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 Delhi High Court observed that no penalisation for inadvertent error in submitting erroneous information which has since been rectified.
The Bench comprising Justice VibhuBakhru and Justice Amit Mahajan observed that “It is apparent from the above that the rectified information as submitted by the petitioner was not taken into account by either of the concerned authorities while considering the petitioner’s grievance regarding non-payment of its refund, as claimed.”
“We are of the view that it was essential for the concerned authorities to examine the information as submitted by the petitioner and process its claim for refund in accordance with law. Clearly, the petitioner cannot be penalised for the inadvertent error in submitting an erroneous information against Column No. 7 of its form, which has since been rectified” The Court opined.
The Summary Order on Form GST DRC-22 was nullified by the Acting Chief Justice Aparesh Kumar Singh and Justice Deepak Roshan bench of the Jharkhand High Court (HC).
The authorities made a severe procedural error and an infraction of natural justice by failing to issue a Show Cause Notice (SCN).
Also directed for re-adjudication in accordance with law. The Division Bench expressed its opinion after hearing the arguments that the assessment proceedings suffer from major procedural flaws due to the lack of a sufficient show-cause notice. A formal adjudication order is not included before the summary of order that was issued in Form GST DRC-07 on January 21, 2019, either.
The Gujarat High Court (HC) chaired by Justice Sonia Gokani and Justice Sandeep N. Bhat quashed the attachment order issued by the authorities. Also, ruled that the provisional attachment of the bank account should not hamper daily operations.
The HC ordered that the tax money that the Bank has been told not to part with be released once there is a direction, subject to the crystallisation of the petitioner’s liability and subject to the decision of the Appellate Authority if an appeal is filed within the statute’s allotted window of time.
Further directed that the remaining amount of penalty and interest, the petitioner shall furnish the bond before the authority concerned.
The Bombay High Court has recently granted bail to the corruption accused Assistant Commissioner of Income Tax (ACIT), observing that the appeal is not likely to be decided within a short period. Considering that, “The applicant was on bail during trial. The incident is old.
The date of complaint is 19/01/2009. Even after his conviction he is granted bail by the Trial Court under Section 389 of the Cr PC.”, the single bench of Sarang V Kotwal at Bombay High Court granted bail to the accused on a P.R. Bond of Rs. 50,000/- with one or two sureties in the like amount.
The High Court (HC) of Orissa has held that the tax demanded can’t be Contested when Assessee failed to follow the procedure under Rule 142 (1A) of OGST Rules.
Three months after making such payment, he sent a vague letter contending that the liability is “not acceptable” here nor there since the Petitioner had already made the full payment of the tax demanded.
While dismissing the petition, the Court held that “since there is no material to support the contention of the Petitioner that he made payment of the demanded tax under protest, the Court is not persuaded to accept such submission at this stage.”
The High Court (HC) of Bombay has held that the declarant making a voluntary disclosure is ineligible for applying under the Sabka Vishwas (Legacy Dispute) Resolution Scheme, 2019 (SVLDR) under section 125 of the Finance Act of 2019.
A two-member bench comprising Justice Nitin Jamdar and Justice Abhay Ahuja observed that the Scheme is clear that the declarant making a voluntary disclosure, is ineligible for applying under the scheme if it was subjected to audit as of 30 June 2019.
Since it is demonstrated that the Petitioner was subjected to an audit commenced earlier on 30 June 2019 the Petitioner was within the class declarants excluded from the Scheme, as referred to under Section 125 of the Act of 2019. The petition was dismissed.
The Bombay High Court (HC) has held that the Director General of Foreign Trade ( DGFT ) can’t reject the application as not being filed online when an inadvertent mistake was rectified by amending the shipping bill for Merchandise Exports from India Scheme ( MEIS ).
A two-member bench comprising Justice Nitin Jamdar and Justice Abhay Ahuja observed that the Policy Relaxation Committee has correctly pointed out that in the computerised environment when the governance of MEIS is online, it is difficult to proceed unless amended shipping bills are transmitted online.
The Court directed the concerned departments of the Respondents to take necessary steps within four weeks from the date order is uploaded.
Recently, the High Court (HC)of Bombay has held that no interest shall be paid by the assessee when the respondent failed to issue the sanction through an electronic form SVLDRS -3 under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS).
A two-member bench comprising Justice Nitin Jamdar and Justice Abhay Ahuja observed that to date, the Respondents have not issued an electronic form SVLDRS-3 as required.
Therefore, the obligation of the Petitioner under section 127 (5) of the Act of 2019 to pay the amount within 30 days had not arisen at all. It was observed that there is no fault on the part of the Petitioner and the Court held that “the Petitioner is entitled to the relief prayed for as to the benefit of the Scheme.”
In a recent judgement, the High Court (HC) of Bombay has held that the completion of the Investigation is not a condition precedent for eligibility under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
A two-member bench comprising Justice Nitin Jamdar and Justice Abhay Ahuja observed that the Petitioner is entitled to succeed as there is no other ground except the above on which the Petitioner is held to be ineligible under the Scheme.
The Court quashed and set aside the impugned rejections of the declarations filed by the Petitioner on 15 January 2020 under the Scheme of 2019 and the Respondents will process the declarations filed by the Petitioner for the years 2015-16, 2016-17 and 2017-18 as per law.
The Division Bench of Delhi High Court has quashed the notice issued through GST portal holding that the show cause notice (SCN) must clearly state the allegation that the concerned notice has to be met.
The Bench also held that, If the concerned authorities find that they were unable to communicate the allegations in respect of which the response was elicited by way of a show cause notice, by selecting the options as available on the electronic system; the concerned authorities may consider issuing a physical show cause notice.
