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.
In a recent judgment, the Tripura High Court (HC) directed to revoke Suspension of Registration since the GST department failed to furnish a cancellation order of registration.
A Coram comprising Justice Arindam Lodh observed that the respondent authority shall allow the petitioner to submit his return for the period the show cause notice dated 11.08.2022 was issued. While allowing the petition, the Court directed the respondents to release the GST portal which they have blocked relating to the petitioner.
The Bombay High Court ( HC ) granted bail to a Tax Consultant convicted under section 12 of the Prevention of Corruption Act, 1988 in a bribery Case.
Public servants obtain valuable things, without consideration from the person concerned in proceeding or business transacted by such public servant and Punishment for abetment of offences defined in sections 7 or 11 are defined under sections 11 and 12 of the Prevention of Corruption Act 1988.
The Delhi High Court observed that Show Cause Notice ( SCN ) can’t be issued to entertain claims before the period of Approval of the Resolution Plan.
The Bench comprising Justice Rajiv Shakdher and Tara Vitasta Ganju noted that “The Supreme Court has enunciated, in no uncertain terms, the clean slate principle; it cannot be set at nought by entertaining claims that concern the period obtaining before the approval of the Resolution Plan.”
The department’s petition for revision of the Odisha Sales Tax Tribunal’s ruling was denied by the bench of Chief Justice Dr. S. Muralidhar and Justice Raman of Orissa High Court (HC).
The product “Good Knight” was decided to fall under the “Insecticide” category under Entry 30 of Part II of Schedule B to the Odisha Value Added Tax Act (OVAT) and be subjected to 4% tax. The HC remarked that the product sold by the Opposite Party- Dealer has been correctly categorised as an ‘insecticide’ under Entry 30 of Part II of Schedule B of the OVAT Act.
The bench observed that no error had been committed either by the Assistant Commissioner of Sales Tax (ACST) or the Tribunal in accepting the plea of the dealer and negating the contrary plea of the Department.
The Delhi High Court (HC) chaired by Justice Amit Sharma granted bail to the petitioner who claimed fake Input Tax Credit (ITC) under Goods and Services Tax (GST) on personal bond of Rs. 1,00,000 along with two sureties.
The count observed that as per the status report, there are no prior criminal antecedents of the present applicant and no useful purpose will be served by keeping the applicant in judicial custody any further.
The Calcutta High Court has recently condoned the delay in filing a Goods and Services Tax (GST) Appeal by the petitioner-Sikha Debnath, as only a negligible delay has been observed in the matter.
The Single Bench of Justice Bibek Chaudhuri at Calcutta High Court also clarified that the court had not gone into the merits of the matter and the Appellate Authority is at liberty to decide the factual and legal issues involved in the appeal independently without being influenced in any way by the order passed, allowing the appeal for statistical purposes.
The Delhi High Court bench of Justice Yashwant Varma ruled that the debarment of Haj Group Operator without considering the Income Tax Returns rectified and the CA certificate is arbitrary. Also the bench directed to reimburse the security deposit forfeited.
It was concluded that the petitioner would not be disqualified if it applied to enlist as an HGO in the future due to the unsustainable order of blacklisting. Moreover, the additional punishment of forfeiture of security deposit also clearly appears to be disproportionate and arbitrary.
The Calcutta High Court (HC) bench of Justice Md.Nizamuddin rejected the writ petition to change the tariff heading from Central Excise Tax (CET) to Goods and Services Tax (GST) to Central Excise Tax (CET) to avail lower rates.
The bench held that the classification of the Tariff heading cannot be changed simply because the width of the polypropylene strips is less than 5mm, the rate of duty on the exact same product under the same heading has increased since the implementation of the GST Act, and you want to take advantage of the lower rate of Tariff.
Delhi High Court (HC) presided over Justice Vibhu Bharkru and Justice Amit Mahajan quashed the unsigned show cause notice and assessment orders.
The Court decided to provide the petitioner a chance to respond to the show cause notifications that were issued within two weeks of the order’s date. Also told to give everyone another chance to be heard.
Madras High Court (HC) presided over by Justice Abdul Quddhosh stayed the Goods and Service Tax (GST) proceedings during the pendency of proceedings under the Insolvency and Bankruptcy Code (IBC), 2016.
The court quashed the assessment orders on grounds that natural justice principles are violated. The bench finally concluded to quash the assessment proceedings and directed to start fresh proceedings. Also as the orders are quashed, the consequential recovery notice is also quashed.
The Bombay High Court (HC) chaired by Justice Valmiki SA Menezes and Justice Dhiraj Singh Thakur upheld the order of reprimand serves as the end of justice and will be proportionate to the acts of misconduct of which the respondent has been held guilty.
The judges noted that the council had acted within the bounds of the law in light of section 21 of the CA Act. Moreover, it conducted the investigation in accordance with the principles of natural justice; both the complainant and the respondent had a chance to present their cases and cross-examine one another GST:
The Madras High Court has allowed the assessee to file an additional reply to the Show Cause Notice (SCN) issued under section 174 of the Central Goods and Service Tax Act, 2017.
The Court directed the petitioner to submit an additional reply to the impugned show cause notice dated 28.04.2022, within a period of two weeks from the date of receipt of a copy of this order.
On receipt of the additional reply from the petitioner, within the stipulated time, the respondents shall pass final orders after giving due consideration to the earlier reply dated 11.05.2022 as well as the additional reply, after affording a fair hearing to the petitioner including granting them the right of personal hearing within a period of two months thereafter.
