This weekly round-up analytically summarises the key stories of the Supreme Court & High Court cases reported at taxscan.in, from March 23, 2024 to March 30, 2024.
SUPREME COURT
The Supreme Court recently ruled on the applicability of Section 71 of the Customs Act, 1962 concerning imported goods stored outside a notified public bonded warehouse. In a case involving imported machinery parts, the Court noted that goods remaining beyond the warehouse’s permitted period would be considered improperly removed. Despite permission from the designated officer, discrepancies arose regarding the storage location of certain cases of machinery parts.
The Court’s decision clarified the application of customs regulations regarding warehousing and unauthorized removal. While acknowledging the lawful storage of goods outside the bonded warehouse with official approval, it upheld penalties for cases where such authorization was lacking.
The Supreme Court, in a Disproportionate Assets case, upheld that proceedings under the Income Tax Act are not conclusive proof for the discharge of an accused. The appellant, Puneet Sabharwal, argued against the High Court’s decision, highlighting errors in considering his involvement based solely on being named as a beneficiary in a trust deed. Despite arguments referencing exoneration by the Income Tax Appellate Tribunal, the Court emphasized that such orders do not suffice as conclusive evidence and warrant a full-fledged trial. Justices Vikram Nath and K V Viswanathan stressed that the trial, pending for nearly 25 years, must be expedited and concluded by December 31, 2024.
The Court’s ruling clarified that orders from the Income Tax Authorities, while relevant, do not serve as conclusive proof in criminal proceedings. Notably, the Court distinguished this case from others, emphasizing that the Income Tax Act proceedings pertain to income assessment rather than the source of income or allegations of disproportionate assets under the Prevention of Corruption Act. Despite the appellant’s arguments regarding exoneration in civil adjudication, the Court maintained that the criminal trial must proceed independently, urging for its swift conclusion.
HIGH COURTS
The Kerala High Court, in a recent ruling, determined that compliance with the prerequisites outlined in Section 148A of the Income Tax Act, 1961, is not obligatory prior to the issuance of notices under Section 148 of the same Act. Justice Gopinath P, presiding over a Single Bench, emphasized that when assets or cash are presented before a Criminal Court, the Income Tax Department cannot issue notices under Section 132A to that specific Court.
Instead, any application concerning the release or custody of such items must adhere to the provisions of the Code of Criminal Procedure, particularly Section 451 Cr.P.C. The petitioner challenged the notices issued under Section 148 for the assessment years 2020â2021, 2023â2024, arguing that the procedure outlined in Section 148A had not been followed. Despite the petitioner’s claims, the Court ruled in favor of the Income Tax Department, stating that in this instance, adherence to the procedure under Section 148A was unnecessary before issuing notices under Section 148.
The Madras High Court directed income tax authorities to conduct a re-assessment, granting the petitioner a fair opportunity within 12 weeks. The case involved Pallazzio Energy Farms LLP, whose Chartered Accountant, a senior citizen, couldn’t represent them due to the COVID-19 pandemic when income tax notices were issued. The petitioner challenged the order dated 30.03.2021 under Section 264 of the Income Tax Act, 1961, citing inadequate opportunity. Despite the issuance of notices, the petitioner’s CA couldn’t attend due to pandemic-related risks, supported by medical reports. The court, noting the necessity for a fair opportunity, remanded the matter for reassessment, with a 12-week deadline, as requested by the petitioner’s counsel and unopposed by the Income Tax department.
The Madras High Court dismissed a writ petition filed by a borrower who sought access to the income tax returns (ITR) of the lender. The court advised the petitioner to address any grievances or complaints regarding the lending business to the Reserve Bank of India (RBI) instead. The bench, led by Chief Justice Sanjay V. Gangapurwala and Justice D. Bharatha Chakravarthy, deemed the petitioner’s request for the lender’s ITR as misconceived, stating that the petitioner lacked the right to make such a demand.
The petitioner, who had borrowed from the third respondent engaged in lending activities, alleged that the lender had not disclosed their income in their ITR. Despite submitting a representation and subsequent writ petition concerning the lender’s conduct, the court emphasized that civil claims should be pursued through the appropriate civil court. Additionally, any grievances regarding the lender’s business practices should be directed to the RBI rather than the court. Consequently, the writ petition was dismissed by the High Court.
The Madras High Court affirmed that secured creditors hold priority charges over the claims of Sales Tax, Commercial Tax, and Income Tax. The court granted relief to ICICI in a writ petition concerning the removal of an attachment order and registration of a sale certificate, clarifying the rights of secured creditors under the SARFAESI Act.
Chief Justice Sanjay V. Gangapurwala and Justice D. Bharatha Chakravarthy’s bench ordered that the registering authority must register auction sales by secured creditors, despite attachments by tax departments. Additionally, if the secured creditor receives excess amounts from the auction, they are obligated to remit the surplus to the respective departments. However, if the creditor hasn’t received any excess amounts, they are not required to remit anything, and the departments cannot pursue prosecution against the creditor’s officers. Dr. B. Ramasamy and Mr. K. Karthik Jegannath represented the 1st and 4th respondents, respectively.
The Madras High Court has resolved writ petitions filed by various companies challenging the constitutionality of Income Tax provisions Section 115 WA(2) and 115 WB(2)&(1) as these provisions were removed from the statute. The petitioners, represented by Ms. G. Pramila, argued that these sections, introduced by the Finance Act, 2005, violated several articles of the Constitution and exceeded Parliament’s legislative competence. With no representation made by the respondents, including the Union of India and CBDT, the petitioners highlighted that the contested provisions were eliminated by the Finance Act 2/2009, rendering the petitions moot. Consequently, Chief Justice Sanjay V. Gangapurwala and Justice D. Bharatha Chakravarthy’s bench concluded that since the provisions were no longer in effect and no further relief was sought, the petitions were disposed of as academic.