The Division Bench of Delhi High court has granted relief to CISCO Systems directing it to refund duty paid on enhanced value of the goods under protest.
“It is difficult for this Court to accept that the payment of custom duty imposed pursuant to an order while appealing the same can be construed as payment of duty without protest. The very act of filing an appeal against an order imposing customs duty is a protest against the duty as assessed.””
“The entire purpose of such an appeal is to seek reduction of the levy. It is, thus, obvious that the assessee does not accept the said levy and payment of the same would necessarily have to be construed as payment under protest.”
The Madras High Court has recently rejected the pleas of three well-known music composers, AR Rahman, G V Prakash Kumar, and Santhosh Narayan, who challenged the proceedings initiated by the Commissioner of the GST Department, holding that, Show Cause Notice issued by Director General of GST Intelligence for service tax on permanent transfer of copyright in musical works is valid.
In conclusion, the Madras High Court dismissed the petitions filed by composers AR Rahman, G V Prakash Kumar, and Santhosh Narayan and ruled that the proceedings initiated by the Goods and Services Tax Department were valid.
The composers were given the opportunity to follow the appeals process, but the interpretation of contractual clauses was left to the authority.
The Madhya Pradesh High Court has recently quashed and set aside the post-decisional hearing notice served on the assessee on rejection of the Goods and Services Tax ( GST ) Input Tax Credit ( ITC ) claim.
The Madhya Pradesh High Court thus directed that “the Nodal Officer shall take a decision thereupon within a period of six weeks from the date of receipt of certified copy of this order and thereafter only the respondents shall proceed further in the matter pursuant to the notice”, quashing the impugned notice and order.
A Division Bench of the Gujarat High Court has recently reduced the pre-deposit from 20% of the tax amount to 15%, considering the inability of the petitioner-Vinod Kumar Dugar to pay the full amount.
Observing “There had been no challenge to the direction of 15% of the tax amount during the pendency of the adjudication”, the authority concerned was directed to accept the pre-deposits of 15% of the tax demand, by the Gujarat High Court Bench of Justices Sonia Gokani and Sandeep N Bhatt.
The Madras High Court (HC) presided by Justice Abdul Quddhosh directed for fresh consideration on merits and in accordance with law.
The respondent side had violated natural justice, according to the bench. Quashed as well, and the case must be returned to the respondent for an if further of the merits and compliance with the law, within a time range to be established by this Court.
In pursuance of section 54(6) of the Central Goods and Services Tax Act (CGST) of 2017 and the Gujarat Goods and Services Tax Act of 2017, the Gujarat High Court (HC), presided over by Justice Sonia Gokhani and Justice Sandeep N. Bhatt, ordered the authorities to refund the claim of Integrated Goods and Services Tax (IGST) that is allegedly withheld illegally.
As shown by Section 54(6) of the CGST Act read with Rule 91 of the CGST Rules, the Division Bench ordered the respondents-authorities to grant the amount of IGST refund to the petitioner as claimed by the petitioner and credit such amount to the petitioner’s account within three weeks of the date of receipt of a copy of this order
The Madras High Court recently rejected the pleas of three well-known music composers, AR Rahman, G V Prakash Kumar, and Santhosh Narayan, who challenged the proceedings initiated by the Commissioner of the GST Department.
In conclusion, the Madras High Court dismissed the petitions of the three music composers, AR Rahman, G V Prakash Kumar, and Santhosh Narayan, and ruled that the proceedings initiated by the Goods and Services Tax (GST) Department were valid. The liberty of the composers to follow the appellate procedure was preserved, but the interpretation of contractual clauses were left to the authority.
The Delhi High Court has recently ruled in favour of Blackstone Capital Partners, that there is no capital gain earned by the petitioner liable to tax in India in the matter before them.
Thus, the Delhi High Court ruled in favour of Blackstone Capital Partners held that the impugned reassessment proceedings are without jurisdiction and the impugned Notice under Section 148 of the Income Tax Act and the impugned Order and subsequent draft Assessment Order under Section 144C of the Act were quashed.
The bail request made by the accused who fraudulently claimed Input Tax Credit worth Rs. 24 Crores was dismissed by the Delhi Chief Metropolitan Magistrate (CMM), presided over by Judge Snigdha Sarvaria. Given the apparent facts and arguments, the bench inferred that there is insufficient evidence to support the grant of bail given the preliminary nature, seriousness, and manner of the offence, the claimed role of the accused, and the fact that the matter is still under investigation.
The Rajasthan High Court (HC) stayed the time barred reassessment proceedings. The bench of Justice Rajendra Prakash Soni and Justice Sanjay Mehta observed that the income limit did not meet. The respondent was given 4 weeks to file their requested reply after the bench accepted their request.
The court postponed the ensuing actions and notices against the petitioner in the interim. Additionally, it should be emphasised that the responders are free to transfer a request for a vacation or extension of stay if they so choose.
The High Court (HC) of Delhi has held that C Form issued at the material time cannot be cancelled retrospectively.
M/s Louis Dreyfus Company India Pvt. Ltd, the petitioner has filed the petition to restore and validate the 4 cancelled Statutory Form C issued to the Petitioner and to declare all the other 9 Statutory Forms issued to the petitioner as Valid and the same is to be communicated to the Gujarat VAT department.
Based on the precedents a two-member bench of Justice Vibhu Bakhru and Justice Amit Mahajan held that “there is no reason for denying the benefit of C-forms to the petitioner as there is no allegation that the petitioner had not supplied the goods in question.” The petition filed by the petitioner was allowed.
