SUPREME COURT
The Supreme Court of India dismissed an appeal, affirming that services aiding in goods exportation are not “intermediary services.” The case involved M/s. SNQS International Socks Private Limited disputing a Service Tax demand. The Customs, Excise And Service Tax Appellate Tribunal had upheld the demand, arguing the services were classified as “intermediary” under tax rules.
However, the Court ruled otherwise, emphasizing the lack of a service provider-recipient relationship and absence of consideration from vendors developed by the appellant. Justices B V Nagarathna and Augustine George Masih concluded that the appellant’s activities did not fit within the definitions of ‘Business Auxiliary Service’ or ‘Intermediary’.
The Supreme Court upheld a CESTAT order exempting services related to container supply in Special Economic Zones (SEZ) from service tax. The case involved Arkay Logistics Ltd, which provided various taxable services, including inter-carting for M/s Essar Steel Ltd. Despite the revenue’s claim of classification under “Cargo Handling Services,” CESTAT ruled in favour of exemption for SEZ operations. Justices Abhay S Oka and Ujjal Bhuyan affirmed CESTAT’s decision, stating no grounds for interference were presented.
The Supreme Court ruled that no coercive action can be taken against the Indian National Congress (I) / All India Congress Committee (INC) for a demand of Rs. 3,500 crore under the Income Tax Act, 1961, pending the disposal of a civil appeal. The Solicitor General assured no steps would be taken until the next hearing, scheduled for the second week of July 2024, citing pending adjudication and upcoming elections. Justices B V Nagarathna and Augustine George Masih issued the directive, emphasising no coercive measures should be taken against the appellant(s) until the specified date.
The Supreme Court of India dismissed a civil appeal by the state revenue department due to a delay of 142 days, exceeding the allowable limit under Section 62 of the Insolvency and Bankruptcy Code 2016. The appeal stemmed from a decision by the National Company Law Appellate Tribunal (NCLAT) involving Zicom Saas Pvt Ltd & Anr. The appellant claimed an amount in a corporate insolvency resolution process, which was partially accepted by the Resolution Professional. The Tribunal upheld the decision, stating that treating the appellant as an operational creditor did not violate Section 30(2)(b). The three-judge bench, including Chief Justice Dr. Dhananjaya Y Chandrachud, found the delay excessive for condonation under the law.
The Supreme Court ruled that a resolution applicant cannot withdraw or modify a resolution plan once approved by the Committee of Creditors, citing legal precedent. The decision stemmed from cross-appeals filed under Section 62 of the Insolvency and Bankruptcy Code, 2016, involving Metalyst Forgings Ltd. The Court emphasised that post-approval by the Committee of Creditors, withdrawal or modification of the plan is impermissible, highlighting reasons including delay, uncertainty, and the binding nature of approved plans on all stakeholders. Justices Sanjiv Khanna and Dipankar Datta set aside the NCLAT’s judgment, upholding the NCLT’s order and approving the resolution plan submitted by Deccan Value Investors L.P. and DVI PE (Mauritius) Ltd.
HIGH COURTS
The Madras High Court recently instructed a petitioner, who contested incorrect TDS deduction by their LLP employer under Section 194H of the Income Tax Act, to file a statutory appeal within two weeks, along with necessary pre-deposit. The petitioner, claiming to be an employee, challenged the TDS classification as an agent. The Court directed filing the appeal disregarding the limitation issue and ordered its disposal on merits. The writ petition was disposed accordingly.
The Delhi High Court directed the disposal of an application for cancellation of Goods and Service Tax (GST) registration, which faced delays. M/S Asian Traders, the petitioner, sought cancellation effective from 30.05.2023. Despite multiple applications and replies, the disposal was pending. Justices Sanjeev Sachdeva and Ravinder Dudeja instructed the respondent to dispose of the petitioner’s application within four weeks. The Court clarified it hadn’t commented on the case’s merits.
The Bombay High Court deemed a Central Board of Direct Taxes (CBDT) notification invalid for extending beyond the Income Tax Act, 1961’s provisions. The petitioner challenged the Department of Revenue’s circular dated 28th September 2021, which restricted settlement commission applications to assessees eligible as of 31st January 2021. The Court, comprising Justices Dr. Neela Gokhale and KR Shriram, emphasized that retrospective legislation cannot affect vested rights. They noted that while the CBDT extended deadlines, it cannot introduce new eligibility criteria contrary to the Act. Additionally, they highlighted that retrospective provisions can only take effect after receiving the President’s assent.
The Delhi High Court stated that income tax additions concerning unsubstantiated share capital are eligible for deduction under Section 80-IC of the Income Tax Act, 1961. The petitioner-assessee challenged the Income Tax Settlement Commission’s order, focusing on additions related to share capital infusion by certain entities and the denial of Section 80IC deductions on income of INR 24.99 crores. The Division Bench of Justices Yashwant Varma and Purushaindra Kumar Kaurav held that the surrendered income doesn’t fall under Section 115BBE, as this provision didn’t exist during the assessment years in question. Therefore, the Court refused to grant reliefs sought by the Department to set aside the ITSC’s order granting immunity and allowing the petitioner’s claims related to share capital infusion and deductions under Section 80IC.
The Kerala High Court dismissed a writ petition challenging orders of a Tamil Nadu assessing authority due to lack of territorial jurisdiction. The petitioner sought to lift the attachment on a bank account in Kerala, but the Single Judge found it not maintainable as the assessing authority was in Tamil Nadu. The Division Bench upheld this decision, citing precedent and dismissing the writ appeal.
The Allahabad High Court criticized the Enforcement Directorate (ED) for not providing substance of accusation to summoned individuals, stating it’s not inclined to endorse sealed covers in judicial proceedings. The petitioner raised concerns about abuse of authority and violation of law in the investigation process, alleging it’s more for propaganda than genuine inquiry. The Court emphasized the need for accused persons to receive the substance of accusations for adequate preparation. Justice Mohd. Faiz Alam Khan stated that interference at this stage is unwarranted, as the petitioner’s status isn’t clear and no formal accusation has been made by the ED.
