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 7th December 2024 to 13th December 2024.
The Supreme Court of India, in a hearing, addressed a writ petition (No. 785/2024) filed by Yash Dodani and others, seeking enhanced accessibility for visually impaired candidates in examinations conducted by the Bar Council of India ( BCI ). The bench comprised of Justices Surya Kant, Dipankar Datta, and Ujjal Bhuyan.
Thus,the BCI was directed to make all necessary arrangements to enable visually impaired candidates to answer questions on computers, should they choose this option. The Supreme Court emphasized compliance with the directive to ensure inclusivity and empowerment of visually impaired candidates. The matter has been adjourned to January 22, 2025, for further review of the progress.
The Supreme Court is to decide whether Cash qualifies as ‘Thing’ for the purposes of Section 67(2) of Goods and Services Tax ( GST Act ).
The seizure is only applicable when the cash is stock-in trade otherwise not. With the Supreme Court set to address this important question of law, a definitive and uniform clarification is expected, allaying any lingering vagueness.
In a landmark judgment, the Supreme Court of India ruled that subsequent purchasers of imported vehicles cannot be held liable for customs duty evasion committed by the original importer.
In result, the Supreme Court Bench of Justice B.V. Nagarathna and Justice Nongmeikapam Kotiswar Singh quashed the High Court decision, reinstating the Appellate Tribunal’s order in favor of the appellant. The Customs Department was directed to pursue claims against the original importer instead. This decision is expected to set a significant precedent in similar disputes involving subsequent purchasers of imported goods.
In a recent ruling, the Madras High court has ruled that the Input Tax Credit ( ITC ) is not available under the Goods and Services Tax ( GST ) for the goods purchased for the sales promotion activities.
The court provided the clarity of Section 17(5)(h) of the GST Acts, which explicitly disallows ITC for items disposed of as gifts or free samples, regardless of their use in promotional activities. Consequently, the petitioner’s claim for ITC on T-shirts and gold coins was found untenable under the law. The writ petitions were dismissed accordingly.
In a recent ruling, the Delhi High Court dismissed the Revenue’s appeal ruling that non-issuance of notice under Section 143(2) is a fatal procedural lapse that cannot be validated under Section 292BB of the Income Tax Act, 1961
The court explained that Section 292BB cannot cure the defect of non-issuance of notice under Section 143(2) if no notice was issued in the first place. The court rejected the revenue’s argument. The Court dismissed all appeals filed by the revenue.
In a recent ruling, the Calcutta High Court held that statements made by co-accused under Section 50 of the Prevention of Money Laundering Act (PMLA) cannot be treated as substantive evidence and such statements must be tested during the trial and cannot form the sole basis for denying bail at the preliminary stage.
The court explained that these allegations must be supported by other evidence during the trial and cannot be the only basis for keeping the petitioner in jail. Considering the petitioner’s long time in jail without trial and no further need for custody. The court granted him bail.
In a significant case, the Kerala High Court held that the provisions of the Foreign Trade Policy cannot by itself authorise the levy of interest under Section 28AA of the Foreign Trade (Development and Regulation) Act, 1992, as such levy must be supported by plenary legislation.
The Court while allowing the petition held that the petitioner is not liable to pay interest under Section 28AA of the 1962 Act on the amounts repaid by the petitioner on the petitioner being found ineligible for the benefit of the Scheme introduced by the Foreign Trade Policy which was in force for the period from 01-04-2015 to 31-03-2020.
In a recent case, the Kerala High Court ruled that loss in derivatives is not a speculative transaction and can be set off against business income of the assessee. Further, this is not a case where Section 73 of Income Tax Act is attracted since it deals with losses in speculation business.
While dismissing the appeal, the single Bench of Justice A.K. Jayasankaran Nambiar observed that “a loss in the derivative business would consequently be a business loss for the purposes of Section 72, and a set off of such business loss would have to be permitted against profits and gains of business as computed in terms of the I.T. Act”.
The Gauhati High Court in a significant case has dismissed a challenge to an order under Section 148A(d) of the Income Tax Act, 1961. The bench held that mere mentioning of sale of entry as purchase does not invalidate Income Tax notice flagging bogus transactions.
