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 28th December 2024 to 3rd January 2025.
In а reсent judgement, thе Suрreme Cоurt оf Indiа resоlved а legаl dispute on сlаssifying Chinа Dеvеlopmеnt Bаnk аnd othеr lenders аs finаnciаl creditоrs undеr thе Insolvеncy аnd Bаnkruptcy Cоde ( IBС ), 2016.
Аccording tо thе bеnch, if third pаrties dеfаulted, thе mortgаgor, who wаs nоt а dirеct borrowеr, tоok оn thе duty оf releаsing thеm frоm thеir obligаtiоns, whiсh bеcаme а guаrаntee.
The Allahabad High Court granted bail to an accused in a Goods and Services Tax ( GST ) Input Tax Credit ( ITC ) fraud case involving Rs. 264.56 crores, citing the accused’s clean criminal record and noting that the mastermind had already been granted bail by a coordinate bench.
The court listed the conditions of not tampering with evidence, intimidating witnesses, or engaging in any further criminal activities, surrendering passport pursuant to the granting of bail.
In a recent ruling, the Tripura High Court held that a refund for unutilized Input Tax Credit ( ITC ) can only be claimed under specific circumstances prescribed under Section 54 of the Central Goods and Service Tax ( CGST ) Act, 2017.
The court ruled that the petitioner’s claim for a refund was inadmissible and directed the petitioner to utilize the unutilized ITC for future tax obligations. The court dismissed the writ petition and upheld the appellate authority’s decision.
The Allahabad High Court has ruled that the expiry of the limitation period for passing a Goods and Services Tax ( GST ) assessment order does not justify denying an opportunity of hearing to the concerned party.
The bench quashed the assessment order dated August 6, 2024, and directed the authorities to issue a fresh order after granting the petitioner a proper opportunity for a personal hearing. The petitioner was instructed to appear before the authority without requiring a fresh notice for the appearance.
The Allahabad High Court has quashed a Goods and Services Tax ( GST ) order passed by the First Appellate Authority ( FAA ) as the appellate authority has recorded the wrong fact in its finding part of the order that the assessee neither responded to the notices nor moved any adjournment to it.
The FAA was instructed to fix a hearing date within a fortnight and dispose of the matter within one month thereafter. The court also clarified that the FAA’s subsequent order must be reasoned and detailed.
In a recent ruling, the Patna High Court has clarified that Panchnama cannot be considered as seizure memo following the decision of Delhi HC. It also stated that the customs officers acting on secret information must record at least the minimal reasons in the seizure memo.
It was also added that “Secret information is only tentative when Section 110 of the Act, 1962 stipulates that reason to believe. In this backdrop, Seizing Officer cannot keep reasons in his mind and he has to disclose minimal reasons in the seizure memo.” Accordingly, the impugned seizure memo was decided to be unsustainable and the same was quashed and set aside.
The Allahabad High Court quashed an order issued in the name of a driver concerning the ownership of seized goods during transit. The Court clarified that when goods are accompanied by valid invoices or specified documents, the consignor or consignee must be treated as the owner of the goods.
Thus, the Court ruled in favor of the petitioner, stating that the impugned orders against the driver were unsustainable. It directed the authorities to recognize the petitioner as the owner of the goods and to pass a fresh order within ten days, in accordance with the circular and applicable legal precedents.
In a recent ruling, the Allahabad High Court provided relief to a Limited Liability Partnership (LLP) by granting an opportunity to contest an ex parte Goods and Services Tax ( GST ) order.
The High Court directed that the impugned order be treated as a notice under Section 73 of the GST Act, allowing the petitioner to submit objections and supporting documents within eight weeks. The assessing officer was instructed to reconsider the matter, provide a hearing, and issue a fresh decision within four weeks thereafter.
The Allahabad High Court ruled that personal hearing is mandatory under Section 75(4) of the GST Act, 2017, before passing adverse orders.
Thus, the Court quashed both orders and remanded the matter to the assessing authority, directing it to provide the petitioner an opportunity for a personal hearing and to pass fresh orders in accordance with the law.
In a recent ruling, the Karnataka High Court has ruled that the non-proper officers cannot make any investigation, search, seizure and arrest on Good and Services Tax ( GST ) evasion. It is invalid. The court declared the notice void-ab – initio.
Therefore, the impugned notice was set aside, and the respondents were ordered to refund the ₹50,00,000 deposited by the petitioner and return the seized materials. The court also allowed the respondents the liberty to initiate appropriate legal action if necessary.
