This Annual Case Digest analytically summarizes the key stories related to Tax judgements of various High Courts in India reported in Taxscan.in during the year 2023. These stories include judgements and observations of High Courts related to Income Tax, Goods and Service Tax(GST), Excise Duty, Service Tax, Customs Duty, etc.
The Bombay High Court quashed the order passed by the Maharashtra Sales Tax Tribunal on non-issuance of notice of proceeding to Kirloskar Oil Engines. The Second Appeal No. 12A of 2016 was returned to the file of the Tribunal to be evaluated on its own merits in accordance with the law by a two-judge panel made up of Justice Nitin Jamdar and Abhay Ahuja.
The judgement made by the Tribunal on July 11, 2017, was overturned and set aside. The order made in response to the restoration application filed with the Tribunal, according to the court, “will not survive and is set aside.”
While entertaining the writ petition, a Division Bench of Justice Dr. B. Sarangi and Justice M.S. Raman of Orissa High Court directed the petitioners to file an appeal before the appropriate authority under Section 107 of the Orissa Goods and Services Tax Act, 2017 (OGST Act).
The bench considered the submissions of the department and stated that this Court is not inclined to entertain this writ petition. However, liberty is granted to the petitioner to pursue its remedy before the appropriate forum.
In a recent decision the Bombay High Court quashed the re assessment order passed on change of opinion as to the calculation of tax payable. “We find no substance in the AO’s reason to believe that income chargeable to tax has escaped assessment inasmuch as there is no mention of any tangible material that led to his conclusion,” the Coram, composed of Justices Kamal Khata and Dhiraj Singh Thakur, stated.
A difference of opinion over how the assessee should calculate their tax liability sets off the entire procedure. It is clear that the evaluation is being reopened using blatant claims that the transaction was “An accommodation entry made in collusion & connivance with the entry provider.” It is well settled judicial principal that, the true test of income chargeable to tax escaping assessment is whether there exists fresh “tangible material” on the basis of which appropriate conclusion is reached” the Bench concluded.
The Bombay High Court quashed the re-opening of assessment on the ground that no new tangible material available on record to prove escapement of income. The Bombay High Court noted that “where assessment was not sought to be reopened on the’reasonable belief’ that income had escaped assessment on account of failure of assessee to disclose truly and fully all material facts that were necessary for computation of income but was a case wherein assessment was sought to be reopened on account of change of opinion of AO the reopening was not justified.”
The Court of Justices Kamal Khata and Dhiraj Singh Thakur observed that in the present case, the Assistant Commissioner of Income Tax has relied upon the same information available from the assessment records there was no new tangible material available on record to conclude that income had escaped assessment. The Bench concluded by noting that the instant case is clearly a ‘change of opinion’.
In a recent ruling, a Division Bench of Bombay High Court directed the Income Tax Authorities to issue a fresh Form-3 subsequent refund of the amount paid under the Income Declaration Scheme (IDS) and the balance amount, if any. The petitioner admitted that she had not paid the entire sum owing in accordance with the revised Form-3, dated September 27, 2021, the bench remarked.
The petitioner’s claim under the aforementioned Scheme could not be rejected, according to the petitioner, if the revised Form-3 under the Direct Tax Vivad se Vishwas Act’s Scheme were to be adjusted against the sum of Rs. 3,48,752 that was deposited and was lying with the respondents under the IDS. According to the Bombay High Court, the Direct Tax Vivad se Vishwas Act’s goal of eradicating and resolving disagreements between the assessee and revenue would be carefully adhered to.
The Calcutta High Court allowed the assessee to pay the mandatory pre-deposit for appeal under section 35Fof the Central Excise Act, 1944. Justice Arindam Mukherjee observed set aside the order and directed the petitioner to deposit the pre-deposit amount required under the provisions of Section 35F of the Central Excise Tax, 1944 within a period of ten daysso that the Commissioner of Appeal can hear out the appeal on merits.
The petitioner must pay Rs. 2,30,949 by May 12th, 2023, or the order from March 28th, 2023 would resume and the appeal will be dismissed, it was further decided. The Siliguri case Commissionerate’s Commissioner of Appeal will hear the case on the merits if the money is submitted in accordance with this instruction.
In a recent decision the Bombay High Court ruled that is the onus of the Assessing Officer (AO) to provide reasons to disbelieve bank statements and supporting documents for reopening assessment. The Court of Justices Kamal Khata and Dhiraj Singh Thakur noted that “The Petitioner has by production of bank statements and supporting documents shown that the reasonable belief of the Assessing Officer was unfounded and consequently the presumption that the Petitioner was one of the beneficiaries of the accommodation entries based on the statement of the third party was disproved.”
It would be the Assessing Officer’s responsibility to give justifications for not believing the bank statements and other supporting documentation in order to reopen the assessment. The Bench stated, “In our opinion, that has not been spelt clearly, and as a result, the reassessment sought to be launched ought to be halted.
The Andhra Pradesh High Court held that the authority cannot pass provisional attachment order under section 5 of the Prevention of Money Laundering Act, 2002 without recording the reason. The deposits were made by the National Highway Authorities only and no private transactions or third-party deposits are made.
It was submitted that if the authorities want to attach the said accounts also they should do so by giving proper reasons for attaching the said accounts. By attaching the said accounts, the petitioners are unable to complete the contract works and are unable to pay salaries to the employees. The Court comprising Justice Ravi Cheemalapati observed that the authority failed to record the specific reasons for attaching Account Nos.641301010050403 and 641304010000001.
The Court set aside the impugned order only to the extent of attaching Account Nos.641301010050403 and 641304010000001 of the Union Bank of India. The 2nd respondent-Deputy Director, however, is free to investigate the aforementioned two accounts if he so chooses. If he determines that the aforementioned two accounts should be attached, he may do so by issuing a new, legally binding, reasoned order.
