Supreme Court and High Court Weekly Round-Up

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 April 2 to April 8, 2023. Criminal Prosecution initiated mistakenly on Assessee who was not an Account Holder: Jharkhand HC quashes Prosecution initiated on Offence u/s 276CC of Income Tax Act-Mrs. Anita Gupta vs Union of India- 2023 TAXSCAN (HC) 670 The Jharkhand High Court quashed the prosecution initiated on offence under section 276CC of the Income Tax Act, 1961 since the criminal prosecution was initiated mistakenly on the assessee who was not an account holder. From the counter affidavit filed by the Income Tax department, they have admitted the assertion made on behalf of the petitioner that the said account does not stand in the name of the petitioner. In view of the admitted position, the Coram Comprising of Justice Gautam Kumar Choudhary held that criminal prosecution was without any factual basis. The Court quashed the order dated 14.03.2019 passed by the Special Court (Economic Offence), Ranchi. Relief to Landis Gyr: Calcutta HC confirms Relief Granted on Account of Unascertained Liability, “Provision Warranty” which is Contingent in Nature-PRINCIPAL COMMISSIONER OF INCOME TAX vs M/S. LANDIS GYR -2023 TAXSCAN (HC) 673 The Calcutta High Court confirmed the relief granted on account of unascertained liability, “Provision Warranty” which is Contingent in nature, thereby granting relief to Landis Gyr, the respondent. The High Court Bench of Acting Chief Justice TS Sivagnanam and Justice Hiranmay Bhattacharyya observed that “We are of the view that no substantial question of law arises on the said issue as the Tribunal has decided in favour of the assessee by returning ‘finding of fact’.” The Court concluded by noting that the substantial question of law being entirely factual and the Tribunal having decided in favour of the assessee by returning a finding on fact, we are of the view that no such substantial questions of law arise for consideration. Supreme Court upholds 4% TDS Deduction on Sales Tax in Transfer of Right to Use Vehicles as ‘Deemed Sale’-STATE OF TRIPURA & ANR vs CHANDAN DEB & ORS. -2023 TAXSCAN (SC) 144 The Supreme Court of India upheld a 4% TDS deduction on sales tax in the transfer of the right to use vehicles as ‘deemed sale’. The Apex Court further observed that the High Court has fallen in error in misinterpreting Rule 3A(2) of the Tripura Sales Tax Rules and has fallen in error in declaring Rule 3A(2) of the Tripura Sales Tax Rules ultra vires to Tripura Sales Tax Act. The Supreme Court quashed and set aside the impugned common judgment and order passed by the Division Bench of the High Court and that of the common judgment and order passed by the Single Judge declaring Rule 3A(2) of the Tripura Sales Tax Rules, 1976 as ultra vires to the Tripura Sales Tax Act, 1976. No Service Tax on Issuance of Corporate Guarantee on behalf of Group Companies without Consideration: SC-COMMISSIONER OF CGST AND CENTRAL EXCISE vs M/S EDELWEISS FINANCIAL SERVICES LTD. CITATION: 2023 TAXSCAN (SC) 142 In a significant case, the Supreme Court has held that the issuance of a corporate guarantee on behalf of group companies without consideration is not a taxable service and no need to levy service tax. The respondent-assessee contended that issuance of a corporate guarantee to a group company without consideration would not fall within the banking and other financial services and is therefore not a taxable service. He would also read Section 65B (44) of the Finance Act 1994 to point out that the definition of service indicates that it relates to only those services that are rendered for valuable consideration. The division bench of Justice Hrishikesh Roy and Justice Manoj Misra has observed that no service tax would be assessed on the corporate guarantees given by a parent company to its subsidiaries in absence of consideration. Order passed without giving Reason for Denying Claim of ITC on Capital Goods under KVAT Act: Kerala HC sets aside Assessment Order-PRODAIR AIR PRODUCTS INDIA PRIVATE LIMITED vs STATE OF KERALA-2023 TAXSCAN (HC) 669 In a recent judgement, the Kerala High Court set aside the assessment order passed without giving the reason for denying the claim of ITC on capital goods under the Kerala Value Added Tax Act (KVAT Act). Further, the court viewed that the taxing authority assumed a jurisdiction that it did not have and the assessing authorities mechanically passed orders without showing how the taxable event is attracted in or without giving reasons for denying the claim of an assessee for exemption or deduction. While allowing the appeal, the Court set aside the impugned judgment of the Single Judge and the assessment order. Calcutta HC quashes Notice U/s 148 issued Towards Non-existing Company-Brillant Credit & Finance Private Limited vs Income Tax Officer-2023 TAXSCAN (HC) 667 In a recentcase, the High Court of Calcutta quashed the notice issued under section 148 of the Income Tax Act, 1961 towards a non-existing company. A single judge bench comprising Justice Md. Nizamuddin viewed that the impugned notice dated June 30, 2022, and all further steps under the said impugned notice also is not tenable in the eye of the law. While allowing the petition, the Court quashed the impugned notice solely on the ground that the impugned notice was issued in the name of a non-existing company despite revenue having notice and knowledge of the non-existence of such Company. Initiation of Reassessment processing beyond six years of Assessment is barred by limitation: Calcutta HC-Laser Vanijya LLP vs Income Tax Officer- 2023 TAXSCAN (HC) 668 The High Court of Calcutta held that initiation of reassessment processing beyond six years of assessment is barred by limitation and directed the respondent to file a reply to the petition. A Single bench comprising Justice Md. Nizamuddin viewed that the matter deserves adjudication by calling for affidavits from the respondents and held that the petitioner has been able to make out a prima facie case for an interim order by raising the issue of jurisdiction of the assessing officer concerned in initiating the impugned re-assessment proceeding. The Court directed the respondents to file an affidavit in opposition within four weeks and the petitioner to file a reply thereto, if any, within two weeks thereafter. Discrepancy in Amount Mentioned in E-Way Bill and Tax Invoice: Orissa HC directs Fresh Adjudication-M/s. Jena Trading and Co. vs CT and GST Officer-2023 TAXSCAN (HC) 666 The Orissa High Court Bench has directed for fresh adjudication as there was a discrepancy in amount mentioned in e way bill and invoice. The Division Bench Of Justice B.R. Sarangi and Justice M.S.Raman quashed the impugned order and directed for fresh adjudication observing that, “In the tax invoice the amount has been mentioned as Rs.1,97,047.86 whereas in the e-Way Bill it has