This Annual Case Digest analytically summarizes the key stories related to Tax judgements of various High Courts in India reported in Taxscan.in during the year 2023. These stories include judgements and observations of High Courts related to Income Tax, Goods and Service Tax (GST), Excise Duty, Service Tax, Customs Duty, etc.
The Delhi High Court has recently dismissed a plea to waive pre-deposit for an appeal against a limitation order that was barred by limitation. The Division Bench of Justice Vibhu Bakhru and Justice Amit Mahajan thus held, “We find no ground to interfere with the impugned order dated 04.05.2022. We clarify that if the petitioner makes the pre-deposit within a period of two weeks from today, the Appellate Authority shall consider the petitioner’s appeal on merits.”
The Delhi High Court has recently held, in favour of the Reliance Industries Limited, that the 2.3 Million US Dollar arbitral award claim against Reliance raised in an execution petition by the Central Government was ‘unenforceable’.
It was thus clarified by the SIngle Bench Justice C Hari Shankar that, of Actual executability would require, as its sine qua non, determination, by the learned AT, of all the issues on the basis of which the liability of the parties towards each other can be fixed. Without such determination, the award remains inchoate – as in the present case , which was resultantly held to be ex facie unenforceable.
In a recent decision the Tripura High Court observed that Goods and Service Tax (GST) Input Tax Credit (ITC) on the goods and services being utilized for providing the taxable work contract services for construction of hotel building.
A Division Bench of the Tripura High Court comprising Acting Chief aJustice Ujjal Bhuyannd Justice Arindam Lodh observed that “The petitioner has been providing work contract services to the owner of the hotel and not for it’s own. Further, in providing taxable work contract services for the said construction of Hotel Building, he is entitled to take Input Tax Credit on the Goods and Services being utilized for providing the taxable work contract services.”
In a major decision, the Kerala High Court observed that the gratuity is to be calculated from the date on which it becomes payable and not from the date of disbursement.
The Court observed that “Even if it is assumed that the petitioner’s claim for gratuity was under the Payment of Gratuity Act, 1972, the maximum amount of gratuity payable under the said Act has to be determined with respect to the date on which the gratuity became payable and not on the date on which sanction was accorded for payment of DCRG or the date on which the amount was actually disbursed to him.”
The Jammu & Kashmir and Ladakh High Court has held that budgetary support is not allowable since the exemption of excise duty is not availed on chemical products manufactured after 01.07.2017.
A two-judge bench comprising Chief Justice N. Kotiswar Singh and Justice Vinod Chatterji Koul observed that the goods were not manufactured/cleared by the petitioner before 01.07.2017 and as such there is no question of availing excise duty exemption before 01.07.2017 in respect of these goods. “As these goods were not manufactured earlier and consequently, no exemption of excise duty was availed in respect of these goods, these goods are not eligible for budgetary support.” The Jammu & Kashmir and Ladakh High Court held.
A Single Bench of the Calcutta High Court dismissed a Writ Petition (WP) noting that an assessment order under Section 147 of Income Tax Act, 1961 is an appealable order. The Court further went on to note that since the Assessing Officer has given its reasons and findings for coming to its conclusion, sufficiency of it and the reasons and findings cannot be appreciated and scrutinized by a writ court under Article 226 of the Constitution of India like an appellate authority.
A Division Bench of the Bombay High Court upheld the provisions to levy Goods and Service Tax (GST) on intermediaries. The Division Bench comprising of Justice Sunil B Shukre and Justice Abhay Ahuja observed that “Considering the views taken by Justice G. S. Kulkarni and one of us (Abhay Ahuja, J.), we hold the provisions of Section 13(8)(b) and Section 8(2) of the IGST to be legal, valid and constitutional.”
A Division Bench of Justice Rajiv Shakdher and Justice Girish Kathpalia of Delhi High Court has set aside the order assessment order passed under Section 148A(d) of the Income Tax Act, 1961. Also, directed the assessing officer to re-adjudicate the matter. The Assessing Officer failed to adequately hear the petitioner’s standpoint, according to the High Court.
Thus, it was ordered that a new notice be issued under Section 148A(b) of the Income Tax Act. Additionally instructed the petitioner to submit the response within 4 weeks of receiving the notice. Furthermore, the court directed to allow a personal hearing for the petitioner and pass necessary orders in accordance with the law.
The Orissa High Court quashed the order since the opposite party got selected in the bid merely because it had quoted the highest price without considering the ‘no dues certificate’ from the Goods and Service Tax department.
A two-judge bench comprising Dr Justice B R Sarangi and Justice M S Raman held that “the decision-making process in selecting opposite party no.4, being arbitrary, unreasonable and contrary to the provision of law, cannot be sustained in the eye of the law. Consequentially, the order passed by the Tahasildar, Banspal settling the source in favour of opposite party no.4 The opposite party authorities are directed to go for fresh tender in respect of Karangadihi Sand Quarry as expeditiously as possible in the interest of justice, equity and fair play.”
In a recent ruling, a Division Bench of Delhi High Court directed the Income Tax Officers not to take any coercive steps till the disposal of the pending revision application under section 264 of Income Tax Act, 1961.
Thus the bench stated that “the writ petition is disposed of with a direction to respondent no.1 to dispose of petitioner’s revision application, if not already disposed of, at the earliest, though not later than eight (8) weeks from the date of receipt of a copy of the order passed today.” Abhishek Maratha, senior standing counsel appeared for the department side. He refused to file the counter affidavit based on the direction of the High Court. Thus with the consent of the other parties, the bench considered this case for final disposal.
In a recent ruling, the Delhi High Court directed the Assessing Officer to re-adjudicate the matter as they failed to send the notice under Section 148A(b) of Income Tax Act, 1961. The Delhi High Court also directed the AO to accord a personal hearing to the authorized representative of the petitioner. For this purpose, a notice shall be issued fixing the date and time of the hearing. Thereafter, he also has to send a speaking order in accordance with law, the bench further instruccted.