The Delhi High Court has recently ruled in favour of Blackstone Capital Partners, that there is no capital gain earned by the petitioner liable to tax in India in the matter before them.
Thus, the Delhi High Court ruled in favour of Blackstone Capital Partners held that the impugned reassessment proceedings are without jurisdiction and the impugned Notice under Section 148 of the Income Tax Act and the impugned Order and subsequent draft Assessment Order under Section 144C of the Act were quashed.
The Gujarat High Court (HC) has held that failure to communicate adjournment invalidates the order under section 148(A) of the Income Tax Act, 1961.
A two-member bench comprising Justice Sonia Gokani and Justice Sandeep N Bhatt quashed the order of 148A(d) of the Act and the issuance of notice under Section 148 of the Income Tax Act, 1961.
The Karnataka High Court (HC) chaired by Justice M. Nagaprasanna quashed the criminal proceedings initiated against the petitioner for non-remittance of Employees’ Provident Fund contribution by establishment due to the attachment of bank account by the Income Tax Department Authorities.
The High Court noted that the petitioner worked for the Establishment. The Establishment should have been added as a party before any proceedings for offences under Sections 406 or 420 of the IPC were started.
The prosecution of the petitioner cannot go forward without the Establishment being named as an accused. It is further considered that allowing the petitioner to be the subject of additional legal actions would turn into harassment, constitute an abuse of the legal system, and ultimately lead to a miscarriage of justice.
The Madras High Court recently quashed the impugned penalty levy in violation of natural justice principles against the Input Tax Claim of assessee, M/s Hind Aluminium Company on the basis of alleged bogus tax invoices and debit notes.
It was thereby held that, “the impugned order has to be necessarily quashed and the matter will have to be remanded back to the respondents for fresh consideration on merits and in accordance with law after affording a fair hearing to the petitioner, including granting them the right of personal hearing”, in favour of the petitioner M/s Hind Aluminium Company.
The Karnataka High Court recently quashed the AAR and AAAR rulings on applicability of Goods and Services Tax (GST) on issuance of vouchers.
The Court held that no GST was applicable on the vouchers in the nature of prepaid payment instruments issued by the assessee.
Answering whether vouchers themselves are chargeable to tax at the time of supply or chargeable when goods and services are redeemed, the Karnataka High Court Division Bench of Justice P S Dinesh Kumar and Justice T G Shivashankare Gowda observed that the issuance of vouchers is similar to pre-deposit and not supply of goods or services.
A Single Bench of Manipur High Court, while disposing the writ petition has held that Central Government employees posted in the North Eastern region who had kept families in previous places would be entitled to additional HRA.
The Bench of Justice M.V. Murali Daran Allowed the writ petition and held that the petitioners were entitled to HRA of last place of posting.
The Bench set aside the impugned orders holding that the impugned orders were issued without applying the mind and affording any opportunity of hearing before stopping the payment of HRA.
In the case of Bharatiya Vidya Bhavan, the Andhra Pradesh High Court (HC) has held that the food supplies to hostel students as an ancillary function of education trust can’t be brought to tax.
While allowing the writ petition, a two-member bench comprising Justice U Durga Prasad Rao and Justice T Malli karjuna Rao held that “the 2nd respondent in directing the petitioner school to obtain registration as a dealer under AP VAT Act, 2005 and the further action of respondents in assessing the petitioner’s school to VAT under the provisions of AP VAT Act, 2005 for the period from 01.04.2005 to 31.12.2005 vide order dated 08.03.2006 is held as illegal, arbitrary and contrary to provisions of AP VAT Act, 2005 and accordingly the said order is set aside”
In a recent Judgement, the Calcutta High Court ordered to allow the opportunity to hear the assessee who failed to file a GST return due to Mental stress and Physical Illness.
The Court held that” the petitioner should be given an opportunity of hearing. But to avail of such opportunity, the petitioner shall first make payment of up-to-date GST with statutory interest and penalty within three weeks from the date.”
The Delhi High Court has held that the underlying information or material that formed the basis for triggering the assessment or reassessment proceedings needs to be furnished to the assessee.
It was observed by the Court that since the reply of the petitioner was partial, and the petitioner itself had indicated that even if no material is supplied, it will file a further response to the notice issued under Section 148A(b) of the Act, the one-month timeframe would kick in only from 30.06.2022.
The Court set aside the impugned order dated 25.07.2022 passed under Section 148A(d) of the Act and the consequential notice of even date i.e., 25.07.2022 issued under Section 148 of the Act.
In a recent case, the High Court( HC) of Gujarat has held that a detachable warrant has a conceivable cost and the sale consideration from the transfer of the capital asset is liable to capital gain.
A Coram comprising Chief Justice Aravind Kumar and Justice Ashutosh Shastri upheld the view taken by the lower authority since the assessee itself has accepted the cost. Further upheld that the conclusions arrived at by the Tribunal and by the C.I.T. (Appeals).
The Andhra Pradesh High Court (HC) has held that an advance ruling application should not be accepted by Advance Ruling Authority (ARA) when the investigation started before the application was filed.
A two-member bench comprising Justice U Durga Prasad Rao and Justice T Mallikarjuna Rao observed that any proceedings referred to in 98(2) proviso encompasses within it the investigation against the applicant as per the provisions of CGST/APGST Act and if by the date of filing of the application before the ARA, already such proceedings were commenced, the ARA shall not admit the application inviting advance ruling.
In a recent judgment the Calcutta High Court observed that Writ Court should not act as Expertise to classify Products Under Customs Tariff Act, requires Technical Analysis.