The Karnataka High Court has held that the interstate purchase of capital goods by dealers does not bar benefit under the composition of Value Added Tax (VAT). The challenged order dated 07.11.2017 as well as the notices dated 09.12.2015 and 11.12.2015 were set aside by a two-judge panel consisting of Justice P S Dinesh Kumar and Justice C M Poonacha.
The Court further ruled that the advantage under Section 15(1) of the KVAT Act shall not be impacted by the assessee’s interstate acquisition of capital goods. Veena J. Kamath, an attorney, represented the appellant, while Jeevan J. Neeralgi, an attorney, represented the State.
The Orissa High Court, in view of the alternative efficacious remedy available to the petitioner, has refused to remand the matter to the Assessing Officer for reassessment when the assessee had failed to enrol in the common Goods and Services Tax (GST) Portal within the prescribed statutory time limit.
The Bench observed that, “if the contention of the petitioner, that he has already paid the demands raised by the authority is accepted, then it is the responsibility of the petitioner to apprise the authority concerned indicating that the demands raised are erroneous and, as such, in view of the dues already paid vide Annexure 5 series, the demand notices be rectified.”
The plea was dismissed, with the Division Bench of Justices B R Sarangi and M S Raman noting that “the assessment order is very clear that the petitioner has been issued with a provisional ID for enrolment on the common portal, but he has failed to enrol on the common portal.”
The Calcutta High Court directed the Motor vehicle taxing officer to consider the tax exemption claim made by the assessee under the West Bengal Vehicle Tax Act, 1979 on tractors used in Tea Garden which were not used on public roads.
The bench of a single judge Justice Arindam Mukherjee ordered the Regional Transport Officer, Alipurduar, to take into account the representation made by the petitioner on October 14, 2022 before the Taxing Officer, Department of Motor Vehicles, Alipurduar, after providing the petitioner with a reasonable opportunity of hearing to show that the tractors/trailers against which exemption of motor vehicles tax is claimed are not used or do not play in the public road but are confined only within the petitioner’s property. According to the ruling, the full process must be finished within six months of the date. The Court reached the same conclusion in a case involving a related problem, Sankos Tea Garden v. State of West Bengal and Others, 2023 TAXSCAN (HC) 312.
The Tripura High Court in its recent judgement held that no penalty under section 53(1) of the Tripura Value Added Tax Act, 2004 in the absence of the prescribed format of the audit report. The proceedings were started under Section 31(1) of the TVAT Act, 2004, but no separate notice was given under Section 53(1) of the Act, 2004, before the imposition of penalty, a two-judge panel made up of Chief Justice Aparesh Kumar Singh and Justice Arindam Lodh remarked.
Due to the lack of a regulated structure for the submission of audited returns in accordance with Section 53(1) of the Act, 2004, the Court invalidated the contested penalty. Furthermore, it was said that “the remainder of the assessment order remains intact, except for the penalty part.”
In a recent ruling, a Division Bench of Bombay High Court overturned the decision of the Maharashtra Administrative Tribunal (MAT) revoking the deputation of the sales tax officer on grounds of inherent lack of jurisdiction.
Justice Gauri Godse and Justice R. D. Dhanuka bench was reluctant to accept the respondent side’s arguments because doing so would constitute a complete violation of the rules of jurisdiction, a violation of Section 5 of the Administrative Tribunal Act, and a violation of the circular issued by the Chairman in the exercise of his or her authority to order that a particular dispute be decided by the Single Member or by the Division Bench. The tribunal noted that a single tribunal member lacked the authority to resolve the conflict about “appointment by deputation and order of cancellation.” Set aside the Maharashtra Administrative Tribunal’s contested order as a result of its lack of jurisdiction.
A Division Bench of Telangana High Court quashed the order of the income tax authority disallowing the petitioner’s request to file returns manually The bench of Chief Justice Ujjal Bhuyan and Justice N. Tukaramji allowed the amalgamated company to file income tax returns manually in absence of the order of the condonation of delay by the competent authority.
The bench noted that the NCLT had accepted and sanctioned the merger plan after the deadline for filing the revised return for the assessment year 2016-2017, in accordance with the Supreme Court’s decision in the case of Dalmia Power Limited. In the Dalmia case, the Supreme Court also cited the provisions of Section 139(5) of the Income Tax Act and declared that the said provision would not be applicable in a circumstance where a revised return could not be filed because of the time it took for NCLT to approve the amalgamation plan.
The Telangana High Court overturned the respondent authorities’ decision and instructed them to process the petitioner’s revised return of income, which was submitted on December 23, 2022, for the assessment year 2021–2022 in line with the law.
A Single Bench of the Calcutta High Court observed that the Tax Officer must have to provide personal opportunity of hearing even without request from assessee under Section 73 of West Bengal Goods and Services Tax Act (WBGST). The Court of Justice Md. Nizamuddin cited the Allahabad High Court’s decision in the case of Bharat Mint and Allied Chemicals v. Commissioner of Commercial-tax, in which it was noted that all those decisions in unmistakable terms Courts have held that even without any request for a personal hearing by an assessee, the officer must be required to provide a personal opportunity of hearing, if the order is anticipated to be adverse.
The High Court of Jharkhand directed the joint commissioner (appeals) to dispose of the appeal under Goods and Service Tax (GST) which was kept dormant by the department within eight weeks. The petitioner already used the appeal provision of Section 107 of the Jharkhand Goods and Services Tax Act, which the Department is keeping dormant, according to a two-judge panel made up of Justice Rongon Mukhopadhyay and Justice Deepak Roshan.
This judge pair made this observation. The Jharkhand High Court dismissed the writ motion and ordered the Joint Commissioner (Appeals), Dhanbad Division, Dhanbad to decide the petitioner’s appeal mechanically as soon as possible, preferably within eight days.