The Bombay High Court deemed the provisional attachment of bank accounts under the Customs Act illegal due to procedural lapses. Three gold bullion trading firms challenged the attachment, arguing it lacked a written order as mandated by Section 110(5) of the Customs Act. The court emphasized the necessity of a written order based on tangible evidence before attachment and declared the action unlawful. It directed banks to unfreeze the accounts, highlighting the importance of procedural compliance and valid grounds for such coercive actions. The court rejected the argument that no written order was necessary and underscored the need for adherence to statutory requirements. While allowing provisional attachment if done lawfully, the court emphasized strict compliance with due process.
The Delhi High Court directed the re-adjudication of an order rejecting Input Tax Credit (ITC) claim due to lack of consideration of the assessee’s reply. Ruchika Jain challenged a demand raised against her under Section 73 of the CGST Act, 2017. Despite furnishing detailed replies, the impugned order disregarded them. The Court held the order unsustainable, remitting the matter to the Proper Officer for re-adjudication. The Officer is instructed to provide necessary details/documents to the petitioner, who must furnish explanations. A fresh speaking order is to be passed after a personal hearing, in accordance with the law, within the prescribed period under Section 75(3) of the Act.
In a recent case, the Delhi High Court directed re-adjudication on an order demanding tax and penalty under the GST Act, citing an ‘unsatisfactory reply’. The court found the Proper Officer’s decision lacking proper consideration of the petitioner’s response and noted procedural irregularities. The petitioner, Knowledge Infrastructure Systems Pvt Ltd, challenged the order, highlighting that their detailed reply was disregarded. The court set aside the order and instructed the Proper Officer to re-adjudicate the matter, emphasizing the need for a thorough consideration of the petitioner’s submission and compliance with statutory requirements.
The Delhi High Court overturned the order denying Input Tax Credit (ITC) claim, citing it as unclear and unsatisfactory, directing re-adjudication. Tim Delhi Airport Advertising Private Limited challenged the order proposing a demand of Rs. 2,18,73,860.00 under the CGST Act, 2017. The court noted procedural defects and lack of consideration of the petitioner’s detailed reply. The Proper Officer’s decision was deemed inadequate, as it did not reflect proper consideration of the petitioner’s response. The court remitted the matter to the Proper Officer for re-adjudication, emphasizing the need for a thorough review of the petitioner’s submission and compliance with procedural requirements.
The Chhattisgarh High Court ruled that ice cream is not a luxury item and directed the GST Council to reconsider its decision to exclude small-scale ice cream manufacturers from the composition scheme. The court responded to a petition by the Small Scale Ice Cream Manufacturer Association, criticizing the decision as arbitrary and discriminatory. It noted the lack of reasoning for the exclusion and emphasized the socio-economic impact. The GST Council must review its decision within three months.
The Delhi High Court upheld the disqualification of a bid in an IRCTC tender due to discrepancies in UDIN certificates provided by the petitioner’s Chartered Accountant. The court dismissed the petition, stating that the discrepancies warranted bid rejection and that UDIN certificates are essential for verifying the authenticity of CA certificates. The bench noted that the petitioner failed to explain discrepancies in the UDIN certificates, leading to doubts about their accuracy.
The Bombay High Court ruled that writ jurisdiction cannot address grievances regarding alleged coercion by the GST Department to deposit tax amounts. The petitioner claimed coercion to deposit Rs. 2.5 crores at 3:30 a.m. on October 13, 2022, during a search and seizure action. However, the court found the claim unsubstantiated. The bench observed that determining coercion is a disputed question of fact not suitable for Article 226 proceedings. Consequently, the court declined to convert the writ petition into a civil suit and left the matter for consideration by the appropriate tax authority.
The Bombay High Court recently ruled that levying IGST on transportation services provided by a shipping line to an Indian importer is violative of Section 8 of the GST Act. The petitioner argued that such a levy was arbitrary and illegal. The court held that the levy on the importer, who is neither the service provider nor the receiver, contradicted the principles of ‘composite supply.’ This decision aligns with the Supreme Court’s ruling in Union of India Vs. Mohit Minerals Pvt. Ltd.
The Bombay High Court ruled that the Customs Department’s decision to withhold clearance of goods based on non-conformance with an opinion by the Customs Authority for Advance Ruling (CAAR) is unsustainable. The petitioner sought classification of the goods from CAAR, which confirmed it. Despite clearance from the Food Safety and Standards Authority of India (FSSAI), the Customs Department sought further analysis. The court observed that such actions undermined CAAR’s ruling and other clearances, deeming them unjustifiable.
The Kerala High Court Division Bench ruled that the Customs Department must collaborate with the assessee to draw samples from the imported urea consignment for testing in laboratories. The appeal was filed against the dismissal of a writ petition seeking provisional release of a consignment found non-compliant with urea content requirements. The court upheld the Single Judge’s decision, emphasizing its lack of expertise in disputing the Chemical Examiner’s report. The court directed the Customs Department to jointly draw samples with the appellant and send them to the Central Fertilizer Quality Control Unit, Faridabad, for analysis within a month.
The Punjab and Haryana High Court ruled that the assessee cannot be expected to constantly monitor the Income Tax Department’s e-portal for updates. In a case where a show cause notice was only posted on the Department’s e-portal without being sent to the petitioner’s email or otherwise, the court emphasized the importance of proper communication. The court stated that communication of notices must adhere to prescribed provisions, and notices cannot be presumed to be received simply by being posted on the e-portal. The court emphasized the need for adherence to principles of natural justice and granted the petitioner the opportunity to respond to the notice under Section 12A(1)(ac)(iii) of the Income Tax Act.
The High Court of Kerala granted a stay on Goods and Services Tax (GST) recovery proceedings against the Bar Council of Kerala in response to a petition filed by the council’s Honorary Secretary, Joseph John. Despite the council’s contention of being a statutory body exempt from tax payment, the Additional Commissioner issued an assessment order for tax recovery. The court, after considering arguments by Anil D Nair, Advocate, along with Aditya Unnikrishnan, and hearing from Advocate Sreelal Warrier, learned Senior Standing counsel for the Central Board of Excise, granted a stay on coercive steps until the next date of posting in response to the show cause notice and assessment order.
