This weekly round-up analytically summarises the key tax judgements of the Supreme Court and all High Courts reported at Taxscan.in during the previous week from October 21 to October 27, 2023.
The Kerala High Court directed to file appeal under Section 107 of the Goods and Service Tax Act (GST), 2017 and ruled that the question of limitation to be computed from the date on which date the rectification order was passed.
A Single Bench of Justice Dinesh Kumar Singh observed that “In the above circumstances, the present writ petition is dismissed as withdrawn with liberty to the petitioner to file an appeal against the impugned rectification order under Section 107 of the GST Act, 2017. The appellate authority should consider the question of limitation with effect from 19.07.2023, on which date the rectification order came to be passed.”
The Gauhati High Court has granted interim relief to the Writ Petitioner, Greenlam Industries Limited, from coercive measures on the issue of refund/adjustment of advance tax paid to the Income Tax Department.
Notable, the question of maintainability of the writ petition was kept open and shall be decided at the stage of admission hearing, the bench stated while directing to list the matter on 17th November, 2023.
The Delhi High Court refused to grant bail to an under-trial Prisoner who submitted a bail application on the Prevention of Money-Laundering Act (PMLA) 2002. The petition was sought to extend the bail granted by the judge.
Justice Swarana Kanta Sharma viewed that there are no grounds to enlarge the applicant on regular bail in the present ECIR and disposed of the present bail application along with all pending applications.
The Kerala High Court observed that the administrative circular will not operate as a fetter on the commissioner as it is a quasi-judicial authority and dismissed the writ petition against the income tax order.
With aforesaid observation, the single bench of Justice Dinesh Kumar Singh disposed of the present writ petition and dismissed the Pending interlocutory application/s, if any, in the writ petition.
The Delhi High Court held that the claim of income tax is extinguished with post-approval of the resolution plan by the National Company Law Tribunal (NCLT).
A division bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia disposed of the writ petition in terms of the CIT(A) order. The interim order dated 24.12.2019 shall stand vacated and the pending interlocutory applications are closed.
The Madras High Court directs the income tax department to lift the attachment of the pension account considering the age and ailment of the Pensioner.
The Court held that the appellant is entitled to operate the pension account and make all transactions with the amount lying therein, excluding a sum of Rs.1,35,000/- and the direction issued by the Judge in the order impugned was confirmed. Further directed the Appellate Commissioner to dispose of the appeals on merits and as per law, within three months.
The Sikkim High Court stayed the show cause notice issued under Rule 31 A of the Central Goods and Service Tax Rules (CGST Rules), 2017 as it is ultra vires of the Constitution of India.
The Deputy Solicitor General of India on behalf of respondent no.1 and the Additional Advocate General on behalf of respondent no.2 accept notice and waive formal notice thereof. Justice Bhaskar Raj Pradhan directed the respondents to file their response to the interim application praying for a stay of the proceedings within two weeks. The respondents shall maintain the status quo as of today. The counsel for the parties is requested not to delay the hearing of the interim application.
The Delhi High Court set aside the assessment order passed under the Income Tax Act,1961 whereby the request of hearing via video conferencing was denied. The Court directed the Assessing Officer to decide afresh.
A division bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia viewed that “the best way forward would be to set aside the impugned assessment order dated 18.05.2023 with liberty to the AO to pass a fresh order, albeit, as per law. The AO will have the liberty to pass a fresh assessment order after abiding by the principles of natural justice.”
The High Court of Kerala has issued a directive to expedite the resolution of the Kerala Goods and Services Tax (KGST) appeal and stay petition, thereby halting the enforcement of the demand notice against Mathew Scaria, the proprietor of Hotel Thushara International, Kodenchery, Kozhikode.
The court’s directive has brought temporary relief to Mathew Scaria and his hotel business, as the enforcement of the demand notice has been put on hold. The ruling underscores the importance of expeditious consideration of appeals and stay applications, which is crucial in maintaining a fair and efficient tax adjudication process under the KGST system.
The Delhi High Court allowed the refund of Input Tax Credit (ITC) under Goods and Service Tax(GST) based on the shipping bill and invoices and set aside the rejection of the refund claim of ITC.
Since there was no controversy as to the evidence produced by the petitioner in respect of the exports before the Adjudicating Authority, the court allowed the writ petition and the respondents were directed to process the petitioner’s claim for refund along with applicable interest.
The Kerala High Court in a recent decision set aside the demand of balance tax deposit as assessee already remitted amount under section 55 of the Kerala Value Added Tax Act, 2023.
A division bench comprising Justice A Muhamed Mustaque & Justice Shoba Annamma Eapen set aside the condition imposed by the third respondent to deposit 10% of the balance tax demand for both years if the petitioner had already remitted the amount under section 55 of the KVAT Act.