The Bench of Justice Md. Nizamuddin has observed that “a writ court in the exercise of its constitutional writ jurisdiction under Article 226 of the Constitution of India should not act as an expert to scrutinize the composition and mode of manufacture of a product and do the job of classifying a product as to under which classification list of the Customs Tariff Act the product falls since it requires scientific and technical analysis to be conducted by experts in scientific and technical fields.”
The Karnataka High Court directed the State Government to release balance payments due to M/s BBP Studio Virtual Bharat Pvt Ltd, the petitioner, which was appointed to produce a 3D film during the Global Investors Meet, held in November 2022, but the contract was cancelled last minute and film was not showcased at the event on the sole reason that cancellation of contract on last minute on political interference is arbitrary.
The Division bench of the Delhi High Court allowed corporate social responsibility deduction to steal authority of India under section 37(1) of Income Tax Act 1961.
The division bench of the Delhi high court held that CSR expenses had been allowed as deductible expenditure under Section 37(1) of the Income Tax Act 1961 and upheld the decision of the ITAT.
A Single Bench of Orissa High Court has restored the matter to Kolkata Income Tax Circle holding that transfer of jurisdiction of matter was done after completion of assessment.
A single Bench of Chief Justice, MS Raman quashed the impugned order holding that the petitioner would continue to be within the jurisdiction of the relevant Income Tax Circle at Kolkata where he had been filing his returns.
Show Cause Notice (SCN) issued under section 73(1) of Central Goods and Services Act, 2017 (CGST) is not a mere formality, opined the bench of Acting Chief Justice Aparesh Kumar Singh and Justice Deep Roshan of Jharkhand High court.
Regarding the facts, the HC noted that the format of the show cause notice does not strictly comply with Section 73(1) of the JGST Act and Rule 142(1)(a) of the Rules, and since the principle of natural justice has not been upheld in the present case, the court will not accept the argument that an alternative remedy is available.
The division bench quashed and set aside the disputed show cause notice and DRC 01 and also the summary of order issued under DRC-07.
According to the Jharkhand High Court (HC), the cost of transporting goods from the seller to the buyer is not included in the selling price under the Value Added Tax Act, 2005.
The orders were invalidated by the acting chief justice’s bench and justice deepak roshan, who determined that the decisions made by the tribunal and the authorities were both unlawful.
The HC overturned and annulled the disputed orders. Further instructed to evaluate the materials and the petitioner’s arguments before delivering a new ruling on the petitioner’s claim insofar as it relates to freight charges that the petitioner received from its customers and that are shown and charged separately on the invoices.
The Telangana High Court, on Wednesday, agreed to examine a case in which Rs 126 crore was paid as income tax on non-existent income by the former chairman of Tech Mahindra (formerly Satyam Computers) B Ramalinga Raju.
The company has been attempting to correct the accounts since 2011, and if the plea is allowed, it could result in a refund.
The bench scheduled further examination of the issue on February 15 and adjourned the hearing after department counsel Sapna Reddy informed the court that an Additional Solicitor General from Chennai will come to argue the case.
The Bombay High Court has recently quashed an order, demanding penalty and duty on Lauryl Alcohol, seized from the respondent-assessee, Galaxy Surfactants Ltd., a listed company engaged in the manufacture and export of Surfactants used for manufacture of toothpaste and shampoos.
The observation in the same that, no sale liable to tax has occurred in the said transaction was reiterated by the Bombay High Court, ruling the issues in the case in favour of the petitioner.
The Bombay High Court in a recent ruling while allowing the writ petition filed by the assessee held that taxpayers would not be deprived of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVL DRS-1) benefit for pending change of accounting code by authorities.
After considering the contention of the both parties the division bench of high court of Bombay consisting Nitin Jamdar and Abhay Ahuja, allowed the writ petition and observed that Petitioner could not be deprived of the benefits of this scheme just because the amount of interest was deposited under Accounting Code 00441481 (Other Receipts (interest)) and not under 00441480 in respect of tax receipts which change of Accounting Code was pending with the Respondents Authorities at the time of filing of Form SVLDRS-1 by the Petitioner
A Single Bench of Allahabad High Court has held that in the case of segregation of works contract and supply of materials maintainable in view of agreement separate Goods and Services Tax shall be payable.
A Single Bench of Justice Rohit Ranjan Agarwal allowed the petition and set aside the impugned order observing that, “The agreement, which was arrived between the parties, did not segregate between works contract and the material to be supplied.”
“The agreement specifically provided for the payment of lump-sum money to the contractor for the material as well as the works contract. The interpretation given by the Assessing Authority and Tribunal cannot be sustained in view of the agreement arrived between the parties. The notification dated 27.4.1987 is not applicable in the case of assessee.”
A Division Bench of the Rajasthan High Court recently set aside the orders passed against the assessee, both in adjudication and appellate stages and observed that the violation of natural justice in adjudication stage cannot be cured by substantial compliance of natural justice in appellate stage.
The petitioner had claimed refund of accumulated input tax credit on account of export of goods under a letter of undertaking. The matter was thus remanded back to the adjudicating authority and the rejection of the refund claim of accumulated input tax credit was set aside.
A division bench of the Delhi High Court has held that the payment of tax and penalty to release the detained goods shall not be treated as “admission” on the part of the assessee and the same cannot be the sole reason to uphold the GST liability.
Justice Vibhu Bakhru and Justice Amit Mahajan was considering a petition by Ram Prakash Chauhan where though there has been no mismatch in the quantity of the goods found in the vehicle and the invoice produced, the GST department detained the vehicle on the ground that the goods were not accompanied by an E-Way Bill. However, in order to release the vehicle, the assessee paid tax, interest and penalty.
