This weekly roundup analytically summarizes the key stories related to the Supreme Court and High Court reported at Taxscan.in from 10th November 2024 to 16th November 2024.
In a significant ruling, the Supreme Court invoked its extraordinary powers under Article 142 of the Constitution to order the liquidation of Jet Airways in the circumstance that the resolution plan has not been implemented for five years.
The Court directed the NCLT Mumbai Bench to appoint a liquidator forthwith and commence proceedings for the liquidation of the corporate debtor. The amount of Rs 200 crores already infused by the SRA, Jalan KalRock Consortium (JKC), stands forfeited. The lenders and creditors are entitled to encash the Performance Bank Guarantee of Rs 150 crores furnished by the SRA.
In a recent ruling, the Karnataka High Court exercised its powers under Article 226 of the Indian Constitution to restore the GST registration of the petitioner citing genuine difficulties in accessing its email and Highlighting the society’s significant public role
Justice S.R. Krishna Kumar heard the matter and observed that the petitioner’s appeal was dismissed solely due to being time-barred without considering the merits. Since the appeal was dismissed on procedural grounds, the original cancellation order still stood independently and could be reviewed under Article 226 of the Indian Constitution.
The High Court of Delhi recently allowed a Petition filed against the Revenue holding that Income Tax Reassessment Notice may not be issued beyond a period of 10 years from the relevant Assessment Year (A.Y.) according to the provisions of Section 149 read with Section 153C of the Income Tax Act, 1961.
The Division Bench of the Delhi High Court constituting Justice Vibhu Bakhru and Justice Swarana Kanta Sharma referred to the recent decision of the Delhi High Court in The Pr. Commissioner of Income Tax -Central-1 v. Ojjus Medicare Pvt. Limited (2024) to observe that the limitation of ten years under Section 153C of the Act is to be calculated from the end of the relevant assessment year to the year under which the notice under Section 148 is served.
The Delhi High Court directed for the issuance of the Police Clearance Certificate (PCC) as the Denial of the PCC due to mere Pendency of FIRs under the Employee Provident Fund Act, 1952 constitutes unreasonable restriction.
Justice Sanjeev Narula observed that the rights and interest of the Petitioner must be balanced with Respondents’ obligation as a sovereign. So the Court directed to issue a PCC to the Petitioner explicitly mentioning the pending criminal case against him as well the fact that the Petitioner has complied with the RPFC’s order by making the required deposit.
The Patna High Court granted bail to the accused allegedly linked to the smuggled gold collection and delivery on bond and conditions.
The bench of Justice Chandra Prakash Singh directed the petitioner to furnish bail-bond of Rs.20,000/- (Rupees Twenty Thousand) with two sureties of the like amount each to the satisfaction of the Special Judge of Patna Economic Offense.
Recently, the Madras High court has directed the Goods and Services Tax Network ( GSTN ) to allow the return filing and payment after finding the reasons for Non-Compliance with the GST notices were found to be genuine.
Justice Krishanan Ramasamy ruled that since the petitioner has already filed all the Returns up to date, the cancellation of the registration stands revoked.
The Delhi High Court in a significant case has held that sale deed is not a document issued by the revenue authorities or any government authority which would certify the agricultural nature of a land. The court viewed that a sale deed primarily reflects the transaction between the parties and the terms of sale, but it does not, in itself, verify the land’s classification as agricultural for the taxation purposes.
A division bench of Justices Vibhu Bakhru and Swarana Kanta Sharma held that a sale deed primarily reflects the transaction between the parties and the terms of sale, but it does not, in itself, verify the land’s classification as agricultural for the taxation purposes. Therefore, heavy reliance on the sale deed to establish the agricultural character of the land would be misplaced.
The Madras High Court quashed the GST ( Goods and Services Tax ) demand order issued against the deceased proprietor after 4 years. The court remanded the matter for reconsideration.
Considering the submissions of the both counsels, Justice Krishnan Ramasamy noted that impugned order was passed by the respondent against a dead person, who was passed away on 21.11.2019. Thus, it is to be set aside.
