Supreme Court and High Courts 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 November 28 to December 3, 2022.

WESTERN OFFSHORE & MARINE PROJECTS PVT. LTD vs STATE TAX OFFICER -2022 TAXSCAN (HC) 964

The Kerala High Court has recently set aside the order canceling GST Registration of assessee, M/s Western Offshore & Marine Projects Pvt. Ltd. The petitioner had approached the Court challenging an order issued by the State Tax Officer canceling the registration granted to the petitioner under the provisions of Central Goods and Services Tax (CGST)/State Goods and Services Tax Act (SGST). The High Court Single Bench of Justice Gopinath P, thereby quashed the cancellation of registration and allowed the writ petition of the assessee, while saving the liberty of the revenue to initiate or continue the proceedings against the assessee in accordance with law.

DEEPAK KUMAR vs STATE OF PUNJAB -2022 TAXSCAN (HC) 966

The High Court of Punjab and Haryana at Chandigarh has recently held that in case of tax evasion FIR cannot be registered as the VAT Act does not have provisions authorizing the same. Allowing the petition, Justice Jasjit Singh Bedi observed that “a perusal of the aforementioned judgments would show that there is no provision for registration of an FIR in such like matters of alleged evasion of tax. The provisions of the Act only provide for mandatory penalty. It is well-settled proposition of law that if a special provision has been made qua a particular subject (in the present case Value Added Tax), the said subject is excluded from the general provisions (in the present case Indian Penal Code). Since the provisions of the VAT Act do not provide for the registration of the FIR and the said Act is a Code in itself, the provisions of the IPC also cannot be invoked. Therefore, quite apparently an FIR could not have been registered against a person who was said to have evaded tax.”

Murali Krishna Chakrala vs The Deputy Director, Directorate of Enforcement -2022 TAXSCAN (HC) 970

The Madras High Court has recently quashed the prosecution against Chartered Accountant Murali Krishna Chakrala observing that, he cannot be held guilty for the ingenuine documents submitted to him by the client. The Division Bench of Justice P N Prakash and Justice G Chandrasekharan observed that, “the submission of Mr.Nithyaesh Natraj, learned counsel, that mere issuance of five numbers of Form 15CB at the request of Kiyam Mohammed [A7], would not, by itself, bring Murali Krishna Chakrala into the net of conspiracy to indulge in money laundering, merits acceptance.”

Sanjiv Kumar Rai vs The State Of Bihar -2022 TAXSCAN (HC) 968

The Patna High Court, amidst hearing the bail plea of the accused in Sanjiv Kumar Rai vs The State of Bihar [2022 TAXSCAN (HC) 968], observed the lack of cooperation of the GST Council to block the generation of E-way Bills with respect to such trucks which are seized and confiscated in the State of Bihar for smuggling of liquor. The case against the accused was for being involved in smuggling 2529 liters of illicit alcohol. The Single Bench of Justice Purnendu Singh thus directed the Registrar (List & Computer) to place the records of the present case along with the records of another Criminal Miscellaneous Petition, in view of the submission that, “such reports are required to be referred particularly with respect to the measures taken by the State Government.”

SYAMALADASAN KUMARAN, Vs STATE TAX OFFICER,JOINT COMMISSIONER,PALAKKAD -2022 TAXSCAN (HC) 969

A Single Bench of the Kerala High Court comprising Justice Gopinath directed fresh adjudication on the treating the product of the petitioner as a branded item, for determining the rate of tax as the additions thereby made were solely based on certain Facebook posts. The High Court observed that, “the proceedings were initiated and continued against the petitioner on the basis of certain facebook posts which showed that the petitioner was dealing in branded rice” and remanded the matter to the the State Tax Officer for fresh adjudication within two weeks with due consideration of the contentions of the petitioner.

SURESH KUMAR VERMA & ORS vs .CUSTOMS, CENTRAL EXCISE AND SERVICE TAX SETTLEMENT COMMISSION & ORS. -2022 TAXSCAN (HC) 941

The Delhi High Court has held that the Settlement Commission cannot make final orders during the subsistence of the Dispute. The petitioner, Suresh Kumar Verma & Ors challenged the order dated 14.03.2018 and corrigendum dated 27.03.2018, passed by the Customs, Central Excise & Service Tax Settlement Commission, Principal Bench, New Delhi (“Settlement Commission”). The Court comprising Justice Rajiv Shakdher and Justice Tara Vitasta Ganju observed that the petitioners have got practically no benefit in approaching the Settlement Commission, as the quantum of liability which was indicated in the aforementioned show cause notice(s) is practically what has been the thrust on them via impugned orders. The Court set aside the impugned order and the notice of demand dated 06.04.2018 was quashed.

