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 recent ruling of Delhi High Court the impugned cancellation order canceling the petitioner’s Goods and Services Tax (GST) registration and Show Cause Notice was quashed and the respondent- department was directed to restore the petitioner’s Goods and Services Tax registration owing to unreasonable cancellation.
The division bench of Justice Vibhu Bakhru and Sachin Datta observed that the impugned cancellation order canceling petitioners’ GST registration should be revoked and directed the petitioner’s GST registration.
The Bombay High Court directed the tax department to issue necessary certificates to the assessee, who has fully paid all dues under the Income Declaration Scheme, 2016 ( IDS ).
The bench comprising Justice G. S. Kulkarni and Justice Somasekhar Sundaresan observed that the petitioner had met all requirements under the IDS and deposited the appropriate tax amounts.
The Bombay High Court has annulled the legal proceedings initiated against the directors of M/s. Hubtown Ltd. under Sections 276B and 278B of the Income Tax Act. This action followed a belated deposit of TDS, despite the company having already rectified this by depositing the same with accrued interest as stipulated in section 201(1A) of the Income Tax Act.
The High Court of Delhi found that the show cause notice ( SCN ) was insufficiently detailed and thus invalid. The court granted the petition, canceled the notice, and directed the immediate restoration of the petitioner’s Goods and Services Tax ( GST ) registration, while allowing for the possibility of new proceedings if warranted. The pending application was also disposed of.
The High Court of Delhi allowed the petition, ruling that the failure to pass a fresh assessment order within the prescribed time rendered the assessment for assessment year (AY) 2004-05 time-barred. The court set aside the impugned notices issued by the assessing officer and directed a refund of INR 37,73,012/- along with applicable interest, to be made within eight weeks.
The Delhi High Court quashed retrospective cancellation of GST as it does not satisfy the provisions under Section 29(2) of the Central Goods and Services Tax Act, 2017.
The bench, comprising Justice Vibhu Bakhru and Justice Sachin Datta, observed that the SCN does not meet the requisite standards of a show cause notice. It opined that the cancellation order did not specify why the petitioner’s GST registration was terminated. The Delhi High Court thus disposed of the petition and held that the cancellation order will take effect from the date of the SCN, which is 28.06.2023, not retrospectively, which is on 29.12.2022.
The Andhra Pradesh High Court held that compensation awarded under Motor Vehicle Act, 1988 computed after deduction of income tax. The court enhanced the amount of compensation once allowed and directed the insurance company to pay the balance amount in one month.
The Jammu & Kashmir and Ladakh High Court held that appellate authority cannot condone delay beyond four months under section 107 of Central Goods and Service Tax ( CGST ) Act, 2017. It was evident that this discretion conferred upon the appellate authority is restricted to condoning the delay only for a maximum period of one month.
The Calcutta High Court in a significant case held that Goods and Service Tax ( GST ) Registration cannot be cancelled for Non-filing of return when there is no dubious process to evade tax.
The Bench directed the respondents/ Department to take a pragmatic view in the matter and permit the assessee to carry on his business. Further clarified that if the assessee complies with the directions, then the assessee’s registration under W.B GST Act shall be restored by the Jurisdictional Officer.
The Delhi High Court reversed the decision of canceling the GST Registration of the petitioner with retrospective effect, due to the lack of details in the SCN.
The Division bench comprising Justice Vibhu Bakhru and Justice Sachin Datta observed that, the petitioner is not aggrieved by the cancellation of the GST Registration but seeks that the cancellation should not be operative with retrospective effect. In view of the above, the order dated 16.06.2020, canceling the GST Registration will take effect from the date of the SCN, i.e 29.05.2020 and not ab initio.
The Calcutta High Court directed the GST department to allow rectification application under Sections 161 of the Central Goods and Service Tax ( CGST ) Act, 2017. iT was observed that Section 161 of the act allows assessee to apply for rectification within time prescribed.
Section 161 clearly provides for, inter alia, affected person to apply for rectification. The third proviso says, where the rectification adversely affects any person, he is to be given hearing. The authority in already having passed impugned order, hereby set aside, had decided no rectification was necessary.
In a recent ruling, the High Court of Karnataka dismissed the writ petition and directed the petitioner to seek statutory remedy as provided under the law against the threatening action of the VAT officer.
The bench comprising of Justice Jyoti MulimanI held that the petitioner has an alternative efficacious statutory remedy under Section 62 of the KVAT Act, 2003. Thus, the bench dismissed the writ petition and directed the petitioner to seek statutory remedy as provided under the law.
