Annual Digest 2024: Supreme Court and High Court Cases on Taxation [Part 33]

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.

Demand Order issued due to GST ITC claimed under wrong GSTIN by Suppliers: Allahabad HC orders fresh decision as per Circular No. 183/15/2022-GST M/S My Auto World (Kanpur) Pvt. Ltd. vs Union Of India And 5 Others CITATION: 2024 TAXSCAN (HC) 2155

In a recent ruling, the Allahabad High Court quashed the Goods and Service Tax ( GST ) demand order against a taxpayer for claiming Input Tax Credit ( ITC ) under an incorrect GSTIN. The court directed the tax authorities to pass a fresh decision following Circular No. 183/15/2022-GST.

The bench comprising Justice Shekhar B. Saraf, J. and Justice Manjive Shukla, J. observed that Circular No.183/15/2022-GST was directly applicable to the petitioner’s case. The petitioner’s issue of incorrect ITC reporting between two GSTINs falls within the scope of the Circular.

Cost of Free Fuel cannot be added to Account of Taxable Supply by GTA: Uttarakhand HC New Jai Hind transport Service vs Union of India CITATION: 2024 TAXSCAN (HC) 2156

In a recent ruling, the Uttarakhand High Court held that the cost of free fuel provided by a service recipient cannot be added to the value of taxable supply by a Goods Transport Agency (GTA) for GST purposes. The dispute arose over whether the value of this fuel should be included in the calculation of GST.

The bench of Justices Ritu Bahri and Rakesh Rakesh Thapliyal reviewed Section 15 of the Central Goods and Services Tax (CGST) Act, 2017, particularly focusing on Section 15(1) and 15(2)(b), which detail how the value of taxable supply should be determined. According to the ruling, the value of any amount incurred by the recipient but not included in the price of the service may be added to the taxable value. However, the court found that in this case, the agreement clearly specified that the cost of fuel was the responsibility of the service recipient and was not part of the service provider’s obligations or charges. Therefore, the cost of free fuel did not constitute “consideration” for the service and could not be taxed under GST.

GST SCN Must Specify Fraud or Misstatement for initiating S. 74 Proceedings: Allahabad HC Hcl Infotech Ltd vs Commissioner CITATION: 2024 TAXSCAN (HC) 2157

In a recent ruling, the Allahabad High Court held that a Goods and Services Tax ( GST ) Show Cause Notice must specify allegations of fraud, willful misstatement, or suppression of facts to invoke Section 74 of the Central Goods and Services Tax ( CGST ) Act.

The bench comprising Justice Shekhar B. Saraf and Justice Manjive Shukla observed both sides’ arguments and emphasized that Section 73 deals with non-fraudulent errors in tax claims, while Section 74 requires fraud or willful misrepresentation.

Simply Citing ‘Delay in Submission of Appeal’ Insufficient for Rejecting GST Appeals: Allahabad HC New Shanti Restaurant vs State Of Up And 2 Others CITATION: 2024 TAXSCAN (HC) 2158

The Allahabad High Court ruled that simply mentioning ‘Delay in Submission of Appeal’ is not sufficient for rejecting the GST ( Goods and Services Tax ) appeals. While quashing the order, it stated that ‘An order without valid reasons cannot be sustained’.

The High Court quoted the Supreme Court ruling in the cases of Assistant Commissioner, Commercial Tax Department, Works Contract & Leasing, Kota Vs. Shukla & Brothers, M/s Travancore Rayon Ltd. v. Union of India have observed that the administrative authority and the tribunal are obliged to give reasons, absence whereof would render the order liable to judicial chastisement.Once the reason has not been assigned by the competent authority for levying the penalty then on this ground alone, the impugned orders cannot be sustained.

Budgetary Support Scheme 2018 Withdrawal For Reimbursement Of IGST To Manufacturing Units: J & K HC Upholds UT Govt’s Decision Sudhir Power Limited vs Union Territory of Jammu and Kashmir CITATION: 2024 TAXSCAN (HC) 2159

The Jammu and Kashmir and Ladakh High Court has upheld the UT government’s decision to withdraw the ‘Budgetary Support Scheme’, notified in the year 2018 for providing budgetary support to manufacturing units in the UT, by reimbursement of Integrated Goods and Service Tax.

The High Court observed that promissory estoppel operates even in the legislative field and applies against the Government, even when acting in exercise of its sovereign or executive functions. A division bench of Justices Sanjeev Kumar and Rajesh Sekhri observed that the Scheme did not create any legitimate expectation in the units nor did it attract promissory estoppel on the government.

Anonymous Hundi Donations received by Sai Baba Trust eligible for S. 115BBC(2)(b) Income Tax Exemption: Bombay High Court Commissioner of Income Tax (Exemptions) vs Shree Sai Baba Sansthan Trust – Shirdi CITATION: 2024 TAXSCAN (HC) 2160

In a significant ruling, the Bombay High Court has held that anonymous donations received through the Hundi by the Shree Sai Baba Sansthan Trust, Shirdi, are eligible for exemption from tax under Section 115BBC(2)(b) of the Income Tax Act, 1961.

