This weekly round-up analytically summarizes the key tax judgments of the Supreme Court and all High Courts reported at Taxscan.in during the previous week from January 13 to January 19, 2024, the last week of 2024.
The Supreme Court has granted a stay on the Delhi High Court’s decision concerning the Income Tax exemption for Capital Gains in the Blackstone Capital case. The High Court had ruled that Capital Gains tax is not liable to income tax.
A Division Bench comprising Justice Manmohan and Justice Manmeet Pritam Singh Arora observed that the revenue authorities cannot dispute the TRC issued by the foreign tax jurisdiction. They emphasised that the TRC serves as sufficient evidence for claiming treaty eligibility, residence status, and legal ownership. Consequently, the court held that no taxable income has evaded assessment in this particular case.
This reaffirms the earlier stance of the Delhi High Court Division Bench, reiterating the significance of the TRC as a valid and conclusive document in establishing treaty benefits and dismissing any claims of undisclosed income liable for taxation in the current scenario.
The Supreme Court has affirmed that any debt claimed as a ‘financial debt’ under Section 5(8) of the IBC must demonstrate the essential element of disbursing funds against the consideration for the time value of money in its origin.
The three judge bench comprising of Chief Justice Dhananjay Chandrachud, Justice J.B. Pardiwala and Justice Manoj Misra determined that the debts in question took the form of a third-party security, purportedly provided by JIL to secure the loans, advances, and facilities acquired by JAL from the Said Lenders. The Court concluded that such a form of ‘debt’ does not fall within the scope of the term ‘financial debt’ as defined in Section 5(8) of the IBC. Consequently, the Said Lenders, acting as mortgagees, do not qualify as ‘financial creditors’ of JIL. Therefore, the Court ruled that the fundamental element of disbursal, specifically against the consideration for the time value of money, must be evident in the origin of any debt claimed as a ‘financial debt’ before it can be recognized as such under Section 5(8) of the IBC.
The Madras High Court dismissed proceedings related to the escapement of income due to the existence of a document wherein the Income Tax Officer ( ITO ) acknowledged the filing of a reply to the income tax notice.
A Single Bench of Justice Senthil Kumar Ramamoorthy observed that “The documents on record include the reply dated 01.06.2022 of the petitioner to notice dated 23.05.2022. The said reply also bears acknowledgment dated 01.06.2022 of the relevant Income Tax Office. A subsequent reply dated 02.06.2022 is also on record and, likewise, the said reply also bears acknowledgment dated 02.06.2022 of the relevant office.”
The Supreme Court dismissed the assessee’s request to reopen assessment proceedings against her. The three-member bench of the Supreme Court emphasized that the tribunal possessed the appropriate authority to address such issues and saw no justification for the courts to intervene in the matter.
The two-member bench of the Supreme Court, comprising Justice Abhay S Okha and Justice Ujjal Bhuyan, dismissed the assessee’s contentions for reopening of assessment proceedings by pointing out that the assessee could approach the tribunal itself for dealing with such matters. The bench observed that the Tribunal shall consider such an application appropriately as per the law. With these directions, the bench dismissed the appeal of the assessee. The Supreme Court allowed the application seeking exemption from filing a certified copy, and the delay was condoned.
M/s. JSW Steel Ltd., the taxpayer, brought in 98,450 metric tons of Goonyella C Coking Coal for unloading at Marmagao Port. The shipment arrived on April 14, 2017, and the provisional assessment for clearance was processed with Bill of Entry No. 9375854 dated April 20, 2017. Clearance was granted upon the payment of duty amounting to Rs. 9,32,79,393/-.
The two judge bench comprising of Justice B.V. Nagarthana and Justice Sanjay Karol Held that held that the bill of entry for the entire quantity on 20th April, 2017 had been issued by the assessee within the prescribed time limit. It had also paid the entire duty for 98450 metric tons of Goonyella C Coking Coal, even though, 1,341 metric tons had not landed in Marmagao but had landed in Jaigad and as soon as the amendments to the IGM were approved by the Appellant on 14th March, 2018, again the filed the bill of entry on the very same day in respect of 1,341 metric tons. The bench had further observed that the assessee had demonstrated its bona fide intent . The bench also pointed out that the assessee had taken efforts to get the IGM amended and no sooner the the IGM was amended, the bill of entry in respect thereof was filed on the same day within time. The bench observed that this shows the assessee’s eagerness to be on the follow the assessment requirements.
The Supreme Court, in its provisional ruling, excused the delay by the Revenue in submitting a Special Leave Petition. The petition contested an order in favor of the assessee, which questioned the contractual and revenue-sharing arrangements made by the assessee and had been contested by the Commissioner of Sales.
CESTAT had held that the demand of service tax is not sustainable against the appellants. The two member bench also noted that wherein the ‘exempted service’ was expanded to include ‘an activity which is not a service as defined under Section 65B (44) of the Finance Act, 1994’ w.e.f. 01.04.2016, for which reversal of CENVAT credit is required.
The two judge bench consisted of Justice B.V. Nagarthna and Justice Sanjay Karol the SC in its interim order condoned the delay and issued notice to the assessee regarding the same.
A Three-Judge Bench of the Supreme Court, consisting of Chief Justice DY Chandrachud, Justice JB Pardiwala, and Justice Manoj Misra, opted to schedule a batch of 93 appeals for a hearing after three weeks. The matter pertains to the TDS liability of Catholic Nuns and Missionaries.
