This Annual Case Digest analytically summarizes the key stories related to Tax judgements of various High Courts in India reported in Taxscan.in during the year 2023. These stories include judgements and observations of High Courts related to Income Tax, Goods and Service Tax(GST), Excise Duty, Service Tax, Customs Duty, etc.
The Bombay High Court Thursday rejected the petitions filed by businessman Mehul Choksi challenging the applications of the Enforcement Directorate (ED) to declare him a fugitive economic offender (FEO). In relation to the Punjab National Bank (PNB) Scam case.
The Court of Justice Sarang V Kotwal observed that “Firstly I do not find any infirmity in the verification and even otherwise I find that all the requirements under Section 4 of the FEO Act and under Rule 3 of the FEO Rules are properly complied with in this case. Therefore, I do not see any reason to interfere with the impugned order and hence the application is rejected.”
A Single bench of Justice Dinesh Kumar Singh of Kerala High Court, while upholding the penalty imposed by the authorities has ruled that “in the absence of valid documents in possession of the person in charge of the goods would be treated as a willful act of evasion of tax.”
Taking into account the guidelines outlined in Section 129 of the KGST Act, 2017, along with Rule 138 of the KSGT Rules established under it, and considering the specific circumstances of this case, the Kerala High Court determined that there is no need to intervene in the challenged decision that imposed the tax and penalty. Consequently, the writ petition was not successful and was dismissed.
The Kerala High Court, based on the Calcutta High Court’s ruling in the case of Suncraft Energy Private Limited v. The Assistant Commissioner, State Tax, Ballygunge Charge, has ruled that, in the GST regime, the assessee cannot be refused the Input Tax Credit simply due to variations between GSTR 2A and GSTR 3B.
Further, directed that the Assessing Authority to issue new orders in compliance with the applicable regulations after examining the submissions. The petitioner is also instructed to attend a meeting with the Assessing Officer on October 3, 2023, at 11:00 a.m., and should bring all supporting evidence for their input tax credit claim.
In a noteworthy ruling, the Delhi High Court has concluded that the preference of Chartered Accountants (CAs) over Cost Accountants for Finance Director positions is neither arbitrary nor in violation of Articles 14 and 16 of the Indian Constitution.
The bench stated that the Supreme Court in a large number of cases has held that unless a policy decision taken by the Government is demonstrably capricious or arbitrary or if it suffers from the vice of discrimination or infringes any statute or provisions of the Constitution, the same cannot be interfered with. Thus, the bench justified the dismissal of the writ petition by the single bench and held that there is no case for interference with the Impugned Judgment made out in the instant appeal.
In a significant ruling a Single Bench of the Kerala High Court observed that Input Tax Credit (ITC) cannot be denied to a purchaser merely on ground of non-recording of the transaction in the GSTR-2A Form.
The Court of Justice Dinesh Kumar Singh observed that “If on examination of the evidence submitted by the petitioner, the assessing officer is satisfied that the claim is bonafide and genuine, the petitioner should be given input tax credit. Merely on the ground that in Form GSTR-2A the said tax is not reflected should not be a sufficient ground to deny the assessee the claim of the input tax credit.” Advocates Aji V. Dev, H. Abdul Lathief, Alan Priyadarshi Dev, and S. Sajeevan appeared for the petitioner and Government Pleader Jasmine M.M, appeared for the respondents.
The Bombay High Court ruled that commission payments are allowable as business expenditure and commented that “There cannot be contradictory course of action as Revenue needs to be consistent”. A Division Bench comprising Justices Jitendra Jain and GS Kulkarni observed that “It is the business prerogative of the Appellant-Assessee as to whose services they should engage in the course of its business and on what terms and conditions. Most significantly, the fact that the Assessing Officer and the Tribunal have allowed part of the commission payment for the purpose of business also indicates that the Revenue has accepted the services rendered by and this part of expenditure in that regard was held to be allowable. There cannot be a contradictory course of action as the Revenue needs to be consistent.” “We are of the view that the Assessing Officer and the Tribunal were not justified in disallowing part of the commission payment for the assessment years 1986-87, 1987-88 and 1988-89. In view thereof, the appeal of the Assessee is allowed by answering the question of law in favour of the Assessee and against the Revenue” the Bench concluded.