While dismissing the appeal, the bench viewed that there was no violation to Section 148A of the Act of 1961 while passing the impugned orders and as such the said impugned orders do not come within the ambit of the exceptions as settled by the Supreme Court as referred to supra. It is the opinion of the Court that both the writ petitions challenging the impugned orders dated 10.09.2022 in WP(C) No.7014/2022 and the order dated 31.05.2022 in WP(C) No.4975/2022 do not call for interference under Article 226 of the Constitution.
In a significant case, the Telangana High Court has held that the loss of fixed deposit investments does not qualify as a ‘trading loss’ for the purposes of claiming deduction from income under Section 28 of the Income Tax Act, 1961.
The division bench of Chief Justice Alok Aradhe and Justice Sreenivas Rao held that the loss suffered by the assessee, when the bank went to liquidation, is only a capital loss and cannot be treated as bad debt or trading loss.
In a significant development, the Delhi High Court has stayed proceedings related to a contested Show Cause Notice ( SCN ) issued by the Anti-Evasion Wing of the Central Goods and Services Tax ( CGST ) Commissionerate. The matter pertains to a writ petition filed by M/S Siemens Healthcare Pvt. Ltd., challenging the legality of the transfer of an ongoing GST audit to the Anti-Evasion Wing.
The respondents have been directed to file their reply within three weeks, while the petitioner has two weeks thereafter to file a rejoinder. The case is scheduled for its next hearing on January 17, 2025.
In a recent ruling, the Rajasthan High Court confirmed that Central Tax Officers and the Directorate General of Goods and Services Tax Intelligence ( DGGI ) have nationwide authority to issue Show Cause Notices ( SCNs ) under the Goods and Services Tax ( GST ).
The court held that the writ petition was premature and should have been filed after responding to the show cause notice. The writ petition was dismissed.
The Madras High Court sets aside GST ITC disallowance under Section 16( 4 ) of the Goods and Service Tax Act, 2017 for belated filings, owing to S.16( 5 ) insertion.
The bench also observed that “ if reply is filed by the petitioner, the same shall be considered and orders shall be passed, after affording reasonable opportunity of personal hearing to the petitioner. If such reply is not filed within the prescribed period, i.e., three weeks from the date of receipt of a copy of this order, the impugned order shall stand revived.”
In a recent ruling, the Madras High Court set aside the assessment order in a GST dispute and granted the petitioner a final opportunity to deposit 10% of the disputed tax within four weeks.
The bench, comprising Justice Mohammed Shaffiq, set aside the impugned order on the condition that the petitioner should deposit 10% of the disputed tax within a period of four weeks from the date of copy of the order of the court.
The Delhi High Court recently held that allegations of clandestine removal of goods to evade taxes must be supported by concrete evidence rather than presumptions or assumptions.
Whilst holding reference to precedents like Commissioner of Central Excise vs. Saakeen Alloys Pvt. Ltd. and Arya Fibres Pvt. Ltd. v. CCE, Ahmedabad-II, the court reiterated that concrete, tangible evidence is necessary to prove allegations of tax evasion through illicit clearance.
In a recent ruling, the Madras High Court ruled that the Income Tax Settlement Commission ( ITSC ) does not have the power to invoke Section 154 of the Income Tax Act, 1961, to rectify concluded proceedings or levy interest prior to the introduction of rectification powers in 2011.
Thus, the Court ruled that the rectification orders dated March 21, 2003, were invalid as the ITSC lacked statutory power to issue them at the time. The court allowed the writ petition and the impugned rectification orders were quashed.
In a recent ruling, the Bombay High Court sharply criticized the Income Tax Department for delays in processing tax refunds. The Court warned of the growing interest burden on public funds caused by such administrative inefficiencies.
The court explained that taxpayers are deprived of rightful refunds, and the government incurs unnecessary financial losses affecting public funds meant for developmental purposes. The next hearing was scheduled for December 10, 2024, where the respondents were expected to provide updates on the interest payment and compliance with the court’s directives.
In a recent ruling, the Madras High Court remanded the matter for fresh consideration due to the National Faceless Appeal Centre ( NFAC )’s failure to grant a personal hearing via video conferencing which violated the principles of Natural Justice.
The court directed the Appellate Authority to complete the exercise within four months from the receipt of the order. The writ petition was disposed of without costs, and any connected miscellaneous petition was closed.
