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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 the recent ruling, the High Court of Delhi, set aside the Final Assessment Order passed by the Assessing Officer (AO) for AY 2022-23, as the assessee’s objections were still pending before the Dispute Resolution Panel (DRP).
The Division Bench comprising Acting Chief Justice and Tushar Rao Gedela (Justice) after hearing the arguments, concluded that there was no need to examine the issue further, as it was clear that if an objection was pending with the DRP, the Assessment Order passed without considering it had to be set aside. As a result, the petition was allowed, and the impugned Final Assessment Order dated 20.05.2024 passed by the AO for AY 2022-23 was set aside.
The Delhi High Court recently granted relief to the arraigned director of a company accused of fraudulently availing Input Tax Credit ( ITC ), observing that the Respondent Goods and Services Tax (GST) Department had committed gross errors in following the procedural requirements to effectuate a valid arrest.
Additionally, the High Court clarified that the present decision is a judicial review of the arrest and not an opinion of the merits of the GST Authorities case against the Petitioner.
The Kerala High Court has observed that the Prevention of Money Laundering Act 2002 (PMLA) does not mandate attaching a property unconnected with the proceeds of crime. The bench set aside the order of provisional attachment of properties purchased by the petitioners in 1997, 1999, and 1987, which was much prior to the commission of the crime in 2014.
A single bench of Justice Bechu Kurian Thomas set aside the order of provisional attachment of properties purchased by the petitioners in 1997, 1999 and 1987 which is much prior to the commission of the crime in 2014. The Court also noted that the PMLA came into existence only in 2002.
In a recent case, the Madras High Court held that the Enforcement Directorate is not required to establish where the money eventually went as the concealment of proceeds of crime itself is an offence under the Prevention of Money Laundering Act ( PMLA ), 2002.
The accused after engineering a disappearing act cannot be heard to contend that they must be exonerated because proceeds of crime has not been identified. If a rat has escaped into a hole, one can only point to the hole. The rat might even have exited through another end. The defence cannot argue that unless the rat is found, there cannot be a prosecution.”
The Allahabad High Court on Tuesday denied based wil to the accused had committed an offence booked under the Prevention of Money Laundering Act (PMLA),2016 on the allegations that he duped people financially by flaunting on social media morphed images with ministers and impersonating himself as person close to Prime Minister Narendra Modi.
The bench of Justice Samit Gopal noted that the alleged recovery of huge amount of money and other related documents and articles corroborate his deeds and that there is nothing credible to overcome the twin conditions of Section 45 of PMLA, 2002. The court denied bail by stressing that the recovery of the huge amount of money and other related documents and articles corroborated his deeds.
The Bombay High Court recently clarified that the system-generated provisional acknowledgement receipt received on the Goods and Services Tax ( GST ) Portal, is adequate proof of payment of the mandatory pre-deposit equal to 10% of the disputed amount in terms of Section 107(6) of the Central Goods and Services Tax ( CGST ) Act, 2017.
Laying reference to the decision passed by other Benches of the Delhi High Court in cases such as Century Textiles & Industries Ltd. v. Union of India & Ors. (2024) and Heena Metals v. Union of India & Ors. (2024), the Delhi High Court proceeded to quash the impugned order and remanded the same to the Respondent for de novo consideration and allied order.
In a recent ruling,the High Court of Delhi upheld the settlement of a disputed derivatives trading loss under the Direct Tax Vivad Se Vishwas ( DTVSV ) Act,2020, limiting the settlement to the specific dispute over the loss.
The court further emphasized that the assessee’s declaration only concerned the appeal regarding the derivatives loss and not other disputes, even though the Revenue had filed a separate appeal on a different issue. As a result, the court directed the respondents to issue a modified certificate under the DTVSV Act in line with the petitioner’s declaration. In short,the petition was allowed in favour of the assessee.
Тhe Delhi Нigh Cоurt, in а recent ruling, dismissed а рetitiоn filеd by Mаjestic Hаndicrаft Privаte Ltd chаllenging reаssessment nоtice аnd оrder аs pеr Sectiоns 147 аnd 148 оf thе Income Tаx Aсt 1961. Тhe сourt rulеd thаt thеre wаs no reаsоn tо intеrfеrе with thе first proсess оf determining whethеr revenue hаd escаped аssessment.