been mentioned as Rs.197047086.00. Thereby, there is palpable error in the way bill, which may be construed to be a human error. If this fact is brought to the notice of the assessing authority, the same can be considered in accordance with law and a fresh assessment order can be passed.” Relief to Mahanagar Telephone Nigam Limited (MTNL): Delhi HC set aside Demand of Service Tax of Rs. 56.61 Crores-MAHANAGAR TELEPHONE NIGAM LTD vs UNION OF INDIA AND OR-2023 TAXSCAN (HC) 663 As a relief to Mahanagar Telephone Nigam Limited (MTNL),the Delhi High Court set aside the demand for service tax of Rs. 56.61 crores since the surrender of any right to use the spectrum before 14.05.2016 would not be chargeable to service tax. Justice Vibhu Bakhru and Justice Amit Mahajan observed that MTNL had received the compensation during the financial year 2015-16, which was before14.05.2016 – the date on which the Finance Act, 2016 came into force and Clause (j) was introduced in Section 66E of the Act. The surrender of any right to use the spectrum by MTNL before the said date would not be chargeable to service tax. The Court set aside the impugned show cause notice and allowed the petition. Jharkhand HC to decide on issue of levy of GST on Mining Lease / Royalty-M/s RQS Mining Private Limited vs Commissioner of State Tax-2023 TAXSCAN (HC) 665 The Jharkhand High Court has tagged the instant matter along with W.P (T) No. 432/2021 and analogous cases as it relates to common issue i.e. levy of GST on royalty upon the petitioner who is the lessee of minor minerals in the District of Sahebganj. The Bench further noted that “Following the interim order passed by the Apex Court in the case of M/s Lakhwinder Singh, this Court had been pleased to grant interim protection on levy of GST on mining lease / royalty/DMF. In the background of the legal position that royalty has been considered to be a tax or profit pendre and the issue is pending before the 9 Judge Constitution Bench, we are of the considered view that the petitioners have made out a case for interim protection.” Non-Constitution of GST Appellate Tribunal: Patna HC stays Recovery of Balance Tax amount-M/s KW and Jasim Traders vs State of Bihar-2023 TAXSCAN (HC) 664 Be the First The Patna High Court stayed the recovery of the balance tax amount from the petitioner on the ground of non -constitution of GST appellate tribunal. The Court of Chief Justice K. Vinod Chandran and Justice Madhuresh Prasad, noted that “The petitioner cannot be deprived of the benefit, due to non- constitution of the Tribunal by the respondents themselves. The recovery of balance amount, and any steps that may have been taken in this regard will thus be deemed to be stayed. It is not in dispute that similar relief has been granted by this Court in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others.” Claim of deletion of Addition in Respect of Providing for Dam Maintenance by Orissa Hydro Power: Orissa HC declines to Frame issues-Orissa Hydro Power Corporation Vs Principal Commissioner- 2023 TAXSCAN (HC) 662 The High Court of Orissa refused to frame issues on the deletion of a claim by the assessee in respect of providing for Dam maintenance by Orissa Hydro Power since it was decided against the revenue. Mr Tushar Kanti Satapathy Senior Standing Counsel for the Revenue is unable to point out if the said orders for AY 2005-06 have been appealed against by the Revenue. Moreover, these are the concurrent views of the CIT (A) and the ITAT which turned on facts. In that view of the matter, following the rule of consistency, the Court declined to frame the questions as urged. Inaction of Income Tax Authority in disposing of series of representations: Calcutta HC directs to pass Speaking Order-Pramod Kumar Drolia vs Income Tax Officer- 2023 TAXSCAN (HC) 655 The Calcutta High Court directed the respondent to pass speaking order in the matter of inaction of the Income Tax Authority in disposing of series of representations. The Bench of Justice Md Nizamuddin observed that “The writ petition is disposed of by directing the respondent authority concerned to consider and dispose of the aforesaid representation of the petitioner in accordance with law and by passing a reasoned and speaking after giving an opportunity of hearing to the petitioner or his authorized representatives within a period of four weeks from the date of communication of this order.” AO can initiate Income Tax Proceedings against Non-Searched Persons in Searches prior to 2015 Amendment: Supreme Court-Vikram Sujitkumar Bhatia Vs Income Tax Officer-2023 TAXSCAN (SC) 143 In a significant move, the Supreme Court has held in Income Tax Officer vs Vikram Sujitkumar Bhatia that the Income Tax Assessing Officer can initiate proceedings under Section 153C of the Income Tax Act, 1961 against non-searched persons, even for searches conducted prior to the amendment in 2015, i.e., before However, it was also conservatively held that, “as before the High Court respective assessment orders were challenged mainly on the aforesaid issue, which is now answered in favour of the Revenue as above, we reserve the liberty in favour of the respective assessees to challenge the assessment orders before CIT (A) on any other grounds which may be available and it is observed that if said appeals are preferred within four weeks from today, the same be considered in accordance with law and on their own merits, on any other grounds.” Demand of Motor Vehicle Tax Pertaining to already Sold Vehicle: Kerala HC directs to Consider Objection Filed-THANKAMMA vs TAXATION OFFICER-2023 TAXSCAN (HC) 661 The Kerala High Court directed the respondent, the Taxation Officer to consider objection filed by the petitioner, as there was a demand of motor vehicle tax pertaining to already sold vehicle. The Bench also directed the respondent herein to consider the objection in the light of the guidelines prescribed by the government as per the Circular and take a decision thereon in accordance with law, after issuing notice to the affected parties and that the said exercise shall be completed within a period of six weeks from the date of production of a copy of the judgment. Non availment of Statutory Remedy under KGST Act: Kerala HC dismisses Writ Petition for quashing Ledger Details-SABU PUTHEN VEEDU vs ASSISTANT COMMISSIONER OF STATE TAX- 2023 TAXSCAN (HC) 658 The High Court of Kerala dismissed the writ petition for quashing ledger details on the ground of non-availment of statutory remedy under the Kerala Goods and Service Tax (KGST) Act. The Bench of Justice TR Ravi noted that “The petitioner has not chosen to exhaust the statutory remedies available against the order passed on the ledger details and after waiting for more than one year the writ petition has been filed. The petitioner cannot be permitted to invoke the jurisdiction under Article 226 of the Constitution of India