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.
The Calcutta High court set aside the order cancelling Goods and Services Tax ( GST ) registration on filing of GST returns. It was found that since, the petitioner in such a case would not be able to carry on his business in the sense that no invoice can be raised by the petitioner and ultimately would impact recovery of tax.
The Calcutta High Court directed fresh adjudication on the matter of mismatch in annual return filed in GSTR -9 due to Unintentional error.
The Future of Tax and Finance: Upskill with Us, Click here
The division bench comprising Chief Justice T S Sivagnanam and Justice Hiranmay Bhattacharya M A viewed that two aspects have appealed to us to send back the matter to the adjudicating authority. First is with regard to the effect of GSTR-9. This being an annual return filed within the extended period oflimitation viz. , upto 7th February, 2020 on account of various notifications issued by the Government due to the Covid pandemic. Therefore, if the GSTR- 9, which was filed within time is not considered, the assessee’s rights would be greatly prejudiced. The second aspect, is the contention of the assessee that the entire matter is revenue neutral. Considering the peculiar facts and circumstances of the case making ,the Court remanded the matter back to the adjudicating authority viz. , the Assistant Commissioner to consider the submissions made by the assessee, afford an opportunity of personal hearing, examine the annual return filed in GSTR-9 and proceed to take a fresh decision on merits and in accordance with law.
The Rajasthan High Court observed that the challenge to the income tax notice issued under Section 153C of the Income Tax Act, 1961, was raised only after the assessment order was issued, and thus directed the petitioner to seek statutory remedies.
The Future of Tax and Finance: Upskill with Us, Click here
The high court decided not to exercise its discretion under Article 226 of the Constitution and dismissed the writ petition, advising the petitioner to use the statutory appeal remedy. However, the court allowed the petitioner to file an appeal within 30 days, with the stipulation that the appeal be considered on its merits without regard to the limitation period.
The Madras High Court has ruled that a faceless hearing under Section 144B(6)(8) of the Income Tax Act, 1961, must be granted if requested. This court set aside the assessment order that had disregarded the request for a video conferencing hearing.
The Rajasthan High Court has upheld a penalty imposed under Section 271(1)(c) of the Income Tax Act, confirming that the unexplained cash deposits were correctly added by the income tax department after considering the withdrawal benefits granted. Justice Shubha Mehta and Justice Avneesh Jhingan observed that “The addition of the cash deposits was made after deducting the withdrawal relying upon the material available with the department and after considering the explanation of the appellant.”
The Rajasthan High Court declined to exercise the jurisdiction under Article 226 of Constitution of India as the income tax reassessment notice under Section 148 was challenged only after the issuance of the order instead of its inception.
In a recent ruling, the Rajasthan High Court upheld the order of the Income Tax Appellate Tribunal ( ITAT ), observing that the income tax department failed to provide any contradictory evidence against the taxpayer’s proof of Long-Term Capital Gains ( LTCG ) from the sale of shares.
The Madras High Court highlighted the importance of filing a petition under Article 226 within a reasonable time period. The court dismissed the petition filed against GST ( Goods and Services Tax ) after a 5 year delay. A single bench of Justice Senthilkumar Ramamoorthy observed that “Although a period of limitation is not prescribed for the initiation of proceedings under Article 226 of the Constitution of India, it is needless to say that the petitioner is required to approach the Court within a reasonable time.”
The Future of Tax and Finance: Upskill with Us, Click here
The Bombay High Court has directed the Customs Department to refund Rs. 5 lakhs, upon application, to an importer, who was penalised for alleged mis-declaration of assessable value rather than for the import of prohibited goods. The case revolves around the petitioner, engaged in importing, manufacturing, and supplying medical equipment, including used hemolysis machines, since 2008.
The bench of Justice Shubha Mehta and Pankaj Bhandari determined that the appropriate authority in this case is the First Appellate Authority. They found no grounds to entertain the writ petition, as the objections raised could be addressed by the appellate authority.
The Future of Tax and Finance: Upskill with Us, Click here
The writ petition was dismissed, allowing the petitioner to pursue an alternative remedy of appeal. The court also directed that the period during which the petition was pending shall not count towards the limitation period for filing the appeal, and the appellate authority was instructed to expedite the decision in accordance with the law.