The Court also took note of the Sai Baba Trust Act, 2004, which reconstituted the Trust as a religious and charitable organisation, thus further affirming its dual status. It was observed that, “From a cumulative reading of the objects of the assessee, read with the provisions of the Sai Baba Trust Act which is a special legislation promulgated by the State Legislature reflecting the objects and activities of the assessee, as also, considering the provisions of the Bombay Public Trusts Act, we are of the clear opinion that the assessee certainly is a religious and charitable trust, hence, the assessee rightly and legitimately claimed an entitlement under sub-section 2(b) of Section 115BBC of the Act. Such entitlement of the assessee is rightly recognized by the CIT(A) and the Tribunal.”

“Appellant wasted public money and time of courts”: Bombay HC slaps Exemplary Costs of ₹5 Lakh in Writ against GST SCN, Demand Viswaat Chemicals Ltd. & anr vs Union of India CITATION: 2024 TAXSCAN (HC) 2161

The Bombay High Court recently dismissed a writ petition filed by Viswaat Chemicals Ltd. challenging a Show Cause Notice ( SCN ) issued by the tax authorities under the Central Goods and Services Tax ( CGST ) Act. The court not only dismissed the petition but also imposed exemplary costs of ₹5,00,000 on the petitioner for attempting to bypass the proper legal process.

The court emphasised that filing writ petitions to challenge Show Cause Notices should not be done routinely unless there is a clear violation of principles of natural justice or the notice is wholly without jurisdiction. The Bench noted that the petitioners had not raised any substantial grievance regarding the SCN in their initial responses and only brought up the vagueness argument after the adjudication process was completed.

Punjab & Haryana HC Orders Departmental Action against Income Tax Dept for Bouncing of Cheque for Refund Issued SUVIDHI UDYOG PRIVATE LIMITED vs NATIONAL FACELESS ASSESSMENT CENTRE AND OTHERS CITATION: 2024 TAXSCAN (HC) 2162

In a significant case, the Punjab and Haryana High Court has directed to take the departmental action against the income tax officials as the cheque for refund issued by income tax dept. bounced despite the court’s clear directions.

The court observed and considered that the deponent-Ms. Jeotsnaa Johri has joined only on 17.09.2024 as the Principal Commissioner of Income Tax, Rohtak, proposed not to take any action against her personally, however, the court expected her to be careful and vigilant in future. Further remarked that once the Officer assumes charge of any office, he or she is required to have full information relating to the pending cases in the Court, orders passed by the Court and whether they have been complied with or not.

Credit Cannot Be Blocked In Electronic Credit Ledger in Absence of Availability of Sufficient Balance: Gujarat HC PMW METAL AND ALLOYS PVT. LTD. vs UNION OF INDIA & ORS. CITATION: 2024 TAXSCAN (HC) 2163

The Gujarat High Court in a recent case ruled that there cannot be any blocking of the credit in electronic credit ledger if there is no sufficient balance available. The Division Bench ruled as above while hearing a case where the assessee contested the blocking of Input Tax Credit ( ITC ) amounting to ₹2,44,05,567 in its electronic credit ledger.

The bench comprising Justices Bhargav D. Karia and Niral R. Mehta observed that if there is Nil or insufficient balance in a particular tax head in the Electronic Credit Ledger, then the balance in another tax head can be blocked only if the cross-utilization from such head is permissible in law.

Non Mentioning of issuance of Notice u/s 148A (d) of Income Tax Act in Portal: Orissa High Court stays Proceedings Initiated Nirmal Kumar Kar vs Income Tax Officer Ward-1 CITATION: 2024 TAXSCAN (HC) 2164

In a recent case, the Orissa High Court stayed the Income Tax proceedings initiated due to failure in mentioning issuance of notice under section 148A (d) of Income Tax Act, 1961 in Goods and Services Tax ( GST ) Portal.

Section 148A of the Income Tax Act, empowers Income Tax officers to initiate reassessment proceedings when they suspect that a taxpayer may have concealed income during any assessment year. While allowing the tax authorities to reopen cases, also emphasizes the importance of providing taxpayers with an opportunity to present their side of the story.

Challenge against Income Tax Order directing Re ajudication by AO: Orissa HC dismissed Petition in Absence of Substantial Question Of Law Biswajit Behera vs Income Tax Officer CITATION: 2024 TAXSCAN (HC) 2165

The Orissa High Court in a recent case dismissed the petition in absence of substantial question of law. The Writ petition was on challenging the Income Tax Order which directs reajudication by Assessing Officer (AO).

A division bench of Justice Arindam Sinha And Justice Sanjay Kumar Mishra found that the Tribunal in following the declaration of law made by the Supreme Court, directed the AO to re-adjudicate upon first dealing with the objection. Further held that “in event, consideration of the objection renders satisfaction to the AO that the reopening does not result in enhancement, the proceeding will be appropriately closed.”

