This half-yearly 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 the First half of 2024.
The Delhi High Court has overturned an order under Section 73 of the Central Goods and Service Tax (CGST) Act, 2017, as it was issued without a prior Show Cause Notice (SCN). The petitioner contested the demand order, which was set off against blocked Input Tax Credit (ITC). Section 73 mandates the issuance of an SCN before creating a demand, which was not done in this case. Although a show cause notice proposing to cancel the GST registration was issued earlier, it was dropped upon consideration of the petitioner’s reply.
The bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja ruled the order invalid due to this procedural lapse, allowing authorities to issue a proper order after providing the petitioner with a show cause notice and an opportunity for a hearing.
In a recent verdict, the Madras High Court declared Clause 5(ii) of Circular No.6 of 2023, issued by the Central Board of Direct Taxes (CBDT), as illegitimate, arbitrary, and unconstitutional. The clause, failing to extend the deadline for Section 80G(5) to new trusts, was deemed violative of the Constitution of India. The petitioner, Jain Cement Udyog, challenged this clause, arguing it was discriminatory and violated Article 14 of the Constitution. The court agreed, stating that the differential treatment lacked a substantial distinction relevant to the circular’s objective.
Consequently, the bench declared the clause unconstitutional and directed the respondents to consider the petitioner’s applications for recognition/approval within the specified time. As a result, the Writ Petitions were allowed, with the clause being declared illegitimate, and the respondents were directed to consider the petitioner’s applications within six months.
The Delhi High Court has directed re-adjudication of a Goods and Services Tax (GST) assessment order due to flaws found by the court. The petitioner challenged an order issued under Section 73 of the Central Goods and Services Tax Act, 2017, which proposed a demand of Rs. 44,24,400.00. The court observed that the proper officer failed to consider the detailed reply of the assessee and issued a vague decision dismissing it as incomplete and unsupported.
The court concluded that the assessment was flawed and directed remittance of the matter to the Proper Officer for reassessment, instructing them to afford the petitioner a fair opportunity to present additional details and documents. The petition was disposed of accordingly.
The Allahabad High Court ruled that Indian made foreign liquor (IMFL) is not taxable under the UP Entry of Goods into Local Area Act, 2007. The case stemmed from a writ petition challenging an adjudication order for recovery of entry tax. The petitioner argued that the provisional assessment order was passed under an earlier act, which was held to be ultra vires by the High Court and is pending before the Supreme Court. The court observed that the appellate authority did not consider the absence of IMFL in the schedule of the new act, which renders the imposition of entry tax invalid. The court concluded that final assessment under the new act could not have been done for goods not included in its schedule.
The Madras High Court has granted a second chance to contest a GST demand by setting aside penalties despite the petitioner’s failure to submit essential documents like E-way bills or lorry receipts. The petitioner, a metal scrap trader, was scrutinized following a surprise inspection, leading to penalties imposed without considering crucial documents. The court noted the petitioner’s request for more time to gather evidence and remanded the case with a 5% penalty remittance condition. Justice Senthilkumar Ramamoorthy directed the petitioner to provide a detailed reply with all relevant documents within three weeks. Once fulfilled, the respondent will provide a fair opportunity for a personal hearing before issuing fresh orders within two months.
The Madras High Court, quashing the order, allowed the taxpayer to contest the demand with a 10% pre-deposit condition. The court considered the petitioner’s claim that procedural guidelines outlined by CBIC were not followed regarding discrepancies in GSTR-3B and 2A returns. The petitioner, a base metals supplier, faced assessment for the 2018-19 tax year but failed to respond due to lack of awareness. The court deemed it appropriate to grant an opportunity to contest the tax demand, provided the petitioner remits 10% of the disputed tax demand within two weeks and files a reply to the show cause notice. Upon satisfaction of these conditions, a fresh assessment order will be issued within two months.
In a recent ruling, the Madras High Court directed the Assistant Commissioner (ST) to dispose of a representation within six weeks regarding the calculation of interest for refunds under the Tamil Nadu Value Added Tax Act (TNVAT), 2006 instead of the Tamil Nadu General Sales Tax Act, 1959. The petitioner, Syngenta Crop Protection Pvt. Ltd, challenged an order and sought interest payment. The petitioner’s counsel argued that the interest rate was incorrect and the start date should be earlier. A representation was submitted to the Assistant Commissioner, pending resolution. Consequently, the court disposed of the case, directing the respondent to resolve the representation within six weeks, granting a reasonable opportunity for a personal hearing.