The Meghalaya High Court has ruled that seized goods by the customs cannot be destroyed during the pre-trial stage, directing a refund of Rs. 60 lakhs for 32,000 kg of betel nuts that were destroyed.
The Madras High Court held that Goods and Services Tax ( GST ) is not payable by an Assessee in the event that Invoice for payment has not been raised and amount has not been received by the Assessee. The Madras High Court upon perusal of the facts and circumstances of the case, placed reliance on a Circular issued by the Central Board of Indirect Taxes and Customs ( CBIC ) and set aside the impugned orders and remitted the case back to the Respondent State Tax Officer to re-examine the issues in light of the Circular.
The Future of Tax and Finance: Upskill with Us, Click here
Delhi High Court, the court set aside an order of CESTAT which imposed a penalty on appellant and allowed the appeal.
The division bench comprising Justice Yashwant Varma and Ravinder Dudeja, observed that CESTAT did not proceed in the matter with due caution. The bench also noted that the principal allegation was solely made against the importer with respect to misdeclaration. Further the violations of clauses (d), (e) or (m) of Regulation 11 of the CBLR, 2013 can’t be discerned in this case. Thus the order of CESTAT imposing penalty upon the appellant is erroneous.
The Punjab & Haryana High Court recently upheld the revisional order passed by the Principal Commissioner Income Tax ( PCIT ) under section 263 of the Income tax act as the assessment wrongly passed by the Assessing Officer ( AO ) under section 44ADA of the Act.
The Bench found that AO has given the benefit to the assessee considering the income in terms of Section 44AD. The Bench noted that the assessment had to be done under the head ‘income from other sources’ under section 115 BBE.
The Gauhati High Court observed that Notification No. 56/2023, issued on December 28, 2023, was issued without the GST ( Goods and Services Tax ) Council’s recommendation, and thus it does not withstand legal scrutiny and all subsequent actions cannot be sustainable.
The Future of Tax and Finance: Upskill with Us, Click here
In reaffirming the landmark decision, the Supreme Court of India has ruled that the imposition of mining taxes by state legislatures will apply retrospectively from April 1, 2005. This ruling, delivered on August 14, 2024, by a bench headed by Chief Justice Dr. Dhananjaya Y Chandrachud, stems from the case Mineral Area Development Authority vs. Steel Authority of India Ltd.
The Supreme Court ruling is a decisive moment in Indian fiscal policy, reaffirming the authority of state legislatures to impose taxes within their constitutional mandate.
The Gujarat High Court has ruled that the Geomembrane used for waterproof lining fabrics is subject to a 12% GST rate, rather than the previously applied 18%. The court has instructed the GST department to refund the excess 6% paid by the petitioner.
The Bench of Justices Bhargav D. Karia and Niral R. Mehta reviewed the case M/s.CTM Technical Textiles Ltd. v. Union of India, noting that previous judgments had classified similar products as textiles under Chapter 59 rather than plastics. The court concluded that the Geomembrane, a textile product, should indeed be classified under HSN Code 59111000 and be subject to the 12% GST rate. Consequently, the high court directed the GST authorities to apply the 12% GST rate from November 15, 2017, and to refund the excess GST paid by the petitioner. The petitioner is entitled to a refund without interest. It ruled absolutely in favour of the petitioner.
Madras High Court ruled that the authorities must provide an opportunity to offer reply and hearing before issuing a GST ( Goods and Services Tax ) assessment order. The court viewed that the order was passed without complying with the principles of natural justice.
The Future of Tax and Finance: Upskill with Us, Click here
The court held that the contested order was passed without following the due process of law and thus violated the principles of natural justice. It was deemed necessary to grant the petitioner a fair opportunity to present their case on merits and in accordance with the law on terms. The matter was remitted back to the The Deputy Commercial Tax Office for fresh consideration on 10% pre-deposit condition.
The Madras High Court ruled that the Assessing Officer ( AO ) cannot rectify the order issued by the Settlement Commission. The rectification under Section 154 of Income tax Act, 1961 cannot be invoked for the settlement proceedings.
The Future of Tax and Finance: Upskill with Us, Click here
The judgment explained that the Settlement Commission operates like an arbitration process, distinct from regular assessments and procedures outlined in Chapter XIV of the Income Tax Act. This chapter includes Section 154, but the Settlement Commission’s procedures are governed by Chapter XIX-A, which does not incorporate Section 154 for rectification.