A Division Bench of the Delhi High Court has recently directed the Income Tax department to reconsider the taxability of the investment made by the private equity firm Blackstone Capital Partners in Agile Electric Sub-Assembly.
The disputed facts as to applicability of Section 139 and 115A were also directed to be reconsidered, along with other disputed facts, by the Bench of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju, while remanding the matter to the file of the AO.
Disposing the petition, the Division Bench noted, “the Assessing Officer (AO) should have applied his mind as to whether the investment in shares of Agile by the petitioner was a capital account transaction, given the fact that there is no allegation of round-tripping.”
The Division bench of the Bombay High Court held that failure to update Income Tax Portal could not cause any prejudice to the assessee and quashed the assessment proceedings.
The bench of the Dhiraj Singh Thakur and Kamal Khata quashes the order made by the respondents on 29th September, 2022 and held that “A fresh order be passed, after the Petitioner is granted an opportunity to upload its response to the show cause notice dated 22nd September, 2022, for which the requisite portal may be made available to the Petitioner. An opportunity of being heard may also be provided to the Petitioner.”
A Division Bench of the Delhi High Court recently directed to return the amount taken in possession by GST Officers with interest, noting that the GST Officers cannot take possession of cash found during search, under Goods and Services Tax Act, 2017.
The Division Bench of Justices Vibhu Bakhru and Amit Mahajan also directed to release the Bank guarantee furnished for the release of currency immediately.
A Single Bench of the Kerala High Court has recently held that carrying of gold in pocket without proper documents is sufficient to suspect Goods and Services Tax (GST) evasion.
It was observed by the Bench of Justice Gopinath P that, “The contention of the learned counsel appearing for the petitioners that the 2nd petitioner had forgotten to hand over about 100 gms of gold, which was being carried in his pocket, cannot be accepted.”
In a very recent decision the Calcutta High Court observed that additional directors of a company appointed under Section 161 (1) of the Companies Act, 2013 are equally liable for the company’s affairs, just as regular directors of the company.
“Additional directors are on equal footing, in terms of, of power, rights, duties, and responsibilities, as other directors are. The responsibility of an Additional Director being the same as that of a director (but [different] from an independent director) they remain responsible, as the statute provides for the same,” the judgment stated.
The Calcutta High Court stayed order passed under Section 148A(d) of the Income Tax Act, 1961 on the ground of non-filing of affidavits-in-opposition.
The Coram consisting of Justice TS Sivagnanam and Justice Hiranmay Bhattacharyya, observed that “We are inclined to grant an interim order sought for by the appellants.
Accordingly, the order passed by the assessing officer under Section 148A(d) of the Income Tax Act, 1961 dated 29th July, 2022 / 28th July,2022 and the consequential notice issued under Section 148 of the Act dated 29th July, 2022 / 28th July, 2022 shall remain stayed till the writ petitions are heard and disposed of.”
The High Court (HC) of Calcutta held that advisory services did not amount to Fee for Technical Service (FTS) as per Indo-US Treaty and are not taxable in India.
The revenue under Section 260A of the Income Tax Act, 1961 challenged the order dated 19th February 2020 passed by the Income Tax Appellate Tribunal Kolkata, ‘C’ Bench, Kolkata in ITA No.1276/Kol/2018 for the Assessment Year 2010- 11.
A Coram comprising of Justice T S Sivagnanam and Justice Hiranmay Bhattacharyya observed that the assessee is rendering only advisory service and it cannot be treated as included services under Article 12(4)(b) and held that the contention of the assessee about the binding nature of the ruling of the AAR has become academic.
The Jharkhand High Court upheld the conviction of Former Minister Anosh Ekka under Section 4 of the Prevention of Money Laundering Act, 2002 (PMLA).
The appeal is preferred against the Judgment of conviction and sentence passed by the Special judge, whereby and where under, the appellant has been held guilty for the offence under Section 4 of the Prevention of Money Laundering Act, 2002 (PMLA).
The Court lashed at the appellant and observed that these are species of crime that strike at the financial foundation of the State and the convict does not deserve any clemency so that the deterrent effect of punishment is not completely diluted.
Accordingly, the order of confiscation of crime proceeds is also affirmed.
A Single Bench of the Allahabad High Court, in a major relief to the assessee, M/s Yash Kothari Public Charitable Trust, has held that offline filing of Goods and Services Tax (GST) appeal shall be permitted if no other method was notified by the commissioner.
Observing that, “The Appellate Authority is there to adjudicate the matter, which is before it under the provisions of the Act, and it cannot stop any aggrieved person from approaching the forum through filing the appeal restricting his right”, the Single Bench of Justice Rohit Ranjan Agarwal held that, “the taxing authorities cannot stop any assessee from claiming his statutory right, as provided under this Act in the garb of technicality.”
A Division Bench of the Delhi High Court observed that avoidance applications under Insolvency and Bankruptcy Code (IBC) can be heard for approval of Resolution Plan, thereby granting relief to Tata Steel BSL Limited.
The Bench comprising Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad observed that “CIRP and avoidance applications, are, by their very nature, a separate set of proceedings wherein, the former, being objective in nature, is time bound whereas the latter requires a proper discovery of suspect transactions that are to be avoided by the Adjudicating Authority.”
A Single Bench of the Madras High Court has recently referred a bunch of writ petitions challenging cancellation of Goods and Services Tax (GST) registrations to a Division Bench of the same court.