The Karnataka High Court ruled that filing a petition against a partnership firm or its directors under Section 95 of the Insolvency and Bankruptcy Code, 2016, before the National Company Law Tribunal (NCLT) is not permissible. The case involved a dispute over the application of Section 95 of the IBC regarding a Joint Development Agreement. The firm argued that the IBC does not cover individuals or partnership firms, while the company claimed the firm’s actions justified NCLT’s jurisdiction. Justice M Nagaprasanna emphasized that such petitions challenge the Tribunal’s jurisdiction, highlighting the contradiction in filing before a Tribunal lacking jurisdiction.
In a recent case, the Delhi High Court declined to release Arvind Kejriwal, the Chief Minister of Delhi, from arrest on a money laundering offence under Section 19 of the Prevention of Money Laundering Act, 2002 (PMLA). The court found that the arrest was made in compliance with Section 19 of the PMLA after the Directorate of Enforcement conducted a search at Kejriwal’s official residence and subsequently arrested him regarding his alleged involvement in money laundering related to the Delhi Excise Policy 2021-2022. The petition challenged the arrest on grounds of alleged violation of Section 19 of the PMLA, arguing that the summons issued by the Directorate of Enforcement lacked evidence implicating Kejriwal in money laundering. Senior Counsel Abhishek Manu Singhvi contended that the arrest adversely affected the level playing field in the upcoming Lok Sabha Elections 2024. However, the court held that the arrest was lawful and rejected the plea seeking Kejriwal’s release.
The Kerala High Court dismissed a writ petition filed by Dileep Divakaran challenging an order issued under Section 73 of the Central Goods and Service Tax (CGST/SGST) Act, 2017. The petitioner failed to file a reply to the show cause notice and did not produce supporting documents. The Court held that such a taxpayer is not entitled to approach the Court. The petitioner’s counsel included Meera V Menon, R Sreejith, K Krishna, Achyuth Menon, Parvathy Menon, and Padmanathan K V, while Smt Reshmita Ramachandran appeared for the respondent. The Court found the petition not maintainable due to the petitioner’s failure to respond within the statutory period and dismissed it.
The Madras High Court provided interim protection to Eicher Motors until the disposal of an appeal regarding the imposition of interest on Rs. 49 lakhs. The case originated from proceedings under the Central Excise Act, 1944, resulting in an order in original in 2009. The matter was appealed, and the Customs Central Excise and Service Tax Appellate Tribunal (CESTAT) issued a decision in 2023, upholding a claim of Rs. 49,00,000/- with interest. Eicher Motors filed a civil miscellaneous appeal against this order, pending due to a delay condonation application. The petitioner’s senior counsel argued against the applicability of Section 11AB of the Central Excise Act to the interest claim.
Justice Senthilkumar Ramamoorthy granted protection to the petitioner until the appeal is decided, allowing them to reply to the show cause notice while restraining the respondents from issuing orders or appropriating the interest liability until the appellate court hears the matter.
The Madras High Court invalidated a GST DRC-07 order in favor of Tokyo Zairyo (India) Private Limited. Authorities failed to consider the petitioner’s response adequately, issuing the order despite the submission. Rejection of the reply due to absence at the personal hearing was deemed unjust. Additionally, failure to provide separate financial documents for the Tamil Nadu branch led to the tax demand confirmation. The court set aside the flawed order, instructing a reconsideration with a reasonable opportunity for the petitioner, including a personal hearing, within two months.
The Kerala High Court upheld the assessment of a petitioner on a compounded basis under the Kerala General Sales Tax Act. The petitioner contested the computation of tax on the basis of over-the-counter sales permitted during the Covid lockdown. The court rejected this argument, citing precedent that once opting for a compounded basis, the assessee cannot challenge the method later. Additionally, the court emphasized that the permission for over-the-counter sales during the lockdown did not exempt the petitioner from tax liability.
The Bombay High Court invalidated a GST demand on ocean freight originating from outside India, citing a notification as ultra vires. The petitioner, M/s. Agarwal Coal Corporation Pvt. Ltd., challenged a show cause notice, arguing lack of jurisdiction due to the notification being struck down by the Gujarat High Court. The High Court upheld previous decisions, ruling that no tax is levied on ocean freight for services from non-taxable territories. It emphasised that applying an unconstitutional notification is impermissible, setting a precedent for challenging tax demands based on such notifications. Consequently, the court ruled in favour of the petitioner, allowing their petition and permitting the refund of taxes paid under protest.
