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 17 to June 23 2023.
In a recent judgment the Kerala High Court quashed the property tax demand made without assessment of property under the Kerala Panchayat Raj Act, 1994.
The Court further directed that in case the petitioner submits his objections to the assessment of property tax, the same shall be taken note of by the Secretary and a proper order of assessment shall be passed with notice to the petitioner. The demands, if any, on the basis of such assessment can be raised by the Secretary in accordance with the provisions of the Panchayat Raj Act and the Rules made thereunder.
A Single Bench of the Kerala High Court recently ruled that there is necessity for land to be re-assessed for fixing basic tax rate after the change in nature of the land under the Kerala Land Utilisation Order, 1967.
A Single Bench of Justice N Nagaresh observed that “As the nature of the land of the petitioner has been permitted to be changed pursuant to passing of a statutory order under the Kerala Land Utilisation Order, 1967, the competent authority is bound to re-assess the rate of Basic Tax in respect of the land and to make necessary entries in the Basic Tax Register, if necessary, after verifying the veracity/genuineness of the permission obtained under the Kerala Land Utilisation Order, 1967 produced by the petitioner.”
A Division Bench of the Delhi High Court quashed the order under Section 148A(d) of Income Tax Act, 1961 and an assessment notice issued against non-existent partnership firm.
A Division Bench of the Delhi High Court comprising Justices Girish Kathpalia and Rajiv Shakdher observed that “In nutshell, the impugned order under Section 148A(d) of the Income Tax Act and notice under Section 148 of the Income Tax Act were passed and issued against a non-extant entity, as such the same cannot be complied with. Therefore, the impugned order under Section 148A(d) and notice under Section 148 of the Income Tax Act both are set aside. The respondents would be at liberty to take further steps in accordance with law.”
A Division Bench of the Jharkhand High Court confirmed the deletion of income tax addition on Business expenses under “Provision for Warranty Expenses”.
A Division Bench comprising Justices Rongon Mukhopadhyay and Deepak Roshan observed that “The Assessee has not committed any violation of the provisions of the Income Tax Act and its Rules. As a matter of fact, the ITAT has discussed each and every ground raised by the Revenue in detail and rejected the contentions of the Revenue and dismissed their appeal filed before it. We hold that no error has been committed by the tribunal in rejecting the claim of the respondent revenue and dismissing the respective appeal.”
The Calcutta High Court quashed an assessment order passed on non-consideration of the objection to the show cause notice as there was delay in filing objection due to technical snag in the Income Tax Portal.
The Court directed that a judicious should be passed after giving an opportunity of hearing, within a period of eight weeks from the date of communication of the order and also clarified that it has not gone into the merit of the objection of the petitioner and the same shall be decided by the assessing officer concerned by applying its independent judicious mind.
The Madras High Court stayed the condition of furnishing of bank guarantee on remission of 50% of disputed tax.
The Court further noted that subject to the furnishing of personal bond by the petitioner, there shall be an order of stay of balance of the disputed tax till the disposal of the appeal by the first appellate authority. It was made clear that impugned order was modified to the limited extent alone.
The Madras High Court quashed a notice issued to discharge tax liability on filing of an additional rectification petition filed under Section 84 of Tamil Nadu Value Added Tax Act.
The Bench concluded by observing that “In light of the fact that the additional rectification petition is now pending in light of setting aside of order, the petitioner is permitted to appear before the authority for hearing of both the rectification petition as well as additional rectification petition dated 16.03.2023 and 12.04.2023 respectively on 23.06.2023 at 10.30 a.m. without expecting any notice in this regard to the hearing as scheduled aforesaid.”
The Gujarat High Court (HC) quashed the Show Cause Notice (SCN) wherein the cancellation of Goods and Service Tax (GST) registration without stating the reason is cryptic.
The impugned show-cause notice dated 06.01.2023, being without reasons, is cryptic and the bench quashed and set aside. However, liberty is granted to the respondent authorities to issue a fresh notice with particulars of reasons incorporated with details and thereafter to provide a reasonable opportunity of hearing to the petitioner and to pass appropriate order bythe law. The concerned respondent is hereby directed to restore the registration of the petitioner forthwith.
The Gauhati High Court stayed the recovery of royalty due till the next returnable dates as an interim measure.
“As an ad-interim measure that no coercive action shall be initiated against the petitioner for recovery of the said amount of Rs.3,00,24,540/- till the next returnable date, as a natural sequel, would have to provide as an interim measure that till the next returnable date, the respondent nos. 2 to 4 shall not initiate coercive action against the petitioner for recovery of the amount indicated in the communication under memo no. FSET/G-51/B/Simplex/2023/1450-51 dated 16.03.2023 till the next returnable date.”, the single judge bench comprising Justice Kalyan Rai Surana held.