In a recent judgement, the Delhi High Court (HC) has held that refund under section 42(1) of the Delhi Value Added Tax Act, 2004 (DVAT Act ) can’t be allowed on the failure of the Objection Hearing Authority (OHA) to pass an order in the prescribed time.
A two-member bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan observed that the prayer of the petitioner for the refund of the amount of ₹14,12,185/- along with interest cannot be acceded to at this stage.
Further directed the concerned OHA to pass an appropriate order, in compliance with the order dated 17.09.2021 passed by the Tribunal, as expeditiously as possible.
The Delhi High Court ( HC ) has held that the application for a refund under section 54 of the Central Goods and Services Tax Act, 2017 (CGST) can’t be rejected on the ground of expiry of limitation since the period from 01.03.2020 to 28.02.2022 was excluded.
While analysing the said notification, a two-member bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan viewed that the impugned orders cannot be sustained as the benefit of the relaxation in the period of limitation has not been accorded to the petitioner. The Court directed the respondents to process the petitioner’s application for a refund under law.
The Delhi High Court (HC) in its recent judgement refused to allow duty drawback against pre-deposit under section 129E of the Customs Act, 1962.
The Court granted liberty to the petitioner to utilise the funds received for complying with its obligation to make a pre-deposit to maintain an appeal before the CESTAT.
In a recent judgement, the Madras High Court (HC) dismissed the writ petition related to the reversal of Input Tax credit in absence of final order since it amounts to a Premature petition.
Further held that “the respondent if they conclude that the reply is acceptable to them, they shall drop any further proceedings against the petitioner, but if they decide otherwise, the respondent shall follow the due procedure established under the law for taking further action against the petitioner.”
A Single Bench of Jharkhand High Court held that rejection of GST refund under Section 77(1) of CGST Act 2017, could not be claimed on fresh application.
A Single Bench of Chief Justice Deepak Roshan no fresh application can be made on the face of rejection observing that, as per the amended Rule 89 (1A) of CGST Rules, 2017 and Circular dated 25.09.2021, the limitation period for seeking refund would be two years from the date of the instant notification i.e. 24.09.2021.
However, in the face of rejection order, petitioner cannot make a fresh application, though the instant amendment and the notification beneficially applies to his case also.
The Delhi High Court in a recent ruling held that non-scheduled passenger services do not include providing air transport services to the public at large on payment of published tariff.
The Bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan observed that “We are not in agreement with the Tribunal that the provision of non-scheduled (passenger) services as defined under clause (b) of explanation to Condition no.104 of the Notification, entails providing air transport services to public at large on payment of published tariff; we agree with the conclusion that the appellant has not complied with the Condition no.104 of the Notification.”
The Delhi High Court (HC) has held that notice for revocation of a Customer Broker licence issued beyond the period of ninety days from the offence report is not valid.
A two-member bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan observed that the proceedings for revocation of the petitioner’s licence were commenced beyond the period of ninety days from the date of the Offence Report.
The High Court (HC) of Calcutta dismissed the petition as no evidence to prove the voluntary participation of assessee company to have advertised its product without permission.
It was held that the specific role of the respondent company is indistinct and incomprehensible as to whether it has been directly instrumental in advertising its product or legally entrusted any other agency to advertise its product on its behalf and cannot be held responsible under Section 202(1)/204 of the Calcutta Municipal Act. The appeal was dismissed.
The Calcutta High Court ( HC ) Chaired Justice Bibek Chaudhuri by quashing the penalty imposed on the petitioner and also directed to repay the amount. Also further ordered to issue the discharge certificate in form SVLDRS-4 to the petitioner under the scheme of Sabkha Vishwas (Legacy Dispute Resolution) Scheme, 2019.
The bench observed that for the failure of the bank in sending the money electronically by RTGS on 30th June, 2020, the petitioners cannot be held liable.
The Bombay High Court (HC) in a significant judgement has held that the failure of the Assessing Officer(AO) to follow directions given by the HC while issuing notice under section 148 of the Income Tax Act, 1961 to reopen the assessment invalidates the order and order demanding penalty and tax not valid.
While allowing the petition the Court set aside the impugned orders and remanded the matter back to the Assessing Officer, who shall provide the Petitioner with the satisfaction note of the Principal Commissioner of Income Tax.
The Division Bench of Gujarat High court has held that the Indian citizen working as travel agent in Dubai needs to deposit pre-deposit under Section 29E of customs Act for further proceedings.
The Division Bench of Justice Sonia Gokani and Justice Gita Gopi observed that, “With regard to non-availment of opportunity for want of necessary pre-deposit required under section 29E of the Customs Act, the appellate authority could not adjudicate on merits.
Therefore, we are of the opinion that the balance needs to be struck by allowing the petitioner to approach the appellate authority by furnishing the amount of pre deposits of the requisite amount. Resultantly, without making any interference with the OIO, all the petitioners are permitted to approach the appellate authority.”
The Jharkhand High Court refused to grant pre-arrest bail on an offence under prevention of corruption Act 1988. Anil Kumar Additional Solicitor General of India for respondent submits that, petitioner worked as authorised representative of five assessee companies given by the accused.
The Applicant conspired with other accused persons which subsequently resulted in huge relief in tax liability/penalties to the assessee companies.
The Bombay High Court (HC) in its recent judgement has held that notice issued under section 148 of the Income Tax Act, 1961 towards a non-existent Company is not valid.