The High Court of Kerala has extended the stay on coercive actions against the assessee P. Somarajan, the proprietor of Hotel Nila Palace in Cheerankavu, Kollam. The extension of the stay comes in light of the pending Value Added Tax (VAT) appeal before the 1st Appellate Authority.
The bench emphasised the importance of preserving the rights of individuals and business owners who may be subjected to coercive actions by government authorities while their legal appeals are pending. In result, the bench allowed the review petition filed by the petitioner and also extended the stay on coercive actions against the petitioner until November 30, 2023, due to the pending VAT appeal.
The Kerala High Court directed to consider condonation application for 234-day delay in filing an appeal on rectification application against the Rejection of the Foreign Tax Credit (FTC) Claim.
The single judge bench of Justice Dinesh Kumar Singh the appellate authority to consider the application for condonation of delay expeditiously, preferably within two months and if delay is condoned, the appellate authority should take up the stay application filed by the petitioner and dispose of the same expeditiously.
The Delhi High Court held that any order passed by the adjudicating authority can be appealed before an appellate tribunal under section 26 of the Prevention of Money Laundering Act, 2002 ( PMLA).
The bench comprising Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad observed that “the Act provides complete machinery for the assessment/reassessment of tax, imposition of penalty and for obtaining relief in respect of any improper orders passed by the Revenue Authorities, and the assessee could not be permitted to abandon that machinery and to invoke the jurisdiction of the High Court under Article 226 of the Constitution when he had adequate remedy open to him by an appeal to the Commissioner of Income Tax (Appeals). The remedy under the statute, however, must be effective and not a mere formality with no substantial relief.
The Kerala High Court allowed the petitioner to discharge the road tax liability instalment payment as the petitioner prayed for the same. Shahul Hameed, the petitioner filed the petition with the limited prayer to allow him to discharge the tax liability for the period from 01.04.2022 to 30.09.2023 in respect of the stage carriage KL-54-E-2642 in instalments.
It was further held that “If the petitioner fails to make payment of any of the instalments, the authorities would be free to take appropriate action for the realisation of the tax. “
The Kerala High Court held that the principal commissioner has revisional power to interfere assessment order even if it is pending before CIT(A) and dismissed the Writ petition.
The Single judge bench of Justice C.S. Dias held that “the first respondent has the revisional power to interfere with the assessment order as provided under Sec.263 of the Act, till the disposal of the appeal. Furthermore, I do not find any prejudice being caused to the petitioner because, if at all the petitioner is aggrieved by the order that is to be passed by the Assessing Officer, in compliance with the direction in Ext P5 order, the petitioner can very well challenge the said order also in an appeal, notwithstanding the pendency of the appeal filed against order.” The Court dismissed the writ petition, reserving the right of the petitioner to challenge the order by law.
The Delhi High Court held that Section 264 of the Income Tax Act, 1961 can be triggered for making corrections when the assessee fails to claim amenable deduction under the Income Tax Act, 1961.
Further held that “since the petitioner/assessee passed away during the pendency of the writ petition, necessary steps were taken for bringing the legal heirs of record. Similar steps will also be taken by Mr Krishanan to bring his legal heirs on record before the concerned statutory authorities. set aside the impugned order.”
The Kerala High Court has held that Section 220(2) of the Income Tax Act, 1961 has no retrospective effect and no liability to pay interest on tax crystallised. Smt.Nisha John, counsel appeared for the petitioner and Sri. Christopher Abraham, Standing Counsel appeared for the Income Tax Department.
As the Finance Act itself makes it clear it has come into effect from 01.10.2014 and therefore, by no stretch of imagination its operation cannot be said to be retrospective. Considering the said position of law, the court comprising Justice Dinesh Kumar Singh held that the petitioner cannot be held to default in making the payment of tax which was crystallized by order. Therefore, Section 220(2) would not empower the Department to levy interest on the tax assessed which has already been paid.
The Supreme Court of India dismissed the Special leave petition (SLP) arising out of the impugned final judgment and order dated passed by the High Court of Gujarat as the Income Tax Amount to be recovered is less as per Central Board Of Direct Tax (CBDT).
From the limited notice issued, the two judges bench of Justice Sanjiv Khanna and Justice S V N Bhatti observed that the amount of tax involved is low. In terms of Circular no. 17/2019 dated 08.08.2019 issued by the Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, the tax amount on which notice has been SLP(C) No. 8483/2019 issued, is less than Rs.2 crores. The Court dismissed the special leave petition.
The Supreme Court of India in the case of Bharti Hexacom Ltd held that the license fee for a License under the Telegraph Act 1885 cannot be partly revenue and Partly Capital by Dividing into Two periods.
The two-judge bench comprising Justice B V Nagarathna and Justice Ujjal Bhuyan observed that “the licence issued under Section 4 of the Telegraph Act is a single licence to establish, maintain and operate telecommunication services. Since it is not a licence for divisible rights that conceive of divisible payments, apportionment of payment of the licence fee as partly capital and partly revenue expenditure is without any legal basis.”
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