This annual round-up analytically summarizes the key Direct and Indirect Tax Judgments of the Supreme Court and all High Courts of India reported at Taxscan.in during 2024.
In a 15-year-old dispute regarding the classification of small bottles of coconut oil, the Supreme Court held that small bottles of coconut oil should be classified as edible oil and taxed at 5%. The Court rejected the tax department’s demand to classify the oil as hair oil and tax it at 18%.
While allowing the appeal, the bench ruled that the argument of the revenue department that the fact that edible coconut oil marketed by the respondents could also be used as hair oil is, therefore, not sufficient to classify the same under Heading 3305.
The Supreme Court of India has delivered a landmark judgment on the excise classification of pure coconut oil sold in sachets and small packages, resolving a contentious debate. The apex court ruled that such products should be classified as “edible oil” under Heading 1513 of the Central Excise Tariff Act, 1985, and not as “hair oil” under Heading 3305, unless specific indications on the packaging explicitly point to cosmetic or toiletry use.
The Bench of Chief Justice of India Sanjiv Khanna, Justice Sanjay Kumar and Justice R Mahadevan noted that, “, we are of the opinion that pure coconut oil sold in small quantities as ‘edible oil’ would be classifiable under Heading 1513 in Section III-Chapter 15 of the First Schedule to the Central Excise Tariff Act, 1985, unless the packaging thereof satisfies all the requirements set out in Chapter Note 3 in Section VI-Chapter 33 of the First Schedule to the Central Excise Tariff Act, 1985, read with the General/Explanatory Notes under the corresponding Chapter Note 3 in Chapter 33 of the Harmonized System of Nomenclature, whereupon it would be classifiable as ‘hair oil’ under Heading 3305 in Section VI Chapter 33 thereof.”
In its latest ruling, the Supreme Court granted relief to Adani Power Rajasthan Ltd. from Income Tax Reassessment due to a delay in filing the Special Leave Petition.
The Supreme Court, comprising Justice Dipankar Datta and Justice Prashnat Kumar Mishra noted that the special leave petition was barred by a 437-day delay. The Supreme Court dismissed the special leave petition as it was time-barred.
The Supreme Court of India recently adjudicated a Special Leave Petition involving an alleged tax evasion of Rs.38,000 Crore, providing a period of three weeks to the Petitioner to find Rejoinder.
Calling on the Revenue to file a supplementary affidavit explaining the actions taken against the erring officials who allowed the appeals to be filed before the Court after a prolonged delay, the Apex Court proceeded to pass an order requiring all the directives to be fulfilled within a period of two weeks while also providing the Petitioner to file a Rejoinder is required while listing the matter after 37 days.
In a recent ruling, the Supreme Court ( SC ) found that the Rajasthan High Court erroneously granted benefits under Section 10(20) instead of under Sections 11 and 12 of the Income Tax Act, 1961, which the Jaipur Development Authority originally claimed. The Supreme Court remanded the matter for fresh consideration.
The Supreme Court found that the High Court had erred in granting relief under Section 10(20) and remanded the cases for fresh consideration under Sections 11 and 12 of the Income Tax Act, 1961. The Supreme Court mandated the High Court to complete the reevaluation within six months. The appeal of the Commissioner of Income Tax (Exemptions) was allowed.
The Supreme Court of India recently set aside an Order passed by the Bombay High Court regarding issuance of Notice under Section 148A(b) of the Income Tax Act, 1961 to the legal representatives of a deceased taxpayer.
Subsequently, the Supreme Court remanded the matter to the Assessing Officer with directions to consider all the contentions raised by the Appellant on their own merits.
In a recent ruling, the Supreme Court confirmed that Section 271-AAA(2) of the Income Tax Act, 1961 mandated that undisclosed income sources must be specified and substantiated and upheld the penalty for non-compliance.
The bench comprising Justice Abhay S. Oka and Justice Augustine George Masih heard the Special Leave Petition (SLP) challenging the Delhi High Court’s judgment. The Supreme Court dismissed the SLP stating that the High Court’s interpretation of Section 271AAA(2) was correct and that statutory obligations were not fulfilled by the petitioner.