The Delhi High Court directed a reevaluation in a recent case due to a procedural error by the petitioner’s office, leading to missing documents regarding GST invoices and payment proof. Electra Power Transmission Systems appealed against the order disposing of their Show Cause Notice, citing errors in recording their appearance and uploading necessary annexures. Justices Sanjeev Sachdeva and Ravinder Dudeja set aside the order and instructed the petitioner to submit all relevant documents within two weeks for reevaluation. Advocates Rakesh Kumar, P.K. Gambhir, and Akul Mangal represented the petitioner, while Rajeev Aggarwal, ASC, along with other counsels, appeared for the respondent.
The Delhi High Court directed the revocation of GST registration cancellation in a recent case where MD Mustafa Raza petitioned against the retrospective cancellation due to delays caused by his father’s demise and a change in chartered accountant. The court noted deficiencies in the show cause notice issued by the respondent and considered the petitioner’s circumstances. Anurag Rajput, counsel for the petitioner, explained the delay due to the father’s death, while Harpreet Singh, counsel for the respondent, mentioned pending queries. Justices Vibhu Bakru and Amit Mahajan directed the Proper Officer to decide on the revocation application within two weeks.
The Delhi High Court recently restored the GST registration of DP Abhushan, a jewelry business, citing flaws in the show cause notice issued by the authority. The notice failed to provide adequate reasons for cancellation, merely stating “Others.” The court noted contradictions in the order, which lacked justification for cancellation. Justices Sanjeev Sachdeva and Ravinder Dudeja set aside the notice and order, restoring the petitioner’s registration. Advocates Rishabh Sancheti, Padma Priya, and Shreya Bhatnagar represented the petitioner, while Arnav Kumar and Gurdas Khurana represented the respondent.
The Madras High Court dismissed a writ petition challenging a show cause notice from the customs department seeking to recover customs duty on imports. The court directed the petitioner, despite mergers and corporate restructuring, to cooperate with the authorities. Failure to do so would result in confirming the demand stated in the notice and recovering the amount from the petitioner. The court emphasized that mergers cannot evade tax liabilities, and the petitioner must respond to the notice within 30 days. If cooperation is lacking, the authorities are empowered to recover the amount from the petitioner based on available material.
The Madras High Court granted relief to Hitachi Systems India by setting aside a GST order due to lack of opportunity to respond with relevant documents. Justice Senthilkumar Ramamoorthy stated that the assessment order was issued without providing the petitioner with a reasonable opportunity to present relevant documents.
The Madras High Court quashed Income Tax reassessment orders and notices, emphasising the need for a thoughtful approach rather than mechanical initiation or incorrect factual foundations. The Court observed that reassessment based on flawed premises warrants interference and invalidated the orders and notices. Notably, approvals for reassessment did not align with specified authorities under the Income-tax Act, rendering proceedings invalid for certain assessment years.
The Madras High Court instructed GG Organics Care Private Limited to submit Form GST ITC-02, even if no Input Tax Credit (ITC) is transferred, and ordered a reconsideration of a tax demand imposed on them following an audit initiated in September 2023. The petitioner, a subsidiary resulting from a demerger, contested the order, citing procedural irregularities and emphasizing that the audit exceeded the prescribed duration. The court acknowledged the concerns but deemed it necessary to provide an opportunity for the petitioner to contest the tax demand. Justice Senthilkumar Ramamoorthy set aside the impugned order and remanded the matter for reconsideration, contingent upon the petitioner remitting 10% of the disputed tax demand within two weeks.
The Madras High Court quashed a GST Assessment Order due to a significant discrepancy between the confirmed tax liability and the amount specified in the Show Cause Notice (SCN). Aristo Telemedia Pvt. Ltd, the petitioner, received a show cause notice demanding a certain sum, but the subsequent assessment order deviated substantially in the amount demanded. Justice Senthilkumar Ramamoorthy set aside the order, remanding the matter for reconsideration, with directions for affording the petitioner a reasonable opportunity, including a personal hearing.
The Madras High Court quashed a GST demand order conditionally, requiring the petitioner, AP Foundries Private Limited, to remit 10% of the contested demand within two weeks. Despite non-payment of tax and absence in a personal hearing, the petitioner challenged the order, seeking a breakdown of alleged ineligible Input Tax Credit (ITC). The court observed the petitioner’s submission of relevant supply details and tax payments, warranting an opportunity to contest the demand. Justice Senthilkumar Ramamoorthy directed the petitioner to remit the deposit and submit a comprehensive reply within two weeks.
The Madras High Court directed the State Tax Officer to issue supplements providing clear reasons for the denial of GST transitional credit to Alpha City Chennai IT Park Projects Private Limited. The impugned GST order was to be treated as a Show Cause Notice. The petitioner had raised concerns about the lack of rationale behind the denial of transitional credit in response to a show cause notice. The court observed that the notice failed to provide adequate particulars regarding the alleged ineligible Input Tax Credit. Justice Senthilkumar Ramamoorthy concurred with the petitioner’s contention regarding the inadequacy of the notice and directed the STO to issue a supplement within two weeks, allowing the petitioner to respond within a further two weeks.
The Madras High Court granted relief to APL Apollo Tubes by quashing a GST order due to lack of specific reasons for denying Input Tax Credit (ITC) and discrepancies in the treatment of evidence related to freight charges. The court observed shortcomings in the assessment process, particularly regarding the denial of ITC and treatment of evidence on freight charges. Justice Senthilkumar Ramamoorthy directed the State Tax Officer to provide the petitioner with a fair opportunity, including a personal hearing, and issue a fresh order within two months. The court clarified that its observations were not binding on the assessing officer during reconsideration.
