This weekly round-up analytically summarises the key tax judgments of the Supreme Court and all High Courts reported at Taxscan.in during the previous week from July 08 to July 14, 2023.
In a recent ruling, the bench of Chief Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya of Calcutta High Court ruled that the Goods and Services Department (GST) or Anti-Fraud Dept of police cannot issue any notices to the advocates of the tax evaders or any individuals.
The High Court stated that “it is the GST authorities who have first to conduct the thorough study and investigation to ascertain as to whether there has been any illegal availment of GST. Upon such assessment, it will be well open to the GST authorities to initiate proceedings under the provisions of the GST Act. However, if the authority comes to the conclusion that there is a criminal overt act attached to the said violation, then the matter should be handed over to the appropriate investigation authority who has to proceed in accordance with the law.”
The Madras High Court dismissed the writ petition filed against the assessment order passed by the Assistant Commissioner under section 73 of the Tamil Nadu Goods and Services Tax Act,2017 on the ground of Limitation.
A single-member bench comprising Anitha Sumanth (Judicial) directed the petitioner to file any appeal before the first appellate authority within one week from the date of receipt of a copy of this order. Also held that the same shall be taken on file by the first appellate authority without reference to limitation and ensure compliance with all other statutory conditions, including pre-deposit and disposed expeditiously as per the law.
The Madras High Court quashed the order passed by the Commissioner of Customs for rejecting the claim of refund application filed under section 27A of the Customs Act, 1962 without giving sufficient opportunity to the petitioner.
A single-member bench comprising Anitha Sumanth (Judicial) quashed the order passed by the Commissioner of Customs and directed them to reconsider the matter.
The Madras High Court upheld the order passed by the Deputy Commissioner under section 220(6) of the Income Tax Act,1961 on the ground of non-appearance of the petitioner.
A single-member bench comprising Anita Sumanth (Judicial) directed that the stay applications, after hearing the petitioner, shall be disposed of within six weeks from the date of the current order.
The Karnataka High Court granted relief to Manipal Finance Corporation Limited by dismissing the appeal of the revenue. The high court has dismissed the same on the grounds of monetary limits.
Further, even in the case of composite order of any High Court or appellate authority which involves more than one assessment year and common issues in more than one assessment year, no appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit. In cases where a composite order/ judgement involves more than one assessee. each assessee shall be dealt with separately. Thus viewing the instructions given and monetary limits set by the abovementioned circular, it was decided to dismiss the appeal of the revenue.
The Madras High Court dismissed the writ petition filed by the Saravana Group against income tax proceedings for suppressed sales and challenging tax demand on technical grounds.
A single-member bench comprising Anita Sumanth (Judicial) held that no avenue to intervene in these writ petitions and in any event, and no case is made out for quashing the impugned demands, in light of the admitted position while dismissing the petition filed by the petitioners.
The Madras High Court quashes the assessment order passed without giving sufficient opportunity for a personal hearing to the petitioner under section 73 of the Tamil Nadu Goods and Services Tax Act, 2017.
A single-member bench comprising Anita Sumanth directed the adjudicating authority to reconsider the matter after giving the sufficient opportunity of a personal hearing to the petitioner and passed an order within four weeks from the date of the personal hearing and quashed the previous assessment order.
The Cuttack bench of the Orissa High Court held that no coercive action shall be taken against the petitioner during the pendency of the writ petition for the Goods and Service Tax arrears.
The two-member bench comprising B.R Sarangi and M.S Raman held that no coercive action shall be taken against the Petitioner during the pendency of the writ petition so far as the impugned demand is concerned.
The Delhi High Court dismissed the appeal filed by the revenue against the deletion of addition by the Commissioner of Income Tax (Appeals).
The two-member panel comprising Rajiv Shakdher and Girish Kathpalia dismissed the application filed by the revenue and held that the decision of the Commissioner was as per the law and liable to be sustained.
In a recent case, the Delhi High Court quashed the assessment order passed by the assessing officer under section 144 of the Income Tax Act,1961 on the ground of non-consideration of proper evidence.
The two-member panel comprising Rajiv Shakdher and Girish Kathpalia quashed the assessment order and directed the assessing officer to pass fresh assessment order while disposing of the petition filed by the petitioner.
