Supreme Court & High Courts Weekly Round-up [March 22nd to March 28th,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 22nd March 2025 to 28th March 2025)

Supreme Court Questions GST ITC Denial Due to Clerical Errors, Seeks Clarity from CBIC

THE UNION OF INDIA & ORS vs BRIJ SYSTEMS LTD & ORS CITATION: 2025 TAXSCAN (SC) 145

Recently, the Supreme Court observed the growing concerns over the denial of Input Tax Credit ( ITC ) due to clerical or arithmetical errors in GST return filings and issued notice to the Central Board of Indirect Taxes and Customs ( CBIC ) to examine the matter further.

To assist in a more thorough resolution, the court appointed Senior Advocate Mr. Arvind P. Datar as Amicus Curiae. The court sought CBIC’s response on the possibility of enabling post-deadline corrections for genuine mistakes in GST returns. The case is scheduled to be heard again in the week commencing April 28, 2025.

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Supreme Court Permits NFRA’s Audit Regulatory Proceedings Against CAs, Stays Execution of Final Orders

NATIONAL FINANCIAL REPORTING AUTHORITY vs SNEHAL N. MUZOOMDAR & ANR. CITATION: 2025 TAXSCAN (SC) 144

In a recent ruling, the Supreme Court permitted the National Financial Reporting Authority ( NFRA ) to continue audit regulatory proceedings against chartered accountants (CAs) in cases where no Audit Quality Review Reports (AQRRs) have been prepared and no final orders have been passed and stayed the execution of final orders already issued.

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The Court also observed that NFRA intends to file further special leave petitions in related matters where the Delhi High Court had similarly intervened. The matter is scheduled for further hearing in the week commencing April 28, 2025.

Borrower cannot Enforce Consumer Rights Without Privity of Contract: Supreme Court Grants Relief to Citicorp Finance (India) Limited

M/S CITICORP FINANCE (INDIA) LIMITED vs SNEHASIS NANDA CITATION: 2025 TAXSCAN (SC) 142

The Supreme Court of India recently ruled in favor of Citicorp Finance (India) Limited, holding that a borrower cannot claim consumer protection rights without privity of contract with the lender.

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Emphasizing that Citicorp Finance’s liability under the Agreement for Sale was limited to settling the dues of the complainant, with ICICI Bank, which was quantified at ₹17,87,763, the Apex Court held that in no scenario could this liability exceed the total loan amount of ₹23,40,000 sanctioned to Patel. Accordingly, the Appeal was allowed and the impugned order was set aside.

Once NCLT Approves Resolution Plan, All Dues Including Central Govt’s Stand Extinguished: Supreme Court

Vaibhav Goel & Anr. vs Deputy Commissioner of Income Tax & Anr. CITATION: 2025 TAXSCAN (SC) 143

The Supreme Court of India held that once a resolution plan is approved by the National Company Law Tribunal (NCLT), no further recovery of dues including statutory dues owed to the Central Government can be initiated if such claims were not part of the approved plan.

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The Supreme Court set aside the orders of the NCLT and NCLAT, ruled that the tax demands for AYs 2012–13 and 2013–14 were unenforceable, and allowed the appeal in favor of the appellants.

Composite GST Order for Several Financial years is not Legally Proper: Kerala HC Directs to Pass Separate Order

NARAYANA RAMA BHAT AGED 74 YEARS 17/63 vs THE DEPUTY COMMISSIONER OF STATE TAX (INTELLIGENCE) CITATION: 2025 TAXSCAN (HC) 402

In a recent case, the Kerala High Court has held that composite order under Central Goods and Service Tax (GST) for several years is not legally proper and directed the department to pass a separate order.

The court directed the second respondent to pass separate orders in respect of each of the financial years pursuant to  notice. In respect of financial year 2022-2023 and 2023-2024 a time limit of one month from today is granted to the petitioner to file a reply and thereafter appropriate orders can be passed for those years also separately. The orders shall be passed after granting an opportunity of hearing to the petitioner.

Disallowance of Deduction Claim u/s 80P(2)(a)(i) of Income Tax Act without Following Precedence: Kerala HC sets aside Assessment order

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

The Kerala  High Court set aside the income tax assessment order as the department failed to consider the precedent while disallowing the claim of deduction under section 80O (a)(i) of the Income Tax Act, 1961.

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While allowing the appeal, the bench  directed a fresh consideration in the light of specific principles laid down in Mavilayi Service Co-operative Bank Ltd. ‘s case and set aside the assessment order.

Non Compliance of Pre deposit Condition u/s 35 F of Central Excise Act: Kerala HC Dismisses Customs Appeal

M/S. KUMARAKOM VADAKKUMBHAGOM SERVICE CO-OPERATIVE BANK LTD vs THE COMMISSIONER OF CENTRAL TAX & CENTRAL EXCISE CITATION: 2025 TAXSCAN (HC) 403

In a recent case, the Kerala High Court dismissed the customs appeal due to the non compliance of predeposit condition under section 35 of the Central Excise Act, 1944.The bench directed the appellant to seek remedies available under the law.