A two-member bench comprising Justice Dhiraj Singh Thakur and Justice Kamal Khataf viewed that the PAN in the name of the non-existent entity had remained active does not create an exception in favour of the revenue to dilute in any manner the principles enunciate. While allowing the Writ petition the Court set aside the impugned notice and penalty notice.
The Mumbai Sessions Court confirmed conviction under Section 276CC of the Income Tax Act, 1961 on the ground that there was filing of the Income Tax Returns (ITR) of a company being a director but failure to file the individual ITR.
The Court observed that “It is also rightly inferred that, when the accused himself states for receipt of documents in xerox form and still failed to comply with the notice was incumbent upon the accused to have cleared the cloud of suspicion.”
The bench of Justice P. S. Dinesh Kumar and T.G. Shivashankare Gowde granted relief to the IBM Philippines. It was decided that the payments received by IBM Philippines shall not be liable for Tax Deduction at Source (TDS) under Section 195 of the Income Tax Act, 1961.
The bench observed that, as far as the IBM Philippines is concerned, it works like a sub-contractor under IBM India. It earns profit by rendering service to P&G India. It does not provide any technical service to the assessee.
Further, IBM Philippines does not have a permanent establishment (PE) in India. Therefore, the income in the hands of IBM Philippines from the assessee is a business income.
The Single bench of Calcutta High court recently directed the Motor vehicle taxing officer to consider tax exemption applications within four weeks.
Justice Bibek Chaudhuri allowed the appeal filed by the petitioner and “directed to give an opportunity to the petitioner of hearing on the question of exemption of tax in relation to the application filed by the petitioner”
A single Bench of Calcutta High Court has directed to serve show cause notice for confirmation of penalty finding that transporting own machinery from one place to another for execution of particular work would not be liable to Goods and Service Tax.
A single Bench of, Justice Bibek Chaudhuri disposed the writ petition holding that, “In view of such submission and considering the fact that the learned Advocate for the respondents has served a copy of the show cause notice to the Advocate for the petitioners, the petitioners are directed to submit a reply to the adjudicating authority within 3 days from this date and the adjudicating authority thereupon shall adjudicate as to whether that petitioner is liable to pay any penalty or not after giving opportunity to the petitioners or their authorised representative of hearing within a fortnight thereafter.”
The Bombay High Court has quashed a re-assessment notice under section 148 of the Income Tax Act, 1961 issued against a dead person.
The bench of Justice Dhiraj Singh Thakur and Kamal Khata observed that “initial notice under Section 148 was in the name of the deceased and so was the subsequent communication dated 20 May 2022 purporting to be a notice in terms of Section 148A(b), it is settled law that notice issued under Section 148 of the Act against a dead person would be invalid unless the legal representatives submit to the jurisdiction of the Assessing Officer without raising any objection”
The Bombay High Court observed that mere change of opinion does not provide jurisdiction to the Assessing Officer (AO) to initiate proceedings under Section 147 of the Income Tax Act, 1961.
Upholding the precedent, the Court observed that “There cannot be any failure to disclose fully and truly, if there was no such document as such. This, in our opinion, is nothing but a change of opinion, which does not satisfy the jurisdictional foundation under Section 147 of the Act.”
The Bombay High Court quashed re assessment notice on the ground that there was no tangible material for the Assessing Officer (AO) to have ‘reason to believe’ for escapement of income.
Quashing the re assessment notice the Bench comprising Justice Kamal Khatta and Justice Dhiraj Singh Thakur, noted that “It is clear that the assessing officer had not at all discussed as to what was the material which was not disclosed by the assessee fully and truly, which was otherwise necessary for assessment. There would be no tangible material or basis for the assessing officer to have ‘reason to believe’ that income for the said assessment year 2008-09 had escaped assessment.
The Gauhati High Court has directed the Income Tax Authorities to provide ten days time for filing reply of notice issued for Re-open Assessment.
The single bench of the Justice Michael Zothankhuma dismiss the writ petition and held that “petitioner has been given only 2 (two) days time to file a reply to the show cause notice dated 25.03.2022, view of that the respondents should give the petitioner a further 10 (ten) days time, for filing reply to the show cause notice”
The Calcutta High Court recently held that the re assessment notice on a non-existing company is not tenable in the eye of law.
“Considering the submission of the parties, I am of the view that the impugned notice and the subsequent proceeding thereof is not tenable in the eye of law and all further steps pursuant to the said impugned notice also are not tenable in the eye of law”, The Court said.
A Division Bench of the Bombay High comprising Justice Kamal Khata and Justice Dhiraj Singh Thakur quashed re assessment notice on the ground that permission under Development Agreement was given only for construction and that it does not amount to transfer under Income Tax Act.
“If that is so, then there would be neither any tangible material nor any reason for the assessing officer to believe that ‘any income chargeable to tax had escaped assessment’ and the action of the assessing officer, therefore, would be without jurisdiction”, the Bench said.
In a major ruling the Bombay High Court ruled that Central Board of Direct Taxes (CBDT) Circular disallowing Expenses associated with Doctor Freebies, not applicable to Assessment Year 2008-09.
The Bench comprising Justice Kamal Khata and Justice Dhiraj Singh Thakur observed that “The Circular No.5/2012 referred to the position of the regulations of 2002 after its amendment in the year 2009 and, therefore, neither the circular nor regulation 6.8 incorporated w.e.f. 10 December 2009 would be applicable to the instant case pertaining to assessment year 2008-09.”
The Delhi High Courtin 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.
In a significant case, the Delhi High Court (HC) quashed the order penalising the fraudulent export for not issuing Show Cause Notice (SCN).