In a significant case, the Supreme Court criticized the revenue department’s action of conducting 6 years litigation on issue of invalid penalty order under the Andhra Pradesh Value Added Tax Act 2005 (APVAT). The two judge bench criticized that “Instead of issuing Show cause notice (SCN) for Imposing penalty under APVAT Act, the revenue wasted six years in litigation”.
The bench viewed that it has been fairly conceded before us that the order of penalty was passed without issuing any show cause notice. Further held that It is needless to clarify that if the revenue wants to issue a fresh show cause notice to the assessee, it may do so, if permissible in law and dismiss the petition.
In a recent case, the Supreme Court upheld the High Court ( HC ) order dismissing writ petition stating availability of statutory remedy before Goods and Service Tax ( GST ) appellate authority. The bench held that the appellate authority has got powers to condone the delay beyond 30 days of the stipulated period of limitation.
Further while disposing the petition, the bench stated that “if any issue as regards limitation arises the Appellate Authority may consider the fact that the petitioner was pursuing his remedy before this Court.”
The Supreme Court has directed the Central Government to provide a report explaining the reasons behind the continued non-functionality of the Goods and Services Tax ( GST ) Appellate Tribunal.
Additionally, the apex bench noted that the petitioner was compelled to approach the High Court due to the Department’s demand for repayment of an amount previously refunded to the assessee. Accordingly, the Supreme Court stayed the operation of the Department’s order demanding repayment of the refunded amount until further orders.
The matter has been listed for further hearing, with notice issued to the respondents, and service of notice waived by the counsel for the respondents.
In a recent ruling, the Madras High Court ruled in favour of the assessee and ordered fresh assessment due to insufficient details in the assessment order on employee’s cash transactions. Particulars of the cash transactions of the account of the said employee, namely Meruva Sanjeeva Kumar.
The bench set aside the impugned orders and directed the department to issue fresh orders by giving particulars of the date of cash transactions made into the account of the said employee, MeruvaSanjeeva Kumar.
The Madras High Court, in a recent ruling, allowed re-adjudication on discrepancies in input tax credit ( ITC ) claims and non-reversal of ITC for credit notes, subject to a pre-deposit of 25%.
The bench directed the department to consider the objections and pass a fresh order after granting a hearing, and if the deposit or objections are not filed within the stipulated time, the impugned order will be restored. The bench further held that garnishee proceedings shall be withdrawn upon payment of the 25% deposit.
In a recent ruling, the Madras High Court quashed the assessment order and held that petitioners were entitled to prior notice before the department arrived at an adverse conclusion on the capital gains account.
The High Court observed that the petitioners were entitled to notice before an adverse conclusion arrived in the impugned assessment order that the certificate did not mention capital gains account. The bench was of the view that the respondents should have informed the petitioners before an adverse order was passed against the petitioners.
In a recent ruling, the Allahabad High Court held that once Form 5 was issued under the Vivad se Vishwas ( VSV ) Act, there was no requirement for filing Form 26B for claiming refunds. The court directed the department to proceed with the refund of Rs. 2.19 Crore to Dish TV India.
The court rejected the respondent’s interpretation of Section 7 of the VSV Act and held that interest was payable for delays post-issuance of Form 5. The court directed the respondents to refund Rs. 2,19,42,954 along with 6% interest per annum for the delay from 20.12.2022 to the date of actual payment.
In a recent interim order, the Orissa High Court stayed a show cause notice ( SCN ) issued by the Centre under Section 74 of the Central Goods and Services Tax (CGST) Act, 2017, in response to a petition filed by the Orissa Industrial Infrastructure Development Corporation, Bhubaneswar.
The High Court thus directed the opposite parties to obtain instructions on the matter. The bench stayed the impugned SCN until the next hearing, scheduled for January 16, 2025, thereby providing temporary relief to the petitioner.
In a recent ruling, the Allahabad High court declared the order issued under Section 129(3) of UPGST Act unsustainable rejecting the ownership claim of the petitioner, who is the proprietor of the consignee whose goods were detained by the Goods and Services Tax ( GST ) department and issued in the driver’s name.
The Court held that, despite these official records, the authorities had unjustifiably ignored these documents and wrongly denied the petitioner’s ownership claim, thereby making the order unsustainable. Conclusively, setting aside the impugned orders, the Court remanded the matter to the competent authority for fresh proceedings, directing them to pass a new order in compliance with the observations made by the Court and in line with the provisions of Section 129(1)(a) of the GST Act. It directed fresh order analysing to the official records.
