This weekly roundup analytically summarizes the key stories related to the Supreme Court and the High Court reported at Taxscan.in from 19th November 2024 to 23rd November 2024.
In a landmark decision, the Supreme Court of India has ruled that prior sanction under Section 197(1) of the Criminal Procedure Code (CrPC) is mandatory before initiating criminal proceedings against public servants accused under the Prevention of Money Laundering Act, 2002 (PMLA).
The decision by Justices Abhay S. Oka and Augustine George Masih also observed that the issue of sanction can be raised at any stage of the legal process, including after a court has taken cognizance of an offense.
The Supreme Court quashed the penalty against the commercial tax officer on the grounds that its evidence in the disciplinary proceedings against him was not proper. The bench restored the decision of the tribunal and set aside the judgment of the Allahabad High Court.
Justices Pamidighantam Sri Narasimha and Sandeep Mehta, viewed that the inquiry proceedings conducted against the appellant pertaining to charges punishable with major penalty, were totally vitiated and non-est in the eyes of law since no oral evidence whatsoever was recorded by the department in support of the charges.
The Supreme Court of India has delivered a landmark judgment affirming that mobile towers and prefabricated buildings (PFBs) used by Mobile Service Providers (MSPs) qualify as “goods” and not immovable property. This ruling enables MSPs to claim CENVAT credit on excise duties paid for these items under the CENVAT Credit Rules, 2004, a decision that resolves a long-standing controversy in the telecom sector.
Court analyzed whether these items qualify as capital goods or inputs under the CENVAT Rules. It determined that mobile towers and PFBs serve as integral components of Base Transceiver Stations (BTS), essential for transmitting and receiving telecommunication signals. These items are therefore considered components or accessories of telecom equipment, meeting the criteria of capital goods under Rule 2(a)(A) or inputs under Rule 2(k) of the Rules.
In a recent ruling, the Madras High Court observed that cross-examination requests should not be entertained unless there is a substantive reply on the merits to the Show Cause Notice (SCN).
The bench comprising Justice R.Suresh Kumar and Justice C.Saravanan observed that the Chief Commissioner validly extended the time for adjudication. The court observed that the petitioner’s actions of filing for cross-examination and appealing procedural orders caused the procedural delay.
The Punjab and Haryana High Court has quashed a Goods and Services Tax ( GST ) demand notice and order issued under Section 74 of the Central Goods and Services Tax Act, 2017, following the earlier closure of proceedings under Section 61 of the Central GST Act.
The Punjab and Haryana High Court Division Bench of Justice Sanjeev Prakash Sharma and Justice Sanjay Vashisth thus set aside the order dated June 14, 2023, and the notice issued under Section 74(1) of the Goods and Services Tax Act.
In a recent ruling, the Madras High Court held that an expired Anti-Dumping Duty ( ADD ) notification cannot be extended. The court directed a reassessment of Huawei Telecommunications’s ADD on imports from China strictly within the valid period of the original notification.
A single bench led by Justice Senthilkumar Ramamoorthy referred to Section 9A(5) of the Customs Tariff Act, 1975, which mandates that an anti-dumping duty notification remains valid for five years unless extended within that period.
The Bombay High Court was recently faced with multiple petitions pertaining to the quashing of demand notices issued under the Goods and Services Tax ( GST ) Acts, filed by separate entities involved in the construction business. The High Court advised the Petitioners to first approach all alternate remedies available to them to contest their case before approaching the High Court for relief.
The Division Bench of the Bombay High Court comprising Justice M.S. Sonak & Justice Jitendra Jain observed that whether tax demands purported against the Petitioners concerns any activity in relation to the functions of the Municipality under Article 243W may only be determinable through the proper adjudicatory process and not by the High Court exercising extraordinary and summary jurisdiction under Article 226 of the Constitution as the same may require examination of factual aspects that cannot be conveniently undertaken by the High Court at this stage.
The Delhi High Court in a recently upheld an Order passed by the Principal Commissioner of Income Taxes, Delhi-11 ( PCIT ), ruling against the incorrect classification of an Assessee’s land by the jurisdictional Assessing Officer in the course of income tax assessment.
The two-member Bench of the Delhi High Court comprising Justice Vibhu Bakhru and Justice Swarana Kanta Sharma considered the submissions on record and concluded that the AO had absolutely erred in his decision by failing to measure the distance of the land from nearest municipal limits, which is a critical requirement under Section 2(14)(iii) of the Income Tax Act, 1961.
The Bombay High Court has directed the Directorate General of Foreign Trade (DGFT) to pay ₹50,000 in costs to Larsen & Toubro Limited (L&T) for systemic lapses that caused undue delays in the processing of Merchandise Exports from India Scheme ( MEIS ) benefits.