The Orissa High Court dismissed the writ petition which challenged the audit report since it was premature. A two-judge bench comprising Dr Justice B R Sarangi and Justice M S Raman observed that the petitioner has challenged the audit report under Annexure-4 contending that certain observations have been made in the audit report to which the petitioner is not liable to pay the amount.
It was clear that the petitioner had not objected to any orders made by the relevant body. “In any situation, the petitioner may raise an objection with the assessing authority if he has a complaint regarding the audit report and the subsequent order in connection with notice. The petitioner will have an opportunity to speak up during the assessment process. The court concluded that because the writ petition is premature at this point, it is unlikely to be heard.
The Jharkhand High Court held that presumption under section 24 of the Prevention of Money Laundering Act, 2002 (PML Act) can be rebutted only at the stage of trial and upheld the rejection of the discharge petition.
A single judge’s bench led by Justice Gautam Kumar Choudhary noted that the presumption under Section 24 of the PML Act may only be refuted during the trial stage and not during the charge-formation stage. The Court stated in dismissing the appeal that any connections, if any, between the assets bought in the petitioner’s name and the profits of crime should be investigated at the trial stage rather than the discharge stage.
In a recent decision the Calcutta High Court directed the Assistant Commissioner of Revenue to file affidavit-in-opposition in the matter of attachment of bank account. The Court of Justice Md. Nizamuddin opined that “The issues involved deserves adjudication after calling for affidavits from the respondents. Let the respondents file affidavit-in-opposition within four weeks, petitioner to file reply thereto, if any, within two weeks thereafter.”
The Court concluded by noting that there will be the stay of operation of the impugned order of attachment of bank account of the petitioner.
The Karnataka High Court directed the petitioner, Annadurai Muniswamy to file revocation application as per Central Board of Indirect Taxes and Customs (CBIC) Notification on cancellation of GST Registration on non-filing of tax returns.
“It is seen that this Notification dated 31.03.2023 enables a registered person, whose registration has been cancelled under the provisions of Section 29(2)(b) or (c) of the Central Goods and Services Tax Act, 2017 [CGST Act] on or before 31.12.2022 and who has not filed any application for revocation or cancellation of such registration within the time specified under Section 30 of the CGST Act, to file an application for revocation. The Bench further went on to note that the petitioner will have to make necessary application as provided for in the Central Board of Indirect Taxes and Customs (CBIC) Notification.
In a recent ruling, a Division Bench of Bombay High Court directed the district magistrate to dispose of the applications filed by the secured creditor under section 14 of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 within 30 days.
The panel held that new applications filed after March 31 must be decided by District Magistrates within thirty days of their filing. In a comparable instance, the Division Bench of this Court issued many decisions, including serial numbering and time-bound resolution of applications. Nothing has changed, which is disappointing.
The Madras High Court held that the assessment order passed under section 143(3) of the Income Tax Act, 1961 against a dead person without issuing a notice to legal heirs is void. It was viewed that the original assessee passed away on 14.02.2023 and notice of hearing was fixed on 28.03.2023, no ample opportunity was given to the legal heirs of the deceased assessee.
A single-judge panel led by Justice R Vijayakumar dismissed the writ petition and remanded the case to the original authority to allow the original assessee’s rightful heirs to present their case. The originating authority was also directed to dispose of the matter after giving both parties due opportunity within 90 days of receiving a copy of this order.
In a significant case of Jindal Steel and Power, the Orissa High Court ruled that post-GST Value Added refunds must be processed under section 142 (3) of the Central Goods and Service Tax Act, 2017. The Commissioner (Appeals) held that since the application for the rebate was filed after the appointed date, i.e., 01.07.2017, the amount which earlier would have been allowed to be refunded by way of re-credit, should now be refunded in cash as per the provisions of said Section 142(3). While upholding the impugned order, the two-judge bench comprising Dr Justice B R Sarangi and Justice M S Raman held that “respondent No.2 ought to have directed the sanctioning Authority to refund the amount of the duty refundable to the petitioner in cash instead of credit in CENVAT Account.”
The Bombay High Court quashed the notice issued further since the commissioner failed to complete the assessment within a period of ten years of issuing Form H. The Court observed that there was no justification indicated by the Municipal Corporation for the failure on the part of the Commissioner to assess the amount of cess due from the Dealer to the best of the Commissioner’s judgment at least from 21.08.2013 till the reminder in Form-H was issued on 24.09.2019.
It is well settled that where no period of limitation is prescribed for completing an act, the same is required to be done/ completed within a reasonable period. The Court held that since the Commissioner failed to complete the assessment for the relevant years within a period of ten years of issuing the initial notice in Form-H, the notice dated 24.09.2019 is quashed.
It was viewed that the period of ten years from the issuance of notice in Form-H on 30.10.2014 for the year 01.04.2012 to 31.03.2013 is yet to expire, then the Commissioner is free to proceed to complete the assessment expeditiously and by the law.
The Jharkhand High Court held that Assessing Officer has the right to control the conduct of cross-examination during the Income Tax Proceedings. A two-judge bench comprising Justice Rongon Mukhopadhyay and Justice Deepak Roshan directed the petitioner to file a petition for recall of the witnesses namely, Rohtas Krishnan, Budh Narayan Gupta, Ajay Bafna and Vikas Sinha who have been cross-examined and discharged, to put them the question which has been initially discarded by the Assessing Officer.
Further held that “the Revenue may also be directed to provide effective cross-examination opportunity by the provisions of the Indian Evidence Act, 1872 and permit the petitioner to cross-examine such persons who are being named by the witnesses being cross-examined without in any manner interfering or restricting the same. In other words, the Revenue is hereby instructed to conduct cross-examination in accordance with the law and the aforementioned guidelines.
In a recent judgement, the Madras High Court has cancelled the cancellation of the customs duty exemption certificate issued to the Apollo Hospitals. The Single Judge bench of Justice S.M. Subramaniam has observed that the petitioners could not establish that they have treated 40% of their outdoor patients in the hospital, where the imported medical equipment is installed and further they have failed to establish that 10% of all the hospital beds are reserved for such patients, who have taken free treatment in the hospital, where the imported medical equipment is installed.
