This weekly round-up analytically summarizes the key tax judgments of the Supreme Court and all High Courts reported at Taxscan.in during the previous week from December 23 to December 29, 2023, the last week of 2023.
In a significant development, the Gujarat High Court, presided over by Justice Bhargav D. Karia and Justice Niral R. Mehta, raised pertinent queries regarding the extension of the show-cause-notice period under the Central Goods and Service Tax Act, 2017.
He also invited the attention of the Court to the explanation to section 168A of the Act and submitted that none of the eventuality mentioned therein existed when the impugned notification was issued by the Central Board of Indirect Taxes and Customs.
In a recent case, the Kerala High Court has directed Indian Kanoon, a law search engine to anonymise the name and address of the petitioner Chartered Accountant (CA) and reprimanded Indian Express, an Indian news media publishing company, which published news and court order relating to an allegation of rape against the petitioner CA, in essence violating his fundamental right to privacy.
The counsel for the petitioner had submitted that in a conflict between freedom of speech and expression and the right to privacy, the latter must prevail. What would be the position if these two rights were in conflict?
The Bombay High Court has directed the department to permit the petitioner or assessee to amend or rectify Form GSTR-1 for July 2021 either online or manually.
The division bench of Justice G. S. Kulkarni and Justice Jitendra Jain have observed that the State Tax officer ought to have granted the petitioner’s request to rectify/amend the Form GSTR–1 for the period July 2021, November 2021 and January 2022, either through Online or manual means.
In a recent case, the Delhi High Court directed the cancellation of Goods and Service Tax (GST) registration on the date of the application filed seeking cancellation of the registration. The writ petition was filed by the petitioner, Saroj Gagneja, challenging the order; the petitioner’s GST registration was canceled with retrospective effect. The petitioner was registered with the GST authority from 01.07.2017, conducting business as ‘M/s S. S. Enterprises,’ assigned a Goods and Service Tax Identification Number.
The bench observed that not filing returns after closing the business in January 2020 should not be grounds for canceling the registration during the compliant business period. The petitioner’s GST registration should not be canceled, as suggested by the show cause notice. The order revoking the registration lacked justification and was subject to being set aside.
After analyzing the facts and arguments, a division bench of Justice Vibhu Bakru and Justice Amit Mahajan directed the cancellation of Goods and Service Tax (GST) registration on the date of the application seeking cancellation.
Recently, the Bombay High Court has overturned the customs deputy commissioner’s decision that diverged from the ruling issued by the Authority of Advance Ruling (AAR).
The court underscored the assessee’s right to invoke writ jurisdiction under Article 226 of the Constitution, even with an alternative statutory remedy available. Grounds for invoking writ jurisdiction include breaches of fundamental rights, natural justice violations, orders passed without jurisdiction, or challenges to the statute’s vires.
The court determined that the department’s action, contrary to Section 28J provisions, lacked jurisdiction, rendering the Order in Original invalid.
The Bombay High Court has held that Customs Officers have no power to sell seized gold without following provisions under section 110 of the Customs Act, 1962.
A division bench comprising Justice G S Kulkarni & Justice Jitendra Jain declared that the action on the part of the Assistant Commissioner of Customs in disposing of selling the gold jewellery belonging to the petitioner’s subject matter of the present proceedings, is illegal and unconstitutional.
The Division bench of the Delhi High Court observed that the investigation conducted by the CBI concerning the Adani and Essar Group of Companies, among others, was conducted promptly.
The Delhi High Court held that no further action could be taken against the assessee, considering there is no additional evidence provided to support the allegations against the implicated companies.
The Kerala High Court observed that the Jurisdiction to consider application under Section 119(2)(b) of the Income Tax Act, 1961 is not vested with the Chief Commissioner of Income Tax as the refund claim was above 10 Lakhs.
A Single Bench of Justice Dinesh Kumar Singh observed that “In the present case, the claim of refund is more than Ten Lakhs, and therefore, the jurisdiction to consider the application of the petitioner under Section 119(2)(b) of the Income Tax Act, is not vested with the Chief Commissioner of Income Tax. However, the Chief Commissioner of Income Tax-1, Kochi has passed the order, and thus, the order passed is without jurisdiction.”
The Karnataka High Court directed the Chartered Accountant (CA) Firm, the petitioner to pay 250000 rupees which is 25% of the total penalty imposed against non-payment of Service Tax due to Delayed Payment of Salary by KSFC. The 25% penalty was accepted to be paid by the petitioner itself in the affidavit submitted.