The Madras Bench of the High Court has held that the appellate authority should consider the Goods and Service Tax (GST) appeal with reference to the statutory compliance only without referring to the limitation.
The petition was dismissed by the Single Bench of Justice Anita Sumanth granting liberty to file appeal and appeal, if any had filed within a period of four (4) weeks from date of receipt of a copy of this order, it was directed to be entertained by the appellate authority without reference to limitation but ensuring compliance with all other statutory conditions.
The High Court of Karnataka dismissed the Writ Petition direction to declare section 16(4) of the Central Goods and Service Tax (CGST/SGST) Act 2017 r/w Rule 61 of Karnataka Goods and Service Tax (KGST) Rules as ultra vires constitution.
A Single judge bench comprising Justice S Vshwajith Shetty dismissed the writ petition as not pressed with liberty to the petitioner to challenge the order dated 01.05.2023 passed by the 2nd respondent in a separate proceeding.
The Delhi High Court granted interim bail to Sameer Mahandru under the Prevention of Money Laundering Act (PMLA), 2002 in the Delhi Excise Policy Case .
“In view of the entirety of the matter, the petitioner is admitted to interim bail for a period of six weeks on his furnishing a personal bond in the sum of Rs.10,00,000/- (Rupees Ten Lakhs Only) with two sureties” the Court concluded.
In a recent decision the Delhi High Court ruled that the power to grant bail on medical grounds under first proviso to Section 45(1) of the Prevention of Money Laundering Act, 2002 (PMLA) is discretionary and directed the Director of All India Institute of Medical Sciences (AIIMS) to evaluate the medical condition of the petitioner, Sanjay Jain.
The Court further went on to note that on humanitarian grounds, the medical condition of the petitioner as articulated in the affidavit of petitioner’s wife cannot be simply brushed aside given. Hence the Director, All India Institute of Medical Sciences (AIIMS) was directed to immediately constitute a Medical Board of Doctors from minimum three different specialties having regard to the nature of ailments the petitioner is stated to be suffering from, for evaluating the medical condition of the petitioner.
A Single Bench of the Kerala High Court recently observed that the appeal Provision of the Central Goods and Services Tax Act, 2017 (CGST) is inbuilt mechanism and impliedly excludes the application of Limitation Act, 1963.
Confirming the action of the Additional Commissioner a Court of Justice CS Dias, observed that “The Central Goods and Services Tax Act is a special statute and a self-contained code by itself. Section 107 is an inbuilt mechanism and has impliedly excluded the application of the Limitation Act. It is trite, that the Limitation Act will apply only if it is extended to the special statute. It is also rudimentary that the provisions of a fiscal statute have to be strictly construed and interpreted.”
The Calcutta High Court in a bogus case of E -Way Bill directed to release of the Tea consignment since it was not connected with the smuggled poppy seeds.
Justice Krishna Rao directed the respondent no. 3 to take appropriate steps for the release of the tea consignment in favour of the petitioner by law if there does no impedereleasing the tea consignment within a period of one week from the date of receipt of the copy of the order subject to furnishing an undertaking before the authority, as and when, if required, the petitioner will appear before the authority for enquiry/investigation.
A Single Bench of Justice Bharat P. Deshpande of Bombay High Court upheld the cancellation of the liquor license by the Excise Commissioner in the application of the legal heirs of the deceased partner.
The bench stated that “The appellate authority in its impugned order has rightly observed that the petitioner is trying to mix the issues with regard to the Deed of Partnership with that of transfer of licence under the provisions of the Goa Excise Duty Act.” It was also stated that it is the duty of the concerned authority and when the legal heirs of the deceased licence holder applied for cancellation, the excise Commissioner was duty bound to cancel it.
A Single Bench of the Delhi High Court granted bail to Preeti Chandra in the Unitech Case and observed that sub-classifying women into different categories to apply twin conditions under the Prevention of Money Laundering Act, 2002 (PMLA) is arbitrary.
The Bench concluded by noting that the twin conditions of Section 45 of the PMLA will not be applicable to the applicant. The applicant has to satisfy the triple test which can be taken care of by imposing stringent conditions. The applicant has already been investigated for more than 13 occasions and has been in custody for more than 20 months.
The Calcutta High Court dismissed an assessment order passed during pendency of writ petition, taking into consideration the non-participation of the petitioners, SKP Infrarealty Private Limited & Anr, in the income tax proceedings.
A Single Bench comprising Justice Md Nizamuddin observed that “In the interest of principle of natural justice the impugned order under Section 147 of the Income Tax Act relating to assessment year 2014-2015 is set aside and the matter is remanded back to the Assessing Officer concerned to proceed afresh from the stage subsequent to notice under Section 148 of the Income Tax Act and conclude the proceedings and pass final order within twelve weeks from the date of communication of the order.”