The Supreme Court stayed the Madras High Court judgment which had ruled that salaries received by missionaries and nuns of Catholic Church are liable to be subjected to Tax Deduction at Source ( TDS ) under Section 192 of the Income Tax Income Tax Act. The bench of Justice Ashok Bhushan and K M Joseph ordered to maintain “status quo as on today” while issuing notice in the petition filed by Institute of Franciscan Missionaries of Mary.
A two-member bench of the Supreme Court has rejected the Special Leave Petition seeking the exemption of liability for the Directors of Seville Products Ltd. The bench determined that the proposals to impose penalties and liability were distinct and could be considered separately.
The two judge bench of the Supreme Court consisting of Justice Pamidhigantam Sri Narasinha and Justice Aravind Kumar held that although the show cause notices were issued to various noticees, the proposal to impose penalties/liability were separate and severable. Discharge of liability of one of the noticees either by making payment without a contest, or by settlement before the Settlement Commission would not absolve the other noticees from their liability.
The Supreme Court of India issued notice to file counter affidavit in the matter regarding service tax demand on Konkan Railways.
The SLP arose out of the impugned final judgment and order dated 22-06-2023 in STA No. 87709/2019 passed by the Custom Excise Service Tax Appellate Tribunal, West Zonal Bench at Mumbai.A Two Judge Bench comprising Justice BV Nagarathna and Justice Manoj Misra observed that “Delay condoned. Issue notice to the respondent. Mr. Abhishek Vikas, Adv. for the respondent accepts notice. Four weeks’ time is granted to file counter-affidavit.”
The Supreme Court rejected a special leave petition ( SLP ) in a case related to the decision on excluding the reimbursement of service tax from the aggregate of amounts mentioned in clauses (a) and (b) of Section 44BB (2) of the Income Tax Act, 1961.
The SLP arose out of the impugned final judgment and order dated 02-11-2022 in ITA No. 18/2021 passed by the High Court of Uttarakhand at Nainital.A Two-Judge Bench comprising Justice BV Nagarathna and Justice Manoj Misra observed that “Following the order of this Court in SLP (C) Dy. No.36391/2023 dated 30.10.2023 [Commissioner of Income Tax vs. M/s Vantage International Management Company], this Special Leave Petition is also dismissed, as we are not inclined to interfere in the matter”.
The Delhi High Court affirmed the prohibition on the export of non-basmati rice due to non-payment of export duty and failure to comply with the specified conditions in the notification.
A perusal of the notification, therefore, shows that the notification was brought in to impose an immediate ban on the export of Basmati rice and the permission to export basmati rice was only in certain circumstances. A perusal of the amendment shows that the time by which the details of the consignment had to be entered into the system was mentioned. A separate category was also introduced whereunder if the customs duty is paid before 21:57:01 hours on 20.07.2023, then the consignment could be permitted for export.
Justice Subramonium Prasad observed that the Petitioner has not filed any verifiable evidence of the date and time of stamping of these 11,000 MT of rice having entered the Customs station before 20.07.2023. The Petitioner only has valid shipping bills, vessel call number ( VCN ) and the customs rotation number. The Court dismissed the Writ Petition.
The Delhi High Court affirmed the decision of the Income Tax Appellate Tribunal ( ITAT ) and ruled that the Assessing Officer ( AO ) has no jurisdiction when investigating the issuance of high premium shares, rejecting the authority of the Principal Commissioner of Income Tax ( PCIT ) in this matter.
A division bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia observed that an enquiry was, indeed, made by the AO with regard to the subject shares being issued at a high premium. This was not a case of no enquiry. The Court held that PCIT had committed an error in exercising the powers under Section 263 of the Act.
The Delhi High Court has invalidated the cancellation of Goods and Service Tax ( GST ) Registration without providing any specified reason.
In terms of Section 29(2) of the Central Goods and Services Tax Act, 2017, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. The registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. Merely, because a taxpayer has not filed the returns for some period does not mean that the taxpayer’s registration is required to be cancelled with a retrospective date also covering the period when the returns were filed and the taxpayer was compliant.
A division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja observed that a taxpayer’s registration can be cancelled with retrospective effect only where such consequences are intended and warranted.
A division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia held that In the course of assessment proceedings, the Assessing Officer noticed that the respondent/assessee had claimed deductions under Section 80IC of the Act to the tune of Rs.7,88,63,013/- about Assessment Year 2011-12 and Rs.10,40,36,033/- about Assessment Year 201213.
As regards the deduction under Section 80IC of the Act claimed by the respondent/assessee for the Assessment Year 2012-13, the Assessing Officer reiterated the above-mentioned reasoning of the previous year i.e., Assessment Year 2011-12 and held that the respondent/assessee had not carried out any printing or binding of books in the eligible undertaking at Rudrapur, so the deduction of Rs.10,36,64,265/- claimed by the respondent/assessee in this regard was liable to be disallowed.
The Delhi High Court nullified the Show Cause Notice ( SCN ) issued for the cancellation of Goods and Service Tax (GST) registration, citing the absence of a specified reason.
The bench comprising of Justice Sanjeev Sachdeva And Justice Ravinder Dudeja that even the letter dated 12.06.2023 does not give any clarity as to the allegation of availing of fraudulent input tax credit by the petitioner. However held that it is open to the respondent to take further action following law inter alia, cancellation of registration with retrospective effect. However, the same would be by law and under a proper Show Cause Notice and an opportunity of hearing is given to the petitioner.