A division bench comprising Justice P S Dinesh Kumar and Justice V Srishananda observed that “Further, order imposing Rs.10,12,433/- as penalty under Section 78 of the Act, itself needs to be set aside, if there is a factual error, especially in the absence of department making an available copy of the letter issued by the KSFC. The affidavit filed by the Review Petitioner mentions that he is intending to put quietus by paying 25% of the penalty. “
The Delhi High Court has ruled that deductions sought for expenses related to income other than gross income are not valid. The Delhi High Court has granted relief to Jite Shipyard Ltd.
“To be noted, one of us [Rajiv Shakdher, J.], was part of the bench that authored the judgment in Commissioner of Income-tax, Central 1, Chennai v. Chettinad Logistics (P.) Ltd. A special leave petition (SLP) filed by the appellant/revenue, against the said judgment, was dismissed by the Supreme Court on 02.07.2018, both on the grounds of delay and merits”, the Delhi High Court Division Bench of Justice Rajiv Shakdher and Girish Kathpalia observed.
The Delhi High Court set aside customs circular imposing discretion of adjudicating authority to impose conditions, being contrary to Section 110A of Customs Act, 1962.
A Division Bench comprising Justices Vibhu Bakhru and Amit Mahajan observed that “Paragraph 2 of the impugned Circular to the extent it curtails the discretion accorded to the adjudicating authority is set aside as being contrary to the Customs Act. The impugned order is set aside and the petitioner’s application for the provisional release of the goods is restored before respondent no.6. Considering that the goods involved are perishable, respondent no.6 is directed to decide the matter afresh and pass a speaking order within a period of four working days from date after hearing the petitioner”.
The Delhi High Court has ruled that the prior inspection by state Goods and Service Tax (GST) authorities is not a bar for concluding an ongoing investigation by Central Goods and Service Tax (CGST) officers.
The Delhi High Court in a significant ruling held that Section 115BBE of the Income Tax Act, 1961 cannot be held unconstitutional on ground that there is apprehension of misuse.
A Division Bench comprising Acting Chief Justice Manmohan and Justice Mini Pushkarna observed that “Consequently, at this stage, Section 115BBE of the Income Tax Act cannot be held unconstitutional on the ground that there is an apprehension of misuse of the said provision. Further, it is settled law that the Income Tax Act provides a complete machinery for assessment/re-assessment of tax and the assessee is not permitted to abandon that machinery to invoke jurisdiction of the High Court under Article 226 of the Constitution.”
The Kerala High Court quashed the assessment order passed under the Goods and Service Tax Act (GST Act), 2017 as the official copy of GST ASMT-10 or show cause notice (SCN) was not served.
A Single Bench of Justice Dinesh Kumar Singh observed that “In view thereof, I find that there is violation of the principles of natural justice and, therefore, the impugned assessment order, is unsustainable and the same is hereby set aside. The matter is remanded back to the file of the assessing authority, 1st respondent, to pass a fresh order. The petitioner is permitted to file a reply to the show notice dated 30.9.2023, within a period of three (3) days from today.”
In a recent case, the Delhi High Court, while allowing the writ petition, held that the cancellation of Goods and Service Tax registration would be effective from the closing date of the petitioner’s firm. The writ petition was filed by the petitioner, R.K Metal Industries, challenging the order as the petitioner’s GST registration was canceled with retrospective effect. The order did not record any reason for canceling the petitioner’s GST registration.
In the present case, the only reason for proposing to cancel the petitioner’s GST registration was that the petitioner had not filed the returns for a continuous period of six months. However, the registration has also been canceled for a period during which the petitioner had filed the GST returns.
The Kerala High Court directed to take decision after hearing the Official Liquidator in the matter of claim for unpaid service tax and central excise dues.
The said contention was not, however, accepted by the Single Judge, who was of the view that there was no bar for finalization of assessment and adjudication proceedings merely upon the ground that a reference on the insolvency resolution process had been admitted and there was a consequent moratorium for recovery of tax.
The Kerala High Court upheld the assessment order passed under the Income Tax Act, 1961 and observed that the assessee cannot go on asking for time one after another in response to the show cause notice (SCN).
A Single Bench of Justice Dinesh Kumar Singh observed that “The petitioner did not file a reply and therefore, the Authority was well within its power not to grant further time for the petitioner. Therefore, I do not find much substance in the submission that there is violation of the principles of natural justice. Petitioners cannot go on asking for time one after another in response to the show cause notice issued one after another. Therefore I do not find any ground to interfere with the impugned order or notice.”
The Delhi High Court has held that the mere fact that an employee’s efficiency improves with learnings acquired through seminars cannot be treated as such expenses as capital expenditures.
A two-member bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia observed that the mere fact that employees’ efficiency improves with learnings acquired through seminars, conferences, and other forms of training, cannot be the reason to treat such expenses as “capital” expenditure.
