Supreme Court and High Courts Weekly Round-Up

This weekly round-up analytically summarizes the key stories related to Supreme Court and High Courts reported at Taxscan.in during the previous week from July 11 to July 16, 2022

M/s. Sri Vasavi Wedding and Event Planners vs Department CITATION: 2022 TAXSCAN (HC) 540

A division bench of the Andhra Pradesh High Court, while considering a writ petition challenging the GST assessment against the Wedding & Event Planners, refused to quash the proceedings as the Court prima facie found that it cannot be said that the Petitioner has not conducted any event during the relevant period.The Court added that “Hence, we do not want to go into these factual aspects and, accordingly, the Writ Petition is dismissed giving liberty to the Petitioner to approach the Appellate Authority and avail the remedy by putting forth the grievances on the factual aspects. It is made clear that any observations made in this order are only for the purpose of passing this order and the same shall not influence the Appellate Authority while deciding the matter, in case any Appeal is filed. No order as to costs.”

Purulia Metal Casting Pvt. Ltd. vs Assistant Commissioner of State Tax, Purulia Charge & Ors. CITATION: 2022 TAXSCAN (HC) 539

The Calcutta High Court has held that the action of the GST department recovering the tax demand from the electronic cash ledger before the expiry of statutory time to file the appeal is a clear violation of the provisions of section 78 of the Central GST Act, 2017.

M/S. SREELEATHERS vs PRINCIPAL COMMISSIONER OF INCOME TAX CITATION: 2022 TAXSCAN (HC) 537

The Calcutta High Court, on Thursday delivered an assessee-friendly wherein the Court commented that the allegations of money laundering are very serious allegations and the effect of a case of money laundering under the relevant Act is markedly different. holding in favour of the assessee, the Court held that the said allegations cannot be used when the assessee discharges his obligations and explained the transaction.

Renu Devi Banka & Ors. Vs Union of India & Ors CITATION: 2022 TAXSCAN (HC) 538

The Calcutta High Court has recently dismissed a writ petition claiming ownership of cash seized by Enforcement Directorate (ED) in Chandigarh, for want of locus standi and jurisdiction.Dismissing the petition, the Court held that “Considering the facts and circumstances of the case and the submission of the parties and in view of the fact that this Writ Petition filed by the petitioners challenging the impugned show-cause notice and prayed for quashing of the same are by none of the noticees and noticees have not challenged the same which has been issued by the Enforcement Authority at Jaipur in Rajasthan and none of the noticees have filed this Writ Petition challenging the impugned adjudication proceedings in question arising out of the impugned search and seizure proceedings out of which impugned adjudication proceedings are pending at Chandigarh and in view of the fact that the highly disputed question of ownership of the seized cash amount in question is involved which is a part of the said pending adjudication proceeding at Chandigarh which the petitioners want release by the order of this writ court, I am not inclined to entertain this writ petition.”

PRINCIPAL DIRECTOR OF INCOME TAX (INVESTIGATION) & ORS. vs LALJIBHAI KANJIBHAI MANDALIA CITATION: 2022 TAXSCAN (SC) 154

The division bench of the Supreme Court has held that sufficiency or adequacy of “reason to believe” need not be considered to determine the validity of search under section 132 of the Income Tax Act 1961.The division bench observed that the sufficiency or inadequacy of the reasons to believe recorded cannot be gone into while considering the validity of an act of authorization to conduct search and seizure. The belief recorded alone is justiciable but only while keeping in view the Wednesbury Principle of Reasonableness. Such reasonableness is not a power to act as an appellate authority over the reasons to believe recorded.

Instruction No: F. No. 2 7511 41 2022- CX.8 A

In connection with the recent Bombay High Court judgment ordering to impose costs on Pr. Chief Commissioner (Customs) and adjust the same from the salary, the Central Board of Indirect Taxes and Customs (CBIC) has decided to conduct HC Litigation Monitoring Fortnight from 14.07.2022 to 27.07.2022.

M/s.Hotel Southern Comforts vs State Tax Officer CITATION: 2022 TAXSCAN (HC) 534

The single bench of Madras High Court presided by Mr. Justice R. Suresh Kumar has held that extraordinary Writ jurisdiction under Article 226 can’t be invoked if appellate jurisdiction under section 107 is available.The High Court has held that “the impugned orders cannot be successfully challenged before this Court on the ground of non-exhausting the alternative, the efficacious appellate remedy which is available to the petitioner under Section 107 of the GST Act, hence, these writ petitions are rejected with the liberty to the petitioner by relegating the petitioner to go before the Appellate Authority to file appeals”.

M/S. ORISSA STEVEDORES. LTD. vs Union of India & Others CITATION: 2022 TAXSCAN (HC) 536

The division bench of Orissa High Court has lifted bank attachment for payment of Interest on delayed payment of admitted tax.The Coram of Mr. Justice Jaswant Singh and Mr. Justice M.S. Raman after considering the reconciliation statements has allowed the prayer of the appellant’s counsel prayer for lifting forthwith the attachment on the Bank to enable it to deposit Rs.5,00,00,000/-(rupees five crores only) within 48 hours and the Petitioner undertakes to deposit rest of the amount out of Rs.9,25,43,693.52 in two equated fortnightly instalments but not later than 16th August 2022.