Since, there were two contradictory views expressed by two Judges of the Madras High Court, the High Court Justice Abdul Quddhose, for Judicial Discipline and Propriety, referred the matter to a Division Bench of the High Court.
Acknowledging the nature of the matter deserving an expeditious disposal, the Registry was directed to immediately place this matter before the Acting Chief Justice of the Court for getting suitable orders for posting the writ petitions before the appropriate Division Bench nominated by the ACJ for an early hearing.
The Tripura High Court (HC) in a recent ruling quashed the service tax demand of Jurisdiction as the contractual works to the railway was within Assam.
Justice Arindam Lodh set aside the impugned demand since a non-speaking order has been passed without dealing with the exemption clauses. Further held that the respondents shall consider the explanation in the light of the exemption notification No.25/2012 and then pass a speaking order after allowing a personal hearing.
The division bench of Justices Sonia Gokhani and Sandeep N. Bhatt of Gujarat High Court (HC) quashed the re-assessment order and the final notice on the grounds of breach of natural justice principles.
The bench noted that despite the officer in question having been informed that the petitioner had requested the issuance of Form “F” through the Rajasthan Authority, he had chosen not to accommodate the petitioner and neither had he been given the chance to submit Form “F” nor been given the opportunity to be heard.
The Calcutta High Court (HC) allowed the revision application under section 264 of the Income Tax Act,1961 to rectify the mistake of offering exempted income to tax by an old lady.
A single-member bench consisting of Justice Md. Nizamuddin Held that “a mere typographical error committed by the assessee cannot cost them payment of excess tax as collected by the Revenue. Certainly, the denial for repayment of such excess collection would amount to great injustice to the Assessee.“
The Orissa High Court (HC) while quashing the VAT assessment held that the suppression of purchases and Sales cannot be based on ‘Eye Estimation’ of Stock.
Justice M S Raman held that the court was not satisfied with the Department which has been able to show the materials based on which it could conclude that there has been suppression of purchase and sales leading to enhancement of the taxable turnover of the Petitioner-dealer.
The High Court (HC) of Rajasthan held that the refund of accumulated ITC cannot be denied to the exporter without granting an opportunity of being heard as per the provision of Rule 92(3) of the CGST Rules.
It was submitted by the petitioner that as per provisions of Section 54(3) of the CGST Act and Rule 92 of the CGST Rules, the refund could not have been rejected by the authority without providing the opportunity of hearing as it envisage issuance of notice in Form GST RFD-08 requiring the applicant to furnish a reply in Form GST RFD-09.
A Coram comprising Justice Arun Bhansali and Justice Ashok Kumar Jain observed that the provisions of Rule 92(3) of the CGST Rules, emphasize that the refund shall not be rejected without giving the applicant an opportunity of being heard.
A Division Bench of the Calcutta High Court has recently quashed the transfer of jurisdiction from the Assistant Commissioner of Income Tax / Deputy Commissioner of Income Tax, Circle 13(1), Kolkata to Deputy Commissioner of Income Tax, Central Circle 1, Kanpur, done without giving assessee the opportunity of fair hearing.
The Bench of Justice T S Sivagnanam and Justice Hiranmay Bhattacharya observed that, “we find that no such reasons have been recorded by the authority for dispensing with the opportunity of personal hearing as no show cause notice was issued to the assessee prior to order of transfer.”
The Calcutta High Court has recently condoned the delay in filing of first appeal on grounds of medical illness. It was also observed by the court that, “it is not a case that deliberately the appellant had presented the appeal beyond the condonable period.”
The appeal was resultantly allowed, quashing the order passed without considering the medical illness of the appellant, Kajal Dutta, while remanding the matter to the appellate authority, with condonation of the delay in filing the appeal.
In an interim relief to MyTeam11, the Rajasthan High Court has stayed the show cause notice issued by the Directorate General of GST Intelligence ( DGGI ) last month.
The Company challenged the show cause notice served to them under Section 74(1) of the Central Goods & Services Tax, 2017 alleging that “MyTeam11 has avoided tax by undertaking activities in the form of betting and misclassified their supply as service instead of actionable claims which are goods.”
Online gaming companies have been under Taxscan for a few years. Last year, the GST department also served a similar notice worth ₹21,000 crore to GamesKraft Technologies in 2022.
The Delhi High Court has quashed the provisional attachment order by the Enforcement Directorate (ED) and held that it can only investigate the offence of money laundering in terms of Prevention of Money Laundering Act, 2002 and not assume that a dependent criminal offence has been committed in relation to the same.
The court quashed the provisional attachment order, which related to allegations of manipulation of share prices and inducement for the purposes of allotting preferential shares.
In a significant ruling, a division bench of the Gujarat High Court has held that since the assessee does not have ill-intent to evade GST as the e-way bill expired during the transit. In a significant ruling, a division bench of the Gujarat High Court has held that since the assessee does not have ill-intent to evade GST as the e-way bill expired during the transit.
The Calcutta High Court has recently quashed the cancellation of registration for non-mentioning of reply to SCN in a system generated order, while directing the assessee, Monirul Islam, to pay the entire tax due along with interests and other charges within 10 days for restoration of the canceled Goods and Services Tax (GST) Registration.
The Division Bench of Justices T S Sivagnanam and Hiranmay Bhattacharya observed, “In any event, whether it is an order passed by an authority in the physical form or an auto generated order, there should be application of mind.”
A Division Bench of the Calcutta High Court recently remanded a Goods and Services Tax (GST) matter to the adjudicating authority to reconsider the denied Input Tax Credit (ITC) claim of the appellant on grounds of cancelled GST registration of the other end dealer.
