Supreme Court & High Courts Weekly Round-up [May 24th to May 31st, 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 from May 24th, 2025 to May 31st, 2025.

Supreme Court Upholds Gujarat HC Verdict: Pre-Deposit via Electronic Credit Ledger Valid for GST Appeals, Rejects Dept’s SLP

UNION OF INDIA & ANR vs M/S YASHO INDUSTRIES LTD CITATION:   2025 TAXSCAN (SC) 177

In a landmark decision, the Supreme Court of India has dismissed the Special Leave Petition (SLP) filed by the Union of India and CGST authorities against the Gujarat High Court’s ruling in the case of Yasho Industries Ltd vs Union of India & Ors.

The bench comprising Justice B.V. Nagarathna and Justice Satish Chandra Sharma, on May 19, 2025, condoned the delay but dismissed the SLP on merits, effectively upholding the Gujarat High Court’s ruling that payment of pre-deposit via the Electronic Credit Ledger (ECL) is valid and sufficient compliance under Section 107(6)(b) of the Central Goods and Services Tax (CGST) Act, 2017.

Retrospective Notification on GST ITC Refund due to Ledger Mismatch cannot Bar Application Made After Issue Date: Supreme Court

ASSISTANT COMMISSIONER OF CENTRAL TAXES & ORS. vs M/S. GEMINI EDIBLES AND FATS INDIA LIMITED CITATION:   2025 TAXSCAN (SC) 178

The Supreme Court of India summarily dismissed a batch of Special Leave Petitions filed by the Assistant Commissioner of Central Taxes, refusing to interfere with the decision of the Andhra Pradesh High Court wherein it rectified a notification concerning the availability of Goods and Services Tax (GST) Input Tax Credit (ITC) refunds in cases of mismatch in the tax credit ledger.

A Division Bench of Justice R. Raghunandan Rao and Justice Maheswara Rao Kuncheam of the Andhra Pradesh High Court carefully examined the relevant legal framework, including Section 54 of the CGST Act and observed that the restrictions imposed by Notification No. 9/2022 were prospective, effective only from 18.07.2022, and could not prohibit claims relating to earlier periods.

Specific Role of Director Need Not Be Detailed in Cheque Dishonour Complaint: Supreme Court Clarifies Vicarious Liability u/s 141 of NI Act

HDFC BANK LIMITED vs STATE OF MAHARASHTRA AND ANR. CITATION:   2025 TAXSCAN (SC) 179

In a recent judgment, the Supreme Court of India held that a cheque dishonour complaint under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881, does not require a detailed description of the specific role played by a director to establish vicarious liability.

The bench comprising Justice Manoj Misra and Justice K.V. Viswanathan disagreed with this rigid interpretation and observed that the substance of the complaint showed sufficient material to infer that the respondent was indeed in charge of and responsible for the conduct of the company’s business.

Supreme Court Stays ₹5,712 Crore GST Demand on Paytm’s First Games Amid Industry-Wide Legal Battle

DIRECTORATE GENERAL OF GOODS AND SERVICES TAX INTELLIGENCE vs GAMESKRAFT TECHNOLOGIES PRIVATE LIMITED CITATION:   2025 TAXSCAN (SC) 180

In a recent order, the Supreme Court of India temporarily stayed further action on a massive ₹5,712 crore tax notice issued to First Games, a real-money gaming (RMG) platform owned by Paytm.

The legal battle started after the GST Council made a major decision in August 2023. It announced that all forms of online gaming, along with casinos and horse racing, would now be taxed at 28%. What made things worse for gaming companies was the government’s decision to apply this rule not just going forward from October 1, 2023, but also retroactively from July 2017.

Clarificatory Circular aiding Parent Provision can be Retrospective: Supreme Court sustains 1% AIR Customs Duty on Soyabean Meal

M/S SURAJ IMPEX (INDIA) PVT. LTD. vs UNION OF INDIA & ORS. CITATION:   2025 TAXSCAN (SC) 181

The Supreme Court of India recently clarified the retrospective applicability of clarificatory circulars issued against a statute, while proceeding to sustain the 1% All Industry Rate (AIR) Customs Duty Drawback on soyabean meal exports prayed for by the Appellant.