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The counsel appearing for the appellant submitted that the appellant may be permitted to contest the matter on merits by payment of pre-deposit.

Orissa HC Sets aside Proceedings initiated u/s 73 of CGST Act without providing Opportunity of Hearing

M/s. Harekrushna Sahoo vs Chief Commissioner of CT and GST CITATION: 2025 TAXSCAN (HC) 404

In a recent case, the Orissa High Court set aside the proceedings initiated under section 73 of Central Goods and Service Tax ( CGST) Act, 2017 without providing an opportunity to hearing.

A division bench of Justice Arindam Sinha, the Acting Chief Justice and Justice M.S. Sahoo observed that the initiation of the proceeding under section 73 was clearly without jurisdiction and the mpugned order was  set aside and quashed.

No Re-Assessment by Revenue Beyond Period of Limitation under KVAT Act based on CAG Report: Kerala HC

THE STATE OF KERALA vs M/S.CHOWDHARY RUBBER & CHEMICALS PVT. LTD CITATION: 2025 TAXSCAN (HC) 405

The Kerala High Court stated that revenue there cannot exercise  power under Section 25A of the KVAT Act beyond the period of limitation prescribed under Section 25(1) of the KVAT Act. The division bench of Justices A.Y. Jayasankaran Nambiar and Easwaran S ruled that the revenue cannot re-assess time barred assessment under KVAT Act based on CAG report.

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While allowing the petition the  bench held that in cases where the completion of an assessment under the KVAT Act has become time barred by virtue of the limitation provisions under Section 25(1) of the KVAT Act, the Revenue cannot proceed to re-assess an assessee on the basis of a subsequent report obtained from the CAG.

“Where It Is Possible to Do So” Cannot Be a License to Delay: Delhi HC Slams CGST Dept for Keeping SCNs Pending Nearly a Decade

MS SHYAM INDUS POWER SOLUTIONS PVT LTD vs PRINCIPAL COMMISSIONER CGST DELHI NORTH CITATION: 2025 TAXSCAN (HC) 406

In a recent judgment, the Delhi High Court slams that the phrase “where it is possible to do so,” used in Section 73(4B) of the Finance Act, 1994, could not be treated as a license to keep tax proceedings pending for years without resolution.

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The court held that statutory language such as “where it is possible to do so” provides limited flexibility for exceptional situations not a blanket justification for administrative lethargy. The court observed that the CGST department had not presented any insurmountable reasons for the inordinate delay, and pinpointed that had one of the SCNs been adjudicated quickly in 2015, the other similar SCNs could have followed suit. The writ petition was disposed of.

No Hearing Date Fixed by GST Authorities: Allahabad HC Quashes S. 73 Order

M/S Mishra Enterprises vs State Of U.P. Thru. Prin. Secy. Tax And Registration Lko And 2 Others CITATION: 2025 TAXSCAN (HC) 407

The Allahabad High Court quashed an order passed under Section 73 of the Goods and Services Tax ( GST ) Act, 2017, stating violation of mandatory procedural requirements under Section 75(4) of the Act.

The Court declared the order to be unsustainable and quashed it. The matter was remanded to the Assessing Authority with instructions to pass a fresh order in compliance with the law providing a hearing opportunity to the petitioner.

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Service Tax and Entertainment Tax on DTH Services Must Be Levied Separately: Karnataka HC Remands Case to Appellate Tribunal

DISH TV INDIA LIMITED vs THE JOINT COMMISSIONER OF COMMERCIAL TAXES CITATION: 2025 TAXSCAN (HC) 408

The Karnataka High Court recently remanded a case involving the inclusion of service tax while levying the  entertainment tax to the Karnataka Appellate Tribunal for reconsideration. The court ruled in favour of the petitioner observing that entertainment tax and service tax must be taxed separately.

The Court set aside the Tribunal’s order and remanded the case for fresh consideration, directing the Tribunal to address the petitioner’s claims, including the treatment of invoices and the constitutional implications of taxing service tax. The Tribunal was instructed to conclude the matter within three months, ensuring all parties are heard.

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Discretionary Power cannot be Exercised to Halt Income Tax Assessments involving Huge Undisclosed Income: Bombay HC refuses to Entertain plea

DNH Spinners Private Limited vs Deputy Commissioner of Income-tax, Principal Commissioner, Union of India CITATION: 2025 TAXSCAN (HC) 409

In a recent ruling, the Bombay High Court has ruled that its discretionary powers cannot be exercised to prevent the officers from proceedings with income tax assessment cases involving huge undisclosed income.

The court made it clear that the present case requires factual based investigation and as the petitioner has alternate remedy, it may avail that. The bench reiterated its reluctance to interfere in matters requiring factual investigation and dismissed the petitions, directing the petitioner to raise all issues in appeal proceedings under the Act.