The Delhi High Court emphasized that no tax could be levied on notional income, ruling that the Valuation Report obtained by the employer was inapplicable to shares subject to a lock-in stipulation and thus not sellable in the open market; consequently, the Court held that the difference between the allotted price and the market price of ESPS ( Employee Stock Purchase Scheme ) shares is not taxable as a perquisite under Section 17(2)(iiia) of the Income Tax Act, 1961.
The Delhi High Court directed the trial court to release the Rs. 25 lakh Fixed Deposit Receipt (FDR) to the petitioner, citing the absence of a fresh Look-Out Circular (LOC).
Justice Manoj Jain of the Delhi High Court, allowed the petition and directed the Trial Court to release the FDR of Rs. 25 lakhs to the petitioner, after which the petition was subsequently disposed of.
the High Court Of Delhi quashed the reassessment notices for assessment year(AY) 2018-19 issued to petitioner. The court held that the interest income from Non-convertible Debentures (NCDs), taxed under Section 194LD of the Income Tax Act,1961 was wrongly reclassified as dividend subject to Dividend Distribution Tax (DDT), which should be paid by Genpact India Private Limited (GIPL), not the petitioner.
The Court, comprising Justice Vibhu Bhakru and Justice Sachin Datta, determined that the petitioner’s GST registration could not be cancelled based on vague allegations and an insufficient SCN. The Court set aside the impugned cancellation order and SCN, directing the respondent to restore the petitioner’s GST registration immediately.
It was clarified that this decision does not prevent the respondents from initiating fresh proceedings in accordance with the law if adverse action against the petitioner is deemed necessary. The petition was disposed of accordingly, and all pending applications were also dismissed.
The Telangana High Court has held that the Non-Resident India ( NRIs) are not exempted from following mandatory faceless procedure under the Income Tax Act, 1961.
The division bench of Justice Sujoy Paul and Justice Namavarapu Rajeshwar Rao has observed that the taxpayer is nowhere distinguished between NRIs and Indian citizens. The reassessment notice issued under Section 148 of the income tax law must comply with the requirement of the scheme whether or not the taxpayer is an NRI or Indian citizen. The court held that the department has erred in not following the mandatory faceless procedure as prescribed in the scheme. Since the department failed to issue notices under income tax Section 148 in a faceless manner, the entire further proceeding founded upon it and assessment orders stand vitiated.
The High Court of Delhi set aside a flawed show cause notice (SCN) issued to petitioner, which lacked specific details and supporting documents. The court ordered the immediate restoration of petitioner’s Goods and Service Tax (GST) registration but noted that new proceedings could be initiated if needed.
The division bench comprising Justice Vibhu Bakhru and Justice Sachin Datta allowed the petition, set aside the SCN, and directed the respondents to immediately restore the petitioner’s GST registration and contended that the order does not prevent the proper officer from starting new proceedings if needed.
The High Court Of Delhi, disposed of the petition by setting aside the impugned cancellation order and the show cause notice (SCN), finding that the cancellation process violated principles of natural justice.
The division bench comprising Justice Vibhu Bakhru and Justice Sachin Datta set aside the impugned cancellation order and SCN and directed that if the respondent wishes to cancel the petitioner’s GST registration, they must issue a new SCN detailing all grounds for the action and follow the legal process.
The Supreme Court recently held that High Court is bereft of the power to quash a case under Section 138 of the Negotiable Instruments Act, using the powers inherent to it under Section 482 of the Code of Criminal Procedure, 1973, as long as there is no consent from the complainant.
The Supreme Court Bench of Justices C T Ravikumar and Sanjay Karol noted that, “High Court entertained the challenge against the order rejecting an application for compounding the offence under Section 138, N.I. Act filed under Section 320 Cr.P.C., the High Court actually compounded the offence invoking its inherent power under Section 482 Cr.P.C., coupled with the power under Section 147 of the N.I. Act.”
The Karnataka High Court, in a recent ruling, set aside the order passed under Sections 201(1) and 201(1A) of the Income Tax Act, 1961, as being beyond the reasonable period of 4 years.
The bench comprising of held that he transactions or payments made to Singapore based company relates to financial years 2006-07, 2007-08, 2008-09 and the transaction or payment made to MJR Consultancy Pvt. Ltd., based in Singapore, relates to financial years 2006-07, 2007-08, and 2008-09 and the initiation of proceedings under the letter dated 31.1.2014 or order passed on 6.3.2014 is clearly beyond four years.