In a recent ruling, the Madras High Court held that disputed questions of fact cannot be adjudicated in a writ petition and allowed the petitioner to approach the Tribunal as it observed that the assessment order was issued on the basis of erroneous facts.
It is to be noted that the petitioner’s counsel sought liberty to file an appeal before the income tax tribunal. The bench, by considering the request made by the counsel, granted to the petitioner to file an appeal within a period of two weeks from the date of receipt of a copy of the order.
The Gauhati High Court shed light on the provisions of Section 73 of the Assam Goods and Services Tax Act, 2017, (AGST Act) affirming that a summary of the purported show-cause notice (SCN) in GST DRC-01 shall not suffice to effectuate an order under Section 73 of the Act, and that the Proper Officer is required to first issue a SCN, statement under Section 73(3) and then pass an Order under Section 73(9) of the AGST Act.
Observing that the summary of SCN in Form GST DRC-01 and Attachment to Determination of Tax is not adequate, the High Court proceeded to set aside the Order by the Revenue with the direction that the Revenue may pursue the proceedings by complying with the provisions of Section 73(1) and other ancillary legal provisions.
In a recent ruling, the Madras High Court dismissed a writ petition as infructuous as the relief sought by the petitioner was no longer valid and held that according to Rule 86A(3) of the CGST Rules, 2017, the blocking of input tax credit ( ITC ) lapses after one year.
The Hig Court bench of Madras, after going through the facts of the case, observed that by virtue of Rule 86A(3) of the CGST Rules, registered taxpayer’s credit available in their electronic credit ledger will be blocked for a single year. The bench, comprising Justice C. Saravanan, held that the relief requested by the petitioner was no longer valid due to the passing of time. The bench dismissed the petition as infructuous.
In a recent ruling, the Madras High Court set aside a goods and services tax (GST) assessment due to order procedural lapses in an input tax credit (ITC) dispute.
The bench further held that the failure to comply with the above mentioned time frame would result in the restoration of the original assessment order.
The Delhi High Court has recently, in relief to J.C. Bamford (JCB) India has held that not all intellectual property disputes are anti-competitive. The court quashed proceedings initiated by the Competition Commission of India (CCI) against JCB India Limited, underlining the sanctity of settlements and the jurisdictional limits of the CCI in such matters.
This ruling is expected to bolster confidence in mediation as an effective dispute resolution mechanism while providing clarity on the interplay between competition law and intellectual property rights.
The Calcutta High Court recently directed that a proper adjudicating authority shall mandatorily provide an opportunity of hearing to an Assessee as per the provisions of Section 75(4) of the West Bengal Goods and Services Tax Act, 2017 (WBGST Act) and the Central Goods and Services Act, 2017 (CGST Act), when an adverse decision against the Assessee is being contemplated by the Assessee.
While allowing the Writ Petition, the Calcutta High Court further clarified that failure on behalf of the adjudicating authority to provide opportunity of hearing would render any consequent order unsustainable and liable to be quashed.
In a recent ruling, the Madras High Court ordered a fresh hearing for the petitioner because the Goods and Service Tax consultant failed to notify about the proceedings and had already paid 90% of the disputed tax amount.
The court set aside the impugned orders and lifted the attachment order on the petitioner’s bank accounts. The court directed the petitioner to submit their reply/objection along with any required documents to the respondent within two weeks from the date of receipt of the court’s order. The writ petition was disposed of with directions.
In a recent ruling, the Delhi High Court upheld the validity of a Rs. 67.50 crore transaction as a legitimate land sale advance citing evidence of banking transfers and an executed Agreement to Sell and dismissed the Principal Commissioner of Income Tax’s ( PCIT ) claim that the amount should be treated as unexplained income under Section 68 of the Income Tax Act.
The court criticized the Revenue for not providing any cogent material to disprove the petitioner’s explanation or establish that the credit was a camouflage for taxable income. Thus, the court dismissed the Revenue’s appeal confirming the ITAT’s decision to delete the addition of Rs. 67.50 crores from the petitioner’s income.
The Karnataka High Court recently held that so long the discharge of entire tax amount is not disputed and reverse charge mechanism would lead to double taxation, petitioner cannot be made liable to pay double tax as held in the aforesaid order, relieving the Goods and Services Tax ( GST ) taxpayer of undue pressure.