The Kerala High Court upheld the inclusion of over-the-counter sales during the COVID-19 lockdown period in the turnover calculation for compounded tax under the Kerala General Sales Tax Act, 1963. Lukose K.C., proprietor of M/S KBC Green Park Hotel, appealed the tax assessment for 2022-2023 and 2023-2024. He argued against including over-the-counter sales in the turnover, contending they should not be considered for tax assessment as his hotel was only licensed for operating a bar-attached hotel. However, the court dismissed the appeal, stating that once a taxpayer opts for compounded tax assessment, they cannot contest its application.
The court reasoned that over-the-counter sales during the lockdown were permissible concessions aimed at supporting businesses, and thus, their inclusion in the turnover calculation was justified. The judgment clarified tax assessments under the Kerala General Sales Tax Act, particularly regarding turnover during extraordinary circumstances like the COVID-19 pandemic.
The Madras High Court nullified a Rs. 5 lakh pre-deposit order in a GST case due to insufficient documentation in the petitioner’s reply. Despite the petitioner’s narrow profit margin and available Input Tax Credit, a tax liability was imposed. The petitioner, unable to attend a hearing due to Cyclone Michaung, agreed to remit Rs. 5 lakh for reconsideration. Acknowledging the petitioner’s willingness to contest and provide documents, the court set aside the order, conditional on the deposit within three weeks. Upon verification, the respondent was directed to allow contesting the tax demand, including a personal hearing, and issue a fresh order within two months. No costs were incurred, and related applications were closed.
The Madras High Court overturned an Assessment Order due to lack of hearing afforded to the petitioner. Marson Industries argued they were unaware of the proceedings as notices were only uploaded on the GST portal. The petitioner had already paid the interest liabilities, as evidenced by payment receipts. Justice Senthilkumar Ramamoorthy ruled in favour of the petitioner, setting aside the orders and remanding the matter for reconsideration. The petitioner was granted 15 days to reply to the notices, and the respondent was directed to provide a fair opportunity, including a personal hearing, before issuing fresh orders within two months. No financial burden was imposed on the petitioner, and connected petitions were closed.
The Madras High Court remanded a matter for reconsideration with a 10% pre-deposit condition after observing that the GST liability was confirmed due to the petitioner’s failure to reply to the Show Cause Notice (SCN) with relevant documents. The petitioner, engaged in bullion and jewellery trading, claimed ignorance of the proceedings as notices were only uploaded on the GST portal. The petitioner’s counsel argued for a fair opportunity to contest the tax demand, highlighting excess tax payment and readiness to clarify discrepancies.
The court set aside the impugned order and remanded the matter, directing the petitioner to remit 10% of the disputed tax demand within three weeks and submit a reply to the notice within this period. Upon verification of the remittance, the respondent was instructed to provide a reasonable opportunity for a fresh order within two months. The writ petition was disposed of without costs, with connected petitions closed accordingly.
The Kerala High Court ruled that rejecting an application to amend Bills of Entry for payment of integrated goods and service tax (IGST) without interest payment is unjustified. The court highlighted the Customs Act’s provision allowing amendments based on documentary evidence existing at the time of clearance. It noted discrepancies in permitting amendments for some entities but not others. The court emphasized that denial of amendment despite IGST and interest payment is unacceptable.
The Bombay High Court ruled that the Enforcement Directorate cannot record statements at night, depriving individuals of their right to sleep. The petitioner sought relief, declaring the arrest illegal and quashing the remand order. The court noted that the petitioner was not produced before the Special Court within 24 hours of arrest as mandated by law. The Division Bench emphasized that recording statements during reasonable hours is essential, as depriving individuals of sleep violates their basic human rights. The court criticized recording the petitioner’s statement late at night and stressed that when summoned under the PMLA, the person is not an accused but could be a witness.
The Madras High Court quashed a faceless assessment order for the Assessment Year 2018-2019 due to the petitioner not being granted an opportunity of hearing during a video conference. Despite the petitioner’s specific request for a personal hearing and difficulty in availing it through video conference, the hearing was not granted because the petitioner did not click on the “Assessee Request” button or fill out the “Box of agenda of VC”.
The court observed that failure to click on the request button does not necessarily indicate that a personal hearing is not required, especially when the petitioner has expressed difficulty in making the request. Therefore, the court set aside the assessment order and directed that a new assessment order be passed after affording the petitioner a reasonable opportunity and personal hearing through video conference within twelve weeks.
The Kerala High Court directed the State GST department to address delayed petitions related to assessment orders under the Kerala General Sales Tax Act, 1963. The petitioner filed appeals and delayed condonation applications for assessment years 2018-19, 2019-20, and 2020-21. The court instructed the Joint Commissioner to review and decide on these applications, suspending recovery proceedings until a decision is made. Additionally, any existing bank account attachments due to the assessment orders were ordered to be withdrawn.