Since there is no material to indicate that the Show Cause Notice was sent by speed post with acknowledgement due or had been served by any of the modes as specified under Section 153(1) of the Customs Act, the Court held that the impugned order imposing a penalty on the petitioner is not valid and set aside.
The Delhi High Court ( HC ) has held that refund under section 54 of the Central Goods and Services Tax Act, 2017(CGST) is allowable when there is no tangible reason to doubt the particulars.
A two-member bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan observed that the petitioner had filed its return disclosing all necessary details for claiming the refund.
The review order dated 15.03.2020 to file an appeal against the Order-in-Original is founded on an erroneous finding.
The High Court of Punjab and Haryana, in a VAT case, recently held that the penalty can’t be imposed if an attempt to evade tax is not proved.
The Coram comprising Ms. Justice Ritu Bahri mrs. Justice Manisha Batra observed that in the present case, the driver had produced the documents at I.C.C. and subsequently at the time of checking, he showed all the invoices. There was no attempt to evade tax.
Hence, VAT appeal is allowed and no case for imposition of penalty is made out under Section 51(7)(c) of the Punjab VAT Act, 2005.
In a recent ruling the Bombay High Court quashed the action of the Principal Commissioner of Income Tax ( PCIT ) as the remand back of the matter to the Assessing Officer (AO) was to calculate disputed tax and not fresh adjudication.
The Coram consisting of Justice Abhay Ahuja and Justice Dhiraj Singh Thakur, observed that “Designated authority had only to calculate the disputed tax by giving effect to the orders of the FAQ No.7 would, in our opinion, be applicable if it was a case of remand by an appellate authority to the Assessing Officer, where a reasonable opportunity of being heard was not given by the Assessing Officer to the assessee or the Appellate Authority wanted the Assessing Officer to carry out a fresh examination of the issue with a specific direction.”
The Bombay High Court quashed re assessment notice as there was true and full disclosure regarding valuation of equity shares.
The Bench comprising Justice Kamal Khata and Justice Dhiraj Singh Thakur, observed that “We have no hesitation that there was no failure on the part of the assessee to disclose fully and truly the material facts, nor there was any tangible material with the A.O. which would have otherwise justified the reopening of the assessment by issuing the notice impugned.”
The division bench of the Bombay high court in a writ petition filed before it quashed the reopening assessment proceedings and held that Notice issued without satisfied condition precedent under section 147 of income tax act 1961 is invalid.
Further the bench observed that the assessing officer did not explain the reason on what basis and material he came to the conclusion that M/s Magnum Tradex Pvt. Ltd., was indeed a shell entity.
The Bombay High Court remanded back matter to the Assessing Officer (AO) as there was contravention of general directions issued by Court where notice under Section 148 of the Income Tax Act for reopening assessment.
“This arbitrary act of the Assessing Officer is also contrary to the specific directions of this Court contained in para 8(d) in Tata Capital Financial Services Limited v. Assistant Commissioner of Income Tax, Circle 1(3)(1) and others, wherein Assessing Officers have been directed to give a personal hearing to assesses with a minimum seven working days advance notice of such personal hearing” the Court noted.
The Orissa High Court (HC) presided by Chief Justice Dr. S. Muralidhar and the Justice M.S. Raman quashed the reassessment proceedings of a non-resident company Vedanta Resources Limited (VRL) and notices issued due to lack of jurisdiction.
The Court, therefore, concluded that the impugned notices were issued by O.P. No.1 without jurisdiction and, therefore, are unsustainable in law. Also, the impugned notices and all other proceedings were quashed. However, the authorities can proceed further in accordance with law.
The unregistered dealer who failed to pay service tax and also the pre-deposit required by section 35F of the Central Excise Act of 1944 received relief from the division bench consisting of Acting Chief Justice Aparesh Kumar Singh and Justice Deepak Roshan.
After hearing both sides, the bench set aside the impugned order passed by the GST Commissioner (Appeals) and also directed the petitioner to remit the mandatory pre-deposit within 4 weeks.
The Calcutta High Court (HC) bench of Justice Md. Nizamuddin dismissed the writ petition against the Goods and Services Tax (GST) Appellate Authority for Advance Ruling (AAR) on ground that there is no reason to invoke the Article 226 of Constitution of India.
The court, acting within its competence under Article 226 of the Indian Constitution was reluctant to grant the petitioner’s request to modify the classification of the Tariff Heading in order to benefit from a cheaper tariff rate under the GST regime.
In a significant case, the Madras High Court (HC) ordered to release of a Vehicle Detained under section 129 of the Goods and Services Tax Act, 2017 (GST) on payment of penalty.
The Court directed the respondent to consider the petitioner’s application as and when it is filed seeking for provisional release of the conveyance on payment of the penalty amount of Rs.1,00,000/- as per the provisions of Section 129(6) of the G.S.T. Act, 2017.
The Jharkhand High Court dismissed an appeal filed by the Revenue holding not maintainable on the ground that the tax effect below the monetary limit prescribed by Central Board of Direct Taxes (CBDT) and absence of audit objection.
The Bench comprising observed that “Thus, it is crystal clear that on the one hand the tax effect in the instant case is much below the monetary limit as enumerated in Circular No. 3/2018 read with Circular No. 17 of 2019 and on the other hand none of the exception clause much less the audit objection is involved in this case and as such, we are having no hesitation in dismissing this appeal on the question of maintainability itself.