The bench noted that, from the finding recorded by the Karnataka High Court in an earlier order, “so long the discharge of entire tax amount is not disputed and reverse charge mechanism would lead to double taxation, petitioner cannot be made liable to pay double tax as held in the aforesaid order.” The impugned order was resultantly quashed by the Karnataka High Court Bench of Justice S R Krishna Kumar.
The Madras High Court recently quashed an GST ( Goods and Services Tax ) assessment order, considering the petition claiming that the same supplies of Damro furniture were subjected to the assessment more than once. The court directed the department to examine the duplication.
Considering the submissions, Justice Mohammed Shaffiq set aside the impugned order, according liberty to the respondent authority to issue a fresh notice to examine whether the supplies in question were the same in both assessments. The court directed that further proceedings, if necessary, be conducted strictly in accordance with the law. Accordingly, the petition was disposed of.
The Madras High Court recently quashed the Goods and Services Tax ( GST ) demand order demanding the recovery of duty drawbacks availed by the petitioner as exports proceeds were realised through the shipping bills.
The court further instructed the authorities to consider the representation and pass a fresh order after providing the petitioner a reasonable opportunity for a hearing. The writ petition was disposed of accordingly.
In a recent ruling, the Madras High Court has directed the Goods and Services Tax ( GST ) department to pass a fresh order after hearing on the issue of TCS ( Tax Collected Source ) mismatch between GSTR 8 and GSTR 1.
The court clarified that failure to comply with the conditions would result in the restoration of the original assessment order. The writ petition was disposed of without costs.
In a recent ruling, the Madras High Court ruled that amounts paid in excess of admitted tax liabilities can be adjusted against the pre-deposit requirement for a final hearing opportunity in Goods and Services Tax ( GST ) disputes.
Additionally, the Court ordered the immediate lifting of bank account attachments imposed as part of recovery proceedings, contingent on compliance with the pre-deposit directive. Failure to meet the stipulated conditions would result in the restoration of the impugned order.
In a recent ruling, the Madras High court has granted the personal hearing with pre-deposit against the order issued for short payment of Goods and Services Tax ( GST ) due to excess input tax credit ( ITC ) claim. The court noted that the petitioner was provided no hearing.
The order of assessment was directed to be treated as a show cause notice, and the petitioner must submit objections with supporting evidence within the same timeframe. The adjudicating authority was instructed to consider the objections and pass a reasoned order after granting the petitioner a fair hearing.
In a recent ruling, the Madras High Court granted an opportunity for a personal hearing on 10% pre-deposit to a petitioner challenging the assessment order related to the financial year 2019-20 concerning the issue of input tax credit ( ITC ) claimed from the cancelled dealers, return defaulters and the non-taxpayers.
The court also ordered the immediate lifting of the petitioner’s bank account attachment upon compliance with the pre-deposit condition. Mr.R.Sivaraman and Mr.Harsha Raj Additional Government Pleader appeared before the court for petitioner and respondents respectively.
The Madras High Court has granted a final opportunity to a trader and reseller of pharmaceutical products to address the reason for not filing the Goods and Services Tax ( GST ) annual returns for the assessment year 2018-19.
The Court clarified that failure to deposit the required amount or submit objections within the stipulated period would result in the restoration of the original assessment order. Accordingly, the writ petition was disposed of without costs.
In a recent ruling, the Madras High Court quashed a tax demand of ₹14.58 crore over an alleged undisclosed cash receipt related to a land sale transaction citing insufficient evidence provided by the Revenue Department.
The court set aside the impugned order and directed the petitioner to deposit 10% of the disputed tax demand within four weeks. The court granted a stay on the assessment order until the disposal of the appeal. The court directed the Assistant Commissioner of Income Tax to proceed with the appeal process and dispose of it on merits and by the law.
The Madras High Court set aside an Goods and Services Tax ( GST ) assessment order related to the financial year 2020-2021, directing a fresh hearing in a case involving discrepancies between GSTR-3B and GSTR-2A returns. The court noted that neither reply filed nor tax paid arising from the mismatch.
If the petitioner fails to meet the stipulated deadlines for the deposit or filing objections, the original assessment order would be restored. The High Court thus disposed of the writ petition. Mr.Manoharan S.Sundaram and Mr.V.Prashanth Kiran, Government Advocate appeared for the petitioner and the respondents respectively.