The judgment by the Division Bench of Justices M.S. Sonak and Jitendra Jain, underscores the court’s disapproval of bureaucratic inefficiencies and technological inadequacies impacting legitimate claims under government schemes.
The Delhi High Court recently granted relief to prominent media entity Discovery Communications by preventing the reopening of their Income Tax Assessment for the Assessment Year (A.Y.) 2011-12, observing that the Respondent Revenue had not been able to satisfy the requisite requirements warranting reopening of Assessment beyond a period of four years from its completion.
The Division Bench of the Delhi High Court composed of Justice Yashwant Varma and Justice Ravinder Dudeja observed that escapement of income by itself is not a sufficient ground for reopening of the Assessment as per the first proviso to Section 147 of the Income Tax Act, 1961. Referring to the Decision of a coordinate Bench of the Delhi High Court in CIT v. Suren International Private Limited (2013) that an Assessment may be reopened only if there is a direct inference that the Assessee had failed to fully and truly disclose all material facts.
In a recent ruling, the Allahabad High Court criticized the conduct of a lawyer representing a Prevention of Money Laundering Act, 2002 (PMLA) accused of directly sending emails to the investigating officer in the case deeming the action as improper and unethical.
A single bench led by Justice Samit Gopal criticized the applicant counsel’s conduct stating that sending emails directly to the investigating officer was inappropriate and improper. The court observed that such communication bypasses the legal and procedural flow established to ensure fairness in criminal proceedings.
In a recent ruling, the Madras High Court has ruled that the Section 4 of the Tamil Nadu Tax on Entry of Goods into Local Areas Act, 2001, grants reduction in the tax liability even for the tax paid under the Tamil Nadu Value Added Tax ( TNVAT ) Act, 2006.
The High Court, considering the notification issued, quashed the impugned orders and directed the respondent to give effect to the provisions of Section 4 of the Entry Tax Act in full.
The Madras High Court ruled that the reassessment proceedings under Section 148 of Income Tax Act, 961 cannot be initiated without completing the assessment. The court also clarified that the notices under Section 143(2) can only be issued to the pending assessments.
The bench found this argument misconceived on the grounds that the issuance of notice under Section 143(2) will apply only in the case of pending assessment. The bench further noted that this is a case where the assessment is pending and instead of completing the same, the assessing authority has initiated proceedings for re-assessment. Hence, the submission of Senior Standing Counsel was seen to be devoid of merit and was rejected by the court.
The Delhi High Court recently granted relief to Calcom Vision, affirming the maintainability of Sales Tax Appeals challenging the procedure of Assessment adopted by authorities of the Value Added Tax (VAT) department, under Section 81 of the Delhi Value Added Tax Act, 2004 (DVAT Act) instead of Section 45 of the Delhi Sales Tax Act, 1975 (DST Act).
The Division Bench of the Delhi High Court comprising Justice Yashwant Varma and Justice Ravinder Dudeja observed that the DVAT Act, in essence, sought to replicate and re-enact the hierarchy of remedies created under the DST Act.
The Bombay High Court has held that Goods and Services Tax (GST) Input Tax Credit (ITC) cannot be denied on advance receipts.
The Division Bench of Justices G S Kulkarni and Jitendra Jain that, “in the peculiar facts of the case on the basis of Receipt Voucher issued by L&T in favour of the petitioner, the petitioner was entitled to avail the Input Tax Credit under section 16 of the CGST/MGST Act.”
In a significant ruling, the Bombay High Court has affirmed that interest on delayed Integrated Goods and Services Tax ( IGST ) refunds under Section 56 of Goods and Services Tax Act must be paid starting 60 days after the date of filing the shipping bill until the refund is disbursed.
The Bench of Justices Jitendra S Jain and M S Sonak noted that the petitioner was not informed about being flagged, leading to unwarranted delays. It was also observed that the respondents failed to complete their investigation within the prescribed 30-day window under Circular No. 16/2019.
The Delhi High Court recently vitiated the arguments raised in a Bail Application filed by an alleged methaqualone smuggler, observing that there had been no prejudicial infirmity on the end of the Customs Department during the seizure of contraband under Section 110 of the Customs Act, 1962.
The Single-Judge Bench of the Delhi High Court presided over by Justice Anish Dayal, observed that the allegations of planting of drugs and delay in filing of Section 52A Application is a matter to be decided during trial and that the Applicant may contend the same during the Trial of the matter; further, allegedly defective Notices served under Section 50, NDPS Act and 102, Customs Act would have no real effect as the contraband had been seized from her bag and not her person.