The Court observed that the respondents have rightly and legitimately cancelled the Customs Duty Exemption Certificate (CDEC) granted in favour of the petitioners, which aligns with the Constitutional principles and the purpose and object of the conditions imposed in Notification No.64/88 in public interest from public funds and dismissed the petition.
In a recent ruling, the Andhra Pradesh High Court directed the authorities to issue fresh intimation notices under the approval of the proper officer. The bench of Justice Durga Prasad Rao and Justice Venkata Jyothirmai Pratapa observed that the two intimation notices issued on discrepancies in Form GST ASMT -10 lacked the proper authorization from the proper officer.
The High Court Division Bench had to determine that the two contested notices were invalid since the Chief Commissioner, the proper officer, had not given the approval.
The Guwahati High Court in the case of smuggling of areca nut and set aside the order rejecting zimma of seized areca nut since the assessee proved the ownership by submitting invoices. A single judge bench comprising Justice Susmita PhukanKhaund observed that the petitioner has appended the invoice dated 19.12.2022, 20.12.2022, 22.12.2022 and 24.12.2023 and the copy of the E-way bill which proves that the petitioner is the owner of the seized areca nuts. It was evident that the penalty for the seized areca nuts. has already been paid.
The Court set aside the impugned order dated 22.02.2023 relating only to the rejection of the prayer of zimma of the seized areca nuts to the custody of the petitioner.
In a recent case, the Jharkhand High Court held that the revocation of cancelled GST Registration can be applied by 30th June 2023 as per the Central Board of Indirect Taxes and Customs (CBIC) notification A two-judge bench comprising Justice Rongon Mukhopadhyay and Justice Deepak Roshan observed that the petitioner falls in the first category of cases where the GST registration of the petitioner has been cancelled under section 29(2) of the CGST Act read with Rule 22 of CGST Rules.
The provision is beneficial in nature and appears to lessen the difficulty faced by those registered persons whose GST registration stood cancelled, the court ruled, so the writ petition is dismissed with instructions for the petitioner to approach the proper officer with an application for revocation of cancellation of registration by June 30, 2023, in accordance with the Notification dated 31.03.2023, after complying with the conditions prescribed thereunder.
The Punjab and Haryana High Court refused to quashed the FIR filed the petitioner, Secretary of Red Cross and ruled that the commission of irregularities by the Secretary of Red Cross is criminal misconduct by public servant under the Prevention of Corruption Act, 1988.
The Court of Justice Gurvinder Singh Gill observed that “Having regard to the totality of the facts and circumstances of the case, this Court finds that there are several irregularities committed in the process of awarding an order to a firm owned by daughter of petitioner No.1 which apparently has been done so as to extend an undue favour to petitioner No.2 daughter of petitioner No.1, who was the Secretary, Red Cross.” The Bench concluded by noting that the facts stated in FIR do prima-facie disclose commission of offences. The facts in any case do not warrant invoking of powers under Section 482 Cr.P.C. for quashing of the FIR at this initial stage.
The Chhattisgarh High Court granted anticipatory bail to the Assistant Director of Horticulture for the complaint raised on non-depositing of GST to the Central and State governments. A Single Judge bench comprising Justice Deepak Kumar Tiwari the bail applications and directed that in the event of arrest of the applicants, they shall be released on bail on each of them furnishing a personal bond in the sum of Rs.50,000/- with one surety each in the like sum to the satisfaction of the arresting officer.
The Punjab and Haryana High Court granted bail during investigation in the matter of aiding fake firms to claim Input Tax Credit (ITC) Using ID Proof. The Bench further noted that the present petition is allowed and the petitioner is ordered to be released on regular bail subject to his furnishing bail/surety bonds to the satisfaction of the trial court or Duty Magistrate concerned.”
“The Trial Court is at liberty to impose any other condition that it may deem appropriate. It is further clarified that in case of default of any of the conditions, then the concerned Court is competent to cancel the bail granted to the petitioner”
The Calcutta High Court quashed the assessment order under Section 148A(d) of the Income Tax Act, 1961 since it was passed without taking approval of the specified authority mentioned under Section 15(ii) of the Income Tax Act, 1961. The challenged order was revoked in accordance with Section 148A(d) of the Income Tax Act by a single-member bench led by Justice Md. Nizamuddin after taking into account the facts and circumstances.
The Court also ruled that the “quashing of the aforesaid impugned order under Section 148A(d) of the Act and subsequent proceedings will not be a bar on the part of the respondent/Assessing Officer concerned to proceed further from the stage where such irregularity has been committed, after taking approval from the “specified authority” in accordance with law.”
The Single Bench of Justice S R Krishna Kumar quashed the impugned Goods and Services Tax (GST) Show-Cause Notice (SCN) against the petitioner Gameskraft which had imposed Rs. 21,000 Crore at 28% GST on online gaming services provided to gamers. The Karnataka HC then sought input from the Directorate General of GST Intelligence (DGGI), which claimed that Gameskraft had filed their taxes under the wrong head, and the company’s services attract a 28% tax rate.
The Karnataka High Court panel, presided over by Justice SR Krishna Kumar, questioned how the GST department had determined that Gameskraft’s services constituted games of chance during a hearing on October 27, 2022. The bench had made it clear that experts, not department officers, should choose the games’ content. The show cause notice had also been given a temporary hold until the main matter was resolved.
The Patna High Court has recently directed the assessee to apply for revocation of cancellation of Goods and Services Tax (GST) registration when the same was cancelled for non-filing of returns. In relation to the Bihar Goods and Services Tax Act, the Division Bench of Chief Justice K. Vinod Chandran and Justice Madhuresh Prasad stated: “At this time, no Tribunal has been established for the State.