The Madras High Court directed the petitioner, M/s. Lucas TVS Limited, to file a fresh application for release of blocked funds as there were technical glitches in the GST Portal.
The Court also directed the petitioner to submit a fresh representation to the second respondent stating their grievances that have been raised in the affidavit filed in support of this writ petition, within a period of one week from the date of receipt of a copy of the order.
The Bombay High Court quashed the reassessment notice on the ground of failure to satisfy conditions under Section 147 of the Income Tax Act, 1961 and non-application of mind.
“No scrutiny assessment had been made and that the only requirement was to initiate proceedings under Section 147 on the basis of ‘reason to believe’ goes to prove that the assessing officer had reopened the assessment only on the basis of ‘reason to believe’ and not a failure to disclose material facts fully and truly, on which too the assessing officer ought to have been satisfied as matter pertained to reopening beyond the period of four years”, the Court said.
The Bombay High Court ordered reconsideration on classification of Aluminium Composite Panels (ACP) under Central Excise Tariff Act, 1985 (CETA).
The Bench comprising Justices Dhiraj Singh Thakur and Abhay Ahuja directed the Tribunal to pass a fresh order after considering and dealing with all the factual submissions made on behalf of the Appellants as well as the Respondent Revenue and particularly a finding on whether or not the aluminium composite panel as used in the context of the business of the Appellants would simply be aluminium plates or strips of a thickness exceeding 0.2 mm or aluminium plates, rods, profiles, tubes and the like, prepared for use in structures or parts of structures. All questions and contentions are left open.
The Bench observed that “PCIT should be conscious that once information was received that a person to whom notice has to be served is in judicial custody, then an appropriate order should be passed requiring service of notice.
With the PCIT having failed to do so, it was not open to the Department to contend the mere appearance of a staff of such a person in judicial custody before the PCIT should be taken to be the appearance by the Notice/Assessee himself.”
The Bombay High Court has recently in a writ petition filed before it held that Re-assessment against non-existent company was not valid despite active Permanent Account Number.
The division bench of Justice Dhiraj Singh Thakur and Kamal Khata Allowed the writ petition and deleted the penalty imposed upon the assessee company .
The Gauhati High Court (HC) presided by Justice Soumitra Saikia ordered the Commissioner of Income Tax (TDS) and concerned Income Tax Officer (ITO) to expedite the Tax Deduction Source (TDS) refund process to the Scheduled Tribe Officer within 3 weeks.
The bench further observed that any member of a Scheduled Tribe as defined in Clause (25) of Article 366 of the Constitution, residing in any of the areas prescribed under Section 10(26), is exempted from payment of income tax.
The Division Bench of Delhi High Court has quashed the service Tax proceedings against Emaar MGF land limited.
The Division Bench of Justice Vibhu Bakhru and Justice Amit Mahajan dismissed the petition and upheld the decision of the tribunal observing that, “In the given facts, the provision to Section 73(1) of the Act could not be applied.
The respondent had filed its return of service tax on the basis that its services were taxable as ‘Works Contract’ Services.
It had availed the Cenvat Credit to the extent of ₹2,44,48,095/- and had paid the balance amount in cash in discharge of the liability, which was computed on the aforesaid basis. There is no allegation that the respondent had concealed that it was carrying on the activity of construction and selling residential flats.”
The Bombay High Court quashed re assessment notice citing jurisdictional errors by the Assessing Officer (AO).
The Bench comprising Justice Kamal Khata and Justice Dhiraj Singh Thakur observed that “Even in the present case there appears to be no tangible material with the A.O. as can be seen from the reasons recorded and that the reference was made only to the records of the assessment. It thus appears that between the date of the order of assessment and the date of the issuance of notice, nothing new had happened.”
The Calcutta High Court upheld the order of the Appellate Authority for Advance Ruling (AAAR) Order and held that Polypropylene (PP) Leno Bags made from Plastic Granules cannot be treated as Textile Articles.
The Court concluded by stating that simply on the ground that width of the polypropylene strips is less than 5mm and that the rate of duty on the very same product under the same heading after the introduction of GST Act is higher and just for availing the lower rate of Tariff, it cannot be allowed to change the classification of Tariff heading.
Quashing a re-assessment notice the Bombay High Court observed that “Feigning Ignorance of Law by Authorities only increases Burden of Courts”. “It is an imperative duty of the authorities to be updated with the law and to apply it to the case at hand before taking decisions and passing orders. Feigning ignorance of law by authorities only increases the burden of the Courts” the Bench commented.
In a significant case, the Bombay High court quashed the demand of ineligible Cenvat credit against Tata teleservices and held that no service tax on telecom towers erected at the site and affixed to earth.
The division bench of Justice Dhiraj Singh Thakur and Abhay Ahuja dismissed the writ petition and determined that “The affidavit filed on behalf of the Revenue did not elicit any distinguishing feature. Counsel for the Revenue has also not brought any material on record to demonstrate that the decision dated 2nd April 2018 in CEXA 6 of 2017 has been a subject matter of any further challenge.
In a significant judgement, the Allahabad High Court (HC) quashed the proceedings against VAT Commissioner and held that disciplinary proceedings can’t be initiated merely on suspicion.
While allowing the appeal, the Court held that “the respondents ought not to have been given liberty to proceed with the disciplinary proceedings against the appellant and to post her anywhere considering the facts that the disciplinary proceedings are pending against her.” The disciplinary proceedings which are pending against the petitioner were set-aside.
The Madras High Court quashed the order on gross violation of natural justice principles as no personal hearing was granted under Section 75 (4) of Goods and Services Tax (GST) Act.