The bench directed the department to release the bank attachment and communicate to unfreeze the bank account to the concerned bank as the impugned order was set aside. However, all these should be done on receipt of 10% pre-deposit.
The Madras High Court set aside the Goods and Services Tax ( GST ) demand order noting that the GST department neither considered reply nor provided any hearing opportunity before passing the demand order.
Justice Krishnan Ramasamy noted that the respondents had neither considered the reply nor provided any opportunity of personal hearing to the petitioner prior to the passing of impugned order. Thus, it set aside the order as the order was passed in violation of principles of natural justice.
The Punjab & Haryana High Court in a recent case, has held that family settlement is not required to be registered for computing capital gains.The court held that even if the existence of the Will may be ignored, so far as the Appellant-Assessee is concerned, he has become the holder of the property on the basis of a family settlement.
A division bench of Justice Sanjeev Prakash Sharma and Justice Sanjay Vashisth viewed that even though the documents relating to Will may not have been accepted by the ITAT, still the calculation has to be done treating the indexation as on 01.04.1981 and merely because the family settlement was arrived in the year 2003 would not make any difference, and the order passed by the CIT (A), is therefore, found to be correct although the CIT (A) has applied Section 49(i) (ii) of the Act of 1961.
In a recent ruling, the Karnataka High Court directed the Income Tax Department to refund the entire amount due, including interest, to IBM India Private Limited. This ruling was made to enforce compliance with previous directives issued by the Supreme Court and other judicial bodies.
Justice S.R. Krishna Kumar acknowledged the undisputed facts that the petitioner was due a refund, supported by evidence from previous orders and Form 26B applications. The court observed that despite the petitioner’s compliance with procedural requirements, the respondents had delayed processing the refunds.
In a significant case challenging the appointment of Junior Assistant ( CT & GST ), the Orissa High Court directed to decide on extending benefits available under Rule 16 of Odisha Civil Services ( Rehabilitation Assistant ) Rules, 1990 ( RA Rules ) read with Rule 12 of Odisha Group-C and Group-D Posts ( Contractual Appointment ) Rules, 2013 ( CA Rules ).
Justice Murahari Sri Raman issued writ of mandamus by directing the opposite parties to consider taking a decision with regard to modification of the Office Order of the Additional Commissioner of CT & GST, CT & GST Territorial Range, Bhubaneswar suitably within a period of three months from today.
The Delhi High Court quashed the addition of supplementary grounds beyond the ones raised during the initiation of reassessment proceedings while adjudging a matter regarding massive discrepancy of Rs.86 Crore in the assessed turnover of an Assessee.
The Division Bench of the Delhi High Court comprising Justice Vibhu Bakhru and Justice Swarana Kanta Sharma while dismissing the Appeal, referred to the decision of the same Court in Ranbaxy Laboratories Ltd. v. Commissioner of Income Tax (2011) and ATS Infrastructure v. Assistant Commissioner of Income Tax, Circle 1 (1) & Ors. (2024) to maintain that no income tax addition can be made by AO during reassessment proceedings, in the event that the proposed additions have not been made on the basis of same Grounds as purported in the preceding Notice issued to the Assessee.
In a recent ruling, the Karnataka High Court directed the Goods and Services Tax ( GST ) Act department to treat the prematurely debited 10% amount from the petitioner’s electronic credit ledger as a pre-deposit for the appeal, as the debit was made before the completion of the statutory appeal period.
Justice S.R. Krishna Kumar heard both side’s arguments and acknowledged the petitioner’s right to file an appeal within the four-month period from December 22, 2023, as per Section 107 of the KGST Act.
The court directed AA to use the 10% debited amount from the petitioner’s electronic credit ledger as a pre-deposit for the appeal and to dispose of the appeal without requiring further deposits. The writ petition was allowed.
In a recent ruling, the Karnataka High Court quashed an income tax notice and deemed it invalid as the notice was issued to an entity that had ceased to exist following its merger.
