This weekly round-up analytically summarizes the key stories related to the Supreme Court and High Court reported at Taxscan.in during the previous week 1st February 2025 to 7th February 2025)
UPADHYAY VS UNION OF INDIA & ORS CITATION: 2025 TAXSCAN (SC) 116
The Supreme Court recently dismissed a Public Interest Litigation against the Tax Deducted at Source (TDS) system on salaried individuals under Income Tax Act, while preserving the liberty to approach the jurisdictional high court.
“We are not inclined to entertain the present writ petition under Article 32 of the Constitution of India. Accordingly, without commenting on the merits either way, the writ petition is dismissed as not entertained with liberty to the petitioner to approach the jurisdictional High Court”, said the bench of Chief Justice Sanjiv Khanna and Justice Sanjay Kumar.
M/s.Annai Angammal Arakkattalai (Pre Mahal) vs The Joint Commissioner or GST CITATION: 2025 TAXSCAN (HC) 199
In a recent decision, the Madras High Court Single Bench of Justice K Kumaresh Babu held that the act of taking a Goods and Services Tax (GST) registration and paying tax dues after an inspection cannot be termed voluntary, upholding the imposition of penalty on the GST taxpayer.
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Observing that, “Only after the inspection they have agreed to pay the tax by registering themselves. This conduct cannot be said to be a voluntary conduct. There have been contraventions of provisions of the GST Act for which the petitioner is liable to make good the non-payment and also suffer penal consequences for the same”, the Madras High Court bench dismissed the writ petition.
S. KUSHALCHAND INTERNATIONAL PVT. LTD. vs THE ADDITIONAL DIRECTOR CITATION: 2025 TAXSCAN (HC) 195
The Gujarat High Court in a recent case has held that the Directorate General of Goods and Service Tax (DGGI) Intelligence (DGGI) is empowered to transfer adjudication of Show cause notice (SCN) in GST evasion.
The court ruled that, generally speaking, the court should not interfere with a show cause notice under Article 226 of the Constitution unless it lacks jurisdiction, is prohibited by law, or has an invalid patent. There are no requirements in the case’s facts to consider this writ petition, and at this point, no intervention in writ jurisdiction is necessary.
Sunil Agrawal Son Of Ghanshyam Agarwal VS Assistant Commissioner Of Income Tax CITATION: 2025 TAXSCAN (HC) 203
In a recent decision, the High Court of Rajasthan has held that recording of satisfaction by DCIT under Section 271E of the Income Tax Act is insufficient for the initiation and imposition of proceedings and penalty under Section 271D of the Income Tax Act by Assessing Officers (AO).
It was thus noted that the issue involved in the present writ petition is squarely covered by the decision of the Supreme Court in Jai Laxmi Rice Mills (supra) and the notice issued under Section 271E and the proceedings in pursuance thereto are quashed, thereby allowing the assessee’s writ petitions.
RAJKUMAR AGARWAL S/O RAGHULAL AGARWAL vs INCOME TAX DEPARTMENT CITATION: 2025 TAXSCAN (HC) 202
In a recent ruling, the Karnataka High Court ruled that merely paying a penalty for delayed filing of Income Tax Returns (ITR) does not exempt a taxpayer from criminal prosecution under Section 276CC of the Income Tax Act.
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A bench led by Justice S. Vishwajith Shetty observed that delayed ITR filings, even if later accepted with penalties, do not exempt taxpayers from prosecution under Section 276CC of the Income Tax Act. The court held that the burden of proof lies on the taxpayer to rebut the presumption of guilt under Section 278E by presenting evidence before the trial court.
Dharamshi K.Patel vs Indian Bank CITATION: 2025 TAXSCAN (HC) 201
According to the Madras High Court, situations in which the default persists after the moratorium term is not covered by the proviso to Section 10-A of the Insolvency and Bankruptcy Code (IBC), 2016. According to the court, Section 10-A merely places a temporary hold on the start of the Corporate Insolvency Resolution Process (CIRP).
While dismissing the appeal, the court held that there was no extraordinary circumstance warranting the Court to entertain a writ petition when there is an alternative remedy.
M/S. VEE ESS HARDWARES vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION: 2025 TAXSCAN (HC) 204
In the latest judgment that has been passed by the High Court of Kerala, the income tax order imposing penalty under section 271 B of the Income Tax Act, 1961 as it was time-barred.
The bench allowed the writ petition and held that the penalty order is time-barred under Section 275(1)(c) and is invalid. The judgement was passed by Justice Bechu Kurian Thomas.
The Nilgiri Dairy Farm P.Limited vs The Assessment Commissioner (ST) CITATION: 2025 TAXSCAN (HC) 205
In a recent ruling regarding mismatch in the claim of Input Tax Credit (ITC) as per Form GSTR-3B and the auto-populated GSTR-2A, the Madras High Court directed the Petitioner to pay 10% of the disputed tax amount while passing an order for re-adjudication by the tax authorities on the basis of new material.
The Madras High Court Bench presided over by Justice Mohammed Shaffiq set aside the impugned order and the consequential demand order while directing the Petitioner to deposit 10% of the disputed taxes along with other compliance measures, the fulfilment of which shall grant the Petitioner another opportunity to submit their objections towards the Respondent who shall pass a fresh order on the basis of any supporting documents or material that are to be produced by the Petitioner.
