Supreme Court & High Courts Weekly Round-up [March 15th to March 21st,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 15th March 2025 to 21st March 2025)

Cheque Dishonouring Case become Invalid when cause of Action arose after Declaration of Moratorium under IBC Moratorium: Supreme Court

VISHNOO MITTAL vs M/S SHAKTI TRADING COMPANY CITATION: 2025 TAXSCAN (SC) 141

The Supreme Court ruled that proceedings under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) against the former director of the company cannot proceed if the cause of action for the offense of check dishonour arose subsequent to the company’s moratorium being declared under the Insolvency & Bankruptcy Code, 2016 (IBC).

The Court further clarified that the S.138 NI Act cause of action arises when the money is still outstanding fifteen days after the demand notice is sent, not when the check is dishonored. As a result, the Court dismissed the check dishonor action against the appellant and granted the appeal.

Delhi HC sustains ₹1L Customs Fine and Penalty on Uzbek National for Improperly Importing 112 Gms Gold through Delhi Airport

GAYRAT DJABAROV vs COMMISSIONER OF CUSTOMS CITATION: 2025 TAXSCAN (HC) 371

The Delhi High Court recently upheld a customs penalty and fine amounting to ₹1,05,000 imposed on an Uzbek national for contravening provisions of the Customs Act, 1962 while bringing in 112 grams of gold through Indira Gandhi International Airport, New Delhi.

The Petitioner was further  given four weeks to complete the payment, after which the gold would be released to him or his authorized representative upon verification of identity.

Jewellery of Iran National Confiscated by Customs Dept 3 Yrs Ago: Delhi HC directs to Release Goods

AMIRHOSSEIN ALIZADEH vs THE COMMISSIONER OF CUSTOMS & ORS. CITATION: 2025 TAXSCAN (HC) 372

The Delhi High Court directed the Customs Department to release the silver-coated gold chains of an Iranian national, which were confiscated on his arrival in India almost three years ago.

Further held that “In case the goods are disposed of, the market value of the detained goods, as per the market rate prevalent today shall be paid to the Petitioner within a period of four weeks. If the same is paid in four weeks, no interest would be payable. If the same is not paid, interest at the statutory rate would be payable from date of detention.”

Waiver of VAT Arrear Request without Opting Amnesty Scheme in Many Years: Kerala HC allows to avail benefit under New Amnesty Scheme

Тhe Kannur Building Materials vs The State of kerala CITATION: 2025 TAXSCAN (HC) 374

The Kerala High Court, in its recent judgment, has directed to avail the benefit under the Amnesty Scheme introduced by the government and rejected the request to waive Value Added Tax (VAT) without opting for amnesty scheme many years.

A single bench of Justice Viju Abraham disposed of the writ petition, stating that “Till a decision is taken as directed above, the status quo order granted by this Court on 27.10.2021 shall continue. The petitioner shall submit necessary application in this regard within the time limit prescribed as per the Amnesty Scheme and if such application is not filed within the said time limit, the interim order granted by this Court on 27.10.2021 will stand vacated.”

GST Appeal Filed on 90th Day from Email Communication of Order is Valid: Karnataka HC directs to Hear Appeal

S K TAKAPPA S/O KALAPPA vs THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES CITATION: 2025 TAXSCAN (HC) 373

The Karnataka High Court has held that an GST ( Goods and Services Tax ) appeal filed on the 90th day from the date of email communication of an order is valid and must be heard on merits.

Setting aside the impugned orders, the Court directed the authorities to hear the appeal on merits and pass an appropriate order in accordance with the law.

Allegation of Suppression of Service Tax: Orissa HC stays Revenue Recovery proceedings till March 27

M/s. Panchanan Birabara Jagdevray vs Principal Commissioner CITATION: 2025 TAXSCAN (HC) 375

In a recent case, the Orissa High Court stayed the demand notice of service tax, alleging suppression of service tax. It was also found that the determination of amount of service tax due was not made anywhere near within one year from date of the notice.