The Delhi High Court allowed Amandeep Singh Dhall to undergo physiotherapy treatment at Safdarjung hospital.
A Single Bench of Justice Swarna Kanta Singh observed that “Considering that at this stage, no immediate arrangement can be made by the jail dispensary for ensuring appropriate medical care. of the applicant, this Court deems it fit, for the purpose of ensuring that a balance is struck between the right of the prisoners to appropriate medical care and the right of the State to ensure rule of law, to allow the request of applicant to get the required physiotherapy treatment at the Safdarjung Hospital, Delhi.”
“The Courts cannot allow inadequate prison health care system to violate a prisoner’s right to timely and adequate medical health care. Preserving the health of the prisoners would require a mechanism to monitor and promote the health care system available in the prisons. In face of increased health vulnerabilities, many prisoners have heightened risk of permanent damage to their bodies” the Court commented.
In a major relief to Pankajakasthuri Herbals, the Kerala High Court ruled the last date mentioned under Section 245C of the Income Tax Act, 1961 to file a SetCom (Settlement Commission) application is to be read as 31st March, 2021.
A Single Bench of Justice Dinesh Kumar Singh observed that “As the issue is covered by the judgment of the Division Bench of the Madras High Court, in the judgment, M/s Jain Metal Rolling Mills, the present writ petitions are allowed and the aforesaid impugned orders are set aside. The cases are remitted back to the competent respondent for taking fresh decisions on the applications in the light of the judgment as aforementioned.”
The Kerala High Court directed the Income Tax Commissioner to decide appeal expeditiously as there was non-compliance of conditions in the stay order.
A Single Bench of Justice Dinesh Kumar Singh observed that “The Authority is free to recover the amount as there is no interim order operating in favour of the petitioner. Be that as it may, according to the petitioner, the appeal filed by the petitioner against the assessment order has remained pending since 2018. Considering the long pendency of the appeal against the assessment order, it would be appropriate to dispose of this writ petition with direction to the 3rd respondent to decide the appeal expeditiously preferably within a period of two months in accordance with the law.”
The Delhi High Court has directed the Assessing Officer (AO) to accept the returned income for 12 years even after the limitation period to pass a fresh assessment order has expired. It was observed that the time limit fixed as per Section 153(2)(A) of the Income Tax Act had expired.
A division bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia observed that “whichever regime we take into account, i.e., the time limit fixed as per Section 153(2)(A) of the Act or the time limit fixed by the amended provision i.e., Section 153(3) of the Act, as of today the AO is bereft of jurisdiction and hence, would have no legal locus to pass assessment order(s). Therefore, the prayers made in the writ petition are allowed. “
The Delhi High Court recently observed that the electricity distribution utilities are not entitled to collect gst from their customers.
A Division Bench of Justices Vibhu Bakhru and Amit Mahajan observed that “Since the impugned circular has been set aside and it is clarified that the supplies mentioned in the impugned circular are bundled supplies and form an integral part of the supplies of distribution of electricity, the said supplies are not chargeable to GST. Consequently, the petitioners are also not entitled to collect such charges from their customers. In this view, we consider it opposite to direct that any GST collected by the petitioners after 08.11.2023, be refunded to customers from whom the said GST has been collected.”
The Delhi High Court directed to progress the matter under the Direct Tax Vivad Se Vishwas Act, 2020 (DVCV Act) as there was refund of money after giving credit.
A Division Bench comprising Rajiv Shakdher and Girish Kathpalia observed that “Therefore, the writ petition is disposed of with a direction that the concerned authority will progress the matter under the 2020 Act, as per law, from the stage at which it is presently positioned. In so far as correction of the challan is concerned, steps in that behalf will be taken by the respondents/revenue and consequential refund of Rs.25 lakhs would be made. This exercise will be completed within three (3) weeks of the receipt of a copy of the order passed today.”
The Delhi High Court upheld the deletion of the addition of Rs 47.07 Crores on Share Revenue MGF Development as a part of the Project. The Tribunal deleted the addition as the contention of the appellant/revenue that the collaboration agreement represented a sham transaction was not established.
A division bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia viewed that the findings of facts returned both by the CIT(A) and the Tribunal, no interference is called for. The Court observed that the Tribunal concluded correctly that the amount received by MGF had been offered for tax and quite clearly, addition in that regard could not have been made in the hands of the respondent/assessee, once the remittance had been accepted in the hands of MGF.
The Madras High Court has quashed the assessment order passed without considering the assessee’s request for a personal hearing through video conference. The bench directed to provide personal hearing through video conferencing.
A single bench of Justice S Srimathy observed that since it was a high-pitched assessment, the petitioner had sought a video conference hearing and it was not considered by the respondent to amount to a clear violation of the principles of natural justice.