In a major decision the Bombay High Court observed that mere filing of an application under Section 7(1) of the Insolvency and Bankruptcy Code, 2016 (IBC) is not enough to invoke the bar of Section 238 of the Insolvency and Bankruptcy Code and consequently it would not bar the to file an application under Section 11 (6) of the Arbitration and Conciliation Act, 1996 for appointment of Arbitrator.
The proviso to Section 7(4) of the IBC further enjoins the Adjudicating Authority to record reasons for not ascertaining the factors, as contemplated by Section 7(4) of IBC, within the time frame stipulated therein. Further Section 7(5) of the IBC enjoins upon the Adjudicating Authority to record its satisfaction that the default has occurred and there is no disciplinary proceedings pending against the proposed resolution professional and upon such satisfaction permits admission of such application” the Bench concluded.
The Calcutta High Court quashes an order of the Single Bench of the Calcutta High Court directing to remit 20% of disputed tax in contravention of Section 107(7) of the Central Goods and Services Tax (CGST) Act, 2017.
Accordingly, the appeal is allowed and that portion of the order passed by the Single Bench directing the appellant to pay 20% of the interest amount is set aside and direction is issued to the appellate authority to consider the appeal filed by the appellant on merits and in accordance with law after affording an opportunity of personal hearing” the Bench concluded.
The Delhi High Court granted interim protection to M3M owner Basant Bansal in the money laundering case.
In the interest of justice as well as considering the mandate of Article 21 of the Constitution of India, this Court is of the considered opinion that the Applicant may be granted interim protection till the next date of hearing” the Court concluded.
The Gujarat High Court in a recent case dismissed the Writ Petition (WP)since the provision under section 73(9) read with sections 78 and 107 of the Gujarat Goods and Services Tax Act, 2017 is misconceived.
While dismissing the WP the Coram comprising Justice Vipul M Pancholi and Justice Devan M Desai viewed that such contention is misconceived in view of the provisions contained in Section 73(9) read with Sections 78 and 107 of the Act. If the appeal filed by the petitioner is allowed by the Appellate Authority, it is always open for the petitioner to make such request before the Appellate Authority that direction be issued to the respondents to refund the amount.
While entertaining the Sales Tax Revision (STR) filed by the revenue department, the Rajasthan High Court maintained the penalty imposed on the Chokhi Dhani Resorts. Also quashed the order of the tax board issued in favour of the resort.
The bench observing the definition of Sale and Sale Price under RVAT stated that the assessee cannot split up the amount charged for the sale of food, even if assessee provides certain services in addition to the food, and VAT has to be paid on the entire consideration charged for the food.
It was held that VAT is applicable on whole entry coupons. Thus, set aside and quashed the impugned order of the tax board and maintained the penalty imposed.
A Single Bench of the Calcutta High Court directed the release of tea consignment on the proof of non- involvement of the supplier of the tea with the smuggled poppy seeds.
A Single Bench comprising Justice Krishna Rao, observed that “The Court finds that no purpose would be served by keeping the writ petition pending. Accordingly, the writ petition is disposed of by directing the respondent to take appropriate steps for release of the tea consignment in favour of the petitioner in accordance with law if there is no impediment for release tea consignment within a period of one week from the date of receipt of the copy of the order.”
The Calcutta High Court quashed demand for interest and refund of stamp duty and registration fee on no proper enquiry about property before participating in the auction.
A Division Bench comprising Justice Tapabrata Chakraborty and Justice Partha Sarathi Chatterjee observed that “The appellant also had not made a proper enquiry about the property before participating in the auction and she ought to have been more diligent. For such laches we are not inclined to allow the appellant’s prayer for interest and refund of the stamp duty and registration fee.”
The Gujarat High Court quashed the order cancelling the registration of Goods and Services Tax (GST) passed without stating a detailed reason for the cancellation.
Further liberty was granted to the respondent authorities to issue a fresh notice with particulars of reasons incorporated with details and thereafter to provide a reasonable opportunity of hearing to the petitioner and to pass appropriate order by law. The concerned respondent is directed to restore the registration of the petitioner forthwith.
The Kerala High Court directed to accept Form 3 and Form 4 within 10 days without additional fee in a matter relating to technical glitches in the Ministry of Corporate Affairs (MCA) Portal.
In the interim order on 21/06/2023, a Single Bench of the Kerala High Court of Justice PV Kunhikrishnan ordered the respondents to accept Form 3 and Form 4 within 10 days without insisting the additional fee of Rs.37,500/-. Ebin Mathew, P J Mathew, Akhila Shoji appeared at the Kerala High Court on behalf of the petitioner – Safa Jewels Areacode LLP.