Calcutta HC stays Notice issued by Jurisdictional AO in contravention to provisions u/s 151A of Income Tax Act VINDYA AGENCIES PRIVATE LIMITED vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION: 2024 TAXSCAN (HC) 2166

The Calcutta High Court stayed the notice issued by the Jurisdictional Assessing Officer ( AO ) in contravention to provisions under section 151A of Income Tax Act,1961. It was viewed that no further steps should be taken by the respondents on the basis of the notice issued under Section 148 of the said Act dated 22nd April, 2024 for assessment year 2017-18 till the disposal of the writ petition.

Taking into consideration the prima facie case as has been made out by the petitioner and the judgement of the Division Bench of the Court presided over by the Chief Justice in the case of Girdhar Gopal Dalmia vs. Union of India & Ors., whereby the Division Bench while considering the competence of the jurisdictional assessing officer to issue a notice under Section 148 of the said Act, consequent upon publication of the Scheme vide Notification dated 29th March, 2022, and while admitting the appeal had stayed the said notice.

Relief to OLA, DGGSTI is not Adjudicating authority: Orissa HC Stays Proceedings M/s. Ani Technologies Pvt. Ltd. vs Additional Commissioner of Commercial Taxes and GST Officer CITATION: 2024 TAXSCAN (HC) 2167

In a recent case, the Orissa High Court stayed the proceedings initiated against OLA under Central Goods and Service Tax ( CGST ) and held that Directorate General of GST Intelligence ( DGGSTI ) is not an adjudicating authority.

“we have not been told of a point in time where adjudication commences after issuance of show cause notice. In the circumstances, petitioner’s reliance on clause (b) under sub-section (2) in section 6 renders prima facie satisfaction for staying, at this stage, impugned order till next date of hearing. Mr. Mishra protests on submission that no adjudication will be done pursuant to said show cause notice dated 31st March, 2022 issued by the DGGSTI. Issuance of impugned show cause notice and order are the action taken pursuant to said show cause notice.”, the division bench of Justice Arindam Sinha And Justice M.S. Sahoo held.

S. 68 of Income Tax Act not Invokable in absence of unexplained Amount in Bank Statement: Gujarat HC NAVNIDHLAL PAREKH vs INCOME TAX OFFICER WARD CITATION: 2024 TAXSCAN (HC) 2168

In a recent case, the Gujarat High Court stated that there cannot be any income escapement by the assessee if there is no unexplained amount in the bank statement on record. The Court found that the reason given by the Assessing Officer for alleged escapement of Rs.3,25,00,000/- is not sustainable since there is no unexplained amount in the bank statement on record.

The division bench of Justice Bhargav D. Karia and Mauna M. Bhatt observed that there is no escapement of income since the amount was received by the late father of the assessee on 04.09.2014 from Mr. Hardik Parekh and was paid by NEFT to Ms. Darshana Doshi on the same day. Similarly, the amount was received back on 19.09.2015 from Ms. Darshana Doshi and returned to Mr. Hardik Parekh. In such circumstances, there is no escapement of income of the late father of the assessee is concerned.

Revenue Counsel admits Genuinity of Unexplained Investment Later: Madras HC refuses Remand Request as Transaction Proven Genuine Sundarapandian vs Assessment Unit CITATION: 2024 TAXSCAN (HC) 2169

The Madras High Court, in its recent ruling, refused to remand the matter as the transaction of the unexplained investment proved genuine. The income tax department’s counsel admitted the genuinity in the later stage of the adjudication and requested the remand.

Justice Krishnan Ramasamy, after examining the evidence, agreed that the transaction was genuine and found no need for remand. It observed that once the genuineness of the transaction was established before the court, sending the matter back to the authorities was unnecessary.

Non-discharge of Onus of Proof by AO: Bombay HC quashes treatment of Purchase Expenses as Bogus Ashok Kumar Rungta vs Income Tax Officer CITATION: 2024 TAXSCAN (HC) 2170

The Bombay High Court ( Bombay HC ) recently set aside an order by the Income Tax Appellate Tribunal ( ITAT ) and Revenue Department, ruling that the purchase expenses claimed by the petitioner could not be treated as ‘bogus’ due to the failure of the Revenue Department to discharge the onus of proof required to purport such an allegation.

The Coram of the Bombay High Court constituted by Justice G.S. Kulkarni and Justice Somasekhar Sundaresan observed that the ITAT had returned a firm finding citing the lack of incriminatory material against the Appellant in the Assessment Order; in the event a quasi-judicial authority finds the lack of cogent or convincing evidence against the Assessee, it would be wrong to expect the Assessee to still prove its innocence.

GST Dept admits Violation of Personal Hearing mandated u/s 75(4): Madras HC Quashes Assessment Order Signet Industries Limited vs The State Tax officer CITATION: 2024 TAXSCAN (HC) 2171

In a recent ruling, the Madras High Court quashed the Goods and Service Tax ( GST ) assessment order after the Goods and Service Tax ( GST ) department agreed that they indeed passed the order without providing a personal hearing opportunity which is mandatory under Section 75(4) of the Goods and Service ( GST ) Act, 2017

The court observed that Section 75(4) mandates a personal hearing, which was not provided in this case. The court found that since the assessment order was set aside, the attachment of the bank account could not be sustained.