The Patna High Court further remarked that, “This is also subject to the condition that the return shall be filed up to the effective date of cancellation of registration and that the payment of tax, interest, penalty, and late fee in respect of such returns has also been made. If the cancellation was carried out in accordance with clauses (b) or (c) of Sub-section (2) of Section 29 of the Goods and Services Tax Act of 2017, the assessee would also be eligible to exercise the aforementioned remedy.
The Gujarat High Court dismissed the Writ petition since the reopening of the assessment was based on material evidence which proves income escapement.
“The Assessing Officer has heard the material on record which would prima facie suggest that the assessee had sold several shares of a company which was found to be engaging in providing bogus claim of long term and short term capital gain,” a two judge bench made up of Justice N V Anjaria and Justice Devan M Desai stated. The business was initially suspected to be a shell organisation. The assessee had requested an exemption for the sale of shares of this company that resulted in a long-term capital gain of Rs.1.33 crores.
The Punjab and Haryana High Court has invalidated the demand notice and penalty proceedings following an assessment order, due to the non-adherence to clauses (vii) and (viii) of Section 144B(6) of the Income Tax Act.
The Bench stated: “In compliance of order dated 12.04.2023, a reply dated 20.04.2023 has been filed by the respondents admitting the fact that information with respect to the request for a personal hearing was forwarded by respondent No. 1 (NFAC) to the concerned assessment unit on 21.03.2023.”
In this case, the petition was granted and the Punjab and Haryana High Court invalidated the contested decision dated 24.03.2023 (P-6), notice of demand dated 24.03.2023 (P-7) and notice dated 24.03.2023 (P-8) without discussing the case’s merits. The matter was also remanded back to the Assessing Officer to pass a fresh order after giving due opportunity of hearing to the petitioner, in accordance with law.
The Allahabad High Court upheld the tax penalty under Section 74 Uttar Pradesh Goods and Service Tax Act (UPGST Act) imposed on Resort Owner based on Corroborative Evidence. A single justice bench Dinesh Kumar Singh pointed out that even if the petitioner had been unable to produce the necessary paperwork at the time of the Special Investigation Branch raid, there was nothing stopping him from doing so when the Assessing Authority demanded it in response to the show-cause notice that had been served on him.
The assessment order was an ex-parte order, and the petitioner never provided the Assessing Authority with the necessary paperwork. “I do not find any merit in the learned petitioner’s counsel’s assertion that the assessment order is presumption-based. The Bench noted that Each and every document that the petitioner supplied as well as the documents that the Special Investigation Branch recovered have been scrutinised by the appellate authority.
The Andhra Pradesh High Court in a significant case set aside the Goods and Service Tax (GST) assessment made based on the wrong total turnover. The challenged Assessment Order dated 15.12.2022, which was passed by the first respondent under the SGST/CGST Acts of 2017, was annulled by a two-judge panel consisting of Justice U Durga Prasad Rao and Justice T Mallikarjuna Rao.
This was done for the tax years 2017–18, 2018–19, and 2019–20. On the condition that the petitioner deposit admitted tax less the tax already deposited within three (3) weeks, the petitioner was further permitted to present the relevant records showing the turnover relating to his bus business separately for the States of Andhra Pradesh, Telangana, Tamilnadu, and Puducherry before the first respondent.
In a recent case, the Calcutta High Court held that issuance of notice and initiation of reassessment beyond six years is barred by limitation. The petitioner has been able to make out a prima facie case for an interim order by raising the issue of the jurisdiction of the assessing officer concerned in initiating the impugned reassessment proceeding, according to the single-judge bench consisting of Justice Md. Nizamuddin.
The court held that “There will be no further proceeding on the basis of the impugned order dated 28th July, 2022, which is Annexure P-7 to the writ petition until the writ petition is resolved.
A Division Bench of the Telangana High Court, observed that the properties attached under the PMLA (Prevention of Money Laundering Act, 2002) shall be released upon closure of the case against their owners, either through acquittal or settlement through compromise. The division bench relied on the judgement of the Supreme Court judgement in Vijay Madanlal Choudary case, wherein it was held that the final acquittal from a scheduled offence or criminal case by competent authority implied there could be no offence. It also stated that it was immaterial whether the acquittal was on merit or compromise.
A Division bench of Patna High Court granted relief to the petitioner due to the absence of the Goods and Appellate Tribunal (GSTAT). The High Court stayed the recovery of the balance amount of the Goods and Services Tax (GST). Further observed that the petitioner cannot be deprived of the benefit, due to the non- constitution of the tribunal by the respondents themselves.
In a recent judgement, the Kerala High Court set aside the assessment order passed without giving the reason for denying the claim of ITC on capital goods under the Kerala Value Added Tax Act (KVAT Act).
A two-judge bench comprising Justice A K Jayasankaran Nambiar & Justice Mohammed Nias C P observed that the agreement entered into between the parent company of Prodair and BPCL was for a works contract, for setting up a production plant for BPCL’s exclusive purpose and the consideration was given as deferred payment through the Fixed monthly charges of around Rs. 30 crores per month, which help the dealer to recoup their investment in 15 years and also collected the value of industrial gases supplied to them as variable charges based on actual reading.
The Income Department had permitted only 13 hours to file a reply to show cause notice (SCN) issued to the assessee. The assessment was overturned and a re-adjudication was mandated by the Madras High Court’s Single Bench of Justice M. Dhandapani. The bench noted that there was a blatant disregard for natural justice norms. As a result, the first respondent’s disputed order was dismissed and the respondents were given a further chance to weigh in on the case.
A Division Bench of the Orissa High Court noted that the tribunal had neglected to provide a justification for its decision to exercise its authority under Section 43(2) of the Orissa Value Added Tax Act, 2004 (OVAT Act) to impose a penalty equal to the amount of tax determined under Section 43(1) while it was considering the petition.
The division bench noticed infirmity in exercise of power and improper use of discretion to impose a penalty under Section 43(2) of the OVAT Act by the Odisha Sales Tax Tribunal.
