This weekly round-up analytically summarises the key stories related to the Supreme Court and High Court reported at Taxscan.in during the previous week from February 19 to February 25, 2023.
The Madras High Court directed the petitioner to pay differential duty on portable emergency lamps even when there was a lapse of 16 years for filing the writ petition.
The Court of Justice Abdul Quddhose observed that “No prejudice would be caused to the respondents if such a direction is issued as the respondents will be getting revenue in view of the deposit made by the petitioner pursuant to the directions given by this Court today.” The Court also noted that since the petitioner has approached the Court belatedly, the Court was of the view that after a lapse of almost sixteen years from the date of the impugned order must be put on terms for quashing the impugned order.
The Jharkhand High Court has recently upheld the order of the Income Tax Appellate Tribunal ( ITAT ) against the revenue, nodding to the deletion of penalty imposed on the assessee under Section 271(1)(c) instead of Section 271AAB of the Income Tax Act.
The appeal, thus being devoid of merit, was dismissed by the Division Bench of Justices Aparesh Kumar Singh and Deepak Roshan of the Jharkhand High Court, while the order of the Income Tax Appellate Tribunal (ITAT) was upheld.
The Jharkhand High Court recently stayed the proceedings in respect of a Show Cause Notice (SCN) issued against the petitioner whereas the matter was already adjudicated by the appellate authority.
The Division Bench of the Acting Chief Justice Aparesh Kumar Singh and Justice Deepak Roshan stayed the proceedings in respect of the impugned Show Cause Notice and Summary of SCN, giving an interim relief to the assessee.
A Division Bench of the Orissa High Court has recently allowed rectification and manual submission of GST return GSTR-1 originally filed on March, 2019, observing that the interests of the revenue are not prejudiced by the said rectification and manual submission. The order will enable the assessee to get the benefit of Input Tax Credit ( ITC ) by the principal contractor.
“Once the corrected Forms are received manually, the Department will facilitate the uploading of those details in the web portal”, the Bench further directed. The directions are to be carried out within a period of four weeks, as per the order of the Division Bench.
The division bench of Punjab and Haryana High Court (HC) consisting of Justices Ritu Bahri and Manisha Batra quashed the public auction order issued by the authorities against the petitioner.
In the instant case, the bench observed that the institution is for religious purpose and as per the notification dated 30.09.2003, Annexure P-6 issued by the government, all religious buildings and lands shall be exempted from the payment of tax.
Naresh Goyal, the founder of Jet Airways, a prominent Indian Airways and his wife escaped from the case filed by the Enforcement Department (ED) under Prevention of Money Laundering Act, 2002. The Bombay High Court presided by Justices Revati Mohite Dere and Prithviraj Chavan quashed all the proceedings against them.
The magistrate dismissed the ED’s protest petition against the closure report. Additionally, the same magistrate accepted the closure report and rejected the Akbar Tours objection petition. The Marg police station, sessions court and also the Supreme Court dismissed ED’s plea regarding this matter. It was observed that there is no prior offence against them.
In a significant case the Bombay High Court quashed income tax proceedings against Mumbai Postal Employees and observed that re-assessment initiated based on the change of the opinion.
After considering the contentions of the both side the division bench of Justice Dhiraj Singh Thakur and Kamal Khata allowed the writ petition filed by the petitioner and observed that the jurisdictional requirement of the proviso to Section 147 of the Income Tax Act 1961 had not been complied with as the assessing officer in these case.
A Division Bench of the Bombay High Court has recently quashed impugned show cause notices and the order issued under Section 179 of the Income Tax Act, 1961, to the petitioner, as the said order did not have any reference as to how the steps to recover the income tax dues from the company assets failed.
Observing that the disclosure of steps and the failure of the same in the attempt to collect the tax dues is a sine qua non (essential condition), the Division Bench of Justice Valmiki S A Menezes and Justice Dhiraj Singh Thakur quashed and set aside the show cause notices and order issued against the petitioner.
The Bombay High Court deleted the addition made on account of interest expenditure as the assessee, Godrej & BoyceMfg. Co. Ltd, had sufficient interest-free surplus funds to make the investment.
ABench comprising of Justice Dhiraj Singh Thakur and Justice Kamal Khata observed that “The AO has neither examined the claim in respect of expenditure incurred in relation to the exempt income of the assessee norrecorded any satisfaction with regard to the correctness of the assessee’s claim with reference to the books of account. The disallowance made by applying Rule 8D is not only against the statutory mandate but also contrary to the legal principles laid down”.