The Madras High Court, noting that the petitioner settled the entire tax liability for one financial year and 50% for another, protected the revenue’s interests by setting aside GST demand orders. Despite receiving intimation and show cause notices, the petitioner was not given a chance to contest the orders. Legal counsel stated the petitioner’s compliance with tax payments. Justice Senthilkumar Ramamoorthy observed that while the petitioner hadn’t been heard, they fulfilled tax obligations, securing revenue interests. The court granted the petitioner another opportunity to contest the tax demand, remanding the case for reconsideration.
The Madras High Court quashed a contested GST Order due to the denial of a requested personal hearing and document submission. The petitioner, a GST-registered entity, replied to a show cause notice but was not granted a personal hearing despite requesting one. Although the reply addressed all defects, the absence of supporting documents led to rejection. The court deemed this a breach of statutory provisions and directed reconsideration. The petitioner was given 15 days to submit relevant documents, after which a personal hearing and a fresh order are expected within two months.
The Madras High Court condoned the delay in filing Income Tax Returns (ITR) by an Agricultural Co-operative Credit Society, considering the genuine hardships faced. The society, S 878 Kalvadangam Primary Agricultural Co-operative Credit Society Limited, faced delays in receiving its audit report, affecting its filing deadline. Despite the rejection of its application for condonation of delay, the High Court recognized the genuine hardships and remanded the matter for assessment based on the filed return. Justice Senthilkumar Ramamoorthy issued directives to nullify the disputed intimation and proceed with assessment based on the submitted income return.
The Madras High Court overturned an assessment order in a Goods and Services Tax (GST) case due to procedural flaws. The petitioner, son of a GST taxpayer engaged in turmeric trading, contested the order citing lack of personal hearing and erroneous calculation of tax liability. The court noted that the assessment assumed turmeric sales without providing a basis and denied the petitioner a personal opportunity to contest. Justice Senthilkumar Ramamoorthy set aside the order, remanding the matter for reconsideration. The petitioner was allowed to submit additional documents, and a fresh order with a personal hearing was directed within two months.
The Madras High Court granted an opportunity for contesting a Goods and Services Tax (GST) demand despite the petitioner’s initial failure to respond to a Show Cause Notice (SCN) due to a misconception. The petitioner’s counsel highlighted issues in the assessment order related to IGST on supplies from a SEZ unit and claimed input tax credit of CGST and SGST. Justice Senthilkumar Ramamoorthy ordered the quashing of the assessment order, contingent on remitting 10% of the disputed tax demand and submitting a reply to the SCN within two weeks. The Deputy State Tax Office was directed to provide a personal hearing and issue a fresh order within two months. Additionally, the bank attachment notice was revoked.
The Madras High Court granted relief to Larsen & Toubro (L&T) by overturning a Goods and Services Tax (GST) order and remanding the matter for reconsideration. The order, issued on 30.12.2023, confirmed tax demands based on discrepancies between GSTR 3B and GSTR 2A returns, among other issues. Counsel for L&T meticulously addressed each issue raised, particularly emphasizing the lack of opportunity to present a case adequately. The court observed that the imposition of GST on the surplus amount reflected in the GSTR 2A return and other issues appeared prima facie unsustainable. Consequently, the High Court set aside the order and remanded the matter, granting L&T a two-week window to file a reply.
The Madras High Court invalidated a customs order due to discrepancies in addresses and lack of a fair hearing opportunity. The court directed authorities to issue a corrected Show Cause Notice (SCN) reflecting the petitioner’s accurate address. Despite the petitioner’s communication of their address change, the impugned order was sent to a different address, indicating a lack of reasonable opportunity. Consequently, the court set aside the order and remanded the matter for reconsideration. The respondent was directed to provide a copy of the show cause notice to the petitioner within a week, and the petitioner was instructed to reply within two weeks.
In a recent case, the Delhi High Court granted relief in a writ petition, emphasizing that the assessing officer must adhere to the Arm’s Length Price (ALP) determined by the Transfer Pricing Officer (TPO) regarding international transactions. The petitioner, Giesecke and Devrient India Pvt. Ltd, filed returns for the assessment year 2017-18, which were then scrutinized by the AO. The TPO determined an ALP adjustment of INR 16,84,51,531/-. However, the AO, without considering the TPO’s order, added INR 25,41,84,27,665/- to the total income of the petitioner. The court reiterated that the AO must conform to the TPO’s determination, as per Section 92CA of the Act. The bench, comprising Justice Purushaindra Kumar Kaurav and Justice Yashwant Varma, emphasized that the AO should not deviate from the ALP determined by the TPO for international transactions.
The Delhi High Court directed readjudication of a demand under Section 73 of the CGST Act, 2017, as the petitioner, Larsen And Toubro Limited And Passavant Energy And Environment Gmbh Jv, wasn’t given an opportunity to clarify documents. The appeal challenged a demand of Rs 55,23,524.00. The Court noted the petitioner’s detailed reply to the Show Cause Notice, but the order cited the reply as unsatisfactory without giving an opportunity for clarification. The bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja set aside the order and directed the Proper Officer to re-adjudicate the notice after providing a personal hearing and passing a fresh order within the prescribed period under Section 75(3) of the Act.
In a recent case, the Delhi High Court modified the retrospectively cancelled Goods and Service Tax (GST) registration of K.C.P India, noting an error in the show cause notice. The respondent erroneously mentioned “Non-Filing of GST returns” instead of “Non-Filing of GST registration”. The petitioner’s registration was cancelled retrospectively from 01.07.2017, leading to an appeal. The court observed that the cancellation order lacked reasons and the show cause notice didn’t mention retrospective cancellation. The respondent admitted the error. Considering both parties’ desire for cancellation, the court modified the order to reflect cancellation from the date of the petitioner’s application, 06.05.2019.
The Delhi High Court modified a retrospectively canceled GST registration, noting that the petitioner, Anil Soni of M/S. Soni Sales Corp, wasn’t given a chance to object. The petitioner’s registration was canceled backdated to 02.07.2017 without proper reasoning. The court found the notice and order lacking in detail and rationale. Although the petitioner no longer operated, the court adjusted the cancellation to 08.06.2022, the order date. However, it allowed the authorities to pursue tax recovery legally.