Delhi High Court the right of assessee to challenge reassessment was upheld allowing the writ petition of the petitioner.The petitioner, Banyan Real Estate Funds Mauritius filed a writ petition. A reassessment was proposed to the non resident foreign company ( petitioner ) along with payment of over INR 1,00,000/ for acquisition of shares.
The Madras High Court directed for reconsideration of the matter where a demand order was issued under Section 74 of the GST ( Goods and Services Tax) Act passed without providing opportunity for hearing. It imposed a pre-deposit of 15% of the penalty for quashing the GST order.
The High Court set aside the order dated April 18, 2023, and remanded the matter for fresh consideration under specific conditions. The petitioner was required to pay ₹18,922 (15% of the penalty) to the GST department within two weeks for quashing the impugned order. It also directed to lift the attachment of the bank account.
The Madras High Court has granted a 30-day period for filing a statutory appeal under the GST (Goods and Services Tax) Act, following the failure of the petitioner’s Chartered Accountant ( CA ) to file the appeal on time.
The Future of Tax and Finance: Upskill with Us, Click here
This decision pertains to a case where B.G. Shirke Construction had contested a demand for availment of ineligible Input Tax Credit ( ITC ) issued without complying principles of natural justice.
The Calcutta High Court concerning a case upheld the order of the Income Tax Appellate Tribunal ( ITAT ) which deleted the addition made under section 68 of the Income Tax Act, 1961 on establishment of the source of income.
The Coram of Chief Justice T.S Sivagnanam and Justice Hiranmay Bhattacharyya found no questions of law for consideration in this appeal and thus dismissed the appeal.
The court found that CIT(A) felt in error in doing so for adopting the highest gross profit that too which was for the assessment year 2016-17.
The Court held that the overall gross profit as offered by the assessee at 9.64% was just and proper and does not call for any enhancement. While allowing the appeal , the bench set aside the orders of Tribunal and the CIT(A) and the Assessing Officer. Further determined the gross profit of the assessee is determined at 9.64% for the assessment year under consideration.
Calcutta High court allowed the Income Tax Appeal on condition of paying one lakh to Bar Association as the assessee prayed for one opportunity for hearing.
The Future of Tax and Finance: Upskill with Us, Click here
The Income Tax Appellate Tribunal ( ITAT ) passed order since none appeared for the assessee and the matter was dealt with on the available documents.
The Madras High Court viewed that no order can be passed without providing sufficient opportunity to the assessee. It set aside the GST ( Goods and Services Tax ) demand order and the attachment order on 10% pre-deposit. Justice Krishan Ramasamy noted that all notices were only available under “Additional Notices/Orders,” which the assessee may not have accessed. The lack of opportunity for the assessee to defend their case constituted a clear violation of the principles of natural justice. The court deemed the impugned order and the attachment order void.
the Calcutta High Court upheld the decision of Income Tax Appellate Tribunal ( Tribunal ) that the assessee can apply for registration under section 80g(5)(iii) of the Income Tax Act, 1961 after the commencement of activity. The revenue filed a petition under Section 260A of the Income Tax Act, 1961 ( the Act ) is challenging the order dated 13th September, 2023 passed by the Income Tax Appellate Tribunal in favour of respondent assessee, West Bengal Welfare Society.
The Madras High Court directed the Customs Department to process the amendment application of the Mahindra & Mahindra Ltd for 3 Bills of Entry.
The Future of Tax and Finance: Upskill with Us, Click here
The bench of Justice Krishnan Ramasamy ordered the customs department to dispose of the applications, within three weeks of receiving a copy of the court’s order. The court also directed that the department must provide company with a personal hearing opportunity before rejecting any application.
The Calcutta High Court recently in a case affirmed the Customs, Excise and Service Tax Appellate Tribunal’s ( CESTAT ) dismissal of lower authority’s rejection of CENVAT duty remission under rule 21 of the Central Excise Rules, 2002, noting that the evidence against the assessee to have given such a rejection was weak.