after having failed to prefer statutory remedies available.” The Bench further noted that the writ petition failed and dismissed the same, without prejudice to the petitioner preferring appropriate applications permissible by law before the appropriate forum. Extension of License period by 10 months and to Refund GST: Telangana HC dismisses Writ Petition holding no Cause of Action within Territorial Jurisdiction of Court-K. Padmaja vs Union of India Counsel for Appellant: C RAMACHANDRA RAJU- 2023 TAXSCAN (HC) 659 The Telangana High Court dismissed a writ petition holding no cause of action within the territorial jurisdiction of the Court in the matter of extension of the license period by 10 months and to refund GST. The writ petitioner in the present matter is K Padmaja. The Court of Justice K Lakshman observed that “In the present case, there is no cause of action, much less part of the cause of action within the territorial jurisdiction of this Court. Except for the fact that the petitioner herein is residing in Hyderabad, there is no cause of action within the territorial jurisdiction of this Court. Therefore, the present writ petition is not maintainable.” Authorities should Act with Greater Swiftness when Goods are Perishable in Nature: Gujarat HC Orders Provisional Release of Kiwi Fruits-M/S SUFI IMPEX vs UNION OF INDIA-2023 TAXSCAN (HC) 649 Ordering the provisional release of seized kiwi fruits the Gujarat High Court ruled that the authorities should act with greater swiftness when goods are perishable in nature. The petitioner in the present matter is M/s Sufi Impex. The Bench also noted that as far as the conditions on which the goods may be released to the petitioner, the court leaves the said aspect to the competent authority concerned who shall prescribe the conditions on the lines of the conditions prescribed by this court in M/s. A and A Shipping Services exercising sound discretion in that regard and upon compliance of such conditions shall provisionally release the goods. Second Appeal on Assessment Order: Kerala HC directs VAT Appellate Tribunal to consider Delay Condonation on Second Appeal-M/S. KINGS TRADERS vs STATE TAX OFFICER-2023 TAXSCAN (HC) 660 The High Court of Kerala directed the Value Added Tax (VAT) Appellate Tribunal to consider the delay condonation application on second appeal in relation to an assessment order. The petitioner in the present matter is Kings Traders. A Bench of Justice TR Ravi observed that “In view of the limited prayer made, there will be a direction to the 2nd respondent to take up the petition for condoning the delay and pass orders. On condoning the delay, application for stay filed along with appeal shall be taken up for consideration and the stay petition shall be disposed of within two months. The coercive steps for recovery pursuant to the revenue recovery notice shall be kept in abeyance till disposal.” Payment of Revenue Dues and Agreement to pay Revenue Arrears: Calcutta HC orders Restoration of cancelled GST Registration-Ranjan Ghosh vs The Superintendent of CGST & CX-2023 TAXSCAN (HC) 657 The Calcutta High Court ordered the restoration of cancelled GST Registration on the ground of payment of revenue dues and agreement to pay revenue arrears. The Court of Justice Md Nizamuddin noted that “The writ petition is disposed of by directing the respondent CGST authority concerned to restore the petitioner’s registration and open the portal for a period of 15 days from date to enable the petitioner to make the payment of revenue due if any by the respondent authority concerned within 31st March, 2023. The Court further noted that if the petitioner fails to make the payment of revenue due after indication of the amount by the CGST authority, the respondent authority concerned shall be free to again block the portal again and cancel the registration. Execution of Subsisting Government Contracts Awarded in pre-GST or post GST Regime without updating SOR: Calcutta HC directs to File Application before Additional Chief Secretary-M/s. Classic & Anr. vs State of West Bengal- 2023 TAXSCAN (HC) 656 The Calcutta High Court directed to file an application before Additional Chief Secretary in the matter of Execution of subsisting Government contracts awarded in pre-GST or post GST regime without updating Schedule of Rates (SOR). The Court made it clear that on receipt of such representations the Additional Chief Secretary, Finance Department shall take a final decision within four months from the date of receipt of such representation after consulting with all other relevant departments concerned. The Court also directed that till the final decision is taken by the Additional Chief Secretary, no coercive action shall be taken against the petitioners. In case of default in making representations within the time stipulated herein this order will not have any force. Renewal of Vehicle Permit can be Granted on Issuance of No Due Certificate: Punjab & Haryana HC-M/S DASHMESH MOTORS REGD. GIDDERBAHA vs STATE OF PUNJAB AND OTHERS-2023 TAXSCAN (HC) 653 Be the First The High Court of Punjab and Haryana has held that the renewal of the vehicle permit can be granted on the issuance of a No Due certificate since the assessee had paid the vehicle tax. The respondent accepted the legal notice and instruction. It was stated that the claim of the petitioner arising out of representation dated 10.02.2023 and legal notice dated 01.03.2023 shall be considered and decided by the Competent Authority in accordance with law within a period of one month from the date of receipt of the certified copy of the order. GST Registration Cancellation, Only allowing 4 days to Submit Documents: Karnataka HC directs to Reconsider SCN-UMMER FAROOQ vs SUPERINTENDENT OF CENTRAL TAX CITATION: 2023 TAXSCAN (HC) 654 The High Court of Karnataka directed to reconsider the show cause notice (SCN) since only 4 days were allowed to submit documents to prevent the cancellation of GST registration. A Coram comprising Justice B M Shyam Prasad viewed that the petition must be preferred in part quashing the impugned order of cancellation of GST registration restoring the proceedings for reconsideration by the first respondent. The court allowed the petition in part quashing the impugned order of cancellation of GST registration dated 08.12.2022 restoring the proceedings for reconsideration by the first respondent. Motor Accident Compensation Claim: Calcutta HC directs Reliance General Insurance to Deposit Amount along with Interest-Reliance General Insurance Company Limited vs Sudevi Gupta & Others-2023 TAXSCAN (HC) 650 In a motor accident compensation claim case, the Calcutta High Court directed Reliance General Insurance to deposit the amount along with interest. The appellant- Reliance General Insurance Company Limited was directed by the Court to deposit the balance amount of Rs.1,23,357/- along with