The Delhi High Court has intervened in a case involving the retrospective cancellation of GST registration for a partnership firm.
The court directed the Commissioner of Central Goods and Services Tax ( CGST ), East Delhi, to provide the necessary documents to the petitioner, enabling him to pursue an appellate remedy.
The Karnataka High Court recently held in an Income Tax Appeal that the provisions under Section 153A of the Income Tax Act, 1961 does not permit an Assessing Officer ( AO ) to reassess the income of an assessee in the absence of objective incriminating evidence unearthed during the course of search under Section 132.
The instant Judgment was pronounced by the Karnataka HC for 3 separate Appeals filed against a Common Order passed by the Income Tax Appellate Tribunal, Bengaluru (ITAT). The ITAT had confirmed the Order of the Appellate Commissioner deleting the Assessed Income filed by Gokula Education Foundation (Medical), the parent Trust of M.S. Ramaiah Medical College.
Delhi HC an impugned order was disposed of, for demanding a payment of Rs,29,31,73,600/ tax liability along with interest from the taxpayer even after discharge of liabilities and cancellation of registration.
The division bench of Delhi High Court comprising Justice Vibhu Bakhru and Justice Sachin Datta observed that the impugned order was unreasonable and therefore was set aside. The petition and pending applications were disposed of and the matter was remanded to the adjudicating authority for fresh consideration.
The Karnataka High Court rejected the appeal filed by revenue was not meritorious and held that the revenue has no discretion to adopt any date other than the date of agreement in question.
The High Court bench observed that the date of agreement should be considered and not the date on which it is registered. It also stated that Section 50C clearly states that when the date of the agreement for fixing the amount of consideration and the date of registration for the transfer of the capital asset are not the same, then for stamp valuation, the date of agreement is to be taken.
The Bench comprising of Justice Krishna S. Dixit andAgreement D. Huddar, held that Revenue has no discretion to adopt any date other than the date of agreement under Section 50C(1) of the Income Tax Act, 1961.
In a recent ruling of Karnataka High Court the plea of appellant to set aside the order of Income Tax Appellate Tribunal and pass such other orders. The court dismissed appeal upholding the decision of Income Tax Appellate Tribunal ( ITAT ).
The Division Bench of High Court Karnataka comprising Justice K. Somashekar and Justice Umesh M Adiga observed that the status of the impugned order rendered by the Tribunal is appropriate and the appeal is dismissed as being pointless.
The Delhi High Court rejected application of Employees Provident Fund Organisation, New Delhi seeking condonation of delay as the court finds no reasonable grounds for allowing condonation of delays in filing returns under section 119(2)(b) of Income Tax Act,1961.
The Delhi High Court, in a recent ruling, directed the restoration of the application of the GST cancellation order as the petitioner was not given an opportunity to be heard at the initial stage of the proceedings.
The bench, comprising of Justice Vibhu Bakhru and Justice Sachin Datta, directed to restore the petitioner’s application for revocation of the order canceling the GST registration before the proper officer, as the bench noted that the petitioner was not afforded an opportunity to be heard at the threshold stage as the impugned SCN did not specify the date and time on which the personal hearing was to be scheduled.
The Karnataka High Court ruled in a recent Income Tax Appeal before it, that limitation on the basis of ‘Reasonable Time Limit’ under Section 201 of the Income Tax Act, 1961 applies to Non-Residents as much as it does to Residents.
The Karnataka High Court laid reference to the decision of the Delhi High Court in Bharti Airtel Ltd. and Another vs. Union of India and Another (2016). The case was filed by the Petitioner Assessee owing to the Department’s categorization of the Petitioner as an “assessee in default” on account of their failure to deduct tax at source on payments of interconnect usage charges to non-resident operators.
The Delhi High Court has intervened in a case involving the Directorate General of Foreign Trade ( DGFT ), quashing a hefty penalty of Rs. 50,00,000 imposed under the Foreign Trade (Development & Regulation) Act, 1992.
The penalty was originally levied against a petitioner who had allegedly failed to meet export obligations mandated by an Advance Authorisation Licence.
The Karnataka High Court in a recent decision permitted the Tax Exemptions availed by an Assessee on Surplus Funds parked in Fixed Deposits ( FDs ) of banks as per the stipulations of Section 10AA of the Income Tax Act, 1961.
The Division Bench of the Karnataka High Court comprising Justice S.G. Pandit and Justice C.M. Poonacha, conforming to its own binding precedent, affirmed the Ratio in Hewlett Packard that Section 10A and Section 10AA of the Income Tax Act, 1961 are to be construed in similar manner for the purpose of computing income.
