This weekly round-up analytically summarizes the key stories related to the Supreme Court and High Court reported at Taxscan.in from July 20, 2024 to July 26, 2024.
SUPREME COURT
The notification also clarified the holiday schedule. The office of the court will remain closed on all public holidays, as well as on the second and fourth Saturdays of each month. These changes are set to come into effect from 1st August 2024.
The Supreme Court’s revised schedule aims to ensure that judicial proceedings and administrative functions are conducted smoothly, hopefully benefiting all stakeholders involved in the judicial process. As the new rules take effect from 1st August, the legal community and the public are advised to take note of these changes to plan accordingly.
The Supreme Court of India has dismissed a petition filed by the Directorate General of Goods and Service Tax Intelligence ( DGGSTI ) challenging the bail granted to a businessman, accused of claiming fraudulent Input Tax Credit ( ITC ) worth Rs. 22 crore.
The DGGSTI challenged the Gujarat High Court order in the Supreme Court. However, a three-judge bench comprising Justices Sanjiv Khanna, Sanjay Karol, and Sanjay Kumar decided not to interfere with the High Court judgement.
HIGH COURTS
In the recent case, the Jharkhand High Court, disposed of the writ petition which sought a refund of the Tax Collected at Source ( TCS ) amount. The court resolved the matter based on its earlier landmark decision, finding that the issue was directly covered by that precedent
Chief Justice B.R. Sarangi and Justice Sujit Narayan Prasad relied on the decision made in Adhunik Power and Natural Resources Ltd. v. Central Coalfields Ltd and disposed of the writ petition.
In the recent case,the Andhra Pradesh High Court approved the payment of audit fees for a company in liquidation,citing a clean audit report by M/s. Padmanabha Rao and Company and denied the request for miscellaneous expenses due to lack of detailed evidence.
A single bench of Judge B S Bhanumathi stated that the accounts and audit fee are approved but denies miscellaneous expenses due to lack of evidence and no costs are awarded.
The Allahabad High Court has quashed the search and seizure order as well as subsequent proceedings against a company under Goods and Services Tax Act, owing to procedural irregularities.
In light of the procedural lapses and inconsistencies identified, the court quashed and set aside the entire proceedings initiated from the unauthorised search and seizure under Section 67 of the Act.
The Orissa High Court had set aside the impugned order under specific conditions. Firstly, the petitioner is required to file a reply to the show cause notice by July 8, 2024. Subsequently, the Assessing Authority (AA) will review the matter on July 11, 2024. Following the hearing, a new assessment order must be issued within two months. If the petitioner is dissatisfied with the new assessment, the petitioner can seek relevant remedies.
A division bench of Justice Dr. B. R Sarangi and G. Satapathy hearing both the sides, disposed of the writ petition stating that the petitioner need to be given another opportunity to file a reply to the show cause notice and then appear before the AA for a new assessment order.
In a recent Goods and Services Tax (GST) case, the Orissa High Court set aside the orders rejecting tax appeals as time-barred and sent the cases back to the Appellate Authority for review.
A division bench of Justice Dr. B. R Sarangi and G. Satapathy set aside the challenging orders and sent the case back to the Appellate Authority (AA) for further consideration according to the new notification. The court contended that the tax amount paid by the petitioner should be taken into consideration on reviewing the case and any refund will depend on the final decision of the appeal.
Concerning the Goods and Services Tax (GST) case, the Andhra Pradesh High Court, set aside the demand order stating that it is clearly a violation of principles of natural justice and directed the authorities to allow adequate time for response
A division bench of Judge R Raghunandan Rao and Harinath.N, allowed the writ petition and set aside the demand order in Form GST DRC-07 ,dated July 4, 2023 stating that section 61 of CGST Act mandates a minimum period of 30 days before any further action can be taken by the authorities. The matter is remanded to the authorities and the petitioner must be given adequate time to respond according to the CGST Act and related rules. No costs are awarded.
The single bench of Justice Sunil Dutt Yadav of the Karnataka High Court has granted an opportunity for a hearing due to the non-consideration of a duly acknowledged reply to the Goods and Service Tax (GST) Show Cause Notice (SCN). The assessee submitted a reply to the Show Cause Notice, which is documented as Annexure-E. The order at Annexure-A was set aside, and the authority is granted liberty to take note of the reply at Annexure-E.
The order at Annexure – A is set-aside with liberty to the authority to take note of the reply at Annexure-E and after affording an opportunity of hearing to the petitioner, to dispose of the matter afresh. Accordingly, the petition was disposed of.