The Kerala High Court confirmed the relegation to file appeal before the Income Tax Appellate Tribunal (ITAT) as there was no violation of natural justice as notice regarding hearing issued to the Chartered Accountant (CA).
A Division Bench comprising Justice Dr AK Jayasankaran Nambiar and Justice Kauser Edappagath observed that “On an overall consideration of the facts and circumstances of the case, we are of the view that the impugned judgment of the Single Judge that relegates the appellant to the alternate remedy of filing an appeal before the Income Tax Appellate Tribunal need not be interfered with. At the same time, we find that the learned Single Judge had not protected the appellant against a possible demand arising consequent to the dismissal of the first appeal.”
The Karnataka High Court has held that the civic body would not be exempted from the payment of service tax made for availing third-party services. The civic body Bruhat Bengaluru Mahanagara Palike (BBMP) availed the service of a third party to impart free computer education to persons belonging to economically weaker sections of the Society.
A single judge bench of Justice Suraj Govindaraj allowed the petitions and held that “the Corporation availing the services of the petitioners to render computer education to persons belonging to economically weaker section as regards which the Corporation has made the payment of monies to the petitioners would be amenable to service tax, that is to say, it is not exempted from service tax.”
The Jharkhand High Court held that initiating reassessment proceedings after 10 years post-search is valid on Taking Previous Sanction from a Competent Authority. The two-judge bench viewed that there is no illegality to the initiation of reassessment proceeding by issuing notice under Section 148 of the Income Tax Act, 1961.
A division bench of Justice Rongon Mukhopadhyay and Justice Deepak Roshan held that A.O was justified in reopening the assessment for A.Y.13-14 in the case of both the Assessees for 10 years as they have rightly taken previous sanction of the competent authority.There is no illegality, whatsoever, about initiation of reassessment proceeding by issuing notice under Section 148 of the Income Tax Act.
In a recent decision the Delhi High Court ruled that there is no permission to purchase raw material from the open market for exports when advance authorization is issued to allow duty free import.
“A perusal of the Order challenged in the present Writ Petition indicates that the DGFT has given a proper opportunity of hearing to the other sides and, therefore, this Court is of the opinion that the decision making process is fair. Further, even on merits, the learned Counsel for the Petitioner has not been able to establish as to why the Order is contrary to the law or that any provisions of the Foreign Trade Policy or the handbook of procedures has been violated. Resultantly, this Court finds no reason to interfere with the present Writ Petition” the Court concluded.
The Rajasthan High Court in a significant case directed the Goods and Service Tax(GST) Department to allow the refund as the act of requiring the Requiring Solvent Security and Bank Guarantee are beyond the scope of Section 54(11) of Rajasthan GST Act, 2017.
A division bench of Justice Arun Bhansali and Justice Ashutosh Kumar observed that the indication made that the bank guarantee needs to be taken from the petitioner by way of solvent security by itself is contradictory since the term ‘solvent security’ essentially means that the person who is providing the security should not have been declared bankrupt by the court and he has to produce documents to indicate that he owns some movable/immovable property, which is equivalent to the amount for which the said security is being provided.
It was observed that the action of respondent no.1 in seeking bank guarantee from the petitioner is ex-facie contrary to the directions of respondent no.2 and, therefore, the same cannot be sustained.
The issue to be decided was whether the officer responsible for issuing the impugned order failed to grant the petitioner an opportunity for a personal hearing. Denying the petitioner a chance to present their case in person undermines the principles of natural justice, which mandate a fair and unbiased procedure.
The Delhi High Court Division Bench of Justice Vibhu Bhakaru and Amit Mahajan granted approval to the current petition, nullifying the contested order in a Delhi Value Added Tax (DVAT) case.
The Kerala High Court dismissed a review petition as there was deposit of 20% of GST demand assessed as per the assessment order.
A Single Bench of Justice Dinesh Kumar Singh observed that “This Court finds there is no error apparent on the face of the record to review this order and therefore, the review petition is hereby dismissed. However, the petitioner may move an application for modification of the same, if it is so advised.”
The Kerala High Court dismissed the writ petition as there was clear examination of undisclosed income to returned income in the assessment order.
A Single Bench of Justice Dinesh Kumar Singh observed that “The assessment order would disclose that not only the statements of the Director and Managing Director were taken into consideration but the other incriminating material including the excel sheets and digital data maintained in the computers and laptops had also been examined before adding the undisclosed income to the returned income of the petitioner. Therefore, I do not find much substance in the present writ petition that the merit of the assessment orders have not been considered while passing the impugned order granting conditional stay.”
The Kerala High Court quashed show cause notice (SCN) issued without giving proper opportunity of hearing in the matter of GST demand.