Relief to Ashok Leyland Ltd: No Denial/Delay of ₹3.5 Cr VAT Refund merely for Deposit being Voluntary, rules Delhi HC ASHOK LEYLAND LTD vs THE COMMISSIONER VALUE ADDED TAX CITATION: 2024 TAXSCAN (HC) 2172

In a major decision, the Delhi High Court provided relief to Ashok Leyland Ltd, asserting that the denial of a ₹3.5 crore VAT refund based on the claim that the deposit was voluntary was unjustified.

Justice Ravinder Dudeja and Justice Yashwant Varma, presiding over the case, highlighted several key points. The court ruled that whether the deposit was made under coercion or voluntarily was irrelevant to the claim for a refund.

Ashok Leyland Ltd is expected to receive the ₹3.5 crore refund along with accrued interest within four weeks of the decision.

Madras HC Halts TN Govt from Collecting Omni Bus Taxes for COVID Period All Omni Bus Owners Association vs The State of Tamil Nadu CITATION: 2024 TAXSCAN (HC) 2173

In a recent ruling, the Madras High Court ordered the Tamil Nadu Government to refrain from collecting road taxes from omni buses for the period affected by the COVID-19 lockdown. The court stated that the operators cannot be taxed for vehicles that were not in operation due to pandemic-related restrictions.

After reviewing the case, the Madras High Court agreed with the bus operators. The court ruled that the government cannot demand taxes for the period when omni buses were not operating due to COVID-19 restrictions. The court pointed out that taxes are based on the use of public infrastructure, and if buses were not on the roads, no tax could be justified.

Relief to Patanjali Foods, Claim Arising out of AP VAT Act or GST Act Extinguished on Approval of Resolution Plan: Andhra Pradesh HC Patanjali Foods Limited vs The Assistant Commissioner St Fac and Others CITATION: 2024 TAXSCAN (HC) 2174

In the case of Patanjali Foods Limited, the Andhra Pradesh High Court held that claim arising out of Andhra Pradesh Value Added Tax Act or Goods and Service Tax Act extinguished on approval of resolution plan

A division bench of Justice R Raghunandan Rao and Justice Harinath.N held that the liability of the petitioner, arising out of the AP VAT Act or the GST Act stands extinguished to the extent of its liability up to 4th September, 2019. It was observed that the contention of Government Pleader for Commercial Taxes that the order of NCLT is not binding on the State of Andhra Pradesh in view of Section 88 of the GST Act would have to be negatived in as much as Section 238 of the Insolvency and Bankruptcy Code provides for a non-obstante clause overriding all other laws.

Recovery impermissible for Refunded Cess merely on Overruling of Refund Order by SC: Sikkim HC warns of Rs. 20K Cost on Central GST Commissioner Commissioner of Central Goods and Services Tax and Central Excise vs Alkem Laboratories Ltd CITATION: 2024 TAXSCAN (HC) 2175

The Sikkim High Court recently held that cess priorly refunded cannot be recovered in light of change in law owing to an overruling decision passed by the Supreme Court while warning the Central Goods and Services Tax Commissioner (CGST) of cost of Rs.20,000/- for initiating baseless matters before the Court.

The High Court held that the Excise Officer had accurately passed the Order laying down the then-existent law in light of the Apex Court’s decision in SRD Nutrients and that any subsequent change in the law would not permit the Excise Officer to invoke revisionary powers to reopen a closed matter.

CA’s Office on Fire: Bombay HC Condones 2-Day Delay in Income Tax Return Filing M/s. Neumec Builders Pvt. Ltd. vs The Central Board of Direct Taxes CITATION: 2024 TAXSCAN (HC) 2176

The High Court of Judicature at Bombay recently allowed a Petition seeking a delay condonation of 2 days in filing Income Tax Returns on account of bonafide reasons, including a fire at the office of the concerned Chartered Accountant (CA).

The Bombay High Court Bench constituted by Justice G.S. Kulkarni and Justice Firdosh P. Pooniwalla observed the contentions raised by the Petitioner in light of the Bombay High Court’s decision in Jyotsna M. Mehta v/s. Principal Commissioner of Income Tax (2024) that, the two-delay may be condoned by the Court upon certainty that the cause is wholly bonafide and aligns with principles that are paramount and jurisprudentially accepted.

No Power to Seize Currency under GST Act, reaffirms Supreme Court COMMISSIONER OF CGST vs DEEPAK KHANDELWAL CITATION:   2024 TAXSCAN (SC) 276

In a significant legal development, the Supreme Court has dismissed the Special Leave Petition

( SLP ) filed by the department regarding the authority of the proper officer to seize currency under Section 67(2) of the Central Goods and Services Tax ( CGST ) Act, 2017.

Following this ruling, the department filed an SLP with the Supreme Court, seeking to overturn the High Court’s decision. However, the Supreme Court concluded that there was no valid basis for interference with the lower court’s judgment, stating, “No case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India.”

This ruling clarifies the limitation on powers of the proper officer when it comes to search and seizure under the Central Goods and Services Tax Act, 2017.

