Supreme Court & High Courts Weekly Round-up [Jan 18th to Jan 24th,2025]

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 18th January 2025 to 24th  January 2025)

Women Lawyers to have 30% Reservation in Delhi Tax and Sales Tax Bar Association Executive Positions: Supreme Court

FOZIA RAHMAN vs BAR COUNCIL OF DELHI & ANR. CITATION:   2025 TAXSCAN (SC) 109

Moving further toward gender equality and inclusivity, the Supreme Court of India has mandated a 30% reservation for women lawyers in executive positions within the Delhi Tax Bar Association and the Sales Tax Bar Association, including the Treasurer’s post.

The decision is one step further in the direction of gender parity in the legal profession. Women lawyers have historically faced barriers to leadership in bar associations, which are instrumental in shaping the legal landscape. By reserving 30% of executive positions, including the Treasurer’s post, for women, the Supreme Court judgment also holds symbolic and practical significance. It sends a strong message about the judiciary’s commitment to fostering gender justice and inclusivity.

Price not Sole Sale Consideration: Supreme Court axes Excise Duty Demands against BPCL

Bharat Petroleum Corporation Ltd. vs Commissioner of Central Excise Nashik Commissionerate CITATION:   2025 TAXSCAN (SC) 107

In a landmark ruling, the Supreme Court of India quashed excise duty demands against Bharat Petroleum Corporation Limited (BPCL), establishing that the price under a Multilateral Product Sale-Purchase Agreement (MOU) among Oil Marketing Companies (OMCs) was not the sole consideration for the sale.

This decision is a significant precedent for the petroleum industry, reaffirming the principle that excise duties must consider the genuine nature of transactions rather than purely the price mechanisms in inter-company agreement.

Government should provide Extra Staff to DRT when imposing Additional Workload to Prevent Disruption of Activities: Supreme Court

SUPERWHIZZ PROFESSIONALS PRIVATE LIMITED vs UNION OF INDIA & ORS. CITATION:   2025 TAXSCAN (SC) 108

The Supreme Court of India recently advised the Central Government to allocate additional judicial staff for Debt Recovery Tribunals ( DRT ) when added workload is imposed on the Tribunals in pursuance of retrieving data pertaining to debt recovery, to ensure that the regular functioning of the Tribunals are not affected by the added work.

The Supreme Court disposed of the Petition, advising the Ministry of Finance to provide extra staff to the Tribunals while calling upon them to collect and collate data, owing to their prior treatment of DRT staff as ‘subordinates’.

Delhi HC nullifies ₹31 Lakh Income Tax Addition on Interest from FD Funds reserved for Coal-Mine Purchase

PR. COMMISSIONER OF INCOME TAX-4 vs INTERNATIONAL COAL VENTURES PVT. LTDCITATION:   2025 TAXSCAN (HC) 157

The Delhi High Court recently cancelled an income tax addition of ₹31 Lakh based on the accrual of interest from surplus funds parked in fixed deposits, earmarked for the acquisition of a coal mine.

The Delhi High Court affirmed that the interest-bearing funds deposited by ICVL are not ‘surplus funds’ but funds that were called for and earmarked for the specific purpose of acquiring a coal mine. Consequently, the appeal was answered in favour of ICVL and against the Revenue.

Delhi HC quashes Income Tax Additions based on Historical Data and Facts

GRID SOLUTIONS OY (LTD) vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION:   2025 TAXSCAN (HC) 158

A Division Bench of the Delhi High Court recently quashed several reassessment notices issued by the Assistant Commissioner of Income Tax (International Taxation) against Grid Solutions OY (LTD) for Assessment Years ( AYs ) 2013-14 to 2017-18. The court observed that reassessment proceedings could not be based on outdated or irrelevant facts obtained from prior years without establishing their relevance to the years under scrutiny.

Justice Yashwant Varma and Justice Harish Vaidyanathan Shankar concluded that the reassessment proceedings initiated were not legally tenable. Consequently, the notices for Assessment Years 2013-2018 issued under Section 148 of the Income Tax Act were quashed.

Framing of Transfer Pricing Order against Non-Existent Entity not a Curable Defect: Delhi HC

PR. COMMISSIONER OF INCOME TAX-7 vs VEDANTA LTD CITATION:   2025 TAXSCAN (HC) 159

In a significant ruling, the Delhi High Court on January 17, 2025, dismissed an appeal by the Principal Commissioner of Income Tax against Vedanta Limited, holding that framing a transfer pricing order against a non-existent entity constitutes a fundamental flaw, not curable under the Income Tax Act, 1961, in confirmation with and conformity to the Maruti Suzuki ruling by the Supreme Court.

In the recent ruling, the Division Bench of Delhi High Court held that, without any intent to assess the resultant entity, the transfer pricing order could neither have been rectified nor would it be saved by Section 292B of the Income Tax Act, in reference to the transfer pricing order issued against a non-existent entity.

Secondment of Employees by Samsung does not Prove PE under Art.5 of India-Korea DTAA: Delhi HC

THE PR. COMMISSIONER OF INCOME TAX VS SAMSUNG ELECTRONICS CO. LTD CITATION:   2025 TAXSCAN (HC) 160

In a recent ruling, the Delhi High Court affirmed that the secondment of employees by Samsung Korea to its Indian subsidiaries would not affirm the creation of a Permanent Establishment ( PE ) in India in terms of Article 5 of the Double Taxation Avoidance Agreement ( DTAA ) between India and Korea.

Senior Standing Counsel Sanjay Kumar, SSC appeared for the Revenue along with Junior Standing Counsels Monica Benjamin and Easha Kadian while Samsung Electronics was represented by Himanshu S. Sinha, Prashant Meharchandani, Jainender Singh Kataria and Kanika Jain.

Income Tax Joint Commissioner cannot grant Reassessment Approvals relying on Rajeev Bansal SC Decision: Delhi HC

ROHIT KUMAR vs INCOME TAX OFFICER WARD 54 (1) CITATION:   2025 TAXSCAN (HC) 161

The Delhi High Court has clarified that the Supreme Court ruling in Union of India & Ors. v. Rajeev Bansal (2024) does not validate the authority of a Joint Commissioner to grant approval under Section 151 of the Income Tax Act, 1961 for initiating reassessment proceedings.

The Department contended that the Abhinav Jindal judgment was outdated due to Rajeev Bansal. However, the court clarified that Rajeev Bansal did not support Joint Commissioner approvals under the amended regime. Consequently, the reassessment proceedings in question were held to be invalid under law.

Bombay High Court sets aside GST Order due to Improper Service of Notice u/s 37C (1) of CGST Act

Champions Steel Industries Private Limited VS Union of India CITATION:   2025 TAXSCAN (HC) 163

The Bombay High Court, in a recent ruling, set aside an Order-in-Original ( O-I-O ) issued against the petitioner, Champions Steel Industries Private Limited, citing procedural lapses in the service of notices.

A two-member bench comprising Justices M.S. Sonak and Justice Jitendra Jain quashed the O-I-O. It also remanded the matter back to the adjudicating authority for fresh consideration. The court specifically directed the respondents to ensure that all future notices and communications are sent to the petitioner’s correct address at “A/3, Ahmedabad Street, Carnac Bunder, Mumbai – 400009” or their registered email ID.

Delhi HC: Section 129 of GST Act cannot Override Procedural Safeguards for Minor Breaches

KAMAL ENVIROTECH PVT. LTD vs COMMISSIONER OF GST AND ANR CITATION:   2025 TAXSCAN (HC) 162

The Delhi High Court has ruled that Section 129 of the CGST Act cannot be used to impose penalties for minor e-way bill errors. The court held that such errors constitute minor procedural breaches, and penalties should not be imposed without considering the principles of moderation and proportionality outlined in Section 126.

The court emphasizes that non-obstante clauses should be interpreted within the context of the entire statute. They should not be applied broadly to override other relevant provisions. The court highlights the importance of considering the entire statute and its overall purpose when interpreting specific clauses

No Penalty Imposable u/s 16(7) HP VAT Act w/o Contravention of 16(4): Himachal Pradesh HC

M/s Bhushan Power & Steel Ltd. vs Assistant Excise & Taxation Commissioner and another CITATION:   2025 TAXSCAN (HC) 164

The Himachal Pradesh High Court has ruled that the penalty provision under Section 16(7) of the Himachal Pradesh Value Added Tax (HP VAT) Act, 2005, cannot be applied unless the statutory authority establishes the applicability of Section 16(4) of the Act.

The Court also highlighted that the purpose of legislation should guide the exercise of discretion, ensuring that penalties are not imposed on unintentional defaulters who are otherwise law-abiding.

Implementation of Govt Projects not exigible to Service Tax: Calcutta HC

COMMISSIONER OF SERVICE TAX KOLKATA vs M/S ELECTROSTEEL CASTINGS LIMITED CITATION:   2025 TAXSCAN (HC) 165

In a significant judgment, the Calcutta High Court ruled that services rendered in implementing government projects for public utilities are not exigible to service tax under the Works Contract Service category.

The Court clarified that payments made under a mistaken interpretation of tax liability fall outside the purview of Section 11B of the Central Excise Act, 1944, reminding that the department had no authority to retain such funds.

Allahabad HC Denies Bail to GST ITC Fraud Accused, Cites Co-Offender’s Bail Rejection & Risk of Evidence Tampering

Sanjay Jindal VS State of U.P. CITATION:   2025 TAXSCAN (HC) 166

In a recent ruling, the Allahabad High Court denied bail to GST Input Tax Credit ( ITC ) fraud accused citing the rejection of a co-offender’s bail as evidence of strong charges and the high risk of tampering with evidence and witnesses.

The court ruled that the accusations against Sanjay Jindal were serious and supported by much evidence, including confessions from co-accused and material recovered during investigations. So, the court rejected the bail application.

Bankers’ Higher Salaries Justify Proportionate Tax Burden, No Arbitrariness: Bombay HC Upholds S. 17(2) Income Tax Amendment

All India Central Bank Officers Federation vs Union of India CITATION:   2025 TAXSCAN (HC) 168

In a recent ruling, the Bombay High Court stated that requiring higher-paid bank employees to bear a proportionately higher tax burden was justified and not violative of Article 14 of the Constitution and upheld the constitutional validity of the 2007 amendments to Section 17(2) of the Income Tax Act, 1961.

The court rejected the claim that the amendments constituted an impermissible judicial override or contradicted the principles established in Arun Kumar. The court explained that his amendments were consistent with judicial observations and addressed the gap without overstepping legislative competence. The court dismissed the writ petitions.

Seller cannot dissect Settlement Commission Order to avail Preferred Provisions Only: Delhi HC upholds ₹1.15 Crore Penalty

KBS INDUSTRIES LTD & ANR VS THE CUSTOMS CENTRAL EXCISE CITATION:   2025 TAXSCAN (HC) 169

The Delhi High Court recently upheld the imposition of  ₹1.15 Crore Penalty against a trader, averring that Order passed by the Settlement Commission in regards to adjudication of a specific issue cannot be chosen in parts, and that the concerned trader is required to follow the provisions of the order in full.

The Impugned Settlement Commission order explicitly provides that the order would be void, vitiating all granted immunities if the Petitioners fail to comply with the provisions of the Order. In light of the observations made, the Delhi High Court upheld the Petitioner’s liabilities to pay requisite duties from the date of clearance of the imported goods.

No  Writ Petition Miantainable Against Order of Appellate Authority Upholding Imposition of Property Tax: Chhattisgarh HC

Deepak Agrawal vs Sanjay Agrawal CITATION:   2025 TAXSCAN (HC) 167

The Chhattisgarh High Court has ruled that it lacks the authority to exercise writ jurisdiction over a District Judge’s ruling, which upholds the imposition of property taxes and makes the District Judge the Appellate Authority under the Municipal Corporation Act 1956.

Single judge Justice Narendra Kumar Vyas viewed that the writ petition is not maintainable and the Civil Revision is maintainable. The petitioners have alternative efficacious remedy of filing Civil Revision under Section 115 of the Civil Procedure Code.

Local Sale of Duty-Exempt Imports Violates Export Obligations under Advance Authorization: Delhi HC

KBS INDUSTRIES LTD & ANR VS THE CUSTOMS CENTRAL EXCISE CITATION:   2025 TAXSCAN (HC) 169

In a notable ruling, the Delhi High Court affirmed that the localized sale of goods imported under Advance Authorization, with duty exemptions, shall result in a breach of the concerned seller’s export obligations.

In closing, the Delhi High Court upheld the interest levy of  interest of ₹1,15,13,067/- calculated by the Settlement Commission while dismissing the contest of the constitutional validity of the Customs Notification since the Petitioners failed to substantively challenge the same.

“Fit Case for Exemplary Costs on Complainant and ED”: Bombay HC in Cooked up Case against Developer

Rakesh Brijlal Jain and Ors. vs State of Maharashtra and Ors. CITATION:   2025 TAXSCAN (HC) 170

In a recent decision, the Bombay High Court, presided over by Justice Milind N. Jadhav quashed criminal proceedings against the developers Rakesh Brijlal Jain and others, initiated under the Prevention of Money Laundering Act (PMLA) and Indian Penal Code (IPC).

Imposing exemplary costs, the court directed the complainant and the ED to pay ₹1,00,000 each to designated law libraries as a warning against misuse of judicial resources. However, the order was stayed, after the judgment was pronounced in Court, Mr. Shirsat, learned Advocate for Respondent No. 3 – ED prayed for stay of judgment to challenge the same before superior Court. His request for stay was allowed for a limited period of time.

Issuance of Two Orders u/s 73 for Same Tax Period Prima Facie Unsustainable: Delhi HC

NITENDER THAKUR VS ASSISTANT SALES TAX OFFICER DELHI CITATION:   2025 TAXSCAN (HC) 171

In a recent ruling, the Delhi High Court held that issuing two separate orders under Section 73 of the Central Goods and Services Tax ( CGST ) Act, 2017, for the same tax period appears prima facie unsustainable.

The court directed that the operation and effect of the order dated 26th April 2024 be stayed until the next hearing. The case was scheduled for further proceedings on 4th March 2025.

Order Passed u/s 73 CGST Act without Signature of Proper Officer Is ‘Ineffective’: Gauhati HC

SHRI SHAMBHU PRASAD vs THE STATE OF ASSAM CITATION:   2025 TAXSCAN (HC) 172

The Gauhati High Court has held that the order passed under Section 73 of the Central Goods and Service (CGST), Act, 2017 must mandatorily be signed by the proper officer.The Court believes that the impugned order challenged in the instant writ petition is contrary to the provisions of Section 73 as well as Rule 142 (1) (a) of the Rules as the said impugned Orders were passed with issuance of a proper Show Cause Notice.

Under such circumstances, the Court believes that the impugned order challenged in the instant writ petition is contrary to the provisions of Section 73 as well as Rule 142 (1) (a) of the Rules as the said impugned Orders were passed with issuance of a proper Show Cause Notice. The court set aside the impugned order.

Bombay HC quashes GST on Leasehold Rights, directs to Consider Gujarat HC decision while Remanding Matter

M/s Panacea Biotec Limited vs Union of India & Ors CITATION:   2025 TAXSCAN (HC) 173

The issue involved was whether the GST Authorities can levy GST on a Deed of Assignment under which the land and the building constructed thereon is transferred by a Lessee to the 3rd party.

The Gujarat High Court in the earlier ruling had held that Goods and Service Tax (GST) is not leviable on assignment/transfer of leasehold rights to third parties. The bench also quashed  the notices issued by the GST department that sought to recover tax on the transfer of GIDC plots to third parties from their original allottees.

Registration of Proprietary Firm to Evade Tax , Advocate not Liable to Verify Fake Documents Provided by his Client: Jharkhand HC

Satya Prakash Singh vs The State of Jharkhand CITATION:   2025 TAXSCAN (HC) 174

In a decision in support of the tax practitioner, the Jharkhand High Court observed that a lawyer cannot be held accountable for confirming documents his client filed to register a proprietary business for tax avoidance. Satya Prakash Singh, the applicant, was granted anticipatory bail by the court.

The bench of Justice Anil Kumar Choudhary held that “it is a fit case where the above-named petitioner be given the privilege of anticipatory bail. Hence, in the event of his arrest or surrender within a period of six weeks from the date of this order, he shall be released on bail on depositing cash security of Rs. 50,000/-and on furnishing bail bond of Rs. 25,000/- with two sureties of the like amount each.to the satisfaction of J.M. 1st Class, Jamshedpur.”

Commissioner Must Specify Necessity of Arrest u/s 69 CGST Act Besides ‘Reasons To Believe’ that Assessee Committed Offence: Gauhati HC

DHARMENDRA AGARWAL vs THE UNION OF INDIA AND 2 ORS CITATION:   2025 TAXSCAN (HC) 176

The Gauhati High Court ruled that Section 69 of the Central Goods and Services Tax Act 2017, which gives a Commissioner the authority to make an arrest under the Act, mandates that the authority document not only “reasons to believe” that an assessee committed the specified offense but also the necessity of making an arrest.

The Court observed that the Petitioner had been called in, had been subjected to a lengthy interrogation, and that the investigating authorities had also recorded his statements. The bench granted the petitioner interim bail after concluding that there was no prima facie evidence from the documents presented at the stage that his custody was required to avoid evidence tampering or that he would likely interfere with ongoing investigations.

Pre-deposit Made for Appeal Proves Bonafide Intention of Assessee:  Calcutta HC condones 5 days Delay in Filing GST Appeal

Akash Jana vs State of West Bengal & Ors CITATION:   2025 TAXSCAN (HC) 175

The Calcutta High Court considering that the petitioner is a small businessman and there is no lack of bona fide on the part of the petitioner, condoned the delay of 5 days in filing appeal under Central/West Bengal Goods and Services Tax Act, 2017(CGST). It was viewed that the petitioner had also made pre-deposit for maintaining the appeal, which proves there is no lack of bona fide on the part of the petitioner.

While setting aside the order, the court condoned the delay in preferring the appeal and directed the appellate authority to hear out and dispose of the appeal, on merit, upon giving an opportunity of hearing to the petitioner, within a period of 8 weeks from the date of communication of this order.

Non Payment of M V Tax: Orissa HC Directs to release Seized Vehicle on Payment of Tax Dues

Mita Parida vs RTO, Dhenkanal CITATION:   2025 TAXSCAN (HC) 177

The Orissa High Court in a case related to seizure of vehicle due to non payment of Motor Vehicle Tax , directed to release the seized vehicle on payment of tax dues under Odisha Motor Vehicles Taxation Act, 1975( OMVT).

It was further directed that the Petitioner shall produce the original driving license of the Driver of the offending vehicle. The Petitioner shall also file an undertaking to cooperate the Authorities for compounding/contesting the challan raised in respect of the aforesaid vehicle. 

Income Tax Assessing Officer Cannot Remain Oblivious to Claim Without Enquiry: Kerala HC Dismisses Appeal of Cochin International Airport

COCHIN INTERNATIONAL AIRPORT LTD. vs THE ASSISTANT COMMISSIONER OF INCOME TAX CORPORATE CIRCLE-1(1) CITATION:   2025 TAXSCAN (HC) 178

The Kerala High Court ruled that an income tax assessing officer cannot remain oblivious to claim without enquiry and dismissed the appeal of Cochin International Airport .

The Tribunal  concluded rightly that the order passed by the Commissioner of Income Tax did not suffer from any illegality or perversity.  The court viewed that the order impugned in the appeal does not suffer from any jurisdictional infirmity.

Penalty u/s 129 of GST Act not invokable merely on non disclosure of full details of supplier in e way bills: Calcutta HC

Truth Udyog Metal and Steel Private Limited & Anr. vs The Deputy Commissioner CITATION:   2025 TAXSCAN (HC) 180

In a recent case, the Calcutta High Court held that penalty under section 129 of Goods and Service Tax ( GST ) Act, 2017 is not invokable merely on non-disclosure of full details of supplier in e way bills. The bench held  that the appellants are entitled to apply for refund of the penalty, which was remitted by them without prejudice to their rights and contentions.

While allowing the petition, the Court set aside the order  and held that the appellants are entitled to apply for refund of the penalty, which was remitted by them without prejudice to their rights and contentions and if such application is filed.

Granting Approval u/s 80G(5)(vi) of Income Tax Act merely relying on instrument creating the trust is not valid: Punjab & Haryana HC

Tilok Tirath Vidyavati Chhuttani Trust VS Commissioner of Income Tax CITATION:   2025 TAXSCAN (HC) 179

In a recent case, the High Court of Punjab and Haryana has held that granting approval under section  80g(5)(vi) of the Income Tax Act, 1961 merely relying on the instrument creating the trust is not valid. It was viewed that the order is based only on assumptions and there is not supportive evidence.

The Bench held that “We are not prepared to place any such interpretation on the language implied in Section 80G so as to uphold an obligation on the part of the Commissioner to grant an approval to a trust merely by looking at the instrument creating the Trust and shutting its eyes towards the activities actually carried out by it.”

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