The Delhi High Court, while examining the tax implications and characterizing compulsorily convertible debentures under the India-Mauritius Double Taxation Avoidance Agreement, concluded the appeal in light of the pending Special Leave Petition before the Supreme Court.
In This case respondent/assessee and an entity named, Vatika Pvt. Ltd.had invested in Compulsorily Convertible Debentures ( CCDs ) issued by another entity named, SH. Tech Park Developers Pvt. Ltd. The respondent/assessee transferred the CCDs issued to it to Vatika. respondent/assessee claimed that the gains arising from transfer of CCDs were in the nature of capital gains and, therefore, not taxable in view of the provisions of Article 13 of the IndiaMauritius Double Taxation Avoidance Agreement. However, the Assessing Officer treats the gains as interest, placing reliance upon Section 2(28A) of the Income Tax Act, 1961 and Article 11 of the India-Mauritius DTAA. This was the view of the AAR, which was overruled by this court. Aggrieved by the order the revenue filed appeal The court during the proceedings observed that appellant/revenue has preferred a Special Leave Petition, which has been converted into a Civil Appeal
After analyzing the facts and arguments of both parties, a division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia disposed of the appeal due to the Special Leave Petition pending before the supreme court.
The penalty order under the Kerala Value Added Tax Act, 2003 ( KVAT Act ) for non-disclosure of accurate information was affirmed by the Kerala High Court.
The provision to pay tax at compounded rate is only in lieu of the obligation to pay tax under Section 6 of the Act. The payment of tax at compounded rate, is only an optional method which assessee may adopt for the purposes of his convenience in making the payment of tax.
The petitioner had not filed Form No.49 declaring the details of ongoing projects as prescribed under Rule 24B, therefore, he has not been granted permission to pay tax at compounded rate. The payment of tax and penalty is of his own without any permission. The petitioner/assessee has not made true and correct disclosure, and there has been a pattern of untrue and incorrect returns for all the quarters for the year 2013-14 suppressing substantial volume of taxable contract receipts evading the tax.
A single bench of Justice Dinesh Kumar Singh held that “The petitioner’s appeal against the assessment order is already pending and therefore, if the petitioner files appeal within a period of 15 days against the impugned penalty order, the appellate authority should consider the appeal on merits, without going into the question of limitation in accordance with law.”
The Delhi High Court has ruled that the Commissioner of Income Tax ( Appeals ) ( CIT(A) ) does not have the authority to prolong the deadline for filing an audit report under section 142(2C) of the Income Tax Act, 1961.
It was viewed that the initial exercise of the power has been explicated as one that is not administrative, the CIT(A) could not have extended the time based on the recommendation of the AO. However, the enunciation of this legal principle does not derogate from our observation above that since the discretionary power was vested in the AO ( which was non-delegable ), it could not have been exercised by the CIT, irrespective of the nature of the power.
A division bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia answered the questions of law against the appellant/revenue and in favour of the respondent/assessee.
The Delhi High Court determined that the inclusion under section 69 of the Income Tax Act, 1961 lacks validity in the absence of incriminating evidence and affirmed the decision of the Income Tax Appellate Tribunal ( ITAT ).
A division bench comprising Justice Rajiv Shakdher And Justice Girish Kathpalia observed that in the absence of incriminating material, the addition under section 69 of the act is not valid. The Court upheld the view of the Tribunal and closed the appeal.
The Delhi High Court noted the applicability of Section 41(1) of the Income Tax Act, 1961 in the context of the remission of liability and affirmed the decision of the Income Tax Appellate Tribunal ( ITAT ).
It was found that since the lender was a private limited company, it was perhaps open to the appellant/assessee i.e., the borrower, to produce the erstwhile directors to establish the genuineness of the loan agreement. None of these steps were taken by the appellant/assessee.
A division bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia observed that “the initial onus was not discharged by the appellant/assessee. Besides this, the argument advanced that since there was remission of liability Section 41(1) of the Act would apply and not the provisions of Section 68 of the Act, as rightly held by the Tribunal, is an untenable submission.”
The Bombay High Court held that the assessee did not suffer any prejudice when they “clearly understood” the meaning and significance of the income tax notice issued over 30 years ago.
A Division Bench comprising Justices Jitendra Jain and Justice GS Kulkarni observed that “If the party has taken up a particular position not only at the early stage of the proceedings but even before the appellate forums, it is not open to a party to appropriate and reprobate and resile from such position.When a question of fact namely whether a prejudice was at all caused, was not raised before the forums below, the parties were estopped from urging it before the appellate forum. Even otherwise and considering the well settled position in law, even a legal right which may accrue to a party can be waived. Such party would be later on estopped / precluded from raising any question on a breach of a right which stood waived.”
Madras High Court observed that Section 248 of Income Tax Act, 1961 is inapplicable to Declaration and distribution of dividend by company to its shareholders.
A Single Bench of Justice SenthilKumar Ramamoorthy observed that “On examining Section 248 of the Income Tax Act, it is evident that it applies to a case where the tax deducted on payments made under Section 195 of the Income Tax Act to a non-resident, other than by way of interest, is required to be borne by the person by whom the income is payable ( i.e. the person making the payment ) as per contract or arrangement between the parties and the person making the deduction claims that tax was not payable.”
Jammu and Kashmir High Court has held that the delivery note cannot be used as a delivery challan under Goods and Service Tax ( GST ).