Mr. Kedia, advocate, Junior Standing Counsel appears on behalf of revenue. The bench  required the  revenue to issue instruction for being heard on adjourned date. Since the Mr. Kedia prayed for two weeks, the bench of Justice Arindam Sinha, Acting Chief Justice and Justice M.S. Sahoo  listed the matter on 27th March, 2025 and stayed the  impugned order dated 16th August, 2024 till next date of hearing. To Read the full text of the Order CLICK HERE

Partial Relief to Vodafone: Delhi HC Orders Reassessment of ₹5.10 Crore Asset Restoration Cost u/s 37 of Income Tax

VODAFONE MOBILE SERVICES LTD vs DEPUTY COMMISSIONER OF INCOME TAX CITATION: 2025 TAXSCAN (HC) 376

In a recent ruling, the Delhi High Court granted partial relief to Vodafone by directing the reassessment of Rs. 5.10 crore claimed as Asset Restoration Cost (ARC) under Section 37 of the Income Tax Act.

The court directed the tax authorities to reassess the claim under Section 37 to determine whether the provisioned amount qualifies as a business expense. The company did not receive outright relief but secured a chance to justify its claim under Section 37, potentially allowing the deduction in future proceedings. The case now returns to the tax authorities for reassessment.

Co-operative Societies Must Furnish Information for TDS Inquiry u/s 133(6) Even if it Exempt from TDS: Kerala HC

M/S. CHENNITHALA THRIPPERUMTHURA SERVICE CO-OPERATIVE vs INCOME TAX OFFICER CITATION: 2025 TAXSCAN (HC) 377

In a recent ruling, the Kerala High Court held that co-operative societies must furnish information for TDS inquiries under Section 133(6) of the Income Tax Act, even if they are exempt from TDS.

The court clarified that these societies may enjoy exemptions under Section 194A(3)(viia) of the Income Tax Act, but they are still subject to scrutiny by tax authorities. Rejecting the petitioner’s arguments, the court upheld the validity of the notice issued by the Income Tax Department and confirmed the penalty imposed for non-compliance. The writ petition was dismissed.

GST Portal Notice Insufficient, Assessee gets relief from Madras HC

Chokalingam Srinivasan vs The Deputy State Tax Officer CITATION: 2025 TAXSCAN (HC) 378

The Madras High Court has ruled that uploading notices solely on the GST portal is insufficient service, while providing relief to an assessee who was unaware of the proceedings against him.

Additionally, the court treated the impugned order as a show cause notice and required the assessee to submit objections within four weeks. In the event of filing objections, the tax authority was instructed to consider them and grant a fair hearing before passing a fresh order. With these directions, the court disposed of the petition.

Income Tax Proceedings against Deceased Person Invalid, must be Initiated against Legal Heirs u/s 159: Bombay HC

Amjad Ahmed Shaikh vs Income Tax Officer CITATION: 2025 TAXSCAN (HC) 379

In a recent ruling, the Bombay High Court held that tax proceedings initiated in the name of a deceased person are invalid and must be directed against legal heirs under Section 159 of the Income Tax Act.

The court quashed assessment orders and demand notices issued by the Income Tax Department against the late Ahmed Gulamnabi Shaikh, despite prior intimation of his demise but clarified that the department remains free to initiate fresh proceedings against the legal representative in accordance with the law. The writ petition was allowed.

Calcutta HC stays Customs SCN against Hinduja Global: Prima Facie Finds No Jurisdiction Without SEIS Scrip Cancellation

Hinduja Global Solutions Limited & Anr vs Union of India & Ors. CITATION: 2025 TAXSCAN (HC) 380

In a recent ruling, the Calcutta High Court granted an interim stay on a show-cause notice (SCN) issued by the Principal Commissioner of Customs (Port) against Hinduja Global Solutions Limited. The court found that the Customs authorities prima facie lacked jurisdiction to issue the SCN since the SEIS (Service Exports from India Scheme) scrips in question had not been canceled by the issuing authorities, namely Cochin EPZ and DGFT, Mumbai.

The High Court ordered an interim stay on the SCN until the final disposal of the writ petition. It also directed the respondents to file an affidavit-in-opposition within six weeks, with the petitioner granted four weeks thereafter to file a reply. The matter has been scheduled for a full hearing in May 2025.

FMV of Shares Determined by Statutorily Prescribed Methods cannot be Rejected without Recording Contrary Evidence: Karnataka HC

THE PR. COMMISSIONER OF INCOME TAX vs WATERLINE HOTELS PVT LTD CITATION: 2025 TAXSCAN (HC) 381

In a recent ruling, the Karnataka High Court clarified that income tax authorities cannot reject the Fair Market Value ( FMV ) of shares determined using methods prescribed by Rule 11UA(2) without clearly recording evidence that proves otherwise.

They pointed out that the tax authorities failed to conduct a proper factual inquiry or present concrete evidence to justify rejecting the valuation. The Karnataka High Court dismissed the appeal of the Income Tax Department, confirming the deletion of the Rs. 33,71,77,500 addition made against the company.

Taxpayer Responsible to Prove Land’s Agricultural Status to Claim Capital Gains Tax Exemption: Kerala HC

M J GEORGE vs DEPUTY COMMISSIONER OF INCOME TAX CITATION: 2025 TAXSCAN (HC) 382

In a recent decision, the Kerala High Court ruled that the taxpayer has the burden of proof to establish the agricultural nature of land when claiming exemption from capital gains tax.

The court pointed out the lack of substantial documentary proof of farming operations, including the absence of records relating to irrigation, farming expenditures, or labor payments, explaining that classification alone does not substantiate actual agricultural use. The Kerala High Court upheld the Income Tax Appellate Tribunal’s findings.

Proceedings u/s 129 of GST Act are Summary Proceedings: Allahabad HC

M/S Jaya Traders Through Its Proprietor Mr. Vishwanath Tiwari vs Additional Commissioner Grade-2 And Another CITATION: 2025 TAXSCAN (HC) 384

The Allahabad High Court has ruled that proceedings under section 129 of the GST Act are summary proceedings, meaning that the assessee conveying the commodities bears the burden of demonstrating the actual physical movement of the goods.  It also said that if a product is undervalued, the government can confiscate it.

The bench ruled in rejecting the appeal that the assesee transporting the commodities had to disclose the actual worth of the goods.  It was decided that if the commodities were not declared to be of their actual value, the authorities could seize them.

DGFT HQ in Delhi Doesn’t Give Jurisdiction for Hyderabad Firm’s Advance Authorisation Dispute: Delhi HC

RAIN CII CARBON VIZAG LTD & ANR. vs UNION OF INDIA CITATION: 2025 TAXSCAN (HC) 385

In a recent ruling, the Delhi High Court clarified that the presence of DGFT headquarters in Delhi does not automatically confer jurisdiction over matters related to the rejection of Advance Authorisation applications by regional DGFT offices.

The Delhi High Court dismissed the petition ruling that jurisdiction should be determined based on where the primary cause of action arises, not the location of an authority’s headquarters.

Relief for Indian Oil: Patna HC Quashes ₹5,463 Cr Sales Tax Demand Over Antedated Ex Parte Order

Indian Oil Corporation Ltd vs The State of Bihar CITATION: 2025 TAXSCAN (HC) 386

In a recent ruling, the Patna High Court quashed Rs. 5,463 crore sales tax demand against Indian Oil Corporation Ltd. (IOCL) citing that the reassessment order was antedated and time-barred.

The court held that the reassessment order was legally invalid, quashed the Rs. 5,463 crore tax demand, and imposed a Rs. 1 lakh cost on the tax department for procedural lapses. The court also directed the Bihar Tax Department to initiate an internal inquiry and take responsibility for the delay and misconduct. The writ petition was allowed.

Mining without Environmental Clearance Not Illegal, Income Tax Dept cannot Disallow Expenses without Proof u/s 37(1): Orissa HC

Principal Commissioner of Income Tax vs M/s. Tarini Minerals Pvt. Ltd. CITATION: 2025 TAXSCAN (HC) 387

In a recent ruling, the Orissa High Court held that mining without environmental clearance does not automatically constitute illegal mining for taxation purposes and ruled that the Income Tax Department cannot disallow expenses under Explanation (1) to Section 37(1) of the Income Tax Act unless illegal activity is conclusively proven.

The court upheld the ITAT’s decision, stating that the tax department failed to prove illegal activity. The court explained that expenses can only be disallowed under Section 37(1) if a penalty is imposed and claimed as a deduction, which was not the case here. Since no substantial question of law arose from the ITAT’s order, the court dismissed the appeal.

Bombay HC directs ICAI to Investigate CAs without COP Engaged in Illegal Activities for Professional Misconduct

Principal Commissioner of Income-tax - 14 vs M/s Buniyad Chemicals Ltd. CITATION: 2025 TAXSCAN (HC) 388

In a recent judgment, the Bombay High Court directed the Institute of Chartered Accountants of India (ICAI) to investigate Chartered Accountants (CAs) operating without a Certificate of Practice (COP) who are allegedly engaged in illegal activities and possible professional misconduct.

The court also directed ICAI to examine whether CAs operating without a COP could be held accountable under the CA Act, 1949, and to report on any action taken against such individuals.

Non-Constitution of GSTAT: Orissa HC directs to Deposit reduced 10% Amount of GST Demanded

M/s. Pramoda Kumar Swain vs Commissioner of CT and GST CITATION: 2025 TAXSCAN (HC) 389

In a recent case , the Orissa High Court directed to deposit reduced 10 % amount of Goods and Service Tax (GST) demanded, where the petition was filed to stay the recovery proceedings till the constitution of GST Appellate Tribunal (GSTAT)

A division bench of Justice Arindam Sinha, the Acting Chief Justice and Justice M.S. Sahoo made on behalf of petitioner regarding corresponding notification reducing requirement of the deposit to 10% of disputed tax for the impugned first appellate order to remain stayed.

No Close Shave! Madras HC Favours Gillette’s Subsidiary, Holds GST Refund Claims Were Within Limitation

M/s.Gillette Diversified Operations Private Limited vs The Joint Commissioner of GST and Central Excise (Appeals-II) CITATION: 2025 TAXSCAN (HC) 390

The Madras High Court has ruled in favour of M/s Gillette Diversified Operations Private Limited (Gillette), holding that its Goods and Services Tax (GST) refund claims were filed within the prescribed limitation period, rejecting the Revenue Department’s contention that they were time-barred.

While setting aside the impugned orders, the Madras High Court held that while Rule 90(3) of the CGST Rules, amended via Notification No. 15/2021-CT explicitly provides that the period spent rectifying deficiencies should be excluded from the limitation period, this provision cannot be applied retrospectively.

BCI Cannot Deny Enrolment Without Legal Basis: Delhi HC Orders to Enrol South Korean National as Advocate

BAR COUNCIL OF INDIA vs DEAYOUNG JUNG CITATION: 2025 TAXSCAN (HC) 391

In a recent ruling, the Delhi High Court directed the Bar Council of India (BCI) to enroll a South Korean national as an advocate within two days and held that BCI cannot deny enrolment without a legal basis.

The court dismissed the BCI’s appeal and directed that Jung’s enrolment must be completed within two days. The court also instructed the BCI to release Jung’s AIBE result without further delay. The matter was listed for further hearing on March 28, 2025, with a clear warning that no adjournments would be granted. To Read the full text of the Order CLICK HERE

“Sikkimese” u/s.10(26AAA) is for Purposes of Income Tax Act Only: Sikkim HC Affirms No Violation of Rights u/ Art. 371(k)

DR. DOMA T. BHUTIA vs UNION OF INDIA CITATION: 2025 TAXSCAN (HC) 392

The Sikkim High Court has reaffirmed that the term “Sikkimese” as defined under Section 10(26AAA) of the Income Tax Act, 1961 applies exclusively for the purposes of computing tax and related matters under the Income Tax Act, 1961 and does not violate Article 371F(k) of the Constitution of India.

A Division Bench of Chief Justice Biswanath Somadder and Justice Meenakshi Madan Rai observed that the clarificatory press release issued by the Ministry of Finance clearly states that the definition of “Sikkimese” within the Income Tax Act is for tax purposes only and has no bearing on the sanctity of rights and privileges reserved for genuine indigenous Sikkimese which are carefully preserved and protected under Article 371F (k) of the Constitution of India.

Delhi HC refuses to Condone Delay in Filing Second Appeal before CESTAT due to Negligence of Assessee in Tracking Order

M/S TECMAX ELECTRONICS vs COMMISSIONER OF CUSTOMS (PREVENTIVE) CITATION: 2025 TAXSCAN (HC) 393

The Delhi High Court has refused to condone the delay in submitting a second appeal, stating that the assessee was negligent in following the order and that the Commissioner (Appeals) was not at fault.

The two member panel of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta held that the Commissioner (Appeals) cannot be held accountable for sending the ruling to the appellant’s previous address.  The appellant’s lack of promptness is evident in the fact that it has not bothered to confirm if the Commissioner (Appeals) issued any orders in the appeal that was preferred at its request.  Additionally, the appellant was responsible for seeing if any orders had been issued in the appeal.

Registered Goods Carriage Vehicles cannot be Reclassified for One-Time Tax on Construction Use: Kerala HC

MANAGING PARTNER vs JOINT REGIONAL TRANSPORT OFFICER CITATION: 2025 TAXSCAN (HC) 395

In a recent ruling, the Kerala High Court held that vehicles registered as Goods Carriage Vehicles cannot be reclassified as Construction Equipment Vehicles solely for the purpose of levying a one-time tax.

The court rejected the reclassification and ruled that the government cannot change a vehicle’s classification after already taxing it under a different category. The court allowed the writ appeal.

‘Proving beyond Reasonable Doubt’ applies to Penal Laws, Tax Reassessment Needs ‘Reason to Believe’: Delhi HC

PR. COMMISSIONER OF INCOME TAX-1 vs M/S EAST DELHI LEASING PVT. LTD CITATION: 2025 TAXSCAN (HC) 394

In a recent ruling, the Delhi High Court clarified that the legal standard of “proof beyond reasonable doubt” applies strictly to penal laws and tax authorities require only “reason to believe” based on objective material to reopen assessments.

The court set aside ITAT ruling, and the matter was remanded for fresh adjudication on the merits. The court directed that the matter be reconsidered using appropriate tax law principles rather than criminal law standards.

Wrongfully Seizure of NRI’s Personal Belongings by Customs Dept: Delhi HC allows to Avail Baggage Rule Benefits

AMAL KRISHNA vs UNION OF INDIA & ORS. CITATION: 2025 TAXSCAN (HC) 397

The Delhi High Court has held that the non-resident Indian (NRI) is fully entitled to the benefit provided to an eligible passenger under the Baggage Rules, 2016. Since the customs department had wrongfully seized NRI’s personal belongings, the court allowed them to avail of Baggage Rule benefits.

According to the division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta, the gold chain is personal property of the petitioner, an NRI, and hence could not have been confiscated in the way that the Customs department has. The court ordered that the petitioner’s gold item that had been confiscated by customs officers could be returned to the petitioner or any designated representative within two weeks of their identity being confirmed. To Read the full text of the Order CLICK HERE

1% of Disputed VAT amount has to be Paid to Kerala Legal Benefit Fund From 07.04.2016: Kerala HC

HINDUSTAN PREFAB LTD. vs STATE TAX OFFICER (WORKS CONTRACT) STATE GOODS AND SERVICE TAX DEPARTMENT CITATION: 2025 TAXSCAN (HC) 396

The Kerala High Court has held that 1% of the disputed Value Added Tax (VAT) amount has to be paid to the Kerala Legal Benefit Fund from 07.04.2016. It was held that the amendment is prospective and can apply only to appeals arising from the year in which the amendment was effected and thereafter.

While allowing the appeal , the court set aside the order rejecting petitioner’s appeal as defective. If the petitioner remits 0.5% of the disputed tax (if not already paid) in the aforesaid appeal to the Kerala Legal Benefit Fund and also furnishes a personal bond without sureties before the Assessing Authority undertaking to pay the balance amount due under the Kerala Legal Benefit Fund, if ultimately found payable, the Appellate Authority shall restore the appeal and consider the same on merits in accordance with law.