A Division Bench comprising Justice Dr AK Jayasankaran Nambiar and Justice Kauser Edappagath observed that “However, it appears that the 1st respondent issued the order finalizing the demand without referring to reply or granting the appellant an opportunity for personal hearing. Thus, the impugned order clearly violates the principles of natural justice. Hence, we are of the view that the show cause notice cannot be sustained and it is liable to be set aside.”
The Delhi High Court directed the Income Tax department to grant hearing to Ester industries in a case related to claim of capital loss. The Court directed the Income Tax department to correct its mistake in taking action in favor of the assessee in accordance with section 154 of the Income Tax Act.
The division bench of the Delhi HC comprising Justice Rajiv and Justice Girish Kathpalia held that ”The application of the assessee has been examined and found correct. On perusal of the tax computation for AY 2005-06, it is observed that the AO has taken income of Rs. 18,30,.23,363/-but had not set off it against the available unabsorbed depreciation of Rs.18,30,23,363/-. The mistake mentioned above being apparent from records is hereby rectified u/s 154 of the Income Tax Act, 1961.” The court directed the Income Tax department to grant hearing to the petitioner and pass a speaking order concerning the issue involving short-term capital loss.”
The Delhi High Court directed to examine refund claims in the matter of failure to upload application of GST refund due to technical glitches.
A Division Bench comprising Justices Vibhu Bakhru and Amit Mahajan observed that “The respondent has denied that the concerned officer had misguided the petitioner in any manner and there is no record of any advice given by the concerned officer. However, we are inclined to accept the petitioner’s version that he had made oral enquiries for filing an application for refund. Ordinarily, this would be no ground to overlook the delay but this Court cannot be oblivious of the fact that during the initial period of the rollout of the GST regime, both taxpayers and the officials of the GST departments had faced innumerable difficulties which were being addressed.”
The Bombay High Court ruled that the agreement to provide manpower for maintenance is contract of service, not sale under the Maharashtra Value Added Tax Act, 2002 (the MVAT Act).
“In the present case, there is no saleable medium as the work has been carried out on the original software itself which exists only on the US servers of QAD. As stated above, even if there were no bugs reported during a month, QAD would be liable to pay appellant under the agreement at the rate of US $ 4200 per month. This itself shows that this was not a contract of sale but was a contract for service” the Court noted.
The Supreme Court in a recent decision observed that the arrested person, if informed or made aware orally about grounds of arrest within 24 hrs of arrest is sufficient compliance of Section 19 of the Prevention of Money Laundering Act (PMLA), 2002.
A Two-Judge Bench comprising Justice Bela M Trivedi and Justice Satish Chandra Sharma observed that “The only contention raised by the learned Senior Counsel, Mr. Singhvi is not furnishing a copy of the document containing the grounds of arrest at the time of arrest. Since the appellant was indisputably informed about the grounds of arrest and he having also put his signature and the endorsement on the said document of having been informed, we hold that there was due compliance of the provisions contained in Section 19 of PMLA and his arrest could neither be said to be violative of the said provision nor of Article 22(1) of the Constitution of India.”
The Bombay High Court observed that the customs assistant commissioner in selling seized gold jewelry of assessee without reasons is illegal.
“It is declared that the action on the part of the Assistant Commissioner of Customs in disposing of / selling the gold jewelry belonging to the petitioner’s subject matter of the present proceedings, is illegal and unconstitutional. The respondents are directed, to restore to the petitioners, an equivalent amount of gold namely 1028 gms. and / or to compensate the petitioners by making payment of amounts equivalent to the market value of the said gold, as on date” the Court noted.
The Delhi High Court in a ruling in favour of Canara Bank Relief Welfare Society has held that Revised Form 10 can be filed during reassessment proceedings.
A division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia observed that the respondent/assessee is not precluded from filing a revised Form No. 10 during reassessment proceedings.
The Delhi High Court has held that income received by GoDaddy.Com as consideration for providing domain name registration services amounts to ‘Royalty’ under section 9(1)(vi) of the Income Tax Act, 1961.
A division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia observed that “the respondent/assessee before us has succeeded in the appeals, the penalty imposed in the instant appeal cannot be sustained. Therefore, the impugned order, in our opinion, requires no interference.”
In a recent judgment, the Delhi High Court upheld the deduction of liquidated damage based on evidence. The liquidated damage arises from the delayed supply of service to BSNL and MTNL adjusted with the purchase amount.
A division bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia held that “there is nothing brought on record to suggest that the findings returned by the CIT(A) are perverse. Thus, having regard to the orders passed by the CIT(A) and the Tribunal, according to us, no substantial question of law arises for our consideration.”