Justice S Sunil Dutt Yadav heard the case and observed that the petitioner had officially informed the income tax authorities about the merger with Symphony Services Pune Pvt. Ltd. back in 2011.The court quashed the notice issued to Symphony Services Pune Pvt. Ltd., along with any subsequent proceedings under Sections 148A(d) and 148 of the Income Tax Act, 1961. The petition was disposed of.
In a landmark ruling, the Bombay High Court has quashed a 2020 Press Release issued by the Ministry of Finance, which classified alcohol-based hand sanitisers as “disinfectants” and imposed an 18% Goods and Services Tax (GST) rate.
The Court noted that while the executive can issue guidance, it cannot impose interpretations that preempt judicial or quasi-judicial determinations by tax authorities. By attempting to classify hand sanitisers without legislative backing, the Press Release had intruded upon the domain reserved for judicial interpretation, which was a clear violation of the separation of powers.
The Delhi High Court granted Writ Petition for Defreezing Bank Account as there was no Violation of FEMA (Foreign Exchange Management Act), 1999 or Customs Act, 1962 during the Export of Proceeds Transaction.
In Analysis of the Section 75(1) of the Customs Act, 1962 states that the drawback shall not be allowed in case the sale proceeds in respect of the exports are not received in India within the time allowed under Foreign Exchange Management Act, [“FEMA”] 1999. However, RBI Master Circular No. 14/2013-14 permits the receipt of foreign remittances from an entity other than consignee of the exported goods subject to the conditions prescribed therein.
In a recent ruling, the Karnataka High Court quashed an income tax reassessment notice issued to the petitioner where the full sale consideration was considered in calculating capital gains without applying an indexed cost adjustment.
Justice S Sunil Dutt Yadav heard both side’s arguments and observed that the sale transaction dated July 20, 2015, appeared more relevant to the 2016-17 assessment year. The court also observed that the assessment order did not account for the indexed cost of acquisition in calculating capital gains which prima facie seemed to disadvantage the petitioner.
In a significant case, the Kerala High Court held that assessing authority has no right to reassess prior years without inquiry while determining the assessment of relevant years under Income Tax Act, 1961.
The Division Bench of Justices A.K. Jayasankaran Nambiar and Syam Kumar V.M. viewed that how the assessing authority, as well as the First Appellate Authority, while considering assessment proceedings for the assessment years 2011-12 could have embarked upon an enquiry with regard to the nature and extent of business that was carried on by the assessee during the assessment years from 1999- 2000 to 2009-10.
The Kerala High Court sets aside consequential order passed by Assessing Authority beyond terms of remand by Commissioner. It was observed that the concern of the Assessing Authority, while passing a consequential order, has to be limited to those specific issues that have been remanded to it for consideration by the Commissioner.
The Division Bench comprising Justices A.K. Jayasankaran Nambiar and Syam Kumar V.M.viewed that the Assessing Authority, who passed the consequential order, apparently strayed beyond the terms of the remand by the Commissioner under Section 263 of the Income tax act which is unacceptable.
The Gauhati High Court has held that interest on refund under Section 244A of the Income Tax Act, 1961 applies only to those cases where refund is delayed by the Income Tax Department and declined interest to construction contractor whose TDS was deposited in the wrong PAN number by the Defence Ministry’s Border Roads Organisation, the Employer.
A single bench of Justice Devashis Baruah viewed that even if the amount was deposited in the correct PAN number, Petitioner was not entitled to any refunds, rendering the provision inapplicable to the case.
The Orissa High Court in a recent case, has made it clear that an entry in the dispatch register maintained by the Revenue is not primary evidence to prove the service of notice on an assessee under Income Tax Act, 1961.
The division bench of Justices Arindam Sinha and MS Sahoo observed, that entry made in the system is not primary evidence. It has to be based on something to show that the assessment order denying the exemption claim was informed to petitioner.
In a recent ruling, the Karnataka High Court remanded the matter for fresh consideration due to income tax authorities’ failure to consider the submission of the petitioner on lender identity and creditworthiness.
Justice M.I. Arun heard the case and observed that the petitioner submitted a reply and relevant documents, but were disregarded without proper reasoning. The court noted that there was a lack of explanation for dismissing the petitioner’s evidence.