Тhe сourt furthеr stаted thаt thе petitiоner’s intеrfеrеnce аt thаt stаge wаs unwаrrаnted, аs thе AО hаd nоt exceeded аny оf thе circumstаnces рrovided by thе stаtute. It wаs unlikely thаt сourts would intervene unlеss thе AО’s аctiоns were аrbitrаry. Аs а rеsult, thе рetitiоn wаs dismissed.
The High Court of Delhi in a recent ruling,set aside the Transfer Pricing Officer(TPO)’s 28.01.2021 order disallowing the depreciation claim on the ‘FABINDIA’ trademark for Assessment Year(AY) 2011-12 and directed the Assessing Officer(AO) to reassess the claim based on the original acquisition value, in line with Income Tax Appellate Tribunal(ITAT)’s earlier findings.
However, the court declined to issue specific directions for computing depreciation, leaving the matter to the AO to decide in line with the ITAT’s earlier findings. In short,the petition was disposed.
In a recent case, the High Court of Kerala remanded the matter as it was found that the appellate authority failed to consider the issue of the tax effect on account of the discount granted under the Central Goods and Service Tax (CGST) Act, 2017.
The court quashed the orders and restored them to the file of the First Appellate Authority, who shall pass fresh orders, after affording an opportunity of hearing to the petitioners. It was held that orders are set aside only to the extent that they consider the issue related to the discount received by the petitioners and on no other issues.
In the recent ruling,the High Court of Delhi granted relief to Huawei Telecommunications India, ruling that the assessment for the assessment year(AY) 2013-14 was time-barred due to inaction by the Revenue authorities after the Income Tax Appellate Tribunal(ITAT)’s remand.
The bench concluded that since the stipulated time for taking action under Section 153 had lapsed, any further proceedings by the AO or TPO are now barred. Accordingly, the assessee’s return must be considered accepted. In short,the petition filed by the assessee is allowed.
The Delhi High Court recently ruled in a petition filed by Sanjay Singhal that notices issued beyond statutory limits are not valid unless the delay is substantiated with proper reasons. The petitioner, Sanjay Singhal, filed his return of income for the assessment year(AY) 2015-16 on 20.08.2015, with a total income of ₹7 lakhs. Later, the tax department conducted a search and seizure operation on the petitioner’s account as part of the Sharp Group of cases investigation.
The two-member bench, Justice Vibhu Bakhru and Justice Swarana Kanta Sharma, asserted the importance of regulating the reassessment avenues available to serve equitable justice. The Court held that the period within which a notice can be issued under Section 148 of the Act, as stipulated under Section 149(1), is unmerited and unsuitable in the facts of the case. As a result, the notices issued under Section 148 of the Act for the 2015-16 AY are set aside.
The Bombay High Court recently illuminated the ability of the Revenue to invoke a larger period of limitation in matters involving possible suppression or fraud while adjudicating a matter involving disputed Central Value Added Tax ( CENVAT ).
The two-judge Bench of Justices M. S. Sonak and Jitendra Jain observed that the Tribunal had rightly upheld the order for recovery of Rs.5,63,66,047/- after unearthing the modus operandi of the Appellant. Observing that the Appellant failed to argue against the invocation of the larger limitation period for recovery and penalties due to suppression or fraud, the High Court upheld such invocation because it was justified, unchallenged, and confirmed by the Tribunal.
In a recent case, the Kerala High Court stayed the recovery proceedings as it was found that the second appeal challenging the order under section 74 of the Central Goods and Service Tax ( CGST ) Act, 2017 failed due to the non-constitution of the Goods and Service Tax Appellate Tribunal ( GSTAT ).
It was held that the petitioner shall file the statutory appeal before the Appellate Tribunal within a period of one month from the date on which the Appellate Tribunal is constituted.
The Madras High Court held that the accused cannot request a simultaneous or joint trial even if both are pending before the same court since the trial under the Prevention of Money Laundering Act (PMLA), 2002 is separate and different from the trial of the predicate offence.
When the procedures contemplated under the PMLA for the trial are distinct and different, the question of conducting simultaneous or joint trial would not arise at all. That apart, the accused in a PMLA offence cannot be allowed to make any attempt to stall the trial on economic offences, since the procedures contemplated are independent. The court refused to grant relief.