PRINCIPAL COMMISSIONER OF INCOME TAX vs VINITA CHAURASIA -2022 TAXSCAN (HC) 942

The Delhi High Court has held that the addition of unexplained cash based on a single document is not permissible. Given the factual finding returned by ITAT in the assessment proceedings to the effect that no fresh material was taken into account by the AO for making additions in the present proceedings and the sole basis for making the additions was the Seized Document. While dismissing the appeal filed by the revenue, the Court comprising Justice Manmohan and Justice Manmeet Pritam Singh Arora upheld the finding of the ITAT.

COMMISSIONER OF INCOME TAX vs MATA PARVATI EDUCATIONAL & INNOVATIVE SOCIETY -2022 TAXSCAN (HC) 943

The Delhi High Court upheld the order of ITAT when there was no evidence to challenge the genuineness of the object of the charitable trust. The revenue contended that the ITAT erred in directing the CIT(E) to register the Assessee Society under Section 12AA of the Income Tax Act, 1961, (‘Act’) considering that, there were doubts concerning the genuineness of the activities of the Respondent. The Court comprising Justice Manmohan and Justice Manmeet Pritam Singh Arora observed that there isno adverse finding of the Assessing Officer against the Assessee with respect to the saidcash deposits. The scope of the application was to examine the genuineness of the objects of the society and to ascertain if the said objects are charitable or not. While dismissing the appeal, the Court upheld the order of the ITAT.

AJAY GUPTA (HUF) vs INCOME TAX OFFICER WARD 54(1) -2022 TAXSCAN (HC) 944

The Delhi Bench High Court (HC)has held that the writ jurisdiction of the court cannot be invoked when there are no materials which show reassessment proceedings as arbitrary. The Court comprising Justice Manmohan and Justice Manmeet Pritam Singh Arora observed that the Petitioners have not brought on record anything to suggest that the reassessment proceedings are being undertaken in an arbitrary manner and the cases do not fall under the exceptional ground on which a writ jurisdiction of the High Court can be invoked.

COMMISSIONER OF INCOME TAX, (EXEMPTION) KOLKATA vs VIJAY KUMAR BAJORIA FOUNDATION -2022 TAXSCAN (HC) 952

The Calcutta High Court (HC) has held that registration of trust u/s 12AA of the Income Tax Act,1961 is valid when the object of the Trust is charitable in nature and allowed the Exemption u/s 80(G)(S)(vi) of the act. The Commissioner of Income Tax (Exemption), Kolkata [CIT(E)] rejected the application filed by Vijay Kumar Bajoria Foundation, the assessee for registration under Section 12AA of the Act on the ground that the assessee was not carrying on any charitable activity.

ABHINAV KUMAR vs The State of Bihar BIHAR -2022 TAXSCAN (HC) 963

While considering a bail application by an accused charged with the offence of cheating and other offences under the Indian Penal Code, the Patna High Court has Granted Bail to the accused After 9 Months in Custody. Granting bail to the petitioner, Justice Alok Kumar Pandey observed that “Considering the facts and circumstances of the case, period of custody, arguments advanced on behalf of both sides, taking into consideration the material available on recordas well as this aspect of the matter that charge has already been framed, let the petitioner above named be released on bail on furnishing bail bond of Rs. 10,000/- (Rupees Ten Thousand) with two sureties of the like amount each to the satisfaction of learned Chief Judicial Magistrate, Lakhisarai in connection with Lakhisarai (Kawaya).

TARSEM JODHAN & ANR. Vs THE STATE OF PUNJAB & ORS. -2022 TAXSCAN (SC) 206

The two-judge Supreme Court Bench of Justice M R Shah and Justice M M Sundresh observed recently in a Special Leave Petition filed by Tarsem Jodhan and others that, “No serious efforts seem to have been made” in regard to the pendency of investigation in excise matters in Punjab. The Supreme Court bench observed that, “As such, we are not at all satisfied with the progress in the investigation. It appears that no serious efforts seem to have been made to reach out to the real guilty/culprits who are in business of manufacture and transportation of such illegal liquors. Cancelling the licences and/or recovery of penalties/duties is not sufficient. Even nothing has been pointed out that the penalties/duties levied are in fact paid or not.”