In a recent ruling, the Karnataka High Court remanded the delayed Input Tax Credit (ITC) claim matter for reconsideration citing Section 16(5) of the Central Goods and Services Tax (CGST) Act as amended by the Finance (No.2) Act, 2024. This provision allows taxpayers to claim ITC for Assessment Years 2018-19 to 2020-21 if returns were filed by November 30, 2021.
Justice S.R. Krishna Kumar heard the case and acknowledged that the recent amendment under Section 16(5) of The Finance (No.2) Act, 2024 retroactively extended the deadline for claiming Input Tax Credit (ITC) for financial years 2017-18 to 2020-21. This amendment allows taxpayers to claim ITC for invoices from the specified periods in returns filed up until November 30, 2021, providing relief for those who missed initial deadlines.
The Madras High Court granted an opportunity to explain the discrepancies between the form GSTR 1 and GSTR 3B as 75% disputed Goods and Services Tax ( GST ) has already been paid.
Justice Mohammed Shaffiq, considering the peculiar facts that the petitioner has already paid the 75% of the disputed tax, viewed that the petitioner can have an additional opportunity to explain the discrepancies.
In a recent ruling, the Madras High Court, concurring with the Supreme Court’s decision in Commissioner of Service Tax v. Bhayana Builders (P) Ltd has ruled that the explanation in serial number 7 of the service tax notification no. 1/2006 is ultra vires to the finance act provisions and the constitution.
The Supreme Court, in its decision observed that there was no evidence to justify the formula used in the notification, which set service tax at 33% of the gross amount charged. The Court noted that the language of the notification implied service tax was based only on the amount charged by the service provider, excluding the value of goods supplied by the service recipient. Even with a 2005 explanation, which clarified inclusion of goods provided by the service provider, there was no provision for including goods supplied by the recipient in the gross amount calculation.
The Division Bench of the Delhi High Court comprising Justice Yashwant Varma and Justice Ravinder Dudeja recently held that an error in the name on a notice does not automatically invalidate the proceedings, provided the intended recipient’s identity remains clear and unaltered except for nominal changes.
The Delhi High Court decision clarifies that procedural mistakes, like incorrect names post-name change, are curable under Section 292B if the recipient’s identity is unmistakable and duly notified.
In a recent ruling, the Delhi High Court clarified that it is not necessary for Customs Brokers to maintain continuous surveillance of the physical addresses of exporters.
The Delhi High Court upheld the decision of the Customs, Excise and Service Tax Appellate ( CESTAT ), affirming that Customs Brokers are not obligated to maintain ongoing surveillance of an exporter’s physical address after the initial verification.
The High Court held that the documents provided by Shakti Cargo Movers, although dated, were still valid at the time of verification. Consequently, the appeal was dismissed, and the CoC’s initial revocation of the customs broker license was annulled.
In a recent decision, the High Court of Delhi has directed the revenue to immediately release goods detained without issuing a notice as required under Section 124 of the Customs Act, 1962.
The Division Bench of the Delhi High Court comprising Justices Vibhu Bakhru and Swarana Kanta Sharma thus directed to release the seized goods to the petitioner immediately.
In a significant ruling, the Kerala High Court has directed to refund the import duty to importer as the goods were not cleared for home consumption but were re-exported.It was found that there was no clearance for home consumption of goods that had been imported.
The division bench of Justice A.K. Jayasankaran Nambiar and Justice K. V. Jayakumar has observed that the redemption fine paid was in lieu of confiscation and only to enable the importer to reclaim the goods imported for the purpose of re-export. The direction of the Appellate Tribunal to refund the import duty paid by the importer, under circumstances where the goods were never cleared for home consumption but were re-exported in their entirety, cannot be found fault with.
In a recent case, the Kerala High Court set aside order denying InputTax Credit ( ITC ) under Central Goods and Service Tax ( CGST ) Act, 2017 in consideration of notification on provision under section 16(5) of the act.