The Delhi High Court, based on the submissions of both sides, has directed the Assessing Officer to re-adjudicate the case again. The court ordered a personal hearing for the authoritative representatives of the petitioners. Ananya Kapoor appeared for the petitioner and Gaurav Gupta, Sr. Standing Counsel with Mr Shivendra Singh and Mr Puneet Singhal appeared for the respondent-department.
The two judge bench of Justice Rajiv Shakdher and Justice Girish Kathpalia disposed the writ petition with directing Assessing Officer to proceeds to pass an assessment order, he would verify the assertion made by the petitioner/assessee which is recorded in the reply, and in this context, also accord personal hearing to the petitioner/assessee and/or his authorised representative.
A Division Bench of Justice Rajiv Shakdher and Justice Girish Kathpalia of Delhi High Court directed the authorities to dispose of the 4 and half years pending appeal within 3 months.
After considering the submissions of both sides, the bench directed that respondent authorities had to dispose of all pending appeals at the earliest, though not later than three (3) months from the date of receipt of a copy of the judgment. Also, while adjudicating the appeal, the authorities had to take into account the entirety of the reassessment order dated 31.12.2016 passed in the case of CBV and the judgments on the issue concerning the restricted grant.
In a recent ruling, the bench of Justice Rajiv Shakdher and Justice Girish Kathpalia of Delhi High Court has set aside the assessment order on grounds that the Assessing Officer violated the principles of natural justice without considering the relaxation request to file reply under Income Tax Act, 1961. It was also directed to conduct a personal hearing to the authorised representative of the petitioner and the notices shall indicate the date and time of the hearing. The petitioner was directed to furnish the information sought by the Assessing Officer via notice issued under Section 142(1) of the Income Tax Act within the next three (3) weeks.
The Delhi High Court has dismissed the Public Interest Litigation (PIL) filed against the Reserve Bank of India (RBI) and State Bank of India (SBI) notifications allowing exchange of 2000 Rupee Currency notes without proof of identity, upholding the impugned notifications.
The Division Bench of Chief Justice Satish Chandra Varma and Justice Subramonium Prasad dismissed the Public Interest Litigation (PIL), upholding the notifications of RBI and State Bank of India (SBI) allowing the public to exchange/deposit 2000 rupee notes as per existing deposit norms.
In a major ruling the Delhi High Court has ruled that the allotment of lesser quota of Haj pilgrimage seats solely on the difference in GST remittance before application is unjust.
A Single Bench of the Delhi High Court comprising Justice Prathiba M Singh observed that “So long as the HGOs have a GST registration and have an explanation for the manner in which they have calculated and deposited GST prior to them, filing of the application for allotment of quotas, disqualifying them would be unjust. The Ministry of Minority Affairs is not the competent authority to deal with these issues, though an attempt has been made to explain that the eligible HGOs have made full GST deposits.”
A Division Bench of the Delhi High Court quashed the order passed under Section 148A (b) of the Income Tax Act issued on failure to furnish a return of income, report or statement of financial transaction on failure to appreciate reply in response to the income tax notice issued under Section 148A(b) of the Income Tax Act.
A Single Bench of the Patna High Court rejected the second anticipatory bail application filed in apprehension of arrest for offence punishable under Section 4 of the Prevention of Money Laundering Act,2002 (PMLA). Rejecting the application for anticipatory bail the Patna High Court Bench of Justice Satyavrat Verma observed that “the Co-ordinate Bench in Criminal Miscellaneous No. 34788 of 2019 has already rejected the anticipatory bail application on the ground which is being urged by the petitioner presently, as such the Court does not feel persuaded to again enter into the merits of the case.”
The Jharkhand High Court stayed Estern Coalfields, the respondent from deducting amounts from invoices on the ground that GST amount not reflecting in GSTR-2A on non-uploading of invoices. Rajesh Lala, counsel for the respondent no.1 prayed for and three weeks’ time to file a counter affidavit. A Division bench of the High Court comprising Justices after analysing the facts and the legal provisions ordered for status quo to be maintained by Estern Coalfields thereby not allowing Estern Coalfields to deduct further amounts from future invoices and posted the matter for further consideration on 14.06.2023.
A Division Bench of the Delhi High Court refused to enhance the bank guarantee demand to release the seized gold imported after export for exhibition.
The Coram comprising of Justice C Hari Shankar and Justice Mukta Gupta observed that “The judgment under review worked out the quantum of the bank guarantee to be furnished at Rs 10 crores, as 30% of the total value of the gold seized, including the unreleased 25299.68 grams gold jewellery forming the subject matter of the present review proceedings. That amount was enhanced by the Supreme Court to Rs 15 crores, otherwise upholding our judgment. It is not possible, therefore, for us to direct furnishing of any further bank guarantee, as a condition, for the release of 25299.68 grams gold.”
A division bench of the Bombay High Court ordered that, in the absence of the relevant officers, a judicial magistrate or advocate may carry out an order issued under section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).
Thus, the bench while disposing the writ petition stated that “if the officers entrusted with implementation of the Order are engaged in other pressing public duties, the option of appointing an advocate to implement the Order be explored within the parameters of the law. The same option can also be considered by the Judicial Magistrate, if so permissible in law.”
The Gauhati High Court refused to entertain writ petition against service tax demand on the existence of alternative remedy.
A Single Judge Bench of the Gauhati High Court comprising Justice Kalyan Rai Surana observed that “The Court is inclined to restrain itself from entertaining this writ petition in view of alternative and efficacious remedy available to the petitioners under the Goods and Services Tax Act, 2017 before the Customs, Central Excise and Service Tax Appellate Tribunal, Kolkata.”
While entertaining the petition filed by the McDonald’s India Pvt. Ltd., the bench of Justice Bibhu Bakhru and Justice Amit Mahajan of Delhi High Court observed that the Appellate Authority did not consider the Master License Agreement (MLA) and thus set aside the order. Furthermore, no additional grounds for rejecting the petitioner’s claim for refund could be raised Suo motu by the Appellate Authority, in an appeal preferred by the petitioner. Thus the impugned order of the appellate authority is liable to be set aside. Also directed the adjudicating authority to re-adjudicate the matter.
