This weekly round-up analytically summarises the key tax judgments of the Supreme Court and all High Courts reported at Taxscan.in during the previous week from February 16th to February 23rd of 2024.
The Supreme Court while observing the monetary limits for filing of income tax appeals by the department dismissed the revenue appeal with respect to the low tax effect.
The aforementioned appeal, filed by the revenue concerning the case involving Jagson International Ltd., saw Senior Counsel Mr. Arijit Prasad representing the appellant(s). Mr. Prasad suggested that “considering the low tax effect, as per the Notification dated 08.08.2019 at Instruction No.17 of 2019, these appeals could be resolved.”
The division bench of the supreme court comprising B.V. Nagarathna and Sanjay Kumar dismissed the revenue appeal with respect to the low tax effect.
The Supreme Court issued a notice to the central government on Monday, seeking a response in a case challenging the constitutional validity of anti-profiteering provisions under the Goods and Services Tax Act.
A three-judge bench, led by Chief Justice of India DY Chandrachud, has agreed to hear the appeal arising out of an order of the Delhi High Court that upheld the constitutional validity of these provisions.
The High Court acknowledged the possibility of instances where there might be arbitrary exercises of power under the anti-profiteering mechanism. However, it emphasized that the remedy for such cases is to set aside the order on its merits rather than striking down the provision itself, which vests such power in the authority.
The Supreme Court condoned delay of 265 days in the challenge regarding the judgment that the formation of trust for compliance of corporate social responsibility ( CSR ) requirements not reason for denying registration under Section 12AA of the Income Tax Act, 1961.
The Punjab and Haryana High Court in The Commissioner of Income Tax ( Exemptions ) Chandigarh Vs. M/s. Nanak Chand Jain Charitable Trust, Gharaunda, Karnal upheld the order of the Income Tax Appellate Tribunal ( ITAT ) observed that “While hearing an appeal filed by M/s Nanak Chand Jain Charitable Trust, Delhi bench of Income Tax Appellate Tribunal ( ITAT ), last week, held that the registration under section 12AA of the Income Tax Act 1961 cannot be denied to a trust when it is created for the purpose of carrying out Corporate Social Responsibility ( CSR ) activities.”
The Supreme Court condoned delay in special leave petition ( SLP ) filed by Income Tax Department in the matter regarding a challenge on disallowance under Section 14A of the Income Tax Act, 1961 to be restricted to exempt income earned.The SLP arose out of the impugned final judgment and order dated 13-03-2023 in ITA No. 175/2022 passed by the High Court of Karnataka at Bengaluru.
A Two-Judge Bench of Justice Abhay S Oka and Justice Ujjal Bhuyan observed that “Application seeking exemption from filing certified copy of the impugned order is allowed. Delay condoned. Issue notice.”
The Supreme Court of India has taken up the challenge to the time limit imposed for availing Goods and Services Tax ( GST ) Input Tax Credit ( ITC ) under Section 16(4) of the Central Goods and Services Tax Act, 2017.
The Supreme Court admitted the Special Leave Petitions and issued notices to the respondents, signaling the initiation of a thorough judicial examination of the issue. Alongside admitting the SLPs, the Supreme Court has issued notice on the interim reliefs as well.
The Supreme Court of India dismissed a special leave petition ( SLP ) in the challenge regarding the judgment on software firms that purchase computer software from foreign software suppliers exempted from deducting TDS.
A Two-Judge Bench of Justice Sanjiv Khanna and Justice Dipankar Datta observed that “Recording the aforesaid, the special leave petition is dismissed, as the same is covered by the said decision of this Court. In case the review petition on the issue raised in the present special leave petition is allowed, it will be open to the petitioner(s) to get the present special leave petitions revived.”
The Supreme Court of India dismissed a special leave petition ( SLP ) filed by the Income Tax Department in the challenge regarding the deletion of addition on submission of proper cash book.
A Two Judge Bench of the Supreme Court of Justice Pamidighantam Sri Narasimha and Justice Aravind Kumar observed that “Delay in the matters is condoned. Having heard the counsel for the petitioner(s), we are not inclined to interfere. Hence, the special leave petitions are dismissed.”
