Supreme Court and High Courts Weekly Round-Up

This weekly round-up analytically summarizes the key stories related to the Supreme Court and High Court reported at Taxscan.in during the previous week from March 13th to March 20th, 2022.

PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) vs M/s. MOTISONS ENTERTAINMENT INDIA PVT. LTD. - 2022 TAXSCAN (SC) 125

A two-judge bench of the Supreme Court comprising Justice Uday Umesh Lalit and Justice S. Ravindra Bhat has held that the High Court is not justified in disposing of a tax appeal with a one-paragraph order without discussing the issues arising for consideration.

M/s. Kasturi Towers Private Ltd. vs Income Tax Officer, Ward –13(1) & Ors. - 2022 TAXSCAN (HC) 167

The Calcutta High Court has quashed an Income Tax assessment order for the reason that the grievances of the assessee were not properly addressed by the department. Justice Md. Nizamuddin observed that the assessing officer shall consider the proceedings afresh and held that “this writ petition, being WPA 4090 of 2022 is disposed of by setting aside the impugned order dated 3rd February, 2022 rejecting the petitioner’s objection to the impugned notice under Section 148 of the Act and the respondent concerned is directed to consider and dispose of the representation of the petitioner dated 20th January, 2022 being Annexure P-9 to the writ petition in accordance with law and by passing a reasoned and speaking order after giving an opportunity of hearing to the petitioner or its authorised representative within eight weeks from the date of communication of this order and all further proceedings will depend upon the final outcome of the order to be passed by the respondents on the aforesaid representation.”

OMKAR NATH vs NATIONAL FACELESS ASSESSMENT CENTRE DELHI (EARLIER NATIONAL E-ASSESSMENT CENTRE DELHI) & ANR. - 2022 TAXSCAN (HC) 137

A division bench of the Delhi High Court has quashed an income tax notice and an assessment order on the ground that a personal hearing was not allowed to the assessee. Allowing relief to the assessee, the Court held that “The impugned assessment order dated 07.06.2021, as well as consequential notices i.e., the notice of demand issued under Section 156 of the Act, and the notice issued for initiation of penalty proceedings under Section 270A of the Act, of even date, are set aside.”

MRS. JAYANTI DALMIA vs DY. COMMISSIONER OF INCOME TAX - 2022 TAXSCAN (HC) 213

A division bench of the Delhi High Court, holding that no Prejudice would be caused if the assessee complies with section 142(1) notice and the Consent Form for the alleged holding of the Swiss Bank Account in HSBC Bank, upheld the validity of income tax penalty.

Pankaj s/o Roshan Dhawan vs National e-Assessment Centre - 2022 TAXSCAN (HC) 215

The Bombay High Court has held that proper opportunity shall be given to the assessee to pass an order and direct the Assessing Officer to consider the income tax faceless assessment. The division bench of Justice A.S.Chandurkar and Justice Pushpa V. Ganediwala, held that “thus, despite the petitioner responding to the show cause notice much prior to issuance of the assessment order, there is no consideration of the reply given by the petitioner to the show cause notice. A mere statement now in the affidavit in reply that the petitioner’s response to the show cause notice did not contain any new or material fact cannot be accepted as such reason/consideration is not found in the impugned assessment order. The validity of the impugned assessment order would have to be judged from its contents and the same cannot be supported by extraneous material in the form of an affidavit in reply. Hence for this reason the challenge to the assessment order dated 14.05.2021 is liable to succeed and the proceedings are remanded to the AO for fresh consideration in accordance with law after giving due opportunity of hearing to the petitioner”. Further held by the court that “it is true that an alternate remedy, by way of statutory appeal is available to the petitioner. However, in view of the fact that it is apparent that the assessment order has been issued without granting the due and proper opportunity to the petitioner, we are not inclined to relegate the petitioner to avail that statutory remedy”.