The Madras High Court has disposed of a writ petition filed by Ramco Cements challenging the constitutionality of Sections 115 WA to 115 WL of the Income Tax Act, 1961, as these provisions have been removed from the statute. The petitioner sought a Writ of Declaration, alleging that these sections were ultra vires to Article 14 and 19(1)(g) of the Constitution.
Represented by Mr. J. Balachander, the petitioners argued that the provisions were eliminated from the statute book by the Finance Act 2/2009, effective from April 1, 2010, raising questions about their constitutionality and compatibility with fundamental rights. Chief Justice Sanjay V. Gangapurwala and Justice D. Bharatha Chakravarthy’s bench concluded that since no consequential relief was sought and the petition was now academic, it was unnecessary to decide on the prayer made in the writ petition, leading to its disposal.
A Single Bench of the Patna High Court recently dismissed the bail applications of six individuals accused in a Cyber Fraud case involving a Work From Home Scam perpetrated via WhatsApp and Telegram. The prosecution alleged that the accused posed as bank Directors and a Chartered Accountant to open bank accounts, through which they lured unsuspecting victims into depositing money for promised online work opportunities. The Economic Offences Unit conducted investigations, leading to the arrest of several individuals involved in the scam. Despite pleas of innocence from the defendants’ counsels, the court noted the severity of the offence and the defendants’ alleged pivotal roles in it, emphasising the difficulty in detecting and prosecuting cyber criminals due to their sophisticated understanding of technology.
The Madras High Court intervened in a long-pending income tax appeal filed by Pandyan Grama Bank, directing the Commissioner of Income Tax (Appeals) to resolve the matter within three months. The appeal, initiated in January 2019 following a reassessment order issued in December 2018, had remained unresolved for five years, prompting the petitioner to seek court intervention. The issue at hand concerns the petitioner’s eligibility for deduction under Section 80B(2) of the Income Tax Act, 1961, which has been extensively debated in various judgments of the Income Tax Appellate Tribunal. Acknowledging the delay and recognizing the importance of swift resolution, the court instructed both parties to cooperate and set a maximum time frame of three months for the appeal’s disposal.
The Calcutta High Court recently affirmed the validity of disability findings provided by experts in an insurance claim case, emphasizing the acceptance of disability certificates for assessing the extent of disablement. In the case brought by Pandyan Grama Bank against the National Insurance Co. Ltd, the tribunal initially awarded compensation amounting to Rs. 11,44,937/- along with interest, under Section 166 of the Motor Vehicles Act, 1988.
Furthermore, the court referenced previous Supreme Court judgments, asserting that in the absence of cross-objection from claimants, the compensation awarded by the tribunal stands final, with no scope for enhancement in appeals filed by insurance companies. Noting the absence of evidence indicating deliberate delay from the insurance company, the court ordered compensation of Rs. 2,23,709/- along with interest, based on the statutory deposit made by the appellant-insurance company, ultimately resolving the long-standing dispute.
The Madhya Pradesh High Court recently dismissed a writ petition challenging a show cause notice and provisional attachment order issued under the Prohibition of Benami Property Transactions Act, 1988, emphasizing the availability of statutory remedies under the Act.
Despite arguments from the petitioner’s counsel, that the show cause notice and attachment order were invalidated by the aforementioned Supreme Court judgment, the High Court upheld the availability of statutory remedies provided under the Act. The court emphasized that the adjudicating authority under the Act is best suited to decide questions regarding the nature of property transactions, and petitioners can present factual and legal grounds before it. Referring to relevant judgments, the court ruled out entertaining the petitions, directing the petitioners to avail themselves of the statutory remedies available and indicating that the court had not taken a stance on the case’s merits.
The Calcutta High Court intervened in a matter concerning a typographical error in an Income Tax Department order and directed the department to rectify it. SS Commotrade Pvt. Ltd filed a writ petition, highlighting the mistake where the writ petition number mentioned in the income tax order was incorrect. Upon submission by the petitioner’s advocates, Justice Md. Nizamuddin acknowledged the error and directed that the correct writ petition number, WPA 4122 of 2023, be recorded instead of WPA 4122 of 2022. The court instructed the Income Tax Department to consider the rectified order accordingly, treating it as part of the original order dated February 13, 2024.
The Andhra Pradesh High Court recently dismissed a revision petition filed by Prathipati Sarath, challenging an order passed by the Additional Chief Metropolitan Magistrate. The petitioner alleged diversion of public funds amounting to 45.37 crores, but the court found no evidence to support this claim. Sri B. Adinarayana Rao, senior counsel representing the Respondent/A.1, argued that there was no contractual relationship with the government, thereby refuting charges under various sections of the IPC. The court upheld the magistrate’s order, emphasizing the lack of evidence and dismissed the criminal revision case, with Smt. Y.L. Shivakalpana Reddy representing the petitioner and Sri B. Adinarayana Rao representing the Respondent/A.1.