interest @ 6% per annum from the date of filing of the claim application till deposit by way of a cheque with the Registrar General, High Court, Calcutta within the period of four weeks. Service Tax & Penalty imposed in absence of Consignment note related to the Transport of Goods by Road: Punjab & Haryana HC directs to Seek Alternate Remedy-Treveni Cargo Movers Pvt. Faridabad vs Union of India and Other- 2023 TAXSCAN (HC) 652 The High Court of Punjab and Haryana in its recent judgement directed to seek Alternative Remedies when Service Tax & Penalties are imposed in absence of a consignment note related to the transport of goods by road. The Court set aside the order and the petitioner is being allowed to produce the consignment notes before the authorities concerned. Further, the matter is remanded back to the Assessing Officer-Joint Commissioner, Central GST Commissionerate for passing a fresh order, following the law, after allowing the petitioner to furnish consignment notes. Treveni Cargo Movers Pvt. Faridabad vs Union of India and Others CITATION: 2023 TAXSCAN (HC) 652-M/s. Shiva Transport Company vs Union of India and Others-2023 TAXSCAN (HC) 651 The High Court of Punjab and Haryana set aside the order passed without allowing the assessee to produce the relevant documents for service tax exemption. A Coram comprising of Justice Ritu Bahri and Justice Amarjot Bhatti set aside the order dated 30.12.2022 since the impugned order has passed without any giving opportunity to the petitioner to produce the relevant documents which were in his custody. While allowing the petition, the court remanded the matter back to the Assessing Officer to pass a fresh order after giving one opportunity to the petitioner to produce the consignment note(s) and then pass a speaking order keeping in view the Entry No.21 of the Exemption Notification, following the law. Non-Payment of Kerala Legal Benefit Fund: Kerala HC directs GST Appellate Authorities to consider Appeal after Payment-K.J. JAGATH SIMHAN vs THE STATE TAX OFFICER- 2023 TAXSCAN (HC) 648 In a recent ruling of the Kerala High Court, presided by Justice A K Jayasankaran Nambiar and Justice Mohammed Niyas C P directed the Goods and Services Tax (GST) Appellate Authorities to consider the appeal after the payment of the Kerala Legal Benefit Fund. The division bench while upholding the decision of the single bench in the writ appeals to the extent it finds against the appellant on the issue of the power of the State Government to reopen an assessment subsequent to the Constitution Amendment (101st Amendment Act), decided to dispose these Writ Appeals by directing the First Appellate Authority to entertain the appeals preferred by the appellant against the orders of assessment, after collecting the amounts due towards the Kerala Legal Benefit Fund. Also, if the appellant corrects the issue with the transfer of funds to the Kerala Legal Benefit Fund within three weeks of the judgement date, the appeals would be treated as properly filed and will be resolved on their merits. Reassessment initiated during the pendency of Scrutiny Assessment: Delhi HC issues Notice-DISH INFRA SERVICES PVT. LTD. Vs ASSISTANT COMMISSIONER OF INCOME TAX-2023 TAXSCAN (HC) 647 The division bench of Delhi High Court consisting Justice Rajiv Shakdher and Justice Tara Vitasta Ganju issued the notice to the respondent side on the petition filed by the petitioner against the issue of notice under section 148A(b) of Income Tax Act, 1961 when the scrutiny assessment was going on. The bench observed that the petitioner approached the court after some delay. Also, the assessment order has not been passed yet. According to the court, it requires further detailed deliberation however it directed the Income Tax authorities to continue with the assessment proceedings. If any order is passed which is adverse to the interest of the petitioner, the same shall not be given effect to till further directions of the court, stated the bench. Kerala HC halts Income Tax Recovery on Solidarity Movement of India till Decision on Audit Report Delay Condonation Application-M/S. SOLIDARITY MOVEMENT OF INDIA vs THE INCOME TAX OFFICER-2023 TAXSCAN (HC) 646 The Kerala High Court has recently granted relief to the Solidarity Movement of India by directing the Income Tax department not to take any coercive measures such as recovery of taxes until the application for condonation of filing audit reports is decided on. This decision by the Kerala High Court is significant as it provides relief to charitable organisations who may have missed the deadline for filing their audit reports. The court’s direction to consider applications for condonation of delay in filing Form No.10B, along with the interim stay on recovery steps initiated by the Income Tax department, will provide a much-needed reprieve to such organisations. Transfer of Income Tax File from Kolkata to Lucknow: Calcutta HC directs to provide Opportunity of Personal Hearing-Vivek Kumar Goenka vs The Principal Commissioner of Income Tax- 2023 TAXSCAN (HC) 643 The Calcutta High Court directed to provide opportunity of personal hearing in the matter regarding Transfer of Income Tax File from Kolkata to Lucknow. A Bench of Justice Md Nizamuddin noted that “I find that neither the materials as asked for by the petitioner nor opportunity of personal hearing was provided to the petitioner though in this case a show cause-notice was issued to the petitioner to file objection to the impugned action of transfer of the petitioner’s file but it is the case of the petitioner that he is not able to file any effective objection in view of non-providing of any materials for taking such action of transfer against the petitioner.” The Court further directed the respondent authority concerned to provide relevant documents to the petitioner indicating the basis for taking such order of transfer of the petitioner’s file and to provide opportunity to file further objection, if such material is supplied and also to give opportunity of personal hearing to the petitioner. No challenge of Final Re Assessment order: Calcutta HC dismisses Writ Petition-Tanmoy Dutta vs Union of India & Ors-2023 TAXSCAN (HC) 642 A Single Bench of the Calcutta High Court dismissed a writ petition the ground that no challenge as regards to the final re assessment order was made in the petition The Bench observed that “This is not a case where the petitioner has approached this writ court immediately after getting notice under Section 148A(b) of the Act or after passing the order under Section 148A(d) of the Act and not only that when the writ petition was filed on 9th March, 2023, petitioner could have brought to the notice of the court the final assessment order and challenged it though it may not be maintainable in view of availability of alternative remedy by way of appeal.” Calcutta HC quashes GST notice issued