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 July 22 to July 28 2023.
A single bench of Justice Deepak Kumar Tiwari of Chhattisgarh High Court has instructed two individuals who posed as sales tax officers to provide Rs. 2 lakhs in compensation to the victims who were deceived into giving them 2.5 lakhs under the pretense of securing the allocation of a petrol pump and purchasing land.
It was clarified that the applicant will not be subjected to any additional jail sentence since he has already served the substantive jail term, and the default sentence for the fine has also been completed. The rest of the contested judgment will remain unchanged.
In a recent ruling, the Allahabad High Court granted one month to submit the reply since the assessee failed to submit that alleging the Show Cause Notice (SCN) as invalid.
A division Bench comprising Justice Siddhartha Varma and Justice Arun Kumar Singh Deshwal allowed the petitioner to file his reply/objection against the impugned notice and relevant material within one month.
In a recent decision the Kerala High Court observed that the vehicle cannot be seized by the Customs Department on mere apprehension of usage for transporting smuggled goods.
A Single Bench of Justice Bechu Kurian Thomas observed that “The power of confiscation under section 115(2) of the Customs Act can arise only if the vehicle was actually used or is being used for smuggling goods and not for apprehended use or future use. Hence a vehicle cannot be seized by customs on an apprehension that it may be used in future as a means of transporting smuggled goods.’
The Calcutta High Court has held that loans to credit card holders are not part of credit card service and held that No Goods and Service Tax Exemption.
Justice Biswaroop Chowdhury added further that the basic difference between a loan and a credit card is that the former is granted as a necessity and is a welfare scheme and the latter is a facility granted to customers to get goods and services on credit from 3rd parties by availing the Credit Card Services of the Bank regarding payment.
The Orissa High Court has held that registration of the vehicle with the Regional Transport Officer(RTO) is not allowable when the assessee failed to file Form F under Odisha Motor Vehicles Taxation Rules, 1976.
Justice K R Mohapatra held that “the Petitioner-Dealer cannot register the vehicle with any Regional Transport Officer of his choice.” Since the Petitioner has not yet complied with the direction made in W.P.(C) No.1267 of 2023, the writ petition was dismissed
The Bombay High Court quashed re-assessment on no omission or non-disclosure on the part of the assessee, Mukand Limited.
A Division Bench consisting of Justices KR Shriram and Firdosh P Pooniwalla observed that “In this case, petitioner had filed all details and the subject of brought forward unabsorbed depreciation was also considered while passing the assessment order under Section 143(3) of the Income Tax Act. Therefore, the Assessing Officer had in his possession all primary facts and it was for him to draw proper inference as to whether the brought forward unabsorbed depreciation should be adjusted against capital gains or profit and gains from business or profession.”
The Bombay High Court ruled that income tax deduction under Section 80IA(4)(iii) allowable on obtaining Government approval to Industrial Park.
A Division Bench comprising of Justices KR Shriram and Firdosh P Pooniwalla observed that “The objection of the AO that the Industrial Park was being developed by the partnership firm is also not factually correct, in view of the explanation offered by the Assessee and also the letter issued by the Competent Authority. Once the Central Government grants the approval, it is incumbent on the part of the AO to grant the claim of deduction.”
The Madras High Court ordered provisional release of seized car as no mahazar was served on seizure of car and cash.
“On compliance of the above conditions by the petitioner, the said car shall be provisionally released by the second respondent within three days. The cash seized shall be released/or confiscated and /or appropriated towards penalty if only any after adjudication of the proposed proceedings” the Court noted.
The Patna High Court while dismissing the appeal against Indian Oil Corporation Ltd, has held that four years is a reasonable time of limitation in the absence of limitation provided in statute for an order under section 201 of the Income Tax Act, 1961.
Chief Justice K Vinod Chandran and Justice Partha Sarthy answered the question of law against the revenue and in favour of the assessee and reject the appeals filed by the Revenue.
In a recent judgement, the Delhi High Court refused to grant bail to the director of Shakti Bhog in a Money laundering case.
Justice Jasmeet Singh held that “In the light of these documents and material facts I cannot hold that the applicant is not guilty of the offence of money laundering.”
In a significant case, the High Court of Jammu & Kashmir and Ladakh set aside the extended period of limitation since the revenue fails to prove unjust enrichment on sanctioned erroneous refund of excise duty.