While dismissing the petition the Court held that there is a distinction between delivery note and delivery challan. A delivery note is a mere document that accompanies a shipment of goods which would have an impact on inventory levels since it decreases delivery stock. But delivery challan is issued while making delivery of goods to the buyer as per Rule 55 read with Rule 138A of the CGST Rules, 2017. The delivery note is neither mandatory nor a prescribed document for transportation. The delivery note is not a substitute for delivery Challan. Therefore, the proceedings against the Petitioner are valid.
Madras High Court quashed an order directing reversal of input tax credit ( ITC ) as the show cause notice ( SCN ) was received on the date of hearing.
The petitioner had been directed to reverse ITC of a substantial value. Such action had been taken pursuant to a show cause notice dated 09.10.2023, which the petitioner asserts was received on the date of hearing.A Single Bench of Justice Senthil Kumar Ramamoorthy observed that “These facts reveal that a reasonable opportunity was not provided to the petitioner to submit necessary documents and provide an explanation to the respondent.
The Madras High Court dismissed proceedings related to income escapement upon finding a document acknowledging the Income Tax Officer’s receipt of the reply to the income tax notice.
A Single Bench of Justice Senthil Kumar Ramamoorthy observed that “The documents on record include the reply dated 01.06.2022 of the petitioner to notice dated 23.05.2022. The said reply also bears acknowledgment dated 01.06.2022 of the relevant Income Tax Office. A subsequent reply dated 02.06.2022 is also on record and, likewise, the said reply also bears acknowledgment dated 02.06.2022 of the relevant office.”
The Delhi High Court directed the cancellation of the Goods and Service Tax ( GST ) registration of the petitioner from the date on which the return was filed.
The court observed the cancellation was solely due to non-filing for six months, challenging that this couldn’t justify retrospective cancellation. The petitioner wasn’t given a chance to contest it. The court directed cancellation from the date of return filing.
Delhi High Court has held that an order passed invoking section 263 of the Income Tax Act, 1961 without satisfying twin condition is invalid. The conditions included that the order of the AO should be erroneous and prejudicial to the interest of the revenue.
A division bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia viewed that for invoking powers under Section 263 of the Act, twin conditions have to be satisfied i.e., the order of the AO should be erroneous and prejudicial to the interest of the revenue. In view of the statement made by Dr Shashwat Bajpai, the other condition is not fulfilled. The court held that the appeal is disposed of, based on the statement made by Dr Shashwat Bajpai which shall bind the respondent/assessee.
The Delhi High Court quashed the reassessment order passed under Section 148 of the Income Tax Act, 1961, by assessing officers, highlighting a lack of independent application of mind.
The bench determined that reassessment proceedings were triggered without the AO applying his own mind and articulating reasons for believing that the available material indicated that the income chargeable to tax had escaped assessment. After analyzing the facts and arguments, a division bench of Justice Satish Rajiv Shakdher and Justice Girish Kathpalia quashed the reassessment order, emphasizing the lack of independent application of mind by the assessing officers.
Delhi High Court allowed the revenue to approach the court on failure of proceeding under Black Money ( Undisclosed Foreign Income and Assets ) and Imposition of Tax Act, 2015.
A division bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia held that “The registry will dispatch a copy of the order to the respondent/assessee via all modes, including email. The appellant/revenue will also ensure that a copy of this order is served on the respondent/assessee.”
The Special Court while allowing the bail application held that the applicant is not a habitual offender and does not impose any flight risk. It was further noted that the offence is Rs. 38,81,443/- above the bailable offence of Rs. 5 Cr and the entities who supplied the alleged transactions are still active and filing returns on the GST portal.
The court held that since the offence has a punishment of 5 years, the offence falls under Section 41A of CrPC, but since no notice under Section 41A was issued, the bail application of the applicant was allowed subject to conditions.
Kerala High Court has held that a person who participated in an auction sale can always participate in re auction after the cancellation of the auction.
Justice Devan Ramachandran closed the writ petition observing that in the afore mentioned circumstances, the Court once granted the liberty to 1st respondent to call the highest bidder and the petitioner and negotiate between them to obtain the highest value. The resultant report will be produced before the Court for finalising this issue.”
The Delhi High Court held that payment received from the sale/supply of software is not royalty under Article 12(3) of the India-Singapore Double Taxation Avoidance Agreement ( DTAA ).
The bench observed that the Tribunal had ruled correctly in favor of the respondent/assessee and concluded that the amount could not be treated as royalty within the meaning of Article 12(3) of the India-Singapore DTAA, the bench observed.A division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia held that payment received from the sale/supply of software is not royalty under Article 12(3) of the India-Singapore DTAA.
The Kerala High Court made it clear that it prefers not to engage in parallel jurisdiction with the appellate authority to grant the interim order requested by the petitioner’s counsel.
The bench of Justice Dinesh Kumar stated that “This Court would not like to exercise parallel jurisdiction with the appellate authority for granting an interim order as prayed for by the learned counsel for the petitioner.” Further stated that “the present writ petition is disposed of with direction to the 3rd respondent to consider and pass appropriate orders, in accordance with law, on the stay petition, Ext.P3, expeditiously, preferably within a period of two months.”
Patna High Court upheld the classification of Korai with Wheat Bran and held that it is taxable at 4%.The counsel for the appellant argued that the goods dealt with by him, that is ‘Korai’ is exempted as cattle feed and hence, there can be no levy of tax on the exempted goods.
