This weekly round-up analytically summarises the key tax judgements of the Supreme Court and all High Courts reported at Taxscan.in during the previous week from May 27 to June 2 2023.
A Division Bench of Justice Rajiv Shakdher and Justice Girish Kathpalia of Delhi High Court has set aside the order assessment order passed under Section 148A(d) of the Income Tax Act, 1961. Also, directed the assessing officer to re-adjudicate the matter.
The Assessing Officer failed to adequately hear the petitioner’s standpoint, according to the High Court. Thus, it was ordered that a new notice be issued under Section 148A(b) of the Income Tax Act. Additionally instructed the petitioner to submit the response within 4 weeks of receiving the notice. Furthermore, the court directed to allow a personal hearing for the petitioner and pass necessary orders in accordance with the law.
The Supreme Court has ruled that a credit note issued by an automobile manufacturer to a dealer related to defective Parts is a Valuable Consideration and held Tata Motors liable to pay Sales Tax.
The Court held that “a credit note issued by a manufacturer to the dealer, in the situations explained above, is a valuable consideration within the meaning of the definition of sale and hence, exigible to sales tax under the respective State enactments of the States under consideration. In the result, appellants-dealer/assessee are liable to pay sales tax under the respective State enactments under consideration.”
The Orissa High Court quashed the order since the opposite party got selected in the bid merely because it had quoted the highest price without considering the ‘no dues certificate’ from the Goods and Service Tax department.
A two-judge bench comprising Dr Justice B R Sarangi and Justice M S Raman held that “the decision-making process in selecting opposite party no.4, being arbitrary, unreasonable and contrary to the provision of law, cannot be sustained in the eye of the law. Consequentially, the order passed by the Tahasildar, Banspal settling the source in favour of opposite party no.4 The opposite party authorities are directed to go for fresh tender in respect of Karangadihi Sand Quarry as expeditiously as possible in the interest of justice, equity and fair play.”
In a recent ruling, a Division Bench of Delhi High Court directed the Income Tax Officers not to take any coercive steps till the disposal of the pending revision application under section 264 of Income Tax Act, 1961.
Thus the bench stated that “the writ petition is disposed of with a direction to respondent no.1 to dispose of petitioner’s revision application, if not already disposed of, at the earliest, though not later than eight (8) weeks from the date of receipt of a copy of the order passed today.”
Abhishek Maratha, senior standing counsel appeared for the department side. He refused to file the counter affidavit based on the direction of the High Court. Thus with the consent of the other parties, the bench considered this case for final disposal.
In a recent ruling, the Delhi High Court directed the Assessing Officer to re-adjudicate the matter as they failed to send the notice under Section 148A(b) of Income Tax Act, 1961.
The Delhi High Court also directed the AO to accord a personal hearing to the authorized representative of the petitioner. For this purpose, a notice shall be issued fixing the date and time of the hearing. Thereafter, he also has to send a speaking order in accordance with law, the bench further instruccted.
The Delhi High Court, based on the submissions of both sides, has directed the Assessing Officer to re-adjudicate the case again. The court ordered a personal hearing for the authoritative representatives of the petitioners.
Ananya Kapoor appeared for the petitioner and Gaurav Gupta, Sr. Standing Counsel with Mr Shivendra Singh and Mr Puneet Singhal appeared for the respondent-department. The two judge bench of Justice Rajiv Shakdher and Justice Girish Kathpalia disposed the writ petition with directing Assessing Officer to proceeds to pass an assessment order, he would verify the assertion made by the petitioner/assessee which is recorded in the reply, and in this context, also accord personal hearing to the petitioner/assessee and/or his authorised representative.
A Division Bench of Justice Rajiv Shakdher and Justice Girish Kathpalia of Delhi High Court directed the authorities to dispose of the 4 and half years pending appeal within 3 months.
After considering the submissions of both sides, the bench directed that respondent authorities had to dispose of all pending appeals at the earliest, though not later than three (3) months from the date of receipt of a copy of the judgment. Also, while adjudicating the appeal, the authorities had to take into account the entirety of the reassessment order dated 31.12.2016 passed in the case of CBV and the judgments on the issue concerning the restricted grant.
In a recent ruling, the bench of Justice Rajiv Shakdher and Justice Girish Kathpalia of Delhi High Court has set aside the assessment order on grounds that the Assessing Officer violated the principles of natural justice without considering the relaxation request to file reply under Income Tax Act, 1961.
It was also directed to conduct a personal hearing to the authorised representative of the petitioner and the notices shall indicate the date and time of the hearing. The petitioner was directed to furnish the information sought by the Assessing Officer via notice issued under Section 142(1) of the Income Tax Act within the next three (3) weeks.