A division bench comprising Justice Sanjeev Kumar and Justice Javed Iqbal Wani while dismissing the petition observed that the revenue has also failed to make out a case of unjust enrichment having failed to show how the respondent has benefited by such purported erroneous refund sanctioned in its favour by the Competent Authority.
The Orissa High Court stayed the demand for Goods and Service Tax (GST), due to the non-constitution of the second appellate authority.
A Division bench comprising Dr Justice B R Sarangi and Justice Murahari Sri Raman held that “Since the petitioner wants to avail the remedy under the provisions of law by approaching the 2nd appellate tribunal, which has not yet been constituted, as an interim measure subject to the Petitioner depositing the entire tax demand within a period of four weeks from today, the rest of the demand shall remain stayed during the pendency of the writ petition.”
In a recent decision the Allahabad High Court observed that the Creation of cadre of officers for Commissioner of Income Tax (Appeals) (CIT (A)) not mandatory scheme of the Income Tax Act, 1961 and dismissed the challenge on appointment of the Commissioner of Income Tax (Appeals) (CIT (A)).
We find that the statute, i.e. the Income Tax Act is a self contained code which clearly vests jurisdiction with the Central Government to appoint such persons as it thinks fit to be income tax authorities as are specified in Section 116 of the Income Tax Act. The income tax authorities clearly include Commissioners of Income-tax (Appeals) and, therefore, the Central Government would have the jurisdiction to appoint an officer as Commissioner of Income-tax (Appeals). Officers belonging to the cadre of Indian Revenue Services have been appointed as Commissioner of Income-tax (Appeals)” the Court said.
In a recent ruling, the Supreme Court of India had directed the Income Tax department to pay Rs 1,5 Lakhs of the total cost to Western Union Financial Services inc and directed re-adjudication of tax appeals.
The Court restored the appeals before the High Court with a cost of Rs.50,000/- (Rupees fifty thousand only) to be paid by the appellant to the respondents in each of these appeals within a period of four weeks from today. Further held that unless the cost is paid to the respondent, the High Court on remand shall not take up the appeals for consideration on merits.
Dismissing a Special Leave Petition (SLP), the Supreme Court of India upheld the legality of the Engineering Analysis case in the matter of taxability of the royalty paid to foreign companies.
The Court further noted that the decision in Engineering Analysis Centre of Excellence Private Limited is holding the field. In the event, the aforesaid decision is overruled, that cannot have a bearing on the present case, as it will have an impact only on the judgment passed in Engineering Analysis Centre of Excellence Private Limited (supra) and the cases to be decided thereafter.
In a recent decision the Andhra Pradesh High Court ruled that the Time limit for filing Input Tax Credit (ITC) under the Andhra Pradesh General Sales Tax Act, 2017 (APGST Act) is not ultravires the Constitution of India and mere acceptance of Form GSTR-3B returns will not release delay in filing ITC.
A Division Bench comprising Justices U Durga Prasad Rao and T Mallikarjuna Rao held that the time limit prescribed for claiming ITC under Section 16(4) of APGST Act/CGST Act, 2017 is not violative of Articles 14, 19(1)(g) and 300-A of the Constitution of India. Section 16(2) of APGST/CGST Act, 2017 has no overriding effect on Section 16(4) of the said Act as both are not contradictory with each other. They will operate independently.
The Karnataka High Court has held that no Tax Deduct at Source(TDS) deduction on Vodafone Idea for inter-connectivity usage & bandwidth charges.
The division bench comprising of Justice P.S. Dinesh Kumar and Justice Ramachandra D. Huddar has held that since the assessee was entitled to the benefits under the Double Taxation Avoidance Agreement (DTAA), it was not liable to deduct tax at source.
The Delhi High Court has reprimanded the Goods and Service Tax (GST) authority for unnecessarily delaying the case.
Further held that the order be also sent to the Commissioner of GST, Department of Trade and Taxes, Vyapar Bhawan, IP Estate, New Delhi for necessary information and compliance and if it is found that there is dereliction of duties on the part of the concerned officer, appropriate action for recovery of the amount from the salary of the officer be taken.
In the significant case, the Orissa High Court held that personal hearing could not be denied to taxpayers on grounds of mere mentioning “No” in GST DRC-06. Hence the court directed the adjudication authority for rehearing the issue.
After reviewing the facts and submissions of the both parties, a division bench of Justice B.R. Sarangi and Justice Murahari Sri Raman quashed the order passed under Section 73 of the Odisha Goods & Services Tax Act and directed the authority to give opportunity of hearing to the petitioner in conformity with the provisions of law.
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