NAMBIAR BALAKRISHNAN NARENDRAN vs INCOME TAX OFFICER -2022 TAXSCAN (HC) 945

The High Court (HC) of Kerala has held that the reassessment notice issued without following Provision u/s 148A of the Income Tax Act,1961 is not valid. Nambiar Balakrishnan Narendran, the petitioner approached the Court, aggrieved by the fact that proceedings were taken against him under Section 148 of the Income Tax Act, 1961 (‘the Act’) without following the procedure contemplated by the provisions of Section 148A of the Income Tax Act.

H.T. MEDIA LIMITED vs PRINCIPAL COMMISSIONER OF INCOME TAX-4 -2022 TAXSCAN (HC) 957

A Division Bench of the Delhi High Court recently held that, the disallowance estimated by the assessee, H T Media Limited, the publisher of Hindustan Times newspaper and Mint for calculation of exempt income was not founded on a clear basis and upheld the findings of the Income Tax Appellate Tribunal(ITAT) and the Assessing Officer (AO). The bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora also observed that, the submission of the counsel for the Assessee that the issue of satisfaction for AYs 2010-11 and 2011-12 was remanded by ITAT to AO is also not borne out from the record, as the ITAT remanded the said issue back to the AO with the mandate for determining the average value of investment to which Rule 8D(2) has to be applied and thereafter to calculate the expenditure incurred by the Assessee on non-exempt investments including interest portion.

STALCO CONSULTANCY & SYSTEMS PRIVATE LIMITED vs Principal Commissioner of Income Tax -2022 TAXSCAN (HC) 962

The Orissa High Court held that amendments in Income Tax Act under Finance Act 2021 do not affect notices issued prior to April 1st, 2021. The appellant in the present appeal is Stalco Consultancy &Systems Private Limited. A Single Bench consisting of Justice M.S. Raman observed that “The judges held that as far as the notices dated 1st April, 2021 and 5th April, 2021 are concerned, they are bad in law for non-compliance with the mandatory requirements of prior enquiry by the Assessing Officer (AO) in terms of Section 148-A of the Act. Those notices were accordingly quashed. As regards the first notice dated 31st March, 2021, it was seen from the text of the notice itself that it has been issued more than six years after the closure of the relevant AY on 1st April, 2020 and therefore exceeds the time limits set under Section 149 of the Act.

GTS Coal Sales vs Directorate General of Goods & Services Tax Intelligence -2022 TAXSCAN (HC) 959

The High Court of Jharkhand has refrained to decide on the leviablity of GST for GTA Services during the investigation. GTS Coal Sales, the petitioners prayed for a direction to refund the involuntarily deposited amount of Rs. 60 lac in W.P.(T) No. 1539 of 2021 and Rs. 47,64,900/- in W.P.(T) No. 14 of 2021 without there being any demand and/or adjudication proceeding. Justice Aparesh Kumar Singh and Justice Deepak Roshan of the court observed that at this stage any determination on the issue of leviablity of tax, whether @ of 12% or whether @ 18 % will certainly hamper the entire investigation.

Umesh Kumar Vs State Of U.P. And 3 Others -2022 TAXSCAN (HC) 960

The Allahabad High Court has held that the GST registration cannot be canceled merely on round of delay in filing of revocation application once the assessee filed all the returns and paid the dues and the Government has accepted the same. Granting relief to the assessee, the Court further held that “In the present case, as the petitioner has come with the case that he has deposited the entire tax and has filed return in the year 2021, the said Act having not been denied by the State, the rejection of registration solely on the ground of delay in moving the revocation application, is not sustainable in law. Moreover, the Appellate Authority has not recorded any categorical finding as to the service of notice and merely on the ground that the application was time barred, proceeded to uphold the order of rejection of revocation application.”

Tvl.Surya Recreation Club vs The Assistant Commissioner (CT)- 2022 TAXSCAN (HC) 958

A single Bench of the Madras High Court dismissed petition against notice regarding Value Added Tax (VAT) on Sale of Food, Refreshments and Drinks including Liquors by Club to Members. The petition has been filed under Article 226 of the Constitution of India praying for issuance of writ of Certiorarified Mandamus, calling for the records relating to the order passed by the Respondent, the Assistant Commissioner (CT) and the consequential orders and quash the same as illegal and consequently, to forbear the Respondent from assessing the Petitioner Club to service tax.