The Delhi High Court recently dismissed a plea seeking quashal of a criminal complaint in a tax evasion case under The Black Money ( Undisclosed Foreign Income And Assets ) and Imposition Of Tax Act, 2015 ( Black Money Act ), noting that the arraigned Petitioner had failed to disclose their international address to the investigating authorities.
The Single-Judge Bench of the Delhi High Court presided over by Justice Dinesh Kumar Sharma observed that whether a wilful attempt to evade tax under provisions of Section 51(3) of the Black Money Act had been undertaken by the Petitioner by backdating/fabricating documents is a matter of trial, and refused to set aside the summoning order issued against Sanjay Bhandari by the ACMM.
The Delhi High Court recently issued advisory to the Customs Department to alter their proforma notices under Section 102 of the Customs Act, 1962 to provide choice to an apprehended person to opt whether they would like to be searched before a Gazetted Officer/Magistrate or has no objection to being searched by the officer present.
The Single-Judge Bench of the Delhi High Court presided over by Justice Anish Dayal, at the outset, observed that the Applicant’s objections regarding defective Notice under Section 102 of the Customs Act, 1962 and Section 50 of the NDPS Act would not be relevant as the same only pertains to personal search of an apprehended person whereas nothing was revealed in the personal search of the Accused.
In a recent ruling, the Madras High Court has ruled that the service tax must be levied considering contract-specific basis between the service provider and the recipient. The bench was dealing with levying tax on assignment of certain rights in the cinematograph films as representing temporary transfer or permitting use or enjoyment of intellectual property i.e., copyright in the instant case.
Justices R. Mahadevan and Mohammed Shaffiq observed that “the question as to whether a particular transaction would attract the levy of Service Tax as constituting a taxable service within the meaning of 65(105)(zzzzt) prior to 01.07.2012 or Section 66B read with Section 65B(44) and Section 66E(c) w.e.f. 01.07.2012 ought to be determined on the basis of the contracts entered into between the service provider and the recipient. One cannot generalize the transactions nor determine the liability without examining the contracts individually for the rights/ obligations flowing therefrom may vary from contract to contract.”
The court set aside the observations made by the Judge that imposed restrictions on the adjudicating authority’s powers. It remanded the cases, allowing the petitioners to submit fresh objections within four weeks. The adjudicating authority was directed to independently and objectively adjudicate the matters, free from the earlier court’s observations, and issue a fresh order within four weeks of receiving the objections.
The Chhattisgarh High Court while dismissing the petition of J.K. Lakshmi Cement Ltd, challenging constitutional validity of clauses (c) & (d) Of Section 17(5) of the Central Goods and Service Tax (CGST Act), 2017 held that clauses (c) & (d) Of Section 17(5) of CGST Act relates to works contract services and goods and services received for construction of immovable property respectively. J.K. Lakshmi C
The division bench of Justice Sanjay K. Agrawal and Justice Radhakishan Agrawal dismissed the writ petition qua the constitutional validity of clauses (c) & (d) of Section 17(5) of the CGST Act and liberty is reserved in favour of the petitioner to raise the issue whether the construction of immovable property carried out by the petitioner amounts to plant within the meaning of Section 17(5)(d) (plant) of Act of 2017.
The Punjab & Haryana High Court in the case of Bar Code India Limited vs Union of India held that the GST Number of purchasers in GSTR-1 return cannot be rectified after expiry of the limitation period. The bench held that merely because of an error being committed by a particular company, which causes loss to the purchaser company, the provisions of the Act need not be interpreted to suit them.
The division bench of Justice Sanjeev Prakash Sharma and Justice Sanjay Vashisth has observed that merely because of an error being committed by a particular company, which causes loss to the purchaser company, the provisions of the Act need not be interpreted to suit them. The law is settled that a person who is engaged in business has to be well versed with the provisions of law including the time frame provided under the said provisions. Both the companies, long and if as asserted by the respondents, have committed an error, are engaged in business since the law cannot be changed for giving them any such benefit.
In a ruling in favor of BMW India Pvt. Ltd, the Punjab and Haryana High Court held that Input Tax Credit is Available to Demo vehicles and quashed the ruling given by Appellate Authority of Advance Ruling ( AAAR ) which is contrary to the same.
The division bench of Justice Sanjeev Prakash Sharma and Justice Sanjay Vashisth has observed that the circular discussed the availability of Input Tax Credit on demo vehicles, which are motor vehicles for transportation of passengers having approved seating capacity of not more than 13 persons in terms of clause(a) of section 17(5) of Haryana Goods & Services Tax Act, 2017.
The Punjab and Haryana High Court granted anticipatory bail to accused uploading fake bills on GST Portal and wrongfully claiming Input Tax Credit ( ITC ) worth Rs. 25 Crores.