The Court opined that, “one more opportunity should be granted by the adjudicating authority and decision should be taken on merits after considering the documents that may be placed by the appellant before the authority”, quashing the impugned order denying the Input Tax Credit Claim.
In response to issues with the e-filing of the GST ITC-01 Form to transfer from the composition scheme to the conventional taxpayer Scheme, the Jharkhand High Court bench of Acting Chief Justice Aparesh Kumar Singh and Justice Deepak Roshan ordered the Department to take the extension into consideration.
The bench observed that the petitioner should approach the Commissioner, State Taxes with a request for extension of time limit for submission of Form GST ITC-01, which may be considered in accordance with law.
The Gujarat High Court bench of Justice Sonia Gokhani and Justice Sandeep N. Bhatt directed the department to refund the Central Sales Tax to Indian Oil Corporation.
The division bench ordered the respondents to process the petitioner’s refund application and award the return of the tax amount that had been dutifully received from the petitioner and submitted by the seller.
A Division Bench of the Patna High Court has recently quashed the ex-parte Goods and Services Tax (GST) assessment order passed against the petitioner in violation of the natural justice principles.
Observing the ex parte nature of the order, passed in violation of natural justice principles, without giving the assessee an opportunity to be heard, without assigning sufficient reasons about the determination of the tax amount due and payable by the assessee, the High Court Bench of Chief Justice Sanjay Karol and Justice Partha Sarthy set aside the impugned order.
The Jharkhand High Court (HC) chaired by Acting Chief Justice Aparesh Kumar Singh and Deepak Roshan quashed and set aside the Show cause notice, summary of show cause notice in FORM GST DRC01 and also the summary of order in FORM GST DRC-07.
The HC court observed that in the instant case purported show cause notice has been issued but at the cost of repetition, the same was issued in a format without striking out irrelevant particulars which is not the intent of the legislature.
Thus, the bench holds that the foundation of the proceeding in the instant case suffers from material irregularity and hence not sustainable being contrary to Section 73 (1) of the JGST Act.
A Division Bench of the Bombay High Court has recently set aside the undue denial of reward money to Jayashree Chandrakant Dhavre, the wife of Late Chandrakant Shivaram Dhavre, who in a major aid to the department had provided specific information to the office of the Marine and Preventive Wing of the Mumbai Commissionerate of Customs which led to seizure of smuggled goods.
“Once the deponent has accepted that reward at the interim stage was paid to Chandrakant and that the Petitioner has established that she is the legal heir of Chandrakant, then withholding the final reward is entirely arbitrary”, the Court observed and directed the the Respondents to treat the claim of the Petitioner’s husband – Chandrakant as eligible for the grant of final reward in respect of the concerned case and process the Petitioner’s claim as his legal heir.
A Madras High Court Single Bench has recently allowed the submission of manual application of a time barred Goods and Services Tax (GST) Input Tax Credit (ITC) claim of the assessee,Tvl. Ramana Textiles Private Limited.
The bench of Justice K Kumaresh Babu further directed the third respondent, The Assistant Commissioner (CT)/ (ST), Aruppukkottai Assessment Circle to consider the request of the petitioner and pass appropriate orders on merits and in accordance with law within a period of eight (8) weeks thereafter.
The Rajasthan High Court dismissed the refund application and observed that Central Excise Act and Rules do not Contemplate Extension of Time beyond the period of limitation.
The Coram consisting of Justice Rajendra Prakash Soni and Justice Sandeep Mehta observed that “The Central Excise Act and the rules framed thereunder, do not contemplate extension of time beyond the period of limitation for entertaining applications for refund of duty and interest rebate claims, which have to be submitted within a period of one year as stipulated under Section 11-B of the Central Excise Act.”
A Single Bench of the Madras High Court stayed the auction of property by the Income Tax Department on the sole ground that the appeal was filed beyond the prescribed time.
The Bench of Justice Abdul Quddhose held that “An interim protection will have to be granted in favour of the petitioner by directing the respondents to keep the auction in abeyance for a limited period on condition that the petitioner deposits 30% of the demand amount for each of the Assessment Years viz Assessment years 2009-10, 2010-11 and 2011- 12, within a period of one week from the date of receipt of a copy of this order.”
As a relief to Steel Authority of India Limited ( SAIL ), the Orissa High Court (HC) quashed the + sales tax proceedings as the department could not prove inter-state sales even after 35 Years.
While allowing the petition, the Court held that “nearly 35 years have already elapsed since the year 1988-89 and these proceedings cannot interminably carry on.”
Further, the impugned order of the Tribunal and the corresponding orders of the First Appellate Authority and the AO was set aside.
A Single bench of Kerala High Court while disposing a writ petition has allowed the payment of motor vehicle tax in instalments.
A Single Bench of Justice Gopinath P granted relief to the petition as the court had in other writ petitions, granted the relief of equated monthly instalments for clearing the arrears of motor vehicles tax.
A Single Bench of the Kerala High Court, recently held that the extension granted to the time limit of passing demand order under the Central Goods and Services Tax (CGST) Act and State Goods and Services Tax (SGST) Act are applicable to issue of Show Cause Notice (SCN) also.
The Kerala High Court Bench of Justice Gopinath P observed that, “the show cause notice can also be issued with reference to the date 30.09.2023 and not with reference to any other date” and dismissed the writ petition.
The single bench of the Allahabad high court in a revision petition filed before it held that four percent Value Added Tax is applicable to supply of Pat Pre-Form of plastic bottles to dealers.
After considering the both contentions of the parties then single bench Justice Rohit Ranjan Agarwal dismissed the revision petition and held that bottles which are manufactured by the assessee in part pre-form of plastic bottles are actually the bottles which find place in Entry No.174 of Schedule II Part C.