on Dead Person-Kakali Saha vs State of West Bengal & Ors-2023 TAXSCAN (HC) 645 In a recent decision the Calcutta High Court quashed GST notice issued under the West Bengal Goods and Service Tax Act (WBGST) on a dead person. The Court of Justice Md Nizamuddin observed that “Considering the facts and circumstances of the case as appears from record and submission of the parties, the aforesaid impugned order is quashed on the ground that the same has been issued in the name of a dead person. Illegal Demand of GST: Rajasthan HC Seeks Response from GST Dept-Shri Ganesh Traders vs Chief Commissioner-2023 TAXSCAN (HC) 640 The High Court of Rajasthan sought responses from the GST department in a case of an illegal demand for Goods and Service Tax ( GST ) and granted time for filing the reply for the petition. A Coram comprising Justice Vijay Bishnoi and Justice Kuldeep Mathurgranted time to Mr Hemant Dutt to file a reply to the writ petition. The petitioner was directed to deposita further 10% of the disputed tax amount and furnishing security, other than cash and bank guarantee for the remaining 80%, to the satisfaction of the Assessing Authority. The Court held that “no coercive steps shall be taken against the petitioner to recover any amount under the impugned assessment order dated 25.02.2021 and appellate order dated 31.01.2023.” Granting of Instalment in Payment of Revenue Dues: Calcutta HC Directs to File Application u/s 80 WBGST Act-S & ID Management Services Private Limited vs The State of West Bengal & Ors-2023 TAXSCAN (HC) 644 In a recent decision, the Calcutta High Court directed the petitioner, S & ID Management Services Private Limited, to file an application under Section 80 of the West Bengal Goods and Service Tax (WBGST) Act, relating to granting of instalment in payment of revenue dues. The Court of Justice Md Nizamuddin directed the petitioner to make an application under Section 80 of the WBGST Act before the Commissioner concerned within a period of two weeks from date and if such application is filed by the petitioner within the time stipulated herein, in that event Commissioner concerned shall consider and dispose of the aforesaid application under Section 80 of the Act for grant of instalments in accordance with law within a period of four weeks from the date of receipt of such application. Non-Constitution of GST Appellate Tribunal shall not Deprive Assessee’s Statutory Benefit u/s 112(9): Patna HC stays Deposit of Balance Tax Amount-SAJ Food Products Pvt. Ltd vs The State of Bihar through the Secretary cum Commissioner-2023 TAXSCAN (HC) 637 While staying deposit of balance tax amount the High Court of Patna held that non-constitution of Goods and Service Tax appellate tribunal should not deprive assesee’s statutory benefit under section 112(9) of the Bihar Goods and Services Tax Act, 2017. The bench of the Justice Madhuresh Prasad observed that,“If the petitioner makes a deposit of a sum equal to 20 percent of the remaining amount of tax in dispute, in addition to the amount deposited earlier under Sub-Section (6) of Section 107 of the B.G.S.T. Act, then the petitioner must be extended the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act, for he could not be deprived of the benefit, due to non constitution of the Tribunal by the respondents themselves”. “Authorities under the Act are misinformed of their powers and the limits of their jurisdiction”, Kerala HC slams GST Dept for Seizure of Cash w/o Service of SCN-SHABU GEORGE vs STATE TAX OFFICER-2023 TAXSCAN (HC) 638 The Kerala High Court has recently observed that authorities under the act are misinformed of their powers and the limits of their jurisdiction and the court slamed the GST department for seizure of cash without show cause notice. The division bench of the high court observed that seizure of cash from the premises of the appellants was wholly uncalled for and unwarranted. Further the respondent has retained the seized cash for more than six months and is yet to issue a show cause notice to the appellants in connection with the investigation, there can be no justification for a continued retention of the said amount with the respondent. Therefore the division bench consisting A.K. Jayasankaran Nambiar, (Judge) and Mohammed Nias C.P. (Judge) allowed the appeal by directing the first respondent to forthwith release to the appellant the cash seized from the premises, against a receipt to be obtained from him. Non-Constitution of GST Appellate Tribunal Deprives LIC ‘s Right to Appeal under BGST: Patna HC Directs to File Appeal u/s 112-M/s Life Insurance Corporation of India vs The Union of India through the Ministry of Finance Counsel-2023 TAXSCAN (HC) 639 In a recent judgment, the Patna High Court bench comprising of Acting Chief Justice Chakradhari Sharan Singh and Justice Madhuresh Prasad observed that the non-constitution of GST Appellate tribunal deprives Life Insurance Corporation of India’s right to appeal under BGST and directed to file an appeal under section 112 of the Bihar Goods and Services Tax Act ( B.G.S.T. Act), 2017. A two-member bench comprising of Chakradhari Sharan Singh, ACJ and Madhuresh Prasad J observed that non-constitution of the Appellate Tribunal caused deprivation to the petitioner’s statutory right to appeal under Section 112(8)(9) and held that 20 per cent of the remaining tax in dispute is required to be deposited by the petitioner with due diligence if he is genuinely desirous of availing the remedy of appeal within four(4) weeks. Valid Consideration is Necessary for a Service to be Taxable as per S. 65(44) of Finance Act: SC dismisses GST Dept. appeal-COMMISSIONER OF CGST AND CENTRAL EXCISE vs M/S EDELWEISS FINANCIAL SERVICES LTD. CITATION: 2023 TAXSCAN (SC) 142 The Supreme Court of India has held that a valid consideration is necessary for a service to be taxable as per section 65(44) of Finance Act, 1994 and dismissed the GST departments’ appeal. Any activity must, for taxability under the Finance Act, 1994, not only, about another, reveal a ‘provider’, but also the flow of ‘consideration’ for the rendering of the service. In the absence of any of these two elements, taxability under section 66B of the Finance Act, 1994 will not arise. There is no consideration insofar as the ‘corporate guarantee’ issued by respondents on behalf of their subsidiary companies is concerned. A Coram comprising of Justice Hrishikesh Roy and Justice Manoj Misra observed that since the assessee had not received any consideration while providing a corporate guarantee to its group companies and would not be a taxable service. Interim Maintenance Grant on the Basis of ITR and Balance Sheets: Punjab and Haryana HC upholds Maintenance Order of Family Court-Avtar Singh Vs Mandeep Kaur and others- 2023 TAXSCAN (HC) 636 The Punjab and Haryana High Court has recently upheld the maintenance order based on the