The Kerala High Court granted the petitioner, a seafood export company, an opportunity to be heard regarding allegations of non-repatriation of export proceeds. The petitioner claimed duty drawback under the Customs Act, 1962, for marine product exports from 06.01.2020 to 30.06.2022. A demand of Rs. 87,58,913/- was raised against 374 shipping bills for alleged non-repatriation. The petitioner argued that this demand was incorrect, citing certificates from Federal Bank Limited and receipts issued by the Customs Department. The court, acknowledging the petitioner’s submissions, set aside the order, granting them one last opportunity to prove repatriation before the adjudicating authority.
The Punjab and Haryana High Court ruled that the Enforcement Case Information Report (ECIR) cannot be quashed using the inherent power of the High Court. The petitioner sought to quash the ECIR, arguing it was illegal and an abuse of process, given their discharge from predicate offences. However, the court held that since the ECIR is an internal administrative document of the ED and precedes criminal proceedings, it falls outside the purview of Section 482 of the Cr.P.C. Thus, the petition to quash the ECIR under Section 482 cannot be entertained.
The Delhi High Court granted relief to FMC India, allowing a 5% IGST rate on the import of dialysis machines. The petitioner sought clarification on the applicable IGST rate, citing an office memorandum. The respondents confirmed that dialysis machines fall under the 5% tax bracket as per the relevant notification. The court disposed of the petition, binding the respondents to their statement.
The Bombay High Court ruled that it lacks authority to interfere with ITSC orders. The Revenue sought further investigation due to unclear seized material, but the court highlighted Section 245-I, making ITSC orders conclusive. While Article 226 grants jurisdiction, interference isn’t automatic. The Bench emphasized ITSC’s broad authority under Chapter XIX-A, making interference narrow, it concluded.
The Kerala High Court held that the CBDT circular on tax deposition applies when appeals under the Income Tax Act go to the Income Tax Appellate Tribunal (ITAT), not the Commissioner of Income Tax (Appeals) (CIT(A)). The circular protects the assessee from further recovery if 20% of the assessed tax is deposited until the ITAT decides on the appeal. Since the appeal in this case lies only before the ITAT, the circular applies, the Court concluded.
The Division Bench of the Patna High Court dismissed a writ petition challenging certain sections of the Constitution (101st Amendment) Act of 2016. The petitioner, a lawyer, argued that these sections violated the Constitution’s basic structure. However, the court ruled that the petitioner lacked an enforceable right recognized by law and failed to demonstrate any harm caused by the Amendment Act. The court emphasized that only aggrieved parties could intervene in legal proceedings, and since the petitioner did not show any direct involvement in GST-related activities, the petition lacked substance. The dismissal came with a caution to the petitioner against filing similar petitions in the future.
The Telangana High Court Division Bench overturned a GST Demand Order dated 30.12.2023, citing duplication of proceedings. Represented by Kailash Nath, the petitioner challenged the order, pointing to a previous Order-in-Original issued by respondent No.4, already under challenge. The court noted a lack of timely information provided to the State Authorities regarding the previous order and the non-upload of the Central Authority’s order as mandated by Circular No.4 of 2023. Relying on Section 6 of the CGST Act, the court concluded that initiating subsequent proceedings on the same facts and issues was impermissible. Consequently, the Telangana High Court quashed the impugned Demand Order dated 30.12.2023, in favour of the petitioner.
The Delhi High Court ruled that cancelling Goods and Service Tax (GST) registration retrospectively without valid reason is invalid. The petitioner challenged the retrospective cancellation of their GST registration, arguing that their compliance during the period in question warranted retention of registration. The court observed that cancelling registration retroactively should not be done merely for non-filing of returns, especially if the taxpayer was compliant otherwise. It was emphasized that registration cannot be cancelled retroactively without proper justification, as per Section 29(2) of the CGST Act. Mr. Preetam Singh represented the petitioner, while Mr. Rajeev Aggarwal, along with others, appeared for the respondent.
The Delhi High Court ruled that pending DRC-01 proceedings cannot be a basis to deny a taxpayer’s request for GST registration cancellation. Chetan Garg sought cancellation of his GST registration effective from 01.02.2024, but his initial application was rejected without considering his response to a query. Despite pending DRC-01 proceedings against Garg for multiple financial years, the court held that these were separate from the cancellation request. The court directed cancellation of Garg’s registration from 01.02.2024, with the requirement for him to fulfill necessary compliances.