The Insolvency and Bankruptcy Board of India (IBBI) has recently restored the registration details of the registered valuer Entity Since the matter was sub judice by the stay order of the Bombay High Court. The authority held that since the subject matter is sub-judice with the High Court of Bombay, it will not be appropriate to go into the merits of the suspension order of the director who is also a registered valuer or the RV-E. Considering the decision of the High Court, the Authority suspended the operation of IBBI’s Order. The registration details of the RVE shall be restored in the records of IBBI.
The Ministry of Corporate Affairs (MCA), represented by Central Government Counsel Jagadeesh Lakshman has submitted that the resolution of the MCA V1/V2/V3/21 Portal issues is in progress, while the case was listed on 29th May before the Kerala High Court.
The Central Government Counsel submitted that, based on the interim order dated 23/5/2023, the resolution is currently in progress. The respondents will do the needful forthwith to resolve the issue. The MCA 21 and V1/V2/V3 Portals are yet to achieve smooth functionality to ensure seamless and tension-free compliance due to the innumerable number of portal glitches.
The Delhi High Court has held that the re-assessment order passed completely inconsistent with the previous assessment without a valid reason is invalid. A two-judge bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia observed that the decision taken first in point of time (order dated 28.07.2022) was a reasoned decision, based on the analysis of material on record, but the decision taken subsequently (order dated 31.07.2022) not just took a view completely inconsistent with the previous view but even without an iota of reason. While allowing the petition, the Court set aside the impugned notice and order dated 31.07.2022 under Section 148 of the Income Tax Act, 1961.
The Gauhati High Court granted bail to the offence under Section 21( c) of the driver of the truck which transported cough syrup bottles without due E-way Bill Narcotic-Drugs and Psychotropic Substances Act, 1985 (NDPS). A single-judge bench comprising Justice Ajit Borthakur directed to release the petitioners on bail of Rs.1,00,000/- (Rupees One Lakh) only with two sureties of like amount to the satisfaction of the learned Special Judge (NDPS), Dhubri subject to certain conditions.
A Division Bench of the Delhi High Court quashed the cancellation of GST Registration made on assumption that petitioner being non-existent at principal place of business. The Coram comprising of Justices Vibhu Bakhru and Amit Mahajan observed that “It is now clear that the respondents proposed to cancel the petitioner’s registration on the assumption that he was not-existent at his principal place of business, this Court considers it apposite to set aside the impugned order and remand the matter to the concerned officer to consider afresh after affording the petitioner a full opportunity to be heard.”
In a significant case, the Delhi High Court directed re-adjudication since the department mistakenly demanded tax without giving credit to Tax Deducted at Source (TDS) on compensation from the National Highways Authority of India (NHAI). A two-judge bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia disposed of the writ petition with the directions to Jurisdictional Assessing Officer (JAO) to render a decision on the pending rectification application dated 18.08.2022.
In a significant case, the Delhi High Court ordered to commence the construction of the Chamber Block of the Sales Tax Bar Association after 15 years of delay in construction. The Court directed to conduct a meeting convened by the Commissioner VAT, Department of Trade and Taxes in an appropriate venue and the coordination shall also be done by the said Commissioner. The two representatives of the Sales Tax and Bar Association shall also join the meeting.
In a recent case, the Delhi High Court has set aside the show cause notice (SCN) which suspended the Goods and Service Tax (GST) registration without stating specific allegation. A two-judge bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan set aside the impugned Show Cause Notice and quashed the order suspending the petitioner’s GST registration also stands quashed. It was clarified that the respondents are not precluded from issuing an appropriate Show Cause Notice, setting out the reasons for proposing any adverse action against the petitioner.
The Calcutta High Court has held that the cash-credit facility is not a debt, and cannot provisionally attach u/s 83 of the Central Goods and Service Tax Act, 2017. “When there is efficacious relief in the statute itself, this Court is of the view that the petitioner should adopt such efficacious relief and this Court is not inclined to afford any relief under Article 226 of the Constitution,” Justice Bibek Chaudhuri held.
The Delhi High Court directed to seek statutory remedy on the allegation that the sale consideration of agricultural land was assessed to tax without adjusting the cost of acquisition.
A two-judge bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia disposed of the petition by directing the petitioner to prefer an appeal with the Commissioner of Income Tax (Appeals) (CIT(A)). Further held that “the petitioner will file an application for stay with the concerned authority, within ten [10] days from today. The concerned officer will dispose of the application for stay within ten [10] days of the same being filed. The AO will inter alia, bear in mind, the broad contentions raised before us, and, the aspect that the entire sale consideration has been brought to tax.”
The Calcutta High Court quashed the order to dismantle and remove the hoarding since no notice was issued by the corporation on unpaid dues of advertisement. Justice Kausik Chanda disposed of the writ petition with a direction upon the corporation to consider the said representation by the law within a period of three weeks. “There shall be a stay of operation of the impugned notice for a period of four weeks.”, the Court held.
The Madras High Court dismissed the writ petition since the attachment of the bank account under the Tamil Nadu Value Added Tax Act, 2006 was withdrawn by authorities. C Baktha Siromoni appeared on behalf of the petitioner and Ms Amirta Dinakaran appeared on behalf of the respondent. It was submitted that the bank attachment which is the subject matter of the writ petition has been withdrawn. Since there was no cause of action for the writ petitioner, Justice V Lakshminarayanan dismissed the petition.
The Chhattisgarh High Court directed the CIT (Appeals) to decide the pending appeal within 90 days on non-consideration of statutory appeal by the Income Tax Appellant Authority. It was evident that the appeals were preferred by the petitioner on 09.02.2023 and the bank account of the petitioner has been frozen and on account of that very ground, he could not appear in the proceedings.
In a recent case, the Calcutta High Court set aside the demand for late fees since the non-furnishing of the return was due to the cancellation of registration. A two-judge bench comprising Justice T S Sivagnanam and Justice Hiranmay Bhattacharyya held that “the demand of late fee from the appellant @ Rs.5,000/- per return is without jurisdiction and not tenable in the eye of law. It is pointed out by the learned Advocate appearing for the official respondents that unless the appropriate direction is given to the concerned respondent, the appellant will not be able to electronically file its return.”