In a recent case, the Jharkhand High Court allows anticipatory bail for petitioner apprehending arrest for the allegation of smuggling of coal. The bail was granted based on tax invoices and e-way bills. It was observed that the petitioner has no criminal antecedent as has been stated of the present anticipatory bail application.
A single bench of Justice Rajesh Shankar held that “in the event of his arrest or surrender before the court below within three weeks from today, shall be released on bail on furnishing bail bond of Rs.20,000/- (Rupees Twenty Thousand) with two sureties of the like amount each to the satisfaction of Sub-Divisional Judicial Magistrate, Dhanbad”.
The Allahabad High Court has quashed the detention and penalty orders issued against a registered dealer, ruling that during the transitional period from February 1 to March 31, 2018, the requirement for a State GST E-Way Bill under the Uttar Pradesh GST Act was not enforceable. The Court held that a valid Central E-Way Bill sufficed during this period.
Additionally, the Court directed the respondent authorities to refund any amount deposited by the petitioner pursuant to the impugned orders within one month of presenting a certified copy of the order. To Read the full text of the Order CLICK HERE
In a recent judgment, the Allahabad High Court ruled that goods cannot be detained under Section 129(1)(b) of the Goods and Services Tax ( GST ) Act solely due to GST registration suspension if the consignment is accompanied by a valid tax invoice and e-way bill.
Referring to precedents, including Halder Enterprises v. State of U.P., Chief Justice Arun Bansali and Justice Vikas Budhwar, held that goods with valid tax invoices and e-way bills cannot be detained merely due to registration suspension. The bench set aside the penalty order and directed the authorities to release the goods in accordance with Section 129(1)(a) of the CGST Act within two weeks.
The Allahabad High Court has ruled that GST registration cannot be cancelled if none of the conditions under Section 29(2) of the Goods and Services Tax ( GST ) Act are violated or if specific findings justifying the cancellation are not recorded.
The Court set aside the cancellation and revocation orders, directing the respondent authority to issue a fresh notice, if required, under Section 29(2) with specific grounds and in compliance with the law. Additionally, the Court imposed a cost of ₹10,000 on the Proper Officer for procedural lapses, to be paid to the petitioner within one month.
In a recent decision, the Allahabad High Court provided the benefit of doubt to the petitioner for not responding to the orders and notices uploaded in GST portals’ ‘Additional Notices Tab’. The bench followed the decision of the same high court in the case of Ola Fleet Technologies.
The bench admitted that the petitioner’s claims were consistent with its findings in Ola Fleet. Consequently, it quashed and set aside the impugned order and directed the assessing officer to issue a fresh notice with a clear 15-day response period.
In a recent case, the Bombay High Court has held that the the Goods and Service Tax (GST) department cannot issue tax demand against corporate debtor and set aside the demand order without relegating the Petitioner to avail of the alternate remedy given in the peculiar facts and the breach of natural justice.
The matter was remanded to the Respondent department. The Petitioner, if so wishes, should file a detailed response within two weeks from today, raising all permissible contentions and furnishing copies of all relevant documents and decisions.
In a recent ruling, the Delhi High Court examined the authority of Directorate of Revenue Intelligence ( DRI ) officers to issue Show Cause Notices ( SCNs ) under the Customs Act, 1962, considering it prolonged legal uncertainty surrounding their jurisdiction.
In light of the above observation, the court quashed the SCNs and pending adjudication proceedings due to inordinate delays and a lack of steps by the authorities. So, now it’s clear that DRI has the power to issue a Show Cause Notice under the Customs Act and it is also important to note that inordinate delays in adjudicating the matter will not be tolerated under the law.
In recent judgement Kerala High Court dismissed a bunch of writ petitions relying on the Mineral Area Case held that royalty is not a tax.The bench observed that in the said case, the supreme court (SC) ruled that “there is no direct connection between the taxing powers of the States in relation to mineral rights and regulatory powers of the Parliament in relation to mines and minerals.”
Further held that “ If the appeals are filed within the aforesaid period of 30 days, the said appeals shall be treated as appeals filed in time and the 1st Appellate Authority will consider and pass orders on those appeals on merits.”