Despite allegations of diversion of public funds and fraudulent practices, the Andhra Pradesh High Court found no substantiating evidence and dismissed a revision petition filed by Prathipati Sarath. The court upheld the order passed by the Additional Chief Metropolitan Magistrate, highlighting the absence of a contractual relationship with the government and refuting charges under several sections of the IPC. Sri B. Adinarayana Rao, senior counsel for the Respondent/A.1, argued against the validity of the charges, leading to the dismissal of the criminal revision case. Smt. Y.L. Shivakalpana Reddy appeared for the petitioner, while Sri B. Adinarayana Rao represented the Respondent/A.1 in the proceedings.
The Madras High Court recently ruled that hostels, providing accommodation to female students and working women, are exempt from Goods and Services Tax (GST) under Entry Nos. 12 and 14 of Notification No. 12/2017-Central Tax (Rate) dated June 28, 2017. In a consolidated decision, the court addressed several writ petitions and Writ Miscellaneous Petitions (WMP) with similar facts, circumstances, and issues. Representing the petitioners, including Thai Mookambikaa Ladies Hostel, Ms. Aparna Nandakumar argued that their operations qualify as ‘residential dwelling’ under the exemption notification, thus exempting them from GST. The court emphasized that the burden of proof lies on the petitioners to demonstrate their eligibility for exemption, clarifying that GST on hostel accommodation depends on the residential nature of the end-use by the occupants, not the property’s nature or the service provider’s business.
Despite the Tamil Nadu Authority for Advance Ruling (TN AAR) comparing hostel premises to hotel premises, the Madras High Court set aside the AAR ruling, stressing that GST imposition on hostel accommodation should be considered from the perspective of the service recipient, not the provider. The court highlighted that GST is collected from the recipient and deposited with the government by the provider, and exemption depends on the residential nature of the end-use, rather than the property’s nature or the service provider’s business. Consequently, the court ruled in favor of the petitioners, exempting hostels from GST, and allowed all writ petitions without imposing any costs.
The Madras High Court recently quashed the cancellation order of Goods and Services Tax Identification Number (GSTIN) registration due to non-filing of GSTR 3B returns for six months, as there were no tax dues pending against the petitioner. The petitioner, a registered entity under GST laws, received a show cause notice threatening cancellation of their registration for non-filing of returns. Despite promptly filing their returns upon receiving the notice and revocation of the suspension of registration, a fresh cancellation order was issued later. The petitioner’s appeal against this order was rejected on procedural grounds, prompting the challenge before the High Court.
The petitioner’s counsel argued that the subsequent cancellation order was unsustainable as it was based solely on limitations, despite no outstanding tax dues against the petitioner. Senior standing counsel Sai Srujan Tayi, representing the respondents, acknowledged the notice and highlighted the procedural aspect regarding the filing deadline for the appeal. The court, considering the facts and merits of the case, directed the appellate authority to review the appeal within a month, providing the petitioner with a reasonable opportunity. Consequently, the Madras High Court quashed the cancellation order and remanded the matter for further consideration, disposing of the writ petition with no costs imposed.
The Madras High Court recently disposed of a writ petition filed by the petitioner concerning a bank attachment notice issued by the income tax department. The petitioner contested the notice dated 18.01.2024, which followed an assessment order dated 29.12.2019, alleging fraudulent linkage of their PAN to a specific SBI account.
Dr. B. Ramaswamy, senior standing counsel for the respondents, countered by stating that there is no basis for intervention, as there is a pending statutory appeal. After examining the documents, the High Court observed that the assessment order was issued on 29.12.2019, and the petitioner subsequently appealed to the fifth respondent, with the appeal still pending. Considering the existence of the statutory appeal, the court directed the petitioner to approach the appellate authority for any interim relief and disposed of the appeal accordingly, instructing the appellate authority to expedite the disposal of the appeal.
The Madras High Court recently ruled that the Joint Commissioner of GST & Central Excise lacks jurisdiction to proceed until the Sabka Vishwas Discharge Certificate is revoked by the Designated Committee. Justice Mohammed Shafeeq emphasized that under the Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 (SVLDRS), only the Designated Committee has the authority to revoke or cancel a Discharge Certificate based on false particulars. The case involved a partnership firm that participated in the SVLDRS, received a Discharge Certificate, and subsequently faced adjudication proceedings. The court set aside the adjudicating authority’s order, highlighting the limited jurisdiction of the adjudicating authority and the exclusive authority of the Designated Committee to revoke or cancel Discharge Certificates.
In a recent ruling, the Madras High Court instructed a taxpayer-petitioner to submit consolidated grievances regarding refund adjustments by the Income Tax Department to the Jurisdictional Assessing Officer (JAO). The petitioner, facing a prolonged dispute over a refund totaling Rs. 8,64,604/-, highlighted concerns about adjustments made without prior intimations or demand notices. The court directed the petitioner to file a consolidated grievance petition before the JAO within 15 days, addressing adjustments not only for the assessment year 2009-2010 but also for other relevant years. The JAO must review the petition, provide a fair opportunity for the petitioner’s representation, and issue a detailed order within two months, ensuring due consideration and resolution of grievances.
A Single Bench of the Calcutta High Court recently restored an appeal to the Goods and Services Tax (GST) appellate authority, condoning the delay in its presentation. The petitioner, dissatisfied with the rejection of their appeal due to exceeding the four-month limitation period, approached the High Court seeking relief.
The Court clarified that the Appellate Authority retains discretion to consider appeals filed within one month after the limitation period, citing Section 5 of the Limitation Act, 1963. Justice Hiranmay Bhattacharyya criticised the restrictive interpretation of the Impugned Order and ruled in favour of the petitioner, emphasising the petitioner’s medical condition as a valid reason for the delay. Consequently, the appeal was restored to the file of the appellate authority.