K.VISWANATH vs DEPUTY COMMISSIONER OF INCOME TAX CORPORATE CIRCLE 1 -2022 TAXSCAN (HC) 946

The High Court (HC) of Kerala has held that the Assessing Officer must hear the assessee before Issuing notice u/s 148 of the Income Tax Act, 1961. Justice Gopinath P observed that the Impugned Order does not show that the petitioner was afforded an opportunity fora personal hearing before the order was issued. The provisions of Section 148 A(b) indicate that an order can be issued only after affording an opportunity fora hearing. In light of the observations, the Court quashed the Order and remanded the matter to the file of the 1st respondent, who shall issue fresh orders after following the procedure contemplated by Section 148A(b) of the Income Tax Act and also after affording to the petitioner an opportunity of being heard.

Kamal Dev Vs State of H.P. & Ors. -2022 TAXSCAN (HC) 961

A Division Bench of the Himachal Pradesh High Court has recently held that, the notice of eviction served to the petitioner upon finding that he has encroached into forest land in Shimla town cannot be set aside on the sole basis of payment of property tax to the municipality. The petitioner admitted that he had encroached upon the forest land in Shimla town itself and had been served with a notice of eviction dated 18.11.2020. The Court observed that, “once it is found that the petitioner is a rank – encroacher, then obviously his illegal possession cannot be permitted to be continued, that too, under the order of the court, as it is the bounden duty of the court to ensure that such wrong doer is discouraged at every stage and not permitted to prolong the litigation” and refused to serve notice on the respondents.

Mr. K.Durga Prasad vs Mr. B.Narsimha Sarma -2022 TAXSCAN (HC) 948

The Telangana High Court has held that the Order confirming service tax without issuing SCN is invalid. Chief Justice Ujjal Bhuyan and Justice C V Bhaskar Reddy observed that there is no finding recorded by the first respondent that shows cause notice was served on the petitioner or that the four letters intimating virtual personal hearing were served upon the petitioner. Mere issuance of show cause notice or letters of personal hearing to an assessee is not adequate. The assessing Officer is required to record a finding that notices were issued and served upon the assessee but despite the service of notice, the assessee did not come forward to contest the proceeding.

PR. COMMISSIONER OF INCOME TAX -12 vs KARUNA GARG -2022 TAXSCAN (HC) 949

The Delhi Bench High Court has held that the Addition of unexplained credit based on bogus LTCG on the sale of penny stock without cogent evidence is not valid. Karuna Garg, the appellant contended that the ITAT has erred in deleting the additions of Rs.1,60,18,923/- as unexplained credit under Section 68 read with Section 115BBE of the Income Tax Act, 1961 (‘the Act’) on account of bogus Long-Term Capital Gain on sale of penny stock company namely M/s Goldline International Finvest Ltd. on the ground that the assessing officer has not made an independent enquiry. The Court comprising Justice Manmohan and Justice Manmeet Pritam Singh Arora observed that the AO made an attempt to delve into the question of the infusion of Respondent’s unaccounted money, but he did not dig deeper. There was an astronomical increase in the share price of a company which was not commensurate with the financial parameters of the said company.

Rupal Jain vs Commissioner Of Income Tax -2022 TAXSCAN (HC) 947

The Allahabad High Court (HC) has held that an Addition based on an unexplained deposit becomes valid when Three conditions required under section 68 of the Income Tax Act,1961 are not proved. Under Section 68 of the Income Tax Act,1961 if any sum is found credited in the Books of account of Mrs Rupal Jain, the assessee and the assessee do not explain the nature and source thereof or the explanation offered by him is not satisfactory in the opinion of the Assessing Officer, the sum so credited may be charged to income tax as to the income of the assessee of that previous year. Justice Sunita Agarwal and Justice Vipin Chandra Dixit observed that the assessee has failed to prove the transaction as per Section 68 of the Income Tax Act,1961 and the appeal filed by the assessee was dismissed.

MANORAMA KUMARI D/O. UMA SHANKAR PRASAD vs UNION OF INDIA -2022 TAXSCAN (HC) 955

A Division Bench of the Gujarat HC has recently denied to compel the expeditious appointment of Manorama Kumari as the Judicial Member pursuant to the willingness shown in being reappointed at the National Company Law Tribunal (NCLT). The petitioner was appointed as a judicial member of the National Company Law Tribunal on 01.06.2016 in terms of Section 413 of the Companies Act, 2013. The petitioner had held office for 5 years as contemplated. The petitioner expressed her willingness to continue as Judicial Member, National Company Law Tribunal (NCLT) for another term of 5 years. The petitioner had already served for a term of five years and retired.