The Allahabad High Court has held that the 4 months limit should be liberally interpreted and restored the appeal filed under section 107 of the Uttar Pradesh Goods and Services Tax Act, 2017 on the 121st day. A single-judge bench comprising Justice Dinesh Kumar Singh observed that the four months in the appellant’s case come with around 121 days and the appeal was filed on the 121st day.
The Calcutta High Court allowed the filing of the time-barred appeal since Form GST DRC01 was uploaded to the GST Portal by the department which was failed to notice by the assessee.
The two-judge bench comprising Acting Chief Justice T. S. Sivagnanam and Justice Hiranmay Bhattacharyya observed that the appeal should not be treated to be as time-barred, since the appellants had responded to the first intimation.
Delhi High Court in its recent judgement held that information about the goods must be produced within a reasonable time by the person in whose custody the goods were found.
A Coram comprising Justice Vibhu Bakhru and Justice Amit Mahajan observed that “it would be open for a person found in the custody of goods to produce the relevant information in its possession in respect of the goods within a reasonable time on being required to do so by the Commissioner.”
In a recent ruling, a Single Bench of the Calcutta High Court stayed the impugned order attaching the bank account of the petitioner for the recovery.
The bench of Justice Md. Nizamuddin observed that the statutory limitation period mentioned under Section 112 of the West Bengal Goods and Services Tax Act, 2017 (WBGST) to file the appeal had not expired.
A Single Bench of Calcutta High Court directed the respondent Goods and Services Tax Network (GSTN) authorities to submit an affidavit regarding the dilemma on rectifying Goods and Services Tax Identification Number (GSTIN) of the service recipients in the Goods and Services Tax Portal (GST Portal).
The bench concluded by stating that no intermediate orders could be made in the case and that the respondent’s affidavit had to be filed for a final determination of the issue addressed in the writ petition.
The Delhi High Court allowed the appeal of poor daily wage earners against seizure of agarwood chips and oil without pre-deposit.
A Division Bench of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju observed that “The valuation of the goods seized, is also not in terms of the prices as set forth in the Government of Assam’s Agarwood Policy. No proper calculation has been made for the penalty levied. The penalty imposed on the Petitioners has been imposed based on a provisional valuation. The penalty imposed is therefore without any legal basis and cannot be sustained.”
A Division Bench of Acting Chief Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya of Calcutta High Court set aside the order of the West Bengal Authority for Advance Ruling (WBAAR) and remanded the case to the same Authority for Advance Ruling to reconsider the application.
According to the bench, the term “applicant” has been construed in the broadest sense feasible to encompass any individual registered under the West Bengal Authority for Advance Ruling Act or seeking registration.
The Delhi High Court, in its recent judgement has held that cancelling GST Registration without considering Assessee’s Response to Show Cause Notice (SCN)is not valid. A two-member bench comprising Justice VibhuBakhru and Justice Amit Mahajan observed that the impugned order dated 28.12.2020, cancelling the petitioner’s registration is unsustainable as it does not consider the petitioner’s response to the Show Cause Notice.
The Orissa High Court stayed the impugned tax demand since the Goods and Service Tax Appellate Tribunal was not constituted for considering the appeal.
A two-judge bench comprising Dr Justice B R Sarangi and Justice M S Raman held that “since the petitioner wants to avail the remedy under the provisions of law by approaching 2nd appellate tribunal, which has not yet been constituted, as an interim measure subject to the Petitioner depositing entire tax demand within a period of fifteen days from today, the rest of the demand shall remain stayed during the pendency of the writ petition.”
The High Court of Karnataka allowed filing the revocation application since as per the latest GST notification on Revocation of GST registration, an application filed beyond the limitation period can be reapplied if the cancellation of the registration was made before 31.12.2022.
A single judge bench comprising Mr Justice B M Shyam Prasad held that the petitioner will be entitled to apply according to the special procedure now notified since the cancellation of the petitioner’s GST registration was before 31.12.2022. The petition was disposed of with giving liberty to the petitioner to avail such remedy subject to all just exceptions.
A Division Bench of the Bombay High Court has recently upheld the constitutionality of the Goa Tax in Entry of Goods Act, 2000.
The bench of Justice M S Sonak and Justice Valmiki Sa Menezes placed reliance on the decision of the Constitution Bench of the Supreme Court in Jindal Stainless Limited and another vs. State of Haryana and Ors. which had upheld the constitutional validity of entry taxes imposed by states on goods coming in from other states.
The Bombay High Court had recently upheld the levy of property tax by Panvel Municipal Corporation (PMC), while the plea against the retrospective levy was raised by the Kharghar Co-Operative Housing Society, Kharghar was dismissed.
The Bombay High Court Bench went on to note that, “A public body like the respondent-PMC cannot be placed in a cloud of such uncertainty when it comes to levy and recovery of municipal taxes. Thus, entertaining this petition would open floodgates of litigation before this Court. This more particularly, as none of the grounds as raised in the petition impresses us, so as to exercise our extraordinary writ jurisdiction by permitting these assessees to bypass the remedy of a statutory appeal.”
The Delhi High Court has recently remanded a matter to the assessing authority for fresh adjudication on the inter-state sales transaction claim of the assessee. Justice Vibhu Bakhru and Justice Amit Mahajan stated that the assessing authority is requested to complete the proceedings within a period of three months, after giving due opportunity to the petitioner, by placing reliance on Indo Silicon Electronics Pvt. Ltd. and Surinder Pal and Sons-HUF.
A Single Bench of Justice Anita Sumanth of Madras High Court directed the Goods and Services Tax (GST) Department to release the blocked website to download C Form for the petitioner.
The bench observed that the Petitioner has stated on affidavit that it is unable to download the ‘C’ forms from the websites as the same stand is blocked from use. Upon the enquiry with the Assessing Authorities, they have been informed that the benefit of the decision in M/s Ramco Cements Ltd can be extended only to those dealers that are party to the decision.