In a recent case, the Delhi High Court addressed a dispute over the principal place of business in a GST registration cancellation. The petitioner, Deep Plastic Granules Trading Company, challenged the cancellation order citing non-existence at the declared location. The court directed the petitioner to submit a detailed response to the Show Cause Notice within 30 days, along with supporting evidence. The Proper Officer was instructed to review the response within two months and provide a chance for a personal hearing. Multiple advocates represented the petitioner, while a Senior Panel Counsel represented the Union of India.
The Delhi High Court directed the Assessing Officer to determine the fair market value of shares using the discounted cash flow method, barring any alteration of the valuation method chosen by the taxpayer. This ruling came in a case regarding the Assessment Year 2014-15, where the ITAT upheld additions made by the Assessing Officer under Section 56(2)(viib) of the Income Tax Act. The bench allowed the appeal, remitting the matter to the AO for a fresh valuation using the DCF method. The AO may scrutinise the report but cannot change the chosen method. Additionally, the FMV of shares must be determined independently by a valuer appointed for this purpose.
The Delhi High Court directed the retrospective cancellation of a closed firm’s GST registration, effective from the issuance of the Show Cause Notice, not from July 1st, 2017. The court noted the lack of detail in the notice and order, stating the petitioner had no opportunity to object to the retrospective cancellation. Consequently, the court concluded the impugned order did not qualify as a cancellation order and disposed of the petition.
The Delhi High Court quashed a GST demand order, emphasising that proper officers must consider replies on their merits. The petitioner contested an order proposing a substantial demand under Section 73 of the CGST Act. Despite submitting a detailed reply, the impugned order failed to consider it adequately, leading the court to set it aside. The matter was remitted to the proper officer for reassessment, with instructions to inform the petitioner of any additional documents required. Upon submission, a new order will be issued within the statutory timeframe, allowing for a personal hearing. Consequently, the petition was resolved in favour of the petitioner.
The Madras High Court overturned a GST order due to the petitioner’s failure to respond to notices. Malaysia Metals, engaged in trading, claimed ignorance of proceedings until receiving a bank attachment notice. Despite missed responses, the petitioner wasn’t heard before the order issuance. The court set aside the order, remanding it for reconsideration, with a directive for the petitioner to deposit 10% of the disputed tax and respond to the notice within 15 days. The respondent is to issue a fresh order within two months after confirmation of the deposit and response. Additionally, any funds seized via bank attachment are to be retained pending the outcome of the remanded proceedings. The writ petition is disposed of without costs.
The Madras High Court granted a writ petition for re-examination of an export refund under a GST circular, remanding the matter for reconsideration. Tvl. Mallow International sought annulment of a refund rejection and full refund honoring. Citing a relevant clarification in Circular No. 197/09/2023-GST, the petitioner’s counsel argued for reconsideration. Despite government advocacy, the court set aside the order, directing fresh consideration within eight weeks, taking into account the petitioner’s submissions and the circular’s content. This decision reflects a willingness to reassess the refund claim in light of evolving legal interpretations.
The Madras High Court nullified a GST assessment order due to discrepancies between GSTR 3B and 2A, leading to inappropriate appropriation of funds from the petitioner’s bank account and Electronic Credit Ledger (ECL). Nakoda Unique Gold Private Limited contested the order, citing insufficient opportunity to challenge the tax demand. The petitioner’s counsel noted that over 60% of the total demand was appropriated, exceeding the tax liability. The court granted the petitioner an opportunity to contest the tax demand on its merits, emphasizing that all appropriations should align with the outcome of the remanded proceedings. The writ petition was disposed of accordingly, with no costs incurred.
The Madras High Court overturned an unreasonable Goods and Services Tax (GST) order regarding vouchers, directing issuance of a fresh order considering the taxpayer’s contentions. The writ petition challenged a GST assessment order, arguing that vouchers didn’t constitute goods or services but actionable claims. Despite the petitioner’s submissions, the impugned order lacked reasoned analysis, merely concluding vouchers were subject to GST. Recognizing this deficiency, the court set aside the order and remanded the issue for reconsideration, directing the respondent to provide a fair opportunity and issue a new order addressing each contention within two months.
The Madras High Court ordered the disposal of applications for GST registration cancellation due to alleged misuse by third parties. The petitioner, facing challenges exacerbated by the pandemic, discovered the misuse and promptly lodged a complaint with the Cyber Crime Cell. However, despite their efforts, they received a show cause notice preceding an impugned cancellation order, of which they claimed unawareness. Recognizing the need for resolution, the court directed the Joint Commissioner (CT) to expedite the disposal of the revocation application within two months, affording the petitioner a reasonable opportunity to present their case. No costs were imposed, and the related petition was closed.
In a recent ruling, the Madras High Court directed the Assistant Commissioner (ST) to dispose of rectification petitions regarding GSTR 3B and GSTR 2A discrepancies within two months. The petitioner’s counsel highlighted a discrepancy between their GSTR 3B and GSTR 2A returns, noting that the petitioner had already reversed Input Tax Credit (ITC) to address it. The Additional Government Pleader assured the court that the rectification petition would be duly considered and resolved in a reasonable timeframe. Considering the submissions, the court mandated the disposal of the rectification petition within two months, ensuring the petitioner’s reasonable opportunity, including a personal hearing.
The Madras High Court overturned a GST assessment order with a 10% pre-deposit condition, noting the petitioner’s awareness of GST proceedings as a registered entity. Despite the petitioner’s alleged lack of familiarity with GST compliance procedures, the court emphasized the importance of compliance. However, acknowledging the need for a fair chance to explain discrepancies, the court set aside the order subject to conditions. The petitioner was directed to remit 10% of the disputed tax demand and respond to the show cause notice within two weeks. Once met, the Assistant Commissioner (ST) (FAC) would provide a reasonable opportunity, including a personal hearing, before issuing a fresh order within two months.