In a recent ruling, the Madras High Court dismissed a writ petition challenging legal proceedings initiated by the Income Tax Department against the petitioner for alleged non-filing of Income Tax Returns and delay in tax payment. The petitioner sought compounding of the offence under Section 276B of the Income Tax Act, submitting an application which remained unaddressed. The court noted that the application had indeed been considered, but the petitioner failed to comply with the prescribed deadline for payment of compounding fees, leading to rejection of the application. As a result, the court dismissed the Criminal Original Petition while granting the petitioner liberty to present their case before the trial court.
The Delhi High Court modified a retrospective cancellation order of Goods and Service Tax (GST) registration for M/S Supreme Enterprises. The petitioner challenged the order, citing lack of notice or opportunity to object to the retrospective cancellation. Despite multiple applications for cancellation, the Show Cause Notice lacked specificity and failed to inform the petitioner about the retrospective cancellation. Justices Sanjeev Sachdeva and Ravinder Dudeja found the notice and order insufficient in detailing reasons for retrospective cancellation. Consequently, the court modified the order, stating that the registration shall be treated as cancelled from the date the petitioner closed business activities, i.e., 26.07.2022, and directed necessary compliances under Section 29 of the Central Goods and Services Tax Act, 2017.
In a recent case, the Delhi High Court found that the failure to dispatch Form GST REG 31 to the assessee violates the right to take appropriate remedy against GST cancellation. The court set aside the impugned show cause notice and Form GST REG 31. Rajkumar Singhal, the petitioner, argued that the Show Cause Notice lacked essential details, including the name and designation of the issuing officer, and failed to mention the grounds for cancellation clearly. Counsel for the petitioner also pointed out discrepancies in the signatures and attachments of the notice. Respondent No.3 was consequently removed from the case, and the court noted that the Form GST REG 31 had not been dispatched electronically as required by law. Justices Sanjeev Sachdeva and Ravinder Dudeja directed the respondents to issue a proper show cause notice if necessary, ensuring compliance with the law and providing the petitioner with an opportunity for a personal hearing.
The Delhi High Court ruled that bail under the Prevention of Money Laundering Act (PMLA) cannot be automatically granted solely for treatment at a specialized hospital. The petitioner, Ramesh Chandra, sought an extension of interim bail granted on medical grounds, citing his age and deteriorating health condition. The Court extended the interim bail until March 16, 2024, directing Chandra to surrender before the Superintendent Jail on that date. Additionally, the Superintendent Jail was instructed to ensure immediate medical attention for Chandra if his condition worsens, including referral to specialized government hospitals. Moreover, the court emphasised the need for continuous evaluation and proper medication for Chandra’s medical treatment, considering his declining cognitive abilities.
The Delhi High Court ruled that rejecting a claim of Input Tax Credit (ITC) solely on the basis of an unsatisfactory reply is invalid. Ethos Limited challenged an order proposing a demand against them, contending that their detailed reply to the Show Cause Notice was not considered. The Court observed that the officer did not properly evaluate the reply and merely deemed it unsatisfactory without adequate examination. Consequently, the Court remitted the matter to the Proper Officer for re-adjudication, emphasizing the need for a thorough review of the petitioner’s response.
The Delhi High Court overturned an order cancelling GST registration without providing sufficient reasons, emphasizing that such cancellations cannot be done mechanically. M/S 3 Shades Events challenged the retrospective cancellation of their registration, arguing that they were not given a fair opportunity to object. The Court observed flaws in the cancellation process and modified the order, stating that the registration shall now be treated as cancelled from a later date. However, the Respondents retain the right to take lawful steps for tax recovery, including retrospective cancellation of GST registration.
The Madras High Court, in response to a writ petition, clarified that without proper notification under Section 6 of the Central and State Goods and Services Tax Acts, there’s no cross empowerment for tax authorities to conduct inspections, searches, seizures, or arrests under GST laws. The petitioners challenged the proceedings of the State Authorities, arguing that in the absence of such notifications, the actions taken by the counterparts were without jurisdiction.
The court highlighted the need for consensus between the GST Council, State, and Central Governments to avoid confusion and multiple assessments. It emphasised that without cross-empowerment notifications, actions taken by authorities beyond their assigned jurisdiction are invalid, concluding that such proceedings initiated by the respondents were without jurisdiction.
In a recent Karnataka High Court decision, it was ruled that average income should be considered when variations are found in the claimant’s income tax returns (ITR). The case involved a petitioner seeking compensation for injuries sustained in a road accident. The Tribunal confirmed the liability of the insurer and awarded compensation. The petitioner argued that disability should be considered as whole-body functional disability and income assessed based on the 2018-2019 ITR. The Court, represented by Division Bench of Justice H.T. Narendra Prasad and Justice K.V. Arvind stated that averaging income over years is appropriate to ensure fair compensation, especially when income stability is uncertain.
Mere Variance in Allowable Deductions not Ground to Believe Assessee Furnished Inaccurate Particulars of Income: Delhi HC Pr. Commissioner of Income Tax-2 vs ICICI Bank Ltd CITATION: 2024 TAXSCAN (HC) 631
In a recent Delhi High Court decision, it was observed that a mere variance in allowable deductions is not sufficient to believe that the assessee furnished inaccurate particulars of income. The case involved a banking company that filed its return of income, later revised, declaring total income and book profit. The Assessing Officer disallowed certain deductions, leading to a penalty notice under Section 271(1)(c) of the Income Tax Act.