In a recent ruling, the Madras High Court ruled that entities claiming charitable status under the “general public utility” ( GPU ) category as defined in Section 2(15) of the Income Tax Act, 1961, must make sure that income from commercial activities does not exceed 20% of their gross receipts.
The court dismissed the appeal upholding the ITAT findings. The court remanded the matter back to the assessing officer for further examination and no costs were awarded in the judgment.
The Madurai bench of Madras High Court has ruled that a maximum of three personal hearings must be granted to the assessee in compliance with provisions under the Goods and Services Tax ( GST ) Act pursuant to Form GST DRC-01 notice. The court set aside an impugned order for failing to provide the petitioner with the mandated third hearing.
While setting aside the contested order, Justice Kumaresh Babu directed the respondent to provide a personal hearing to the petitioner. It was instructed that the petitioner to appear before the authority on December 24, 2024, for the hearing. The respondent was ordered to pass a fresh order based on the merits of the case and the documents submitted by the petitioner. Accordingly, the petition was disposed of.
The Madras High Court has demanded to make pre-deposit 25% for granting hearing opportunity on challenging the contested GST ( Goods and Services Tax ) demand order alleging excess GST Input Tax Credit ( ITC ) claim on account of non-reconciliation of the information.
After making such compliance, the court stated that the impugned order would be treated as a show cause notice, and the petitioner would be allowed to submit objections and supporting documents within an additional four weeks. The authorities were instructed to consider these objections and pass appropriate orders after granting a reasonable hearing.
In a recent ruling, the Madras High Court addressed the issue of a mismatch between GSTR-01 and GSTR-3B/GSTR-2A/2B filed by the petitioner, a trader of automobile spare parts registered under the Goods and Services Tax ( GST ) Act, 2017.
The bench directed the gst department to consider the objections and pass an order after a reasonable hearing. The writ petition was disposed of accordingly.
The court directed to treat the assessment order as a show cause notice after the payment of the payment of deposit. The petitioner has been granted another four weeks to file objections with supporting documents.The bench directed the gst department to consider the objections and pass an order after a reasonable hearing. The writ petition was disposed of accordingly.
In a recent ruling, the Madras High Court ruled that a company cannot reclassify an expenditure initially recorded as capital in its books of accounts and later claim it as revenue for tax benefits.
The bench comprising Justice R. Suresh Kumar and Justice C. Saravanan found no fault in the assessment and determined that the appellant could not claim the entire amount as revenue expenditure after having capitalized it in their records. The court upheld the ITAT’s decision and the appeal was dismissed
The Punjab and Haryana High Court held that the Goods and Service Tax (GST) appeal cannot be dismissed stating it is not maintainable on account of non-payment of the requisite fee to be deposited as per the Central Goods and Service Tax Act(CGST),2017.
While allowing the appeal, the Division Bench consisting of Justices Sanjeev Prakash Sharma and Sanjay Vashisth held that “on account of the non-payment of the requisite fee, an appeal cannot be dismissed as not maintainable, and in fact, before the Appellate Authority takes up any appeal, the appellant should be informed of any deficiency and be given a chance to deposit and remove the deficiency, if any. “
The Madras High Court recently granted a final opportunity to a petitioner to address non-payment of interest on delayed payment and the GST Returns mismatch.
The bench clarified that failure to comply with the deposit or objection deadlines would result in the restoration of the assessment order resulting in the confirmation of the demand. The writ petition was disposed of accordingly.
The Jharkhand High Court has held that Goods and Services Tax ( GST) Input Tax Credit ( ITC ) is allowable even on Delayed filing Goods and Services Return GSTR-3B for the FY 2017-18, while directing a Refund of Penalty & Interest to the petitioner.
Hearing both sides, the Jharkhand Bench of Chief Justice noted that, In view of Clause (5) of Section 16 inserted by the Finance (No.2) Act, 2024, with effect from 01.07.2017, the respondents are directed to allow the petitioner to take Input Tax Credit in respect of delayed returns filed for the Financial Year 2017-18, and the interest and penalty levied on the petitioner by the respondents shall be refunded with 6% p.a interest from the date of such collection till the date of repayment.
The Madhya Pradesh High Court recently held that the Revenue may not unfairly prejudice an Assessee by disallowing Input Tax Credit ( ITC ) citing delay in returns after already levying late fees for belated filing of Goods and Services Tax ( GST ) Returns.