The Bench observed that the Circular does not expand or alter the scope of the previous notifications, but merely resolved certain ambiguities that remained following the promulgation of the concerned Notification. Since no new right or benefit was created, the Supreme Court held that the benefit of 1% customs duty drawback as indicated under the notification was always existent, and Soyabean Meal exporters, even if they had availed CENVAT, from 2008 onwards.

No S.153B Limitation Relief for Invalid Indo-Swiss DTAA Reference Made Under Amended Article 26: Delhi HC

THE PR. COMMISSIONER OF INCOME vs SMT. SNEH LATA SAWHNEY CITATION:   2025 TAXSCAN (HC) 857

In a recent judgment, the Delhi High Court held that the Income Tax Department cannot claim exclusion of limitation under Section 153B of the Income Tax Act for the time spent on an invalid reference made under the Indo-Swiss Double Taxation Avoidance Agreement (DTAA).

The bench comprising Justice Vibhu Bakhru and Justice Tejas Karia observed that Article 26 was substituted by the 2010 Protocol and came into effect from April 1, 2011. The court clarified that the substituted article entirely replaced the earlier one, and there was no saving clause preserving the previous rights. The request made by the department for information predating this cut-off was invalid and could not extend the limitation period.

Delhi HC Stays ₹10.35 Cr GST Demand on CCI Over Taxability of Non-Business Activities

COMPETITION COMMISSION OF INDIA vs THE ADDITIONAL COMMISSIONER OF CGST CITATION:   2025 TAXSCAN (HC) 858

In a recent development, the Delhi High Court stayed a Goods and Services Tax (GST) demand of Rs. 10.35 crore raised against the Competition Commission of India (CCI), observing that no coercive steps shall be taken against the statutory regulator at this stage. The demand was raised through an order dated 16.01.2025 by the Commissioner of CGST, Delhi South Commissionerate.

A division bench comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta took note of the legal position established in the CERC judgment and directed that no coercive action be taken against CCI in connection with the impugned tax demand.

Non claim of Carry Forward Loss in Next AY Not Valid Reason to Reject DTVSV Application: Delhi HC

IE VENTURE FUND I vs PRINCIPAL COMMISSIONER OF INCOME TAX DELHI 4 CITATION:   2025 TAXSCAN (HC) 859

The High Court of Delhi ruled that non-claim of carry forward loss in the next assessment year (AY)is not a valid reason to reject an application under the Direct Tax Vivad Se Vishwas Scheme, 2024 (DTVSV) Scheme. IE Venture Fund,petitioner-assessee, filed its return of income for AY 2022–23 on 29.07.2022, declaring a loss of ₹17.68 crore to be carried forward. However, it later clarified that it did not intend to claim this loss.

Justice Vibhu Bakhru and Justice Tejas Karia examined the petitioner’s rejection under the DTVSV Scheme, which was based on the case not falling under Rule 9 of the DTVSV Rules. Rule 9 explained how to calculate disputed tax when there was a reduction in loss or unabsorbed depreciation, allowing the petitioner to either pay tax on the reduced amount but keep the original loss or accept the reduced loss. The petitioner had to choose this option voluntarily and could not be forced.

GST officials must Specify Exact Provisions of GST Act and Rules allegedly violated in SCN: Delhi HC directs to Circulate Copy of Order to all Delhi GST offices

RASI INNOVATION PVT LTD vs SUPERINTENDENT, WARD 84, DELHI GST & ANR CITATION:   2025 TAXSCAN (HC) 860

The Delhi High Court has strongly ruled that the GST official must clearly mention the specific provisions of the GST ( Goods and Services Tax ) Act and Rules that are allegedly violated in the Show Cause Notices ( SCNs ). The court also issued directions to send a copy of the order to all  GST Commissionerates and Superintendents across the Delhi GST department.

Justice Prathiba M. Singh and Justice Rajneesh M. Gupta, while delivering the judgment, observed that the issuance of such generalised SCNs without citing specific sections or rules undermines the principles of natural justice.