The Court of Justice Abdul Quddhose observed that “therefore, necessarily the impugned assessment order has to be quashed on the ground of violation of the principles of natural justice as no personal hearing has been granted to the petitioner as contemplated under Section 75(4) of the GST Act, 2017 and remanded back to the respondent for fresh consideration on merits and in accordance with law.
In a recent judgement, the Madras High Court ( HC ) held that failure to allow the assessee invalidates the assessment order.
Justice Abdul Quddhose quashed the impugned Assessment Orders and remanded the matter back to the first respondent for fresh consideration.
Further directed “the first respondent to pass final orders on merits and by law in respect of the contentions raised by the petitioner including the limitation issue, after furnishing a copy of the Show Cause Notices to the petitioner to enable them to submit a detailed reply, after adhering to the principles of natural justice including the limitation issue and also by granting the petitioner a right of personal hearing within a period of three months.”
The Gujarat High Court ( HC ) has held that Value Added Tax ( VAT ) and sales tax dues have no Priority over dues of Secure Creditors who exercise powers under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ( SARFAESI ).
A two-member bench consisting of Justice N V Anjaria and Justice Bhargav D Karia observed that respondent No.10 Axis Bank had held an auction in the exercise of powers derived from the provisions of the SARFAESI Act to sell the property mortgaged with it, to recover its dues. Notice under Section 13(2) was issued, possession was taken and the auction by the law was conducted.
The Madras High court has recently directed to the Income tax authority for Re-adjudicate the assessee’s matter when it was caused by the negligence of Income tax Practitioner.
The single bench of Justice Abdul Quddhose after considering the contentions of the both parties Observed that, several opportunities were granted to the petitioner by way of the notices issued under sections 142(1) and 143(2) of the Income Tax Act 1961, notices were received in the Email address of the Chartered Accountant or the Income Tax Practitioner engaged by him for filing the revised return of income.
The Single bench of Hyderabad High court has recently directed the state to form a committee to study the issues of exhibitors and directors in the field of entertainment tax on cinema tickets .
The bench further set-aside the order passed by the Andhra Pradesh Government before bifurcation and ordered the both state governments to constitute committee Study Issues of Exhibitors and Distributors.
The Division Bench of Delhi High Court has stayed order under Section 148A(d) and consequential notice finding that the Assessing Officer had committed error in law in framing initial assessment.
“We have taken note of the fact that the expression “any audit objection” was introduced only by Finance Act, 2022 albeit w.e.f. 01.04.2022. Prior to the said amendment, the expression which was obtained in Explanation 1(ii) appended to Section 148 of the Act advertised to the “Comptroller and Auditor General of India”. We are, prima facie, also of the view that if the AO, according to the respondents/revenue, had committed an error in law.”
A Single Bench of the Calcutta High Court recently allowed the petitioner to manually file the appeal against the order of Goods and Services Tax (GST) demand which could not be filed online within the stipulated time.
However, on behalf of the petitioner, Himangshu Kumar Roy and Abhilash Mittal submitted that the time to prefer such appeal since has expired, the petitioner will not be able to file the said appeal online, he seeks leave to file the appeal manually on the ground that the order under challenge was passed manually.
The Single Bench of Justice Biswajit Basu, at this instance, granted the permission to file the said appeal as per the prayer of the petitioner.
In a recent judgement ,the Patna High Court (HC)while dismissing the petition, held that the Reimbursement of Seignorage Charge and Labour Cess on construction work done under NABARD has to be challenged before the appropriate forum.
As a general rule the order will not be granted unless the party complained of has known what it was he was required to do so that he had the means of considering whether or not he should comply, and it must be shown by evidence that there was a distinct demand of that which the party seeking the mandamus desires to enforce and that that demand was met by a refusal.’
The Court observed that there was no such demand or refusal. While dismissing the petition the court held that Petitioner shall approach the authority concerned for redressal of the grievance.
The single bench of the Calcutta high court in a writ petition filed before upholds the proceedings on expiry of E-Way bill during transportation due to breakdown of vehicle.
After considering the contentions of the both parties the single bench of the Justice Bibek Chaudhuri held that the “respondent authority is lawfully permitted to impose penalty under Section 129 as well as the State Goods and Service Tax Act 2017 as the goods were found to be detained in the territory of the State”.
The Karnataka High Court granted interim relief to the Flipkart by hindering the coercive action from the Income Tax Department and they assured the same till next hearing i.e. February 24, 2023.
“The submission on behalf of the respondent is that there cannot be any prohibition in law against issuance of notice, but during the appeal period, no coercive measure may be taken and as such, coercive measures will not be taken,” recorded by the Court in its interim order.
K V Aravind, the department lawyer, was asked to acknowledge the notice. The petitioner’s complaint that notices as per Annexure-B are issued in both of these petitions before the period provided to prefer appeal against the order dated 31.01.2023 caused the court to group the two applications filed by Flipkart together.
The Orissa High Court confirmed the order of Customs, Excise and Service Tax Appellate Tribunal (CESTAT), wherein it was held that there was no service tax liability when no provision for reversing credit involved on input services utilised for inputs.
The Bench comprising Justice Dr. S. Muralidhar, Chief Justice and Justice M.S. Raman, observed that “On the previous hearing, this Court had inquired from the Senior Standing Counsel for the Appellant-Department whether the Department had challenged the order of the CESTAT in Chitrakoot Steel & Power Pvt. Ltd.