In a significant development, the Bombay High Court has directed the Central Board of Direct Taxes ( CBDT ) to extend the deadline for filing Income Tax Returns ( ITRs ) to January 15, 2025, following a Public Interest Litigation ( PIL ) filed by The Chamber of Tax Consultants.
The matter is scheduled for final disposal on January 9, 2025, where the court will examine the broader implications of the software modifications and their impact on taxpayers’ rights. The Bombay High Court, in the interim, has directed the CBDT to extend the ITR deadline to January 15, 2025, citing procedural anomalies in the Section 87A rebate. Case to be finalized on January 9, 2025.
The Madurai bench of Madras High court has ruled that the Goods and Services Tax ( GST ) invoices under Rs. 1 lakh are exempted from E-way bill generation. The court has directed the petitioner to submit the invoices.
The respondent was directed to provide the petitioner with an opportunity for a hearing and issue a final order within two weeks thereafter on receipt of the required documents. With these directions, the Court allowed the writ petition and concluded the matter without imposing any costs.
In a recent ruling, the Madras High Court has ordered for hearing on 10% pre-deposit in a writ petition where the main dispute was the under declaration of ineligible Input Tax Credit ( ITC ) under the Goods and Services Tax ( GST ) by a registered GST dealer for the financial year 2019-20.
The court also directed that the impugned order would be treated as a show cause notice, allowing the petitioner to submit objections along with supporting documents. Along with all these directions, the GST authorities were directed to consider the objections and issue a fresh order after granting a reasonable hearing.
The Delhi High Court, in a recent decision, remanded a case to the Assessing Officer ( AO ) for a fresh assessment of a case relating to held-to-maturity ( HTM ) securities. The petitioner, Punjab National Bank, challenged an order made by the Income Tax Appellate Tribunal ( ITAT ), in which the ITAT classified profits from the sale of HTM securities as business income instead of capital gains and disallowed a business loss of ₹10Cr on purchase of such securities.
The two-judge bench, consisting of Justice Vibhu Bakhru and Justice Swarana Kanta Sharma, remanded the matter to the AO for revaluation. The court directed the AO to properly investigate the petitioner’s claim and review all the relevant materials provided, and as a result, the appeal was disposed of.
The Delhi High Court recently, in the case of Nokia Solutions and Networks India Pvt Ltd, upheld the CBDT guidelines declaring the actions of the Revenue arbitrary. The petitioner, Nokia Solutions and Networks Pvt Ltd manufactures and trades telecommunication network equipment and network design.
The two-judge bench consisting of Justice Vibhu Bakhru and Justice Swarana Kanta Sharma directed the revenue to refund the amount adjusted along with the interest that is applicable on such sum for the 2008-09 and 2017-18 AY within eight weeks from the date of the order. As a result, the court allowed the petition.
In the recent ruling, the High Court of Calcutta quashed the rejection of the petitioner’s candidature in Indian Oil Corporation Ltd.’s selection process for retail outlet dealerships due to alleged unpaid municipal taxes, finding the appellant’s disqualification lacked sufficient evidence and clear criteria, thus making the process unfair.
After reviewing the case, the court found the appellant’s reasons for disqualification lacked proper evidence and clear criteria, making the process seem unfair. It also stressed that the selection process had to be transparent and based on solid grounds. As a result, the bench dismissed the appeals and upheld the Single Judge’s decision to reconsider the petitioner’s candidature.
In the allegations of difference in Input Tax Credit ( ITC ) under Integrated Goods and Services Tax ( IGST ) of Rs.10.2L in GSTR 3B and 2A, the Madras HC has granted a final chance to explain the issues for the assessment year 2018-19.
The petitioner was then directed to file objections to the assessment within four weeks, supported by relevant documents or evidence to substantiate their claims. The GST department-respondent was also directed to adjudicate the matter after hearing.
In a recent ruling, the High Court of Madras held that profits from the sale of jaggery are taxable and that sugarcane and jaggery are different commodities and rejected the agricultural claim made by the assessee. It ruled that profit from the sale of jaggery falls beyond ken of agricultural income.
The Madras High Court, comprising Justice Anita Sumanath and Justice G Arul Murugan, after relying on several judgments such as [CIT v H.G.Date (1971) 82 ITR 71, Commissioner of Income-Tax v Kirloskar Bros. Ltd (181 ITR 523), held that ‘the essential characteristic of sugarcane in its original form, stands converted after processing, into jaggery and both the commodities are different and distinct from one another.‘
In a mismatch between the GST Returns 3B and the GSTR 9C, the Madras High Court has granted a last opportunity to explain the discrepancies to the petitioner on 25% pre-deposit of the disputed tax.