“You are Treating the Judicial Staff as if they are Your Subordinates”: SC rebukes Finance Ministry for Asking DRTs to Collect Data SUPERWHIZZ PROFESSIONALS PRIVATE LIMITED vs UNION OF INDIA & ORS CITATION: 2024 TAXSCAN (SC) 277

In a recent hearing of Superwhizz Professionals Private Limited, the Supreme Court expressed strong disapproval of the Finance Ministry’s directive to collect data by the Debts Recovery Tribunals ( DRT ).

During the hearing on 21st October 2024, Justice Oka noted that the court’s involvement was important because, without it, the problematic practices might have continued without any control.

The matter was listed on 22nd November 2024 tentatively.

Parliament does not have Legislative Competence to Enact a Law taking control of Intoxicating Liquor Industry: Supreme Court State of U.P. & Ors vs Lalta Prasad Vaish and sons CITATION: 2024 TAXSCAN (SC) 278

The Supreme Court, on Wednesday, ruled that ‘industrial alcohol’ falls within the scope of ‘intoxicating liquor’ as defined under Entry 8 of List II (State List) of the Constitution, thus affirming the States’ authority to regulate it in the case State of Uttar Pradesh and Ors. v. Lalta Prasad Vaish.

While acknowledging potential overlaps between the two entries, the Court stressed the need for a broad interpretation of legislative lists to avoid redundancy, ultimately holding that intoxicating liquor under Entry 8 includes all alcohols, not just those for consumption.

The ruling overturned the 1990 judgment in Synthetics & Chemicals Ltd. v. State of Uttar Pradesh, which had restricted ‘intoxicating liquor’ to potable alcohol, thereby allowing States to tax industrial alcohol. The Court stated that the term “intoxicating liquor” encompasses any alcohol that could pose a threat to public health

The decision also revisited the 2007 State of UP v. Lalta Prasad Vaish judgment, which had referred the issue to a larger bench, leading to this landmark ruling. During hearings, the States argued that regulating industrial alcohol is vital in the post-GST regime, with implications for public health monitoring.

ED Officer accused of Bribery allowed to Leave Tamil Nadu to Meet Relatives by Supreme Court DIRECTORATE OF ENFORCEMENT vs THE STATE OF TAMIL NADU CITATION: 2024 TAXSCAN (SC) 279

In a recent ruling, the Supreme Court of India permitted an Enforcement Directorate ( ED ) officer accused of bribery to temporarily leave Tamil Nadu and travel to Madhya Pradesh to meet his relatives.

The Supreme Court Bench of “Having heard learned counsel for the applicant/petitioner as well as learned senior counsel for the State, the order dated 20.03.2024 is modified/clarified to the extent that the petitioner is permitted to visit the State of Madhya Pradesh to meet his family members/relatives upto 09.11.2024. However, if there is any date fixed by the Trial Court before 09.11.2024, the petitioner shall remain present before the Trial Court on the date fixed.”

The matter will be heard next by the Supreme Court on November 27, 2024​.

Service Tax Not Separately Payable on Interchange Fee as Tax has been paid on Merchant Discount Rate: Supreme Court rules in Citibank Case COMMISSIONER OF GST AND CENTRAL EXCISE vs M/S CITIBANK N.A. CITATION: 2024 TAXSCAN (SC) 280

The Supreme Court, in the matter of Citibank NA, clarified that service tax is not separately payable on the interchange fee when tax has already been paid on the Merchant Discount Rate ( MDR ).

The bench ruled in favor of Citibank, affirming that service tax already paid on the full MDR suffices, dismissing the Revenue’s contentions, and disposing the matter for pending appeals and applications.

CBDT Circular on Monetary Limits in Filing Appeal/SLP Not Applicable on International Tax Appeal Involving DTAA: Punjab & Haryana HC COMMISSIONER OF INCOME TAX vs PERFETTI VAN MELLE ICT B.V CITATION: 2024 TAXSCAN (HC) 2178

In a recent case, the Punjab and Haryana High Court has held that the circular issued by the Central Board Of Direct Taxes (CBDT) prescribing monetary limits to file appeal/SLP is not applicable on international tax appeal involving the provisions of Double Taxation Avoidance Treaty (DTAA)

While dismissing the department's appeal , the court held that the case does not falling within exception to clause l(ii) of para 3.1 which is only with respect to litigation arising out of disputes related to TDS/TCS matters in both domestic and international taxation charges, wherein disputes relating to appeals of international taxation charges with the applicability of provisions of Double Taxation Avoidance Agreement would fall. Urvashi Dhugga appeared for the appellant and Deepak Chopra appeared for the respondent.

Rectification Order is invalid if it Fails to provide Reasons in exercise of Rectification Power: Kerala HC KRISHNA AGENCIES vs THE SUPERINTENDENT CITATION: 2024 TAXSCAN (HC) 2179

In a significant case, the Kerala High Court stated that rectification order is not sustainable if it does not provide any reason justifying the exercise of power of rectification. It was observed that the personal hearing notice does not indicate that any reason justifying the exercise of power of rectification was pointed out to the assessee.

The bench quashed both the notice and the rectification order. Aji V. Dev, H. Abdul Lathief and Alan Priyadarshi Dev appeared for the petitioner. The respondent was represented by P.R. Sreejith.