The Kerala High Court, a plea for cross-verification of GSTR 2A and GSTR 3B mismatches in a GST matter was swiftly addressed. Led by a team of capable advocates, including K.S. Hariharan Nair and G. Remadevi, the case sought various reliefs, ultimately focusing on expeditious disposal of a rectification application. The petitioner highlighted discrepancies between GSTR 2A and 3B, emphasizing the need for timely rectification. Justice Dinesh Kumar Singh directed the State Tax Officer to consider and pass appropriate orders on the rectification application expeditiously, preferably within two months.
The Kerala High Court ruled that proceedings under Section 148 of the Income Tax Act could not be continued against the petitioner for deposits in the bank accounts of third parties. The appeal by K. Abdul Majeed challenged orders passed under Section 148(A)(d) for assessment years 2016-2017 and 2019-2020. Advocates K J Abraham Premjit Nagendran and Nikhil John represented the petitioner. The court noted that the deposits were treated as unexplained investments of other individuals under Section 69 of the Income Tax Act, and thus found it unjustified to continue proceedings against the petitioner based on these deposits. Consequently, the Division Bench allowed the appeal and quashed the impugned orders along with consequential orders.
In a Motor Vehicle Tax Dispute, the Kerala High Court, in a ruling by a Single Bench, granted relief to the petitioner. Represented by advocate Saju J. Vallyara, the petitioner sought to discharge pending motor vehicle tax liability in eight monthly instalments. The court directed acceptance of the arrears in six equal monthly instalments, with the first instalment due by April 16, 2024, and subsequent instalments on the 16th of each succeeding month. The Government Pleader did not object significantly to this arrangement. However, the authorities were granted the liberty to proceed under the Revenue Recovery Act in case of default in remitting any instalment.
The Delhi High Court directed re-adjudication of a Show Cause Notice (SCN) issued for Input Tax Claim (ITC), providing an opportunity for a hearing. A B Traders filed a writ petition challenging the SCN proposing a demand of Rs. 44,48,488. The petitioner argued that their detailed reply was not fully considered in the impugned order, which merely cited legal precedent without examining the documents submitted. The court observed that the Proper Officer failed to adequately consider the petitioner’s response and directed the matter to be remitted for re-adjudication. The petitioner was instructed to provide supporting documents for their reply, after which the Proper Officer will re-examine the SCN with a chance for a personal hearing.
Justice S Rachaiah of the Karnataka High Court acquitted two accused in a Karnataka Excise Act case following a revision petition. The case, stemming from a 2008 incident of alleged liquor transportation, saw the defendants contesting procedural irregularities, including the timing of events and the absence of proper documentation. Advocate Pratheep K.C, representing the defense, highlighted these lapses, questioning the legality of search and seizure before FIR registration and the lack of a statement under Section 313 of the Cr.P.C. HCGP Rahul Rai K defended the Investigating Officer’s actions. The court, after examining legal provisions, deemed the FIR registration erroneous, leading to the acquittal of the defendants due to flawed procedures.
The Bombay High Court recently emphasized the importance of Assessing Officers (AO) recording dissatisfaction regarding the correctness of an assessee’s claim under Section 14A(2) of the Income Tax Act, 1961. In a case for Assessment Year 2008-09, the AO disallowed the expenditure claimed by the assessee under Section 14A, applying Rule 8D of the IT Rules. However, the CIT(A) and ITAT ruled in favor of the assessee, noting that the AO did not provide adequate reasons for rejecting the claim. Justices Dr. Neela Gokhale and KR Shriram stressed that the AO must record dissatisfaction and provide cogent reasons for disallowing the expenditure related to exempt income.
The Bombay High Court ruled that a reassessment order against a housewife regarding property purchased by her husband is invalid. The petitioner, a housewife with no income, received a notice under Section 148A(b) of the Income Tax Act, 1961, suggesting income had escaped assessment for Assessment Year 2016-2017. The order was based on the petitioner not providing details of the source of funds for her husband’s property purchase, despite his lower income. The court noted the lack of grounds for reassessment and quashed the order.
The Kerala High Court granted interim protection to an assessee in an Income Tax matter, suspending coercive actions and recovery during the appellate remedy process. The Division Bench modified a decision related to an assessment order under the Income Tax Act for the years 2016-2017. The appellant, Remya Vikraman Nair Rema Devi, had filed an appeal and a stay application against the assessment order. Initially, relief was sought through a writ petition, but it was disposed of by a Single Judge Bench, directing the appellant to pursue the appeal route. However, the Single Judge did not grant a stay on recovery proceedings during this period. The High Court modified the Single Judge’s judgment, clarifying that the appellant should be protected from recovery proceedings during the pendency of the stay application or appeal before the appellate authority.
The Kerala High Court directed the Commissioner (Exemptions) to reconsider Snehatheeram Charitable Trust’s application for a Certificate under Section 80G of the Income Tax Act, 1961. The Trust, represented by its Trustee and Vice Chairman, sought judicial intervention after their application was rejected due to alleged non-submission of documents, despite evidence suggesting otherwise. The court noted a discrepancy in the department’s claim and set aside the rejection, allowing the Trust to reappear before the commissioner with all relevant documents for a fresh evaluation.
The Madras High Court ruled that a GST payer has the right to be heard even if they forget to request a personal hearing on the GST portal. Despite the petitioner’s inability to check the box for a personal hearing while uploading their reply, the court stated that this does not waive the statutory obligation. The petitioner, Sathya Furniture, faced scrutiny for discrepancies in their GST returns. Despite their request for a personal hearing being overlooked, the court highlighted the obligation for such a hearing under Section 75(4) of the Tamil Nadu GST Act. Consequently, the court quashed the order and remanded the matter for reconsideration, granting the petitioner fifteen days to submit relevant documents and mandating a fresh order within two months.