YASH KRISHI SEVA KENDRA vs STATE OF MADHYA PRADESH -2022 TAXSCAN (HC) 956

In an order favouring the GST department, the Madhya Pradesh High Court has upheld an order stating that the notice for cancellation of GST registration was duly received by the assessee via mobile phone. The petitioner, M/s Yash Krishi Seva Kendra was aggrieved by the dismissal of appeal preferred under section 107 of the GST Act passed by Joint Commissioner-cum-Appellate Authority for State Goods and Service Tax whereby the said appeal has been dismissed as time-barred.

RAJESH KATYAL vs INCOME TAX DEPARTMENT -2022 TAXSCAN (HC) 954

he Delhi Bench High Court has held that Section 53 of Benami Transactions (Prohibition) Amendment Act has prospective effect, and only applies to transactions entered after 1st November 2016. RajeshKatyal, filed seeking a direction for quashing and to set aside the Show Cause Notice dated 04th April, 2022 (‘SCN’) issued by the Respondent under Section 53 of the Prohibition of Benami Property Transactions Act, 1988, as amended by the Benami Transactions (Prohibition) Amendment Act, 2016 (the ‘Act of 2016’), which came into effect on 01st November 2016, against the Petitioner. The Court comprising Justice Manmohan and Justice Manmeet Pritam Singh Arora observed that the alleged benami transactions undertaken by the Petitioner were entered prior to 1st November 2016. While allowing the petition the Court quashed the Show Cause Notice dated 04th April, 2022.

M/s Jagdalpur Motors vs Union of India -2022 TAXSCAN (HC) 953

In a significant ruling which may lead to a debate, the Chhattisgarh High Court has stated that the revisal of TRAN-1/2 forms are allowed under the Central GST Act and the recent circular issued by the Central Board of Indirect Taxes and Customs (CBIC) denying the further revisal is legally not permitted.

THURUTHIYATH SUMA Vs ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME -2022 TAXSCAN (HC) 939

The Kerala High Court, while considering a petition where the assessee approached the jurisdictional appellate Commissioner requesting a stay of demand, has held that the said authority is no longer empowered to grant stay after the introduction of faceless scheme and therefore, directed the National Faceless Appeal Centre (NFAC) to provide a link for filing the petition.

NEEMA NIDHI LTD Vs THE ASSISTANT COMMISSIONER OF INCOME TAX -2022 TAXSCAN (HC) 938

The Kerala High Court, while considering a writ petition against the delay in processing the income tax refund due to the technical glitches in the online portal, has directed the Centralized Processing Centre (CPC) to initiate the process and allow the refund to the assessee along with interest. Justice Gopinath P was considering a bunch of petitions by the petitioners in these cases suffered orders of assessment and orders imposing penalty for assessment years 2010-11 and 2016-17. They filed applications under the Vivad Se Vishwas Act, 2000 and the matter has been settled. As a consequence of settlement, certain amounts have to be refunded to the petitioners. However, such refund has not been made despite the passage of merely one year and 9 months from the date of settlement

Sansera Engineering Limited Vs Deputy Commissioner, -2022 TAXSCAN (SC) 205

The Supreme Court of India has recently rejected the excise duty rebate claim of M/s Sansera Engineering Limited as the same was time-barred under the Section 11B of the Central Excise Act, 1944. The appellants had made the claim for rebate as they had filed claims for rebate of duty paid on the goods exported to the tune of Twenty Nine Lakh Rupees and Forty Two Lakh Rupees under the Rule 18 of Central Excise Rules, 2002. Subsequently, for the period October 2015 to March 2016, the appellant also claimed a rebate of One Crore Forty Seven Lakh Rupees.

CRESCENT CONSTRUCTIONS Vs THE DEPUTY COMMISSIONER OF STATE TAX (WC) STATE GOODS & SERVICERS TAX DEPARTMENT -2022 TAXSCAN (HC) 940

The Kerala High Court, while granting relief to the assessee, has held that the mistake of applying the correct VAT rate can be rectified under the Kerala Value Added Tax Act and therefore a rectification application cannot be rejected for submission of documents along with the application. Justice P Gopinath noted that the officer has misdirected himself in law while deciding to reject the application for rectification on the ground that the petitioner produced the documents in support of the claim for lower rate of tax only along with the application for rectification.