Granting relief to the Petitioners, the Division Bench allowed the Petitions observing no requirement to examine the Constitutional validity of the Section 16(4) of the GST Act while setting aside all of the impugned show-cause notices and assessment orders.
In a recent ruling, the Madras High Court held that Goods and Services Tax ( GST ) authorities cannot introduce new defects or issues in their orders that were not previously mentioned in the Show Cause Notices ( SCNs ).
The court directed the respondent to issue an additional addendum to the original notice within 45 days allowing the petitioner 30 days to respond. A fresh order was mandated to be passed on merits and in accordance with the law, within two months from the reply submission. The writ petition was allowed.
The High Court of Telangana has held that the director of the liquidated company had no power when Resolution Professional (RP) took charge as per Insolvency Bankruptcy Code (IBC), 2016. The bench held that the petitioner could not be held responsible for alleged violations by the accused-company since he had relinquished his position as Director at the time such offences were alleged to have occurred.
The High Court allowed the criminal petition and quashed the proceedings against the petitioner. Further held that the petitioner could not be held liable for actions committed by the company after his tenure as Director had ended, especially considering that the “company was under liquidation” and an IRP had “assumed charge” and taken its “complete control” by the time the complaint was lodged.
In a recent ruling, the Madras High Court directed the tax authorities to reconsider an order issued in the name of a deceased individual despite a condonation of delay application submitted by the legal heir for filing a late income tax return.
The court quashed the notice and impugned order dated 30.03.2024 and directed the respondents to consider and dispose of the petitioner’s application within four weeks after giving her a personal hearing. The writ petitions were disposed of with no costs.
The Madras High Court, on the dispute of discrepancies were detected between the ITC availed in Table 4.A.(2) + 4.A.(3) of GSTR-3B and the tax liability declared in Table 3.1d of the same form, has directed to provide fresh hearing on pre-deposit.
The court directed the petitioner to deposit 25% of the disputed tax and after complying that was to be treated as a show-cause notice. The GST authorities were instructed to adjudicate the matter afresh, after providing a fair hearing.
In a writ petition challenging a recovery notice for ₹28,87,154, representing interest on delayed GST ( Goods and Services Tax ) payments for the financial year 2019-20, the Madras High Court has granted relief by allowing payment in ten monthly instalments.
The court ordered that the attachment of the petitioner’s assets be lifted upon payment of the first instalment. However, any default in payments would render the entire amount immediately due, allowing the authorities to resume recovery proceedings as per the law.
In a recent ruling, the Madras High Court quashed an income tax order against a Hindu Undivided Family (HUF) citing non-compliance due to the death of the Karta and the issuance of notices to an outdated address. The court directed the authorities to reconsider the matter
The court quashed the assessment order and remanded the matter to the Income Tax Department for reassessment under the faceless assessment scheme. The writ petition was allowed.
In a significant case, the High Court of Punjab and Haryana set aside the order under section 148 of the Income tax Act, 1961 as it was passed without following the procedure under section 144 B of the act.
While allowing the petition, the division bench of Justice Sanjeev Prakash Sharma and Justice Sanjay Vashisth set aside the notice issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act and all consequential proceedings.
In a recent ruling, the Madras high court has directed to issue fresh order after hearing on issue of fraudulent ITC availment utilising the documents issued by non-existent supplier. The court set aside the order on pre-deposit condition as it was issued without providing hearing.
The GST authorities were instructed to consider these objections and pass a fresh order after granting the petitioner a reasonable opportunity for a hearing.
In a recent ruling, the Madras High Court remanded the case back to the Assessing Officer for reassessment concerning the denial of input tax credit (ITC) under VAT ( Value Added Tax ) due to the cancellation of the supplier’s registration.
The court remanded the case back to the assessing officer and allowed the respondent to furnish additional evidence to substantiate their ITC claim.
In a significant ruling, the High Court of Kerala held that Goods and Service Tax is not ( GST ) leviable on interest from Chit Fund Defaults and set aside the demand order against Kerala State Financial Enterprises Ltd ( KSFE ).
The bench viewed that show cause notice is confined to the interest received from the defaulting subscribers. In such circumstances, for reasons indicated, it must be held that the amount of interest received by the foreman of a chit on defaulting subscriptions cannot be said to be amounts received as consideration for the supply of services.
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