A Division Bench of the Delhi High Court recently dismissed a review petition belatedly filed against income tax proceedings under Section 148 of the Income Tax Act, 1961. The court pointed out that there was no error apparent on the face of the record, and it upheld the previous judgment. Consequently, the review petition was dismissed.
The Insolvency and Bankruptcy Board of India (IBBI) has issued an order disposing of the appeal filed by Yardi Prabhu Consultants & Valuers Pvt. Ltd. against the previous order dated April 6, 2022. The suspension order issued by IBBI on April 6, 2022, is hereby suspended, pending the decision of the High Court of Bombay in the Civil Writ Petition No. 10440 of 2022. The registration details of Yardi Prabhu Consultants & Valuers Pvt. Ltd. were directed to be reinstated in the records of IBBI.
In a recent decision, the Delhi High Court has quashed the reassessment proceedings initiated by the Income Tax Officer (ITO) in relation to Assessment Year (AY) 2017-18. Consequently, considering the facts stated in the writ petition as correct, the court allowed the prayer made by the petitioner and quashed the impugned notice issued under Section 148A(b) and the order passed under Section 148A(d) of the Income Tax Act, 1961. The consequential notice issued under Section 148 of the Income Tax Act on the same date was also quashed by the Delhi High Court.
Karnataka HC lays down Guidelines to determine Tax Liability on Works Contracts entered into during Pre-GST Period SHRI CHANDRASHEKARAIAH vs THE STATE OF KARNATAKA CITATION: 2023 TAXSCAN (HC) 902
The Karnataka High Court has issued directions and guidelines to State and Central tax authorities for determination of liability on contracts entered into during the pre-GST regime.
The Single Bench of Justice S R Krishna Kumar issued the Respondents-State and other Govt agencies Respondents who have entered into works contract with the Petitioners with these directions/guidelines:-
In a recent development, the Delhi High Court has directed the Jurisdictional Assessing Officer (JAO) to render a decision on the pending rectification application filed by the assessee. The High Court bench of Justice Rajiv Shakdher and Justice Girish Kathpalia disposed of the writ petition with directions to the Jurisdictional Assessing Officer to decide the pending rectification application at the earliest, but not later than six weeks from the receipt of the judgment. The court also emphasized that if the decision is adverse to the petitioner, the petitioner can seek an appropriate remedy as per the law.
The Delhi High Court has held that attaching a taxpayer’s bank account merely based on suspicion and without tangible material is invalid.
Justice Vibhu Bakhru and Justice Amit Mahajan, who made up a two-judge panel, noted that the claimed harsh measure is illegal simply because it is based on suspicion and does not have any supporting evidence. The fact that the petitioner’s director is/was a worker for M/s Best Crop Group and is partly in the domain of assumptions is the second indication that the petitioner is a fictitious business. The mere suspicion that the petitioner is a dummy company, which is founded based on statements that one of the directors of the petitioner company was, or is an employee of M/s Best Agrolife Group, and is in complete disregard of the corporate documents of the petitioner, would fall foul of the requirement of forming an opinion, as it does not meet the standards required for taking an action under Section 83 of the CGST Act. The Court set aside the attachment.
While entertaining the writ petition, a Single Bench of Justice. S. Srimathy observed that without instructions and without verifying the records, the petitioner cannot direct his representatives to appear. Moreover, the petitioner is having full knowledge of the transactions, thus he has to appear for the personal hearing. The petitioner is the only individual who has complete knowledge of the transactions, the judgement ruled. The petitioner must also instruct and verify the documents, which takes time. He must also brief his attorney on the circumstances.
The Madras High Court instructed the petitioner to cease requesting new adjournments after upholding the appeal. The petitioner must also give the respondents Rs. 2,000 (Rupees Two Lakh only) over the course of two instalments.
In a major ruling a Single Bench of the Madras High Court ruled that the requirement to furnish certified copy of impugned order within 7 days of filing of appeal under Rule 108(3) of Tamil Nadu GST Rules(TNGST), is only procedural requirement which can be condoned as it is only technical defect.
The Orissa High Court held that in the context of supplying a certified copy within the time frame specified in sub-rule (3) of Rule 108, the requirement to furnish a certified copy of the impugned order within seven days of filing an appeal is only a procedural requirement, which can be excused by exercising powers under Article 226 of the Indian Constitution. The Bench cited this ruling in M/s. Atlas PVC Pipes Limited vs. State of Odisha and others.
The Patna High Court observed that the entertainment tax collected by Commercial Tax Officers under Bihar Entertainment Tax Act is ultravires of the 101st Constitutional Amendment. “Since it is not imposed and collected by a local self-government entity, the entertainment tax as it was imposed under the Bihar Entertainment Tax Act, 1948, cannot survive after the 101st Amendment. After the 101st Amendment, the State likewise lost the ability to implement legislation similar to the Bihar Entertainment Tax Act, 1948, the Bench said.
In a major decision the Gujarat High Court ruled that the limitation period to file appeal begins when order is uploaded in the GST Portal. Although the petitioner received a physical copy of the adjudication ruling, the time limit for filing an appeal would not begin until the judgement was uploaded to the GST portal, according to the two-judge bench of the Gujarat High Court.
The petitioner was unable to submit the appeal without the order. The Bench further stated that, in its opinion, the impugned order rejecting the petitioner’s appeal on the basis of limitation is unjustifiable because the petitioner cannot be punished for the lack of clarity of the provision when the new law is enacted simply because the petitioner manually filed the appeal after exhausting all efforts to ensure filing of the appeal in a proper and legal manner.
The Delhi High Court has held that the Goods and Service Tax (GST) department cannot ignore the refund allowed on zero-rated supply because of an appeal to be filed against the said order. The Revenue cannot disregard the Order-in-Appeal and refuse the benefits of the same on the grounds that it intends to appeal the said order, according to the two-judge panel made up of Justice Vibhu Bakhru and Justice Amit Mahajan. The Court ordered the respondent to distribute the petitioner’s claim for refund with relevant interest as quickly as feasible, within a period of four weeks, because the petitioner had been deprived the benefit of the ruling in its favour for more than two years.
