This weekly round-up analytically summarises the key tax judgments of the Supreme Court and all High Courts reported at Taxscan.in during the previous week from August 26 to September 1, 2023.
In a recent case, the Tripura High Court has held that a plea for condonation of delay under the limitation act beyond the statutory period prescribed under section 107(4) of the Goods and Service Tax (GST) Act, 2017 is not accepted.
A division bench comprising Chief Justice Mr Aparesh Kumar Singh and Justice Arindam Lodh observed that since the limitation for filing appeals is prescribed under Section 107(4) of the Tripura State Goods and Services Tax Act, 2017 being a special statute, the same would be governed thereby. Further held that any plea for condonation of delay relying upon the Limitation Act, 1963 beyond the statutory period prescribed under Section 107(4) of the Act of 2017 cannot be accepted. The Court dismissed the petition.
In a recent ruling, a Single bench of the Allahabad High Court noted that not informing the taxpayer or their legal representative, whether it’s an advocate or a tax expert, cannot be used as a reason to excuse a delay in filing an appeal when the petitioner doesn’t show how they became aware of the order and subsequently filed the appeal with a different advocate.
The writ petition was rejected solely because the petitioner’s counsel did not provide any information regarding how the petitioner became aware of the order and subsequently filed the appeal with a different legal representative.
The Delhi High Court has held that rendering investment advisory services related to investment by non-resident group companies amounts to advisory service and directed to refund of Input Tax Credit (ITC).
The Court set aside the impugned order and further observed that no material would even remotely suggest that the services rendered by the petitioner are not as claimed, that is, advisory services relating to investments in India. The Adjudicating Authority is directed to process the petitioner’s claim for refund as expeditiously as possible and preferably within eight weeks from today.
In a recent decision the Bombay High Court observed that providing Satellite derived 3D model services is “export of services” under Section 2(6) of the Integrated Goods and Services Tax Act, 2017 (IGST Act).
A Division Bench comprising Justices Jitendra Jain and GS Kulkarni observed that “Further, the establishment of the petitioner (supplier of service) and the recipient of service (Emirates Defence Industries Co.) were not establishments of distinct person under Explanation 1 below Section 8. The petitioner had received consideration in convertible foreign exchange as seen from the copy of invoice as placed on record in regard to which there is no dispute. It is thus clear that the petitioner certainly qualified the requirement of Section 2(6) that it was dealing in export of services in relation to the Agreement in question.”
The High Court of Delhi has directed the release of excess tax adjustment by the Assessing Officer (AO) on the finding that the set-off of refund against the outstanding tax demands is limited to 20% of the disputed demand.
The decision provides clarity on the limits and procedures for adjusting tax refunds against outstanding tax demands and underscores the importance of adhering to the provisions of the OM and the Income Tax Act while making such adjustments.
The Delhi High Court set aside the order cancelling Goods and Service Tax (GST) Registration without stating the reason.
The division bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan set aside the order dated 10.06.2022 rejecting the petitioner’s application and remanded the matter to the concerned officer to consider afresh.
The Bombay High Court has held that payment towards output tax can be made by utilisation of the amount available in the Electronic Credit Ledger (ECL) of a registered person.
A division bench comprising Justice K. R. Shriram & Justice A. S. Doctor held that since the amounts payable are towards output tax, the Petitioners may utilise the amount available in the Electronic Credit Ledger to pay the 10% of Tax in dispute as prescribed under Sub-section (6) of Section 107 of MGST Act. The Court quashed and set aside the impugned order and allowed the petition.
The Delhi High Court in a recent case warned the Income Tax Department on delay in filing an appeal under section 260 A of the Income Tax Act, 1961 and directed them to avoid snail pace work style even with a click of the mouse age.
The Court viewed that the applicant failed to explain sufficient cause for a delay of 498 days in filing the appeal and dismissed the condonation application.
In a recent case, the Allahabad High Court while allowing a tax revision petition, held that treating a purchase from an unregistered dealer is valid when the dealer fails to prove actual physical movement of goods.