A Division Bench of the Delhi High Court has recently refused to condone revenue’s delay of 309 days in filing the appeal against the order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) that reduced the penalty imposed on Customs Broker Licence of the respondent to forfeiture of security deposit.
The bench also noted the infirmity caused by lack of service of notice on the respondent-assessee, along with the lack of sufficient reason for the delay in filing and rejected the appeal.
In a recent decision, a Single Bench of Justice Md. Nizamuddin of Calcutta High Court invalidated the reassessment order made by the Assessing Officer (AO) in violation of Section 148 of the Income Tax Officer, 1961, without the necessary clearance from the relevant authority. The High Court noted that the Income Tax Authorities concerned would not be prevented from starting any further legal procedures in the future after seeking approval from the proper specified authority due to the quashing of the contested notice and related proceedings.
A Division Bench of Jammu & Kashmir and Ladakh High Court held in favour of the assessee that sales tax is not applicable on goods and material purchased by it from outside the State against C-Forms for the purpose of erecting/establishing transmission lines, substations and power grids.
According to the panel, it was abundantly clear from the definition of “sale” as it stood as of 15 May 1997 that the transfer of property in the form of goods or in any other way involved in the performance of a work contract constituted a “sale” as defined by Section 2(L) of the Central Goods and Services Tax Act and was subsequently subject to tax.
The Rajasthan High Court stated that if declarations, as in the present case, are digitally authenticated in the manner prescribed under Rule 26 of the CGST, non-submission of physically signed and scanned declarations may only be an irregularity, but not an illegality.
The Bench of Acting Chief Justice Manindra Mohan Shrivastava and Justice Anil Kumar Upman thus held that, “impugned order rejecting claim of refund and depriving the petitioner of the refund to which it may be entitled, without any authority of law, cannot be allowed to be sustained”, allowing the refund claim of the assessee.
The Calcutta High Court has recently quashed the order directed against a resigned director who had no connection to the actual offence alleged to be committed under the West Bengal Value Added Tax Act, 2017.
The Bench of Justice Subhendu Samanta observed that, “It appears that the impugned order passed by the Magistrate is a cryptic one and he has not assigned any reason for passing the impugned order.”
In a significant case, the Delhi High Court held that an application filed for refund of excess payment could not be treated as non-est if it was not deficient in material particulars and set aside the order of Appellate Authority.
It was observed that “If the application filed is not deficient in material particulars, it cannot be treated as non-est. If it is accompanied by the “documentary evidence” as mentioned in Rule 89(2) of the Rules, it cannot be ignored for the purposes of limitation.”
The Bombay High Court at Goa held that the assessee cannot take advantage of the failure of the state government to insist upon a timely deposit of Annual Recurring Fees (A.R.F.).
The Two Judge Bench comprising Justice Valmiki Sa Menezes and Justice M S Sonak observed that the State Government’s denial of waiver or exemptions cannot be held as a palpably arbitrary, unreasonable or unfair exercise of power. Further held that the State Government has not breached the equality mandate under Article 14 of the Constitution and the Petitioners cannot wriggle out of their obligations.
The Bombay High Court at Goa has directed the petitioner companies to pay the principal amount demanded on gambling casinos for arrears of ₹321.66 Cr Annual Recurring Fees (A.R.F.) during covid and waived the interest.
The Two Judge Bench comprising Justice Valmiki Sa Menezes and Justice M S Sonak noted that the licence fee currently demanded was not very high, and the number of tenders was lapsing as there were no bidders for these shops. Further held that the Petitioners pay the entire principal amount within four weeks and waived the interest.
The Bombay High Court at Goa in its recent judgement has held that the licence fee paid to the Goa state government for allowing permission of casino amount to price or consideration of Contract and no Fee for Technical Service (FTS) is applicable.
The Two Judge Bench comprising Justice Valmiki Sa Menezes and Justice M S Sonak observed that the State Government has only parted with its exclusive privilege and permitted the petitioners to undertake casino operations, which are otherwise not even the legitimate objects of any trade, occupation or business. The licence fee so-called is the price or the consideration for parting with such privilege, which is exclusively owned and controlled by the State Government.
The Bombay High Court has directed the VAT department to conduct an enquiry on whether VAT shall be applicable on the amount of road tax, insurance premium, octroi duty and other charges collected by the vehicle dealers from the customers in the light of the recent AAR ruling by the Maharashtra VAT department in the year 2018.
“We make it clear that we have not concluded on other aspects that may arise during the assessment proceedings other than the decision of the Tribunal in the case of M/s. B.U.Bhandari Auto and the Commissioner would examine the facts of each case and pass the order as per law. Needless to state, the contentions of the Petitioners and the department are expressly kept open,” the Court concluded.
The bench of Rajani Dubey of Chattisgarh High Court directed the petitioner to make a fresh claim on the reimbursement of additional Goods and Services Tax (GST) paid.
Further, the court directed the authorities to proceed with the necessary scrutiny and enquiry. Based on the same, the authorities were asked to reimburse the additional tax liability incurred upon the petitioners, suitably be refunded.
The Delhi High Court bench of Justice Vibhu Bakhru and Justice Tushar Rao Gadela set aside the Show Cause Notice (SCN) and restored the cancelled Goods and Services Tax (GST) registration.
The bench observed that the SCN did not disclose the reason for the cancellation of the GST registration. Further stated that a show cause notice must clearly set out the reasons for proposing an adverse action in order for the noticee to respond to the same.
In a recent ruling, the Madras High Court bench of Justice P T Asha stated that the petitioner company must be permitted to show their bona fides and settle the dues and permitted the petitioner to pay the amount in instalments. The court ordered the petitioner to pay the income tax department in 11 payments.