The Karnataka High Court has remanded the matter, ruling that the components of input services used for dutiable goods can be segregated from those used for exempted service tax.
The single bench of Justice Sunil Dutt Yadav held that the order at Annexure-‘A’ was set aside insofar as it contained adverse findings against the assessee. The assessee must appear before the sole respondent within one month of receiving a certified copy of this order and is expected to cooperate fully in the expeditious resolution of the proceedings upon remand.
The single bench of the Bombay High Court has granted leave to appeal in a cheque dishonor case under the Negotiable Instruments Act, 1881, citing the ongoing tax audit, justified absence, and the merits of the case.
The bench led by Justice Abhay S. Waghwase has ruled that leave should be granted, ensuring a fair opportunity to contest the proceedings. Accordingly, application stands allowed, leave was granted to file Appeal.
A significant ruling of the Karnataka High Court has directed the refund of the Earnest Money Deposit (EMD) by Respondent No. 3 due to the condition of GST payment specified in the tender document.
The single bench of Justice Hemant Chandan Goudar held that “ I pass the writ petition is allowed, and respondent No.3 is hereby directed to refund the earnest/EMD money deposited by the petitioner following the tender notification dated 15.11.2018, vide Annexure-A, within a period of three months from the date of receipt of certified copy of this order”.
The single bench of Justice Sunil Dutt Yadav of the Karnataka High Court has ruled that the official liquidator must verify and be satisfied with the payment to determine liability for GST or Service Tax. The official liquidator is expected to verify this payment, and once the statutory obligations to the Department have been fulfilled, the necessary documentation confirming this satisfaction will be handed over to the respondent.
In relation to the obligation of paying GST or service tax, it has been confirmed that the GST has been duly settled. The official liquidator is expected to verify this payment. Once the statutory obligations to the Department have been fulfilled, the necessary documentation confirming this satisfaction will be handed over to the respondent.
The Bombay High Court has quashed an order refusing to condone the delay in filing an appeal due to a lapse in communication under Section 35(7) of the Value Added Tax ( VAT ) Act and has directed a fresh hearing.
The single bench of Justice Valmiki Menezez held that the order dated 09.08.2021 passed by the respondent refusing to condone the delay in filing the petitioner’s appeal and refusing to admit the appeal was not a “decision” within the meaning of Sub-section 7 of Section 35 and Sub-section 1 of Section 36 of the VAT Act and was therefore not amenable to challenge in an appeal under the Act.
Recently the Delhi High Court has set aside a Tax order issued under Section 73 of the Central Goods and Services Tax Act, 2017 ( CGST Act ) and ordered fresh consideration into the matter citing procedural flaws.
The bench consisting of Justice Vibhu Bakhru and Justice Sachin Datta found merit in the petitioner’s arguments noting that the order did not adequately address the contentions raised in the petitioner’s reply to the SCN and also that it was incorrectly stated that a personal hearing was granted to the petitioner when it was not.
The Delhi High Court has modified the retrospective cancellation of GST registration on failure to file the returns timely, citing a lack of reasoning in the impugned order.
The bench of Justices Vibhu Bakhru and Sachin Datta found several procedural lapses in the cancellation process, noting that the SCN lacked a specified date and time for a personal hearing, and no reasoning was provided in the impugned order for the retrospective cancellation.
In a recent judgement, the Andhra Pradesh High Court allowed the application made under the Companies Act, 1956 as the half-yearly accounts were duly audited and certified by Chartered Accountant ( CA ).
Justice B S Bhanumathi allowed the company application and directed to take the half-yearly accounts of the subject company (in liquidation) for the period from 01-04-2022 to 30-09-2022 along with Auditor Report dated 06-12-2023 submitted on 08-12-2023 by M/S. Padmanabha Rao & Company, Chartered Accountants, on record and permission may be accorded to make the payment of audit fee of Rs.500 plus GST.
In the recent case, the Calcutta High Court, set aside an order rejecting appeal under section 107 of GST( Goods and Service Tax ) on sufficient explanation for delay in filing appeal and directed the Appellate Authority to hear the case within two months.
A Single Bench of Justice, Raja Basu Chowdhury, on hearing both the sides and considering the material records contended that the petitioner had adequately explained the reason for delay.Therefore, the appeal is to be reinstated to its original file and number and direct the AA to hear the appeal on its merits within two months from the date of the order’s communication.