Delhi HC Orders Stay on GST Demand against CCI on Considerations Received from Disputing Parties

Competition Commission Of India Vs. The Additional Commissioner Of CGST, Delhi South

The Delhi High Court recently issued a stay order on the levy of Goods and Services Tax (GST) demand imposed on the Competition Commission of India (CCI) by the Additional Commissioner of Central GST (Delhi South) in relation to considerations received by the CCI for the purposes of adjudicating matters.

A Division Bench comprising Justice Yashwant Verma and Justice Harish Vaidyanathan Shankar found merit in CCI’s argument, observing that the taxability of regulatory functions must be determined consistently across statutory bodies. Accordingly, the Court issued an interim stay on the GST demand, preventing the authorities from enforcing any tax liability on the CCI’s collected fees until further review.

Karnataka HC quashes GST ITC Block u/r 86A for Relying on Enforcement Reports without Independent ‘Reason to Believe’

M/S A.M. ENTERPRISES vs STATE OF KARNATAKA REP CITATION: 2025 TAXSCAN (HC) 399

In a recent judgment, the Karnataka High Court quashed the blocking of Input Tax Credit ( ITC ) under Rule 86A of the CGST/KGST Rules for solely relying on the enforcement authority reports without independent and cogent reasons to believe that justified such action.

The court allowed the petition, quashed the impugned order dated 14.10.2024, and directed the respondents to immediately unblock the petitioner’s Electronic Credit Ledger. The court granted liberty to the department to initiate fresh proceedings against the petitioner as per law, following the procedural safeguards outlined in the K-9 Enterprises judgment.

Delhi HC Quashes Rs. 26.52 Cr Income Tax Addition on Power Pricing, Upholds SEB Rates for S. 80IA Deduction

PRINCIPAL COMMISSIONER OF INCOME TAX – 1 vs DCM SHRIRAM LTD CITATION: 2025 TAXSCAN (HC) 400

The Delhi High Court quashed the addition of Rs.26.52 crore on DCM Shriram Ltd. stating that SEB rates were appropriate to determine the market value of power transactions for claiming deduction under section 80IA of the Income Tax Act.

The High Court further cited the Supreme Court’s decision in CIT v. Jindal Steel and Power Ltd., which held that power pricing should be benchmarked against SEB rates rather than the rates at which surplus electricity is sold in the market. The Delhi High Court dismissed the Revenue’s appeal, confirming that the ₹26.52 crore addition against the assessee was unjustified. In short, the appeal of the revenue was dismissed.

Ayurvedic Treatment Incidental to Resort Activities: Kerala HC upholds Luxury Tax Liability

KERALEEYAM AYURVEDIC RESORT A UNIT OF SD PHARMACY PVT. LTD. vs THE COMMERCIAL TAX OFFICER CITATION: 2025 TAXSCAN (HC) 401

In a recent judgment, the Kerala High Court upheld the imposition of luxury tax on Keraleyam Ayurvedic Resort, ruling that the Ayurvedic treatment offered by the resort was only incidental to its main activities as a hospitality service provider.

The court held that the Ayurvedic treatment was not the principal service offered so the resort could not claim exemption from luxury tax. The court dismissed the writ appeals

Orders ignoring Binding Precedents are in Violation of the Doctrine of Precedent and cannot be Countenanced: Kerala HC

VALLAPUZHA SERVICE CO-OPERATIVE BANK LTD vs THE INCOME TAX OFFICER CITATION: 2025 TAXSCAN (HC) 398

The Kerala High Court recently reaffirmed that any tax assessment orders passed on ignorance of binding precedents set by higher courts are violative of the doctrine of precedent and thus unsustainable.

Observing a violation of the doctrine of precedent, the Kerala High Court proceeded to set aside the impugned assessment order and directed the Assessing Officer to reconsider the assessment afresh, after considering the principles laid down by binding Supreme Court rulings that had been previously adverted to.

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