The Kerala High Court condoned a delay of 467 days in the matter of payment of disputed tax under the Kerala Value Added Tax Act, 2003 (KVAT Act). A Division Bench of Dr Justice A.K. Jayasankaran Nambiar and Dr Justice Kauser Edappagath observed that “The above application is filed to condone the delay of 467 days in filing the Writ Appeal. Heard. Taking note of the averments in the affidavit filed in support of the delay condonation application, the delay is condoned.”
In a major ruling the Kerala High Court observed that “When a party can be compensated in terms of money, it cannot be a case of suffering irreparable loss” and thereby upheld the payment of 30% of disputed tax under the Kerala Value Added Tax Act, 2003 (KVAT Act).
By noting that the Tribunal has not committed any error of law in passing the impugned order by balancing the equities, the Court further went on to add that the Tribunal, while deciding the stay petition has observed that, for granting stay to the impugned disputed demand, interest of revenue is required to be considered and, in that premises, it has proceeded to direct the petitioner to deposit 30% of the disputed demand apart from furnishing simple bond for the balance amount.
A Division Bench of the Bombay High Court criticized the Commissioner of Customs for non-consideration of representations for 2 years and noted that this is not expected from a public servant.
The Bench further noted that the “Respondent No.2 hence could not have taken a position, that he would not even respond to such representations/applications of the petitioner. This was certainly not, what would be expected from a public official”. The Court allowed the petition by ordering that the goods be provisionally released on the Petitioner furnishing a bond containing an undertaking that the Petitioner shall pay the duty, fine and/or penalty as may be adjudged by the Adjudicating Authority.
In a significant ruling the Kerala High Court upheld the cancellation of Goods and Service Tax (GST) Registration and ruled that the assessee is responsible to monitor GST portal on GST registration cancellation. The Court of Justices CS Dias observed that “It was the bounden duty of the petitioner to have verified its common portal that is made available as per the provision. Thus, I am of the definite view that the contentions raised in the writ petition that Ext P1 assessment order was not served as per the provisions of the Act is untenable. The writ petition is meritless and is consequentially dismissed.” Alan Priyadarshi Dev, the counsel appeared for the petitioner and Thushara James, the Senior Government Pleader appeared for the respondents.
A Single Bench of the Kerala High Court dismissed a writ petition filed under Article 226 of the Constitution of India as there was delay of 3 years in approaching High Court against assessment order passed under Kerala Value Added Tax Act, 2003 (KVAT Act). A Single Bench of Justice Dinesh Kumar Singh observed that “The petitioner, instead of filing an appeal on time, approached this Court after more than three years of passing the impugned order. This Court is not inclined to entertain such a writ petition on the ground of delay and latches. Accordingly, this writ petition is dismissed on the ground of delay alone.”
In a major set back to the Indian Overseas Bank (IOB), the Madras High Court ruled that the Bank cannot file writ petition to protect interest of third party, who knowingly purchased property having encumbrance. “Once the purchaser has the knowledge about the encumbrances and purchased the property through auction, then it is his obligation to discharge the encumbrances and convert the encumbered property free from encumbrances. The Bank cannot file a writ petition so as to protect the interest of the third party, who has purchased the property knowing the fact that there are other encumbrances” the Court concluded.
The High Court of Patna has held that the reopening of assessments under Section 153A of the Income Tax Act, 1961 is unjustified if no incriminating material linked to undisclosed income is discovered during the search operation. The bench emphasised the requirement of incriminating material linked to undisclosed income and concrete evidence to justify reopening assessments under Section 153A of the Income Tax Act. Providing taxpayers with a crucial safeguard against arbitrary or baseless assessments, ensuring that the tax authorities adhere to the statutory framework and established legal principles when conducting such proceedings. In conclusion, the division bench of Chief Justice K Vinod Chandran and Justice Partha Sarthy rejected the appeal filed by the revenue.
The Kerala High Court quashed the intimation order issued under the Income Tax Act, 1961 in the matter of levy of late fees under Section 234E of the Income Tax Act, 1961 for filing delayed previous Tax Deducted at Source (TDS) return. The Court of Justice Dinesh Kumar Singh observed that “I find that the grievance of the petitioner thus covered by the said Judgment of the Division Bench and therefore, the Writ Petition is allowed. Impugned orders in Ext. P1 to Ext.P6 (the intimation orders) are hereby set aside.” K.N.Sreekumaran, Counsel appeared for the petitioner and Christopher Abraham, Standing Counsel for appeared for the Income Tax Department.