In a recent ruling, the bench of Justice Rajiv Shakdher and Justice Girish Kathpalia of Delhi High Court has set aside the assessment order on grounds that the Assessing Officer violated the principles of natural justice without considering the relaxation request to file reply under Income Tax Act, 1961.
It was also directed to conduct a personal hearing to the authorised representative of the petitioner and the notices shall indicate the date and time of the hearing. The petitioner was directed to furnish the information sought by the Assessing Officer via notice issued under Section 142(1) of the Income Tax Act within the next three (3) weeks.
The Delhi High Court has dismissed the Public Interest Litigation (PIL) filed against the Reserve Bank of India (RBI) and State Bank of India (SBI) notifications allowing exchange of 2000 Rupee Currency notes without proof of identity, upholding the impugned notifications.
The Division Bench of Chief Justice Satish Chandra Varma and Justice Subramonium Prasad dismissed the Public Interest Litigation (PIL), upholding the notifications of RBI and State Bank of India (SBI) allowing the public to exchange/deposit 2000 rupee notes as per existing deposit norms.
In a major ruling the Delhi High Court has ruled that the allotment of lesser quota of Haj pilgrimage seats solely on the difference in GST remittance before application is unjust.
A Single Bench of the Delhi High Court comprising Justice Prathiba M Singh observed that “So long as the HGOs have a GST registration and have an explanation for the manner in which they have calculated and deposited GST prior to them, filing of the application for allotment of quotas, disqualifying them would be unjust. The Ministry of Minority Affairs is not the competent authority to deal with these issues, though an attempt has been made to explain that the eligible HGOs have made full GST deposits.”
A Division Bench of the Delhi High Court quashed the order passed under Section 148A (b) of the Income Tax Act issued on failure to furnish a return of income, report or statement of financial transaction on failure to appreciate reply in response to the income tax notice issued under Section 148A(b) of the Income Tax Act.
A Single Bench of the Patna High Court rejected the second anticipatory bail application filed in apprehension of arrest for offence punishable under Section 4 of the Prevention of Money Laundering Act,2002 (PMLA).
Rejecting the application for anticipatory bail the Patna High Court Bench of Justice Satyavrat Verma observed that “the Co-ordinate Bench in Criminal Miscellaneous No. 34788 of 2019 has already rejected the anticipatory bail application on the ground which is being urged by the petitioner presently, as such the Court does not feel persuaded to again enter into the merits of the case.”
The Jharkhand High Court stayed Estern Coalfields, the respondent from deducting amounts from invoices on the ground that GST amount not reflecting in GSTR-2A on non-uploading of invoices.
Rajesh Lala, counsel for the respondent no.1 prayed for and three weeks’ time to file a counter affidavit. A Division bench of the High Court comprising Justices after analysing the facts and the legal provisions ordered for status quo to be maintained by Estern Coalfields thereby not allowing Estern Coalfields to deduct further amounts from future invoices and posted the matter for further consideration on 14.06.2023.
A Division Bench of the Delhi High Court refused to enhance the bank guarantee demand to release the seized gold imported after export for exhibition.
The Coram comprising of Justice C Hari Shankar and Justice Mukta Gupta observed that “The judgment under review worked out the quantum of the bank guarantee to be furnished at Rs 10 crores, as 30% of the total value of the gold seized, including the unreleased 25299.68 grams gold jewellery forming the subject matter of the present review proceedings. That amount was enhanced by the Supreme Court to Rs 15 crores, otherwise upholding our judgment. It is not possible, therefore, for us to direct furnishing of any further bank guarantee, as a condition, for the release of 25299.68 grams gold.”
A division bench of the Bombay High Court ordered that, in the absence of the relevant officers, a judicial magistrate or advocate may carry out an order issued under section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).
Thus, the bench while disposing the writ petition stated that “if the officers entrusted with implementation of the Order are engaged in other pressing public duties, the option of appointing an advocate to implement the Order be explored within the parameters of the law. The same option can also be considered by the Judicial Magistrate, if so permissible in law.”
The Gauhati High Court refused to entertain writ petition against service tax demand on the existence of alternative remedy.
A Single Judge Bench of the Gauhati High Court comprising Justice Kalyan Rai Surana observed that “The Court is inclined to restrain itself from entertaining this writ petition in view of alternative and efficacious remedy available to the petitioners under the Goods and Services Tax Act, 2017 before the Customs, Central Excise and Service Tax Appellate Tribunal, Kolkata.”
While entertaining the petition filed by the McDonald’s India Pvt. Ltd., the bench of Justice Bibhu Bakhru and Justice Amit Mahajan of Delhi High Court observed that the Appellate Authority did not consider the Master License Agreement (MLA) and thus set aside the order.