The Madras High Court allowed petitioner to contest a demand order requiring a 10% pre-deposit due to alleged failure to respond to a show cause notice regarding Goods and Services Tax (GST) discrepancies. The petitioner, involved in water purifier supply, faced a tax dispute initiated by discrepancies in GST returns. The court noted that subsequent notices were uploaded only on the GST portal, denying the petitioner an opportunity to be heard. Despite the petitioner’s agreement to the 10% remittance condition, the court set aside the order, contingent upon the petitioner remitting the amount within two weeks and submitting a reply to the notice within the same period.
The Madras High Court recently quashed a Goods and Services Tax (GST) registration cancellation order, as the Show Cause Notice (SCN) was issued prematurely before the completion of the required non-filing period. The petitioner, involved in construction and real estate sub-contracts, faced a dispute over their GST registration due to a lapse in return filing. Despite receiving the SCN, the petitioner filed pending GST returns, rectifying the alleged non-compliance. The court noted that the cancellation order was issued prematurely and the subsequent filing of returns addressed the issue, leading to the restoration of the petitioner’s GST registration. As a result, the writ petition was allowed, and the petitioner’s GST registration was reinstated, with connected miscellaneous petitions closed and no costs imposed.
The Madras High Court nullified an Income Tax Assessment order, highlighting that documents provided in response to the income tax notice adequately addressed issues regarding zero-rated supplies without tax payment and trade receivables. The petitioner contested the validity of the order, citing non-adherence to statutory provisions and insufficient consideration of their submissions. The court found merit in the petitioner’s contentions, noting discrepancies between the documents submitted and the findings in the order. Consequently, the assessment order was set aside, and the matter remanded for reconsideration, with a directive to afford the petitioner a reasonable opportunity, including a personal hearing.
In a recent ruling, the Madras High Court granted permission for a petitioner to submit a new representation under Section 80 of the Tamil Nadu Goods and Services Tax Act, 2017 (TNGST Act). The petitioner, facing delays in discharging GST liabilities due to the COVID-19 pandemic’s impact on their business, sought additional time to fulfill payment obligations. Despite submitting a representation on February 1, 2024, no decision had been made. In response to the writ petition, the court allowed the petitioner to submit a fresh representation to the Commissioner within three weeks.
The Madras High Court dismissed a writ petition challenging an income tax assessment order due to alleged unauthorized bank account opening and transactions. The petitioner claimed innocence, stating they were unaware of a business account opened in their name, which allegedly received a substantial amount without their involvement. However, the court ruled that disputed factual issues are not suitable for adjudication under Article 226 of the Constitution. As statutory appeal options are available, the court found no grounds for interference and advised the petitioner to pursue statutory remedies. No costs were awarded, and the connected miscellaneous petition was closed accordingly.
In a recent ruling, the Madras High Court declined to exercise discretionary jurisdiction as the petitioner had the remedy to approach the appellate authority. The court noted that principles of natural justice were sufficiently complied with. The petitioner, M/s Richards & John Wesley Engineers Pvt Ltd, objected to an audit report but participated in subsequent proceedings without raising objections to the audit’s validity. The court observed that the petitioner was notified before the audit and provided various documents in response. While some tax proposals were dropped upon consideration of the petitioner’s response, others were confirmed. The court allowed the petitioner to file a statutory appeal within the original period of limitation, emphasizing that the petitioner remained within the condonable period.
The Madras High Court nullified an order in a Goods and Services Tax (GST) matter due to the alleged failure of the petitioner’s GST auditor to notify them of the proceedings. The petitioner, S M J Marble & Granite, received a notice from GST authorities after an audit report, claiming they didn’t respond because their auditor didn’t inform them. The court observed the petitioner’s failure to engage in the proceedings but deemed it just to afford them an opportunity to contest the tax demand. Consequently, the order was set aside, and the matter remanded for reconsideration, with a requirement for the petitioner to remit 10% of the disputed tax demand within two months and submit a reply to the show cause notice.
The Delhi High Court directed re-adjudication in a case where Canara Bank’s claim for Input Tax Credit (ITC) was rejected without considering their reply. The court observed that the proper officer didn’t seek further details from the petitioner despite deeming the reply inadequate. Canara Bank challenged the order proposing a demand of Rs.20,07,15,517.00 under Section 73 of the Central Goods and Services Tax Act, 2017 (CGST). The court found the order cryptic and lacking proper consideration of the petitioner’s reply. The matter was remitted for re-adjudication, emphasising the need for the proper officer to consider the petitioner’s reply on its merits.
The Kerala High Court directed the revenue respondent to decide on Zia Ul Haq’s rectification application within two weeks, failing which no coercive measures should be taken against the petitioner. The petitioner sought to quash orders issued by the revenue department and challenged the constitutionality of certain sections of the CGST and SGST Acts. However, the petitioner’s counsel focused on the disposal of the rectification application in a time-bound manner. The single bench of Justice Dinesh Kumar Singh disposed of the petition accordingly. Sri V Devananda Narasimham and Smt Sheeja D K represented the petitioner, while Smt Reshmita Ramachandran appeared for the respondent.
The Allahabad High Court ruled that the imposition of a penalty under Section 54(1)(2) of the Uttar Pradesh Value Added Tax Act, 2008 (UPVAT Act) requires the intention to evade tax. The case involved a survey conducted at the premises of the revisionist, where discrepancies were found between recorded and physical stock. Despite a reduction in the disputed demand by the appellate authority, the court emphasized the necessity of specific findings of deliberate evasion of tax to impose a penalty. The Single Bench of Justice Abdul Moin concluded that the penalty imposed on the revisionist lacked such findings and did not fall within the ambit of Section 54(1)(2) of the Act.
The Delhi High Court, in a recent decision, emphasised that abatement under Section 153C of the Income Tax Act, 1961 should be based on the formation of opinion. The batch of writ petitions challenged notices issued under Section 153C, with the petitioners arguing that the assumption of jurisdiction is illegal without material gathered during a search. The court noted that abatement should follow the formation of opinion by the jurisdictional Assessing Officer (AO) of the non-searched entity. It stressed that the mere existence of power to assess preceding assessment years does not justify indiscriminate invocation of Section 153C.