The Delhi High Court quashed the revocation of Customs Broker Licence by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), and observed that there is no necessity that every contravention of the Customs Brokers Licensing Regulation, 2013 (CBLR) be visited with extreme punishment or revocation of license. The Court noted that the CESTAT had failed to consider whether the punishment imposed was disproportionately high, as contended by the appellant and was of the view that the punishment of revocation of appellant’s CB License, is disproportionately excessive. “In view of the above, we set aside the impugned order revoking the appellant’s CB License and direct that in the event the appellant seeks renewal of the CB License or applies afresh, the same would be considered in accordance with law” the Bench concluded.
A Single Bench of the Kerala High Court quashed an assessment order passed without affording personal hearing as under Section 75(4) of the Goods and Service Tax (GST) Act, 2017. The petitioner was directed by the Court to appear before the State Tax Officer on 20.09.2023 and to make his submission with respect to the Show Cause Notice issued to him for finalization of the assessment order. It was also made clear that no notice of hearing shall be given to the petitioner. Harisankar V. Menon, Counsel appeared for the petitioner and Jasmine M. M., Government Pleader appeared for the respondents.
A Division Bench of the Kerala High Court directed the petitioner to remit balance tax amount in 3 instalments as per Kerala Value Added Tax Act, 2003 (KVAT) order taking into consideration the financial incapacity of the petitioner, Pyramid Architects and Engineers.
The Coram comprising Justice A Muhamed Mustaque and Justice Shoba Annamma Eapen observed that “we do not find any reason to interfere with Ext.P6 (the common stay) order. Sufficient reasons have been stated by the Appellate Tribunal while passing Ext.P6 order. However, we feel that the petitioner can be given instalment facility to pay off the amount now demanded as per Ext.P6.” The Bench further allowed the petitioner to remit the amount demanded as per Ext.P6 (the common stay order) in three equated monthly instalments.
In a recent ruling, the Delhi High Court ruled that the telecommunication company Providing export services and entering separate contracts with Indian telecom operators on its own is not an ‘Intermediary’. Thus, the bench allowed the refund of CENVAT credit.
The High Court also observed that the agreement envisages that SGIPL has to provide, at its own expense, all necessary infrastructure in order to provide the services to SingTel and its customers. It further envisages that SGIPL shall raise invoices upon SingTel in US dollars for the services rendered on a monthly basis and on such transfer prices as may be agreed upon from time to time. On a careful perusal of the terms and conditions of the Agreement between SingTel and SGIPL, the bench of Justice Yashwant Varma and Justice Dharmesh Sharma observed that there is no legal infirmity or irrational approach adopted by the CESTAT when it came to conclude that SGIPL is not providing “intermediary services”. Thus, entitled to CENVAT credit refund. Subsequently dismissed the appeals of the revenue.
A Single Bench of the Kerala High Court quashed notice issued under Section 148 A (b) of the Income Tax Act, 1961 as no reasonable opportunity of being heard was provided.
The Court of Justice Dinesh Kumar Singh observed that “There is no opportunity of being heard provided to the petitioner, issued the impugned order and thereafter Notice which are unsustainable. The present petition is allowed. The impugned order and Notice are set aside. The matter is remanded back to the respondents to pass a fresh order, after giving an opportunity of being heard to the petitioner.” Nikitha Susan Paulson, Counsel appeared for the petitioner and Jose Joseph, Standing Counsel appeared for the Income Tax Department.
The Delhi High Court, in its decision to restore the appeal to the appellate authority [Commissioner (Appeals)], noted that the GST authorities had neglected to take into account the evidence that supported the input supplies in relation to the Input Tax Credit (ITC) that was being claimed. It was further mentioned that “the Appellate Authority shall examine the material relied upon by the petitioner and if the Appellate Authority is of the view that the same cannot be corelated to the export of sugar as claimed by the petitioner, the Appellate Authority will state the reasons for the same.”