The Gujarat High Court ( HC ) held that the order for cancellation of GST registration without determining the amount payable by the assessee is not valid.
The Court allowed the petition and quashed the show cause notice and the consequential order cancelling registration with liberty to the respondent to issue a fresh notice with particular reasons incorporating the details and a reasonable opportunity of hearing.
The High Court (HC) of Delhi, in its significant judgement, directed the Income Tax Appellate Tribunal (ITAT) to re-adjudicate the appeal by Cement Corporation of India Ltd.
Justice Rajiv Shakdher and Justice Tara Vitasta Ganju opinionated that the appeal deserves to be heard on merits and set aside the impugned order. Further, the matter is remitted to the Tribunal for disposal of the petitioner’s statutory appeal on merits.
In a significant case the Bombay High Court bench of Justice Dhiraj Singh Thakur and Valmiki Sa Menezes, Observed that reconsidering decisions rendered in earlier regular assessment amounts to change of opinion. Thus the bench quashed the re-assessment proceedings initiated against Pushpa Nahata.
Further the bench consider that the “AO has only tried to re-visit and reconsider the decision rendered in the earlier regular assessment proceedings on the ground that the addition ought not to have been limited only to Rs.27,27,657/- and ought to have been extended to Rs.3,60,135/-. This, in our opinion, was nothing but a change of opinion on the part of the AO, and therefore, impermissible in law.
The Delhi High Court ( HC ) held that tax dues under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 ( SVLDRS ) cannot exceed the amount confirmed by the commissioner of the central excise department.
The Court directed that the disputed tax dues in respect of the Petitioner would be the amount confirmed by the original authority in the first round of litigation of Rs. 1,11,35,419/-. The determination of tax by the Designated Committee in Form No. SVLDRS-3 was set aside by the Court.
A Division Bench of the Gujarat High Court has recently quashed and set aside the forced generation of Input Tax Credit (ITC) while directing the revenue to recredit the reversed ITC with interest to the electronic credit ledger of the assessee.
The Division Bench of Justices Sonia Gokani and Sandeep N Bhatt noticed that this conduct is also contrary to the instructions issued by the Board (CBIC) and therefore, the action of the petitioner which is termed to be voluntary and not have any element of voluntariness.
In a matter of reopening of assessment after 4 years based on a change of opinion without stating any reason, the Bombay High Court (HC) set aside the re-assessment order being void.
The Court held that the department has purported to reopen the assessment only based on change of opinion and the Petition does not spell out failure on the part of the assessee to disclose fully and truly all material facts. The Court set aside the impugned notice.
The Bombay High Court (HC) in its recent judgement quashed the re-assessment notice secondary email address when the primary address was provided.
The Court quashed and set aside the notice dated 28th March 2022, and all consequential proceedings including the show cause notice for proposed variation dated 25th March 2022 and assessment order u/s 144B r.w s.144 of the Income Tax Act.
On delay in the revocation application of GST registration, the Madras High Court (HC) granted time for further Submission.
Justice M Sundar observed that both sides requested a short accommodation to make further submissions on the above lines. Request acceded to. Mr C. Harsha Raj, Additional Government Pleader (Tax) was given an audience who highlighted Section 30 of the parent legislation point alluded to supra. The counsel is permitted to assist the Court in the next listing along with Mr Pramodkumar Chopda for greater clarity.
On delay of the Income Tax department’s to comply with the assessee’s refund request, the Bombay High Court ( HC ) directed to issue an additional refund.
A two-member bench comprising Justice Dhiraj Singh Thakur and Justice Kamal Khata observed that the respondent failed to take steps to comply with the order dated 18th February 2010 and even within 9 months after receipt of the letter addressed by the Petitioner on 6th March 2018.
The bail plea by the wife of an Ex-income Tax Commissioner was rejected by the Jharkhand High Court in a case relating to disproportionate assets. The bail applicant was in custody since 07 December 2022 for the alleged commission of offences under the Prevention of Corruption Act and Indian Penal Code.
The bench of Justice Gautam Kumar Choudhary of Jharkhand High Court thus rejected the bail plea of the petitioner.