The CIT(A) deleted the penalty, a decision upheld by the ITAT. The revenue argued that the failure to claim deductions initially amounted to inaccurate particulars. However, the Division Bench of Justices Dr. Neela Gokhale and K.R. Shriram held that the provisions of Section 271(1)(c) were not attracted, noting that the claimed deductions were linked to business profit and that the mere making of unsustainable claims does not constitute furnishing inaccurate particulars of income.
The Orissa High Court Division Bench upheld Hindustan Unilever Ltd’s (HUL) deduction of Tax at Source (TDS), dismissing the challenge by the works contractor of ‘Wheel, Surf Excel, and Domex’. The petitioner, Oriclean Pvt. Ltd., had a purchasing agreement with HUL for manufacturing and supplying products. HUL deducted TDS at 2% under section 194 (C) of the Income Tax Act from the petitioner’s sale invoices. The petitioner contended that their agreement was a contract for sale, not a works contract, and therefore not liable for TDS.
However, the court ruled that the agreement fell under ‘works contract’ as defined by Section 194C, and the petitioner failed to provide sufficient evidence to the contrary. Additionally, the petitioner had previously claimed amounts from HUL as ‘contractual receipts’ and did not dispute the TDS deductions earlier. Consequently, the court upheld HUL’s TDS deductions.
The Delhi High Court recently ruled that membership of an arbitral institution is not a prerequisite for invoking arbitration. The dispute between the parties arose over various issues, including non-payment of dues, failure to provide land free from encumbrances, and deduction of amounts from bills. After failed conciliation attempts, the petitioner sought arbitration under the Arbitration and Conciliation Act, 1996, proposing a three-member tribunal. The petitioner did not use the rules of the “Society for Affordable Redressal of Disputes (SAROD)” as it required primary membership. Justice Sachin Datta observed that arbitration agreements don’t obligate parties to join the arbitral institution. SAROD’s insistence on membership violated the agreement and triggered the court’s intervention to constitute the arbitral tribunal under Section 11(6)(c) of the Act.
The Bombay High Court directed the refund of tax inadvertently deposited by a Chartered Accountant to the old Goods and Services Tax Identification Number (GSTIN) of the petitioner. Despite the cancellation of the old registration, the petitioner’s CA filed returns and deposited tax under both old and new GSTINs. The petitioner sought a refund for the tax deposited under the cancelled registration. The High Court noted the inadvertent mistake and criticised the authorities’ hyper-technical approach in rejecting the appeal. Consequently, the court quashed the earlier orders and directed the refund of the erroneously deposited tax amounting to Rs. 1,22,220/- under the cancelled registration number, along with interest within four weeks.
In a significant ruling, the Punjab and Haryana High Court held that if a show cause notice (SCN) regarding GST registration is not decided within 30 days of the reply, the suspension of registration is deemed to be revoked. The petitioner’s counsel argued that despite the petitioner’s response, the authorities failed to decide within the stipulated period as per CGST/PGST Rules, 2017. The Division Bench of Justices Sajeev Prakash Sharma and Sudeepti Sharma noted the delay and ruled that the suspension of the petitioner’s registration, which had been in effect for almost four months, should be revoked. Consequently, the court ordered the suspension of the petitioner’s registration from 21.11.2023 to be revoked.
The Delhi High Court directed the petitioner to apply for a refund under Section 54 of the CGST Act, 2017 for GST paid, excluding the period between 19.01.2024 and the date of judgment for limitation. Pedersen Consultants India Pvt Ltd sought a refund of Input Tax Credit for the period 2019-2020, paid on invoices for which Respondent No. 3 also paid tax. The court ruled that the petitioner must file a refund application as per Section 54 of the Act within one week. The period from 19.01.2024 till the date of judgment was excluded for limitation purposes. The court directed the proper officer to consider the petitioner’s claim under Notification No. 13/2022 while processing the refund application.
The Delhi High Court overturned an order passed under Section 73 of the CGST Act, 2017, rejecting Mother Dairy Fruit And Vegetable Private Limited’s Input Tax Credit (ITC) claim without proper hearing opportunity. The court found that the order lacked consideration of the petitioner’s detailed reply to the Show Cause Notice. The Proper Officer’s opinion that the reply was unsatisfactory was deemed insufficient, prompting the court to remit the matter for re-adjudication and setting aside the order.
The Delhi High Court overturned an order by the Appellate Tribunal under the Prevention of Money Laundering Act (PMLA) 2002, for failure to address issues regarding the confirmation of a provisional attachment order. The court restored the appellant’s application for document supply to its original number on the Tribunal’s records. The appellant’s counsel argued that the Tribunal erroneously concluded that the appeal solely challenged the confirmation order, neglecting the appellant’s plea against the rejection of their application for document supply. The court held that the Tribunal overlooked the appellant’s challenge to both orders and set aside the Tribunal’s decision.
The Delhi High Court overturned an order by the Appellate Tribunal under the Prevention of Money Laundering Act (PMLA) 2002, citing failure to address issues regarding the confirmation of a provisional attachment order. The court reinstated the appellant’s application for document supply to its original number on the Tribunal’s records. Counsel Vijay Choudhary argued that the Tribunal mistakenly concluded that the appeal solely challenged the confirmation order, overlooking the appellant’s plea against the rejection of their application for document supply. The court held that the Tribunal overlooked the appellant’s challenge to both orders and set aside its decision.