The Rajasthan High Court stayed issuance of final order in the matter of issuance of time barred GST DRC-01 with respect to input tax credit (ITC) demand in Form GST TRAN-1.
A Division Bench of Justices Arun Bhansali and Narendra Singh Dhaddha observed that “In the meanwhile, as the petitioner has already filed response to the show cause notice, the authority may proceed with the adjudication, however final order shall not be passed by the authority till the next date.”
A single bench of the Andhra Pradesh High Court denied anticipatory bail to the petitioner on the grounds that anticipatory bail petition lacks reasonable grounds under the requirements for application of such petition.
The court denied the anticipatory bail petition filed by the petitioner. Justice Mallikarjuna observed that “that the anticipatory bail is not to be granted as a matter of routine, and it has to be granted when the Court is convinced that exceptional circumstances exist to resort to that extraordinary remedy.”
The Madhya Pradesh High Court slammed the action of the Commercial Tax Commissioner as withholding 10% pension is unjustified as no departmental or criminal proceedings are pending.
A Single Bench of Justice Vivek Rusia observed that “Even otherwise, since 2016 enquiry has not been concluded till date and no report has been filed, therefore, withholding of 10% pension is unjustified as no departmental or criminal proceedings are pending against the petitioner, hence, his pension cannot be withheld under the Pension Rules.”
The Delhi High Court granted permission to travel to Dubai and noted that prior permission of the trial court is necessary to travel abroad after filing the charge sheet.
A Single Bench of Justice Swarna Kanta Sharma observed that “In such circumstances, this Court deems it appropriate to modify the condition (i) of order dated 07.07.2022 to the extent, that instead of prior permission to be obtained from the I.O., the same be read as “prior permission of the Trial Court”. The counsel appearing on behalf of the respondent fairly states that the applicant herein had been granted permission to travel abroad earlier also, on two occasions, and he has not misused the liberty so granted.”
The Karnataka High Court quashed a reassessment notice issued under the Income Tax Act, 1961, and observed that the reassessment proceedings cannot be in the nature of review.
A Single Bench of Justice S Sunil Dutt Yadav observed that “Accordingly, the conclusion arrived at by the Assessing Officer for the Assessment Years 2005-2006, 2006-2007 and 2007-2008, when examined from the point of view of the Circular would strengthen the case of upholding deduction under Section 10A of the I.T. Act and would indicate that the resort to a review by recourse to Section 148 of the Income Tax Act in the guise of reassessment would be a futile exercise.”
The Gujarat High Court rejected the application for pre-arrest bail as the benefit was obtained by input tax credit (ITC) illegally opened GST Account on the basis of false and fabricated documents.
A Single Bench of Justice JC Doshi observed that “Money is transferred from one account to another account and such huge loss has been caused to the government exchequer by the petitioner. Hence, a serious economic offense is made out against the petitioner, which has wide effect on the society. Thus, the petitioner has failed to make out a case to allow this application and grant of pre-arrest bail.”
The Patna High Court directed the State Taxation Department to be vigilant so that materials are not removed without accepting royalty and tax due to any person or company.
A Single Bench of Justice Purnendu Singh observed that “In any case, the authority must not delay to allow the petitioner company to lift the broken stone chips from the site, beyond the period of two months. It is made clear that the petitioner ensures to make payment of royalty and GST, if any due is there, within the aforesaid period of two months.”
The Punjab and Haryana High Court granted bail to the accused in the matter of fraudulent procurement of Rs 29 lakhs value added tax (VAT) refund by the use of false and fabricated documents.
A Single Bench of Justice Deepak Gupta observed that “At the same time, it is not disputed even by the ld. State counsel that FOR pertains to the bogus refund of input tax credit in respect of Assessment Year 2011-12, in which the alleged loss of `29,29,359/- to the State exchequer was finalized at least on 11.11.2014 in revision order, as is mentioned in the FIR itself. No explanation is given in the FIR about the delay of more than 5 years so as to write a letter to the Superintendent of Police, Sirsa on 11.12.2019 to take action against the culprits and then another approximately one year for getting the FIR registered on 24.10.2020.”
The division bench of the Calcutta High Court quashed an order categorizing income from subletting as income from house property. The court concurred with the assessee‘s assertion that income from subletting should be classified as business income.
The division bench comprising of Justice Surya Prakash Kesarwani and Justice Rajarshi Bharadwaj observed that:”Therefore, except for the assessment order in question, the appellant assessee’s income from sub-letting/sub-licensing the space in question, has always been accepted by the respondent Income Tax Department as, income from business. Under the circumstances when the respondent Income Tax Department has always accepted the income of the appellant assessee from sub-licensing/sub-letting of the space in question, to be income from business, then the respondent cannot take a contrary stand in the present appeal.”