Delhi HC sets aside Order u/s 73 of CGST Act as the Challenge on GST Notification yet to be Adjudicated by Supreme Court

KK TRADING CO THROUGH ITS PROPRIETOR SATYA VATI vs AVATO WARD 77 STATE GOODS AND SERVICE TAX & ORS CITATION:   2025 TAXSCAN (HC) 861

The Delhi High Court  in its recent ruling, set aside the order passed under section 73 of the Central Goods and Services Tax Act, 2017 (CGST) as the challenge on the GST notification was yet to be adjudicated by supreme court.

A division bench of Justice Prathiba M. Singh and  Justice Rajneesh Kumar Gupta noted that the validity of the impugned notifications is under consideration before the Supreme Court and had disposed of several matters in the said batch of petitions after addressing other factual issues raised in the respective petitions.

Pen Drive cannot be Incriminating Material: Delhi HC sets aside Notice issued u/s 153C of Income Tax Act

PANCH TATVA PROMOTORS PRIVATE LIMITED vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION:   2025 TAXSCAN (HC) 862

The Delhi High Court set aside the notice issued under section 153 C of the Income Tax Act, 1961 holding that the Pen Drive contains information regarding transactions of bogus invoices that cannot be incriminating material.

In so far as the petitioner is concerned, information allegedly found was regarding a purported transaction of ₹70,78,680/-, which was allegedly supported by bogus invoice. However, the said transaction pertains to the Financial Year 2014-15.

A division bench of Justice Vibhu Bakhru and Justice Tejas Karia Vibhu Bakhru allowed the petition and set aside the impugned notice issued under Section 153C of the Act in respect of AY 2019-20.

‘Industrial Building’ Not only includes  Manufacturing Units but also includes IT & Software Offices for purposes of Property Tax: Delhi HC

SOUTH DELHI MUNICIPAL CORPORATION vs MOON STEELAND GENERAL INDUSTRIES PVT. LTD CITATION:   2025 TAXSCAN (HC) 863

The Delhi High Court ruled that, for property tax purposes, a “industrial building” can incorporate an IT and software office in addition to more conventional ideas of production including tangible and real commodities.

A single bench of Justice Purushaindra Kumar Kaurav held that an ‘Industrial Building’ encompasses IT sector businesses where non-material inputs such as data, digital content, or intellectual capital are subjected to systematic transformation or reconstitution into new intellectual property outputs, such as software, algorithms, digital products, or proprietary databases.

Delhi HC Allows Rectification of  DVAT Returns to enable Issuance of Requisite ‘F’ Form in respect of Goods Transferred under Interstate Trade and Commerce

Y.P.SPICES P LTD vs COMMISSIONER OF TRADE TAXES & ANR CITATION:   2025 TAXSCAN (HC) 864

The Delhi High Court in a recent ruling allowed the rectification of  DVAT returns to enable issuance of Requisite ‘F’ Form in respect of goods transferred under Interstate Trade and Commerce

A division bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta permitted  the petitioner to rectify its DVAT returns for the period of 01st January, 2013 to 31st March, 2013, all four quarters of Assessment Year 2013-14 and for the period April 2014 to June 2014 in order to enable the issuance of the requisite ‘F’ Forms to the Petitioner.

GST Proper Officer Must Pass Reasoned Order u/s 75(6) Even If Assessee Does not Respond to SCN: Allahabad HC

M/s Shakil Ahmad Security Agency vs Deputy Commissioner State GST Ghaziabad and 2 others CITATION:   2025 TAXSCAN (HC) 865

In a recent ruling, the Allahabad High Court ruled the “proper officer” under the Goods and Services Tax ( GST ) must clearly state the relevant facts and the basis for the decision in their final order even if the assessee failed to respond to the show cause notice.

Chief Justice Arun Bhansali and Justice Kshitij Shailendra and quashed the demand order dated 27.04.2024, directing the department to grant the petitioner an opportunity to file a response to the show-cause notice within four weeks. The Court further instructed the GST officer to pass a fresh, reasoned order only after granting the petitioner a proper opportunity of hearing.