The Delhi High Court ruled that Customs AAR is valid despite on-going investigation by the Directorate of Revenue Intelligence (DRI).
The Bench comprising noted that “any preliminary exercise done by an officer of customs, to consider whether any question for consideration arises, would not preclude the CAAR from giving its advance ruling on that question.”
The High Court (HC) of Madras set aside the order demanding a penalty since the expiry of the E-way bill does not create scope for evasion and there is revenue loss.
It was held by the Court that mere delivery of the goods at a place other than those mentioned in the documents would not render the transaction as an evasion or abetment of evasion.
The impugned proceedings dated 02.12.2022 was set aside by the court with a directive that the writ petitioner shall pay a penalty of Rs.5,000/- (Rupees Five Thousand only).
The Bombay High Court has recently quashed a show cause notice-cum-demand order issued on 12 October 2009, holding that the same cannot be carried forward after such an inordinate delay.
The Division Bench of Justices Abhay Ahuja and Nitin Jamdar observed that respondents had delayed the transfer of proceedings from Delhi to Mumbai without any satisfactory explanation for this delay.
The Telangana High Court has recently issued notice to the State Government of Telangana and the authorities responsible for its tax system, asking for an explanation as to why they have not been filling the tax tribunals with the necessary judges.
Despite the implementation of the GST regime five years ago, new tribunals under the GST Act, the GSTATs have not yet been formed. In the past, tribunals were established under the VAT Act, but since GST tribunals have not been created and all related cases are being shifted to high courts, contributing to the overburdened judiciary.
The Delhi High Court has recently set aside a notice issued to the assessee, M/s Rajat Finvest, in lieu of alleged unaccounted income in its books in the guise of bogus Long Term Capital Gains and held that the said transaction cannot be said to be “bogus” when the shares traded are on stock-exchange after Securities Transaction Taxes (STT) were paid and the money was received through banking channels.
GST Evasion: Rajasthan HC grants bail to Gaurav Kakkar in ITC Fraud case- Gaurav Kakkar vs Directorate General of GSTIntelligence-2023 TAXSCAN (HC) 193
The Rajasthan High Court has granted bail to Gaurav Kakkar, the petitioner accused of creating fake firms for availing and passing of ineligible Input Tax Credit (ITC) and embezzling funds to a tune of Rs 19.65 crores.
The Bench noted that “taking into consideration the investigation and evidence so collected, the trial will take considerable time and it may happen, if denied bail, the judicial custody be prolonged beyond the statutory period of punishment which is for five years.”
The Bombay High Court bench of Justice Abhay Ahuja and Justice Nitin Jamadar quashed and set aside the service tax show cause demand notice on the grounds of 7 years delay.
The bench observed in Parley International Ltd. vs. Union of India has observed that proceedings should be concluded within a reasonable period and proceedings that are not concluded within a reasonable period, which the Court on the facts of each case has to consider, may not be allowed to proceed further.
The HC opined that the action on the part of a constituent of State has to be with responsibility and not caprice.
The Patna High Court restored GST Registration of the petitioner, Manoj Kumar Sah on the ground that there was gross violation of natural justice principles on the order cancelling the GST Registration.
The Court noted that the Joint Commissioner of State Taxes order is revoked, the petitioner’s registration is reinstated, and the State of Bihar is further instructed to complete the petitioner’s assessment and/or issue the necessary orders in accordance with the law.
The Jharkhand High Court has held that the benefit under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SLV DRS scheme), cannot be denied by the Designated Committee on the sole basis of Departmental decision to file an appeal against the order.
The division bench of Acting Chief Justice Aparesh Kumar Singh and Justice Deepak Roshan observed that “the Designated Committee travelled beyond the purview of the Scheme and acted in a wholly illegally and arbitrary manner by denying the benefit of the Scheme to the petitioner. It appears that the benefit of Scheme has been extended from 31 December, 2019 to 15th January, 2020, vide Notification dated 31″ December, 2019, issued by Central Government. “
The Calcutta High Court(HC)held that the second notice issued u/s 148 of the Income Tax Act without disposing of the return filed to the first notice is not valid.
A Single member consists of Justice Md. Nizamuddin observed that the respondent assessing officer concerned was not justified in law in issuing impugned second notices under Section 148 of the Income Tax Act, 1961, relating to the same assessment years instead of completing the assessment on returns filed in response to the first notices under Section 148 of the Act.
Further viewed that the action of the assessing officer allowing the expiry of period of limitation of one year to complete the assessment as per Section 153(6)(i) of the Income Tax Act, 1961, from the date of order of this Court in earlier writ petition on the first notices under Section 148 of the Act relating to same assessment year and issuing second notice in respect of the very same assessment year is not legal and valid.
The Calcutta High Court (HC) held that the approval from the non-authorised authority under section 151(ii) of the Income Tax Act,1961 invalidates the reopening.
A Single member consists of Justice Md. Nizamuddin observed that quashing the impugned notice and subsequent proceedings will not be a bar on the part of the Income Tax authorities concerned to initiate any fresh proceeding in future by the law.
The Calcutta High Court(HC)held that High Court can’t answer the classification of products under the Customs Tariff Act as it requires Technical Analysis by technical experts.
It was observed that only scientific and technical expertise can give any opinion as to the nature of the material used and method of manufacturing involved in the production of the articles in question and after taking into consideration the aforesaid scientific and technical aspect, appropriate Authority under the law can conclude and make a declaration as to under which heading of the classification list product in question will fall.
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