In a recent decision the Rajasthan High Court observed that wrong payment of value added tax (VAT) under different statute would not absolve liability to pay VAT where it is actually due.
A Single Bench of Justice Sameer Jain observed that “Since the nature of transaction attracts applicability of RVAT Act, the assessee cannot be absolved of his liability to pay the same merely because the parties had agreed to pay different tax. There is no estoppel against law. Merely because the assessee might have wrongly paid tax under a different statute would not absolve the assessee from liability to pay tax where it is actually due. The issuance of C-Form under CST Act or Form VAT-47 under RVAT Rules have no bearing on the nature of the transaction.”
As a relief to HDFC Bank Limited, the Delhi High Court has held that non-payment of tax on the sale of repossessed vehicles on assertion on tax exemption under Delhi Value Added Tax (DVAT) Act, 2004 does not amount to concealment.
A division bench of Justice Yashwant Varma and Justice Ravinder Dudeja observed that the non-payment of tax on the sale of repossessed vehicles is not alleged even by the respondents as being an outcome of ―concealment, omission or a failure to disclose all material particulars. The appellant chose not to deposit any tax in respect of the subject transactions proceeding on the assertion that the revenues obtained therefrom were not exigible to tax under the provisions of the Act.
In a recent decision the Madhya Pradesh High Court ruled that the income tax notice issued to dead persons for reopening of assessment of dead persons is null and void.
A Division Bench of Justices SA Dharmadhikari and Pranay Verma observed that “Various High Courts have observed that the notice issued to a dead person for reopening of assessment of a dead person is null and void, this Court holds that the notice and all consequential proceedings arising therefrom in the name of the deceased assessee are not sustainable.”
The Bombay High Court directed the State to ensure spending sanctioned budget after the unspent healthcare budget was brought to the notice of the Court.
A Division Bench of Chief Justice Nitin Madhukar Jamdar and Justice Arif S Doctor observed that “We, thus, expect that adequate and appropriate steps shall be taken to spend the budgetary allocation in its entirety otherwise after sanctioning the amount, if it is not used, the same gets lapsed at the cost of the healthcare system.”
“We direct that an affidavit shall be filed by the MPSC as well giving a timeline for completion of the process of recruitment against posts which fall within its purview. We direct the Secretary and the Chairman of the MPSC to consider as to how the timeline, as indicated by the Advocate General, for completion of process of recruitment can be shortened further” the Court concluded
The Delhi High Court directed the Principal Chief Commissioner of Income Tax to decide application in the matter of application for condonation of delay for filing the income tax returns (ITR).
A Division Bench comprising Acting Chief Justice Manmohan and Justice Mini Pushkarna observed that “Keeping in view the aforesaid, the present writ petition is disposed of with a direction to the Respondent No.2-PCCIT to decide the Petitioner’s application for condonation of delay dated 29th June, 2023 filed on 11th July, 2023 by way of a reasoned order in accordance with law within twelve weeks. The rights and contentions of all the parties are left open.”
In a recent ruling the Bombay High Court observed that the borrower receiving loan in cash is liable for dishonor of cheque even if loan amount is beyond limit for cash transactions under the Income Tax Act, 1961.
A Single Bench of Justice Prithviraj K Chavan observed that “The statutory notice, complaint and evidence of the respective parties, if juxtaposed, would unerringly point out the fact that the respondent No.1 did borrow an amount of Rs.3,00,000/- from the appellant and issued cheques in question in discharge of a debt. Defenses as raised by respondent No.1 are unacceptable and unbelievable. Respondent No.1 had failed to discharge the said onus.”
“It is thus clear that no person should accept any loan or deposit of a sum of Rs.20,000/- or more otherwise than by an account payee cheque or account payee bank draft. The provision does not say that a person cannot advance more than Rs.20,000/- in cash to another person. Restriction on cash advances was, in fact,on the taker and not on the person who makes an advance. The penalty for taking such advance or deposit in contravention of provisions of Section 269-SS was to be suffered by the taker who accepted the advance” the Court concluded.
The Kerala High Court directed the Additional Chief Secretary (Taxes) to decide the appeal filed by Muthoot Pappachan Chits.
A Single Bench of Justice Devan Ramachandran observed that “In the afore circumstances, I order this writ petition and direct the 1st respondent, to take upAppeal of the petitioner and dispose it of, after affording them, as also every other interested person, an opportunity of being heard; thus culminating in an appropriate order and necessary action thereon, as expeditiously as is possible, but not later than two months from the date of receipt of a copy of this judgment.”
“I make it clear that this Court has not entered into the merits of any of the contentions of the petitioner; and they are all left open to be decided appropriately by the 1st respondent during the afore exercise” the Court added.
