This weekly round-up analytically summarises the key tax judgements of the Supreme Court and all High Courts reported at Taxscan.in during the previous week from June 3 to June 9 2023.
A Division Bench of the High Court of Delhi upheld the penalty imposed on M/s Seville Products Limited for its involvement in customs duty evasion. The court dismissed the appeals filed by the appellant against the order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).
The High Court of Delhi upheld the penalty imposed on M/S Seville Products Limited for customs duty evasion. The court, in result, affirmed the application of jurisdiction under Customs Act, rejected the appellant’s arguments against the proceedings, and upheld the findings of the Appellate Authority and the Tribunal. This decision serves as a reminder that overseas entities can be held liable under the Customs Act for their involvement in customs duty evasion within the territory of India.
In a recent ruling, a Division bench of the Delhi High Court has directed the adjustment of a refund against an income tax demand.
Consequently, the High Court ordered the concerned authority to adjust the refund accordingly and emphasized that the authority should pass an appropriate order in this regard. The petitioner was granted liberty to seek an appropriate remedy if aggrieved by the decision on the application for stay, as per the law. The concerned authority was directed to dispose of the application for stay of demand at the earliest, not later than three weeks from the receipt of a copy of the judgment.
In a recent development in the Religare Finvest Ltd (RFL), the Delhi High Court has granted bail to ex-Fortis promoter Malvinder Mohan Singh and three others in a case of alleged misappropriation of funds of Religare Finvest Ltd (RFL) lodged by the Delhi Police.
Considering the fact that the investigation is complete and the main chargesheet, as well as the supplementary chargesheets are filed before the Trial Court, the Court allowed the bail application.
The Delhi High Court quashed the investigation of Competition Commission of India (CCI) against the Institute of Chartered Accountants of India (ICAI) and observed that the CCI has no power to review the Continuing Professional Education (CPE) programme of the ICAI.
The bench observed that there is no other body or institution, which is engaged in the activity of providing professional training to acquire the classification of a chartered accountant or for the continuing education program other than ICAI. Thus, it is not abusing its dominant position but discharging its statutory functions.
In a significant case of Dewan Housing Finance Corporation Ltd. (DHFL) , the Delhi High Court quashed the plea by the Central Bureau of Investigation (CBI) to quash the bail granted to the ex-promoter.
While dismissing the petition, the Court viewed that the offence alleged against the accused persons are very serious and very high in magnitude and the material collected by the investigating agency was too short. The Court held that “merely because cognizance has been taken, the right to statutory bail cannot be extended or defeated.”
The Allahabad High Court (HC) set aside the entry tax demand on Indian Made Foreign Liquor since it was not included in reversed Entry Act of 2007.
Justice Piyush Agrawalobserved that in the schedule of items, Indian-made foreign liquor was not mentioned and therefore, proceedings initiated against the petitioner are without jurisdiction.The court directed the respondent to file a counter affidavit within four weeks. “Till the next date of listing, no coercive action shall be taken against the petitioner provided petitioner furnishes surety other than cash or bank guarantee to the satisfaction of Assessing Authority.”, the Court held.
In a significant case, the Rajasthan High Court held that the reduced rate of stamp duty is allowable to lease deeds on which rent is fixed and premium is not paid or delivered.
The Court held that the respondent-Indus Tower Limited would be liable to pay stamp duty as per the provisions of the law, which were in force on the date of execution of lease deeds without claiming the benefit of the notification dated 05.03.2003.
A Single Bench of Madras High Court has held that providing opportunity of being heard to each and every member of the society was not necessary for proceedings under Section 34A of the Income Tax Act 1961.
Since this Government Order had already been challenged before this Court and the said writ petitions were also pending consideration it was inappropriate for the court to take any decision.
The Madras High Court directed the petitioner, K Marimuthu, to approach statutory authority on the ground that there was delay in payment of service tax due to cancer.
A Single Bench of the Madras High Court comprising noted that “There is no doubt that the petitioner is ailing from cancer. It is also seen that due to the default in paying the service tax, the respondents have attached the bank account of the petitioner and the recovery notice has also been issued, challenging which, the petitioner is before the Court.” “This Court, considering the ailment of the petitioner, permits him to approach the statutory authority by way of within a period of eight weeks from the date of receipt of a copy of this order. However, it is made clear that the request made by the petitioner to release the bank attachment may be raised before the appellate authority” the Bench concluded.
The Madras High Court was directed to grant the opportunity of hearing regarding the provisional release of seized goods.
A Single Bench of the Madras High Court of Justice PB Balaji observed that “It would be just and equitable to direct the first respondent to pass orders on the petitioner’s application dated 19.04.2023, within a period of ten (10) days from today, after affording an opportunity of personal hearing to the petitioner, by putting the petitioner on advance notice so that the final orders are passed on his application within 10 days, without any further delay.”