A Division Bench comprising Chief Justice K. Vinod Chandran and Justice Rajiv Roy observed that “There is nothing to show that ‘Korai’ was sold as a cattle feed. As to ‘Korai’ being not equivalent to Wheat Bran, since it is a processed item which is obtained as a byproduct it is taxable as an unspecified residuary item at the rate of 8%.”
Delhi High Court directed the processing of refunds amounting to Rs 8,35,184 claimed under the Delhi Value Added Tax Act within a period of two weeks. The writ petition was filed by Ases Security Pvt Ltd, seeking direction to refund an amount of Rs. 8,35,184 allegedly due to the petitioner along with interest.
After analyzing the facts and arguments, a division bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja directed the respondents to process the refund within two weeks. Rajesh Mahna, Mr. Ramanand Roy, Mr. Mayank Kouts, and Mr. Shiva Narang, Advocates appeared for the petitioner, while Rajeev Aggarwal, Advocate, appeared for the respondent.
Delhi High Court, in quashing the contested notices and orders, directed the income tax officers to commence new reassessment proceedings against the assessee, adhering to the prescribed legal procedures.
The bench comprising of Rajiv Shakhder and Tara Vitasta Ganju held that considering the aforementioned circumstances, the contested notices and orders in each of the mentioned writ petitions are invalidated on the basis that they lack approval from the specified authority, as stipulated in Section 151(ii) of the Income Tax Act. It was also added that “The direction is issued with the caveat that the revenue will have liberty to take steps, if deemed necessary, albeit as per law. the rights and contentions of both the sides will remain open, in the event the revenue triggers reassessment proceedings.”
The Madras High Court observed that the relevant date for computation of period of limitation for filing refund application under Section 54 of the Central Goods and Service Tax Act, 2017 (CGST Act) is the date of receipt of payment in convertible foreign exchange.
A Single Bench of Justice Senthil Kumar Ramamoorthy observed that “The relevant date is the date of receipt of payment in convertible foreign exchange, as per Explanation (2) to sub-section (14) of Section 54. Even as regards FIRCs issued in April 2018, if the benefit of the above notification is extended to the petitioner, the refund application dated 04.09.2020 would be within the two year period, which is to be computed from the relevant date, as per sub-section (1) of Section 54 of the CGST Act.”
The Kerala High Court has nullified penalties imposed under the Kerala Value Added Tax ( KVAT ) Act, asserting that resellers of machines did not deliberately misclassify them but adhered to the same classification as the original seller.
Dinesh Kumar Singh in a single hedge verdict held that the HSN Code corresponds precisely to Entry 69(22)(c)(i) of the Third Schedule to the KVAT Act. Therefore, the court concluded that the petitioners cannot be accused of intentionally misclassifying the machines to evade the accurate or higher tax rate of 13.5%.
The court’s decision highlighted that the importer-seller had classified the machines as ‘Digital Multifunctional Devices’ with HSN Code 8443 3100 during import, adhering to the Customs Act, 1962, and the Customs Tariff Act, 1975.
Calcutta High Court held that although the authorities acknowledged the appellants’ response to the pre-show cause notice, they failed to address the contentions presented by the appellants, thereby quashing the GST Show Cause Notice ( SCN ) against Coca Cola bottling partner Diamond Beverages for alleged improper utilization of Input Tax Credit ( ITC ).
The Division Bench of Justice T. S. Sivagnanam and Justice Hiranmay Bhattacharyya allowed both the appeal and writ petition, remanding the matter to the Respondent at the stage of the Impugned pre-SCN and setting aside the Impugned Show Cause Notice.
The court observed that while the appellants’ submissions in response to the Impugned pre-SCN were seemingly considered, a closer examination revealed that the authority failed to address these contentions in the Impugned SCN. This led to the conclusion that the SCN was issued without proper consideration. Highlighting that the SCN lacked due consideration, investigation at the supplier’s end and inquiry into the response to the Impugned pre-SCN, the court directed the Respondent to conduct a thorough inquiry, gather necessary information, provide an opportunity for further submissions, allow a personal hearing, and then decide whether to issue the Impugned SCN under Section 73(1) of the CGST Act.
Delhi High Court upheld the direction of the Assessing Officer ( AO ) to adopt the attribution rate of revenue as 75% gross profit earned from Indian operations.
A Division Bench comprising observed that “The coordinate bench in AY 2006-07, while dealing with ITA 301/2022, has sustained the said conclusion and gone on to hold that no substantial question of law arose for its consideration. It is this decision which was affirmed by the Supreme Court with the dismissal of the SLP, as noted hereinabove. Given this position, we are of the opinion that no substantial question of law arises for our consideration.”
Delhi High Court upheld the order of the Income Tax Appellate Tribunal ( ITAT ) directing the exclusion of comparables as there was functional dissimilarity between the companies and the assessee.
A Division Bench comprising Justices Rajiv Shakdher and Girish Kathpalia observed that “Having heard the counsel for the parties and perused the record, we may note that insofar as each of the comparables are concerned, the Tribunal has indeed reached a conclusion, albeit on facts, that there is functional dissimilarity between the respondent/assessee and the comparables. The finding of fact with regard to each of the comparables has been returned in the following paragraphs of the impugned order.”
Delhi High Court directed the Customs Department to release the seized goods as no notice was served regarding the seizure of goods under Section 110(1) of the Customs Act, 1962.
A Division Bench of Justices Sanjeev Sachdeva and Ravinder Dudeja observed that “In view thereof, the petition is disposed of directing the respondents to release the goods seized under the Bills of Entries No. 2143897 dated 05.10.2022 and 2994766 dated 21.10.2022 under seizure memorandum bearing DIN 20221274NE0000007961, within a period of one week from today.”