CITATION: 2025 TAXSCAN (HC) 206
In a recent case, the Delhi High Court has held that the fees paid by IPR law firm Remfry & Sagar to acquire the goodwill of the founder is a business expense and are deductible under Section 37 of the Income Tax Act, 1961.
The primary purpose of referring to the total billing of the law firm was to provide a firm, definite and fixed basis to compute the consideration liable to be paid for use of goodwill.
CENTRAL ELECTRICITY REGULATORY COMMISSION vs THE ADDITIONAL DIRECTOR DIRECTORATE GENERAL OF GST INTELLIGENCE CITATION: 2025 TAXSCAN (HC) 207
In a significant ruling, the Delhi High Court has quashed the show cause notices (SCNs) issued to the Central Electricity Regulatory Commission (CERC) and the Delhi Electricity Regulatory Commission (DERC), holding that their regulatory functions do not constitute a taxable service under the Goods and Services Tax (GST) regime.
The judgment, delivered by a division bench comprising Justice Yashwant Varma and Justice Dharmesh Sharma, categorically stated that the statutory functions discharged by these commissions, including tariff regulation and licensing, cannot be equated with commercial activities that fall under the purview of GST.
RAINBOW INFRASTRUCTURE vs UNION OF INDIA CITATION: 2025 TAXSCAN (HC) 209
The Gujarat High Court recently issued directives to the Revenue Department to refrain from undertaking all forms of coercive action in a dispute regarding the payability of Goods and Services Tax (GST) on royalties paid by an entity who had entered into a contract with the State Government for the lease of a mining quarry.
Granting temporary relief to the Petitioner, Rainbow Infrastructure, the Division Bench of the Gujarat High Court ordered that no coercive action may be taken by the Respondent Governmental Departments while the present petition remains pending before the High Court. The matter was posted to be heard at a later time alongside the similar matters.
Tvl.Jainsons Castors and Industrial Products vs The Assistant Commissioner (ST) CITATION: 2025 TAXSCAN (HC) 211
The Madras High Court recently granted relief to a supplier of purpose-built automotive vehicles, realizing their right to avail reassessment following their failure to participate in assessment proceedings due to not being aware of the initiation of such proceedings undertaken by the Revenue Department.
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The Single-Judge Bench of Justice Mohammed Shaffiq observed the submissions and directed the Petitioner to pay 25% of the disputed taxes to be paid so as to provide them another opportunity of presenting their case, and objections if any, within four weeks from receiving a copy of the present order. Issuing a note of warning to the Petitioner, the Single-Judge advised that any failure to abide by the conditions set by the High Court would result in the restoration of the impugned Assessment Orde
Tvl.Elgi Equipments Limited vs Assistant Commissioner CITATION: 2025 TAXSCAN (HC) 211
The Madras High Court recently set aside an Order passed by the Respondent Assistant Commissioner (State Taxes) rejecting the claim of Input Tax Credit (ITC) under Section 19(5)(c) of the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act), citing the pendency of a Supreme Court decision on a similar matter.
Observing precedence, the present Writ Petition was dismissed by the High Court averring that the impugned order cannot be sustained insofar as it invokes Section 19(5)(c) of the TNVAT Act, 2006, while keeping the door open for the Revenue to pursue the matter following the decision of the Supreme Court.
M/S Buddha Resorts Private Limited vs Chief Commissioner Of Goods And Services Tax CITATION: 2025 TAXSCAN (HC) 210
The Allahabad High Court recently affirmed that the provisions under the Goods and Service Tax (GST) regime does not require a Petitioner aggrieved by an order of an adjudicatory body to first approach the appellate authority before seeking to invoke the revisionary provisions under the Act.
Consequently, the Allahabad High Court proceeded to restore the matter before the Revisional Authority for fresh adjudication in terms of the present decision.
JOB G.OOMMEN vs UNION OF INDIA CITATION: 2025 TAXSCAN (HC) 213
The Kerala High Court ruled that the Income Tax Department cannot recover tax arrears from properties that were auctioned under the Kerala General Sales Tax (KGST) Act.
A Single Bench of Judge Harisankar V.Menon also referred to previous rulings, including one from the Supreme Court, which stated that the Income Tax Department doesn’t get priority over other claims unless clearly stated in law. The Court ultimately ruled that the Income Tax Department could not take any action against the properties and dismissed their claims.
THOMAS PHILIP vs INTERIM BOARD FOR SETTLEMENT CITATION: 2025 TAXSCAN (HC) 214
The Kerala High Court has dismissed an appeal by businessman Thomas Philip against the Income Tax Interim Board for Settlement-II. The court ruled that loans availed by Philip from his companies should be treated as deemed dividend under Section 2(22)(e) of the Income Tax Act, 1961. It held that these transactions qualified as undisclosed income for tax purposes.
The Kerala High Court ruled that settlement orders are final and cannot be easily challenged in court. Loans from closely held companies to major shareholders can be taxed as dividends under Section 2(22)(e) of the Income Tax Act. In Conclusion, the writ appeal was dismissed.
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