The High Court of Karnataka has suspended the recovery of demand till the disposal of the appeal finding that the denial of exemption under Sections 11 and 12 of the Income Tax Act, 1961 was done without uploading prior notice to the assessee through the online portal.
The single bench of Justice S Sunil Dutt Yadav directed the respondents not to take any precipitative steps to recover the demand until the appeal is disposed of by the First Appellate Authority. The bench also instructed the authority to expedite the appeal hearing process. Accordingly, the petition is disposed of and the order is set aside subject to the observations made.
The Two-member bench of Dr D.M. Misra and R. Bhagya Devi directed the adjudicating authority to verify the impugned order after affording an opportunity to the appellant to respond to the said objections.
The Tripura High Court has recently dismissed a criminal revision petition, upholding denial of discharge of the accused in a case where they were alleged to have demanded tax money in the name of an extremist group.
“As such, this court after careful consideration of the submission of the parties, the materials placed on record and the reasons recorded hereinabove, is satisfied that the impugned order passed by the learned trial court dated 20.01.2023 rejecting the application for discharging the petitioners does not require any interference, in exercise of the inherent powers of the court under Section 482 of the CrPC”, the Tripura High Court held.
The Rajasthan High Court directed to decide Goods and Services Tax (GST) refund application within 60 days in the matter of GST refund application pending for 9 months.
A Division Bench of the Rajasthan High Court comprising Justice Manindra Mohan Shrivastava and Justice Anil Kumar Upman observed that “At this stage, we are inclined to dispose of the petition with a direction to the respondent no.2, Principal Commissioner, CGST and Central Excise Commissionerate to ensure that the application claiming refund filed by the petitioner before an Officer subordinate to him is decided within the outer limit of 60 days.”
In a recent decision the Delhi High Court has held that taxpayers filing declarations under the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 (SVLDR Scheme) cannot quantify the duty under indirect taxes, thereby dismissing the writ petition filed by Ideal Broadcasting India Pvt Ltd.
The Bench concluded by noting that if the amount of duty claimed by the Department has not attained finality or has not been admitted by the declarant as recoverable from it, such case would have fallen under the ―litigation category whereas in the other situation where amount of duty has attained finality on account of appeal having been not filed before the expiry of the limitation period or the appellate order having attained finality or the amount of duty having been admitted by the declarant, that would fall under the ―arrears category.
In a recent decision the Delhi High Court has held that taxpayers filing declarations under the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 (SVLDR Scheme) cannot quantify the duty under indirect taxes, thereby dismissing the writ petition filed by Ideal Broadcasting India Pvt Ltd.
The Bench concluded by noting that if the amount of duty claimed by the Department has not attained finality or has not been admitted by the declarant as recoverable from it, such case would have fallen under the ―litigation category whereas in the other situation where amount of duty has attained finality on account of appeal having been not filed before the expiry of the limitation period or the appellate order having attained finality or the amount of duty having been admitted by the declarant, that would fall under the ―arrears category.
A Division Bench of the Delhi High Court confirmed the order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) as no justifiable reasons were given for the delay in filing an appeal after defect notice.
The two member tribunal Bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan observed that “The CESTAT has, accordingly, concluded that there were no justifiable reasons for the delay in filing the appeal after the same was returned as defective. We find that the impugned order is well reasoned and cannot be faulted.”
The Punjab and Haryana High Court rejected the anticipatory bail application of Mandeep @ Monty, the petitioner in the matter as GST Registration was obtained in the name of a fictitious company.
A Single Bench comprising of Justice Jasjit Singh Bedi, observed that “In the instant case, a perusal of the affidavits of the State would show the manner in which the investigation was conducted and the specific role played by the petitioner. In fact, he and his co-accused had set up a fictitious firm/companies and thereby cheated the government of crores of rupees.” “Even otherwise, recoveries of various documents are to be effected from the petitioner and the names of the real beneficiaries are to be revealed. Therefore, the custodial interrogation of the petitioner is certainly required” the Bench concluded.
A Single Bench of the Madras High Court directed the Deputy Commissioner of Customs to consider re-export of Link Samahan without insisting the payment of import duties.
A Single Bench of the Madras High Court comprising Justice Senthil Kumar Ramamoorthy observed that “In view of the said submission, the writ petition is disposed of by directing the respondent to consider the petitioner’s request for permission to re-export the goods and dispose of the request by a reasoned order within a period of 30 days from the date of receipt of a copy of this order.”
The Gauhati High Court (High Court of Assam, Nagaland, Mizoram, and Arunachal Pradesh) has dismissed the appeal observing that the burden of proof on seized goods that are not notified under Section 123(2) of Customs Act, 1962 lies not on the person from whose possession the goods were seized but with the Department of Customs.