The Supreme Court held that the claim submitted by the Resolution Professional ( RP ) under the Corporate Insolvency Resolution Process ( CIRP ) with proof cannot be overlooked on mere submission in the wrong form.
Setting aside the aforesaid findings, the Bench Comprising Chief Justice DY Chandrachud and Justice JB Pardiwala and Justice Manoj Misra observed that the Form in which a claim is to be submitted is directory in nature, and the claim cannot be rejected just because it was submitted in different form.
A two-judge bench of the Supreme Court dismissed the appeal on the ground of low tax effect as being covered by the Circular No. 17 of 2019 issued by the Department of Revenue, Ministry of Finance.
The two-judge bench of the Supreme Court comprising Justice B V Nagarathna and Justice Sanjay Kumar Court bench comprising dismissed the appeal on the ground of low tax effect
The Supreme Court dismissed a review petition, challenging the judgment wherein it was held that variable licence fee paid annually by telecommunication companies to DOT is capital expenditure.
The review petition arose out of the impugned final judgment and order dated 16-10-2023 in C.A. No.11128/2016 passed by the Supreme Court of India. A Two-Judge Bench of Justice BV Nagarathna and Justice Ujjal Bhuyan observed that “Application for oral hearing is rejected. The Review Petition is dismissed in terms of the signed order.”
The Delhi High Court directed the special judge to expedite the hearing on an application seeking the release of passport concerning the urgency of traveling abroad to pursue studies. The petitioner was restricted from traveling abroad based on the charge sheet filed under the Customs Act, 1962.
Justice Navin Chawla disposed of the petition by setting aside the Impugned Order passed by the Special Judge. However, the petitioner is granted liberty to file a fresh application before the Special Judge to seek release of his passport.
The Delhi High Court dismissed the writ petition as the issue on the provisional release of confiscated gold dore bars is factual and cannot be decided by the High Court. The Court upheld the observation of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) that even if the goods are found to be restricted or prohibited at the time of import would still be subject to provisional release, would not amount to expression of opinion and is held to be restricted.
A division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja found that the issue is purely factual and no substantial question of law arises for consideration. The Court dismissed the appeal.
The Delhi High Court, allowed application for release passport which was surrendered before custom department in Narcotic Drugs Psychotropic Substances ( NDPS )crime for pursue higher studies in canada
The bench observed that the “Special Judge seems to have simply accepted the submission of the learned counsel for the respondent, who was appearing therein, that as the brother of the petitioner has made various communications with drugs traffickers located outside India, the petitioner may hamper the investigation, however, as claimed by the counsel for the petitioner, no material in this regard was placed before the Special Judge.” After analyzing the facts and arguments of both parties, a single bench of Justice Navin Chawla allowed the Bail application directed to release the passport surrendered before the customs department involved in Narcotic Drugs Psychotropic Substances ( NDPS ) crime to pursue higher studies in Canada.
The Allahabad High Court, in a recent ruling, has provided significant clarity on the electronic filing of appeals under Section 107 of the Central Goods and Services Tax Act, 2017, coupled with the provisions outlined in Rule 108 of the Central Goods and Services Tax Rules, 2017.
Justice Shekhar B. Saraf, presiding over the case, provided a thorough analysis in the court’s ruling. The judge highlighted that upon reviewing the impugned order, it was evident that the appeal was electronically filed within the stipulated three-month period as per Section 107. Importantly, the judge emphasized a literal interpretation of the first proviso to Rule 108, concluding that the first and second provisos would not apply in this scenario.
A Karnataka High Court Single Bench delivered a significant blow to Exalogic, a corporate entity where the Daughter of Kerala CM serves as a director. The court ruled that initiation of an investigation under Section 210 of the Companies Act 2013 doesn’t strip the Government of India of its authority to assign the probe to the Serious Fraud Investigation Office ( SFIO ) under Section 212 of the Companies Act.