The Delhi High Court held that no appeal would lie against the order in miscellaneous applications under section 260A of the Income Tax Act,1961.
The two-member bench comprising Rajiv Shakdher and Girish Kathpalia held that appeal was disposed of and granted the liberty to file a writ petition against the order.
The Madras High Court has held that the assessment order passed under the Tamil Nadu Goods and Service Tax Act,2017 based on the general notice issued is not valid.
“In the interests of substantial justice, the impugned order of assessment dated 17.03.2023 is set aside and shall be treated as a show cause notice by the petitioner, who shall appear along with all details in support of the reversal under the impugned order on Thursday, the 13th July 2023, at the specific request of the counsel for the petitioner, without expecting any further notice in this regard.”, the Court comprising Dr Justice Anita Sumanth held.
In a recent case, the High Court of Gujarat held that the cancellation order of Goods and Service Tax registration without stating the reason is invalid.
While allowing the appeal, the two-judge panel of Justice Vipul M Pancholi and Justice Devan M Desai set aside and quashed the Show Cause notice and Order.
The High Court of Gujarat has held that compensation received for the compulsory acquisition of land is not taxable as capital gains.
A division bench comprising Justice Ashutosh Shastri and Justice J C Doshi observed that “merely because the compensation amount is agreed upon would not change the character of acquisition from that of compulsory acquisition to the voluntary sale. It may be mentioned that this is now the procedure which is laid down even under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 as per which the Collector can pass rehabilitation and resettlement awards with the consent of the parties/land owners. Nonetheless, the character of the acquisition remains compulsory.” It was evident that the land appears to be compulsorily acquired and the income is rightly claimed as exempted and therefore, the conclusion of an authority that income has escaped assessment, appears to be erroneous. The Court quashed and set aside the impugned order dated 27.01.2022 and also the impugned notice.
In a significant case, the Allahabad High Court has held that enquiry under section 148A(d) of the Income Tax Act, 1961 applies only to the extent of (un) availability of information showing income escapement.
A division bench comprising Justice Ashwani Kumar Mishra and Justice Shiv Shanker Prasad viewed that “any observations of the assessing authority while passing an order under section 148A(d) about merits of assessment of income would remain subject to the order to be ultimately passed in reassessment proceedings under section 148 and would not be to the prejudice of rights and contentions of the assessee under section 148 as well as departmental remedies in respect thereof.” The petition was dismissed.
The Delhi High Court has held that the remuneration payable to the accountant doing a special audit under the Micro, Small and Medium Enterprises Development Act (MSMED), 2006 does not amount to consideration.
Justice Prathiba M Singh held that the IT Department cannot be termed as a ‘buyer’ when it is nominating the accountant for conducting a Special Audit and neither can the CA Firm be termed as a ‘supplier’. The remuneration payable to the accountant cannot also be termed as ‘consideration’ as the Special Audit is a statutory duty being performed by the accountant for and on behalf of the AO. Insofar as Audits under Section 142(2A) are concerned, the IT Act would have to be reckoned as the Special Act and the MSMED Act as the general Act dealing with MSME disputes.
In a recent ruling, a Division Bench of Bombay High Court ruled business profit earned by an entity not having Permanent Establishment in India is not taxable as per provisions of Double Taxation Avoidance Agreement (DTAA)
The court rejected the appeal since no significant issue arose and there was no requirement to intervene in the ITAT’s decision.
The High Court of Madhya Pradesh refused to grant anticipatory bail to the accused who had refunded the Goods and Service Tax (GST) by forming 25 Bogus Firms.
GST-RI and GST-3B sales and purchase of as many as 25 bogus firms are liable to be investigated, hence, looking to the gravity of the offence and huge amount of refund of GST through bogus firms, no case is made out for grant of anticipatory bail.
In a recent case, the Ahmedabad bench of the Gujarat High Court held that the payment of property tax cannot be assessed based on the non-use or close condition of the property under section 140 of the Gujarat Provincial Municipal Corporation Act, 1949. The two-member bench comprising Ashutosh Shastri and Divyesh A. Joshi held that this was not a fit case in which to exercise the appellate jurisdiction and it contained no irregularity, illegality, or perversity in any form while dismissing the appeal filed by the assessee.
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