The Gauhati High Court found that the department had failed to establish beyond reasonable doubt that the betel nuts were smuggled goods. In conclusion, the appeal was dismissed without cost as being devoid of any merit.
The Rajasthan High Court has held that Pizza and Sandwich qualify as ‘Cooked Foods’ for claim of exemption beyond 5% Value Added Tax (VAT) and not ineligible for exemption as ‘Baked Branded Products’, allowing consequential relief to the assessee.
In the opinion of this Court, both the authorities below have relied on extraneous, unsound, specious, and ill-founded factors and have therefore reached a perverse conclusion, the Single Bench of Justice Sameer Jain observed. Answering the issue in favour of the petitioner-assessee and against the respondent-revenue, the SIngle Bench of Rajasthan High Court ruled that, “‘pizza’ and ‘sandwiches’ are held to be ‘cooked foods”, directing the revenue to grant consequential reliefs to the assessee within 90 days.
A Single Bench of the Chhatisgarh High Court directed the department to decide the appeal within 90 days since the Commissioner of Income Tax Appeal delayed considering the statutory appeal.
Considering the limited grievance of the petitioners, Justice Rakesh Mohan Pandey directed the respondent No.2 i.e. Commissioner of Income Tax (Appeals) [CIT(A)] to consider and decide the pending appeals filed in Form No.35 within a further period of 90 days.
The Jharkhand High Court held that the Show Cause Notice under Section 74 of Jharkhand Goods and Services Tax Act, 2017 (JGST Act) is mandatory along with the Form GST DRC-01.
Accordingly, the Division bench observed that the foundation of the proceeding in both the cases suffers from material irregularity and hence not sustainable being contrary to Section 74(1) of the Jharkhand Goods and Services Tax Act; thus, the subsequent proceedings/impugned Orders cannot sanctify the same. The matter was remanded to the adjudicating authority to pass a fresh order in accordance with law from the stage of issuance of proper show cause notice under Section 74 (1) of the Jharkhand Goods and Services Tax Act.
Madras High Court in a recent case granted 3 week time for filing a statutory appeal, since the department not objected to condone the delay in filing an appeal.
Mohana Murali, Senior Panel Counsel, who accepted the notice for R1, fairly does not object to the request, therefore the Court condoned the delay. The Single Bench of Dr Justice Anita Sumanth granted three weeks to file an appeal against the impugned order dated 28.09.2022.
The High Court of Jammu & Kashmir and Ladakh directed to allow 9% interest on the delayed amount of Reimbursement of Goods and Service Tax (GST) due to negligence of the tax officer.
A division bench comprising Justice Atul Sreedharan and Justice Mohan Lal held that “the petitioner is entitled to receive the budgetary support as already arrived at forthwith and the same should be released without any further delay. At the same time on account of the delay caused by the Union territory of almost five years, the court imposed a penalty of 9% interest on the total amount due to the petitioner from 18.05.2017, till the date of payment which shall be paid by the Union Territory. The costs so imposed be recovered by the Union Territory from the Officers so identified on account of whose indolence, and delay in disbursing the reimbursement of GST has occurred.“
In a writ petition to condone delay in the filing of the appeal, the Madras High Court directed the petitioner assessee to approach the appellate authority under Tamil Nadu Value Added Tax, 2006.
A single-judge bench comprising Dr Justice Anita Sumanth held that the petitioner can approach the appellate authority to challenge the impugned orders passed under the Tamil Nadu Value Added Tax, 2006.
The Delhi High Court has held that the court cannot interfere with the matter of tender issued by the Steel Authority of India (SAIL).
A two-judge bench comprising Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad observed that the purpose of calculating net worth should be primarily left with the tender issuing authority and the evaluating committee and the Court cannot dictate how the net worth should be calculated unless the decision is contrary to law. While dismissing the petition, the Court further held that “it cannot be said that the action of the Respondent in not considering deferred tax liability as a part of net worth and rejecting the bid of the Petitioner for not meeting the qualification criteria is so arbitrary that it would warrant interference by this Court under Article 226 of the Constitution of India.”
The Delhi High Court has recently allowed the petitioner to operate bank accounts provisionally attached by Goods and Services Tax (GST) Authorities as a year had passed since the provisional attachment.
It was further noted that, “The petitioner has also filed a list of fifteen bank accounts including the bank accounts maintained with IndusInd Bank which were attached by separate orders passed on 20.04.2022. Mr. Singla fairly states that although the said bank accounts as set out in the Annexure P-62 of the petition, have been provisionally attached by the separate orders, the said orders have also ceased to be operative by efflux of time, by virtue of Section 83(2) of the CGST Act.” It was thus directed that, “the concerned banks shall not obstruct operation of the bank accounts on account of the provisional attachment orders dated 20.04.2022.”
The Rajasthan High Court quashed the tax board order since the department failed to provide the classification of CAT cables under the General Entry of the Rajasthan Value Added Tax Act, 2003.