By the order dated 1st December, 2022 this Court had granted two months’ time to the Department to ascertain the above fact.” “Considering that this is an appeal of 2011, the Court does not consider it appropriate to grant any further time for this purpose. The Court will proceed on the basis that the Department has accepted the decision of the CESTAT in Chitrakoot Steel & Power Pvt. Ltd” the Court noted.
The Kerala High Court while dealing with a case related to the inclusion of GST, the Bidder cannot challenge Bid Condition or Clause after participating in a Tender Process.
A Single member comprising Justice V G Arun observed that Clause 11(f) of the General Conditions of Tender specifically stipulates that all rates quoted should be inclusive of sales tax also. After the introduction of the GST regime, the term sales tax has to be understood as goods and service tax.
Thus, the tender document provided for the inclusion of goods and service tax. While Dismissing the petition the Court observed that “after participating in a tender process, the bidder cannot turn around and challenge the conditions in the bid document.”
Even otherwise, the factual disputes involved cannot be decided in a writ petition under Article 226.
The Jharkhand High Court in its recent judgement ordered a mandatory pre-deposit under 35F of the Central Excise Act for the appeal hearing.
A single-member bench consisting of Mr Justice Deepak Roshan observed that the Respondents have also advertised to the facility provided under the RBI Instruction for making such pre-deposit by the unregistered dealer / registered non-assessees.
The Court set aside the impugned order dated 08.07.2022 (Annexure-5) passed by the Commissioner, CGST & Central Excise and allowed the petitioner to make the mandatory pre-deposit within a period of four weeks.
The High Court (HC) of Jharkhand found that the rectification of the order was valid when the Miscellaneous application under section 254(2) of the Income Tax Act, 1961 was filed within four years before the amendment of the said section.
Justice Deepak Roshan observed that the appellant had filed the miscellaneous application much before the amendment made in section 254 (2) of the Act w.e.f. 01.06.2016 and the impugned order dated 08.9.2017, passed by the Income Tax Appellate Tribunal was quashed and set aside.
Further, the matter is remitted back to the tribunal with a direction to entertain the miscellaneous application filed by the appellant assessee and the appeal was allowed.
The Delhi High Court slammed the Department for Unnecessary Burden If Interest on Exchequer and unnecessary imposition on judicial time on the ground of delay in VAT Refund.
“This Court is also constrained to note that delays on the part of the respondent in processing the pending claims for refund result in unnecessary burden of interest on the exchequer not to mention, unnecessary imposition on judicial time.
The Commissioner, Department of Trade and Taxes is directed to take expeditious steps to ensure that all pending refund claims are processed as expeditiously as possible” the Court opined.
In a recent judgement, the Rajasthan High Court (HC) granted bail to persons arrested for offences under GST.
Justice Inderjeet Singh observed that the petitioner is in custody for last more than two years and the main accused namely Vishnukant Garg has already been released on bail by the Co-ordinate Bench of the Court and the alleged offence is punishable with imprisonment for a term, which may extend to five years and without expressing any opinion on the merits of the case.
The Court allowed the petition and granted regular bail subject to satisfaction of the trial Court. Mr Sanjay Verma appeared on behalf of the petitioner and Mr Kinshuk Jain appeared on behalf of the respondent.
The Jharkhand High Court (HC) in its recent judgement held that the payment of Pre-Deposit is allowable when the assessee was unaware of the mandatory payment.
Justice Deepak Roshan observed that there was no intention on the part of the petitioner to avoid payment of pre-deposit @7.5% as provided under the amended section 35F of the Central Excise Act, 1944.
The Court set aside the impugned order dated 12.02.2021 (Annexure-8) passed by the Commissioner (Appeals), Central GST & CX, Ranchi (Respondent No. 1) and held that “if the petitioner makes the mandatory pre-deposit within a period of four weeks, as indicated above, the appeal shall be heard on merits.”
The High Court (HC) of Karnataka, permits assessee to make necessary changes to GSTR 3- B for the months of July 2017 and March 2018 since it would not cause any prejudice to Revenue.
A single member Justice S R Krishna Kumar held that the petitioner is entitled to the limited relief of being permitted to make the necessary changes to its GSTR 3-B returns for the months of July 2017 and March 2018, particularly, since doing so would not cause any prejudice to the respondents-Revenue.
Concurrent proceedings by the Central and State on the same topic cannot be regarded as a cause to avoid personal hearing, ruled by the Madras High Court (HC) chaired by Justice Abdul Quddhosh.
Furthermore, If it is the same subject matter, the State Authority cannot prosecute the petitioner once again as the Central Authority has already initiated action against the petitioner in respect of the very same subject matter.
The petitioner was given one more chance by the court to take part in the in-person hearing. On February 16, 2023, the date of the personal hearing, he must come before the STO and raise all of his objections to the contested summons.
The Division Bench of Jharkhand High Court stayed the proceedings finding that show cause notices issued by two different authorities on the same subject matter were without jurisdiction.
The Bench comprising of Acting Chief Justice Aparesh Kumar Singh, and Justice Deepak Roshan stayed further proceedings in respect of the impugned ShowCause Notice dated 16.09.2022 along with Summary of Show-Cause Notice in Form GST-DRC-01 issued by the Respondent No. 3 and other impugned Show-Cause Notice dated 20.10.2022 along with Summary of Show- 2. Cause Notice issued by the Respondent and listed the case on 29.03.2023.
The Madras High Court (HC) single bench chaired by Justice Abdul Quddhosh allowed to carry forward the unadjusted Value Added Tax (VAT) Tax Deduction Source (TDS) to Goods and Services Tax (GST) regime.