The Delhi High Court directed re-adjudication after granting a 30-day period for filing a reply to a show cause notice demanding Service tax under the CGST Act, 2017. Maple ODC Movers Private Limited, the petitioner, contested an order creating a demand of Rs. 1,21,64,174/-. The petitioner claimed they never received the show cause notice as it was not uploaded on the GST portal under the ‘Notices’ section. Consequently, they were unaware of the hearing date and couldn’t respond. The impugned order was passed in default, without addressing the petitioner’s submissions. The division bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja set aside the order, directing the petitioner to file a reply within 30 days. The Proper Officer was instructed to re-adjudicate the notice, granting a personal hearing to the petitioner and issuing a fresh order within the prescribed period under Section 75(3) of the Act.
In a significant ruling, the Calcutta High Court stated that payments made by supervisors to individual labourers, each not exceeding Rs. 20,000, cannot be disallowed under Section 40A(3) of the Income Tax Act, 1961. The assessee withdrew a lump sum amount from the bank through supervisors for payment to labourers, with no individual payment exceeding Rs. 20,000. The assessing officer invoked Section 40A(3), but the senior advocate for the appellant argued that the supervisors acted as agents of the assessee, and thus, the payments were covered by the proviso in Rule 6DD(l) of the Income Tax Rules, 1962. The Division Bench observed that the supervisors acted as agents of the assessee, not subcontractors, and therefore, the payments did not fall within the scope of Section 40A(3) of the Income Tax Act.
The Delhi High Court modified a cancellation order of Goods and Service Tax (GST) registration, noting that the respondent did not provide the petitioner, Rajat Kapoor, with an opportunity to object to the retrospective cancellation. The petitioner filed a writ petition against the retrospectively cancelled GST registration of M/s Sarv Shakti Enterprises, of which they were a legal heir. The court observed that the show cause notice and the subsequent cancellation order lacked specific reasons for cancellation, and the petitioner was not notified of the retrospective cancellation. Despite the petitioner providing a detailed reply to the show cause notice, the order stated that no reply was filed, indicating a lack of application of mind. Considering that the business was closed and no activity occurred after the proprietor’s demise, the court modified the cancellation to be effective from the date of the proprietor’s passing.
The Delhi High Court directed re-adjudication in a case where excess Input Tax Credit (ITC) claim was denied without stating reasons. Safe Fly Aviation Services Private Limited challenged an order proposing a demand under Section 73 of the CGST Act, 2017. Despite filing a detailed reply, the impugned order did not consider it. The court observed that the order lacked reasoning and directed the proper officer to reconsider the matter. The division bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja remitted the case for re-adjudication. Mr. Karan Aggarwal and Mr. Amarinder Singh Baweja appeared for the petitioner, while Mr. Rajeev Aggarwal, ASC with Mr. Prateek Badhwar and others represented the respondent.
In a recent case, the Delhi High Court directed re-adjudication regarding an ex-parte demand created under Input Tax Credit (ITC) due to the failure to issue a Show Cause Notice (SCN) regarding GST ITC claim. The petitioner, Jain Cement Udyog, filed a writ petition against the show cause notice and demand created under Section 73 of the CGST Act, 2017. Despite the department’s headings in the SCN, the petitioner’s GST registration had been retrospectively canceled. The court observed that the impugned order, based solely on the petitioner’s failure to reply, cannot be sustained. Therefore, the matter is remitted to the Proper Officer for re-adjudication.
In a recent case, the Delhi High Court directed the petitioner, Manpowergroup Services India Pvt Ltd, to reply to the Show Cause Notice (SCN) issued by the sales tax officer regarding the irregular availability of input tax credit for the financial years 2018-19, 2019-20, and 2020-21 within 30 days. The petitioner challenged the notice citing lack of specific details and clarity on the alleged discrepancy. The court disposed of the petition, instructing the petitioner to respond to the SCN for the financial years 2019-20 and 2020-21 within the given timeframe.
The Delhi High Court directed re-adjudication regarding the demand raised due to the Goods and Service Tax (GST) Input Tax Claim (ITC) from a canceled dealer. The petitioner, Jullundur Motor Agency Delhi Limited, challenged an order proposing a demand under Section 73 of the Central Goods and Services Tax Act, 2017. Despite submitting detailed replies and attending a personal hearing, the impugned order did not consider the petitioner’s submissions. Moreover, the GST registration of the cancelled dealer, M/s Rane Brake Lining Limited, has been restored. The court held that the order was unsustainable and remitted the matter for re-adjudication.
In a recent case, the Delhi High Court set aside a demand order under Section 73 of the Central Goods and Services Tax Act, 2017, regarding Input Tax Claim (ITC), due to lack of verification of bank payment proofs. The petitioner, Amit Upadhyay, challenged the demand and the Show Cause Notice. Despite filing a detailed reply, the impugned order questioned the eligibility for ITC due to a lack of bank payment proof, without giving an opportunity to present such evidence. The court observed that the petitioner wasn’t asked to produce bank payment proofs during the hearing. Thus, the court remitted the matter for re-adjudication and directed the petitioner to provide all relevant documents, including payment proofs through the banking channel.
In a recent verdict, the Madras High Court declared Clause 5(ii) of Circular No.6 of 2023, issued by the Central Board of Direct Taxes (CBDT), as illegitimate, arbitrary, and unconstitutional. The clause, failing to extend the deadline for Section 80G(5) to new trusts, was deemed violative of the Constitution of India. The petitioner, Jain Cement Udyog, challenged this clause, arguing it was discriminatory and violated Article 14 of the Constitution. The court agreed, stating that the differential treatment lacked a substantial distinction relevant to the circular’s objective. Consequently, the bench declared the clause unconstitutional and directed the respondents to consider the petitioner’s applications for recognition/approval within the specified time. As a result, the Writ Petitions were allowed, with the clause being declared illegitimate, and the respondents were directed to consider the petitioner’s applications within six months.
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