A single judge bench comprising Justice Sameer Jain observed that the revenue has utterly failed to adduce any evidence, technical or otherwise, to substantiate its claim that CAT-5 or CAT-6 cables are not covered in Part-A of Schedule IV to the RVAT Act which specifically deals with IT Products. While allowing the order court quashed and set aside the order of the Tax Board.
While entertaining the writ petition, the Gujarat High Court has ruled that land costs are not subject to Goods and Services Tax; rather, only the cost of building construction is subject to the tax.
The High Court in support of the Supreme Court case Mafatlal Industries Ltd. v/s Union of India observed that since the writ petitioner has really paid the tax burden and the tax was paid under protest as a result of the interim decision of the Court. Thus, the applicant should be given a refund.
According to sources, the Central Government is considering filing an appeal before the Supreme Court of India against the decision of the Karnataka High Court quashing the Goods and Services Tax (GST) notice of Rs. 21,000 on Gameskraft.
It is anticipated that the GST Council would clarify the tax rates for online gambling at its upcoming meeting. It is expected that the report from the Group of Ministers on online gambling, horse racing, and casinos will be delivered, and hopefully accepted. Additionally, the online gaming industry now feels confident that the government will continue to impose an 18% GST rather than a 28% tax on gross gaming revenue thanks to the modified Finance Act of 2023 and IT Intermediary Amendment Rules.
The Delhi High Court has recently dismissed a plea to waive pre-deposit for an appeal against a limitation order that was barred by limitation.
The Division Bench of Justice Vibhu Bakhru and Justice Amit Mahajan thus held, “We find no ground to interfere with the impugned order dated 04.05.2022. We clarify that if the petitioner makes the pre-deposit within a period of two weeks from today, the Appellate Authority shall consider the petitioner’s appeal on merits.”
The Delhi High Court has recently held, in favour of the Reliance Industries Limited, that the 2.3 Million US Dollar arbitral award claim against Reliance raised in an execution petition by the Central Government was ‘unenforceable’.
It was thus clarified by the SIngle Bench Justice C Hari Shankar that, of Actual executability would require, as its sine qua non, determination, by the learned AT, of all the issues on the basis of which the liability of the parties towards each other can be fixed. Without such determination, the award remains inchoate – as in the present case , which was resultantly held to be ex facie unenforceable.
In a recent decision the Tripura High Court observed that Goods and Service Tax (GST) Input Tax Credit (ITC) on the goods and services being utilized for providing the taxable work contract services for construction of hotel building.
A Division Bench of the Tripura High Court comprising Acting Chief aJustice Ujjal Bhuyannd Justice Arindam Lodh observed that “The petitioner has been providing work contract services to the owner of the hotel and not for it’s own. Further, in providing taxable work contract services for the said construction of Hotel Building, he is entitled to take Input Tax Credit on the Goods and Services being utilized for providing the taxable work contract services.”
In a major decision, the Kerala High Court observed that the gratuity is to be calculated from the date on which it becomes payable and not from the date of disbursement.
The Court observed that “Even if it is assumed that the petitioner’s claim for gratuity was under the Payment of Gratuity Act, 1972, the maximum amount of gratuity payable under the said Act has to be determined with respect to the date on which the gratuity became payable and not on the date on which sanction was accorded for payment of DCRG or the date on which the amount was actually disbursed to him.”
The Jammu & Kashmir and Ladakh High Court has held that budgetary support is not allowable since the exemption of excise duty is not availed on chemical products manufactured after 01.07.2017.
A two-judge bench comprising Chief Justice N. Kotiswar Singh and Justice Vinod Chatterji Koul observed that the goods were not manufactured/cleared by the petitioner before 01.07.2017 and as such there is no question of availing excise duty exemption before 01.07.2017 in respect of these goods. “As these goods were not manufactured earlier and consequently, no exemption of excise duty was availed in respect of these goods, these goods are not eligible for budgetary support.” The Jammu & Kashmir and Ladakh High Court held.
A Single Bench of the Calcutta High Court dismissed a Writ Petition (WP) noting that an assessment order under Section 147 of Income Tax Act, 1961 is an appealable order.
The Court further went on to note that since the Assessing Officer has given its reasons and findings for coming to its conclusion, sufficiency of it and the reasons and findings cannot be appreciated and scrutinized by a writ court under Article 226 of the Constitution of India like an appellate authority.
A Division Bench of the Bombay High Court upheld the provisions to levy Goods and Service Tax (GST) on intermediaries.
The Division Bench comprising of Justice Sunil B Shukre and Justice Abhay Ahuja observed that “Considering the views taken by Justice G. S. Kulkarni and one of us (Abhay Ahuja, J.), we hold the provisions of Section 13(8)(b) and Section 8(2) of the IGST to be legal, valid and constitutional.”
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