The Delhi High Court held that interest received on compensation or enhanced compensation is taxable under “Income from other sources,” overturning the ITAT’s decision. The case involved Inderjit Singh Sodhi (HUF), whose interest in compensation under the Land Acquisition Act, 1894 was questioned by the AO. Despite the ITAT’s ruling equating the interest with compensation, the High Court found it unsustainable due to a legislative amendment in 2010. Upholding the AO and CIT(A)’s findings, the court set aside the ITAT’s order, affirming the taxability of the interest income.
The Delhi High Court ruled that GST registration cannot be cancelled solely due to non-filing of returns. Representing Hansraj Tiles World, the petitioner challenged the retrospective cancellation of their GST registration. The impugned order lacked sufficient reasoning and opportunity for objection. The court modified the order, now cancelling the registration from 17.10.2020, the date of the petitioner’s cancellation application.
The Madras High Court directed a denovo assessment within 60 days in a case involving denial of input tax credit for invisible loss during manufacturing. M/s. Aruna Alloy Steel Private Limited challenged assessment orders for 2008-09 to 2013-14. The court clarified that Section 19(9) of the TNVAT Act doesn’t apply to manufacturing losses covered by Section 19(2)(ii). Justice C Saravanan set aside the orders, citing precedent, and instructed the respondent to reconsider the case in light of the court’s decision within the specified timeframe. Mr. S. Karunakar represented the petitioner, and Mr. J. K. Jeyaseelan appeared for the respondent.
The Delhi High Court overturned the retrospective cancellation of GST registration for discontinuing business. The court emphasized that cancellation cannot be mechanical but based on objective criteria. Archit Khandelwal challenged the cancellation, citing closure of business. The court found the Show Cause Notice lacking in details and deemed the retrospective cancellation unjustified. It modified the order, canceling registration from 31.12.2019, when the business ceased. Mr. Rishabh Jain & Mr. Ramashish represented the petitioner, and Mr. Rajeev Aggarwal appeared for the respondent.
The Madras High Court nullified GST orders issued without a hearing, finding they were passed before the petitioner could respond to notices. Tenkasi Shencottai Taluk Agricultural Co Op Society filed writ petitions seeking to quash these orders and redo assessments after a fair hearing. The court noted that the orders were premature and remanded the case to the respondent for fresh assessment. The petitioner is instructed to submit a consolidated reply within 30 days. Mr. A. Satheesh Murugan and Mr. J.K. Jeyaselan represented the petitioner and respondent respectively.
The Madras High Court invalidated a GST demand order, subject to a 10% pre-deposit, emphasizing that a change in management doesn’t excuse non-response to a Show Cause Notice (SCN). Zulaikha Motors Private Limited challenged the orders for the 2017-2018 assessment period, alleging a breach of natural justice.
The court found that the petitioner failed to respond to both the intimation and the SCN, noting discrepancies in filings as the basis for the tax demand. It ruled that a change in management doesn’t justify non-response and mandated the petitioner to deposit 10% of the disputed tax demand. Once done, they could reply to the SCN within two weeks, after which the respondent would issue fresh orders within two months.
In a recent ruling, the Delhi High Court held that the National Faceless Assessment Centre (NFAC) cannot utilize Section 144B of the Income Tax Act, 1961 due to failure to lodge claims within the stipulated time. The petitioner argued that once the Resolution Plan was accepted, as per Section 31 of the Insolvency and Bankruptcy Code, 2016 (IBC), the jurisdiction to reassess income prior to plan approval ceased. The Resolution Professional informed tax authorities about the proceedings before the NCLT, followed by a request to lodge claims per IBC provisions. The NCLT approved the Resolution Plan submitted by M/s Sarthi Constructions on 15 March 2022. Only after this approval did the respondents initiate proceedings under Section 144B.
The Division Bench, comprising Justices Yashwant Varma and Purushaindra Kumar Kaurav, concluded that invoking Section 144B contradicted the freeze on liabilities post Resolution Plan approval, as established by the Supreme Court in Essar Steel India Ltd. Committee of Creditors v. Satish Kumar Gupta. They emphasized that the respondents’ failure to lodge a claim within the stipulated time precludes them from invoking Section 144B.
Karnataka HC dismissed a writ petition seeking termination of arbitral proceedings due to delay, imposing costs of Rs. 25,000. Petitioner filed memos before the Arbitral Tribunal, later challenged proceedings in HC. Tribunal rejected memos, citing completion of pleadings and exclusion of stay period. HC upheld exclusion of stay period, dismissed petition, and ordered petitioner to pay costs within two weeks.