M/s Raghav Metals vs State of Haryana & Others - 2022 TAXSCAN (HC) 165

A division bench of the Punjab and Haryana High Court has held that a discrepancy in the quantity of goods mentioned in the E-Way Bill under GST cannot attract Section 129 of the CGST Act, 2017. Justice Ajay Tewari and Justice Pankaj Jain held that “In light of the fair stand taken by the petitioner and the fact that the mismatch cannot be termed as a contravention of the provisions of the Act, we deem it appropriate to allow the present writ petition. Proceedings against the petitioner under Section 129 of the Act are hereby quashed. Fine and penalty, if any, imposed against the petitioner and deposited by him, be refunded to him within a period of 15 days from the date of receipt of the certified copy of this order. Since goods already stand released, no further order is required.”

While concluding, the bench held that “Keeping in view these circumstances, it cannot be said that the petitioner had any intent to evade the tax or the mismatch in the quantities is of such nature which shall entail proceedings under Section 129 of the Act. A person, who has already paid a tax of Rs.1276717.68/- on a consignment cannot be said to have an intent to evade tax amounting to Rs.11000/-. At this stage, Mr. Goyal states that the petitioner is ready to pay even the tax and penalty imposed by the State-Authorities which comes to be around Rs.22000/-.”

Excise and Taxation Commissioner, Haryana Versus M/s Gupta Brother, Bhiwani and another - 2022 TAXSCAN (HC) 175

A division bench of the Punjab and Haryana High Court has held that Input Tax Credit (ITC) available on evaporation of petroleum products under the Haryana Value Added Tax Act, 2003. A division bench of the Punjab and Haryana High Court has held that Input Tax Credit (ITC) available on evaporation of petroleum products under the Haryana Value Added Tax Act, 2003.

Commissioner of Central Excise, Panchkula vs M/s Riba Textiles Limited - 2022 TAXSCAN (HC) 178

In a significant ruling, a two-judge bench of the Punjab and Haryana High Court comprising Justice Ajay Tewari and Justice Pankaj Jain, while dealing with an appeal relating to refund and interest on central excise duty worth Rs. 54 lacs, rejected the department’s plea of transfer of jurisdiction due to the GST regime.

Gamma Gaana Limited VS Union Of India And 3 Others - 2022 TAXSCAN (HC) 166

A division bench of the Allahabad High Court has held that the refund application under the Goods and Service Tax (GST) cannot be rejected merely on the ground of delay.

M/S Nanhey Mal Munna Lal vs State Of U.P. And 4 Others - 2022 TAXSCAN (HC) 179

A division bench of the Allahabad High Court has observed that the requirement of pre-show cause notice is aimed at reducing the number of litigations and the department is bound to follow the principles of natural justice during the proceedings. The division bench comprising Justice Surya Prakash Kesarwani and Justice Jayant Banerji held that perusal of Form GST DRC-01A under rule 142(1A) of the Rules indicates that it is a pre-show cause notice intimation with reference to Section 73(1)/(5) or Section 74(1)/(5) to an assessee so that either he may deposit the amount of tax and interest or he may disagree to the ascertainment resulting in show cause notice under Section 73(1) or Section 74(1), as the case may be.

RITA BHUTANI vs STATE OF NCT OF DELHI THROUGH SHO & ANR. - 2022 TAXSCAN (HC) 180

The Delhi High Court has refused to cancel the bail granted to a Chartered Accountant who has allegedly committed fraud to a senior citizen lady and directed the Trial Court to conclude the trial within 18 months. Justice Subramonium Prasad observed that the aspect of the grant of bail and cancellation of bail stand on different footing as the factors which go into the consideration of an application seeking grant of bail are completely different from the factors that must be considered while hearing an application seeking cancellation of bail on account of the latter involving interference in the personal liberty of the accused that has been duly granted by the lower court.

M/S Apex Leather vs State Of U.P. And 2 Others - 2022 TAXSCAN (HC) 182

A two-judge bench of the Allahabad High Court comprising Justices Surya Prakash Kesarwani and Jayant Banerji, while considering a Public Interest Litigation (PIL) has referred the matter to a larger bench headed by the Chief Justice. While referring the matter to a larger bench headed by Chief Justice, The High Court expressed that “In view of alarming situation created due to non-establishing of State Bench and Area Benches of GST Tribunal in the State of Uttar Pradesh, rendering the entire class of dealers remediless under the Act, 2017 from availing statutory remedy of appeal under Section 112 of the Act, 2017, we are of the view that under the facts and circumstances and prevailing situation, the matter is referred to Larger Bench.”