The Madras High Court remanded the case for reconsideration, citing insufficient time given to the petitioner to address the variation in bank credits. The Income Tax Department had only allowed six days for the petitioner to respond to the discrepancies in the bank statement.
The bench of Justice Senthilkumar Ramamoorthy found that the show cause notice dated 13.03.2024 involved an aggregate credit entry of Rs. 9,50,80,259 in the petitioner’s bank statement, proposed to be treated as unexplained money under Section 69A read with 115BBE of the Income Tax law. This issue was not raised in earlier notices, necessitating a reasonable time for the petitioner to respond. The initial three-day period, extended by another three days, was deemed insufficient, warranting interference with the assessment order.
Delhi High Court, the order issued canceling the petitioner’s Goods and Services Tax ( GST ) registration was set aside for being violative of natural justice principles and for lacking specific details of cancellation.
The Division Bench of Delhi HIgh Court comprising Justice Vibhu Bakhru and Justice Sachin Datta observed that the impugned order and SCN lacked specific details and has hence failed to elicit meaningful response.
The High Court of Jharkhand has quashed criminal proceedings against a tractor trader and franchisee of Mahindra and Mahindra, in a case related to alleged tax evasion. The proceedings were initiated under Sections 276(C)(2) and 277 of the Income Tax Act, 1961.
The high court held that the penalty provisions were not applicable in this case, and consequently, the criminal proceedings could not be justified. The court quashed the proceedings, providing relief to Singh from the charges against him.
The Madras High Court directed for reconsideration of a matter where the ₹1.9 Cr GST ( Goods and Services Tax ) demand passed two days before the hearing date despite adjournment granted.
Justice Krishnan Ramasamy, upon review, found that the order was issued without affording the petitioner a proper opportunity to be heard, thus violating natural justice principles. The High Court set aside the impugned order and remitted the case back to the First Respondent for a fresh consideration.
The Delhi High Court, has limited the retrospective effect of the cancellation of Goods and Services Tax ( GST ) registration for Alaknanda Steel.
Delhi High Court set aside the retrospective cancellation, ruling that the cancellation of GST registration shall be effective prospectively from June 9, 2023, the date of the SCN, rather than from July 1, 2017.
The Orissa High Court rejected the writ petition challenging jurisdiction ruling that the Deputy commissioner can block Input Tax Credit ( ITC ) under Rule 86A of Orissa GST ( Goods and Services Tax ) Rules, 2017.
The Madras High Court instructed the Income Tax Department to resolve an appeal within four months in a matter where the department had rejected the stay application based on an incorrect impression of under-reporting by the assessee.
Justice Krishnan Ramasamy noted that the assessee’s previous stay applications had been rejected by two authorities. However, analysing the circumstances, the Court found it appropriate to direct the fourth respondent, the Commissioner of Income Tax, to dispose of the appeals within 4 months from the receipt of the Court’s order. The interim stay granted on 11.03.2024 was extended until the appeals are resolved.
The Rajasthan High Court set aside the notice issued under Section 263 of the Income Tax Act, 1961 stating the limitation invoking revisionary powers relate back to original income tax assessment order when the reassessment order issued is distinct and different.
The bench of Justices Pushpendra Singh Bhati and Munnuri Laxman also considered the provisions of Section 263(2) of the Income Tax law, which stipulated a two-year limit from the end of the financial year in which the revised order was passed.
It was observed that the petitioner’s challenge was valid as the revisional jurisdiction should not extend beyond this period if the issues are unrelated to the reassessment. The Rajasthan Court ruled that the impugned notice dated January 9, 2024, was barred by the limitation period as the issues addressed were tied to the original assessment order. Consequently, the Court quashed the notice and set aside the proceedings, allowing the writ petition and disposing of all pending applications.
The Karnataka High Court in a recent Judgment disposed of 31 Central Excise Appeals pertaining to the same subject matter. The High Court ruled that Trust Funds cannot be categorized as a ‘Juridical Person’ under the purview of the Indian Finance Act, 1994.
The Karnataka High Court, while allowing the Appeals further mused on the ‘Doctrine of Mutuality’ to gauge the difference between the Contributors and the Fund as two separate legal entities for the purpose of taxation; in light of the findings, the Court held that the Trust and the Investors cannot be regarded as two separate entities as the Trust Fund utilizes the investments received by it to re-invest the same. Hence, in the absence of contradicting evidence, the Court upheld the Doctrine of Mutuality that “A person cannot make profit from self”.