The Kerala High Court directed the assessee, TJ Vinod, to appear before the Commissioner of Income Tax in the matter of rejection of application for registration under Section 12A of the Income Tax Act, 1961.
A Single Bench of Justice Dinesh Kumar Singh observed that “Considering the aforesaid facts, the petitioner is directed to appear before the Commissioner of Income Tax (Exemptions), Ernakulam on 5.1.2024 along with all relevant documents. The Commissioner of Income Tax (Exemptions) may direct the petitioner to produce further documents, if any, required and after hearing the petitioner, the Commissioner shall pass appropriate orders on the application of the petitioner seeking registration under Section 12A of the Income Tax Act.” “If the petitioner fails to appear on 5.1.2024 and does not produce the relevant documents as required by the Commissioner, no further opportunity shall be granted to the petitioner and in such circumstances, the order impugned herein will stand” the Court noted.
The Madras High Court has temporarily stayed the tax demand of Rs. 9,403.09 crore associated with the Cognizant Technology’s Rs. 19,000 crore buyback dividend distribution tax dispute.
The Tribunal had held that “the assessment order passed by the AO is erroneous in so far as it is prejudicial to the interest of the revenue and thus, the CIT has rightly exercised his jurisdictional powers and set aside the assessment order passed by the AO u/s 143(3) dated 31/12/2016. Hence, we are inclined to uphold the order of the CIT and dismiss the appeal filed by the assessee.”
The Delhi High Court directed the Goods and Service Tax (GST) department to refund Rs.10 Lakhs, involuntary deposit of Goods and Service Tax (GST) demand deposited under Coercion.
A Division Bench of Justice Vibhu Bakharu and Amit Mahajan instructed the respondents to reimburse the amount of ₹10,00,000/- that the petitioner deposited through FORM GST DRC-03 on November 12, 2022. It’s crucial to note that this directive does not prevent the respondents from pursuing actions to safeguard the interests of revenue, including issuing an order under Section 83 of the CGST Act or Rule 86(A) of the Central Goods & Services Tax Rules, 2017, provided the conditions for exercising such powers are met.
The Kerala High Court directed the petitioner, Arun Columbus, to file a reply to the show cause notice (SCN) as there was issuance of SCN in Form No. ITCP 29 under Rule 85 of Second Schedule to the Income Tax Act, 1961.
A Single Bench of Justice Dinesh Kumar Singh observed that “The petitioner has been issued only Show Cause Notices and the petitioner has granted fifteen days time to file reply to the Show Cause Notices. The petitioner instead of filing reply to the Show Cause Notices approached the Court.”
The Kerala High Court directed to decide the stay application in the matter of non-filing of return of income under Section 139 of the Income Tax Act, 1961.
A Single Bench of Justice Dinesh Kumar Singh observed that “The petitioner has approached this Court in the present writ petition as this Court is exercising the parallel jurisdiction with the appellate authority. But, no such jurisdiction can be exercised under Article 226 of the Constitution of India. However, it is incumbent upon the appellate authority to decide the stay application of the petitioner, at the earliest.”
The Delhi High Court set aside cancellation of GST Registration as there was non satisfaction of conditions set out in Section 29(1) or 29(2) of the Central Goods and Service Tax (CGST) Act, 2017.
A Division Bench comprising Justices Vibhu Bakhru and Amit Mahajan observed that “In the present case, it is noticed that the impugned SCN was issued solely on the basis of a letter received from another authority. The said letter is neither attached to the impugned SCN nor does the impugned SCN refer to the contents thereon. 13. The impugned order, as stated above, does not indicate that the Proper Officer was satisfied as to any of the conditions as set out in Section 29(1) or 29(2) of the CGST Act.”
In a recent ruling the Bombay High Court has held that the debt owed to financial institutions under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), is arbitrable.
A Single Bench of Justice Manish Pitale observed that “In the present case, the mechanism and
machinery under the RDDB Act is not applicable and available to the petitioner, and therefore,the exercise of determining and resolving disputes pertaining to the debt due, falls within the process of arbitration to which the parties have agreed by incorporating arbitration clauses in the said agreements. In this context, Section 37 of the SARFAESI Act assumes significance, as it provides that the application of other laws is not barred.”
The Delhi High Court reserved order on habeas corpus petitions of Lava MD, Chinese national in Vivo money laundering probe.
“To our mind, the answer is in negative, as in such a situation, the custody of accused is continuum and there is no “break” in the custody of such an accused. The position, however, will be different when the accused is not produced before such a Court on the date of hearing and no production warrant is issued for the said accused on the same date of hearing but is issued subsequently. In such a situation, the custody of the accused will not be in continuum and for the break period, it may be illegal” the Bench noted.
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