M/S J.K Infratech vs Additional Commissioner And Another - 2022 TAXSCAN (HC) 183

The Allahabad High Court has held that while considering the fact that the period of limitation stood suspended by the Apex Court and the High Court from 15.3.2020 to 14.3.2021, that period shall be excluded while computing the statutory period for filing GST appeals. Justice Saumitra Dayal Singh held that “In view of the above facts, the present petition deserves to be allowed as the limitation to file first appeal under Section 107 of the U.P. GST Act, 2017, was three months with delay condonable for a period of one month. Once the order dated 17.9.2019 is taken to have been served on the petitioner on 31.8.2020, then in view of the suspension of limitation from 15.3.2020 to 14.3.2021 the limitation to file the appeal would start running from 15.3.2021. In that case, the appeal having been filed on 19.3.2021, the same was wholly within time.”

Daujee Abhushan Bhandar Pvt. Ltd. vs Union of India - 2022 TAXSCAN (HC) 208

A division bench of the Allahabad High Court has held that mere digitally signing the notice as contemplated under Section 148 of the Income Tax Act would not amount to a valid issuance of notice and that the notice needs to be sent/dispatched to the income tax assessee through paper or electronic devices and when it is so sent, that day would be considered as the date of issuance of notice.

M/S PASHUPATI PROPERTIES ESTATE PRIVATE LIMITED vs COMMISSIONER OF CENTRAL TAXES GST DELHI, (EAST) - 2022 TAXSCAN (HC) 210

A division bench of the Delhi High Court has held that the GST provisional order under section 83 of the Central GST Act, 2017 would cease to effect after the expiry of one year. While allowing the petition, the High Court observed that “According to Section 83(2) of the CGST Act, every provisional attachment order ceases to have effect after the expiry of a period of one year from the date the order was passed under Section 83(1) of the CGST Act. Consequently, the impugned provisional attachment order/letter is no longer effective. Accordingly, this Court directs the Respondent to defreeze the bank accounts and release the immovable properties of the Petitioner not later than three days from today.”

COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION)-2 vs GRACEMAC CORPORATION - 2022 TAXSCAN (HC) 211

A division bench of the Delhi High Court comprising Justice Manmohan and Justice Dinesh Kumar Sharma has held that the penalty under Section 271(1)(c) of the Income Tax Act, 1961 if concealment of income is not proven and the quantum order is quashed by the appellate authority.

Thiru.Yasar Arabath vs Deputy Commissioner (State Taxes) - 2022 TAXSCAN (HC) 212

While dismissing a bail application to a GST offender considering the fact that the investigation is in a crucial stage and granting bail would ultimately result in tampering evidence by the petitioner/accused. Justice G Jayachandran held that the remand application is on 10.01.2022 which reflects the loss of revenue under three different heads with exceeds more than Rs.5 crores. Therefore, the plea of the petitioner that offence committed by him is only a bailable offence, and the tax evasion is less than Rs.5 crores is contrary to the records placed by the prosecution.

Pushpam Reality vs State Tax Officer - 2022 TAXSCAN (HC) 214

The Madras High Court has held that the Goods and Service Tax (GST) department can continue service of the physical copy of the notice through registered post, speed post, or courier with acknowledgment to the assessee at their last known place of business or residence and upload the notice on the web portal.

M/s.Taqa Neyveli Power Company Private Limited vs The Income Tax Appellate Tribunal - 2022 TAXSCAN (HC) 209

The Madras High Court has held that when a revisional order under section 263 of the Income Tax Act, 1961, is pending before the Tribunal, the Assessing Officer shall wait to initiate the proceedings at least till the disposal of the matter by the Tribunal.

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