The Court also directed the immediate lifting of the bank attachment upon compliance with the pre-deposit condition. However, it was clarified that the non-compliance of the directions within the stipulated time will result in the restoration of the original assessment order.
In a dispute of taxable supplier’s discrepancy in the Goods and Services Tax Returns ( GSTR ) – 3B and the form 26AS under Section 203AA of Income Tax Act, 1961, the Madras High Court has granted final hearing on 25% pre-deposit.
The GST department was required to consider these objections and pass orders in accordance with the law after providing a reasonable opportunity for hearing.
In the recent ruling, the High Court of Punjab and Haryana, upheld the disciplinary action taken against the Judicial Officer, petitioner in the Haryana Civil Services ( Judicial Branch ) Service, for violating conduct rules in property transactions.
In its judgment, the High Court stated that judicial review under Articles 226/227 of the Constitution was not intended to reappreciate the evidence, but only to ensure that the inquiry was fair and in accordance with the law. After reviewing the evidence and the findings of the inquiry officer, the Court upheld the conclusion that the assessee had engaged in misconduct, thus affirming the disciplinary action taken against him.
The Madras High Court has ruled that the Goods and Services Tax ( GST ) officers must consider the replies filed by assessees, even if submitted after multiple hearings, while adjudicating tax disputes.
The petitioner was granted 15 days to file a fresh reply, and the GST department was directed to provide a reasonable opportunity, including a personal hearing, before issuing a revised order within three months. The writ petition was disposed of accordingly.
The Madras High Court has conditionally set aside assessment and penalty orders issued against a petitioner for the assessment year 2015-16, citing health issues as a valid reason for failing to respond to income tax notices. The court admitted the pathology reports as evidence for not Responding to Income Tax Notice.
The petitioner was also allowed to file a reply to the show-cause notice, with the assessing officer directed to provide a personal hearing via video conferencing and issue a fresh order within four months.
The Patna High Court has dismissed a writ petition challenging the cancellation of GST registration, citing that legal remedies must be pursued within the stipulated time limit.
Reiterating the principle that “the law favours the diligent and not the indolent,” the Court concluded that the petitioner’s failure to act within the prescribed timelines precluded them from seeking relief. Consequently, the writ petition was dismissed.
In a recent judgement, the Delhi High Court clarified transfer pricing standards under Section 92 of the Income Tax Act to showcase the importance of comparability in significant transactions. In the present case, the assessee, Fluor Daniel India Pvt Ltd, provides engineering and design services to its clients.
The two-judge bench comprising Justice Vibhu Bakhru and Justice Swarana Kanta Sharma dismissed the revenue’s appeal, stating that transfer pricing analysis must be in line with comparability principles to ensure fair taxation.
In a recent judgment, the Delhi High Court struck down reassessment proceedings under Section 148 of the Income Tax Act, 1961 stating that there were no valid grounds and procedural lapses.
The two-judge bench of the Delhi High Court, consisting of Justice Yashwant Varma and Justice Dharmesh Sharma, held that the reassessment powers could not be used to rectify oversights from earlier reviews. Any fresh notice must be based on solid materials and records, and the reasons must comply with all procedural safeguards provided in the Income Tax Act.
In a recent case, the High Court of Kerala viewed that failure to grant an opportunity for cross examination upon imposing penalty under the Central Goods & Services Tax Act, 2017 (‘CGST Act’) violated the principles of natural justice and set aside the said order.
A single bench of Justice Bechu Kurian Thomas believed that the norms of natural justice have been broken by not giving the petitioner a chance for cross-examination and by using people’s remarks to impose punishment. The contested ruling of May 29, 2024, is overturned, and the first respondent is instructed to reexamine the case after giving the individuals whose statements were obtained during the investigation a chance to be cross-examined.
The Madurai bench of Madras High Court has directed the Commissioner of Commercial Taxes ( CCT ) to consider a representation by an Assistant in the Commercial Taxes Department seeking promotion to the post of Deputy Commercial Taxes Officer.