The Bombay High Court has directed the expeditious adjudication of a Show Cause Notice ( SCN ) and the release of a seized truck on deposit of Rs.2,74,400/- under Section 48 of the Maharashtra Land Revenue Code, 1966.
The bench of Justices A.S Chandurkar and Rajesh. S. Patil ordered that upon such deposit, the truck No. MH-04/JU-6554 shall be released. Additionally, petitioner no.2 (Gauransh Traders) is required to appear before the Tahasildar on 24th July 2024.
In a recent case, the Karnataka High Court has held that the goods and service tax (GST) proceedings cannot be initiated against a non-existent company and quashed the notice.
Justice S Sunil Dutt Yadav observed that once an amalgamating entity ceases to exist upon approved Scheme of Amalgamation, the question of continuing the proceedings as regards the non-existent Company cannot be permitted.
In a recent case, the Orissa High Court quashed the order passed under section 73 of the Orissa Goods and Service Tax Act ( OGST ), 2017 which was passed without granting any opportunity for a hearing. The court remitted back the matter to the very same authority to rehear afresh under law after giving the opportunity of hearing to the Petitioner.
A division bench of Justice B R Sarangi And Justice G Satapathy viewed that since the State Tax officer while passing the order has not been given opportunity of hearing to the Petitioner, the said order cannot be sustained in the eye of law.
In a significant ruling, the Karnataka High Court has canceled GST notices issued to a non-existent entity and overturned the related proceedings.
Justice Sunil Dutt Yadav of the single bench ruled that notices issued to a non-existent entity, as detailed in Annexure-‘A’, were invalid. Consequently, all proceedings based on these notices have been annulled. However, the court has clarified that respondents retain the right to pursue actions against the correct entity concerning the matters outlined in Annexure-‘A’, in accordance with legal procedures. The petitions were dismissed on the grounds that legal proceedings cannot be initiated against a non-existent company.
The single bench of Justice Sunil Dutt Yadav of the Karnataka High Court has ruled that the official liquidator must verify and be satisfied with the payment to determine liability for GST or Service Tax.
In relation to the obligation of paying GST or service tax, it has been confirmed that the GST has been duly settled. The official liquidator is expected to verify this payment. Once the statutory obligations to the Department have been fulfilled, the necessary documentation confirming this satisfaction will be handed over to the respondent.
The Division Bench of the Delhi High Court set aside the cancellation of Goods and Service Tax (GST) registration, ruling that the assessee had provided sufficient reasons for the delay in filing the appeal, which should have been condoned.
The Coram of Justice Vibhu Bakhru and Justice Sanchin Datta set aside the impugned Order-in-Appeal dated 08.05.2024 and remand the matter to the Appellate Authority for consideration on merits. The Appellate Authority was requested to dispose of the appeal as expeditiously as possible and preferably within a period of six weeks from date. Accordingly, the petition was allowed.
The Delhi High Court invalidated the suspension of the Customs Broker license and set aside the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) order on the grounds that suspension under the Customs Brokers Licensing Regulations ( CBLR ), 2018 is not a penalty.
The Delhi High Court, comprising Justice Yashwant Varma and Justice Ravinder Dudeja noted that suspension is a provisional measure pending investigation, not a penalty under CBLR 2018, which distinguishes penalties from suspension explicitly.
In the recent case, the Orissa High Court grants relief due to overdue of Motor Vehicle (MV) tax on a vehicle due to an inadvertent delay in payment, allowing tax to be paid without penalties. The court also permitted an appeal against the penalties if the payment was made within four weeks and an appeal was filed.
single bench of Judge K.R. Mohapatra, disposed of the writ petition stating that if the petitioner pays the overdue MV tax of the vehicle within four weeks and files an appeal, the Appellate Authorities must accept the payment and act according to the law. Additionally, after the tax is paid and any required applications are submitted, the Appellate Authorities should consider issuing a permit and fitness certificate for the vehicle.
The Division Bench of the Delhi High Court set aside the cancellation of Goods and Service Tax (GST) registration, ruling that the assessee had provided sufficient reasons for the delay in filing the appeal, which should have been condoned.
The Coram of Justice Vibhu Bakhru and Justice Sanchin Datta set aside the impugned Order-in-Appeal dated 08.05.2024 and remand the matter to the Appellate Authority for consideration on merits. The Appellate Authority was requested to dispose of the appeal as expeditiously as possible and preferably within a period of six weeks from date. Accordingly, the petition was allowed.
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