Saving of Non-Bonded Cargo from Damage by Storage in Bonded Tanks: Bombay HC upholds Restoration of Customs Warehousing Permission Commissioner of Customs vs Ganesh Benzoplast Limited CITATION: 2024 TAXSCAN (HC) 2180

A Division Bench of the Bombay High Court upheld the restoration of customs warehousing permission to Ganesh Benzoplast Limited.

In dismissing the customs department’s appeal, the Bombay High Court underscored that there was no substantial question of law arising in the case, and it upheld CESTAT’s order that relieved Ganesh Benzoplast of penalties and allowed the restoration of its customs warehousing permissions.

This ruling highlights the court’s acknowledgment of practical business necessities and the importance of adhering to safety procedures in warehousing operations. It also sets a precedent for handling similar disputes concerning bonded warehouses and customs permissions.

Notice issued u/s 148A(B) of Income Tax Act against dissolved Firm Is Invalid: Gujarat HCNATHALAL HEMABHAI PATEL vs INCOME TAX OFFICER CITATION: 2024 TAXSCAN (HC) 2181

In a recent case, the Gujarat High Court held that notice issued under section 148A(b) of the Income Tax Act, 19861 against dissolved firms is not valid. Section 148A(b) of the Income Tax Act, 1961, provides that the assessing officer must issue a notice to the taxpayer, providing information and adverse material suggesting that income has escaped assessment.

The bench viewed that the issuance of notice in name of the dissolved firm, the impugned notice and the order would not be tenable more particularly, when the assessee has in reply to the notice issued under Section 148A(b) of the Act. The court allowed the petition and quashed the notice and order.

GST DRC-01 issued for Wrong Assessment Year: Madras HC quashes Assessment Order Tvl.Suresh Sethu vs The Assistant Commissioner CITATION: 2024 TAXSCAN (HC) 2182

Recently, the Madras High Court quashed an assessment order passed under the Tamil Nadu Goods and Services Tax ( TNGST ) Act, 2017, as GST DRC – 01 notice was issued for the wrong assessment year.

The Court directed the petitioner to file a consolidated reply within 30 days, after which the respondent must pass a fresh order on merits within three months. It was also clarified that if the petitioner fails to submit a reply within the stipulated time, the authorities are free to proceed with the case as if the writ petition had been dismissed.

GST Recovery and Hearing Notices ignored: Madras HC orders 25% Pre-Deposit from Cash Ledger for Fresh Consideration Tv.Sornam Medicals vs The Commissioner of Commercial Taxes CITATION: 2024 TAXSCAN (HC) 2183

In a matter of ignorance of the Goods and Services Tax ( GST ) recovery notices and the hearing notices, the Madras High Court has ordered the pre-deposit of 25% from the Electronic Cash Ledger ( ECL ) for the fresh consideration.

The court also made it clear that failure to deposit the amount or submit the reply would result in the respondent proceeding as if the writ petition had been dismissed. The petitioner was assured a personal hearing before the final order was issued.

GST ITC on Leasing Building for Schools: Madhya Pradesh HC Directs to file Appeal relying Safari Retreats Case CHIRANTAN ENTERPRISES LLP vs COMMISSIONER CGST AND CENTRAL EXCISE CITATION: 2024 TAXSCAN (HC) 2184

With regards to an issue of availing Input Tax Credit ( ITC ) under Goods and Services Tax ( GST ) on leasing the building for the schools, the Madhya Pradesh High Court directed file appeal before the appellate authority relying on law laid down by Supreme Court in the Safari Retreats Case.

Justices Vivek Rusia and Binod Kumar Dwivedi noted that in the Safari Retreats case, the Supreme Court had held that if a building, such as a mall or other commercial premises, qualifies as a “plant,” then ITC could be claimed for the goods and services used in its construction. The Court emphasised that each case requires a factual determination of whether the property meets the functionality test of being considered a plant.

No GST proceedings u/s 130 shall be initiated for Excess Stock Detected during GST Inspection, Rules Allahabad HC M/S Kanha Detergent Pvt Ltd vs Additional Commissioner Grade-2 And Another CITATION: 2024 TAXSCAN (HC) 2185

Recently, the Allahabad High Court ruled that the proceedings under Section 130 of the Goods and Services Tax ( GST ) Act cannot be initiated for the excess stock detected during the inspection under Section 67 of Central GST Act.

Consequently, the High Court quashed both the orders issued by the first appellate authority and the adjudicating officer, ruling that excess stock findings during the inspection do not automatically lead to the application of Section 130 proceedings

AO is “Prescribed Income Tax Authority” to issue Notices u/s 143(2) and 142(1): Delhi HC AMBIENCE TOWERS PRIVATE LIMITED vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION: 2024 TAXSCAN (HC) 2186

The Delhi High Court recently dismissed a petition challenging Notices issued by the Assistant Commissioner of Income Tax under Sections 143(2) and 142(1) of the Income Tax Act, 1961, affirming the stature of an Assessing Officer ( AO ) as a “Prescribed Income Tax Authority” authorized to issue the above-mentioned Notices under the Act and Rules therein.