The Karnataka High Court recently held that omission to reply to the first Show-Cause Notice (SCN) issued to an Assessee by the Revenue Department does not constitute malintent to suppress facts in a means to evade payment of Service Tax.
The High Court provided the above explanation while adjudging a Central Excise Appeal filed by the Principal Commissioner of Central Tax against Order of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) ruling in favour of the Respondent Assessee, Adarsh Developers.
The Delhi High Court directed the authorities to issue Show Cause Notice (SCN) if the Duty Drawback and the Integrated Goods and Services Tax (IGST) Refund is denied by the authorities. The SCN indicates the reasons for the same to be issued to the petitioner as early as possible and preferably within a period of eight weeks from date.
The Division bench comprising Justice Vibhu Bakhru and Justice Sachin Datta directed the respondents to process the petitioner’s refund claim and if the same is denied, then a proper SCN indicating the reasons for the rejection to be issued as expeditiously as possible, preferably within eight weeks from date.
The Bombay High Court recently directed the Securities and Exchange Board of India (SEBI), along with the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), to pay a compensation of Rs. 50 lakhs to Dr. Mehta within two weeks for illegal freezing of his demat account.
The Delhi High Court directed the Assessing Officer ( AO ) to grant Tax Deducted at Source ( TDS ) credit in compliance with the Income Tax Appellate Tribunal’s ( ITAT ) directions, after the Assessing Officer ( AO ) failed to account for the total TDS that had been deducted and deposited, which impacted the computation of the refund due as per the original return of income.
The Calcutta High Court has set aside the case under Section 73(9) Central Goods and Services Tax (CGST) Act, 2017, as the consultant failed to inform the petitioner of the Show Cause Notice (SCN) on the portal, and has remanded the case for fresh consideration, noting that the consultant left the job without proper communication, thereby giving the petitioners another opportunity to present their case and explain the situation to the proper officer.
The Delhi High Court, it was held that the cancellation of a GST registration does not prevent the tax department from initiating proceedings or recovering outstanding tax dues.
The Division bench of Delhi High Court comprising Justice Vibhu Bakhru and Justice Sachin Datta observed that it is appropriate to direct the proper officer to reconsider the petitioner’s application for cancellation of GST registration with effect from 01.10.2022.
In a recent challenge with regards to the GST notification related to the time limit for issuing orders under Section 73 of the GST Act, 2017, the Allahabad High Court declined to entertain the plea declaring the notifications ultra vires to Article 14 of the Constitution and Section 168A of the GST Act. Justices Shekhar B. Saraf and Manjive Shukla Court stated that as the impugned GST order was issued within the extended time frame recommended by the GST Council, the Court chose not to address the constitutional and statutory validity of Section 73(10) and related notifications.
The Allahabad High Court quashed a detention order issued under Section 129 of the GST ( Goods and Services Tax ) Act, finding that the expiry of an e-way bill due to a driver’s detour was insufficient grounds for such action. It observed that intention to evade tax is necessary for invoking Section 129.
The Court ruled that the detention order was unsustainable and thus quashed it. The petitioner is entitled to a refund of any amount deposited during the pendency of the writ petition, which should be processed within a month of presenting the certified copy of the order
The Non-filing of certified copy of order in Electronic appeals before GST ( Goods and Services Tax ) within the time frame is a mere technical issue and cannot be used as a grounds for dismissing appeal, ruled the Allahabad High Court. Justice Piyush Agrawal stated that non-filing of a certified copy within the prescribed time for electronic appeals is a technical error, not a valid reason for dismissal.
Bombay High Court directed to issue a replacement notice to legal representatives of the deceased person and proceed with the matter.
The High Court bench, comprising Justice Ravindra V. Ghuge and Justice Y.G. Khobragade, quashed the impugned notice sent on 16.03.2024 as it was issued to a dead person. The bench observed that a fresh notice would be a replacement for the impugned notice, which was accidentally sent to the dead person as the department did not who about his death, nor did the widow intimate the department regarding her husband’s death.
In a recent ruling, the Madras High Court directed the GST ( Goods and Services Tax ) department for fresh adjudication in the Goods and Services matter, the notices were uploaded only on the GST portal and a proper hearing opportunity was not given.
A single bench of Justice Krishnan Ramasamy considered both sides’ arguments and noted that the disputed tax had already been recovered. The court observed that the impugned order passed without hearing the petitioner violated the natural principles of justice. The court considered both side’s arguments and noted that the disputed tax had already been recovered.
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