The Karnataka High Court highlighted that Section 210 permits either interim or final reports and affirmed the government’s right to entrust the investigation to the SFIO based on emerging information during the Section 210 investigation.
In a major ruling the Allahabad High Court observed that self-certified copy of order under challenge not required for appeals filed electronically under Rule 108 of the Central Goods and Services Tax Rules, 2017 ( CGST Rules ).
A Single Bench of Justice Shekhar B. Saraf observed that “Upon a perusal of the impugned order, it clearly appears that the appeal was electronically filed within the time permitted, that is, three months as per Section 107 of the Central Goods and Services Tax Act, 2017. Furthermore, the first and second proviso to Rule 108 of the CGST Rules would not apply, as is clear from the literal interpretation of the first proviso itself.”
The Allahabad High Court quashed penalty order against Hawkins Cookers, quoting the famous words from Chanakya’s Arthashastra that “Governments should collect taxes like a honeybee collects honey from a flower without disturbing its petals”.
A Single Bench of Justice Shekhar B. Saraf observed that “In the present case, it is palpably clear that the goods were accompanied with the relevant invoices, bilty documents and the e-way bills. It is to be noted that the invoices and bilty documents also contain the correct address of the destination and only four out of eight of the e-way bills had the incorrect address. Even this incorrect address was the registered office of the petitioner. In such a case, no presumption to evade tax arises at all. The mere technical error committed by the petitioner cannot result in imposition of such harsh penalty upon the petitioner.”
The Allahabad High Court ruled that the failure to file reply to show cause notice ( SCN ) will not take away right of personal hearing under Section 75(4) of the Uttar Pradesh Goods and Service Tax Act, 2017 ( UPGST Act ).
A Division Bench of Justices Manjive Shukla and S.D. Singh observed that “In that regard, it has also been stated that the petitioner’s business operations are lying closed since 2020. Therefore, for reasons of disruption of business operation, petitioner committed a mistake in not responding the notice, within time. In view of the above noted facts and reasons, we find no useful purpose may be served in keeping this petition pending or calling counter affidavit at this stage or to relegate the present petitioner to the forum of alternative remedy. The order impugned has been passed contrary to the mandatory procedure. The deficiency of procedure is self apparent and critical to the out come of the proceedings.”
The Punjab and Haryana High Court held that non-forwarding of seized material as early as possible is Violative of the mandatory provision under section 19 of the Prevention of Money Laundering Act, 2002 ( PMLA Act, 2002 ).
A single bench of Justice Vikas Bahl observed that there is total non-compliance of Section 19(2) since there is neither any reference to the compliance of the said provision in the application under Section 65 of the 2002 Act read with Section 167 CrPC filed by the respondent authorities seeking custody of the petitioners to the Directorate of Enforcement nor is there any such mention of its compliance in the grounds of arrest, in the personal search memo, arrest memo, arrest order or even panchnama.
The Kerala High Court directed the department to open the Good and Service Tax ( GST ) portal for filing returns based on an order from the GST appellate authority. Counsel for the petitioner submitted that despite the restoration of the registration by the Appellate Authority, the petitioner is not able to file his returns as the portal is still blocked.
The single bench comprising Justice Dinesh Kumar Singh directed the respondents to open the GST portal to the petitioner for filing his returns, within ten days. The court disposed of the writ petition.
In a recent decision, the Jharkhand High Court ruled that reopening of assessment notice liable to be quashed if barred by limitation period under Section 149 of the Income Tax Act, 1961.
A Division Bench of Justices Rongon Mukhopadhyay and Deepak Roshan observed that “If we peruse to the exception which has been carved out by the Hon’ble Apex Court in Whirlpool Corporation, the instant writ application is maintainable as the order or the proceedings are wholly without jurisdiction, inasmuch as, notice under Section 148 of the Income Tax Act, 1961 is normally three years from the end of the relevant assessment year ( in this case A.Y 2016-17 ) and extendable beyond 3 years till 10 years provided the income which has escaped assessment is Rs. 50,00,000/- or more and the permission of the concerned authority is taken and in the instant case it is evident from the notice dated 30.05.2022, under Section 148 A (b) of the Income Tax Act, 1961, which clearly indicates that the alleged income, which has escaped assessment, is only Rs. 39,21, 450/-.”
The Kerala High Court observed that the question to be decided in proceedings under Section 148 of the Income Tax Act, 1961 is whether unaccounted transactions and alleged escaped income would merit exemption.
A Division Bench of Dr Justice AK Jayasankaran Nambiar and Justice VG Arun observed that “In the appeal before us, it is the contention of K.N.Sreekumaran, the counsel for the appellant, that the alleged escaped income, even if taken into account, would not attract any tax liability since the appellant enjoys an exemption in terms of Section 12AA of the Income Tax Act. We note, however, that the exemption under Section 11 read with Section 12AA of the Income Tax Act is one that is subject to certain conditions, and the question to be decided in the proceedings under Section 148 of the Income Tax Act is essentially as to whether the unaccounted transactions and the alleged escaped income would merit an exemption or not.”
The Kerala High Court dismissed a writ petition as remedy of statutory appeal is available against assessment orders under Section 107 of the Central Goods and Service Tax Act, 2017 ( CGST Act ).
A Single Bench of Justice Dinesh Kumar Singh observed that “There is remedy of statutory appeal against the orders impugned in this writ petition under Section 107 of the CGST/SGST Act, 2017. Petitioner, instead of resorting to the statutory remedy of appeal has approached this Court under Article 227 of the Constitution of India.”
The Kerala High Court directed the Income Tax Department to consider tax petition in the matter regarding the initiation of penalty proceedings under Section 271A of the Income Tax Act, 1961.
A Single Bench of Justice Dinesh Kumar Singh observed that “At this stage, the petitioner has filed the stay petition recently before the Appellate Authority. However, the petitioner has approached this Court seeking a direction to stay the demand.”
The batch of writ petitions assailed the action initiated by the respondents predicated upon a purported failure on the part of the writ petitioners to deduct tax on payments made to the Haryana Shahari Vikas Pradhikaran1 ( earlier known as the Haryana Urban Development Authority, for short ―HUDA‖ ) under Section 194C of the Income Tax Act, 1961.
A Division Bench of Justices Yashwant Varma and Purushaindra Kumar Kaurav observed that “We negative the challenge raised in these writ petitions insofar as the invocation of Section 194C of the Income Tax Act is concerned and hold that EDC payments would be covered thereunder. For reasons recorded in the body of this judgment, we also turn down the challenge to the Clarification issued by the Central Board of Direct Taxes dated 23 December 2017.”
The Kerala High Court observed that the remedy of filing appeal is available once request for exemption from payment of customs duty has been declined.
A Single Bench of Justice Dinesh Kumar Singh observed that “In view thereof, this Court does not find that this writ petition is to be entertained when the final order has been passed on 25.01.2024 against which the remedy of appeal is provided under the Customs Act, 1962.
The Orissa High Court condoned delay in invoking proviso to Rule 23 of the Central Goods and Services Tax Rules, 2017 ( CGST Rules ) on payment of tax, penalty and interest.
A Division Bench of Chief Justice Dr BR Sarangi and Justice MS Raman observed that “In that view of the matter, the delay in Petitioner’s invoking the proviso to Rule 23 of the Central Goods and Services Tax Rules ( CGST Rules ) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc. due and complying with other formalities, the Petitioner’s application for revocation will be considered in accordance with law.”
A Single Bench of the Kerala High Court observed that there is no applicability of limitation period of 3 years under Section 149 (1)(a) of the Income Tax Act, 1961 when income escaped assessment is more than Rs.50 lakhs.
The Court of Justice Dinesh Kumar Singh observed that “At the initial stage of enquiry of re-opening the assessment under Section 148A, the assessing authority has to satisfy itself that whether the income of the petitioner has escaped assessment and if the 3 years period has elapsed from the last date of relevant assessment year, whether the income which has escaped assessment is more than Rs.50,00,000/-. In the present case, income escaped assessment is allegedly more than Rs.50,00,000/- and therefore, the limitation period of 3 years provided under Section 149 (1)(a) has no applicability in the facts of the present case.”
A division bench of the Kerala High Court has held that the exemption under Section 11 read with Section 12AA of the Income Tax Act is one that is subject to certain conditions, and the question to be decided in the proceedings under Section 148 of the Income Tax Act is essentially as to whether the unaccounted transactions and the alleged escaped income would merit an exemption or not. The bench observed that It is for the said examination on merits that the proceedings under Section 148 of the Income Tax Act have been initiated. The court refused to intervene with the proceedings initiated to ascertain the same.
The division bench comprising A.K.Jayasankaran Nambiar and V.G.Arun held that “ the exemption under Section 11 read with Section 12AA of the Income Tax Act is one that is subject to certain conditions, and the question to be decided in the proceedings under Section 148 of the Income Tax Act is essentially as to whether the unaccounted transactions and the alleged escaped income would merit an exemption or not. It is for the said examination on merits that the proceedings under Section 148 of the Income Tax Act have been initiated. At this stage, where what is impugned is Ext.P9 order under Section 148 A(d), we see no reason to interdict those proceedings at the instance of the appellant”
The Gujarat High Court dismissed a writ petition as on failure to prove no satisfaction note recorded by the Assessing Officer ( AO ) prior to issuance of notice under Section 153C of the Income Tax Act, 1961.
A Division Bench of Justices Sunita Agarwal and Aniruddha P Mayee observed that “Having noted the above submissions, we may record that it is not the case of the petitioner herein that no satisfaction note has been recorded independently by the Assessing Officer of the petitioner before proceeding under Section 153C of the Income Tax Act on receipt of the satisfaction note of the Assessing Officer of the searched person. The copy of the satisfaction note though was not provided initially to the petitioner and the Assessing Officer has committed an error in forwarding the objection disposal order dated 02.12.2023 to the petitioner treating the communication dated 19.10.2023 as the communication of objection against the satisfaction note.”
The Kerala High Court directed to pass fresh orders as the order was passed by the Principal Commissioner of Income Tax ( PrCIT ) without considering written submissions.
A Single Bench of Justice Dinesh Kumar Singh observed that “The petitioner filed written submission on 03.11.2023. The impugned order has been passed without taking note of the fact that the petitioner had submitted written submission. The order shows that neither the petitioner appeared in person nor submitted the written submission. Prima facie, the said finding is incorrect on the basis of the report.”
The Patna High Court upheld the order of the Settlement Commission on representation of Income Tax Dept and existence of Rule 9 Report.
A Division Bench of Chief Justice K. Vinod Chandran and Justice Rajiv Roy observed that “It is specifically stated that the order under Section 245D(1) was passed on 24.11.2017 directing the application to be proceeded with. A report was called for from the Principal Commissioner of Income Tax under Section 245D(2B), which was received after the due date. Hence, Section 245D(2C) requires the application to be proceeded with in the absence of the report, which, as admitted in the supplementary counter affidavit, reached the Commission after the expiry of 30 days. Section 245D(3)(ii), however, requires an application referred to in sub-section (2D), allowed to be further proceeded with under that sub-section, to be proceeded with after calling for report from the Commissioner. The Rule 9 report with respect to the applicant was submitted by the office of the Commissioner, which has been dealt with by the Commission.”
The Kerala High Court in a recent case held that the clubbing of income of husband and wife is to be decided by appellate authority and cannot be decided by the writ court. The Court dismissed the appeal and upheld the order of the single judge.
The single judge of the High Court observed that the questions of whether these proprietorship concerns are the same and whether the turnover of these concerns could be clubbed together for assessment, etc., are disputed questions of fact, which cannot be adjudicated in a writ petition. Hence, the Single Judge dismissed the petition.
The Supreme Court condoned delay in special leave petition ( SLP ) filed by Income Tax Department in the matter regarding a challenge on disallowance under Section 14A of the Income Tax Act, 1961 to be restricted to exempt income earned.
A Two-Judge Bench of Justice Abhay S Oka and Justice Ujjal Bhuyan observed that “Application seeking exemption from filing certified copy of the impugned order is allowed. Delay condoned. Issue notice.”
In a single judge verdict the Kerala High Court set aside Income Tax assessment order passed without considering written submission of the assessee.
In a single judge verdict Dinesh Kumar Singh held that “The petitioner was given a liberty to file written submission which was to be taken into consideration before deciding upon the application for condoning the delay of 7 days in filing the return. The petitioner filed a written submission on 03.11.2023. The impugned order has been passed without taking note of the fact that the petitioner had submitted written submission. The order shows that neither the petitioner appeared in person nor submitted the written submission. Prima facie, the said finding is incorrect on the basis of the report.” The impugned order was set aside
The Kerala High Court ruled that there is no bar for assessing authority to issue more than one notice under Income Tax Act, 1961.
A Single Bench of Justice Dinesh Kumar Singh observed that “I find no substance in the submission. There is no bar for the assessing authority to issue more than one notice. This Court has directed for re-doing the process and if the authority has information and materiel regarding other unexplained income of the petitioner, the assessing authority is well within the power to ask for explanation in respect of those income and it cannot be said that the notices impugned are without jurisdiction.”
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It was observed by the Single Bench of the Madras High Court that, “Under Section 107 of the CGST Act, the Appellate Authority does not have the power to condone delay beyond 120 days. In this case, the period of further delay is only 24 days and the petitioner has provided cogent reasons to explain such delay. It is pertinent to note that the petitioner has paid the entire tax liability and the proposed appeal is limited to penalty and interest.”
The Karnataka High Court observed that mere reason to believe, cannot be a ground for carrying out assessment under Section 147 of the Income Tax Act, 1961.
The Bench of Justice Krishna S Dixit observed that, “For conducting assessment under section 147, there should be not only escapement but also the reason to believe that there is such escapement, the reason being the information itself. Hence, a plausible view could be taken that post-amendment of the provision, the escapement has to be established with concrete information. Section 148A would only assist the Assessing Officer in coming to a conclusion whether such information is good enough to allow a notice to be issued under Section 148.”
The Madras High Court quashed revision order passed under the Tamil Nadu Goods and Service Tax Act, 2017 ( TNGST Act ).
A Single Bench of Justice Senthilkumar Ramamoorthy observed that “No findings were recorded with regard to this objection in the impugned order. The petitioner also contended that interest was not leviable under Section 50(3) of the TNGST Act and that penalty should not be levied in the facts and circumstances. While these contentions were noticed in the impugned order, the respondent did not engage with these contentions and record reasons for not accepting the same. For such reason, the order impugned herein warrants interference.”
The Bombay High Court allowed the provisional release of premium cold coffee and noted that harsh and unreasonable conditions cannot be imposed by the Customs Department.
A Division Bench of Justices GS Kulkarni and Firdosh P Pooniwalla observed that “We may also observe that the petitioner is a proprietorship and a small importer, the pattern of imports has also been quite consistent. The goods in question are certainly edible goods which are perishable. The petitioner ought not to have been meted out such discriminatory treatment of denying clearance. Also, it is imperative that harsh and unreasonable conditions cannot be imposed and more so when there is not an iota of material on the part of the department, as placed before the Court indicating as to why a different yardstick would be required to be applied to the present consignments when earlier seven consignments were released at 16% to 28% bank guarantee.”
The Gujarat High Court observed that lender banks must furnish copy of audit reports before classifying loan account as fraud.
A Single Bench of Justice Sangeeta K Vishen observed that “Undisputedly, in the present case, no such steps have been taken by the respondent lender banks and therefore, on this limited ground of violation of principles of natural justice, the decision of the respondent banks declaring the account of the company as fraud is hereby quashed and set aside. The matter is remitted and let the respondents concerned, after furnishing the copies of the forensic audit report and supplementary forensic audit report so also reasonable opportunity to the petitioners to submit the representation, complete the proceedings by passing order.”
The Delhi High Court, while allowing Customs Commissioner’s appeal, sets aside the decision of Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) extending settlement immunity to the noticee who didn’t approach before the settlement commissioner.