Validity of Circular No. 150/2021 under Challenge: Rajasthan HC stays GST Recovery on Highway Annuities

M/s Reengus Sikar Expressway Limited vs Additional Director, Directorate General Of Goods And Services Tax Intelligence CITATION: 2025 TAXSCAN (HC) 410

In a recent ruling, the Rajasthan High Court stayed the recovery of GST on annuity payments received under the hybrid annuity model for highway construction considering the challenge to the validity of Circular No. 150/06/2021-GST dated 17.06.2021.

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The Bench comprising Justice Dr. Pushpendra Singh Bhati and Justice Chandra Prakash Shrimali observed that the issue required consideration. The court directed that no coercive steps shall be taken against the petitioner in relation to the GST recovery proceedings initiated under the order dated 09.01.2025. The matter has been listed for further hearing after eight weeks.

IFCI Cannot Withhold Pledged Shares Once Loaned Amount is Cleared by Borrower: Delhi HC

BHUSHAN INFRASTRUCTURE PRIVATE LIMITED vs UNION OF INDIA THROUGH FINANCE SECRETARY CITATION: 2025 TAXSCAN (HC) 411

The Delhi High Court recently ruled that IFCI Limited (previously Industrial Finance Corporation of India) has no authority to withhold shares pledged by a borrower while availing a loan, once the borrower has fully repaid the loan.

Holding that IFCI’s actions amounted to unjust enrichment, the Delhi High Court directed IFCI to release to the petitioners all the pledged shares which had now been converted to Tata Steel shares within a period of six weeks.

BCI Must Respond to Representation Challenging AIBE Fee Structure: Punjab & Haryana HC

Tushar Tanwar vs Bar Council of India CITATION: 2025 TAXSCAN (HC) 412

In a recent order, the Punjab & Haryana High Court directed the Bar Council of India (BCI) to respond to a representation challenging the fee structure of the All India Bar Examination (AIBE).

The court explained the procedural fairness and accountability, leaving the substantive questions regarding the legality of the AIBE fee open for future adjudication. With these directions, the writ petition was disposed of.

‘Comedy of Errors’: Delhi HC Slams CESTAT for Issuing Contradictory Orders in Appeal Barred by Monetary Limits

JAI DURGA RUBBERISED FABRICS INDIA PVT. LTD CITATION: 2025 TAXSCAN (HC) 413

In a recent decision, the Delhi High Court criticized the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) for passing several contradictory calling it “comedy of errors” and pointed out that the Department’s appeal should not have been entertained at all because it involved a small amount much below the official limit for filing such appeals.

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The Court stated that continuing the case would serve no useful purpose and the Department’s own rules didn’t support the appeal. So, the matter should be closed. The court invoked Article 227 of the Indian Constitution to dismiss the Department’s appeal once and for all. The Court also ordered that the bank guarantee, which Jai Durga had provided more than 14 years ago, should be returned within eight weeks.

Orissa HC Revokes Cancellation of GST Registration upon Petitioner’s Willingness to pay Missed Tax, Interest, Late Fee and Penalty

Rebat Kumar Sahu vs Superintendent, CGST, GanjamII Circle CITATION: 2025 TAXSCAN (HC) 415

In a significant ruling, the Orissa High Court directed the revocation of cancelled Goods and Services Tax (GST) registration of a registrant upon his express willingness to pay all outstanding tax, interest, late fee, penalty and any other sum required to be paid for the department to accept his GST forms.

Maintaining precedence with the ruling of the coordinate Bench, Chief Justice Harish Tandon and Justice Arindam Sinha disposed of the writ petition, passing an order of the same effect in Mohanty Enterprises, providing the Petitioner relief in the interest of Revenue.

Expired Bank Guarantees Cannot be Sustained in Law: Kerala HC Dispels Customs’ Claim

M/S. ITMA HOTELS INDIA PRIVATE LIMITED vs THE ADDITIONAL COMMISSIONER OF CUSTOMS and ors. CITATION: 2025 TAXSCAN (HC) 417

The Kerala High Court recently held that the Customs Department does not have the liberty to invoke expired bank guarantees to recover any outstanding duties payable by an entity who had availed the benefits of the Export Promotion Capital Goods (EPCG) Scheme.

However, regarding the Customs’ claim that the Bank was contractually obliged to keep the Bank Guarantees alive, the Kerala High Court abstained from touching upon the specific questions of fact and proceeded to allow the Writ Petition while leaving open the rights of the Respondents to prefer recourse through appropriate proceedings.

Dual GST Orders for Same Period on Different Grounds: Gujarat High Court Stays Recovery

M/S D M JEWELLERS vs UNION OF INDIA & ORS. CITATION: 2025 TAXSCAN (HC) 414

In a recent order, the Gujarat High Court stayed coercive recovery proceedings due to two separate assessment orders passed for the same tax period on different grounds.

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The court directed that no recovery or enforcement proceedings be taken during the pendency of the writ petition. Direct service through email was permitted to expedite communication.

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