The Institute of Chartered Accountants of India (ICAI) has been served with a direction to re-adjudicate on plea against the unusual pay difference between senior and junior employees, by the Delhi High Court owing to the lack of reasons cited in the non-speaking order.
The Delhi High Court Single Bench of Justice Jyoti Singh instructed ICAI to reevaluate the representation of the petitioner and the problems brought up in the writ petition and that “Respondent shall take a decision and pass a speaking order within a period of four weeks from today.” The petitioner will receive notice of the order within a week of it being passed, and if they are unhappy with it and are advised as such, they are free to pursue legal remedies.
In a recent ruling, a Single Bench of the Madras High Court has set aside the penalty order imposed by the Customs Authorities against the petitioner despite the interim order of the Division Bench.
The bench noted that the respondent authorities had instructed the petitioner to pay a penalty of Rs. 2,50,000 within 7 days of receiving the notice and had warned that if she did not, she would be subject to punishment under Section 142(1)(c)(iii) of the Customs Act of 1962. Additionally, the court accepted the appeal and ordered the respondents to abide by the temporary orders issued by the Division court of this Court.
In a recent judgment, the Delhi High Court ruled that the Retaining Explanation to Section 245A of the Income Tax Act serves the purpose of explaining the scope of Section 245A of the Income Tax Act and that the literal interpretation is sufficient.
The claim that the literal interpretation of the law is against the legislative intent is rejected by our team as having no substance. Instead, keeping the Explanation to Section 245A of the Income Tax Act (and later revising it) accomplishes the desired result of adequately describing the application of Section 245A of the Income Tax Act. The Bench came to the conclusion that there is no ambiguity in Section 245A of the Income Tax Act that would require or make it appropriate for the court to ignore the literal reading of the text of Section 245A.
The Delhi High Court has held that notice of proceedings under Section 110(1b) of the Customs Act, 1962 must be issued to the owner of seized goods. The owner or the individuals from whom the goods were seized must receive notice of the process under Section 110(1B) of the Customs Act, according to a two-judge panel made up of Justice Vibhu Bakhru and Justice Amit Mahajan. It was determined that the respondent’s argument that no notice of the proceedings under Section 110(1D) of the Customs Act must be served is invalid. The Court determined that the petitioner has the right to seek that the proceedings under Section 110(1D) of the Customs Act be started from scratch in view of the precedent set in the case of Ishwar Parasram Punjabi v. Union of India.
The Madras High Court ordered fresh enquiry in the absence of notice on freezing of the bank account as it would be fair and equitable to give one more opportunity to the writ petitioner subject to being put on terms. The court ruled that upon receipt of such money, the respondents must make sure that the Writ Petitioner’s bank account is immediately unfrozen. It goes without saying that the first respondent will then undertake a new investigation, and the petitioner will have the chance to make a personal appearance and offer written and oral testimony regarding the purported arrears owing.
The Orissa High Court rejected the anticipatory bail to Khageswar Patra, an accused in the Odisha Honey Trap case on failure to comply Section 45 of the Prevention of Money Laundering Act,2002 (PMLA).
The Court denied the anticipatory bail after taking into account the seriousness and nature of the accusations made against the petitioner, as well as the petitioner’s failure to comply with the requirements of Section 45 of the Prevention of Money Laundering Act and the rules established by the Supreme Court in Vijay Madan Lal Choudhury and Others v. Union of India.
The Delhi High Court ruled that Section 245C (1) application under the Income Tax Act is not maintainable in the absence of a case for the relevant Assessment years (AY).
Justice Vibhu Bakhru and Justice Amit Mahajan, who made up the two-judge Delhi Court panel, stated that “A plain reading of Explanation (i) to Clause (b) of Section 245A of the Income Tax Act clearly indicates that the proceedings in relation to assessment, reassessment, or re-computation under Section 147 of the Income Tax Act had not commenced in respect of the Assessment Years 2012-2013, 2013-14, and 2014-15.” In its final statement, the Bench stated, “We find no infirmity with the decision of the Commission that the petitioner’s application under Section 245C of the Income Tax Act in respect of the said assessment years, was not maintainable.”
A Single Bench of the Delhi High Court directed J.C Flowers Asset Reconstruction Private Limited, the petitioner to approach the appellate tribunal under Section 26 of the Prevention of Money Laundering Act, 2002 (PMLA) to claim beneficial interest in the property.
Accordingly, the court’s conclusion is that the petitioner who asserts a beneficial interest in the property should seek the Appellate Tribunal in accordance with Section 26 of the Prevention of Money Laundering Act, 2002, the Court of Justice Prathiba M Singh stated. The petition is consequently rejected as withdrawn, with the right to appeal granted by the Appellate Tribunal established in accordance with Section 26 of the Prevention of Money Laundering Act, 2002, the Court said.
A Single Bench of the Calcutta High Court dismissed the review petition directing the Enforcement Directorate (ED) to continue the investigation in the much-celebrated Municipality Recruitment Scam.
The Court stated in dismissing the review petition that it believes the State, including its departments, should cooperate with the investigating agencies and ensure that the ongoing investigation comes to a logical conclusion as soon as possible so that the offenders can be arrested and properly dealt with in accordance with the law.
The Allahabad High Court directed to issue fresh notice under Section 29(2) of the Uttar Pradesh Goods and Services Tax Act, 2017(UPGST Act) and observed that no cancellation of the GST registration can be made by merely describing the firm as bogus.
Based on the ruling in Apparent Marketing Private Limited, a single Allahabad High Court bench led by Justice Piyush Agarwal stated: “The registration once granted might be withdrawn only if one of the five statutory prerequisites was found present. Simply stating that the company that received the registration was “bogus” will not result in its cancellation per se. The Bench said that the respondent-author is free to issue a new notice on any specific basis listed in section 29(2) of the GST Act, and that if that action is taken, it will be resolved on its own merits without being influenced by any of the observations made in this judgement.
A Division Bench of the Orissa High Court stayed the penalty and interest demanded by the Goods and Service Tax (GST) Department in absence of Second Appellate Goods and Service Tax (GST) Tribunal.
