the office. Relief to 44 EMB Studio: Bombay HC quashes Rejection of GST Refund filed beyond Limitation Amidst Covid Situation-44 EMB Studio Private Limited vs Union of India and Ors. CITATION: 2023 TAXSCAN (HC) 712 The Bombay High Court quashed the rejection of GST refund filed beyond limitation amidst Covid situation, thereby granting relief to 44 EMB Studio Private Limited, the petitioner. The Coram consisting of Justices Sharmila U Deshmukh and Nitin Jamdar observed that “The arguments of the Petitioner, as reflected in the impugned order, are based on the general situation brought about by the Covid-19 pandemic. The implications of the orders passed by the Supreme Court are not considered while calculating the limitation period.” Relief to Abu-Dhabi Commercial Bank: Bombay HC allows withdrawal of appeal on disputed Income Tax claim being valued at “Nil”-Abu-Dhabi Commercial Bank Ltd. vs Director of Income Tax CITATION: 2023 TAXSCAN (HC) 713 The Bombay High Court allowed the withdrawal of appeal on disputed income tax claim being valued at “Nil”, thereby granting relief to Abu-Dhabi Commercial Bank Ltd. The Bench further noted that “In view of this, the Counsel seeks to withdraw the appeal. The appeal stands dismissed as withdrawn with liberty to approach the Court again for reviving the present appeal in case the Revenue for any plausible reasons finds that the appeal was not to be withdrawn as the disputed claim in the appeal is not covered under the aforementioned circular.” Bombay HC Refuses to Grant Right to Travel Abroad since Application for Cancellation of Bail by GST dept is Pending before Session Court-Mayurkumar Jaysukhlal Gohel vs The Union of Indian and Anr CITATION: 2023 TAXSCAN (HC) 715 In a recent judgement, the Bombay High Court refused to grant the right to travel abroad since the application for cancellation of bail by the GST department is pending before the Session Court. It was found that apart from the issue of entitlement to travel abroad, the other contentious issue is about possession of the passport. The Applicant claims that at the time of his arrest, the department has taken into possession of his passport. A Single judge bench comprising Justice Modak S M refused to accept the request only for one reason that the application filed by the department for cancellation of the bail is pending before the Court of Sessions. The Applicant is at liberty to move again if an application for cancellation of bail is rejected. It is made clear that when this Court has rejected the application to travel abroad, it is expected that a hearing of that application needs to be taken on a priority basis. Order of Attachment with one year Period to Deposit Amount of Cheque will not Prevent Assessee from Honoring Cheque: Bombay HC-Maharaja Log Home OPC Pvt Ltd vs State of Maharashtra and Ors CITATION: 2023 TAXSCAN (HC) 708 The Bombay High Court in its recent judgement has held that the order of attachment with one year period to deposit the amount of the cheque will not prevent the assessee from honoring the cheque. It was found that the account of the accused was attached due to non-payment of liability of tax of petitioners. If that is so, the petitioners cannot get the advantage of their wrongs. It is the petitioners on their failure to pay income-tax dues have invited such an order of attachment and now they cannot turn around and say that the circumstances of dishonour of cheque were beyond their control A Single judge bench comprising Justice Amit Borkar observed that the petitioner had a period of one year to deposit the amount of the cheque after the order of attachment. The Court dismissed the Writ petition. Notice Issued u/s 153C without Granting Opportunity to Assessee for Objection not Valid: Delhi HC -KAMAL NATH vs DEPUTY COMMISSIONER OF INCOME TAX CITATION: 2023 TAXSCAN (HC) 707 The Delhi High Court has held that notice issued under Section 153C of the Income Tax Act, 1961 without granting the opportunity to the assessee for objection is not valid. A two-judge bench comprising Justice Rajiv Shakdher and Justice Tara Vitasta Ganju disposed of the writ petitions by directing the concerned officer to grant a hearing to the petitioner and/or to his authorised representative and shall issue a notice, on this behalf, which will set forth the date and time of the hearing. Further, the court directed the petitioner to file his objections within two weeks and the concerned officer will, thereafter, fix a date and time according to the hearing vis-à-vis the said satisfaction note. Revenue failed to provide material /information based on which allegation levelled against assessee: Delhi HC sets aside Assessment Order u/s 148-SHUKLA ENTERPRISES PRIVATE LIMITED vs ASSISTANT COMMISSIONER OF INCOME TAX- CIRCLE 22(2) CITATION: 2023 TAXSCAN (HC) 706 The Delhi High Court set aside the assessment order under section 148 of the Income Tax Act, 1961 since the revenue failed to provide material information based on which allegation was levelled against the assessee. The Two judge bench comprising Justice Rajiv Shakdher and Justice Tara VitastaGanju set aside the impugned order dated 29.07.2022 and the notice issued under section 148 of the Income Tax Act. The court further held that “before the AO proceeds further in the matter, he will furnish the entire material/information which is in his possession and that which finds mention in the CRID. In such an eventuality, i.e., if material/information is furnished, the AO will provide an opportunity for the petitioner to file a supplementary reply ” Section 75(4) U.P. GST Act is Mandatory, Even if no Demand in Writing for Hearing is made out: Allahabad HC Quashes Order-M/S Swati Poly Industries Pvt Ltd vs State Of U.P. And 2 Others CITATION: 2023 TAXSCAN (HC) 705 In a significant case, the Allahabad High Court held that section 75(4) of Uttar Pradesh Goods and Service Tax Act is mandatory even if no demand in writing for hearing is made out. Therefore, the bench quashed the order passed without giving opportunity for hearing to the petitioner. The standing council for the state contended that the order dated 01.10.2020 also did not reveal that any personal hearing was accorded to the petitioner prior to passing of the order, as such, the inescapable conclusion from the material available on record is that petitioner was not granted personal hearing which is required and is mandatory under Section 75(4), as such, on that ground alone the order dated 01.10.2020 is quashed. The respondents should be at liberty to conclude the proceedings in accordance with law afresh, if so advised. Thus, the single bench of Justice Pankaj Bhatia, allowed the appeal filed by the petitioner Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates