Supreme Court & High Courts Weekly Round-up [March 29th to April 4th,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 29th March 2025 to 4th April 2025)

Supreme Court Probes Customs Officer’s Locus Standi to file PIL against Abhishek Banerjee’s Wife on 2019 Incident

RAJKUMAR BARTHWAL vs THE STATE OF WEST BENGAL & ORS. CITATION: 2025 TAXSCAN (SC) 149

The Supreme Court recently dismissed a Public Interest Litigation ( PIL ) filed by customs officer Raj Kumar Barthwal, who had sought an investigation into an incident from 2019 at the Kolkata airport involving Rujira Banerjee, wife of Trinamool Congress leader Abhishek Banerjee, and her sister Maneka Gambhir.

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Faced with this directive and sustained judicial skepticism from the Apex Court, Barthwal withdrew the petition. The Court formally dismissed the PIL as withdrawn, while granting liberty to the Union of India or the Customs Department to pursue the matter through appropriate legal channels, if they chose.

Creditor Not Required to Prove Financial Capacity to Extend Loan: Supreme Court Slaps ₹32 Lakh Fine on Defaulter in S.138 NI Act Case

ASHOK SINGH vs STATE OF UTTAR PRADESH & ANR CITATION: 2025 TAXSCAN (SC) 148

In a notable ruling, the Supreme Court of India has held that a creditor is not required to prove their financial capacity at the outset to establish a legally enforceable debt under Section 138 of the Negotiable Instruments Act, 1881 (NI Act).

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In light of the observations made, the Supreme Court proceeded to impose a fine of ₹32,00,000 on the Accused which is to be paid within four months failing which the sentence imposed by the trial court in the prior stage would be upheld by the Supreme Court.

Supreme Court Ends 50-Year Dispute on CA Firm’s Undervaluation of Shares: Grants 6% Simple Interest from 1975 and 9% Interest Post-Decree

I.K. MERCHANTS PVT. LTD. & ORS. vs THE STATE OF RAJASTHAN & ORS. CITATION: 2025 TAXSCAN (SC) 147

The Supreme Court of india recently resolved a nearly five-decade old dispute regarding the undervaluation of the share price of a Chartered Accountancy (CA) firm, ordering the levy of 6% interest per annum on the estimated share price from 1975 onwards and another 9% interest per annum on the share price from the date of decree till the date of realisation.

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Furthermore, the Bench directed the Government to pay the amount due towards the enhanced value of the shares after adjusting the amount already paid out, within a period of 2 months from the date of the judgment.

HSD-Classification Dispute: Supreme Court Directs Customs to Establish Requisite Testing Facilities to Avert Prolonged Litigation

GASTRADE INTERNATIONAL vs COMMISSIONER OF CUSTOMS CITATION: 2025 TAXSCAN (SC) 146

The Supreme Court of India recently directed the Customs Department to establish comprehensive testing facilities to prevent prolonged litigation arising from classification disputes of imported goods.

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The Court emphasized that while expert opinions and laboratory reports play a crucial role in classification determinations, they cannot be treated as conclusive if they fail to account for all stipulated criteria.

Gurugram Court Grants Bail in Rs. 7.13 Crore GST ITC Fraud Case as Alleged Individual Gains Fall Below Rs. 5 Crore Threshold

State. Vs. Rahul Dhingra CITATION: 2025 TAXSCAN (HC) 418

In a recent ruling, a Gurugram court granted bail to two accused in a Rs. 7.13 crore GST Input Tax Credit (ITC) fraud case, primarily on the ground that their alleged individual gains fell below the Rs. 5 crore threshold required to attract non-bailable provisions under the CGST Act.

The bail was granted on furnishing a bond of Rs. 50,000 with one surety of the same amount. The court clarified that its findings were limited to the bail stage and would not influence the merits of the case during trial.

No Reasoned Appellate Order for Rejecting GST Appeal: Calcutta HC Remands Matter for Fresh Consideration

Madhusudan Banik vs State of West Bengal & Ors CITATION: 2025 TAXSCAN (HC) 419

The Calcutta High Court recently set aside an appellate order rejecting a Goods and Services Tax (GST) appeal, citing the absence of a reasoned decision provided by the Respondent Commissioner of Revenue, and remanded the matter for fresh consideration.

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The Appellate Authority was directed to set a date for personal healing wherein the Appellant may make his presence in person or through an authorized representative and present his written submissions without seeking adjournment.

Wrongful ITC Claim: Calcutta HC Exempts Wilhelmsen Port Services from Paying 10% Disputed Tax Observing Revenue Neutrality

WILHELMSEN PORT SERVICES INDIA PRIVATE LIMITED AND ANR. vs STATE OF WEST BENGAL AND ORS. CITATION: 2025 TAXSCAN (HC) 420

The Calcutta High Court recently ruled in favor of Wilhelmsen Port Services India Private Limited, exempting the company from making a 10% payment of the disputed Input Tax Credit (ITC) amount, observing that the ITC claim in question was revenue-neutral and did not lead to any loss to the government exchequer.

However, the Bench clarified that the present decision was passed purely in light of the unique facts and circumstances of the present case and thus should not be treated as a precedent for future matters.

Service Charge on Restaurant Bills is Not a Mandatory Tax: Delhi HC Directs CCPA To Revise Misleading Terminology

NATIONAL RESTAURANT ASSOCIATION OF INDIA & ORS vs UNION OF INDIA & ANR CITATION: 2025 TAXSCAN (HC) 421

The Delhi High Court recently reaffirmed that the service charge levied by restaurants and hotels is not a mandatory tax, while directing the Central Consumer Protection Authority (CCPA) to consider revising the terminology on bills to avoid misleading unassuming consumers.

While dismissing the writ petitions, the Delhi High Court also slapped costs of ₹1 Lakh each on the Petitioners that are to be deposited with Central Consumer Protection Authority to be utilized for consumer welfare.

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Automation and AI Cannot Disregard Natural Justice: Bombay HC on CPC Rejecting ITR Without Reasoning

TPL – HGIEPL Joint Venture vs Union of India CITATION: 2025 TAXSCAN (HC) 422

In a recent decision, the Bombay High Court held that automated systems, including AI-driven tax portals, must adhere to the principles of natural justice and cannot reject tax returns without providing proper reasoning.

The court directed that if such an application is filed within four weeks, the Commissioner must dispose of it within three months, after giving the petitioner a proper hearing and passing a reasoned order. The writ petition was dismissed

SCN u/s 110 Customs Act cannot be Issued After 1 Year: Delhi HC Directs to Release Detained Goods

MOHAMMAD ARHAM vs COMMISSIONER OF CUSTOMS CITATION: 2025 TAXSCAN (HC) 423

The Delhi High Court has held that detention of goods by the Customs Department cannot continue beyond a period of one year, if a show cause notice under section 110 of the Customs Act, 1962 was not issued to the assessee within such period. The court directed to release detained goods.

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A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta cited Section 110 of the Customs Act, 1962 which prescribes a period of six months. Further, subject to complying with certain formalities, a further extension for a period of six months for the Department to issue a show cause notice can be given in terms of Section 110(5).

Benefit of Monetary Limits Guidelines Not Applicable In Dispute related to Classification of Product for Customs Duty: Delhi HC

M/S GOURISHANKAR POLYMER INDUSTRIES VS COMMISSIONER OF CUSTOMS CITATION: 2025 TAXSCAN (HC) 424

The Delhi High Court has held that the benefit of monetary limits guidelines is not applicable in disputes relating to the product classification for customs duty.

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The division bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta remanded the matter to Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi for a fresh adjudication on the classification issue itself and not to dispose of the matter on merely the monetary limit. The court held that this is an old matter, CESTAT, Principal Bench, New Delhi shall dispose of the matter within three months.

Wrongful Availment of ITC Upon fake document Corroboarted with statement of  Directors of Company: Calcutta HC Directs to File Appeal u/s 107 of CGST Act

M/S FORGING INDIA IRON AND STEEL LIMITED vs UNION OF INDIA AND ORS CITATION: 2025 TAXSCAN (HC) 425

In a recent case, the Calcutta High Court  has directed to file appeal under section 107 of the Central Goods and Service Tax (CGST) Act, 2017 against the wrongful availment of Input Tax credit ( ITC )  upon fake document corroborated with statement of  directors of company.

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In the light of the fact that the time for preferring the appeal has already expired, the bench directed the assessee to file the appeal within 45 days from the date of receipt of server copy of this order and the assessee shall comply with the pre-deposit condition. The assessee shall be permitted to file the appeal manually as the online filing may not be possible as appeal is belated.

Customs Duty Drawback Evasion: Madras HC upholds CESTAT’s Pre-Deposit Condition

M.Vijay Anand Kalandar Seeni Ahmed vs The Customs, Excise and Service Tax Appellate Tribunal CITATION: 2025 TAXSCAN (HC) 426

The High Court of Madras, upheld the Customs, Excise, and Service Tax Appellate Tribunal’s (CESTAT) pre-deposit condition in a customs duty drawback evasion case, citing the assessee’s prolonged delay and non-compliance.

Observing that the assessee kept the appeal pending for over eight years without pursuing them or paying the pre-deposit, the Court dismissed the appeals for lack of merit. It directed the appellants to pay the pre-deposit within six weeks if they wished to continue. Otherwise, the Department was permitted to take legal action against them.

No Suppression or Fraud: Delhi HC Rejects GST Dept’s Service Tax Demand on Subcontractor Beyond Limitation

THE COMMISSIONER OF CENTRAL TAX vs M/S SIMPLEX INFRASTRUCTURE LIMITED CITATION: 2025 TAXSCAN (HC) 429

The Delhi High Court recently reiterated the bounds of power exercisable by the Goods and Services Tax (GST) Department, dismissing an appeal filed by the Commissioner of Central Tax, CGST Delhi East, seeking to invoke the extended period of limitation under Section 73(1) of the Finance Act, 1994, to impose service tax liability on a company for the period between 2004 and 2009.

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In light of the observations made, the Delhi High Court proceeded to dismiss the matter and all pending applications.

Technical breach in obtaining Provisional ID for GST migration: Calcutta HC directs to reconsider Claim of Transitional Credit

Javed Ahmed Khan vs Deputy Commissioner of Revenue CITATION: 2025 TAXSCAN (HC) 428

The Calcutta High Court  has directed to reconsider the claim of transitional credit considering the technical breach faced by assessee in obtaining provisional ID for GST migration.

The court set aside the order and the matter is remanded back to the Respondent No.1, Deputy Commissioner of Revenue, State Tax, Ballygunge to consider the application filed by the appellant/writ petitioner afresh bearing in mind the observations made in the preceding paragraphs which are to the effect that the application filed by the appellant/writ petitioner for new GST registration was not voluntary but on the direction issued by the department. In this regard, appropriate order be passed after affording an opportunity of personal hearing to the appellant/writ petitioner within three weeks from the date of receipt of server copy of the order.

14 Year Delay to Issue Tax Notice: Kerala HC Holds No Protection u/s 17D KGST Act on “Fast Track Assessments”

FAST TRACK ASSESSMENT TEAM NO.2 vs K. SASILAL CITATION: 2025 TAXSCAN (HC) 430

The Kerala High Court recently delivered a judgment clarifying the scope of limitation exercisable by the Revenue in terms of the Kerala General Sales Tax (KGST) Act, 1963.

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In light of the observations made, the Kerala High Court proceeded to dismiss the appeal, reaffirming that the absence of a limitation period under Section 17D does not imply that tax authorities have unchecked discretion to act arbitrarily, in contravention of statutory principles.

SCN Cannot Be Challenged Prematurely before Final Adjudication unless it Pertains to Jurisdiction or Lack of Authority: Madras HC

M/s. S and T Plastic Machines Private Limited vs The Commissioner of Customs CITATION: 2025 TAXSCAN (HC) 427

The Madras High Court dismissed the premature challenge made by the assessee to the Show Cause Notice (SCN) and directed the respondent authorities to adjudicate the matter after considering the assessee’s reply. The bench observed that SCN cannot be challenged prematurely unless it pertains to jurisdiction or lack of authority

The single bench of the High Court of Madras, comprising Justice Abdul Quddhose, noted that the only limited relief that can be granted to the petitioner in the writ petition was to direct the respondents to consider the reply dated 03.01.2025 submitted by the petitioner to the impugned show cause notice dated 30.10.2024 on merits.

Big Win for Rooftop Solar Users: Madras HC Rules No Separate Network Charges, Already Included in Tariff

The South India Spinners Association vs The Chairman cum Managing Director Tamil Nadu Generation and Distribution CITATION: 2025 TAXSCAN (HC) 431

In a recent ruling, the Madras High Court held that network charges cannot be levied separately on rooftop solar power users, as such charges are already factored into the existing electricity tariff structure.

The court set aside the impugned order and held that no further charges could be collected beyond what was already stipulated in the tariff, and that any such attempt would amount to double recovery. The writ petitions were allowed, and all connected miscellaneous petitions were closed.

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Legal Action not initiatable over any claims that are not included in resolution plan: Bombay HC

Garden Silk Mills Limited vs Gayatri Industries CITATION:   2025 TAXSCAN (HC) 432

The Bombay High Court dismissed an Interim Application filed by the Appellant seeking the release of the bank guarantees, holding that all claims which are not part of the Resolution Plan shall stand extinguishe, and no person will be entitled to initiate or continue any proceedings in respect of any such claim.

While dismissing the petition, the court held  that the debt of respondent stand extinguished and no right vests in the Respondent in respect of the bank guarantees or to oppose the release of bank guarantees.

Relief To Lufthansa Airlines: Delhi HC Sets Aside  Order Denying ‘Nil’ TDS Certificate

LUFTHANSA CARGO AG vs ASSISTANT COMMISSIONER OF INCOME TAX & ORS CITATION: 2025 TAXSCAN (HC) 433

As a relief to German cargo airline Lufthansa Cargo AG, the Delhi High Court set aside the revenue’s order denying nil TDS certificate to the company for the financial year 2024-25.

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A division bench of Justice Vibhu Bakhru and Justice Tejas Karia allowed the petition and directed the issuance of the certificate for nil withholding tax under Section 197 of the Act.  It was further held that issuance of the certificate shall not preclude the AO from examining whether the income/receipts of the petitioner are chargeable to tax in India in assessment proceedings, uninfluenced by the order. 

Specific Provision u/s 40A(7)(b) prevails over S. 43B in Approved Gratuity Fund Deduction: Madras HC

M/s. Sanmar Speciality Chemicals Limited No.9 vs The Assistant Commissioner of Income-Tax Company Circle CITATION: 2025 TAXSCAN (HC) 434

In a recent ruling, the Madras High Court clarified the legal interplay between Section 40A(7)(b) and Section 43B of the Income Tax Act, ruling that where contributions are made to an approved gratuity fund, the specific provision under Section 40A(7)(b) would prevail over the general provision of Section 43B, despite both sections containing non-obstante clauses.

The court answered all substantial questions of law in favor of the assessee and allowed the appeal. The court set aside the disallowance and confirmed the legitimacy of deductions made under Section 40A(7)(b) of the Income Tax Act in relation to an approved gratuity fund.

Delhi HC directs Customs to Sensitize Officials on Detention of Personal Gold and Old Jewellery of Air Travellers

QAMAR JAHAN vs UNION OF INDIA, REPRESENTED BY SECRETARY, MINISTRY OF FINANCE & ORS. CITATION: 2025 TAXSCAN (HC) 436

The Delhi High Court, while adjudicating a recent matter, directed the Customs Department to sensitize its officials and implement immediate measures to prevent the unlawful detention of personal gold and old jewellery carried by air travellers, both Indian and foreign.

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The court further instructed the CBIC and Customs Department to implement sensitization initiatives to educate officials on the distinction between personal jewellery and commercial gold imports while demanding that a compliance report on the directives be submitted before the next hearing; alternatively if the Baggage Rules cannot be amended by the next date of hearing, a Standard Operating Procedure (hereinafter “SOP”) shall be placed on record by then,

No S.263 Notice after Resolution Plan Approval on Extinguishment of Corporate Debtor’s Tax Liabilities: Gujarat HC

AMW AUTO COMPONENT LIMITED vs PRINCIPAL COMMISSIONER OF INCOME TAX RAJKOT 1 CITATION: 2025 TAXSCAN (HC) 435

The Gujarat High Court recently ruled that the Principal Commissioner of Income Tax (PCIT) could not issue a notice under Section 263 of the Income Tax Act, 1961 to revise the assessment order of an assessee once the Corporate Insolvency Resolution Plan (CIRP) is approved, which extinguishes all prior tax liabilities.

In such regard, the Notice issued by the Revenue stood legally untenable and lacked merit, prompting the Gujarat High Court to quash the notice issued under Section 263.

Lack of Corroborative Evidence for Criminal Conspiracy and Bribery: Delhi HC quashes FIR against CA

M/S PRAKASH INDUSTRIES LTD & ANR vs DIRECTORATE OF ENFORCEMENT CITATION: 2025 TAXSCAN (HC) 437

The Delhi High Court recently quashed a First Information Report (FIR) registered against Chartered Accountant (CA), who was working as a financial consultant for Prakash Industries Ltd. (PIL), upon observing the lack of corroborative evidence to prove allegations of criminal conspiracy and bribing.

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Reiterating that a criminal conviction requires a higher threshold of evidence and that the prosecution failed to demonstrate Agarwal’s direct involvement in the alleged bribery scheme, the Bench concluded that the FIR could not be sustained and accordingly quashed the proceedings against him.

Uttarakhand HC Criticizes GST Dept. for Arbitrary Action Against Businesses Prior to Issuance of SCN

M/S KOTDWAR STEEL LIMITED vs OFFICE OF HTE DEPUTY COMMISSIONER CITATION: 2025 TAXSCAN (HC) 438

The Uttarakhand High Court has criticized the Goods and Service Tax (GST) department for arbitrary action against businesses by blocking Input Tax Credit (ITC) before the issuance of show cause notice (SCN).

When the matter was listed on April 29, 2025, the court ruled that an interim order would be granted as requested and that any action would need to be properly compliant with the GST Act’s rules.

Bombay HC sets aside Duty Drawback Demand under Customs Act made After Approval of Resolution Plan

Karthik Alloys Limited vs Union of India CITATION: 2025 TAXSCAN (HC) 441

The Bombay High Court set aside duty drawback demand under Customs Act, 1962 as it was after approval of resolution plan.  It was that observed that a claim brought to the fore during the pendency of the moratorium period after the claims have been recorded by the adjudicating authority would stand waived off in terms of Section 31A of the Insolvency Bankruptcy  Code (IBC), 2016.

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A division bench of Justice M. S. Karnik and Justice Nivedita P. Mehta found that the respondents did not lodge their demand in respect of the duty drawbacks against the petitioner during the CIRP.  Admittedly, the claim of the respondents is not a part of the approved resolution plan. It is, therefore, abundantly clear that a claim brought to the fore during the pendency of the moratorium period after the claims have been recorded by the adjudicating authority would stand waived off in terms of Section 31A of the code. The court quashed and set aside the impugned order and allowed the writ petition.

Read More: https://www.taxscan.in/bombay-hc-sets-aside-duty-drawback-demand-under-customs-act-made-after-approval-of-resolution-plan-read-order/504535/

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