filed Income Tax Returns (ITR) and balance sheets of the family court in a revision petition filed by the assessee-husband. The Single Bench of Punjab and Haryana High Court observed that, “The amount of interim maintenance has been granted by the Family Court by taking into account, the income tax returns filed by the petitioner as also the balance-sheets of the firm which are admittedly in his proprietorship, i.e., M/s. Surjit Diesel Service, Gandarpur, Cuttack, Orissa. It was considered that in the ‘Affidavit of Income, Assets and Expenditure’, the petitioner has himself mentioned his monthly income to be ₹1,50,000. The Family Court has also considered that the respondent wife is earning only an amount of ₹14,000 per month as admitted by her, and not ₹50,000 as alleged by the petitioner.” Non-application of mind without considering Relevant Documents: Bombay HC quashes Reassessment Notice-Lakshdeep Investments & Finance Pvt. Ltd. vs Assistant Commissioner of Income-tax-2023 TAXSCAN (HC) 627 The Bombay High Court quashed reassessment notice on the ground that there was non-application of mind by Assistant Commissioner of Income Tax without considering relevant documents. The Coram comprising Justices Dhiraj Singh Thakur and Valmiki Sa Menezes observed that “The impugned notice under Section 148 appears to suffer from total non-application of mind, in that, respondent No.1, Assistant Commissioner of Income Tax, has not considered all the documents furnished by the petitioner along with its reply / objections to the reopening notice, wherein its valuation report of all the details of calculation and disclosures made in the earlier scrutiny proceedings had been produced.” Relief to Milton Plastics: Bombay HC quashes Re Assessment Notice in absence of material for basis for Assumption of Jurisdiction-Milton Plastics Limited vs Mudit Nagpal-2023 TAXSCAN (HC) 628 In a major relief to Milton Plastics Limited, the Bombay High Court quashed the re assessment notice in the absence of material to form the basis for assumption of jurisdiction. The Court of Justices Dhiraj Singh Thakur and Valmiki Sa Menezes observed that “In the present case, there is clearly a failure on the part of the Assessing Officer to set out such material that provided the basis for assumption of jurisdiction under Sections 147 and 148 of the Act. Such material not being available in the notice, the impugned notice dated 22.03.2004 is clearly without jurisdiction and the same is unsustainable.” Relief to SEBI: Bombay HC Upholds CESTAT Order deleting Service Tax Levy on Fee Collected from Entities-The Principal Commissioner of CGST & Central Excise vs The Securities and Exchange Board of India-2023 TAXSCAN (HC) 626 The Bombay High Court upheld the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Order deleting Service Tax Levy on Fee Collected from Entities, thereby granting relief to The Securities and Exchange Board of India (SEBI), the respondent. The Coram comprising Justices Dhiraj Singh Thakur and Valmiki Sa Menezes observed that “The CESTAT noticed that the issue of tax on the fees charged by the respondent was laid down in the correspondence with the Tax Administration as well as with various Government Authorities within a few months of the transition to the Negative List regime. “ Date of Panchnama Last Drawn is Starting Point of Limitation of Two Years for Completing Block Assessment Proceedings: SC-Anil Minda and Others vs Commissioner of Income Tax CITATION: 2023 TAXSCAN (SC) 141 The Supreme Court of India in a recent ruling observed that the Date of Panchnama last drawn is Starting Point of Limitation of Two Years for completing Block Assessment Proceedings. The appellants in the present matter are Anil Minda and Others. A Division Bench of Justices MR Shah and CT Ravikumar ruled that “The date of the Panchnama last drawn can be said to be the relevant date and can be said to be the starting point of limitation of two years for completing the block assessment proceedings.” The Bench relied on the judgment in VLS Finance Limited, wherein it was held that the relevant date would be the date on which the Panchnama is drawn and not the date on which the authorization/s is/are issued. Relief to Thackeray Family: Bombay HC dismisses PIL seeking ED probe on Disproportionate Assets-Miss Gouri Abhay Bhide vs Union of India CITATION: 2023 TAXSCAN (HC) 630 The Bombay High Court on Tuesday dismissed a Public Interest Litigation (PIL) seeking Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) investigation into the alleged disproportionate assets of the Ex-Chief Minister of Maharashtra and Shiv Sena Leader Uddhav Thackeray, his wife and two sons. The Court further noted that there is absolutely no evidence or live link between the alleged malpractices in the B.M.C. and private Respondents herein and thus Petitioners thus are attempting to seek a roving probe, monitored by this Court into the suspicions so entertained by the Petitioners based on nothing but bald allegations. The Court concluded by stating that the petition is an abuse of the process of law and directed the petitioners to deposit Rupees Twenty-five thousand in the Advocates Welfare Fund within a period of two months. DGFT has no Authority to Violate FTP, Power Vests only with Central Govt: Karnataka HC Grants Relief to Patanjali Foods-M/S PATANJALI FOODS LIMITED vs UNION OF INDIA-2023 TAXSCAN (HC) 631 In a recent ruling, the Karnataka High Court held that only the Central Government can make provision for prohibiting, restricting, or regulating the import or export of goods or services, or technology and not the Director General of Foreign Trade ( DGFT ) in relation to the Foreign Trade Policy ( FTP ), thereby granting relief to M/s Patanjali Foods Limited, the petitioner. The Department contended that the DGFT is an authority constituted under the FTDR Act and is entitled to issue public notices prescribing the procedure. The Bench of Justice SR Krishna Kumar observed that “Only the Central Government can formulate and announce the Foreign Trade Policy by ‘Notification’ in the Official Gazette and may also, in like manner, amend that policy. The power of the Central Government to formulate and amend the Foreign Trade Policy cannot be exercised by DGFT.” Reassessment Proceedings Not valid since it Violates Procedure Prescribed under Section 148A(b) of Income Tax Act: Bombay HC-Anurag Gupta vs Income Tax Offcer- 2023 TAXSCAN (HC) 635 In a recent case, the Bombay High Court held that Reassessment proceedings were not valid since it violates procedure prescribed under Section 148A(b) of Income Tax Act, 1961. A two-member bench comprising Justices Dhiraj Singh Thakur and Justices Valmiki Sa Menezes observed that the reassessment proceedings initiated are unsustainable on the ground of violation of the procedure prescribed under Section 148A(b) of the Act on account of the