The Court of Justices Dr. BR Sarangi and MS Raman stated, “Since the Petitioner wants to avail the remedy under the provisions of law by approaching second appellate tribunal, which has not yet been constituted, the amount of penalty and interest demanded by authority shall remain stayed during pendency of the writ petition subject to the Petitioner depositing the entire amount of tax demanded within a period of fifteen days from today.”
The Orissa High Court has held that the Joint Commissioner of State Tax has the power to search and seizure and upheld the order passed under section 130 of the Integrated Goods and Service Tax (IGST) Act, 2017. It was noted that the search and seizure authority had exceeded its authority and rejected the order under Annexure-10. Instead, the authority acted in accordance with its jurisdiction to issue such an order. As a result, the argument made that he cannot be a judge of his own cause is untrue in this instance. The writ petition was dismissed by a two-judge panel made up of Dr. Justice B. R. Sarangi and Justice M. S. Raman, allowing the petitioner to seek redress from the proper authority.
The Delhi High Court issued the notice for re-examination since the reassessment was time-barred. The requirements of Section 149(1)(a) of the Income Tax Act and the third proviso are therefore applicable, according to a two-judge panel consisting of Justice Rajiv Shakdher and Justice Girish Kathpalia.
The judges also noted that the proceedings brought against the petitioner are time-barred. Since the matter needs to be examined, the court sent notice to the defendant and declared that “the Assessing Officer will have the liberty to continue with the reassessment proceedings.” However, until additional instructions from the Court, any order that is granted and is against the petitioner’s or assessee’s interests is not to be implemented.
A Division Bench of the Delhi High Court observed that the excise duty for Ghutka for July and August, 2008 to be computed as per the Pan Masala Packing Machines(PMPM) (Capacity Determination and Collection of Duty) Rules, 2008(PMPM Rules).
“In the present case, we are unable to accept that it is implicit in the provisions of the amended Rule 17(2), that it applies retrospectively for purposes of determining duty in respect of searches conducted prior to 20.10.2008,” the bench composed of Justices Vibhu Bakhru and Amit Mahajan stated. The duty would be established by assuming – unless established to the contrary – that the machines found were operational from 01.07.2008 and by applying the computational provisions of Rule 7 of the PMPM Rules for searches conducted after the Second Amendment Rules came into force, the Bench stated.
The Calcutta High Court has held that Section 50C of the Income Tax Act, 1961 cannot be applied to the compulsory acquisition of a capital asset. The provisions of Section 50C cannot be applied in cases of compulsory acquisition of capital assets such as land, buildings, or both, according to a two-judge panel made up of Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya. This is because there is no need to pay stamp duty to complete the transfer in question.
The National Highways Act of 1956’s provisions were used to acquire the property. The property vests by operation of the aforementioned statute, and no payment of stamp duty is necessary for this property vesting. As such there was no necessity for an assessment of the valuation of the property by the stamp valuation authority in the case on hand. It was held that the provisions under Section 50C of the Income Tax Act cannot be applied to the case on hand.
Quashing the assessment order on failure to comply natural justice principles the Calcutta High Court remarked that the power of reopening assessment is a power, which is to be sparingly used for adequate reasons.
The Assessing Officer shall redo the process in accordance with law, and the Assessee shall not raise the point of imitation before the Assessing Officer as this order has been passed accepting the case of the Assessee that there has been a violation of the principles of natural justice, as alleged. The Bench further ordered the Assessee to submit a thorough reply enclosing all documents in support of his claim.
Quashing the order rejecting Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR Scheme) Declaration the Delhi High Court remarked that excluding taxpayers from Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR) scheme due to obvious errors is contrary to its object.
The Bench instructed the designated authority to process the petitioner’s declaration in accordance with the SVLDR Scheme as quickly as possible, preferably within a period of eight weeks from today. “The impugned order rejecting the petitioner’s declaration under the SVLDR Scheme is set aside,” the Bench stated.
The Calcutta High Court stayed the recovery proceedings as no prejudice to the taxpayer was caused by non-formation of the Goods and Service Tax Appellate Tribunal (GSTAT).
Chief Justice TS Sivagnanam and Justice Hiranmay Bhattacharyya were on a division bench of the Calcutta High Court when they stated, “We are of the opinion that recovery proceedings should remain stayed without imposing any precondition. Therefore, until the writ petition is resolved, the authorities are prohibited from taking any forceful recovery measures. In light of this, the Single Bench’s requirement that 20% of the contested tax be deposited is no longer in effect.
The Madras High Court dismissed the petition since the issuance of notice by the department was proved based on corroborative evidence.
A single-judge bench comprising Justice R N Manjula observed that even if the petitioner is aggrieved due to any omission committed on the part of the respondent authority, there is an effective alternative remedy available to the petitioner to challenge the impugned orders by way of filing revision/ appeal before the competent authority. The Court dismissed the petition as it was evident that sufficient opportunity was given to the petitioner.
A Division Bench of the Calcutta High Court remanded back the matter to Assistant Commissioner as payment of tax at the rate of 12% was made at the time of filing returns and 10% of the disputed tax was made as pre-deposit.
The Bench stated, “The appeal and the writ petition are disposed of by setting aside the orders passed by the appellate authority and remanding the matter back to the Assistant Commissioner with a condition that the appellant shall pay a further sum of Rs. 1 lakh and upon such payment, the said assessing officer shall consider the documents that the assessee may produce and examine as to whether the assessee was correct in computing the tax.”
A Division Bench of the Calcutta High Court quashed the income tax assessment order since the reassessment was made on entirely a new set of facts which were not known to the assessee. “The reassessment proceedings have to be redone and even if the assessment order has been passed, the same is required to be set aside and the matter is to be restored to the assessing officer for fresh consideration,” the two-judge bench made up of T. S. Sivagnanam, the acting chief justice, and Justice Hiranmay Bhattacharyya concluded.
The Delhi High Court dismissed a batch of petitions by Rahul Gandhi, Sonia Gandhi, Priyanka Gandhi Vadra, Aam Aadmi Party (AAP), and other and other charitable trusts challenging the Income Tax department’s decision of transferring their tax assessments from faceless assessment to its Central Circle.