The Delhi High Court has held that Goods and Service Tax (GST) is not payable by Delhi Metro Rail Corporation (DMRC) for the service of Project Report for Surat Municipal Corporation and refund under section 54 of Central Goods and Service Tax (CGST Act), 2017 not applicable where GST is not Charged. A division bench comprising Justice Vibhu Bakhru and Justice Tara Vitasta Ganju observed that the period of limitation for applying for a refund as prescribed under Section 54 of the CGST Act, would not apply where GST is not chargeable and it is established an amount has been deposited under a mistake of law. The Court set aside the impugned order as well as the refund rejection order and directed the respondents to process the DMRC’s claim for a refund of ₹2,90,520/-.
The Delhi High Court in the case of Pepsico India Holding Ltd has held that a late deposit to the employee’s Provident Fund (PF) due to a national holiday is allowable. A division bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia observed that “since the due date fell on a date which was a National Holiday, the deposit could have been made by the respondent/assessee only on the date which followed the National Holiday. Section 10 of the General Clauses Act would help the respondent/assessee to tide over the objections raised on behalf of the appellant/revenue.” The Court ruled against the appellant/revenue and in favour of the respondent/assessee.
The Calcutta High Court directed the Additional Chief Secretary, Finance Department to decide in the matter of additional tax liability on subsisting Government contracts in pre or post GST regime without updating the Schedule of Rates (SOR). A Single Bench of Justice Md Nizamuddin observed that “Considering the submissions of the parties this writ petition is disposed of by giving liberty to the petitioner to file appropriate representation in the aforesaid regard as referred in preceding paragraph of this order, before the Additional Chief Secretary, Finance Department, Government of West Bengal within four weeks from date. On receipt of such representation the Additional Chief Secretary, Finance Department shall take a final decision within four months from the date of receipt of such representation after consulting with all other relevant departments concerned.” The Court also directed to consider such representation shall be considered and final decision will be taken up by the Additional Secretary, after giving opportunity of hearing to the petitioner or his authorized representatives. Till the final decision is taken by the Additional Chief Secretary, no coercive action shall be taken against the petitioner.
The Allahabad High Court ruled that the consignee is deemed owner if the invoice or any other specified document is accompanying the goods. A Division Bench of Justices Ashwani Kumar Mishra and Syed Aftab Husain Rizvi observed that “It is hereby clarified that if the invoice or any other specified document is accompanying the consignment of goods, then either the consigner or the consignee should be deemed to be the owner. If the invoice or any other specified document is not accompanying the consignment of goods, then in such case, the proper officer should determine who should be declared as the owner of the goods.” “We are of the view that the department ought to have considered the petitioner’s prayer for release of goods and vehicle upon compliance of the provisions
contained under Section 129 (1) (a) of the Act. A direction accordingly is issued to the respondents to act in terms of the above circular and release the goods upon compliance of the condition stipulated under Section 129(1)(a)” the Bench noted.
The Delhi High Court recently observed that a search can be authorized only if the conditions specified under Section 67 of the Central Goods and Services Tax (CGST) Act, 2017 are fulfilled.
A Division Bench of Justices Vibhu Bakhru and Tara Vitasta Ganju observed that “We have serious reservations whether any such roving and fishing inquiry under the Central Goods and Services Act, 2017 could have been directed to be conducted by the Special Judge. Further, the proper officer can authorise the search only if the conditions specified in Section 67 of the Act are fulfilled.” The Court also noted that “The respondent shall also produce the relevant files containing the directions for conducting the search. In the meanwhile, the proceedings pursuant to the search conducted are stayed.”
The Delhi High Court in its recent judgement has set aside the order cancelling the Goods and Service Tax (GST) registration order passed without disclosing reason. A division bench comprising Justice Vibhu Bakhru and Justice Tushar Rao Gedela observed that “Since the impugned show notice dated 5.12.2021 failed to disclose the reason for proposing cancellation of the petitioner’s GST registration, the impugned order cancelling the petitioner’s registration falls foul of the principles of natural justice.” The Court set aside the orders cancelling the petitioner’s registration and the petition is allowed with costs, quantified at ₹5,000/-.
The Delhi High Court observed that disallowance under section 14 A of the Income Tax Act, 1961 without examining accounts of Security Printing and Mining Corporation of India Ltd is invalid. “Completely ignoring the version of the respondent/assessee that being a cash-rich company, it did not have to deploy any person by way of any special effort which could be treated as expenditure to earn the exempted income, the Assessing Officer recorded a conclusion that the respondent/assessee had infused significant funds by way of equity in the joint venture company. No cogent reasons, much less supported by data extracted from accounts of the respondent/assessee were advanced by the Assessing Officer to explain why the case set up by the respondent/assessee was not believable. Even the quantification of the disallowance was carried out under Rule 8D(iii) of the Rules without scrutinizing the accounts of the respondent/assessee and by jumping over the mandate to first proceed under Section 14A of the Act.”, the court viewed. The court upheld the impugned order of the Tribunal and dismissed the appeal.
The Bombay High Court recently ruled that write-off of bad debt is not asset and clause – (a) of 4th proviso to Section 153A(1) of Income Tax Act, 1961 bars assessment. A Division Bench of Justices Firdosh P Pooniwalla and K Shriram observed that “In the instant case, the satisfaction note refers to two items. First, the loan account between petitioner and Hubtown Limited and the alleged escapement is only in respect of the part thereof which is written off during the year. That clearly, i.e., the writing-off of a bad debt cannot fall within the ambit of income, represented in the form of an asset.” It was further observed that the other item referred to in the satisfaction note, that is to say, trading in shares of Hubtown Limited has been undertaken on the stock exchange, recorded in the books of account of petitioner, and the resulting gain offered for tax and the amounts taxed in the hands of petitioner. “Since the write-off of a bad debt cannot be held to be an asset, clause – (a) of the 4th proviso to Section 153A(1) of the Income Tax Act would bar any assessment that is proposed to be made for the relevant assessment year/years, i.e., Assessment Year 2011-2012, 2012-2013 and 2013-2014” the Bench concluded.
The Bombay High Court observed that failure to pass draft assessment order under Section 144C (1) of the Income Tax Act, 1961 renders assessment as one without jurisdiction. A Division Bench of Justices Dr NK Ghokale and K R Shriram observed that “It is clear that the AO shall, in the first instance, forward a draft of the proposed order of assessment to the eligible assessee if he proposes to make any variation is prejudicial to the interest of such assessee. Certainly, there is a variation in the assessment order different from what was filed in the return of income and since it is by way of an addition made, the variation is prejudicial to the interest of Petitioner.” The Court relied on International Air Transport Association v. Deputy Commissioner of Income-tax of the Bombay Court and in the case of Zuari Cement Ltd v ACIT of the Division Bench of the Andhra Pradesh High Court wherein it was held that ‘the failure to pass a draft assessment order under Section 144C(1) of the Income Tax Act would result in rendering the final assessment as one without jurisdiction.
The Delhi High Court quashed the Retrospective Effect of Cancellation of Goods and Service Tax (GST) registration and directed to effect the cancellation only from the date of the closure of the premises of the assessee. A division bench comprising Justice Vibhu Bakhru and Justice Tushar Rao Gedela directed that the cancellation of the petitioner’s GST registration shall take effect from 31.03.2022. However, this would not preclude the concerned authorities from instituting any proceeding if it is found that the petitioner has violated any provisions of the Statute or is liable to pay any tax, interest or liability.
The Delhi High Court upheld the penalty under the Customs Act, 1962 as there was material evidence showing the complicit and active involvement of the assessee in evasion of customs duty.
A division bench comprising Justice Yashwant Varma and Justice Dharmesh Sharma observed that “the respondents had found that the petitioner was complicit and actively involved in the evasion of duty and the intent of these parties to mis-declare imports while acting in concert. Bearing in mind the material which has been relied upon and the nature of the allegations levelled against the petitioner, we find ourselves unable to hold that his case would fall in the category of rare and exceptional cases.” “Prima facie, and solely to examine whether a waiver is merited, we have delved through the relevant record and find that the conclusions drawn by the respondents insofar as the petitioner is concerned can neither be said to be wholly perverse nor unsustainable. We thus find that the circumstances do not warrant the invocation of the extraordinary power conferred by Article 226 of the Constitution.”, the court held while dismissing the petition.
The Bombay High Court granting of license to developer doesn’t amount to possession within meaning of section 53 A of Transfer of Property Act (TP) and Section 2(47)(v) of Income Tax Act,1961 is not applicable.
The division bench comprising Justice K. R. Shriram and Justice Dr.N.K. Gokhale relying upon the judgment of the Apex Court in the case of Seshasayee Steels (P) Ltd. V Assistant Commissioner of Income Tax VI(2), held that the assessee had only granted a licence to Developer who entered into assessee’s land for the purpose of development and that did not amount to ‘allowing the possession of the land’ as contemplated under Section 53A of the Transfer of Property Act,1882 and therefore Section 2(47)(v) of the Act would not apply. The Court held that granting of a licence for the purpose of development of the flats and selling the same could not be said to be granting possession.