The Delhi High Court modified a GST cancellation order, specifying that the registration shall be considered canceled from the date the petitioner applied for cancellation, i.e., 01.10.2019. M/S Veetrag Traders challenged the order cancelling their GST registration retroactively from 01.07.2017. The court found the show cause notice and order lacking in details and reasons, rendering them unsustainable. The petitioner cited closure of business and challenges due to the COVID-19 pandemic as reasons for non-compliance. Justices Sanjeev Sachdeva and Ravinder Dudeja directed the registration to be canceled from the date of application and instructed the petitioner to fulfill necessary compliances under Section 29 of the Central Goods and Services Tax Act, 2017.
The Delhi High Court directed to continue proceedings until the final order on the validity of Rule 5A of Service Tax Rules, 1994. M/S Hardicon Ltd sought to quash a service tax audit initiation letter and a subsequent Show Cause Notice. The validity of Rule 5A is under challenge before a larger bench. The court allowed proceedings to continue but decreed that any final order passed won’t be implemented without court approval.
A Single Bench of the Madras High Court granted an interim stay on the GST demand concerning salary paid to seconded employees of the petitioner. The petitioner challenged a December 23, 2023 order classifying the entire salary amount as taxable under GST. The court noted that similar cases are being examined by other High Courts and granted the stay until the next hearing on April 8, 2024.
The Madras High Court quashed a DRC-07 order issued by GST officers without hearing the petitioner, arising from discrepancies in GSTR 3B and GSTR 2B. The court remanded the matter for reconsideration, granting the petitioner 15 days to reply to the show cause notice. The respondent was directed to provide a reasonable opportunity, including a personal hearing, before issuing a fresh order within two months. As a result, the bank attachment was lifted, and the writ petition was disposed of with no costs.
The Madras High Court quashed a DRC-07 order issued by GST Authorities despite the petitioner’s request to extend the reply time. The court observed that the authorities issued the order without considering the request, denying the petitioner a fair opportunity to contest the tax demand. Consequently, the court remanded the matters for reconsideration, granting the petitioner 15 days to submit a reply to the show cause notices. The respondent was directed to provide a reasonable opportunity, including a personal hearing, and issue fresh orders within two months. The writ petitions were disposed of with no costs, and connected miscellaneous petitions were closed accordingly.
The Delhi High Court ruled in favor of JSW Steel Limited, granting them access to Merchandise Exports from India Scheme (MEIS) benefits despite procedural errors in their shipping bills. Represented by Mr. Kumar Visalaksh and Mr. Udit Jain, JSW Steel filed a petition seeking relief due to discrepancies in processing their applications by the authorities. The court, citing precedents and directives for manual intervention for rectification, directed the authorities to rectify the errors, ensuring equitable access to benefits. The judgment, delivered by Justice Subramonium Prasad, emphasized fair treatment for exporters and allowed JSW Steel to avail MEIS benefits despite procedural errors, ensuring justice in trade regulations.
The Delhi High Court ruled that rejecting a refund application based solely on limitation grounds is unjustifiable, citing a CBIC Notification dated July 5, 2022. The judgment was made in response to a petition by Zenon Analytics Pvt. Ltd. The court, comprising Mr. Justice Sanjeev Sachdeva and Mr. Justice Ravinder Dudeja, set aside the orders rejecting the refund claims and directed their reconsideration by the Assessing Authority within four weeks. The decision emphasized adherence to the CBIC Notification, excluding specific periods from the limitation calculation for refund applications.
The Delhi High Court dismissed a petition by Jetibai Grandsons Services India Pvt Ltd against Union of India and others, ruling that refiling an identical petition after unconditional withdrawal of the previous one is unsustainable and barred by the principle of estoppel. The petitioner sought relief regarding the reversal of Input Tax Credit (ITC), but the court noted the withdrawal of a previous petition without liberty to file a fresh one, indicating an abuse of legal process. The court emphasized the principle of discouraging “bench hunting” tactics and ruled the present petition as not maintainable due to estoppel.
The Kerala High Court dismissed a writ petition filed by Anand Madhavan Nair Indiradevi challenging an order under the CGST/SGST Act. The appellant, engaged in telecommunication and courier services, sought relief against Ext.P5 order passed under Section 73 of the Act. The Division bench held that disputed facts cannot be adjudicated in a writ petition and directed the appellant to pursue the statutory remedy of appeal under Section 107 of the CGST/SGST Act. Harisankar V. Menon represented the appellant, while V.K. Shamsudheen appeared for the respondent.
The Kerala High Court set aside an Assessment order passed without following the Principles of Natural Justice. The division bench of Dr. A.K. Jayasankaran Nambiar and Dr. Kauser Edappagath ruled in favor of the appellant, Wadakkanchery Service Co-Operative Bank Ltd, a Co-operative Society providing credit facilities. Despite filing a reply to the show cause notice and requesting a personal hearing, the Income Tax Officer completed the assessment without considering the appellant’s response. The bench found a clear violation of principles of natural justice and quashed the assessment order. Harisankar V. Menon represented the appellant, while Jose Joseph appeared for the respondent.
The Kerala High Court dismissed a petition filed by a taxpayer who mistakenly claimed an IGST refund instead of CGST/SGST and failed to correct the error. The petitioner, a registered dealer under CGST Act and Kerala SGST Act, received a Show Cause Notice regarding excess input tax credit claimed. Despite arguing it was a bona fide mistake, the court cited statutory limitations and precedent, including a Karnataka High Court judgment, emphasizing the need for timely correction. Since the petitioner failed to submit an application within the prescribed time, the court lacked jurisdiction to amend the statute, leading to the dismissal of the petition.