failure of the assessing officer to provide the requisite material which ought to have been supplied along with the information in terms of the said section. While allowing the petition, the impugned order dated 25 March 2022 passed under Section 148A(d) of the Act, and the notice impugned dated 26 March 2022 under Section 148 of the Act are quashed. Refund of IGST on Service Provided to Overseas Entity is not Allowable to Intermediary, Department Failed to Give Opportunity to Assessee: Delhi HC Sets Aside Order Rejecting Refund Claim DL SUPPORT SERVICES INDIA PRIVATE LIMITED vs ADDITIONAL COMMISSIONER CGST- 2023 TAXSCAN (HC) 633 In a significant case, the Delhi High Court ( HC ) has held that refund of Integrated Goods and Service Tax ( IGST )on service provided to the overseas entity is not allowable for the intermediary and set aside the order rejecting the refund claim since the department failed to give the opportunity to assessee. The Coram comprising of Justice Vibhu Bakhru and Justice Amit Mahajan observed that the petitioner was not allowed to meet the case and that it was not entitled to a refund as the services provided by it were as an intermediary. Since the impugned order has been passed in violation of the principles of natural justice, the Court set aside the impugned order and remanded the matter to the Appellate Authority to decide the petitioner’s appeal afresh following the law after affording the petitioner an opportunity to be heard. To Read the full text of the Order CLICK HERE Reopening of Assessment without any Tangible Information is not valid: Bombay HC -Anwar Mohammed Shaikh vs Asst. Commissioner of Income Tax-2023 TAXSCAN (HC) 634 The Bombay High Court held that the reopening of the assessment is not valid when there is no tangible information. A two-member bench comprising Justices Dhiraj Singh Thakur and Justices Valmiki Sa Menezes observed that any information of the petitioner has not remained undisclosed about the income offered by him to tax for the relevant assessment year. It was viewed that the impugned notice dated 31.03.2021, and the impugned order disposing of the objections dated 30.12.2021 filed by the petitioner are arbitrary and issued without the requisite jurisdiction under Section 148 of the Act. The Court quashed and set aside the impugned notice and the impugned order disposing of the petitioner’s objections. GST not leviable on Ocean Freight: Calcutta HC quashes Service Tax Demand of 28 crores-M/s. LCL LOGISTIX INDIA PRIVATE LIMITED vs UNION OF INDIA AND ANR-2023 TAXSCAN (HC) 629 A Single Bench of the Calcutta High Court observed that GST cannot be levied on ocean freight, thereby quashing a service tax demand of 28 crores. The key provision is relevant to determine whether the taxable event is services supplied by a person located in a non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India. The Court allowed the appeal and set aside the order confirming demand of service tax. The High court followed judgment of the Supreme Court in the case of Mohit Minerals holding that no GST can be demanded on ocean freight. Rectification of Inadvertent Errors enables Proper Reporting of Turnover: Madras HC allows to Upload rectified Form GSTR 1-Deepa Traders vs Principal Chief Commissioner of GST & Central Excise- 2023 TAXSCAN (HC) 632 The Madras High Court allowed to upload rectified Form GSTR 1 and noted that the rectification of inadvertent errors enables proper reporting of turnover. The Court concluded by noting that where an expansive view of the issue is called for, are few and far between, as on date, that the Court is inclined to accept the prayer of the petitioner and issued the writ of mandamus to the respondents to do the needful to enable uploading of the rectified GSTR 1. Suo motu cancelled GST Registration on non-filing of Returns and as GST Tribunal has not been constituted u/s 109 of CGST Act: Telangana HC remands matter for Fresh Adjudication-Balatripurasundari Anjali Saride vs Additional Commissioner Appeals I Central Tax - 2023 TAXSCAN (HC) 625 The Telangana High Court has remanded the matter for fresh adjudication since the GST registration was suo motu cancelled on non-filing of returns and as GST Tribunal has not been constituted under Section 109 of CGST Act,2017. The Coram comprising Chief Justice Ujjal Bhuyan and Justice N Tukaramji set aside the order dated 22.07.2019 as well as the order dated 25.02.2022 and remanded the matter back to respondent No.3 to consider the grievance expressed by the petitioner against the cancellation of GST registration and thereafter pass an appropriate order following the law. Accountant of Firm cannot be Considered as Representative of Taxable Person u/s 169(1)(a) GST Act: Allahabad HC quashes Notice Served-Maa Mahamaya Alloys Pvt. Ltd. vs State Of U.P.- 2023 TAXSCAN (HC) 622 The notice served was invalidated by a panel of the Allahabad High Court presided over by Justice Pankaj Bhatia because it was not served in accordance with law. It was determined that the notice was invalid and that the entire proceeding should be quashed. The court stated that serving the accountant of the firm is neither contemplated nor provided for under Section 169(1)(a), and as such, the service as claimed by the respondent’s counsel on the accountant cannot be held to be a valid service; consequently, on that count as well, the entire proceeding is subject to being quashed. Failure to Serve Notice for Personal Hearing invalidates the Order Confirming Demand u/s 73(2) of the Finance Act: Telangana HC-B. Rajender Reddy vs The Commissioner of Central Tax-2023 TAXSCAN (HC) 624 The Telangana High Court has held that failure to serve notice for a personal hearing invalidates the order confirming demand under Section 73(2) of the Finance Act, 1994. The Coram comprising Chief Justice Ujjal Bhuyan and Justice N Tukaramji observed that notice was not served upon the petitioner and the court could not understand why the notice for personal hearing was sent by registered post when the show cause notice was sent through e-mail. In light of the discussion, the Court set aside the Order-in-original dated 02.11.2022 passed by the 1st respondent and stated that the Petitioner shall file a reply thereto within a period of four weeks from the date of the order. Supply of Service of Manpower on monetary consideration shall be treated as Taxable Supply: AP HC directs to Deposit 50% of GST-REDDY ENTERPRISES vs THE STATE OF AP CITATION: 2023 TAXSCAN (HC) 623 Be the First In a recent ruling, the Andhra Pradesh High Court division bench of Justice U. Durga Prasad Rao and Justice V. Gopala Krishna Rao overturned the assessment decision issued by the authorities with the condition that the petitioner deposit 50% of the tax component. The division bench directed that the authorities must set a date for a personal hearing of the petitioner with