Tvl.Marimuthu Venkateshwaran vs Commissioner -2022 TAXSCAN (HC) 937

The Madras High Court granted relief to the assessee, Tvl Marimuthu Venkateshwaran on cancellation of registration due to non-filing of GST Returns due to health issues. The writ petition has been filed under Article 226 of the Constitution of India for issuance of writ of Certiorarified Mandamus, calling for the records of the Assistant Commissioner (Circle) and quash the same and consequently, direct the Respondents to revoke the cancellation of registration.

M/s.Shimla Fruit Agency vs Commissioner of Customs -2022 TAXSCAN (HC) 936

The Madras High Court directed to consider provisional release of imported cargo of betel nut during investigation. The Bench consisting of Justice Mohammed Shaffiq ordered “The Respondents to consider the application of the Petitioner for provisional release under Section 110-A of the Customs Act and the same shall be disposed of by the Adjudicating Authority on merits and in accordance with law, within a period of one (1) week from the date of receipt of a copy of this order.”

First Global Stockbroking P Ltd vs R. M. Ramchandani -2022 TAXSCAN (HC) 935

A Division Bench of the Bombay High Court has recently held in favour of First Global Stockbroking Pvt. Ltd. that, Adjudicating Authority ( AA )is not authorized to issue notices under the Foreign Exchange Management Act (FEMA), 1999 for violations of provisions in Foreign Exchange Regulation Act (FERA), 1973. The High Court observed that, in view of Sub Section (3) of Section 49 no Adjudicating Officer could take notice of any contravention under section 51 of FERA for a period of two years from the date of the commencement of FEMA. Thus, the Show Cause Notices issued in contravention to the provisions of FEMA were quashed and the refund was consequently directed to be issued.

HEDE FERROMINAS PVT. Vs ASST. COMMISSIONER OF INCOME TAX, -2022 TAXSCAN (HC) 934

The High Court of Bombay at Goa has recently upheld the re-assessment proceedings by the income tax department finding that the late filing of income tax returns by the assessee was with an intention to frustrate the time limit to conclude the assessment under section 147/148 of the Income Tax Act, 1961. The Petitioner, Hede Ferrominas Pvt. Ltd did not file any returns within 30 days despite receipt of the re-assessment notice. Almost eight months later, that is, on 03.01.2022, the Petitioner was served with a notice under Section 142(1) from ITI requiring the Petitioner to furnish accounts and documents to enable the respondents to proceed with the reassessment in terms of the notice dated 27.03.2021, which the Petitioner had not respond.

SHEKHAR P. VERNEKAR vs COMMISSIONER OF STATE TAX -2022 TAXSCAN (HC) 933

The High Court of Bombay High Court at Goa, while quashing an order for compounding of offence, has held that the amount for the compounding of offence under the GST Act shall not exceed the maximum penalty specified in the Act for such offence. Concluding the order, the High Court held that “In so far as the petitioner’s grievance with regards to the wording of the operative part of the order as noted above, in my opinion, the grievance raised by the petitioner is quite correct, although such observation may be clarrificatory in nature, it has some consequence, more particularly when the substantive appeal itself is pending before the Appellate Authority assailing the Assessment Order.

RAVINDER KUMAR AGGARWAL vs INCOME TAX OFFICER, -2022 TAXSCAN (HC) 932

A division bench of the Delhi High Court has imposed a cost of Rs. 50,000 against the assessee for filing petition seeking to nullify the re-assessment under section 148 of the Income Tax Act, 1961 against a struck-off company as the Ministry of Corporate Affairs (MCA) has restored the same in order toenable the income tax department to recover the tax dues. Justice Manmohan and Justice Manmeet Pritam Singh Arora was considering a petition by Mr. Ravinder Kumar Aggarwal seeking quashing of the notice dated 28th March, 2019 issued under Section 148 of the Income Tax Act, on the ground that the said notice is null and void, as it has been issued in the name of the struck off company.

M/s S A Traders vs Goods and Service Tax Officer -2022 TAXSCAN (HC) 929

A Division Bench of the Andhra Pradesh High Court has recently held that, both impugned show cause notice as well as the order for cancellation of registration are not sustainable in the eye of law as both of them are not clear enough to understand the mind of the issuing authority. The Bench of Justice Durga Prasad Rao and Justice T Mallikarjuna Rao observed that, “both show cause notice as well as the order of cancellation of registration are dubious enough and failing to divulge the misdeed or fraud allegedly committed by the petitioner.”