The bench of Justices Sanjeev Sachdeva and Ravinder Dudeja, overturned the CESTAT’s decision to grant immunity to the respondent, similar to the co-noticees, was found unsustainable. As a result, the order granting immunity to the respondent on May 10, 2023, has been revoked.
A division bench of the Kerala High Court dismissed the writ petition on the availability of a statutory remedy for the issue of unexplained cash deposit under section 69 A of the Income Tax Act, 1961.
The court comprising Dr Justice A K Jayasankaran Nambiar & Dr Justice Kauser Edappagath viewed that the appellant challenged orders mainly on factual grounds, which is in dispute. The disputed question of fact cannot be adjudicated in the writ petition. Further observed that the Single Judge rightly held that the remedy open to the appellant is to approach the Tribunal.
The Delhi High Court dismissed the bail application since there was incriminating evidence to prove the commission of a money laundering offence under the Prevention of Money Laundering Act, 2002 ( ‘PMLA’ ).
A single bench of Justice Swarana Kanta Sharma observed that “twin conditions under Section 45 of PMLA are not satisfied since the material on record at this stage points out that the applicant herein was involved in the process of acquisition, possession, concealment of proceeds of crime obtained by way of cheating and forgery and projecting the same as untainted, thereby committing an offence of money-laundering under Section 3 of PMLA.”
The Delhi High Court has held that Cash possessed by an individual cannot be forcibly taken over during a search under the Central Goods and Service Tax ( CGST ) Act, 2017. The petitioners had not handed over the cash to the concerned Officers voluntarily. The CGST Act does not support such action of forcibly taking over the possession of the currency from the premises of any person.
A division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja did not find any justification for the resumption of the cash and its continued retention by the respondents. The court allowed the petition with directions to the respondents to forthwith remit the proceeds of the fixed deposit (along with interest) to the bank account of the entities/persons from whose possession the same was resumed during the search conducted on 04.10.2021.
The Delhi High Court set aside the order and Show Cause Notice ( SCN ) against Federal Bank Ltd alleging an illegal Input Tax Credit ( ITC ) Claim. The Goods and Service Tax ( GST ) order was passed without providing adequate opportunity to reply to SCN.
The Court was of the view that adequate opportunity had not been granted to the petitioner to defend the show cause notice by way of a hearing. While allowing the petition the division bench comprising justice Sanjeev Sachdeva and Justice Ravinder Dudeja remitted the matter to the Proper Officer for readjudication. The impugned order and show cause notice was set aside.
The Delhi High Court has held that merely because proceedings under the Prevention of Money Laundering Act, 2002 ( PMLA Act ) have been dropped against some individuals does not drop proceedings against co-accused.
A single bench of Justice Subramonium Prasad observed that “Merely because proceedings have been dropped against some individuals does not mean that the proceedings against the Petitioner should or will be dropped. The offenses under the PMLA Act are distinct from offenses under the IPC. The companies can still be convicted for the predicate offense and the Petitioner can be prosecuted under the PMLA Act.” The Court dismissed the writ petition.
The Delhi High Court was directed to issue a valid show cause notice ( SCN ) since the same was issued without mentioning details of invoices or bills on alleged Goods and Service Tax ( GST ) evasion is invalid.
A division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja held that the petitioner shall be entitled to avail of such remedies as may be available in law in case aggrieved by any further order passed by the Proper Officer.
In a major setback to Reebok Company, the Delhi High Court upheld the rejection of conversion to limited liability company.
A Single Bench of Justice Subramonium Prasad observed that “The right of the Petitioner for conversion from unlimited company to limited company has not been taken away. In fact, the petitioner/company had no vested right to be granted a certification of conversion to a limited liability company. The rules have only become more stringent inasmuch as the RoC has additional criteria to satisfy himself regarding the networth of the company and as to whether any investigation/inspection is pending against the company or not and only on being satisfied, the permission for conversion can be granted.”