Unexplained Credits Must Be Taxed in the Hands of Ultimate Beneficiaries, Not Conduit Companies: Delhi HC

PR. COMMISSIONER OF INCOME TAX vs THIRD GENERATION TRADERS PVT. LTD CITATION:   2025 TAXSCAN (HC) 866

The Delhi High Court held that unexplained credits routed through conduit companies cannot be taxed in their hands, but must be assessed in the hands of the actual beneficiaries.

Justices Vibhu Bakhru and Tejas Karia  dismissed a batch of appeals filed by the Revenue against the order of the Income Tax Appellate Tribunal (ITAT), which had upheld the deletion of protective additions made under Section 68 of the Income Tax Act, 1961, in the hands of Third Generation Traders Pvt. Ltd. for multiple assessment years ranging from 2012-13 to 2017-18.

Subscription Payment received by End user to a non-resident Computer supplier is not royalties: Delhi HC Dismisses Revenue’s Appeal

COMMISSIONER OF INCOME TAX (INTERNATIONAL TAX)-1 vs GOTO TECHNOLOGIES IRELAND UNLIMITED COMPANY CITATION:   2025 TAXSCAN (HC) 867

The Delhi High Court has dismissed the revenue’s appeal and upheld the ruling that the subscription payment  received by an end user from a non-resident computer supplier is not royalties.

Concededly, the issues involved in the appeal is covered by the decision of the Court in ITA No.282/2024 and 315/2024, captioned Commissioner of Income Tax International Taxation-1, New Delhi v. Goto Technologies Ireland Unlimited Company (Earlier known As Logmein Ireland Unlimited Company).  

In view of the above, the division bench of Justice Vibhu Bakhru and Justice Tejas Karia found that no substantial question of law arises for consideration of the court and dismissed the appeal.

Gujarat HC Fines GST Dept ₹1 Lakh for Ignoring Rectified Mismatch, Flags Non-Application of Mind

GRASIM INDUSTRIES LTD. vs UNION OF INDIA & ORS CITATION:   2025 TAXSCAN (HC) 868

In a recent ruling, the Gujarat High Court imposed a cost of Rs. 1 lakh on the GST Department for failing to apply its mind while adjudicating a case involving input tax credit (ITC) mismatch.

Justice D.N. Ray found that the department had acted mechanically and ignored the reconciliations and amended returns furnished by the petitioner. The court observed that departmental officers themselves had later admitted, through a compliance report and affidavit, that the mismatch was only due to data entry errors and not due to any tax evasion or illegality.

Delhi HC allows DVAT Returns Rectification To Enable Requisite Form of Inter-State Goods Transfer Subject to Supreme Court Verdict

MIS DREAMCANN FOODS PRVIAE LIMITED vs COMMISSIONER OF DELHI VALUE ADDED TAX, & ANR. CITATION:   2025 TAXSCAN (HC) 869

In a recent order, the Delhi High Court has allowed the rectification of its Delhi Value Added Tax ( DVAT ) returns for multiple quarters across the financial years 2014-15 to 2016-17. However, the implementation of this direction has been made contingent upon the outcome of certain appeals currently pending before the Supreme Court.

The matter was heard by a Division Bench comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta, noted that the present dispute bore striking similarity to the issues raised in the case of ‘Commissioner Department of Trade and Taxes v.Ingram Micro India Pvt. Ltd.’, which is currently pending in Civil Appeal before the apex court.

Delhi HC Dismisses Petition of Massive GST Fraud of Rs. 155cr Citing Impact on Exchequer and GST

M/S MHJ METALTECHS PRIVATE LIMITED vs CENTRAL GOODS AND SERVICES TAX CITATION:   2025 TAXSCAN (HC) 870

The Delhi High Court, while dismissing the writ petition of huge Goods and Services Tax ( GST ) fraud involving Rs. 155 crores,  has reiterated that writ jurisdiction under Article 226 of the Constitution should not be exercised in cases involving allegations of fraudulent availment of Input Tax Credit ( ITC ) under the Goods and Services Tax ( GST ) considering the impact on GST and exchequer.

Justices Prathiba M. Singh and Rajneesh Kumar Gupat held that cases involving fraudulent ITC claims cannot be entertained under writ jurisdiction, as such cases involve serious allegations, complex factual disputes, and financial implications for the exchequer.

Inadvertent GST ECL Deposit by ISD Refundable with Interest: Delhi HC orders Refund with 6% Interest, Warns 18% for Delay

MATRIX CELLULAR (INTERNATIONAL) SERVICES PVT LTD. vs THE PRINCIPAL COMMISSIONER STATE TAX DELHI CITATION:   2025 TAXSCAN (HC) 871

The Delhi High Court has held that an Input Service Distributor (ISD) under Goods and Services tax (GST) is entitled to a refund of an inadvertent deposit made into its Electronic Cash Ledger (ECL), along with applicable interest.

Judges Prathiba M. Singh and Rajneesh Kumar Gupta noted that the CGST Rules’ a refund process required strict compliance to deadlines, specifically examination within 15 days and processing within 60 days after receiving a completed application.

Auction Purchaser Liable to Pay Outstanding Tax on Vehicle Acquired: Himachal Pradesh HC

Arif Khan vs State of H.P. & ors. CITATION:   2025 TAXSCAN (HC) 872

The Himachal Pradesh High Court held that an auction Purchaser is liable to pay the outstanding taxes on vehicles acquired through auction. It stated that there is no equity in taxation law and equity would only come into play in case there is no law operating in the field.

The bench noted that in accordance with section 9 of the Himachal Pradesh Motor Vehicles Taxation Act, the onus of paying taxes shifts to the new owner if the tax-liable party transfers possession without paying the outstanding balance.

Challenge against  Difference in taxable value of invoice in GSTR-2A: Calcutta HC remands Matter for fresh adjudication

ENKEBEE INFRATECH INDIA PVT. LTD. VS THE COMMISSIONER OF STATE TAX CITATION:   2025 TAXSCAN (HC) 873

The Calcutta High Court has remanded the challenge on difference in taxable value of invoice mentioned in GSTR-2A for fresh adjudication by the adjudicating authority. It was held that “ The adjudicating authority shall give an opportunity of personal hearing to the authorized representative of the appellant, perused all the documents and records that they may produce and after passing complete verification of all details, the adjudicating authority shall take a fresh decision on merits.”

A division bench of Chief Justice T.S. Sivagnanam and Chaitali Chatterjee (Das)viewed that this can be verified departmentally by various means and the matter need not linger further before this court as any further delay will not be in the interest of revenue.

Calcutta HC directs Assessee to file Fresh Refund Application u/s 54 of CGST Act as Statute mandates it after Rectifying Deficiency

COMMISSIONER OF CENTRAL GOODS vs ABHISHEK RAMISETTY CITATION:   2025 TAXSCAN (HC) 874

The Calcutta High Court has directed the assessee to file a fresh refund application as per section 54 of the Central Goods and Service Tax Act (CGST), 2017 as the statute mandates it after rectifying the deficiency.

A division bench of Chief Justice T.S. Sivagnanam and Chaitali Chatterjee (Das) held that the Single Bench was fully justified in permitting the writ petitioner to cure the deficiencies and submit the refund application which has been directed to be processed. As could be seen from the impugned order the deficiencies are all not substantive in nature but more procedural in nature. If that be so, the assessee should be given an opportunity to rectify the deficiencies. The court viewed that the direction issued by the single bench was just and proper and calls for no interference.

Appeal on Service Tax for Educational Construction Not Maintainable: Delhi HC Directs Revenue to Approach Supreme Court u/s 35L of CEA

COMMISSIONER OF SERVICE TAX vs M/S GLOBE CIVIL PROJECTS PVT LTD CITATION:   2025 TAXSCAN (HC) 875

The Delhi High Court has dismissed an appeal filed by the Commissioner of Service Tax holding that the matter was not maintainable before the High Court and directing the Revenue to approach the Supreme Court instead.

Justices Prathiba M. Singh and Rajneesh Kumar Gupta observed that even though the Tribunal had limited its findings to issues like limitation and minor demands, the core subject matter pertained to the taxability of services, an issue falling squarely within the purview of Section 35L, thus beyond the appellate jurisdiction of the High Court. Consequently, the Delhi High Court dismissed the appeal as not maintainable, but granted liberty to the Department to approach the Supreme Court and seek appropriate remedies.

Failure to Issue Notice by VAT Dept before completion of Assessment Order: Calcutta HC Directs Denovo Proceedings

JHARNA SAHA vs JOINT COMMISSIONER OF SALES TAX CITATION:   2025 TAXSCAN (HC) 876

The Calcutta High Court, in its recent case, directs denovo proceedings under the Value Added Tax Act, 2005, as the department failed to issue notice before completion of the final assessment order.

A division bench of Chief Justice T.S. Sivagnanam and Chaitali Chatterjee (Das)  allowed the writ petition and the judgment passed by the  tribunal dated 7th March, 2025, to the extent it remands the matter to the appropriate assessing authority and direct de novo assessment proceeding for the period 2009-10 is quashed.

Charitable Institution Delayed Filing Form 10B Due to COVID-19 Disruption: Orissa HC Condones 76-Day Delay

Action Research for Health and Socio-economic Development vs Central Board of Direct Taxes (CBDT) CITATION:   2025 TAXSCAN (HC) 877

The Orissa High Court has condoned a 76-day delay in filing the Audit Report in Form 10B for the Assessment Year 2020-21 by Action Research for Health and Socio-economic Development, a charitable institution, due to disruptions caused by the COVID-19 pandemic. The court set aside the rejection order dated 17.02.2025 issued by the Commissioner of Income Tax (Exemption), Hyderabad, and directed the authority to consider the audit report on merits.

A division bench comprising Chief Justice Harish Tandon and Justice Murahari Sri Raman observed that the COVID-19 pandemic constituted a force majeure event, as recognized by government circulars and Supreme Court orders.

TOLA Extension Does Not Waive Mandatory Approval u/s 151 for Reassessment Beyond 3 Years: Delhi HC sets aside Notice against H&M India

HANDMHENNESANDMAURITZRETAIL PRIVATE LIMITED vs THEASSISTANT COMMISSIONEROFINCOME TAX CITATION:   2025 TAXSCAN (HC) 878

In a recent ruling, the Delhi High Court has set aside a reassessment notice issued after 3 years without the statutory approval under Section 151 of the Income Tax Act, 1961 regardless of TOLA extensions. It does not waive the mandatory approval under the act.

The Bench comprising Justice Vibhu Bakhru and Justice Tejas Karia ruled in favour of the Swedish retail giant’s Indian subsidiary, holding that the reassessment proceedings initiated under Section 148 of the Act were legally unsustainable.

Delhi HC upholds Centralisation of Income Tax Proceedings for Coordinated Probe, Dismisses Jurisdictional Challenge

M/S ALTA VISTA INFO SOLUTIONS PVT LTD & ANR. vs PRINCIPAL COMMISSIONER OF INCOME TAX CITATION:   2025 TAXSCAN (HC) 879

In a recent ruling, the Delhi High Court dismissed a petition challenging the centralisation of income tax assessment proceedings following a search operation, upholding the validity of the jurisdictional transfer under Section 127(2) of the Income Tax Act, 1961.

However, the bench comprising Justice Vibhu Bakhru and Justice Tejas Karia rejected these contentions, observing that Pavel Garg was a director of the petitioner companies, had signed their income tax return for AY 2020-21, and had also stated the supporting affidavit for the present writ petition.

No Tangible Evidence to Prove GE Steam Power has PE in India: Delhi HC sets aside Reassessment Notices

M/S GE STEAM POWER SYSTEMS vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION:   2025 TAXSCAN (HC) 880

The Delhi High Court, quashed a series of reassessment notices issued under Section 148 of the Income Tax Act, 1961 as there was not tangible evidence to prove GE Steam Power and its other group of entities has a Permanent Establishment ( PE ) in India.

A Division Bench comprising Justice Vibhu Bakhru and Justice Tejas Karia held that the income tax department failed to furnish tangible evidence demonstrating that the foreign petitioners had a Permanent Establishment (PE) in India during the relevant assessment years, which is a necessary condition to tax business income of non-residents in India.

No Consistency in Practice followed by GST Department: Delhi HC directs Revising Present Protocol or Prepare Fresh SOP Including Key 3 Issues

KHALEEQUE AHMED PROP M/S MARK AD GRAFIX vs SUPERINTENDENT CGST CITATION:   2025 TAXSCAN (HC) 881

The Delhi High Court has expressed concern over the inconsistent procedural practices being followed by the Goods and Services Tax ( GST ) Department and directed to revise the present protocol followed by the department or to prepare a fresh SOP including 3 key issues listed.

The bench observed the recurring lapses, the Bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta stated the need for standardization and transparency in the Department’s functioning.

The Court further instructed the GST Department to file a short affidavit addressing both the specific facts of this case and the proposed SOP. It also observed that while the Department claims to already have a protocol in place, such a protocol must be reviewed and revised, if necessary, to incorporate the above directions. In the meantime, the Court ordered that no coercive steps be taken against the petitioner.

Income Tax Notice Dispatch Date Prevails Over Digital Signature Date: Delhi HC upholds Notice issued on Basis of SC Judgment

RAJESH CHOPRA vs INCOME TAX OFFICER CITATION:   2025 TAXSCAN (HC) 882

In a recent ruling, the Delhi High Court has held that the date of dispatch of an income tax notice is determinative, not the date of its digital signature. The bench upheld the notice issued on the basis of the Supreme Court judgment in Union of India v. Ashish Agarwal.

A Division Bench comprising Justice Vibhu Bakhru and Justice Tejas Karia rejected the petitioner’s plea to quash the reassessment proceedings, observing that mere initial misconception over the notice’s validity would not invalidate proceedings that subsequently complied with Supreme Court-mandated procedures.

No Requirement to Explain Source of Unsecured Loan in Books of Account Prior To April 1, 2023 u/s 68: Delhi HC

SHEELA OVERSEAS PRIVATE LIMITED vs PR COMMISSIONER OF INCOME TAX DELHI-08 DELHI CITATION:   2025 TAXSCAN (HC) 883

The Delhi High Court has clarified that the requirement to prove the “source of the source” under Section 68 of the Income Tax Act, 1961, in respect of unsecured loans, is prospective and applicable only from April 1, 2023, following the amendment introduced by the Finance Act, 2022.

The Division bench of Justice Vibhu Bakhru and Tejas Karia found that the assessee had satisfactorily discharged the burden under Section 68 by establishing the identity of the lender, the genuineness of the transaction through banking records, and the creditworthiness based on the overdraft facility secured against fixed deposits. The doubts regarding cash deposits in the director’s account, the Court observed, were a matter to be examined in the director’s assessment, not that of the assessee company.

Charges Received by Amazon Web Services for Cloud Computing not Taxable as ‘Equipment Royalty’ under India-US DTAA: Delhi HC

THE COMMISSIONER OF INCOME TAX vs AMAZON WEB SERVICES CITATION:   2025 TAXSCAN (HC) 884

The Delhi High Court held that payments received by Amazon Web Services Inc. (AWS) from Indian customers for cloud computing services are not taxable as “equipment royalty” under Article 12(3) of the India-US Double Taxation Avoidance Agreement ( DTAA ).

The Delhi High Court concurred with the ITAT’s analysis, observing that the Agreement between AWS and its customers only granted a limited, non-exclusive, non-transferable license to access the services. There was no right given to commercially exploit AWS’s intellectual property or hardware.

Limitation Applies in Proceedings Under Interest on Delayed Payments to Small Scale & Ancillary Industrial Undertakings Act: Telangana HC

Transmission Corporation of Andhra Pradesh Limited vs M/s. Sri Gowri Shankar Cable Industries CITATION:   2025 TAXSCAN (HC) 885

The Telangana High Court have held that the provisions of the Limitation Act, 1963 are applicable to proceedings initiated under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993.

A division bench of Justice P. Sam Koshy and Justice N. Tukaramji held that the Facilitation Council’s conclusion regarding limitation and its judgment that the Limitation Act did not apply were not supported by the law. Regarding the question of limitation, the Court overturned the conclusions of the XIV Additional Chief Judge and the Facilitation Council.