The two-member Bench of the Delhi High Court constituted by Justice Vibhu Bakhru and Justice Swarana Kanta Sharma observed the lack of merit in the Petitioner’s contention rebuking the jurisdiction exercisable by the Respondent.

Rule 12E of Income Tax Rules does not confine CBDT’s powers to only authorize NFAC Officers for purposes u/s 142(1): Delhi HC NGR CONSULTANTS PVT LTD. vs ASSISTANT COMMISSIONER OF INCOME TAX & ANR. CITATION: 2024 TAXSCAN (HC) 2187

The Delhi High Court recently dismissed a Petition citing that Rule 12E of the Income Tax Rules, 1962 does not mandate the Central Board of Direct Taxes ( CBDT ) to appoint only Officers from the National Faceless Assessment Centre ( NFAC ) as the ‘Prescribed Income Tax Authority’ for the purposes of Inquiry Before Assessment under Section 142(1) of the Income Tax Act, 1961

The Delhi High Court Bench constituted by Justice Vibhu Bakhru And Justice Swarana Kanta Sharma forbade the Petitioner’s argument that the power to issue Notice under Section 143(2) of the Income Tax Act, 1961 lies solely with the authorized Income Tax Officers of the NFAC besides the Assessing Officer, all while asserting that such argument does not sit right with Section 143(2) of the Act or Rule 12E of the allied Rules.

In dismissal, the Court reaffirmed that once jurisdiction of an AO to issue notice under Section 143(2) of the Income Tax Act, 1961 has been accepted, then the AO cannot be faulted for undertaking proceedings to complete the Assessment.

Failure of Dept to intimate Transfer of Case to Call Book and Delayed Adjudication: Bombay HC quashes Customs SCN The Great Eastern Shipping Company Ltd. vs Union of India Through the Secretary Department of Revenue CITATION: 2024 TAXSCAN (HC) 2188

In a landmark ruling, the Bombay High Court has quashed a show cause notice ( SCN ) issued by the Customs Department against the assessee citing a significant delay in adjudicating the case.

The Bombay High Court ruled in favor of the assessee, The Great Eastern Shipping Company, quashing the impugned show cause notice and reaffirming the need for timely adjudication of cases to uphold justice and procedural fairness in Customs matters.

Mere Mentioning of Wrong VAT Provision does not invalidate Order if Authority has Proper Jurisdiction: Madras HC Gingee Agricultural Producers Co-operative Marketing Society vs e Appellate Deputy Commissioner CITATION: 2024 TAXSCAN (HC) 2189

In a recent ruling, the Madras High Court ruled that mere mentioning of a wrong value-added tax ( VAT ) Provision or non-mentioning of a provision does not invalidate an order if the court or statutory authority had the requisite jurisdiction to issue it.

A single bench led by Justice C. Saravanan observed both side’s arguments. The court stated that mere typographical or procedural errors in legal notices do not invalidate them if the correct legal intent is clear and the authorities acted within their jurisdiction. This principle was backed by the Supreme Court’s Ruling in Ram Sunder Ram vs. Union of India.

Consider Waiving Customs Duties and GST for Drugs: Delhi HC to Centre in Plea of Young Victims of Rare Diseases MASTER ARNESH SHAW vs UNION OF INDIA & ANR. CITATION: 2024 TAXSCAN (HC) 2190

The Delhi High Court has directed the Centre to consider waiving customs duties and GST on the import of medicines for rare diseases, specifically in a plea concerning young victims. The case is an important part of the ongoing discussions about the affordability and availability of treatments for conditions like Spinal Muscular Atrophy ( SMA ) and other rare diseases in India.

The Single Bench of Justice Prathiba M Singh came from the due judicial recognition that these financial burdens significantly increase the cost of life-saving treatments for patients suffering from rare diseases. Concrete steps were also directed to be taken to encourage PSUs and pharmaceutical companies to increase their contribution to CSR in rare diseases.

“Fair Tax Regime where No Assessee is Harassed is Equally Crucial”: Bombay HC imposes ₹ 20k Cost on Maharashtra VAT Dept for Natural Justice Violations Soremartec S. A,Luxembourg vs Magic Production Group SA CITATION: 2024 TAXSCAN (HC) 2191

The Bombay High Court, stressed the importance of a fair and transparent tax regime while imposing a cost of ₹20,000 on the Maharashtra VAT Department for violating the principles of natural justice.

In conclusion, the court ruled in favour of the assessee and imposed a cost of ₹20,000 on the VAT Department for its failure to adhere to due process. The ruling serves as a reminder to tax authorities of their obligation to conduct assessments in a manner that is both legally sound and procedurally fair, ensuring that taxpayers are not subjected to undue harassment.

End of the Rope: Delhi High Court grants Bail to PMLA Accused in Cattle Smuggling case after Long Incarceration SEHEGAL HOSSAIN vs DIRECTORATE OF ENFORCEMENT CITATION: 2024 TAXSCAN (HC) 2192

The Delhi High Court recently granted Bail to a person accused of smuggling cattle from India to Bangladesh after a jail term of 19 months undergone by the Accused.