Madras High Court has held that a 300% Penalty by invoking Section 27(2) of the Tamil Nadu Value Added Tax Act, 2006 ( TNVAT ) cannot be imposed when there are no findings regarding wrong availment of Input Tax Credit ( ITC ).
A Single bench of Justice S Srimathy held that invoking section 27(4) read with 27(2) penalty cannot be imposed. Moreover, the penalty cannot be imposed automatically. Some criminalities ought to be in existence to impose penalty and the framing of proof required for imposition of penalty is different from and much higher than i.e., required for framing the best Judgment demand assessment. The Court quashed the impugned order.
Madras High Court directed to verify the certificate of origin to validate the import of areca nut. It should be recognized that areca nuts have a limited shelf-life and the risk of contamination and deterioration of goods increases over time.
A single bench of Justice Senthil kumar Ramamoorthy observed that if the respondents are directed to complete the verification process expeditiously and by enabling clearance against a bond if verification is not completed within the specified time limit.
The first respondent was directed to conclude the verification within a maximum period of thirty days from the date of receipt of a copy of this order. If the certificate is found to be genuine upon such verification, the goods shall be released without insisting on payment of duty. On the other hand, if the certificate is found to be not genuine, it is open to the respondents to take further action by law.
Delhi High Court, while disposing of the writ petition, clarified the cancellation of Goods and Services Tax ( GST ) registration cannot be implemented retrospectively solely on the grounds of the taxpayer not filing the GST Returns ( GSTR ) for a certain period.
The court highlighted the potential consequences of retrospective cancellation, affecting the input tax credit of the taxpayer’s customers. While refraining from delving into this aspect, the court suggested that the proper officer must consider such consequences before retrospectively cancelling GST registration. Importantly, the show cause notice on 01.09.2020 did not alert the petitioner to the possibility of retrospective cancellation, denying them the opportunity to object.
Considering the above circumstances, the bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja modified the cancellation order, specifying that it shall take effect from 25.02.2019—the date of the petitioner’s initial application for registration cancellation. The ruling also clarified that authorities are not precluded from pursuing recovery of taxes, penalties, or interest in accordance with the law.
Delhi High Court directed the Appellate authority to expeditiously pass an order on allegations of wrongful claim of Input Tax Credit ( ITC ). The Goods and Service Tax ( GST ) registration was cancelled on the grounds of issuance of input tax credit without underlying sales of goods and services.
A division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja directed the Respondents to process the application expeditiously and pass appropriate orders on the same in accordance with law within six weeks from today.
Madras High Court quashed the order cancelling Goods and Service Tax ( GST ) registration without providing an opportunity for a hearing. The respondents were directed to issue a fresh show cause notice under law within three weeks.
In a single judge verdict Justice Senthilkumar Ramamoorthy observed that the whole process has been undertaken mechanically. Since such an impugned order has resulted in great prejudice to the petitioner without the petitioner being provided a reasonable opportunity to respond, the impugned order calls for interference. The Court allowed the writ petition by quashing the order cancelling the petitioner’s GST registration.
The Madras High Court directed to Refund of the goods and service tax ( GST ) amount within 30 days.
In a single judge verdict Justice Senthilkumar Ramamoorthy allowed writ petitions and the second respondent was directed to issue refund to the petitioner within a period of thirty days from the date of receipt of a copy of the order. These matters are listed today “for compliance”.
Madras High Court directed to allow the refund within Two Months. The Income tax department delayed refunding tax even after the assessee requested to enable the SWIFT code and IBAN.
A single bench of Justice Senthilkumar Ramamoorthy held that “If the delay is not attributable to the assessee, Section 244A provides for a refund at the rate of ½% per month or 6% per annum. The petitioner has provided a calculation memo in which credit has been given for interest already paid for the period running from 01.04.2021 to 31.03.2022. As regards the period subsequent thereto, the documents on record indicate that the petitioner endeavoured to input the SWIFT code and IBAN in April 2022. Therefore, the petitioner is entitled to interest for the period from 01.05.2022 until the date of receipt of refund.” The court disposed of the writ petition by directing the respondents through the Central Processing Centre to pay interest on the sum of Rs.2,27,20,180/- at the rate specified in Section 244-A of the Income Tax Act from 01.05.2022 to 05.10.2023.
The Kerala High Court directed to file a statutory appeal in a case where the TRAN Credit was not allowed as the assessee registered under Kerala Value Added Tax (KVAT) cannot avail of Input Tax Credit (ITC) under CGST Central Goods and Services Tax Act/State Goods and Services Tax Act, 2017.
Justice Dinesh Kumar Singh disposed of the writ petition with liberty to the petitioner to file an appeal under Section 107 of the CGST/SGST Act before the appellate authority. The judge observed that the petitioner has the remedy of statutory appeal under the provisions of the CGST/SGST Act. Considering the availability of an alternate remedy of statutory appeal.
Delhi High Court observed that merely because books of account were available to the Assessing Officer (AO) is not valid reason for triggering reassessment proceedings.
A Division Bench comprising Justices Rajiv Shakdher and Girish Kathpalia observed that “In our view, this is a case which involves a change of opinion notwithstanding the provision referred to by the AO in his reasons to believe recorded on 05.02.2019. The arguments advanced by Mr Singh that merely because books of account were made available to the AO and he could have discovered material evidence had he been diligent could not be the reason for not triggering reassessment proceedings against the petitioner, does not find favour with us.”