The single bench of Justice Gopinath P observed that on account of notification of Sub-Section (5) of Section 16 of the CGST/SGST Acts, the petitioner will be entitled to input tax credit, which has been denied to the petitioner by order
The Kerala High Court has held that refund dues cannot be adjusted against demand when there was a stay on account of provision under section 60 (1A) of Kerala Value Added Tax ( KVAT ) Act, 2003. The bench directed that the demand for interest out of the liability assessed against the petitioner for the year 2015-16 shall not be demanded as pending disposal of the statutory appeal before the Tribunal for the year 2015-16.
The single bench of Justice Gopinath P disposed of the writ petition directing that the demand for interest out of the liability assessed against the petitioner for the year 2015-16 shall not be demanded or collected from the petitioner pending disposal of the statutory appeal before the Tribunal for the year 2015-16.
The Kerala High Court in its recent judgement related to income tax department’s attachment order, permitted to withdraw 20% of the pending demand. It was held that it will always be open to the Authorities to pass fresh orders under Section 179 of the Act, if circumstances for exercise of jurisdiction under Section 179 of the Income Tax Act subsists in future.
The single bench of Justice Gopinath P disposed of the writ petition permitting the Income Tax Department to withdraw from the bank accounts of the Company/petitioners a total sum of Rs.6,42,07,469/- (Rupees Six Crores Forty two lakhs seven thousand four hundred and sixty nine only) towards 20% of the amount directed to be paid as a condition for stay by the First Appellate Authority in Ext.P3 order;
In a significant ruling related to demand of Income Tax on denial of benefit under section 80 P of the Income Tax Act, 1961, the Kerala High Court set aside recovery on pendency of appeal before Income Tax Appellate Tribunal ( ITAT ).
The single bench of Justice Gopinath P disposed of the writ petition directing that the steps for recovery of any demands finalized against the petitioner for the years 2012-13 and 2013-14 shall stand deferred till appeals filed for the said years are heard and disposed of by the 3rd respondent and till the appeals filed for the years 2016-17, 2017-18 and 2018-19 are heard and disposed of by the 4th respondent-Tribunal. Recovery relating to the demand arising for the year 2014-15 will be deferred till a decision is taken on the application for rectification of mistake by the 4th respondent-Tribunal.
The High Court of Judicature at Bombay while adjudicating a matter before it opined that the National Stock Exchange ( NSE ) should not have illegitimately used its dominating position to block the issuance of duplicate share certificates as sought for by the Petitioner, without being a statutory authority to conduct such activity.
The Division Bench of the Bombay High Court comprising Justice M. S. Sonak and Justice Jitendra Jain, refuted the allegation by NSE that they are not amenable to Writ Jurisdiction of the High Court under Article 226 of the Constitution of India referring to the decision of the Supreme Court in K. C. Sharma Vs. Delhi Stock Exchange and Ors (2005) to observe that the Stock Exchange is amenable to writ jurisdiction under Article 226.
The Statutory Reserves transferred by the Non-Banking Financial Companies ( NBFCs ) under the Reserve Bank of India ( RBI ) Act is not allowable deduction computing assessable income under the provisions of the Act under the regular computation and computation of book profits under section 115JB of Income Tax Act, as the case may be, ruled the Madras High Court.
The bench of Justice Anita Sumath and Justice G. Arul Murugan noted the case which addressed the similar issues. It referred to the ruling of Madras High Court in the case T.C.A.No.755 of 2009 and batch dated 30.06.2022, where bulk orders of different high courts were discussed.
The Delhi High Court recently quashed an Income Tax Appeal filed by the Revenue, ruling that delayed order levying penalty on an Assessee under Section 271C of the Income Tax Act, 1961 for default in timely deduction of Tax Deducted at Source (TDS) is unsustainable in law.
The Division Bench of the Delhi High Court comprising Justice Vibhu Bakhru and Justice Swarana Kanta Sharma referenced the decision of the same Court in Principal Commissioner of Income Tax-5 v. JKD Capital & Finlease Ltd. (2015) where the principle that initiation of penalty proceedings cannot be delayed in an arbitrary manner was laid down; further, the date of on which reference was made to the concerned officer was to be deemed the date of initiation of proceedings.
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