The assessments of the petitioners have been transferred to the Central Circle in conformity with the law by way of the impugned orders passed under Section 127 of the Income Tax Act, according to a division bench of the Delhi High Court composed of Justice Manmohan and Justice Dinesh Kumar Sharma. As a result, the interim orders issued by this Court are revoked, and the current writ petitions as well as any pending applications are dismissed without any order regarding costs
A Division Bench of Bombay High Court directed the appropriate authorities to consider the refund application after giving an opportunity of hearing and after considering the submissions of the petitioner, pass a reasoned order in accordance with law. The court stated that measures unfavourable to a party cannot be carried out without providing the party with adequate notice and a chance to defend.
The Maharashtra Value Added Tax Act further required the respondents to notify the assessee before making any adjustments to refunds, the court added. The Defect Notice and the Refund Adjustment Order are separated by just one day, thus the Petitioner would not have had enough time to even request that the Authorities address his issue. The subject was therefore remanded to the respondent authorities by the bench.
In a recent decision, the Division Bench of Chief Justice Ujjal Bhuyan and Justice N. Tukaramji of Telangana High Court ordered to avail the remedy under the Central Board of Indirect Taxes and Customs (CBIC) notification issued on March 30, 2023, where it was stated that the application to file the revocation of Cancellation of Goods and Services Tax (GST) Registration can be done till June 30, 2023.
The application for revocation must also be completed following the submission of all returns that are due up until the registration cancellation’s effective date, as well as the payment of any taxes, interest, penalties, and late fees related to those returns. According to the provisions of the CBIC notification, the petitioner is free to request the revocation or cancellation of the GST registration, the bench determined.
The Bombay High Court (HC) presided by Justice Abhay Ahuja and Justice Nitin Jamdar directed the Sales tax department to reconsider the Goods and Services Tax (GST) Input Tax Credit (ITC) refund application. Also to examine the evidence that is produced by the Petitioner in addition to the invoices and take a decision.
The bench pointed out that the typographical error is clear-cut because there is no such state in the United States. Since Iowa State is the name of the location in question, the Deputy Commissioner ought to have taken the Petitioner’s statement into account. The Petitioner may also offer additional supporting documentation for its request for a refund.
A Division Bench of the Patna High Court observed that Sub section (5A) inserted by amendment of Finance Act,2017 has no retrospective effect.
According to the bench of Chief Justice K. Vinod Chandran and Justice Madhuresh Prasad, “we are of the opinion that sub-section (5A), inserted by way of an amendment to the Finance Act, 2017, expressly stated to be effective from 01.04.2018, cannot be treated as retrospective, for reason of the express words employed and there can be no intendment ferreted out, so as to deem it impliedly retrospective.”
The Court also noted that the consequences as per Section 45 of the Income Tax Act, for a person who transfers a capital asset as contemplated under Section 2(47)(v) of the Income Tax Act insofar as having to compute the total income by including the capital gains accrued in the previous year in which a transfer was affected, when the JDA was entered into prior to 01.04.2018 was not an unintended consequence.
In a recent decision, the Bombay High Court declared that the semi-finished fabric encompassed in the RG-1 register would not be regarded as a finished product and nullified the Customs, Excise and Service Tax Appellate Tribunals (CESTAT) finding. Also, the bench restored the file back for readjudication. Justices Abhay Ahuja and Nitin Jamdar, sitting as a divisional bench, determined that the “manner in which one of the main findings sought to be scrutinised is reversed, we have to accept the submission of the learned counsel for the Appellants that the matter needs reconsideration by the Appellate Tribunal.”
The Andhra Pradesh High Court granted bail to the accused, Suresh Goyal with regard to arrest under Prevention of Money Laundering Act for diversion of Andhra Pradesh State Skill Development Corporation, Andhra Pradesh (‘APSSDC’) fund. The petitioner was detained on March 4, 2023, and has been held in judicial custody ever since.
The petitioner has continued to appear before the investigating agency and cooperate with the investigation, according to a single bench of Justice K Sreenivasa Reddy. the view that it is not required for this Court to keep the petitioner in custody any longer. The Bench took into account the fact that the primary offence has not been the subject of a charge sheet for more than 15 months. The petitioner in this case, who has been incarcerated since 04.03.2023, is also a Chartered Accountant by profession. Insofar as the petitioner is concerned, it is the first offence.
A division bench of Patna High Court has set aside the Goods and Services Tax (GST) registration cancellation order on ground that the order itself was ‘Non-speaking’. The bench of Chief Justice K. Vinod Chandran and Justice Madhuresh Prasad allowed the appeal and observed that the form GST REG -19 lacks proper reason to cancel the Goods and Services Tax registration. The court further stated that if the cancellation was carried out in accordance with Section 29(2)(c) and Section 29(2)(c) of the Central Goods and Services Tax, the assessee would likewise be eligible to use the aforementioned remedy.
While entertaining the case, a Division Bench of Justice Dr B.R. Sarangi and Justice M.S. Raman of Orissa High Court observed that the date of the discovery of material is not relevant but the nature of material or evidence discovered.
The petitioner was determined to have secured a Weights and Measures Licence, the court said, after the Vigilance officers’ check of the premises revealed the presence of an electronic weighing equipment. However, that cannot be taken as information that can be used to establish judgements ipso facto. “The material’s discovery date is not important.
According to the High Court, “what is relevant is the nature of evidence or material uncovered during the inspection is the most important item. Also stated that in the absence of the same, the same cannot be utilized for making assessments for other years unless their relevance to any other period is established by the Assessing Officer.
The Bombay High Court in a recent judgement has directed the re-adjudication of the matter when the assessee challenged the suspension of Goods and Service Tax (GST) registration based on Show Cause Notice (SCN) with a new cause of action. Without going into the merits of the matter, the two-judge bench comprising Justice Amit Borkar and Justice Kamal Khata directed the Petitioner to appear before Respondent and to decide the show cause notice dated 26th April 2023 as expeditiously as possible and within four weeks.