The Kerala High Court overturned the condition requiring a 15% remittance of the total income tax demand for granting a stay, deeming it arbitrary. The appellant contested an assessment order through a writ petition and appealed to the Commissioner of Income Tax, seeking a stay of recovery proceedings. Although the Single Judge granted a stay, they mandated a 15% remittance. The Division Bench ruled the condition arbitrary and modified the judgment accordingly, allowing the appeal to proceed without the remittance requirement. All other directives in the judgment remained unchanged, and the writ appeal was concluded and disposed of.
The Kerala High Court has instructed the State Tax Officer to reassess the case after GST officers seized the taxpayer’s bank account, despite the taxpayer having settled GST arrears. The petitioner, an assessee under the CGST/SGST Act, challenged a recovery notice for tax arrears. Despite the petitioner’s representation that they had already paid the arrears for certain years, a prohibitory order was issued, leading to the bank account’s attachment. The Court set aside the prohibitory order and remanded the matter to the State Tax Officer for reconsideration. The State Tax Officer was directed to review the petitioner’s representation and issue fresh orders promptly, while the petitioner was instructed to appear before the officer. Any pending applications related to the writ petition were dismissed.
The Kerala High Court dismissed a delayed writ petition filed by a private limited company seeking the refund of demanded GST and penalty paid during the interception of jewellery. The petitioner’s consignment was intercepted due to lack of relevant documents, and tax and penalty were determined. The petitioner paid the demanded amount and appealed against the order, which was rejected due to delay. The petitioner approached the court in 2024 seeking various reliefs, including quashing the appellate order and directing adjudication of confiscated goods or refund of tax and penalty. However, Justice Dinesh Kumar Singh, presiding over a Single bench, deemed the belated writ petition lacking in substance and dismissed it, along with any pending interlocutory applications related to it.
A Division Bench of the Patna High Court has granted interim relief to a petitioner by staying an order issued by GST authorities based on a show cause notice invoking the extended period of limitation as per Notification No. 9/2023 â Central Tax, dated 31.03.2023. The bench observed that the assessment was carried out for the year 2017-18, and the limitation period of 3 years had already expired by the time of the notification. Therefore, the court stayed the order until the next hearing scheduled for 9th April 2024. The issue revolves around the validity of GST Demand Orders under Section 73(9) of the CGST Act in light of extended limitation periods specified in various notifications. The court raised concerns over the potential misuse of legislative provisions and the lack of discussion or recommendation regarding the extension of time limits in GST Council meetings.
The Delhi High Court dismissed a writ petition challenging the quashing of a charge memo against Commissioner of Income Tax, Pavan Ved, citing an inordinate delay of over ten years in issuing the memo and the potential prejudice caused to the officer. The petitioners, Union of India and another, sought to challenge the Tribunal’s order quashing the charge memo alleging wrongful decisions by Ved during his tenure. The court upheld the Tribunal’s decision, emphasizing the lack of justifiable reasons for the delay and highlighting the importance of protecting the independence of quasi-judicial authorities. The bench stressed the need for timely and justified disciplinary actions against government officials while adhering to the principles of natural justice.
The Delhi High Court upheld penalties imposed under Sections 112(a) and 112(b) of the Customs Act, 1962 on Rameshwar Tiwari for smuggling gold. Tiwari was intercepted at Kolkata airport carrying gold concealed in medicine sachets. Despite Tiwari’s claim of unawareness, the court found his involvement evident due to frequent travels and knowledge of the concealed gold. The court deemed the penalties justified, emphasizing the threat posed by smuggling to the country’s economy. It dismissed Tiwari’s petition challenging the penalties, upholding the Rs.10,00,000/- penalty imposed on him.
The Madras High Court quashed a DRC 07 Order in a GST assessment case where the petitioner mistakenly repeated the same invoice number in multiple e-way bills. Despite the petitioner’s explanation and submission of relevant documents, the impugned order failed to consider their response. Acknowledging the procedural lapse, the court remanded the matter for reconsideration by the assessing officer, granting the petitioner 15 days to submit a comprehensive reply. The assessing officer was directed to issue a fresh assessment order within 2 months after affording the petitioner a reasonable opportunity, including a personal hearing. The writ petitions were subsequently closed.
The Madras High Court nullified a GST assessment order due to the petitioner’s unintentional omission regarding the Reverse Charge Mechanism in their filings. Despite rectifying the error in subsequent returns, the petitioner challenged the assessment order, claiming lack of opportunity. Acknowledging the petitioner’s explanation, the court remanded the matter for reconsideration by the respondent, directing a fair opportunity, including a personal hearing, and issuance of a fresh order within two months. Any amounts appropriated under the impugned order would be subject to the outcome of the reconsideration. Consequently, the writ petition was disposed of with no costs awarded.
The Madras High Court ruled that proceedings cannot proceed before an Adjudicating Authority designated under a superseded notification issued under the Foreign Exchange Management Act, 1999 (FEMA). Despite the show cause notice being issued by the Special Director, the subsequent notification altered the designated Adjudicating Authority to the Additional Director. Thus, the court emphasized that the inquiry and adjudication proceedings must be conducted by the Adjudicating Authority as per the current notification in effect, not the one that has been superseded. Therefore, the court concluded that the proceedings cannot proceed before the person who was an Adjudicating Authority under the superseded notification.
The Kerala High Court dismissed a writ petition filed by Chandran Sarath, stating that there is no justification to entertain the petition when there is an equally effective remedy available before the Income Tax Appellate Tribunal (ITAT). Sarath, engaged in the cashew business, challenged the assessment for the assessment year 2015-16, conducted under the Income Tax Act, 1961. Despite filing an appeal before the Commissioner of Income Tax (Appeals), which was dismissed, Sarath pursued a second appeal before the ITAT. The court, represented by Harisankar V. Menon for the appellant and Jose Joseph for the respondent, concluded that the writ petition lacked merit due to the availability of the ITAT route.