The Bombay High Court has recently quashed and set aside the impugned assessment order passed by the revenue authority as per the Income Tax Appellate Tribunal, being delayed for more than 9 months from the date of receipt of order and in violation of the Section 153(3) of the Income Tax Act, 1961, further directing revenue to refund tax paid along with the jewellery seized.
Thus, the revenue was directed to release the seized jewellery and refund the paid income tax, with consequential interest under Section 244A of the Income Tax Act, to the petitioners within two weeks from the receipt of the order.
The Bombay High Court ( HC ) in its recent judgement has held that failure to get Sanction under section 151(ii) of the Income Tax Act, 1961 from PCIT for reopening of assessment beyond 3 years will invalidate the reassessment proceedings.
A two-member bench comprising Justice Dhiraj Singh Thakur and Justice Kamal Khata viewed that before issuing the notice under section 148A (b) the AO needed to have checked if there was a change of address. A condition precedent for any proceeding including a proceeding u/s. 148A, is a valid service of notice, lest it would be a jurisdictional error.
In a significant ruling, the Delhi High Court (HC) held that C Forms cannot be cancelled with its retrospective effect to deny the benefit to the assessee.
In Jain Manufacturing (India) Pvt. Ltd. v. The Commissioner Value Added Tax & Anr. it was held that C-forms cannot be cancelled retrospectively. In light of the decision, Justice Vibhu Bakhru and Justice Amit Mahajan held that the benefit of the C-Forms in question cannot be denied to the petitioner, by cancelling the same retrospectively and allowing the petition.
The Bombay High court has recently held that mere change of opinion did not provide jurisdiction to re-open assessment.
After considering the contentions of the both parties the division bench of Justice Dhiraj Singh Thakur and Valmiki SA Menezes allowed the writ petition filed by the petitioner and observed that “assessing officer has failed to establish that there was any failure on the part of the assessee to disclose fully and truly any material fact in the present case”
The Madhya Pradesh High Court upholds the order of Income Tax Appellate Authority (ITAT) upon the deletion of addition when there is no incriminating material found during the search.
After considering the submission of the both parties the single bench of Justice Sushrut Arvind Dharmadhikari dismiss the appeal filed by the revenue and observed that “No incriminating documents during the course of search were found, the order in appeal could not be said to have suffered any illegality as would give rise to proposed substantial question of law”.
A Single Bench of Delhi High Court has held that the advance authorization could not be denied to the importer merely based on notification under Section 5 of the Foreign Trade Development and Regulation Act, 1992.
A Single Bench of Justice Prathiba M. Singh quashed the impugned order in view of the legal position in Kanak Exports. The Bench further observed that, “The Advance Authorization of the Petitioner was applied for on 26th June, 2019 and the same would have to therefore, be considered in terms of the legal position prevalent on the said date. The subsequent notification cannot be applied retrospectively to reject the said Advance Authorization. Under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, it is the settled legal position as held in Kanak Exports (supra), that a retrospective application of a later notification, cannot be made by the Central Government” To Read the full text of the Order CLICK HERE
The Telangana High Court remanded back matter to ensure opportunity of hearing in the matter of cancellation of the GST Registration.
The Coram consisting of Chief Justice Ujjal Bhuyan and Justice N Tukaramji observed that “Thus, following the above decision, we set aside the order passed by respondent and remand the matter back to respondent No.4 for a fresh decision in accordance with law. The Respondent shall afford a reasonable opportunity of hearing to the petitioner while passing the fresh order on remand. In the remand proceedings, it will be open to the petitioner to submit the GST returns as per the statute.”
In a recent decision the Telangana High Court noted that further burden cannot be imposed during pendency of appeal on remittance of 25% of disputed tax.
The Bench comprising Chief Justice Ujjal Bhuyan and Justice N Tukaramji observed that “Merely because petitioner has availed the remedy provided by the statute, there should not be additional burden on the petitioner. Having regard to the fact that petitioner has already deposited 25% of the disputed tax and considering the fact that the larger issue is pending consideration before this Court, we are of the view that insisting on further payment by the petitioner during the pendency of the appeal would not be just and proper.”
The Bombay High Court (HC) bench of Justice Abhay Ahuja and Justice Bhiraj Singh Thakur observed that there is no proof of negligence or breach of duty of malfeasance against the petitioner and the Assessing Officer (AO) couldn’t state any such act.
The bench noted that not a single instance, choice, or action made by the AO was cited as evidence of gross negligence, a failure to perform a duty, or any wrongdoing that even remotely might have prevented future tax obligations from being recovered.