The bench quashed the contested order and the petitioner is entitled to transition TDS under the TNVAT Act in terms of Section 140 of the TNGST Act, 2017 The HC by considering the judgement in M/s. DMR Constructions Vs. Assistant Commissioner, quashed the contested order on ground that being a non-speaking order as no reasons have been given for rejecting the petitioner’s request for carrying forward of the unadjusted VAT TDS to the GST regime.
In a recent judgement the High Court (HC) of Calcutta has held that the benefit of the Sabka Vishwas (Legacy Dispute Resolution) Scheme ( SVLDRS ) 2019 cannot be denied for filing under the wrong category.
The Court set aside the aforesaid impugned order which rejected the aforesaid applications of the petitioner filed under SVLDRS- 2019 and the respondent’s authority was directed to grant appropriate relief to the petitioner under the aforesaid Scheme by reconsidering the aforesaid applications after giving the opportunity of hearing to the petitioner or its
The Calcutta High Court (HC) has ruled that the writ court cannot decide on the classification of goods under Value Added Tax (VAT).
Justice Nizamuddin observed that there is no description of what will be the component or ingredients of cattle feed and this writ Court in exercise under Article 226 of the Constitution of India is not have the expertise to declare the product in question claimed by the petitioner either the same as ‘tush kuro’ or cattle feed.
While dismissing the petition, the Court upheld the findings of the revisional authority and substituted the same by acting as an appellate authority.
The Madras High Court quashed the non speaking assessment on the ground of non-adherence to the Circular of Tamil Nadu (TN) Commercial Taxes Department.
The Court of Justice Abdul Quddhose observed that “It is not clear as to whether the above mentioned Clause in the Circular was adhered to by the respondent before passing the impugned Assessment Order.
Even though the Circular referred to supra came in later point of time, the instructions given in the said Circular ought to have been adhered to by the respondent before passing the impugned Assessment Order and only then, it can be construed that the respondent has adhered to the principles of natural justice.”
While considering a writ petition, the Orissa High Court (HC) has held that deduction under section 80P(4) of the Income Tax Act, 1961 is allowable to Cooperative Societies involved in the business of banking.
In the writ petition, a challenge is laid to the notice issued under Section 148 of the Income Tax Act, 1961 and the order passed under Section 148A(d) of the Act. In addition, thereto, a challenge is laid to the notice issued under Section 148A(b) of the Act.
Chief Justice M S Raman held that the Appellant-Assessee would be entitled to the benefit of the deduction under Section 80P(4) of the Act since it is a Cooperative Society involved in the business of banking. It is open to the Assessee after the appeal effect is given based on the present order, to apply for a refund by the law.
Delhi HC is about to decide on whether payments made by Ranbaxy India to TEVA Israel are taxable. The writ petition filed under Article 226 of the Constitution of India concerns Assessment Year (AY) 2014-15.
The Bench comprising Justice Rajiv Shakdher and Justice Tarot Vitasta Ganju observed that “According to us, the matter requires examination. We are also told by Mr Salve that there are four writ petitions pending consideration between the same parties and are listed for arguments before the court on 02.05.2023.”
‘The fact that there are other writ petitions also pending consideration between the same parties, qua one issue or the other, is not disputed Mr Sunil Aggarwal, senior standing counsel, who appears on behalf of the respondents/revenue ” the Court said.
The Madras High Court granted opportunity for appearance to the petitioner, Tvl Metal Trade Incorporation, on the ground that truth cannot be unearthed when petitioner is absent for personal hearing.
The Court of Justice Abdul Quddhose observed that “Necessarily, the petitioner will have to participate in the personal hearing and state all his objections with regard to the action launched by the State Authority under the TNGST Act, 2017.
Unless and until the petitioner participates in the impugned proceedings viz., the impugned Summons, truth cannot be unearthed with regard to the petitioner’s contentions.”
“Since the petitioner did not participate in the personal hearing afforded to him as per the impugned Summons, this Court deems fit to grant one more opportunity for the petitioner to participate in the personal hearing” the Court opined.
The Delhi High Court confirmed the penalty for issuance of unauthorised Airway Bills on Red Sandalwood.
The Coram consisting of Justice VibhuBakhru and Justice Amit Mahajan observed that the Tribunal concluded that the appellant was remiss as he had not made proper enquiry. The Tribunal had also observed that the appellant was aware of the prohibited goods and accordingly dismissed the appeals.
It is clear from the impugned order that the Tribunal had found no reason to interfere with the findings recorded by the Adjudicating Authority.”
The Madras High Court observed that an independent decision to be taken by Customs Authorities for Provisional Release of detained goods.
The Court of Justice Abdul Quddhose noted that “As seen from section 110-A of the Customs Act, 1962, an independent decision will have to be taken by the Customs Authorities with regard to the request made by any importer seeking for provisional release of the detained goods which has been detained under section 110-A of the Customs Act, 1962 as in the present case.”
Section 110-A of the Customs Act, 1962 reads as : Provisional release of goods, documents and things seized pending adjudication—Any goods, documents or things seized under section 110, may, pending the order of the adjudicating officer, be released to the owner on taking a bond from him in the proper form with such security and conditions as the Commissioner of Customs may require.
“Whether the petitioner has responded to the Show Cause Notice issued by the Customs Authorities or not is immaterial for the purpose of deciding the application seeking for provisional release of the detained goods under section 110-A of the Customs Act, 1962” the Court said.
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