Furthermore, no additional grounds for rejecting the petitioner’s claim for refund could be raised Suo motu by the Appellate Authority, in an appeal preferred by the petitioner. Thus the impugned order of the appellate authority is liable to be set aside. Also directed the adjudicating authority to re-adjudicate the matter.
The Insolvency and Bankruptcy Board of India (IBBI) has recently restored the registration details of the registered valuer Entity Since the matter was sub judice by the stay order of the Bombay High Court.
The authority held that since the subject matter is sub-judice with the High Court of Bombay, it will not be appropriate to go into the merits of the suspension order of the director who is also a registered valuer or the RV-E. Considering the decision of the High Court, the Authority suspended the operation of IBBI’s Order. The registration details of the RVE shall be restored in the records of IBBI.
The Ministry of Corporate Affairs (MCA), represented by Central Government Counsel Jagadeesh Lakshman has submitted that the resolution of the MCA V1/V2/V3/21 Portal issues is in progress, while the case was listed on 29th May before the Kerala High Court.
The Central Government Counsel submitted that, based on the interim order dated 23/5/2023, the resolution is currently in progress. The respondents will do the needful forthwith to resolve the issue. The MCA 21 and V1/V2/V3 Portals are yet to achieve smooth functionality to ensure seamless and tension-free compliance due to the innumerable number of portal glitches.
The Delhi High Court has held that the re-assessment order passed completely inconsistent with the previous assessment without a valid reason is invalid.
A two-judge bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia observed that the decision taken first in point of time (order dated 28.07.2022) was a reasoned decision, based on the analysis of material on record, but the decision taken subsequently (order dated 31.07.2022) not just took a view completely inconsistent with the previous view but even without an iota of reason. While allowing the petition, the Court set aside the impugned notice and order dated 31.07.2022 under Section 148 of the Income Tax Act, 1961.
The Gauhati High Court granted bail to the offence under Section 21( c) of the driver of the truck which transported cough syrup bottles without due E-way Bill Narcotic-Drugs and Psychotropic Substances Act, 1985 (NDPS).
A single-judge bench comprising Justice Ajit Borthakur directed to release the petitioners on bail of Rs.1,00,000/- (Rupees One Lakh) only with two sureties of like amount to the satisfaction of the learned Special Judge (NDPS), Dhubri subject to certain conditions.
The Vacation bench of Justice Sudhanshu Dhulia and Justice KV Viswanathan of Supreme Court refused the urgent listing for plea challenging the notifications of the Reserve Bank of India (RBI) and State Bank of India (SBI) permitting the exchange of Rs. 2000 notes in bank without ID proofs.
The RBI Governor addressed the public to provide more clarification beyond the notifications and the FAQs published. The Governor Shaktikanta Das stated that the withdrawal of Rs. 2000 bank notes are part of Currency Management Operations of RBI and the public has enough time to exchange or deposit the notes.
A Division Bench of the Delhi High Court quashed the cancellation of GST Registration made on assumption that petitioner being non-existent at principal place of business.
The Coram comprising of Justices Vibhu Bakhru and Amit Mahajan observed that “It is now clear that the respondents proposed to cancel the petitioner’s registration on the assumption that he was not-existent at his principal place of business, this Court considers it apposite to set aside the impugned order and remand the matter to the concerned officer to consider afresh after affording the petitioner a full opportunity to be heard.”
In a significant case, the Delhi High Court directed re-adjudication since the department mistakenly demanded tax without giving credit to Tax Deducted at Source (TDS) on compensation from the National Highways Authority of India (NHAI).
A two-judge bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia disposed of the writ petition with the directions to Jurisdictional Assessing Officer (JAO) to render a decision on the pending rectification application dated 18.08.2022.
In a significant case, the Delhi High Court ordered to commence the construction of the Chamber Block of the Sales Tax Bar Association after 15 years of delay in construction.
The Court directed to conduct a meeting convened by the Commissioner VAT, Department of Trade and Taxes in an appropriate venue and the coordination shall also be done by the said Commissioner. The two representatives of the Sales Tax and Bar Association shall also join the meeting.
In a recent case, the Delhi High Court has set aside the show cause notice (SCN) which suspended the Goods and Service Tax (GST) registration without stating specific allegation.
A two-judge bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan set aside the impugned Show Cause Notice and quashed the order suspending the petitioner’s GST registration also stands quashed. It was clarified that the respondents are not precluded from issuing an appropriate Show Cause Notice, setting out the reasons for proposing any adverse action against the petitioner.