The Allahabad High Court has ruled that a co-owner’s consent letter is not mandatory for obtaining Goods and Services Tax (GST) registration if ownership of the property is established through an electricity bill issued in the GST registration applicant’s name.
The court dismissed the writ petition and affirmed the GST authorities’ decision, holding that the petitioner’s objections lacked merit and that there was no violation of the GST registration rules.
The Madras High Court has ruled that failure to issue GST MOV-09 within seven days of the notice under Section 129(3) of the Goods and Services Tax ( GST Act ) renders the detention proceedings invalid.
The court set aside the impugned proceedings and ordered the immediate release of the detained vehicle and goods. The writ petition was disposed of.
The High Court of Andhra Pradesh at Amaravati recently dismissed a Penalty Order purported by the Revenue, observing that Form GST MOV 07 issued under Section 129(3) of the Central Goods and Services Tax Act, 2017 ( CGST Act ) stipulates provision of seven days time to issue a reply towards a Show-Cause Notice (SCN) issued for the same purpose.
Noting a clear procedural violation, coupled with violation of principles of natural justice in providing adequate opportunity, the Andhra Pradesh High Court set aside the penalty order dated 05.11.2024 and remanded the matter back to the Revenue to pass necessary orders after providing due opportunity to the Petitioner to make out their case.
Recently, the Gujarat High Court has directed the Goods and Services Tax ( GST ) refund to the assessee who deposited excess tax amount of Rs. 40 lakhs to the revenue due to system error without any interest.
It was observed that “when the petitioner has deposited voluntarily the amount of Rs. 40,00,000/-, the same would not be covered by the provisions of Section 54 of the GST Act and the same is required to be refunded by the respondent authorities as the same could not have been rejected on the ground of limitation under Section 54(1) of the GST Act.”
The Madras High Court, in a matter of under declaration of ineligible Goods and Services Tax ( GST ) – Input Tax Credit ( ITC ) has directed to lift the bank account proceedings or garnishee proceedings on 10% pre-deposit. It granted the opportunity for hearing for the last time.
The respondent was directed to consider these objections and pass an order in accordance with the law after providing a reasonable hearing. Failure to comply with these conditions within the stipulated timelines would lead to the restoration of the impugned order. The writ petition was disposed of accordingly.
In a recent case, the Telangana High Court has held that a request for a one-time settlement cannot be entertained by a sole financial creditor after commencement of Corporate Insolvency Resolutions Proceedings ( CIRP ).
While dismissing the petition, the bench noted that there was an unexplained delay in approaching the court and that even otherwise the appropriate forum would be the NCLT.
The Kerala High Court stated that services by charitable society who look after socio-economic and welfare matters of ex-serviceman and their families is liable to service tax. Since educational institutions are not considered to be commercial entities by definition or by the activities they are supposed to carry out, the assessee cannot be regarded on an equal basis with them.
The bench dismissed the plea, ruling that even if it may be true that the assessee did not turn a profit from its commercial activities in a given year or years, it is nonetheless true that the assessee entered into the enterprise with the intention of turning a profit. Since educational institutions are not considered to be commercial entities by definition or by the activities they are supposed to carry out, the assessee cannot be regarded on an equal basis with them. To Read the full text of the Order CLICK HERE
In the recent ruling the High Court of Andhra Pradesh dismissed a revision petition filed by the assessee for misrepresentation of financial facts in his tobacco business.
A single member bench comprising T.C.D. Sekhar(Justice) dismissed the revision petition filed by the petitioner, concluding that the petitioner had approached the court with unclean hands and that the appeal lacked merit. In short,the revision petition filed by the assessee was dismissed.
The High Court of Patna directed the lower authority to consider the appeal which failed to file within the prescribed time limit mentioned under section 107 of the CGST Act, 2017, relying on the Goods and Service Tax ( GST ) Notification for condoning delay. The court found that the notification itself was brought out on 02.11.2023 and in such circumstances any order passed in at least three months before that date; the time provided for filing an appeal, ought to have been considered for such beneficial treatment.
The Chief Justice K. Vinod Chandran and Justice Partha Sarthy directedd the Appellate Authority to consider the appeal on merits and set aside the order. Further held that “The petitioner shall appear before the AppellateAuthority with the copy of the judgment on 06.01.2025. On that date or on any other date fixed; with acknowledgement duly taken from the assessee or the authorized representative, the appeals shall be heard and disposed off on merits.”
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