In a recent ruling, the Orissa High Court ruled that non-maintenance of books of account by the dealer whose registration has been cancelled under Section 9(3-f) of the Orissa Sales Tax Act 1947 cannot be taken as sales tax evasion. A Division Bench of the Orissa High Court granted the relief, concluding that the lack of accounting records could not be taken as proof that sales were being kept secret. Additionally, it was decided that the type of evidence matters more than when it was found.
In a significant case, the Delhi High Court allowed the interest on delayed tax refunds since the authority failed to pay the granted refund. A two-judge bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan observed that the petitioner is also entitled to an interest by the law. While allowing the appeal, the Court directed the respondent to forthwith disburse the petitioner’s claim for refund along with interest as payable by the law.
A Division Bench of the Delhi High Court considered the case while relying on section 83(2) of the Central Goods and Services Act, 2017, and instructed the bank to handle the account normally since the attachment order was no longer in effect.
The High Court noted that the simple language of Section 83(2) of the Central Goods and Services Tax Act makes it apparent that the operation of an order provisionally attaching the bank account would cease to be operative after the statutory term of one year had passed.
Further, it was said, “Insofar as the petitioner’s prayer for permitting the petitioner to operate its bank account is concerned, clearly; the impugned order would not impede the petitioner, in any manner, from operating its bank account.” GST Authorities detain Consignment on ground that Supplier Wrongly Passed ITC to Buyer: Madras HC directs Buyer to Pre-deposit 200% of Maximum Penalty Haresh Kumar vs The Assistant Commissioner (ST) CITATION: 2023 TAXSCAN (HC) 832
A single Bench of Justice C. Saravanan of Madras High Court directed the buyer to make a pre-deposit of 200% of maximum penalty or an alternative furnish Bank Guarantee in terms of Section 129(c) of the respective Goods and Services Tax enactments and the Rules made thereunder. In order to balance the interests of the revenue and the petitioner, the High Court stated, “Therefore, I am of the view that there can be a direction to the petitioner to deposit the maximum penalty of 200% of the tax to safeguard the interest of the revenue.”
The Delhi High Court has held that notice of proceedings under Section 110(1b) of the Customs Act, 1962 must be issued to the owner of seized goods. It was viewed that the contention of the respondent that no notice is required to be served of the proceedings under Section 110(1D) of the Customs Act is not valid. In light of precedent in the case of Ishwar Parasram Punjabi v. Union of India (supra), the Court held that the petitioner is entitled to insist that the proceedings under Section 110(1D) of the Customs Act be conducted de novo.
The Delhi High Court directed re-adjudication since the notice under section 148A(b) of the Income Tax Act, 1961 was received on the date of reassessment. A two-judge bench of Justice Rajiv Shakdher and Justice Girish Kathpalia set aside the impugned order passed under Section 148A(d) and the consequential notice issued under Section 148 of the Income Tax Act. The petitioner was directed to file a reply to the notice dated 10.03.2023 issued under Section 148A(b) of the Act within three (3) weeks commencing from today.
The Delhi High Court has quashed the penalty order under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (BMA) since the department failed to consider the assessee’s email. The reply submitted by the petitioner/assessee on March 9, 2023, did not contain any references to Section 46(4)b) of the B.M. Act, according to the two-judge panel made up of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju. The Court revoked the contested penalty order and instructed the relevant authorities to perform a de novo investigation.
In a recent decision, a Single Bench of the Calcutta High Court ordered the Assessing Officer (AO) to submit a report on May 18, 2023, in order to inquire about the deponent’s business operations and verify from his return the type of business and transaction at issue in this case.
The bench ruled that the contested order was not a non-speaking order, that it did not contravene natural justice principles, that it did not contain any procedural errors, and that it was not issued by an officer who lacked jurisdiction as a result of the relevant facts, findings, and evidence. According to a directive from the High Court given to Mr. Bagaria, the petitioner’s counsel must provide a copy of the pan card to Mr. Tilok Mitra, who is representing the respondent Income Tax Authority, who will then inquire about the business activity of this deponent, Ravi Kumar Agarwal, who affirmed the writ petition and identified himself as a businessman.
The Jharkhand High Court quashed the rejection of revision petition and ruled that the Recording of satisfaction necessary for initiation of proceedings under Section 35 (7) of the Jharkhand Value Added Tax Act, 2005 (JVAT Act).
It is appropriate to note that the requirement of recording satisfaction under proviso to Section 35 (7) of the Jharkhand Value Added Tax Act, 2005 (JVAT Act) is a prerequisite before initiation of proceedings and cannot be dispensed with by the AO, according to the two-judge bench made up of Justice Rongon Mukhopadhyay and Justice Deepak Roshan. The Bench stated, “Therefore, it is necessary to remand the matter to the AO to comply with the provisions of Section 35(7) of the Jharkhand Value Added Tax Act, 2005 (JVAT Act) for initiating the proceeding, if he finds any evidence that the goods have been sold at higher price than shown by the dealers.”
In a recent ruling, a Single Bench of Madras High Court allowed an extension of 30 days to Exide Industries to file the explanation on pending queries which was denied by the Goods and Services Tax authorities.
The court emphasised that the respondent’s circular, dated 26.09.2022, specifically states that the assessee must receive a copy of any letter granting or refusing a request for a delay. According to the High Court, the respondent has obviously broken the circular, thus it was determined to be just and proper to provide the petitioner a fair chance to answer three open questions within a reasonable amount of time. The respondent may then make additional orders after considering the petitioner’s complete justification, including any prior justifications it has offered.
The Delhi High Court set aside the denial of the patent in the application filed by Microsoft Technology Licensing LLC, rejecting the view that the “METHODS AND SYSTEMS FOR AUTHENTICATION OF A USER FOR SUB-LOCATIONS OF A NETWORK LOCATION” invented by Microsoft was a Computer Program per se and non-patentable. In conclusion, the Delhi High Court’s decision specifies how Microsoft’s Two-Tier Authentication Solution is to be classified, highlighting the significance of technical breakthroughs and real-world applications in determining patent eligibility rather than simple classification as patentable or non-patentable.
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