M/s Usha Martin Limited vs Additional Commissioner -2022 TAXSCAN (HC) 930

A Division Bench of the Jharkhand High Court has recently held that proceedings for transition of CENVAT credit alleged to be inadmissible cannot be carried out under the Central Goods and Services Tax (CGST) Act, 2017. The Division Bench of Justice Aparesh Kumar Singh and Justice Deepak Roshan further observed that “The repeal and saving clause (e) under Section 174(1) of the CGST Act allowed such legal proceedings to be instituted in respect of inchoate rights except rights under transactions which were past and closed”, and quashed the adjudication proceedings along with the impugned order, saving the liberty for the revenue to initiate proceedings under existing law, i.e., CEA, 1944 and Finance Act, 1994 read with CCR, 2004 against the petitioner for the relevant tax period.

GAJANAN Vs APPASAHEB SIDDAMALLAPPA KAVERI, -2022 TAXSCAN (HC) 931

A Single Bench of the Karnataka High Court has recently held that, transactions of more than Rs.20000/- in cash, does not vitiate the proceedings under Section 138 Of the Negotiable Instruments Act, 1881 but only results in an additional penalty under Section 269SS of the Income Tax Act, 1961. It was observed that, the said contravention of Section 269SS of the Income Tax Act does not make the alleged transaction void. The concerned authorities can take necessary action against the complainant for non compliance of Section 269 of the Income Tax Act. On the aforesaid observation, the single bench of Justice G Basavaraja held that the court cannot interfere with the conviction on the ground of noncompliance with the Income Tax Act provisions and dismissed the Criminal Revision Petition.

Sanmar Foundries Limited vs The Commissioner of Central Excise and Customs -2022 TAXSCAN (HC) 926

The Madurai Bench of Madras High Court (HC) has held that Writ Court can entertain a show-cause notice issued on lack of Jurisdiction. Justice M S Ramesh and Justice N Anand Venkatesh of HC observed that the scope of interference to a show-cause notice by a writ Court exercising its power under Article 226 of the Constitution of India, is very limited, barring few exceptions, like lack of jurisdiction or abuse of process of law, etc. The HC observed that the present case had a flaw which dispossess the jurisdiction of the respondent in proceeding further with the show-cause notice. The impugned show-cause notice itself was on the strength of the directions issued by the Single Judge in W.P(MD)No.2026 of 2013, dated 08.11.2013, wherein the Investigating was called upon to complete the investigation and thereafter, the Commissioner of Central Excise was granted liberty to proceed further with the adjudication after granting the sufficient opportunity to the appellant

Commissioner of Income Tax vs M/s. Mansukh Dyeing and Printing Mills -2022 TAXSCAN (SC) 204

The Supreme Court bench of Justice M R Shah and Justice M M Sundresh recently held that, the transfer of assets in favour of retiring partners on revaluation of assets of the partnership firm attracts tax under the Section 45(4) of the Income Tax Act, 1961. The two-judge bench examined whether the transfer to capital accounts of retiring and subsisting partners attracts short term capital gains taxable under Section 45(4) of the Act. The assessee, M/s Mansukh Dyeing and Printing Mills was revalued after the partners had reconstituted the firm with four newly added partners. Two of the subsisting partners withdrew part of their capital.

PRINCIPAL COMMISSIONER OF INCOME TAX – 12 vs M/S SOORAJMUL NAGARMULL -2022 TAXSCAN (HC) 927

The Calcutta High Court (HC) has held that the cessation of trading liability u/s 41(1) (a) is not valid in the presence of details of outstanding creditors. The revenue challenged the order passed by the Income Tax Appellate Tribunal “B” Bench Kolkata (Tribunal), dated 20.07.2018 in ITA No. 1907/Kol/2016 for the assessment year 2001-2002. The learned tribunal noted that the creditors have given a written reply in response to the summons reiterating their liability as also the fact that the assessee had settled some of the creditors even after 31.03.2001 and the assessee has fulfilled the duty cast upon them to provide evidence that the liability exists at the end of the year. Based on the above-said observations, the HC bench comprising Justice T S Sivagnanam and Justice Hiranmay Bhattacharyya upheld the order of the Tribunal.The appeal for the revenue was dismissed.

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