The Gujarat High Court ruled in favor of the petitioner, quashing the demand notice and assessment order. The petitioner argued that per the resolution plan approved by the NCLT, the resolution applicant wouldn’t be liable for any tax proceedings before July 1, 2022. They challenged the income tax notices for assessment years 2013-14 to 2018-19. The court agreed, stating that the demands weren’t part of the resolution plan and thus weren’t valid. The notices issued by the CIT (Appeals) were quashed and set aside.
The Madras High Court noted that despite the petitioner’s age and health issues, as a registered person, they are responsible for monitoring the GST portal. The petitioner contested an order due to lack of opportunity to contest the tax demand. The court observed that although an audit was conducted and notices were issued, the petitioner’s failure to respond led to the tax proposal being confirmed. However, considering the circumstances, the court set aside the order and remanded the matter for reconsideration. The petitioner must remit 10% of the disputed tax demand within three weeks and submit a reply to the show cause notice within that time frame.
The NCLAT Delhi bench upheld a Section 7 application filed by a financial creditor against Shweta Housing & Hospitality Private Limited. The creditor extended a loan facility which was not repaid, leading to arbitration and subsequent application filing. The appellant, Shweta Sharma, argued against relying on the arbitral award, claiming it was void. However, the bench found the debt and default established, regardless of the award. Thus, the adjudicating authority’s decision to admit the application was upheld.
The Kerala High Court ruled that Nidhi Companies must raise capital to the mandated statutory level for operations, upholding Section 406 of the Companies Act, 2013. The petitioners challenged the amendments, arguing they were illegal and unconstitutional. The court kept the challenge undecided for future consideration but directed the petitioners to comply with certain requirements. Justice Devan Ramachandran emphasized the need for statutory capital and directed authorities to permit the petitioners to raise their capital within the required limit.
The Delhi High Court dismissed a Public Interest Litigation (PIL) against Delhi Chief Minister Arvind Kejriwal related to the Liquor Policy Scam, rebuking the petitioner for filing it solely for publicity. The PIL challenged Kejriwal’s authority as Chief Minister and urged his removal from office. Despite earlier similar PILs being dismissed, the petitioner persisted, leading to the court’s criticism.
The court emphasized that the petitioner’s reliance on precedent was misplaced, as the circumstances were different. The court also addressed concerns about the functioning of the government due to Kejriwal’s incarceration, which had been previously considered. The PIL was dismissed, and a fine of Rs. 50,000 was imposed on the petitioner for wasting judicial time, highlighting the court’s stance against frivolous litigation.
A Supreme Court Two-Judge Bench directed the Customs Excise and Service Tax Appellate Tribunal (CESTAT) to reconsider compounding offences under Section 137 of the Customs Act, 1962. Counsel Nisha Bagchi argued that CESTAT lacked jurisdiction for such matters, urging the High Court’s order’s reevaluation. Justices BV Nagarathna and Sanjay Karol declined interference, instructing the Chief Commissioner to review the compounding application promptly. They highlighted the option for a writ petition if either party remains dissatisfied.
The Supreme Court dismissed the Income Tax Department’s special leave petition against the All India Fine Arts and Crafts Society (AIFACS) due to a significant delay in filing and unsatisfactory explanation. The petition stemmed from a Delhi High Court judgment. Justices BV Nagarathna and Sanjay Karol noted a delay of 597 days and rejected the condonation application, consequently dismissing the petition.
The case concerns an assessment order dated 30.05.2023, filed on 30.09.2023, within the four-month statutory limitation period, with provision for one-month condonation on reasonable grounds. Despite citing such grounds, the appellate authority rejected the application.
Justices Sanjeev Prakash Sharma and Sudeepti Sharma noted the submission fell within the four-month limit per the General Clauses Act. They recognized additional justifications for the delay, warranting condonation within the authority’s powers. Consequently, the Punjab and Haryana High Court allowed the petition, remanding the case for reconsideration, with directions for the parties to appear before the appellate authority.
Justice Rajani Dubey of the Chhattisgarh High Court directed the department to refund excess Goods and Services Tax (GST) paid by contractors at an 18% rate on Works Contracts. The petitioners contested the imposition of this rate on contracts executed before 18.07.2022 and sought a declaration deeming the 18% GST rate inapplicable to pre-specified date contracts, with a refund request for the additional 6% GST paid. They argued that retrospective application of the increased rate was illegal and violated their fundamental rights.