Delhi High Court directed the Income Tax Department to approach the Court for revival as the insolvency proceedings are pending against Amrapali Group.
A Division Bench comprising Justices Rajiv Shakdher and Girish Kathpalia observed that “Since more than one year has passed without definite information, we are inclined to close the instant appeals, with liberty to the appellant/revenue to approach the court for revival, albeit as per law, as and when they obtain clarity in the above-captioned matters. Consequently, the pending applications concerning condonation of delay in re-filing the appeal (i.e., CM APPL. 60497/2023 in ITA 646/2023) shall stand closed.”
The Delhi High Court set aside the order cancelling the Goods and Service Tax( GST )registration due to non-compliance with the GST Act, 2017. The show cause notice or order is invalid as it doesn’t show the reason for cancellation.
A division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja set aside the show cause notice dated 03.08.2023 and the order of cancellation dated 15.09.2023. The GST registration of the petitioner is restored to its original number. The petitioner shall file the requisite returns following the law.
Madras High Court quashed the addition of Rs. 23 Crores under section 68 of the Income Tax Act, 1961 as it was added without any evidence. The Court remanded the matter for reconsideration by the appellate authority.
The Single bench of Justice Senthilkumar Ramamoorthy allowed the petition by quashing the impugned order and remanded the matter for reconsideration by the appellate authority. After providing a reasonable opportunity to the petitioner, the appellate authority is directed to dispose of the appeal by a reasoned order within a maximum period of four weeks from the date of receipt of a copy of the order. The petitioner is directed to extend full cooperation to ensure that the appeal is disposed of within the time limit specified above.
Delhi High Court, while disposing the writ petition, has declared that the cancellation of Goods and Services Tax (GST) registration will be effective from the date of the Show Cause Notice ( SCN ).
The bench, consisting of Justice Vibhu Bhakru and Justice Amit Mahajan, directed that the order cancelling the registration would take effect from 18.05.2020, the date of the Show-Cause notice. This decision aligned with the petitioner’s claim that no business activities occurred thereafter. The court further clarified that this order did not preclude authorities from pursuing tax recovery or addressing statutory violations if any were found. Additionally, the ruling explicitly stated that it did not express an opinion on whether the petitioner was the legal heir or had any rights in the business of late Varyam Dass Khurana.
Delhi High Court directed the Customs Commissioner to release amount after realising redemption fine and penalty on seizure of foreign currency.
A Division Bench comprising Justice Ravinder Dudeja and Justice Sanjeev Sachdeva observed that “In view of the above, we find no justification for not releasing the money in terms of the Order-in-Original dated 28.01.2020. Petition is allowed with a direction to the respondent to release the remaining amount after realizing the redemption fine and penalty from the seized foreign currency within a period of two weeks from today” the Bench concluded.
Bombay High Court has directed the Registrar of Domains to take down scam websites offering fake Permanent Account Number ( PAN ) Cards in a copyright infringement case by UTI Infrastructure Technology And Services Limited ( UTIITSL ).
The Bombay High Court reportedly issued an ex-parte interim injunction after being convinced that the defendants’ conduct, involving illegal acts, infringed upon the plaintiff’s statutory rights under Common Law. The court found that both identified and unidentified entities engaged in fraudulent activities by imitating the plaintiff and its marks, leading to copyright infringement and passing off marks.The court directed specific defendants to remove unauthorized domains and websites. Additionally, it reportedly instructed the police and Cyber Crime Departments to provide necessary assistance in executing the interim order.
Allahabad High Court held that the seizure of vehicle without notice transporting goods affects civil rights of transporter as truck is the capital asset of transporter.
A Division Bench of Justice Saumitra Dayal Singh and Justice Manjive Shukla noted that “By virtue of the statutory law, the petitioner may not be entitled to release of the truck unless he deposits Rs. One lakh as provided under proviso-1 of Section 129 (6) of the Act. In such facts, it appears that the petitioner is entitled to one opportunity of hearing before the authority to furnish his explanation and to establish the fact that there was no connivance of the petitioner or no active role played by the petitioner in the illegality that are attributed to the dealer viz-a-viz the goods being transported on the truck in question. At present, the penalty order does not appear to bring out any conduct of the petitioner as may indicate or establish collusion between the petitioner and the importing dealer M/s Royal India Enterprises.”
The Bench held that the Truck being the valuable property and a capital asset of the transporter which is utilised to generate revenue/ income, we perceive valuable civil right of the petitioner having being adversely affected exparte and also provided certain conditions for the release of the vehicle.
The Delhi High Court has directed the National Board of Examinations ( NBE ) to refund the Goods and Services Tax ( GST ) collected from candidates, citing the erroneous imposition of GST on course fees.
The Delhi High Court Division Bench of Justices Vibhu Bakhru and Amit Mahajan observed that no further orders are required to be passed in this regard except to restrain NBE from collecting any further GST pursuant to the said notification.
The bench also urged the concerned GST authorities to process such applications as expeditiously as possible. The concerned hospitals, on receipt of the fund from the GST authorities, shall take immediate steps to refund the same to the candidates from whom the GST was collected.
Gauhati High Court recently observed that industrial units not to be discriminated for budgetary support-based turnover.