The case was filed against the The Principal Secretary / Commissioner of Commercial Taxes, The Joint Commissioner, The Deputy Commissioner, The Assistant Commissioner of Commercial Taxes (State Taxes), The Secretary of Tamil Nadu Public Service Commission, The Registrar of The Gandhigram Rural Institute, Deemed University Gandhigram and The Personal Assistant To Principal Secretary to Government of Higher Education Department.
The Calcutta High Court dismissed the petition of Britannia Industries challenging the show cause notice ( SCN ) alleging fraud and misrepresentation under the Central Goods and Service Tax ( CGST )Act, 2017. The court advised to follow the statutory remedies provided under the CGST Act, 2017 including submitting a detailed response to the SCN.
The adjudicating authority is directed to independently and impartially decide the matter based on the evidence and submissions presented before it. While dismisisng the appeal, the petitioner is advised to exhaust the statutory remedies provided under the CGST Act, 2017 including submitting a detailed response to the SCN.
The Kerala High Court, in a recent ruling, held that orders issued under Section 73 of the CGST/SGST Acts without the digital or manual signature of the officer passing the order are invalid.
Since it is possible that in several of the cases, there may have been a change of officer, who passed the original order, the bench held that, fresh orders shall be passed by the competent officer presently in office, after affording a fresh opportunity of hearing to the petitioners in these cases.
In a recent judgement, the Delhi High Court struck down the reassessment notices issued to the petitioner by the assistant commissioner of income tax under Section 148 of the Income Tax Act, x, stating that they violated the amended timelines set by the Finance Act 2021. The court reinforced the stricter time limits imposed by the new law to protect taxpayers from long scrutiny.
The two-judge bench consisting of Justice Yashwant Varma and Justice Dharmesh Sharma concluded that the notices issued to the petitioner were time-barred and lacked solid legal standing. The court also asserted that the Finance Act 2021 would override the TOLA extensions, which implies that the changes brought by the new laws were prospective and could not be applied retrospectively. As a result, the petition was allowed, and the reassessment notice under Section 148A ( d ) was quashed.
The Calcutta High Court held that when the settlement applications were filed before the date on which the Finance Act 2021 did not come into effect, it would not affect the vested right of the taxpayer for adjudicate settlement applications under Section 245(D) under the Income Tax Act, 1961.
It was clear that the appellants had submitted an application to the Settlement Commission before the Finance Act of 2021 took effect. As a result, the High Court granted the Assessee’s appeal and instructed the Interim Board to evaluate the settlement application in line with the plan that the Central Government may develop for cases that started before January 31, 2021.
The Allahabad High Court observed that there is no material to reject the argument of the assessee that the Goods and Services Tax ( GST ) order is not reflecting under “View notices and orders” Tab. It directed the issuance of a fresh notice.
The High Court quashed the impugned orders and remanded the matter, directing the Assessing Officer to issue a fresh notice in accordance with the law. The petitioner was given the opportunity to respond within two weeks, with a clear 15-day notice period for further proceedings.
The Allahabad High Court has observed that a minimal opportunity for hearing should be given before passing Goods and Services Tax ( GST ) assessment orders that impose huge civil liabilities.
It was added that granting an opportunity for a personal hearing ensures that the assessee’s stand is fully understood, facilitates a reasoned decision, and enhances the scope for a fair appellate review. Consequently, the court set aside the impugned order and directed the Assistant Commissioner to issue a fresh notice within two weeks.
In a recent ruling, the Himachal Pradesh High Court held that late fee waiver benefits under an amnesty scheme cannot be denied for GSTR 9 returns filed before the issuance of the notification granting such benefits.
The court quashed the late fee order and the show cause notice. The court remanded the matter to the concerned authority for reconsideration. The court directed the respondent to reassess the petitioner’s liability, extending the benefit of the amnesty scheme. The writ petition was allowed.
In a recent ruling, the Punjab & Haryana High Court clarified that findings of Excise duty non-compliance in a Comptroller and Auditor General ( CAG ) audit do not automatically lead to the imposition of penalty or interest under Section 11AA of the Central Excise Act, 1944 ( CEA ).
The bench stated that mere findings in an audit report cannot form the sole basis for imposing penalties or freezing bank accounts without following due process. The High Court quashed the orders demanding interest and penalties, as well as the action freezing the petitioner’s bank account, deeming them unsustainable in law. The writ petition was allowed.
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