The Court directed petitioners to make fresh refund claims, instructing respondents to process these within four months. Noting documents supporting contractors’ claims, the Court stressed fairness in addressing grievances regarding retrospective GST rate application in works contracts.
The Calcutta High Court ruled that seized goods cannot be released through a writ petition unless an application under the Goods and Services Tax Act is made. Following Search and Seizure proceedings by the Revenue Department, the petitioner sought release of seized timber stock. The court referenced relevant case law, emphasizing the necessity of invoking GST Act provisions for release. Since the petitioner hadn’t filed such an application, the court declined intervention.
The Allahabad High Court ruled that the Assessing Authority’s power under the Income Tax Act to decide on the release of seized assets doesn’t automatically expire after 120 days. The writ petition aimed to quash the seizure of Rs. 36,12,000/- under Section 132B(1)(i) of the Income Tax Act and sought release of the detained amount, along with due interest. The petitioner argued that the authority was obligated to examine the nature, source, and existing liabilities of the seized money within 120 days, as per the Act’s provisions.
However, the Division Bench clarified that the provision is directory, not mandatory, allowing the Assessing Authority to continue considering the application beyond the stipulated period. The court emphasised the provision’s intend to prevent undue delays in releasing assets once their nature and source are explained, without mandating automatic release after 120 days.
The Kerala High Court directed the directors of Highrich Private Limited to file an application for the transfer of frozen property under Section 17(1A) of the Prevention of Money Laundering Act, 2002 (PMLA). The Highrich scam, valued at over Rs 3,141 crore, is under investigation by the Enforcement Directorate (ED) for money laundering. The investigation also revealed violations under the Prize Chits and Money Circulation Schemes (Banning) Act, leading to the attachment of the firm’s assets. A report submitted to the court indicated potential fraud amounting to Rs 1,630 crore.
The court directed the adjudicating authority to consider and pass orders within 180 days from the date of freezing. Additionally, the directors were instructed to file an application for permission to transfer frozen property, and the authorized officer was directed to review the request, limiting the freezing order to the amount covered in the FIR.
The Kerala High Court single bench granted a stay on recovery proceedings against the assessee under the Income Tax Act, 1961, until a final decision is made on the appeal against the Assessment Order. Venugopalan Nair Kuttan Pillai, represented by K P Pradeep, T T Biju, T Thasmi, and M J Anoopa, sought relief from demands under Ext.P1 pending consideration of the stay petition by the appellate authority.
Justice Gopinath P directed the respondent to review the stay application filed with the appeal, providing the petitioner an opportunity for a hearing within three months. The Court ruled that recovery proceedings would remain suspended until a decision is made on the stay application.
The Kerala High Court directed a stay on recovery until the finalization of an appeal against the denial of deduction under Section 80 of the Income Tax Act, 1961. The petitioner, Kerala State Commercial Tax Department Staff Housing Co-Operative Society Ltd, challenged an assessment order rejecting their deduction claim. The petitioner argued that the assessing officer overlooked a Supreme Court judgment.
Justice Gopinath P instructed the Appellate Authority to expedite the appeal process and refrain from coercive actions against the petitioner until its disposal. The petitioner was represented by K P Pradeep, T T Biju, T Thasmi, and M J Anoopa, while the respondent was represented by Christopher Abraham and Sri P R Ajith Kumar.
The Bombay High Court directed disciplinary action against an Assessing Officer for not acting on a rectification application under the Income Tax Act for six years. The petitioner argued that the delay was unjust as it was due to errors by their accountant, not intentional misconduct. Despite reminders, the officer didn’t resolve the matter. The petitioner’s plea under Section 264 was dismissed due to a time limit issue. The Court criticized the officer’s attitude, stressing the need for timely justice. They instructed disciplinary action and forwarded the order to the concerned authority.
The Bombay High Court invalidated Form SVLDRS 3 for being issued without Form SVLDRS 2, directing a designated committee to issue SVLDRS 2 and grant a personal hearing to the petitioner. The dispute stemmed from a Show Cause Notice alleging a discrepancy in tax returns, proposing a hefty demand. The petitioner argued that turnover wasn’t nil as claimed and had already made substantial deposits. Despite filing under the Sabka Vishwas Scheme, the committee disallowed pre-deposit, violating scheme provisions. The court criticized the committee’s actions, citing breach of natural justice principles. Consequently, the High Court quashed Form SVLDRS 3 and ordered reconsideration within six weeks, with proper issuance of SVLDRS 2 and a personal hearing for the petitioner.