The Delhi High Court observed that the trial in the predicate crimes have not yet commenced and that the co-accused of the Applicant has already been granted bail in the same matter; in light of such observation the Court granted bail to the Applicant subject to furnishing of personal bond of Rs.5,00,000/- among other travel restrictions and guidelines meted out to the accused.

AO not at Fault in completing Income Tax Assessment once Jurisdiction to Issue Notice u/s 143(2) is Accepted: Delhi HC NUTAN GEHLOT vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION: 2024 TAXSCAN (HC) 2193

Assessing Officer (AO) to complete a pending Income Tax Assessment, once the jurisdictional competence of the Officer to issue Notice under Section 143(2) of the Income Tax Act, 1961 is established.

In light of the findings, the Delhi High Court dismissed the Petition while passing obiter that once the jurisdiction of the AO to issue a notice Section 143(2) of the Act has been accepted, the AO cannot be faulted for undertaking proceedings to complete the assessment.

GST Appellate Authority must consider Grounds raised in Memorandum even while Considering Appeal Ex Parte: Patna HC Silverline vs The State of Bihar CITATION: 2024 TAXSCAN (HC) 2195

The Patna High Court ruled that the Goods and Services Tax ( GST ) appellate authority must consider the grounds raised in the memorandum even while considering the appeal ex parte.

Thus, the bench of Chief Justice K. Vinod Chandran and Justice Partha Sarthy had set aside the GST order and directed the restoration of the appeal before the Appellate Authority.

‘Gloriously Silent’ on GST Act Violations: Delhi HC quashes Registration Cancellation SCN and Order AMIR MALIK vs COMMISSIONER OF GST, DELHI CITATION: 2024 TAXSCAN (HC) 2196

The Delhi High Court in a recent judgment quashed a Show-Cause Notice and Order signaling the cancellation of Petitioner’s Goods and Services Tax ( GST ) registration citing the inadequacy of the Show-Cause Notice and Order in rightly referencing the specific violations under the GST Act, 2017 that have been purported against the Petitioner.

The Division Bench of the Delhi High Court composed by Justice Yashwant Varma and Justice Ravinder Dudeja observed that neither the Show-Cause Notice or the GST cancellation Order therein clearly assigned or recorded any substantive reasoning warranting the cancellation of the Petitioner’s GST registration.

In light of the findings made, the Delhi High Court proceeded to allow the writ petition and quashed both, the impugned Show-Cause Notice and subsequent Order of GST Registration Cancellation therein. However, the Delhi High Court reaffirmed that the instant Order has been passed by the High Court without laying prejudice to the right of the respondents to contest the instant matter in accordance with the limits permissible by the law.

Wrongful Mentioning of Duty Drawback Scheme, instead of AA Scheme: Kerala HC directs Company to Drawback Amount & Obtain Receipt from Customs Dept. SHINE FLEXIBLE PRINTS AND PACKS PRIVATE LIMITED vs COMMISSIONER OF CUSTOMS CITATION: 2024 TAXSCAN (HC) 2197

In a recent case, the Kerala High Court has directed the company to drawback the amount along with interest and obtain receipt from the customs department. The appellant has wrongfully mentioned the shipping bills in the Duty Drawback Scheme, instead of the Advance Authorisation Scheme.

The two member bench of Justice A.K. Jayasankaran Nambiar and Justice Syam Kumar V.M. has held that the sole mistake committed by the appellant was that, in the shipping bills he had mentioned the Duty Drawback Scheme, instead of the Advance Authorisation Scheme, as the Scheme under which the exports were effected.

Rajasthan HC Stays Order u/s 86A Blocking ITC without Giving any Opportunity of Hearing Lipika Tech Pvt vs The Deputy Commissioner (State Tax) CITATION: 2024 TAXSCAN (HC) 2198

In a recent case, the Rajasthan High Court stayed the order passed by Jurisdictional Range officer under section 86 A of the Central Goods and Service Tax (CGST) Act, 2017 of Blocking Input Tax Credit (ITC)without giving any opportunity of hearing.

The bench comprising Chief Justice Mr. Manindra Mohan Shrivastava and Justice Ganesh Ram Meena stayed the order whereby the respondents have blocked the ITC of Rs.6,62,776/- as uploaded in in the name of M/s Lipika Tech Private Limited for the period 01.08.2024 to 31.08.2024.

Asst Commissioner ignored Direction in Appellate Order: P&H HC directs Commissioner to Take Strict Action against Insubordination In CGST Hierarchy M/s Proxima Steel Forge Pvt. Ltd vs Union of India and others CITATION: 2024 TAXSCAN (HC) 2199

In a significant case, the Punjab and Haryana High Court directed to take strict action against insubordination in the Central Goods and Service Tax (CGST) hierarchy as the Asst Commissioner ignored the direction to hear the case on merits. It was found that the Assistant Commissioner overstepped his authority despite the Joint Commissioner’s directive to consider it on merits.

The court set aside the order passed by the Assistant Commissioner and directed the Commissioner to appoint another officer to deal with the refund application of the assessee. J.S. Bedi appeared for the petitioner and Ajay Kalra appeared for the respondent.

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