The Calcutta High Court has held that the cash-credit facility is not a debt, and cannot provisionally attach u/s 83 of the Central Goods and Service Tax Act, 2017.
“When there is efficacious relief in the statute itself, this Court is of the view that the petitioner should adopt such efficacious relief and this Court is not inclined to afford any relief under Article 226 of the Constitution,” Justice Bibek Chaudhuri held.
The Delhi High Court directed to seek statutory remedy on the allegation that the sale consideration of agricultural land was assessed to tax without adjusting the cost of acquisition.
A two-judge bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia disposed of the petition by directing the petitioner to prefer an appeal with the Commissioner of Income Tax (Appeals) (CIT(A)). Further held that “the petitioner will file an application for stay with the concerned authority, within ten [10] days from today.
The concerned officer will dispose of the application for stay within ten [10] days of the same being filed. The AO will inter alia, bear in mind, the broad contentions raised before us, and, the aspect that the entire sale consideration has been brought to tax.”
The Calcutta High Court quashed the order to dismantle and remove the hoarding since no notice was issued by the corporation on unpaid dues of advertisement.
Justice Kausik Chanda disposed of the writ petition with a direction upon the corporation to consider the said representation by the law within a period of three weeks. “There shall be a stay of operation of the impugned notice for a period of four weeks.”, the Court held.
The Madras High Court dismissed the writ petition since the attachment of the bank account under the Tamil Nadu Value Added Tax Act, 2006 was withdrawn by authorities.
C Baktha Siromoni appeared on behalf of the petitioner and Ms Amirta Dinakaran appeared on behalf of the respondent. It was submitted that the bank attachment which is the subject matter of the writ petition has been withdrawn. Since there was no cause of action for the writ petitioner, Justice V Lakshminarayanan dismissed the petition.
The Chhattisgarh High Court directed the CIT (Appeals) to decide the pending appeal within 90 days on non-consideration of statutory appeal by the Income Tax Appellant Authority.
It was evident that the appeals were preferred by the petitioner on 09.02.2023 and the bank account of the petitioner has been frozen and on account of that very ground, he could not appear in the proceedings.
In a recent case, the Calcutta High Court set aside the demand for late fees since the non-furnishing of the return was due to the cancellation of registration.
A two-judge bench comprising Justice T S Sivagnanam and Justice Hiranmay Bhattacharyya held that “the demand of late fee from the appellant @ Rs.5,000/- per return is without jurisdiction and not tenable in the eye of law. It is pointed out by the learned Advocate appearing for the official respondents that unless the appropriate direction is given to the concerned respondent, the appellant will not be able to electronically file its return.”
A Division Bench of the Delhi High Court recently dismissed a review petition belatedly filed against income tax proceedings under Section 148 of the Income Tax Act, 1961.
The court pointed out that there was no error apparent on the face of the record, and it upheld the previous judgment. Consequently, the review petition was dismissed.
The Insolvency and Bankruptcy Board of India (IBBI) has issued an order disposing of the appeal filed by Yardi Prabhu Consultants & Valuers Pvt. Ltd. against the previous order dated April 6, 2022.
The suspension order issued by IBBI on April 6, 2022, is hereby suspended, pending the decision of the High Court of Bombay in the Civil Writ Petition No. 10440 of 2022. The registration details of Yardi Prabhu Consultants & Valuers Pvt. Ltd. were directed to be reinstated in the records of IBBI.
In a recent decision, the Delhi High Court has quashed the reassessment proceedings initiated by the Income Tax Officer (ITO) in relation to Assessment Year (AY) 2017-18.
Consequently, considering the facts stated in the writ petition as correct, the court allowed the prayer made by the petitioner and quashed the impugned notice issued under Section 148A(b) and the order passed under Section 148A(d) of the Income Tax Act, 1961. The consequential notice issued under Section 148 of the Income Tax Act on the same date was also quashed by the Delhi High Court.
The Karnataka High Court has issued directions and guidelines to State and Central tax authorities for determination of liability on contracts entered into during the pre-GST regime.
The Single Bench of Justice S R Krishna Kumar issued the Respondents-State and other Govt agencies Respondents who have entered into works contract with the Petitioners with these directions/guidelines:-
In a recent development, the Delhi High Court has directed the Jurisdictional Assessing Officer (JAO) to render a decision on the pending rectification application filed by the assessee.
The High Court bench of Justice Rajiv Shakdher and Justice Girish Kathpalia disposed of the writ petition with directions to the Jurisdictional Assessing Officer to decide the pending rectification application at the earliest, but not later than six weeks from the receipt of the judgment. The court also emphasized that if the decision is adverse to the petitioner, the petitioner can seek an appropriate remedy as per the law.
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