The Delhi High Court upheld the validity of Notifications imposing GST on reverse charge basis for recovery agent services. The petitioner challenged these Notifications, alleging discrimination and arbitrariness in denying input tax credit. The Court rejected the petitioner’s arguments, stating that service providers under reverse charge constitute a distinct class. It affirmed that such classifications are permissible under Article 14 of the Constitution, as long as they are reasonable and have a rational nexus to their objective.
The Allahabad High Court nullified an assessment order for increasing house tax due to inadequate notice period for the hearing. Despite seeking an adjournment, the petitioner was not granted sufficient time. The Court emphasised that notice and opportunity for response are crucial safeguards against arbitrary exercise of power. It criticised the authority for not providing proper notice and sufficient time for the petitioner to respond, violating principles of fairness and procedural justice.
The Delhi High Court ruled that the Income Tax Settlement Commission (ITSC) cannot grant immunity from penalty and prosecution without true disclosure under section 254C of the Income Tax Act, 1961. In a case involving Pankaj Buildwell Ltd & Group, engaged in real estate business, the ITSC admitted settlement applications disclosing additional income. However, the ITSC’s order, granting immunity from penalty and prosecution under Section 245H of the Act, was deemed contrary to stipulated conditions. The Court observed that revising the application would undermine the requirement of full and true disclosure, and thus set aside the ITSC’s order.
The Kerala High Court ruled that late fees for belated GSTR 9C filings are invalid due to a CGST notification waving them and allowing refunds for fees already paid. The petitioner, Anishia Chandrakanth, a proprietorship dealer under CGST/SGST Act, didn’t file returns on time. Despite objections, the court confirmed a late fee demand, which the petitioner partially paid. An amnesty scheme waived late fees over Rs. 10,000, but the court denied refunds for fees already paid beyond this amount.
The Delhi High Court instructed Canara Bank to comply with the order to vacate attachment on the assessee’s cash credit under the GST Act, 2017. M/S Sant Steel And Alloys Private Limited petitioned against the attachment, which was later vacated after filing the petition. Canara Bank was directed to follow the instructions issued by the Principal Additional Director General.
The Madras High Court dismissed a GST Order petition after the assessee withdrew it. Counsel for the petitioner, M/s.Priya Alloys, stated that the matter was rendered infructuous and withdrew the petition. Justice Senthilkumar Ramamoorthy dismissed the petition without any order as to costs.
The Kerala High Court stayed recovery proceedings pending appeal against a GST Order. Yem Pee Yen Trade Links, the petitioner, withdrew the writ petition with liberty to file an appeal against the order. The court ruled that no recovery should be made until the appeal is filed within the statutory period. If the petitioner files an appeal and deposits 10% of the assessed tax, further recovery will automatically stay as per statute.
The Delhi High Court overturned a GST order denying Input Tax Credit (ITC) claim because the Proper Officer didn’t consider the assessee’s reply. Surinder Kumar Garg, the petitioner, challenged the order proposing a demand of Rs.2,60,20,062.00. The court ruled that the Proper Officer must assess the reply on its merits before forming an opinion. The matter was remitted to the Proper Officer for re-adjudication. A division bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja remitted the matter to the Proper Officer for re-adjudication.
Vadim Infrastructure Private Limited, involved in engineering and construction, challenged an assessment order primarily for breaching natural justice. The petitioner clarified concerns regarding turnover reconciliation and differences between GSTR 3B return and Form 26AS. The court acknowledged potential issues and granted another opportunity for the petitioner to contest the tax demands. Conditions were set for remitting disputed tax amounts from the petitioner’s bank account. The attachment of the account would be lifted upon realization of the specified amounts. The petitioner was directed to submit necessary documents within three weeks, and the second respondent was instructed to issue a new order within two months after affording a fair chance to the petitioner, including a personal hearing.
The Orissa High Court granted bail to Surjit Kumar Dhal, a senior journalist accused under PMLA, citing cooperation with investigations and lack of prior criminal history. The allegations involve duping Rs. 1 crore for securing government approvals. Dhal, the Editor-in-Chief of “Reporters Today” and “Mahabharat,” was released on stringent conditions, including a bail bond of Rs. 1,00,000 and cash security of Rs. 10,00,000 to be kept in a Nationalized bank until trial conclusion. The court deemed the specific nature of allegations and Dhal’s cooperation sufficient for bail.
The Chhattisgarh High Court directed the petitioner, a construction company, to file a fresh claim for refund of Additional GST paid due to changes in contracted amounts after the introduction of GST. The court instructed the respondents to process the claim promptly and reimburse the additional tax burden incurred by the petitioner. The writ petition was disposed of accordingly.
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