The bench of Justice Gurvinder Singh Gill has directed that “the petitioners be released on interim bail subject to their furnishing personal bonds and surety bonds to the satisfaction of Arresting/Investigating Officer.”
The Bombay High Court has ruled that the ‘water tax’ and ‘water benefit tax’ can be levied by the municipal corporation even if the water is not consumed by the owner or the occupier. However, if they consume the water, they have to pay the water charges in lieu of tax.
The bench, comprising Justice A.S. Chandurkar, Justice Manish Pitale, and Justice Sandeep V Marne, ruled on the issues raised in the petition. They clarified that the expression “for providing water supply” under Section 140(1)(a)(i) of the M.M.C. Act does not require actual water supply to the owner/occupant, and water tax can be levied regardless of whether water is consumed.
In a significant case, the Kerala High Court held that prior notice is not necessary to adjust refund amounts towards service tax dues as there is no such provision under Finance Act, 1994.The court held that there was no illegality in the appropriation of the refund amounts by the department, towards the outstanding dues of the proprietary concern.
The division bench of Justice A.K. Jayasankaran Nambiar and Justice K. V. Jayakumar upheld the decision of single bench wherein it was held that in the absence of any provision in the Finance Act, 1994 requiring the issuance of any notice prior to adjusting refund amounts, the action of the department in appropriating the refund amounts due to the appellant towards the outstanding dues of the proprietary concern could not be said to be illegal.
In a recent ruling, the Madras High Court quashed an attachment order issued by the GST Department after observing that the department failed to serve the assessment order at the petitioner’s newly registered office despite being informed.
Justice Senthilkumar Ramamoorthy observed that the petitioner had repeatedly requested a certified copy of the assessment order through communications dated 29.11.2022 and 19.12.2022 stating the change of address and these requests were ignored by the GST authorities.
The Kerala High Court set aside the Income Tax Appellate Tribunal ( ITAT ) order dismissing appeal under Income Tax Act, 1961 on failure to cure certain defects pointed by authority. It was held that if the petitioner does not cure the defects within one week the appeal will stand dismissed as already directed by the Appellate Authority.
A single bench of Justice Gopinath P. viewed that since the petitioner before the court is seeking a limited relief, the writ petition can be disposed of setting aside and directing that if the petitioner cures the defects pointed out by the Appellate Authority within a period of one week from the date of receipt of a certified copy of this judgment, appeal will stand restored to the file and shall be disposed of on merits by the Appellate Authority.
In a recent case, the Kerala High Court upheld the Goods and Service Tax (GST) cancellation order against Steel India due to submission of false details at time of migration of registration under Value Added Tax (VAT) to GST.
A single bench of Justice Gopinath P viewed that the petitioner has not made out any case for interference with the impugned orders. A perusal of order of the original authority will show that the contentions taken by the petitioner had been considered by the original authority, and there was a specific finding that the petitioner was not conducting business in the premises mentioned in the certificate of registration.
The Kerala High Court set aside the order passed under section 148 of Income Tax Act, 1961 as the court observed that the reply to show cause notice ( SCN ) issued not submitted on permitted time but before passing order need to be considered.
The single bench of Justice Gopinath P set aside the order and consequential notice issued under Section 148 of the 1961 Act and direct that fresh orders be passed in terms of the provisions contained in Section 148 A (d) of the 1961 Act, after affording an opportunity of being heard to the petitioner.
The Kerala High Court permitted one opportunity to upload Goods and Service Tax ( GST ) Input Tax Credit ( ITC ) as it failed due to technical glitches. It was directed that the 5th respondent shall ensure that the portal is enabled for the purposes of filing FORM.
A single bench of Justice Gopinath P disposed of the writ petition by permitting the petitioner to upload FORM, if necessary, by enabling the Portal. The 5th respondent shall ensure that the portal is enabled for the purposes of filing FORM. If the FORM is uploaded within one week from the date on which the Portal is enabled, any input tax credit due to the petitioner shall not be denied on account of the fact that FORM was not filed on or before 08.05.2024.
In a case related to issue on identifying payee of rent which restrained deduction of Tax Deducted at Source ( TDS ) and payment before Income Tax dept, the Kerala High Court permitted TDS as unclaimed.
The Court disposed of the petition by stating that “ If there is any statutory time limit for claiming the benefit of the tax deducted and so paid by the petitioner in the manner indicated above, it is open to the persons who may be aggrieved by non-receipt of the credit (to the extent of tax deducted) to apply to the competent authority under the provisions of Section 119(2)(b) of the Income Tax Act, 1961.”
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