While dismissing the Writ petition, the Punjab & Haryana High Court has held that the Good and Service Tax (GST) department cannot be prevented from conducting preliminary inquiry relating to books of accounts of a registered person.
The division bench of Justice Sanjeev Prakash Sharma and Justice Sanjay Vashisth has held that in the event that it is found that the tax has been evaded fraudulently, the power is available to the Department to initiate proceedings under Section 74 of the CGST Act, independent of the proceedings which may have been undertaken under Section 73 of the CGST Act.
In a recent judgement, the High Court of Kerala held that income tax refund application under section 119(2)(b) of the Income Tax Act, 1961 filed after nine years is not condonable.
A division bench Dr. Justice A.K.Jayasankaran Nambiar & The Honourable Mr. Justice Easwaran S held that “The view taken by the Principal Commissioner cannot be said to be unreasonable when viewed against the statutory framework, where, an assessee seeking condonation of a three month delay that occurred in 2012, had chosen to approach the Principal Commissioner for a condonation of that delay only after eight years.”
In a case challenging the validity of section 16(2)(c) and section 16 (4) of the central Goods and Service Tax ( CGST )Act, 2017,the High Court of Kerala directed to claim Input Tax Credit ( ITC ) applying benefit under GST circular.
A single bench of Justice Dinesh Kumar Singh relying on the precedent held that the time limit for furnishing the return for the month of September is to be treated as 30th November in each financial year with effect from 01.07.2017, in respect of the petitioners who had filed their returns for the month of September on or before 30th November, and their claim for ITC should be processed, if they are otherwise eligible for ITC.
The Orissa High Court allowed the revocation of Orissa Goods and Service Tax ( OGST ) registration on depositing all taxes, interest, late fee, penalty. The delay in Petitioner’s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules ( OGST Rules ) is condoned.
A division bench of Justice Arindam Sinha and Justice M.S. Sahoo in view of the judgement directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc., due and complying with other formalities, the Petitioner’s application for revocation will be considered in accordance with law.
The Kerala High Court viewed that the rejection of the application for refund filed by the petitioner by communication on the ground that the second application filed by the petitioner was beyond the time specified in subsection (1) of Section 54 of the CGST/SGST Acts cannot be sustained in law. The bench held that the refund application cannot be rejected citing limitation when deficiencies cured by subsequent filing.
A single bench of Justice Gopinath P viewed that the rejection of the application for refund filed by the petitioner by communication on the ground that the second application filed by the petitioner was beyond the time specified in subsection (1) of Section 54 of the CGST/SGST Acts cannot be sustained in law. While allowing the petition, the court quashed the rejection order and directed that the refund application filed by the petitioner shall be treated as one filed on 05-04-2021, and if the petitioner has cured all the deficiencies, the refund application shall be processed in accordance with the law.
The Kerala High Court directed to file an appeal before the Goods and Service Tax Appellate Tribunal (GST) in a challenge on Goods and Services Tax applicability over promotional and referral services to foreign universities & colleges.
The court viewed that the writ petition can be disposed of, continuing the interim order and permitting the petitioner to file a statutory appeal before the Tribunal, within one month of the constitution of the Tribunal. It was held that if any additional amounts are to be remitted by the petitioner for maintaining an appeal, in accordance with statutory provision, such amounts shall also be remitted by the petitioner at the time of filing the appeal.
In a significant ruling, the High Court of Jharkhand has quashed an order disallowing Input Tax Credit (ITC) of ₹11,93,004 to Shri Sai Super Market, a proprietorship firm based in Bokaro.
This judgment sets a significant precedent for businesses that filed delayed GSTR-3B returns within the extended period specified under the Finance (No. 2) Act, 2024, which clarifies the retrospective application of Section 16(5) and reinforces the rights of taxpayers to claim ITC under the amended provisions.
The High Court of Kerala allowed to redeem 331.33 gram gold on payment of fine in lieu of Confiscation. The bench found that the challenge on confiscation order under Central Goods and Service Tax (CGST) Act, 2017 was dismissed on the availability of statutory appeal.The court directed that the seized ornaments shall be released to the petitioner immediately on payment of the fine in lieu of confiscation.