Sarvopari Impex Private Limited, the assessee, filed for remission of duty under Rule 21 of the Central Excise Rules, 2002, following a fire incident at their factory. The fire, reportedly caused by an electrical short circuit, destroyed a substantial amount of raw materials, plant, and machinery.
The Calcutta High Court refused to condone a delay of 1923 days in the absence of sufficient explanation. The bench viewed that there may be cases where there is sheer negligence on the lower-level officials’ part. The court found that there was no reason as to why the appeal was filed with such an inordinate delay of 1923 days. The order passed by the Tribunal is dated 7.9.2019 and the certified copy was received by the Income Tax Department on 12.10.2018 and the appeal was presented on 16.5.2024.
The single bench consisting of Justice Rajiv Shakdher held that the unamended Section 2(m) of the Entertainment Tax Act does not include sponsorship of fashion shows and sporting events, making it taxable under Section 6. The bench thus held that the Entertainment Tax Act does not contain a mechanism for assessing and collecting tax on sponsorships due to the absence of a specific charging provision.
The Madras High Court, in a matter where ITC ( Input tax credit ) was denied due to the supplier’s non filing of GST ( Goods and Services Tax ) Returns and non-payment of taxes, has directed to avail statutory remedy.
The Future of Tax and Finance: Upskill with Us, Click here
While disposing the petition, the high court noted that the assessee still has the opportunity to pursue the statutory remedy within the prescribed limitation period and thus directed to avail the same.
The Madras High Court, in its recent ruling has clarified that GST ( Goods and Services Tax ) recovery proceedings under Section 78 must be initiated by the Principal Commissioner or commissioner and not by a state tax officer.
Justice Senthilkumar Ramamoorthy found that the recovery action was undertaken by a State Tax Officer, contrary to the requirement that it should be initiated by the Principal Commissioner or Commissioner.
The Calcutta High Court dismissed the writ petition which challenge the order passed under section 148 of the Income Tax Act, 1961 on non-compliance of formalities of taking approval of specified authority under section 151(ii) of the Act.
It was observed that the revenue cannot dispute the fact that identical issue was decided against the Department in the case of Siemens Financial Services[P] Ltd. vs. Deputy Commissioner of Income-tax.
Calcutta High Court dismissed the petition as the issue of bogus loss on sale of share doesn’t arise from Income Tax Appellate Tribunal ( ITAT ) order which was challenged in the writ petition.
The Future of Tax and Finance: Upskill with Us, Click here
The division bench of Chief Justice T S Sivagnanam and Justice Hiranmay Bhattacharyya found that the question of law suggested by the revenue in the appeal do not arise out of the order passed by the Tribunal. Therefore, the Court held that the appeal cannot be entertained on the question of law as suggested by the revenue and dismissed the same.
The Calcutta High Court dismissed the appeal filed by the Income Tax Department challenging a ruling by the Income Tax Appellate Tribunal ( ITAT ).
The court deemed the appeal infructuous due to the respondent company’s liquidation and the approval of its resolution plan by the National Company Law Tribunal ( NCLT ).
The division bench of Chief Justice T.S Sivagnanam and Justice Hiranmay Bhattacharyya deemed the appeal infructuous and dismissed it without any order as to costs in light of the NCLT’s approval of the resolution plan.
The Madras High Court has ruled that the GST ( Goods and Services Tax ) order exceeded the boundaries of the Show Cause Notice ( SCN ) previously issued.
The Court has instructed that the order be treated as an SCN and has mandated a 10% pre-deposit for reconsideration of the matter.
High Court Of Calcutta,ruling it not maintainable as it did not directly challenge the appellate order. The court refused interim relief due to the tribunal’s non-constitution and advised the petitioner to seek remedies through statutory channels once the tribunal is formed.
The court stated that even though the petitioner’s counsel cited India Tyre & Rubber Company and Jai Venktesh Concast to show stays on recovery proceedings, those cases involved conditions like partial payment, which are not applicable here.The cited cases involved interim relief while examining rights, but they do not support indefinitely deferring recovery proceedings until the tribunal is formed.
The Delhi High Court modified the Goods and Service Tax (GST) registration cancellation, citing the absence of a reasoned decision. While the Proper Officer has the authority to cancel a taxpayer’s registration, including retroactively, such action must be based on reasonable grounds. The court further found that the retroactive cancellation in this case was neither justified nor in accordance with the principles of natural justice.