The Bombay High Court quashed re assessment notice on the ground that there was no satisfaction of jurisdictional conditions by the Assessing Officer (AO).
The Coram consisting of Justices Dhiraj Singh Thakur and Valmiki Sa Menezes observed that “We have no hesitation in holding that both the jurisdictional conditions had not been satisfied by the AO in the reasons recorded on the touchstone of section 147 of the Act.”
The Bombay High Court ( HC ) in its recent judgement has held that reopening of assessment based on mere change of opinion is not allowable.
Justice Dhiraj Singh Thakur & Justice Kamal Khata held that “there was no basis to hold that there was any failure on the part of the assessee to disclose any material facts fully and truly during the regular assessment proceedings and further that reassessment proceedings are nothing but a change of opinion.” The Court set aside and quashed the impugned notice and the order of reassessment which are without jurisdiction.
The Allahabad High Court confirmed detention of goods on the ground that there was an undervaluation of huge quantities of Pan Masala and Tobacco without downloading mandatory E-Way bills.
The Court concluded by stating that if such a conduct of a dealer is permitted, it will harm the business world and lead to a parallel economy and the very purpose of enactment of the Goods and Service Tax Act would frustrate. The idea of ‘One Nation One Tax’ was to subsume all other taxes into one and bring transparency in the business world.
The Bombay High Court has quashed the notice under Section 148 of the Income Tax Act 1961 as no change of law and no new material on record was found.
“Testing the facts of the present case on the touchstone of the judgments referred hereinabove, it is thus clear that the basis for reopening remains the same which was otherwise the subject matter of scrutiny by the AO during the scrutiny assessment proceedings leading to passing of the order under section 143(3) of the Act”, the Bench further observed.
The Allahabad High Court ( HC ) refused to grant bail since the assessee failed to satisfy the twin condition under section 45 of the Prevention of Money Laundering Act, 2002 ( PMLA ).
The Court observed that the bail application of the present application does not qualify the twin conditions of Section 45 of the PMLA since at this stage it cannot be observed that the present applicant has not committed the offence for which the complaint has been filed against him. The proceeds of crime are also in crores. The applicant is based in Abu Dhabi. The factum of guilt can be proved or disproved before the learned trial court. The Court rejected the bail application and directed the trial court to conclude the trial with an expedition, preferably within a period of six months by fixing a short date and no unnecessary adjournment shall be given.
In a recent judgment, the Tripura High Court (HC) directed to revoke Suspension of Registration since the GST department failed to furnish a cancellation order of registration.
A Coram comprising Justice Arindam Lodh observed that the respondent authority shall allow the petitioner to submit his return for the period the show cause notice dated 11.08.2022 was issued. While allowing the petition, the Court directed the respondents to release the GST portal which they have blocked relating to the petitioner.
The Bombay High Court ( HC ) granted bail to a Tax Consultant convicted under section 12 of the Prevention of Corruption Act, 1988 in a bribery Case. Public servants obtain valuable things, without consideration from the person concerned in proceeding or business transacted by such public servant and Punishment for abetment of offences defined in sections 7 or 11 are defined under sections 11 and 12 of the Prevention of Corruption Act 1988.
The Delhi High Court observed that Show Cause Notice ( SCN ) can’t be issued to entertain claims before the period of Approval of the Resolution Plan.
The Bench comprising Justice Rajiv Shakdher and Tara Vitasta Ganju noted that “The Supreme Court has enunciated, in no uncertain terms, the clean slate principle; it cannot be set at nought by entertaining claims that concern the period obtaining before the approval of the Resolution Plan.”
The department’s petition for revision of the Odisha Sales Tax Tribunal’s ruling was denied by the bench of Chief Justice Dr. S. Muralidhar and Justice Raman of Orissa High Court (HC). The product “Good Knight” was decided to fall under the “Insecticide” category under Entry 30 of Part II of Schedule B to the Odisha Value Added Tax Act (OVAT) and be subjected to 4% tax.
The HC remarked that the product sold by the Opposite Party- Dealer has been correctly categorised as an ‘insecticide’ under Entry 30 of Part II of Schedule B of the OVAT Act. The bench observed that no error had been committed either by the Assistant Commissioner of Sales Tax (ACST) or the Tribunal in accepting the plea of the dealer and negating the contrary plea of the Department.
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