The Kerala High Court dismissed a writ petition filed by Manjally Jewellery against an assessment order passed by the state tax officer under the Goods and Services Tax Act, 2017. The court cited the availability of an alternative remedy under the GST Act and noted that the petitioner’s reply to the show cause notice was not considered while passing the order. The Single Judge bench of Dinesh Kumar Singh held that such grievances should be addressed through the provisions of the GST Act rather than through a writ petition under Article 226 of the Constitution of India.
The Kerala High Court dismissed a review petition filed by the revenue against a judgment favoring Kallada Hotels, affirming that bar attached hotels and shops should pay a 5% turnover tax, as applicable to retail outlets run by the Beverages Corporation. The petitioner argued for a reduction from 10% to 5% in turnover tax for a wider period, citing a Cabinet Note. However, the court held that the reduction applied only to specific lockdown periods, as stated in the Cabinet Note, and denied the review, stating that no error was evident on record to warrant reconsideration.
The Delhi High Court granted bail to Sanjay Jain under the Prevention of Money Laundering Act, 2002, as there was no incriminating material to prove his involvement in the offence. The Enforcement Case Information Report (ECIR) was registered based on an FIR by the CBI alleging a conspiracy to cheat and defraud IFFCO, IPL, and the Government of India. However, the court found a lack of evidence to establish the predicate offence and money trail, leading to a weak case against the petitioner. Noting that other accused were also granted bail and considering the absence of likelihood to commit further offences, the court granted bail on a personal bond of Rs. 2,00,000/- and two sureties, one of which should be a family member.
The Delhi High Court directed the revenue department to decide on the cancellation of GST registration within four weeks, as the department failed to do so even after one month since additional information was provided by the petitioner. M/S Air Pro Styles sought cancellation of their GST registration, but the application was pending due to a query raised by the department. Despite the petitioner’s response to the query, the application remained unresolved. The bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja disposed of the petition, reserving all rights and contentions of the parties.
The Delhi High Court directed the refund of the GST amount credited due to a technical error in the automatic generation of non-migrated GST numbers. BCC Developers and Promoters Pvt Ltd sought refund of Rs. 16,19,838 deposited against the non-migrated GST. The petitioner was unaware of the non-migrated GST number until a client claimed to have deposited GST credit not reflected in the migrated GST number. The court directed the respondent and the Central Board of Indirect Taxes and Customs to rectify the issue of automatic generation of non-migrated GST numbers within four weeks. Justices Sanjeev Sachdeva and Ravinder Dudeja presided over the case. Petitioner was represented by Mr. Rahul Malhotra and Mr. Ativ Gupta, while Respondents were represented by Mr. Aditya Singla and Mr. Raghav Bakshi.
In the case of Blackberry India Pvt Ltd, the Delhi High Court set aside a Show Cause Notice denying interest in delayed payment of CENVAT credit. The petitioner had filed refund applications in 2013 and 2014, which were rejected initially but later granted by the Tribunal. Despite the refund being sanctioned and paid to the petitioner, the Revenue issued a Show Cause Notice seeking recovery of the refunded amount, claiming it as erroneous. The High Court dismissed the Revenue’s challenge and held that unless the Revenue succeeds before the Supreme Court, there is no question of refunding the CENVAT credit or the interest paid to the petitioner. Justices Sanjeev Sachdeva and Ravinder Dudeja observed that the Revenue can seek interim orders of protection from the Supreme Court. Consequently, the Court quashed the show cause notice.
The Delhi High Court set aside the retrospective cancellation of Goods and Service Tax (GST) registration of R8 Space Design Pvt Ltd, citing lack of cogent reason. The court modified the impugned order, specifying that the registration would be treated as cancelled from 19.11.2020, the date when the Show Cause Notice was issued. The petitioner argued that the notice lacked details and opportunity for objection, and the impugned order did not provide clear reasons for the retrospective cancellation. Justices Sanjeev Sachdeva and Ravinder Dudeja viewed the lack of justification for the retrospective cancellation and modified the order accordingly. The petitioner, represented by Mr Anurag Soan, Mr Siddhant Gupta, and Mr Saransh Gupta, challenged the order, while the respondents were represented by Mr Rajeev Aggarwal, ASC, with Mr Prateek Badhwar, Ms Shaguftha H. Badhwar, and Ms Samridhi Vats.
The Gujarat High Court granted bail to Mr. Bharat Gordhandas Patel in a GST scam case involving Rs. 37.95 crore. Bail was subject to depositing Rs. 10 lakhs to the Government in six installments. Patel was implicated in a scam uncovered during search proceedings at M/s JK Traders. He was accused of aiding the principal accused in wrongly claiming input tax credit and creating fictitious firms. Considering Patel’s role and the fact that the principal accused was granted bail on depositing Rs. 2 crore, the court deemed Patel’s application worthy of consideration.
Justice Ilesh J. Vora noted that Patel’s custody wasn’t necessary, and the case relied on documentary evidence. Following the precedent set in the case of P. Chidambaram Vs. Directorate of Enforcement, the court released Patel on bail with the condition to deposit Rs. 10 lakhs in six installments within six months. Failure to comply would result in automatic cancellation of bail. Patel was directed to file an undertaking within 15 days of release.
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