The Delhi High Court observed that the taxpayer’s GST registration can be cancelled with retrospective effect only where such consequences are intended and are warranted.
A Division Bench of Justices Sanjeev Sachdeva and Ravinder Dudeja observed that “In terms of Section 29(2) of the Central Goods and Services Tax Act, 2017, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. The registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria.”
The Delhi High Court allowed NRI businessman facing investigation under Black Money Act, 2015 to travel abroad and observed that Look Out Circular ( LOC ) cannot be continued for long period without any cogent and valid reason.
A Single Bench of Justice Subramonium Prasad observed that “An LOC cannot be permitted to continue for such a long period without there being any cogent and valid reason. The Petitioner has not been called for investigation since March 2022 and the counter affidavit filed by the Respondents does not indicate as to how the Petitioner has not cooperated with the investigation. In fact, material on record discloses that the petitioner has complied with the summons and has cooperated with the ongoing investigations against him by the IT Department.”
The Delhi High Court set aside the order passed under Section 73 of the Central Goods and Service Tax Act, 2017 ( CGST Act ) even though there was mentioning of input tax credit ( ITC ) in wrong column.
A Division Bench of Justices Sanjeev Sachdeva and Ravinder Dudeja observed that “None of the averments of the petitioner have been taken into account while passing the impugned order dated 05.12.2023. Accordingly, we are of the view that said order cannot be sustained and the matter calls for a remit.”
The Delhi High Court granted interim bail to Lava Managing Director in the Prevention of Money Laundering Act, 2002 ( PMLA ) and commented that delicate balance between life and death in cardiac emergencies underscores importance for prioritization.
A Single Bench of Justice Swarna Kanta Sharma observed that “The delicate balance between life and death in cardiac emergencies underscores the importance for prioritization and specialized care required in such cases, for mitigating the profound risks posed by these medical conditions. Each passing moment in the face of cardiac distress is fraught with the peril of irreversible harm, and in case of any eventuality that may occur in applicant not getting proper and specialised treatment, this Court will have to bear the weight of regret.”
Kerala HC Disposes of Writ Petition Assessee Request to Take up the Matter with the Assessing Authority under Section 154 of Income Tax Act. The assessee themself requested that they would proceed with the matter with the assessing authority. The Kerala HC disposed of the writ petition as per assessee’s prayer.
The writ petition was disposed of by Justice Dinesh Kumar Singh considering the assessee’s point that he would pursue the matter under section 154 of Income Tax Act with assessing authority.
In a single judge verdict of the Kerala High Court rejected the assessee’s writ petition as the conditions prescribed in the provisions of Section 245C(1) of Income Tax Act have not been fulfilled.
In a single judge verdict the court held that the assessee has not approached the Settlement Commission, with his application under Section 245-C of the Income Tax Act, with clean hands and has failed to disclose true and correct facts and had not offered full and true particulars of his income. Section 245C(1) of the Income Tax Act provides disclosure of full and true particulars of the income and the manner in which that income had been derived and apportioned in order to get the settlement. As the conditions prescribed in the provisions of Section 245C(1) of the Income Tax Act have not been fulfilled in the case, the application was rejected by the impugned order.
The single judge of the Kerala High Court dismissed a writ petition seeking appropriate action against the erring supplier after being informed by Revenue that necessary measures had already been taken against the erring supplier.
In a single judge verdict of the Kerala High Court, Justice Dinesh Kumar Singh held that since appropriate action had been taken against M/s. Spanila Sanitary Ware nothing survives in the present writ petition, hence the petition is dismissed.
The Kerala High Court has instructed the Goods and Services Tax (GST) Department to review rectification applications for Input Tax Credit ( ITC ) that were erroneously claimed under the incorrect categories of Central Goods and Service Tax ( CGST ) and State Goods and Service Tax ( SGST ) instead of being claimed under the Integrated Goods and Service Tax ( IGST ) category.
The single bench of Justice Dinesh Kumar Singh disposed of the writ petition with a direction to the 6th respondent to promptly consider the rectification application filed by the petitioner and pass necessary orders expeditiously in accordance with the law.
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