M/s. Sri Sri Engineering Works and others vs The Deputy Commissioner (CT), Begumpet Division, Hyderabad, and others. CITATION: 2022 TAXSCAN (HC) 535

The Telangana High Court has held that the Telangana Value Added Tax (Second Amendment) Act, 2017 to extend the limitation of four years to six years is ultra vires. “We are in respectful agreement with the views expressed by the Kerala High Court in Baiju A.A. Intention of Parliament in ushering in the GST regime through the Constitution Amendment Act and enactment of the CGST Act and simultaneous enactment of various State GST Acts by the State Legislatures is to avoid multiplicity of taxes by subsuming those indirect taxes in a single tax called GST. It is in this context we have analyzed Section 19 of the Constitution Amendment Act. Viewed thus the amendments brought in by the Second Amendment Act, as discussed above, are wholly inconsistent with the scheme of the Constitution Amendment Act read with the CGST Act and the TGST Act,” the Court said.

Gourav Bansal vs State of Haryana CITATION: 2022 TAXSCAN (HC) 533

In a case of GST input Tax Credit of 14 firms has been blocked on account of suspicious transactions, the Punjab and Haryana High Court has granted bail to two accused persons after spending almost 10 months in the custody.

United Projects vs The State of Maharashtra CITATION: 2022 TAXSCAN (HC) 532

A three-judge bench of the Bombay High Court comprising Justice R.D. Dhanuka, Justice Nitin W. Sambre, and Justice Abhay Ahuja has upheld the validity of the provisions of section 129E of the Customs Act mandating pre-deposit on appeals and observed that the fiscal legislation can very well stipulate as a requirement of law a mandatory pre-deposit as a condition precedent for an appeal to be entertained by the appellate authority.

DECCAN HOLDINGS B V vs INCOME TAX OFFICER CITATION: 2022 TAXSCAN (HC) 528

In a petition filed by Deccan Holdings B V, the Delhi High Court has deleted the addition as the income tax officer personally appeared before Court for his mistake in not following the binding precedent of the High Court.Before the bench of Justice Manmohan Justice Manmeet Pritam Singh Arora the officer admitted that the observations/findings in the impugned order that the judgments passed by the court in the above judgments ‘are not acceptable to him’ are untenable in law. He further admitted that principle of judicial discipline mandates that the lower authorities are bound to follow the orders passed by the higher authorities.

Patel Brothers & Co vs State of Odisha CITATION: 2022 TAXSCAN (HC) 530

A division bench of the Orissa High Court comprising Chief Justice S Muralidhar and Justice R.K Pattanaik has held that the product “Bidi” is classifiable as “Tobacco and Tobacco Products” for the purpose of levying entry tax under the Orissa Entry Tax Act, 1999.

ABHISHEK GUMBER, PROPRIETOR OF M/S AG ENTERPRISES vs COMMISSIONER OF GST, NEW DELHI CITATION: 2022 TAXSCAN (HC) 529

While considering a petition challenging the show cause notice by the GST department has held that the same is premature since the appeal relating to claim of refund is still under process.Disposing the petition, the High Court held that “therefore, the impugned demand notice dated 14.06.2022 is set aside, with liberty to the respondent to trigger the process under Section 75 of the Act and the attendant rules, once clarity is attained with regard to the outcome of the pending appeal lodged by the petitioner.”

Juhi Industries Pvt. Ltd vs The State of Jharkhand CITATION: 2022 TAXSCAN (HC) 527

The division bench of the Jharkhand High Court has held that summary of show cause notice without issue of show cause notice u/s 74(1) and quashes order in violation of Rule 142(1)(a) of Goods and Services Tax Rules.The Coram of Mr. Justice Aparesh Kumar Singh and Mr. Justice Deepak Roshan quashed the impugned show cause notice and final order and held that “we are of the considered view that the impugned show cause notice in both the cases does not fulfill the ingredients of a proper show-cause notice and thus amounts to a violation of principles of natural justice, the challenge is maintainable in the exercise of writ jurisdiction of this Court”.

Vinod Kumar vs Commissioner Uttarakhand State GST and others CITATION: 2022 TAXSCAN (HC) 526

A division bench of the Uttarakhand High Court has upheld the maintainability of the writ petition challenging the order cancelling GST registration by holding that the same amount to violation of right to livelihood.