regard to her objections to the proposed assessment upon the deposit of 50% of the tax component of Rs. 23,79,26,090 as mentioned in the challenged order within six (6) weeks of the date of receipt of a copy of this order. After hearing the petitioner, pass an appropriate Assessment Order in accordance with the governing law and rules expeditiously, stated the bench. Valuation of Goods on Eye Estimation not Prescribed u/s 15 of CGST: Allahabad HC directs to Refund GST Demand-M/S Maa Mahamaya Alloys Pvt. Ltd. vs State Of U.P. And 3 Others-2023 TAXSCAN (HC) 622 Allahabad High Court bench of Judge Pankaj Bhatia directed the Goods and Services Tax (GST) authorities to refund the GST Demand paid by the petitioner on reason that quantifying the goods on basis of eye is not in accordance with law. The bench observed that in “Section 15 of the Central Goods and Services Tax Act (CGST Act) or the Rules framed thereunder, there was no prescriptions for valuation of the goods on the basis of eye estimation as has been done by the department and has been repelled by the appellate authority.” Additionally stated that the appellate authority erred in rejecting the valuation performed using an eye estimate, but went ahead and valued the goods at the appellate stage without following the instructions and procedures outlined in Section 15 read with the Rules, so the contested order is also unjustifiable on that count. Levy of Penalty of 100% of GST Dues in Form GST DRC-07 Invalid: Jharkhand HC quashes SCN and Demand Order-Vikash Kumar Singh vs Commissioner of State Tax -2023 TAXSCAN (HC) 620 The Jharkhand High Court has recently quashed the Show Cause Notice ( SCN ) and Demand Order against the assessee as infructuous for the demand of penalty of 100% of Goods and Services Tax ( GST ) dues in the Form GST DRC-07. The Division Bench of Justice Aparesh Kumar Singh and Justice Deepak Roshan observed that “Levy of the penalty of 100% of tax dues reflected in the Summary of the Order contained in Form GST DRC-07 vide Annexure-4 in the respective writ petitions are also in the teeth of the provisions of Section 73(9) of the Act of 2017, wherein while passing an adjudication order, the Proper Officer can levy penalty up to 10% of tax dues only. The above infirmity clearly shows non-application of mind on the part of the Deputy Commissioner, State Tax, Godda Circle, Godda.” Company Director forcibly taken to GST office to Deposit GST Demand: P&H HC Orders to Refund Sum with Interest-Diwakar Enterprises Pvt. Ltd. vs Commissioner of CGST and anr.- 2023 TAXSCAN (HC) 621 In a recent decision, Judge Ritu Bahri and Justice Manish Batra of the Punjab and Haryana High Court bench concluded that the respondent had forced the petitioner to deposit a Goods and Services Tax (GST) demand. The HC mentioned in the judgment that if the tax is collected without legal authorization, this would amount to taking someone’s property without legal authorization and would violate that person’s right under Article 300A of the Constitution. The division bench observed that “In the present case, no receipt was given by the Proper Officer after accepting the impugned amount. Thus, the amount deposited by the petitioner under protest were liable to be refunded in view of the above mentioned judgments, as the petitioner has been deprived of his right.” Observations made by Commissioner while examining objection raised to provisional attachment of bank accounts u/s 83 of CGST Act will not Bar Assessment Proceedings: Telangana HC-WRIT PETITION No.6587 of 2023 Date of Judgement: 17.03.2023 In a significant case, the Telangana High Court (HC) held that observations made by the Commissioner while examining the objection raised to provisional attachment of bank accounts under section 83 of the Central Goods and Service Tax (CGST) Act will not influence the assessment proceedings. A two-member bench comprising Chief Justice Ujjal Bhuyan and Justice N Tukaramji held that observations made by the Commissioner while passing the order dated 15.03.2023 was in the context of examining the objection raised by the petitioner to provisional attachment of bank accounts under Section 83 of the CGST Act and those would not influence the assessment proceedings that may be initiated against the petitioner. Revised Returns or CA Certificate, relevant to decide whether Typographical Error Crept in VAT Returns: Delhi HC sets aside Decision of Arbitral Tribunal-LAKRA OIL CO vs COMMISSIONER OF TRADE & TAXES & ANOTHER-2023 TAXSCAN (HC) 616 The Delhi High Court set aside the Decision of the Arbitral Tribunal and ruled that the Revised returns or Chartered Accountant (CA) Certificate is relevant to decide whether typographical error crept in Value Added Tax (VAT) returns. The Bench of Justices Vibhu Bakhru and Amit Mahajan observed that “This Court is unable to concur with the decision of the Arbitral Tribunal to disregard the revised returns or the chartered accountant certificate, which are undeniably relevant for deciding the question whether a typographical error had crept in the returns.” No Need to File Fresh Claims when Refund Claim Embedded in Return: Delhi High Court Directs Dept. to Pay 6% Interest-COMMISSIONER OF TRADE AND TAXES vs Corsan Corviam Construction S.A.-Sadbhav Engineering Ltd. JV-2023 TAXSCAN (HC) 619 The High Court of Delhi has held that no need to file fresh claims when a refund claim is embedded in return and directed the department to pay 6% interest. The Court comprising Justice Rajiv Shakdher and Justice Tara VitastaGanju held that since the claim for a refund made by the assessee was embedded in its return, it did not arise out of an order passed by the Court or an authority constituted under the 2004 Act, the assessee was not required to file a fresh claim as contended by the revenue under DVAT 21. Attachment must be Subject to Condition U/s 83 Of GST Act, Attachment of Bank Accounts is Draconian Step: Delhi HC-SAKSHI BAHL & ANR vs THE PRINCIPAL ADDITIONAL DIRECTOR GENERAL -2023 TAXSCAN (HC) 617 In a significant case, the Delhi High Court (HC) has held that attachment of bank accounts is a draconian step and the attachment must be subject to condition under section 83 of the Goods and Service Tax Act(GST), 2017. The Coram comprising of Justice Vibhu Bakhru and Justice Amit Mahajan observed that it was not open for the respondent to attach the bank accounts of other persons on a mere assumption that the funds therein are owned by any taxable person. “The attachment of bank accounts is a draconian step and such action can only be taken in case conditions specified in Section 83 of the Act, are fully satisfied. The exercise of power under Section 83 of the Act must necessarily be confined within the limits of the aforesaid provision.” the Court held. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

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