The Future of Tax and Finance: Upskill with Us, Click here
The division bench, consisting of Justice Vibhu Bakhru and Justice Sachin Datta, ruled that the cancellation order would take effect from November 13, 2023, the date of the SCN, rather than the original date of July 1, 2017. The court clarified that this decision does not prevent the authorities from taking further action against the petitioner for any statutory violations, provided it is done in accordance with the law. The petition was disposed of on these terms.
The Delhi High Court quashed assessment order, stating that no notice under Section 148 can be issued if four to six years have passed since the relevant assessment. The court addressed the assessment order issued under Section 148A (d) and the subsequent reassessment notice under Section 148. The bench held that the re-opening of the assessment was unsustainable due to the limitations set by the pre-amendment version of Section 149(1)(b) of the Finance Act, 1994.
The Division Bench, comprising Justice Yashwanth Varma and Justice Ravinder Dudeja, granted the writ petition and quashed the notice under Section 148A (d) dated April 29, 2024, along with the corresponding Section 148 notice.
The Telangana High Court has ruled that Goods and Services Tax (GST) does not apply to construction services provided to the Maldives government when both the supplier and recipient are outside India.
Justices Sujoy Paul and Namavarapu Rajeshwar Rao observed that “In the peculiar facts of this case, since the supply of service and location of recipient and supplier is outside India, the question of levy and collection of tax in the teeth of Section 9 of the CGST Act or Section 5 of IGST Act does not arise.”
The Calcutta High Court upheld the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) decision, confirming that the respondent-assessee was not liable for service tax on mining services before June 1, 2007. The Court agreed that the services were improperly categorized and the extended limitation period was not applicable due to a lack of evidence for intentional tax evasion. The revenue appellant’s appeal was dismissed.
A coram comprising Chief Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya dismissed the appeal filed by the revenue appellant, finding no reason to overturn the tribunal’s decision as the respondent-assessee was correctly granted relief.
The Delhi High Court has set aside a GST demand of ₹2, 33, 46,912, crores, citing the non-receipt of a Show Cause Notice (SCN) and the inaccessibility of the GST portal following the director’s death and subsequent closure of the business.
The Future of Tax and Finance: Upskill with Us, Click here
The bench directed that the petitioner may submit a response to the SCN within two weeks from the date of this order. The Adjudicating Authority is instructed to review any reply submitted and issue a reasoned order, providing the petitioner with an opportunity to be heard. The present petition has thus been disposed of.
The Calcutta High Court,upheld the Tribunal’s decision on Minimum Alternate Tax ( MAT ) credit and provisions for doubtful debts, concluding that there were no significant errors in the assessment made by the lower authorities.
The court considered the legal aspect of the issues raised by the revenue appellant including the excess set-off of MAT credit and the impact of pending appeals on the finality of MAT credit computation. It was noted that a notice was issued by the Principal Commissioner of Income Tax, Asansol ( PCIT ) under Section 263 addressing the excess set-off of MAT credit.
The Calcutta HC in a recent case upheld the Income Tax Appellate Tribunal’s ( ITAT ) decision to delete Income tax addition made under section 69 of the Income Tax Act 1961 ( ITA ) due to lack of direct evidence against the assessee.
The division bench of TS Sivagnanam and Justice Hiranmay Bhattacharya noted that the Tribunal had re-evaluated the evidence and concluded that the seized documents did not definitively implicate Salarpuria Properties Pvt. Ltd, and that the reference in the cash entries of Sri Dayanand Pai could denote any entity within the group.
The court noted that although no e-way bill was produced during the initial inspection, it was provided before the seizure order was finalised. As the authorities found no discrepancies in the e-way bill, the detention of the goods was deemed unwarranted.
The Future of Tax and Finance: Upskill with Us, Click here
The Allahabad High Court held that if the proper e-way bill is presented before the issuance of a seizure order, any discrepancies are resolved, rendering the detention of goods unwarranted. Justice Piyush Agrawalstated that “Once E-way bill was produced before the seizure order could be passed, it would not be said that any contravention of the provision of the Act have been made by the petitioner.” The court’s statement clarified that goods cannot be detained if the e-way bill is submitted prior to the GST authorities passing the seizure order.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