P C FINANCIAL SERVICES PRIVATE LIMITED vs DEPUTY DIRECTOR OF INCOME TAX CITATION: 2022 TAXSCAN (ITAT) 975

The Delhi High Court has recently dismissed a petition by P C Financial Services Private Limited observing that the provisional attachment order has expired.Justice Manmohan and Justice Manmeet Pritam Singh Arora observed that as the impugned orders dated 17th December, 2021 have expired on 17th June, 2022 due to operation of law, the present writ petition is infructuous. “Accordingly, the present writ petition along with application is disposed of with liberty to the petitioner to file a fresh proceeding in accordance with law to challenge the orders dated 16th June, 2022 passed under Section 281B of the Act. It is clarified that this Court has not expressed any opinion on the merits of the controversy. The rights and contentions of all the parties are left open,” the Court said.

Ola operators vs Goods and Services Tax (GST) authorities CITATION: 2022 TAXSCAN (HC) 525

In a major relief to Ola operators, M/s Ani Technologies Private Limited, the Telangana High Court has quashed an erroneous notice issued by the GST department wherein in the instance of an unregistered receiver, the place of supply should be the recipient’s location.

Principal Commissioner of Income Tax-III vs M/s Wipro Limited CITATION: 2022 TAXSCAN (SC) 151

A two-judge bench of the Supreme Court, while considering an appeal by Wipro Ltd., has held that the deduction to Export-oriented Units (EOU) under section 10(8) of the Income Tax Act, 1961 can be denied on the sole ground of delay in filing the mandatory declaration since the twin conditions mentioned in the provision are mandatory.

CADILA HEALTHCARE LTD vs STATE OF GUJARAT CITATION: 2022 TAXSCAN (SC) 150

A two-judge bench of the Supreme Court has held that KADIPROL, being not directly fed to Poultry/Birds cannot absolutely treated as “Poultry Feed” and may be treated as “Drug and Medicine.”

COMMISSIONER OF SALES TAX ODISHA AND ORS vs ESSEL MINING AND INDUSTRIES LTD CITATION: 2022 TAXSCAN (SC) 152

A two-judge bench of the Supreme Court, on Monday, referred a matter relating to extension of time of six months to the Assessing Authority to complete the audit assessment under the Orissa Value Added Tax Act, 2004, to a three-judge bench.“This Court has traditionally drawn a distinction between statutes prescribing no time limit while performing public duties and statutes providing a time limit. Even with the statutes providing for the time limit, there is a distinction between statutes providing for consequence for not acting with the time limit and statutes not providing for any such consequences. Examination of these factors become necessary for appreciating the procedural ultra vires in the executive action. For the present, we need not say anything more,” the Court said.

M/S D.L. STEELS ETC vs COMMISSIONER OF CUSTOMS CITATION: 2022 TAXSCAN (SC) 153

A two-judge of the Supreme Court comprising Justice Sanjiv Khanna Justice Bela M. Trivedi has held that the product, pomegranate seeds attract Customs Duty at a lower rate of 5% and urged the Centre to consider having a policy decision on the classification of the same.

Commissioner of Central Excise vs M/s Sepco Electric Power Construction Corporation CITATION: 2022 TAXSCAN (SC) 149

A two-judge bench of the Supreme Court comprising Justice M R Shah and Justice Sanjiv Khanna has held that a “firm” and a” company” can be said to be a “consulting engineer” as defined under the Finance Act, 1994 and liable to pay the service tax as a service provider even prior to the amendment in the Finance Act clarifying that the provision is applicable to “body corporates”.

SUNIL BHATIA vs SERIOUS FRAUD INVESTIGATION CITATION: 2022 TAXSCAN (HC) 524

The Delhi High Court has allowed the bail application by a chartered accountant in connection with the SFIO case related to alleged irregularities at Bhushan Steel Limited.

Smt. Parveen Amin Bhathara vs The Income Tax Officer CITATION: 2022 TAXSCAN (HC) 523

The Madras High Court quashed proceedings holding, non-issuance of re assessment notice within prescribed time.The Coram consisting of Justice R Mahadevan and Justice J Sathya Narayana Prasad held that “, in this case, there is no document made available to prove that the notice under section 148 dated 31.03.2018 was sent for despatch to the appellant, within the end of the relevant assessment year i.e., 31.03.2018. Thus, it is crystal clear that the notice under section 148 for reopening the assessment was not sent to the appellant, within the time stipulated under section 149 of the Act and hence, the same vitiates the reassessment proceedings initiated under section 147 of the Act.”

SANJAY KANAKMAL AGARWAL vs THE STATE OF GUJARAT CITATION: 2022 TAXSCAN (HC) 522

The Gujarat High Court has acquitted the employer of a lady Chartered Accountant from the chargesabetment of suicide of the latter. Reportedly, the lady Chartered Accountant committed suicide on 30th June 2020 after reprimanded to maintain office discipline.

COMMISSIONER OF INCOME TAX vs M/s. ITC LIMITED CITATION: 2022 TAXSCAN (HC) 480

The division bench of the Calcutta High Court has held that the statute promoting growth and development should be considered liberally and upholds deduction u/s 80IC.The Coram of Mr. Justice T.S. Sivagnanam and Mr. Justice Hiranmay Bhattacharyya while dismissing the appeal held that “there is no error in the approach of the CITA or the Tribunal for us to interfere”.

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