Further held that “ It will be open to the petitioner to challenge Ext.P5 order as confirmed by Ext.P7 order before the Tribunal as and when the Tribunal is constituted.”
The Madras High Court has quashed the GST demand order, ruling that the liability was discharged through the reversal of Input Tax Credit (ITC).
The bench observed that the petitioner is not required to pay anything by applying the proposed amendment to Section 128(A) of the CGST Act because there is sufficient amount in the ITC. The High Court, comprising Justice Krishnan Ramaswamy, set aside the impugned order and remanded the matter back to the respondent for fresh consideration.
The High Court of Punjab And Haryana held that Show Cause Notice ( SCN ) under section 74 of the Central Goods and Service Tax ( CGST ) Act, 2017 can be issued even if proceedings initiated earlier under section 73 were dropped.
While dismissing the petition, the court held that the proceedings under section 74 of the Act are comprehensively and completely laid down under the provisions of the Act, and cannot hinder the disposal of proceedings not in any manner.
In a recent case, the Kerala High Court quashed the assessment order under Kerala Value Added Tax Act, 2003 ( KVAT ) passed without providing opportunity of hearing.The court restored the assessment of the petitioner under the KVAT Act for the year 2012-13 to the file of the 1st respondent or other competent authority.
Considering the submission of the counsel for the petitioner that the petitioner will not take any objection to the completion of assessment on the ground of limitation, it is hereby declared that it will be open to the 1st respondent to complete the proceedings, as directed above, even if the proceedings are by now barred by limitation.
The Bombay High Court recently granted partial relief to an aggrieved Petitioner, granting restoration of Goods and Services Tax ( GST ) refund application made in Form GST RFD 01 back to file, while also slapping the Petitioner with costs of Rs. 2 Lakh to be paid to the Deputy Commissioner, Chakala – 501, Nodal-12 Large Taxpayer Unit, being the second respondent in the Matter.
In addition, the Respondents were directed to issue intimation under form GST RFD 03 if any deficiencies were to be found in the Petitioner’s prospective refund application.
In a recent case, the Kerala High Court while allowing the writ petition challenging the issue of Income Tax notice to wrong address directed the assessee to update the current address to the Income Tax portal. The court found that the show cause notice under the Income Tax Act, 1961 was issued on address shown in Income Tax portal while the assessee’s actual address was the address mentioned in the Income Tax Return(ITR)
Further held that “The petitioner shall immediately update his address and e-mail ID in the portal of the Income Tax Department, within a period of ten days from the date of receipt of a certified copy of the judgment. Thereafter, the assessment and proceedings for imposition of penalty shall be completed after issuing notices at the registered e-mail ID of the petitioner and after affording an opportunity of hearing to the petitioner. If the petitioner does not update his address and e-mail ID as directed above, he will not be entitled to the benefit of this judgment.”
In a recent case, the Kerala High Court has held that assessing authority cannot pass a fresh order for the same assessment year under section 25(1) of Kerala Value Added Tax (KVAT) Act, 2003.Since the second order of assessment is non-est in law, the court permitted to file an appeal against the order if he is so aggrieved.
Since the second order of assessment is non-est in law, the court permitted to file an appeal against the order if he is so aggrieved, provided such appeal is filed within a period of two weeks from the date of receipt of a certified copy.
The Delhi High Court recently affirmed the sustenance of the existing allocation of Tariff Rate Quota ( TRQ ) on the import of Bullion, in accordance with the Minutes of the Meeting held on 8th November, 2024 for the review of the UAE-India Comprehensive Economic Partnership Agreement ( CEPA ).
Since no re-allocations had been made pursuant to the impugned Minutes of Meeting, the existing allocations were directed to be maintained until a final decision comes out of the review process.
In the recent ruling, the High Court of Delhi, held that Rule 8D can only be applied if the taxpayer’s calculation of expenses for earning exempt income is found to be inadequate.
The court referenced earlier decisions, including Coforge Limited and H.T. Media Ltd., which established that Rule 8D should only be invoked if the AO is unsatisfied with the assessee’s claimed expenses. In this case, as the AO did not question the assessee’s claim, the ITAT’s decision was upheld, and the Revenue’s appeal was dismissed.
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