A Single Bench of the Madras High Court condoned the delay of 2 days in manual filing of appeal after online submission on the Goods and Service Tax (GST) Portal.
A Court of Dr Justice Anita Sumanth noted that “In light of the above, the delay of 2 days in filing the appeal is condoned and the challenge to the order of assessment is rejected. The petitioner is permitted to re-present the appeal papers within a period of one (1) week from today and if so re-presented, R2 shall receive the appeal without reference to limitation but ensuring compliance with all other statutory conditions, including pre-deposit.”
The Delhi High Court granted bail to Dubai based businessman Ramesh Mangalani under the Prevention of Money Laundering Act, 2002 (PMLA) on allegation of siphoning off amount by fake invoices.
Considering that the prosecution complaint has been filed before the learned trial court; that the petitioner has materially co-operated in the investigation; and in view of the nature of the alleged role played by the petitioner in the allegedly offending transactions, this court is also satisfied that the petitioner is not likely to commit any offence under PMLA while on bail” the Court concluded.
The Gujarat High Court dismissed revision petition filed on lack of evidence on the basis of allegation of sale of High-Speed Diesel (HSD) at concessional sales tax rate without permission from Ministry of Petroleum & Natural Gas.
A Single Judge Bench comprising Justice Gita Gopi observed that “This Court finds that the Special Judge has not committed any error in discharging the accused. No sanction has been granted for prosecuting the officers of the oil companies. The assessment made by the Special Judge discharging the accused is consistent with the record.”
The Karnataka High Court recently held that there is no requirement for educational institutions to obtain yearly certificate to claim property tax exemption under the Karnataka Municipalities Act, 1964.
A Single Bench Justice Suraj Govindaraj comprising of observed that “There being no requirement for seeking for an exemption certificate, I am of the considered opinion that this exemption is absolute and apply to all buildings which are used for the purpose of running educational institution and/or incidental activity.”
The Calcutta High Court directed to release of the tea consignment in the case of Smuggling of Poppy Seed by way of the Consolidated E – Way Bill.
Justice Krishna Rao observed that “no purpose would be served by keeping the writ petition pending. Accordingly, the writ petition is disposed of by directing the respondent no. 3 to take appropriate steps for release the tea consignment in favour of the petitioner by law if there does not impede releasing the tea consignment within a period of one week from the date of receipt of the copy of the order, subject to furnishing an undertaking before the authority, as and when, if required, the petitioner will appear before the authority for enquiry/investigation.”
The Calcutta High Court allowed the release of seized machinery on bank guarantee as the petitioner, DRB Infrastructure Pvt. Ltd, has challenged the legality of the seizure.
A Single Judge Bench of Justice Krishna Rao, observed that “the Court is of the view that the writ petition can only be disposed of only after exchange of affidavits and accordingly, the respondents are directed to file affidavit-in-opposition within three weeks; reply thereto, if any, be filed within two weeks thereafter.”
The Division Bench of Justice K.R.Shriram and Justice M.M.Sathaye of Bombay High court has quashed the income tax recovery against directors upon proving lack of control on financial affairs of company.
The petitioner is squarely covered by the exception carved out by the later part of Section 179(1) of the Income Tax Act and as such he cannot be held liable. Therefore, the division bench quashed the order holding Petitioner liable for outstanding dues of M/s. Kaizen Automation Pvt. Ltd
The Delhi High court recently directed the Assessing Officer (AO) to provide information to vodafone Mauritius regarding validity of Tax Residency Certificate (TRC).
After observing the contentions and relevant materials, the division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia direct the AO to confront the petitioner with material or information, which according to her, would have her arrive at a conclusion that the TRC on which the petitioner seeks to place reliance deserves to be rejected.
A Single Bench of the Calcutta High Court dismissed the writ petition by observing that the benefit from the arranged accommodation entries is unaccounted money.
The Court concluded by noting that the impugned order is neither a final assessment order nor any demand arises out of the same and the petitioner still has got ample scope in the course of the proceeding subsequent to the aforesaid impugned order under Section 148A(d) of the Income Tax Act and after issuance notice under Section 148 of the Income Tax Act to make out his case if he has any in his favour during the course of subsequent proceeding.
The Karnataka High Court directed the State and Government agencies to determine tax differences on Pre-Goods and Service Tax (GST) works contracts under the Karnataka Value Added Tax (KVAT) regime.
A supplementary agreement may be signed with the Petitioners for the revised GST-inclusive work value for the Balance Work completed or to be completed as determined above and in case the revised GST-inclusive work value for the Balance Work, completed or to be completed after 01.07.2017, is more than the original agreement work value, the Petitioners are to be paid /reimbursed, as the case may be, the differential tax amount by the concerned employer,” the Court said.
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