A Single Bench of Justice Soumitra Saikia observed that “Under such circumstances when the avowed object of the budgetary support scheme is to provide financial support to those industries who were eligible to avail benefits under the NEIIPP, the exclusion of the petitioner units on the classification that they did not pay Central Excise Duty either because their annual turnovers were below the threshold limit of 1.5 crores or that they had produced items which were already exempted is based on fiction and cannot be permitted to be a ground to deny the benefits of budgetary support scheme. Such classification cannot be held to be a reasonable classification as it fails to achieve the object for which the classification is made, namely providing financial support to those industries availing benefits under the NEIIPP.”
Delhi High Court directed to expedite adjudication of GST refund as the deficiency memo was not received.
A Division Bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja observed that “In view of the above, the petition is disposed of granting liberty to the petitioner to approach this Court afresh in case need so arises. 6. Keeping in view the fact that the application for refund was submitted on 08.10.2023 for the subject period, respondents are directed to expedite the adjudication of the application and endeavour to disposed it of within four weeks from today.”
Madras High Court directed to approach the statutory appellate authority as the assessee was unable to Claim Input Tax Credit ( ITC ) due to a defect in the return filed. The court refused to entertain the writ petition in light of the statutory remedy available to the petitioner.
The single bench of Justice Senthilkumar Ramamoorthy refused to exercise discretionary jurisdiction and entertain the writ petition in light of the statutory remedy available to the petitioner. The Court directed the petitioner to avail the statutory remedy.
Delhi High Court remitted matter to the Commissioner of Income Tax to determine the most appropriate method for determining the arm length price ( ALP ).
A Division Bench comprising Justices Rajiv Shakdher and Girish Kathpalia observed that “Having heard the counsel for the parties, according to us, this appeal can be disposed of with the consent of learned counsel for the parties, with the following directions. The matter is remitted to the CIT( A ) for examination of the issues set forth hereafter: (i) Whether or not the appellant/assessee recovered from its AE a price higher than that which the AE received from DMRC against the supply of bogies/wagons. (ii) The comparables against which ALP should be benchmarked. (iii) Whether, in the facts and circumstances obtaining in the AY in issue, i.e., AY 2011-12, requires the usage of CUP Method for determining ALP as against TNM Method, as held by this court in its order dated 09.04.2018 passed in ITA No.223/2018.”
Madras High Court observed that no reopening of Assessment under Income Tax Act, 1961 can be made when the reasons cited was inspired from change of opinion of the Assessing Officer ( AO ).
A Single Bench of Justice observed that “The reasons given for re-opening of the Assessment along with a notice issued under Section 143(2) read with Section 147 of the Income Tax Act, 1961 on 05.05.2021 is also based on the Profit and Loss Account. Thus, there is no scope for re-opening of the assessment which was completed on 28.09.2018 under Section 143(3) read with section 92CA(3) and Section 144C(8) of the Income Tax Act. Clearly, the reasons given for re-opening of the assessment is inspired from change of opinion.”
Delhi High Court directed the Commissioner of Trade and Taxes to refund Rs 15 lakhs to Sight Sound Electronics.
The refund order was issued in the name of Sight Sound Electronics whereas the complete name of Petitioner is Sight Sound Electronics (1) Pvt Ltd. The counsel for respondents under instructions submitted that the amount is under process and shall be duly refunded to the Petitioner within a period of two weeks from today.
A Division Bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja observed that “In view of above, the petition is disposed of directing the respondents to refund the amount of Rs 15,86,956/- along with interest to Petitioner in accordance with law within a period of two weeks from today.”
Delhi High Court granted interest at 6% per annum as the GST refund pertains to fourth quarter Assessment Year.
A Division Bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja observed that “In view of the above, petition is allowed. The respondents are directed to process the application for refund of the petitioner in accordance with law within two weeks and in case the refund is payable the same shall be paid. Since the refund pertains to the fourth quarter of 2014-15, petitioner shall also be entitled to statutory interest @ 6% per annum from the date the amount is found to be due and payable”.
Delhi High Court has set aside an assessment order, citing the non-mentioning of retrospective Goods and Service Tax ( GST ) cancellation in the Show Cause Notice ( SCN ).
The two member bench comprising Justice Sanjiv Sach Deva and Justice Ravindar Dudeja concluded that deeming the proceedings vitiated due to lack of reason and clarity, set aside the impugned order and the subsequent order in appeal dated 24.08.2023. The petitioner’s GST registration was reinstated. The court emphasized that neither the show cause notice nor the order qualified as a valid cancellation, and relegating the petitioner to an appeal served no purpose. The court highlighted Section 29(2) of the Central Goods and Services Tax Act, 2017, empowering the proper officer to cancel the registration from a retrospective date based on specific circumstances. The court emphasized that such cancellations should not be mechanical and subjective, requiring objective criteria. The failure to furnish returns for a certain period should not automatically warrant retrospective cancellation. Assessment order set aside and the subsequent order in appeal dated 24.08.2023. The petitioner’s GST registration was reinstated.
Delhi High Court in an appeal preferred by the Principal Commissioner of Income Tax observed that the Transactions concerning mutual funds are in nature of investment and not motivated by trade.
A Division Bench comprising Justice Rajiv Shakdher and Girish Kathpalia observed that “The CIT( A ) and the Tribunal, after appreciating the material on record, have concluded that the transactions concerning mutual funds were in the nature of investment and not motivated by trade. In this context, the CIT( A ) and the Tribunal, among other things, looked at the transactions from the following prism: quantum of trade, value, purpose, the period for which mutual funds were held, and how disclosure had been made in the books of accounts/financial statements.”
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