It was also indicated that failure to pay even one of the instalments would result in the termination of the petitioner’s concession. The bench noted that the petitioner company does not own any property that could be easily sold to satisfy the respondent’s debts in this case. Despite the odds stacked against them, the petitioner’s intention appeared to be forthright and allowed to settle the dues in instalments.
The Delhi High Court stayed the proceedings under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 to examine the validity of the retrospective application.
Since there were several other issues/grounds that the petitioner would want to put forth for consideration to the court, the two-judge bench comprising Justice Rajiv Shakdher and Justice Tara Vitasta Ganju stayed the matter and directed to file all details before the next hearing for further examination.
The Bombay High Court at Goa has held that the Goa Value Added Tax (12th Amendment) Act, 2020, confronts the doctrine of Separation of Power and directed the Value Added Tax (VAT) department to allow a refund of excess tax collected.
The bench of Justice M. S. Sonak and Justice Bharat P. Deshpande directed the respondent to deposit the amounts in terms of the referred earlier decisions together with interest within four weeks and allowed the petitioner’s liberty to withdraw the said amounts after furnishing bank details.
The Gujarat High Court has held that the revision under Section 263 of the Income Tax Act, 1961 without any tangible material is not valid and set aside the proceedings against Axis Bank.
A two-judge bench comprising Justice Ashutosh J. Shastri and Justice J C Doshi observed that there was no tangible material and the reopening was sought based on the assessment record itself.
The Madras High Court allowed the assessee to file a GST return since the GST registration was cancelled on failure to file a GST return due to health issues.
The Single judge bench comprising Justice P T Asha held “that the benefit extended by the Court in the earlier orders in Suguna Cutpiece Centre’s case may be extended to the Petitioner.”
In the absence of the Goods and Services Tax Appellate Tribunal (GSTAT), the Orissa High Court bench of Justice Dr. B.R. Sarangi and Justice M S Raman ruled to stay the amount of penalty and interest claimed by the GST authorities.
The High Court entertained the appeal only because the Second Appellate Tribunal had not yet been constituted. If the petitioner intends to seek redress by filing an appeal with the 2nd appellate tribunal, the petitioner must pay a 20% balance disputed tax in order for the 2nd appellate tribunal to examine its case. However, the bench decided not to proceed with the penalties and interest.
The Kerala High Court has held that the pre-condition for claiming the deduction under Section 80P Of the Income Tax Act has been made more stringent by reducing the time available to an assessee formaking the claim. A Bench of Justice A.K. Jayasankaran Nambiar and Justice Mohammed Nias C P observed that the claim for deduction under Section 80P of the Income Tax Act is conditional on filing a return within the due date prescribed under Section 139(1) of the Income Tax Act.
The Madras High Court stayed the recovery proceedings against the Non-Resident Indian (NRI) since the notice under section 142(1) of the Income Tax Act, 1961 was issued in the Peak period of Covid 19 which prohibited the assessee to file a reply.
The Court directed the respondent to dispose of the statutory appeal filed by the petitioner under Section 246(A) of the Act and further since 20% of the disputed tax, interest and penalty has been recovered by the respondent from the banks, in which the petitioner had accounts, a direction is issued to the appellate authority to dispose of the appeal within a period of 12 weeks.
In a recent judgement, the Telangana High Court dismissed the petition challenging re-assessment against HSBC Holdings on the availability of alternative remedies under the Income Tax Act, 1961.
The two-judge bench comprising Chief Justice Ujjal Bhuyan and Justice Surepalli Nanda viewed that a writ Court would not ordinarily invoke its jurisdiction when an aggrieved party has adequate and efficacious remedy provided under the statute.
The Court refused to entertain the writ petition on the point of statutory remedy available to the petitioner. The Supreme court had also set aside the observations of the High Court observing that the writ petitions would not be maintainable in view of the alternative remedy. Conclusively, the bench directed to file a detailed reply if not filed.
In a recent ruling the bench composed of Chief Justice Ujjal Bhuyan and Justice N. Tukaramji meets the ends of justice, while entertaining a writ petition, directed to pay an amount of Rs. 3 crores within a period of fifteen days from the date of the order.
Based on the submissions of both parties, the court concurred to stay the department’s claim until the settlement of the appeals pending before the first appellate body on a deposit of 3 crores by the petitioner.
The Uttarakhand High Court remanded an Income Tax matter to the Commissioner of Appeals for re-adjudication since enhancing cash in hand was made without issuing a show cause notice (SCN).
The two-judge bench comprising Chief Justice Sri Vipin Sanghi and Justice Alok Kumar Verma observed that the appellant/assessee was entitled to put to notice before enhancing the cash in hand, by the Commissioner (Appeals). The matter was remanded to the Commissioner (Appeals) for rehearing of the appeal on the aforesaid issue.
In a recent ruling, the bench of Justice Abhay Ahuja and Justice Nitin Jamdar of Bombay High Court set aside the refund rejection order issued by the Goods and Services Tax (GST) authorities and restored the Form GST RFD-01.
The petitioner was not given an opportunity to rectify any discrepancies, and the petitioner was not given a chance to be heard before the reimbursement claim was rejected, therefore the High Court Division Bench found that the impugned order could not be upheld.
The Gujarat High Court has recently in a writ petition filed before it, held that the fact of the co-owner showing different capital gains amount, is not a ground to reopen an assessment.
The Bench of Justice N.V.Anjaria and Justice Devan M. Desai held: “Neither there existed foundational facts, nor it could be said that any tangible material was available with the assessing officer to justify exercise of power. It could be said that the basis for reopening was absent. When the foundation was missing, there could not have been erection of ground to seek reopening of assessment. It could not be said, in the facts of the case, that the assessing officer could have harboured a reason to believe acceptable in the eyes of law to seek reopening. As a result of the above discussion, the impugned notice deserves to be set aside. Accordingly, the notice dated 30.03.2018 seeking to reopen the assessment of the petitioner in respect of Assessment Year 2011-2012 is hereby set aside.”
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