Delhi HC directs to appeal under CGST Act against Allegations of availment of fraudulent ITC

STANDARD CARTONS PVT LTD vs OFFICE OF THE COMMISSIONER CENTRAL TAX CITATION:   2025 TAXSCAN (HC) 886

The Delhi High Court has directed the assessee to appeal under Section 107 of the Central Goods and Service Tax Act (CGST) 2017 against allegations of availment of fraudulent Input Tax Credit (ITC).

A division bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta held that in exercise of its writ jurisdiction, cannot adjudicate upon or ascertain the factual aspects pertaining to what was the role played by the Petitioner, whether the penalty imposed is justified or not, whether the same requires to be reduced proportionately in terms of the invoices raised by the Petitioner under his firm or whether penalty is liable to be imposed under Section 122(1) and Section 122(3) of the CGST Act.

Non-service of notice against Wrongful Availment of ITC Not raised  in time of hearing : Delhi HC Directs Petitioner to File Appeal Under CGST Act

RAMESH KUMAR WADHERA vs DEPUTY DIRECTOR INT DIRECTORATE GENERAL OF GST INTELLIGENCE CITATION:   2025 TAXSCAN (HC) 887

The Delhi High Court directed the petitioner to file an appeal under the Central Goods and Services Tax Act, 2017 (CGST) as the non-service of notice against wrongful availment of the ITC was not raised at time of hearing

A division bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta observed  that the Show Cause Notice does not deserve to be quashed. When the above order was passed, the Petitioner had an opportunity to seek a hearing in the Show Cause Notice from the Court itself, which the Petitioner did not do. The factum of non-service of notice in time of hearing was also not raised when the Court decided the matter on 29th January, 2025.

Delay cannot be condoned in an appeal u/s 107 of CGST Act: Delhi HC Dismisses Review Petition

ADITYA MADAAN vs COMMISSIONER CGST GST COMMISSIONERATE DELHI & ORS CITATION:   2025 TAXSCAN (HC) 888

In a recent case, the Delhi High Court has held that delay cannot be condoned in an appeal under section 10 of the Central Goods and Service Tax Act, (CGST ), 2017 and dismissed the review petition.

A division bench of Justice Prathiba M. Singh and Justice Dharmesh Sharma viewed that the review petition is unmerited, both on the issue of lack of error apparent on the face of the record as also on merits and dismissed the petition.

Actual Loss Must be Proven for Automatic Recovery of Full Amount : Delhi HC

JAMMU & KASHMIR ECONOMIC RECONSTRUCTION AGENCY vs M/S SIMPLEX PROJECTS LIMITED CITATION:   2025 TAXSCAN (HC) 889

The Delhi High Court ruled that even if the statute contains a Liquidated Damages (LD) clause, it requires proof of actual loss and does not provide automatic recovery of the whole LD amount in the event of a breach.

The single bench of Justice Manoj Kumar Ohri noted that after carefully considering the Petitioner’s liquidated damages (LD) claim, the Arbitral Tribunal (AT) correctly determined that the Petitioner ought to have brought it up as a counterclaim. The Petitioner had to request a declaration confirming the unilateral adjustment when the Respondent objected to it.

Form 10-IC Condonation for AY 2020-21 Only Applicable to Company Opted for Lower Tax Rate u/s 115BAA: Delhi HC dismisses Petition

SARLA HOLDINGS PRIVATE LIMITED vs PR COMMISSIONER OF INCOME TAX CITATION:   2025 TAXSCAN (HC) 890

In a recent ruling, the Delhi High Court has reaffirmed that the condonation provided under Central Board of Direct Taxes ( CBDT ) circular for filing of Form 10-IC for Assessment Year ( AY ) 2020-21 is only applicable to companies opted for lower tax rate under Section  115BAAof Income Tax Act, 1961.

The Division bench of Justices Vibhu Bakhru and Tejas Karia ruled that the circular benefits only those companies that had actually opted for the concessional tax regime under Section 115BAA of the Income Tax Act, 1961, in their originally filed return of income.

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