The Tribunal has failed to appreciate this vital aspect of the matter that the actual physical movement of the goods could not be proved beyond doubt as claimed by the opposite party – the dealer. “The observation of the Tribunal in shifting the burden upon the Department contrary to the provisions of section 16 of the UP VAT Act, is beyond imagination and therefore, the same is perverse.”, Justice Piyush Agrawal held.
Further held that “once the dealer has failed to prove the actual physical movement of goods, the presumption drawn by the assessing authority treating the purchases from an unregistered dealer is justified. Once the dealer has failed to prove its purchases from a registered dealer, the levy of entry tax treating the same to purchase from outside the local area and levying of entry tax on the HDEP bags is also justified.” Both the revisions are allowed with a cost of Rs. 5,000/- each.
The Bombay High Court directed the Finance Ministry to take action against the officers who are involved in delaying the adjudication of the Show Cause Notices (SCN) and observed that they are playing with the Public Revenue.
Relying upon the precedent set in the Coventry Estates Pvt. Ltd. case, the High Court invalidated both the show cause cum demand notice and the ongoing adjudication. Additionally, the division bench prohibited the GST officers from pursuing any subsequent actions or proceedings based on or stemming from the contested show cause cum demand notice, including the adjudication process.
The Bombay High Court detaining of CRGO strip without being any demand due is invalid. It was found that there isn’t any such provision that would empower the respondents in the facts of the present case, to detain the goods.
A division bench comprising Justice G S Kulkarni and Justice Jitendra Jain observed that the respondents have contended that they have not seized the goods but they have only detained the goods. The court held that “the impugned action of the respondents in detaining the goods in question and attaching the bank account of the petitioner without there being any demand due from the petitioner or any proceedings pending is without jurisdiction and any authority of law.”
In a significant case, the Delhi High Court has held that Sanitary wares having Premium Aesthetic and sleek design would not fall in category of Artwork and quashed the order rejecting duty drawback under the Customs Act, 1962.
A division bench comprising of Justice Yashwant Varma and Justice Dharmesh Sharma observed that the impugned order passed by the Revisionary Authority thereby approving the order-in-original No. 101/2013 dated 10 April 2013 by the ACC(E) cannot be sustained in law. While allowing the Writ Petition the impugned order was quashed, and thereby providing that the respondent shall consider the claim for duty drawback of the “subject goods‟ in terms of classification vide item No. 741802 as per tariff applicable for the year 2011-212.
The Delhi High Court has held that no Tax Deductible at Source (TDS ) under section 195 of the Income Tax Act when no income chargeable to tax arose on non-resident and upheld the order of the Income Tax Appellate Tribunal (ITAT).
A division bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia observed that the CIT(A) has correctly deleted the disallowance on account of depreciation on electrical fittings holding them part of the plant and machinery and not furniture and fixtures as claimed by the AO. Further, depreciation on the computer peripherals was also allowed at @60 %relying upon the decision of the Delhi High Court in the case of BSEC Rajdhani Power Ltd.
The Delhi High Court has held that reassessment proceedings commenced after 3 years are time-barred and given leeway to file a Return Of Income (ROI) since it has not been filed under the consequential notice issued under Section 148 of the Income Tax Act, 1961.
A division Bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia disposed of the Writ Petition by giving the petitioner leeway to file the ROI within the next thirty (30) days.
The Delhi High Court in its recent judgement had set aside Order Cancelling Goods and Service Tax (GST) Registration without stating the reason.
A division bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan observed that there was a clear case of violation of the principles of natural justice and set aside the impugned show-cause notice as well as the impugned order.
The Madras High Court (HC) has held that no credit notes were issued under section 34 of the Central Goods and Service Tax Act, 2017 when goods were returned without even having received by the recipient. As per Section 34 of the CGST Act, 2017 Purpose of Credit Note / Debit Note is applicable only when the return of goods is due to unfructified sales/refusal of the consignee to take delivery of goods. Since the buyer refused to take delivery of the goods the subject goods were re-transported to the factory of the petitioner. Justice C Saravanan held that “The petitioner has to merely declare the details of the Credit Note in the monthly return during which the Credit Note is issued for adjustment of tax liability. The question of issuing Credit Notes also will arise only by the supplier and not by the recipient.” The court allowed the Writ Petition and set aside the impugned notice of the first respondent.
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