A Division Bench of the Himachal Pradesh High Court, while quashing the denial of the registration of Sale Certificate in revenue records, held that Excise & Taxation Department cannot raise a priority claim over and above the Petitioner-Bank, when, as per Section 26E of SARFAESI Act introduced by amendment carried in 2016.
It was observed that, “Apex Court has categorically held in Kotak Mahindra Bank Ltd. vs. Girnar Corrugators Private Limited and Others, that non-obstante clause in Section 26E of SARFAESI Act shall prevail over the MSMED Act, in absence of any specific express provision giving priority for payment under the MSMED Act over the dues of the secured creditors or over any taxes or cesses payable to central/state government or local authority.” “The Petitioner-Bank has first charge over the properties being secured creditor in priority over all Other Debts, Revenues, Taxes, Cesses and Other Rates payable to the Central or State Government or Legal Authority”, the Himachal Pradesh High Court held.
The Madras High Court directed to release of the consignment of prohibited Black pepper having an MMI of 500/per kg after testing the samples and paying the customs duty and noted that the consignment of Prohibited Black Pepper can be Released Provisionally under Section 110-A of the Customs Act, 1962 pending Adjudication.
A single-judge bench comprising Justice C.Saravanan observed that since “there is no mandate that the goods shall be confiscated and vested with the Government. They can be released provisionally under Section 110-A of the Act pending adjudication. Taking note of the above view of the Madurai Bench of this Court, the Court is inclined to order a provisional release of the imported consignment of black pepper subject to the petitioner furnishing suitable securities in the form of a guarantee and subject to the meeting standards prescribed by the Food Safety Authority under the provisions of the Food Safety and Standards Act, 2006.”
In a significant case, the Allahabad High Court held that the grant of pardon in a scheduled offence has no effect on proceedings under the Prevention of Money Laundering Act,2002 and upheld the proceeding. A single judge bench comprising Justice Subhash Vidyarthi held that “there is no illegality in the cognizance/ summoning order dated 08.08.2019 passed in Complaint Case No.121/2019 in the Court of Session Judge / Special Judge PMLA, Lucknow, and there is no ground to quash the proceedings of the complaint filed against the applicant under the PMLA. The application under Section 482 Cr.P.C. lacks merit and the same is, accordingly, dismissed.”
In a recent case, the Kerala High Court directed the commissioner of Income Tax to decide the appeal within 2 months since the petitioner is facing the recovery proceeding under the Income Tax Act,1961. The Court finally disposed of the petition with a direction to the third respondent to consider Exhibit P4 appeal filed by the petitioner and pass an appropriate order within two months.
The Bombay High Court HC set aside an assessment order under section 148 of Income ncome Tax Act,1961 in the absence of evidence proving income escapement in assessment.
The division bench comprising Justice K.R Shriram & Justice Dr. N.k. Gokhale accepted the view taken in CIT vs. Dalmia Cement (Bharat) Ltd that “once it is established that there was nexus between the expenditure and the purpose of the business (which need not necessarily be the business of the assessee itself), the Revenue cannot justifiably claim to put itself in the arm-chair of the businessman or the position of the board of directors and assume the role to decide how much is reasonable expenditure having regard to the circumstances of the case. No businessman can be compelled to maximize its profit.”
In a significant ruling the Kerala High Court observed that the Superintendent of Central Tax should take an independent decision without the influence of direction by the Directorate General of GST Intelligence (DGGI) for cancellation of GST Registration.
The Court stated that if the show cause is cancelled, the petitioner would be entitled for restoration of the GST registration certificate. However, if the authority takes a decision to cancel the GST registration of the petitioner, he may take recourse to appropriate proceedings as available under law. The Court made it clear that the Superintendent of Central Tax should take an independent decision without being influenced by the direction of the DGGI, Kochi Zonal Unit. Aswin Gopakumar, Caounsel appeared for the petitioner and P.T. Dinesh, Counseppeared l for the respondent.
The Bombay High Court (HC) has held that delayed payment on the balance amount of self-assessment tax does not amount to tax arrears under Direct Tax Vivad Se Vishwas Act 2020 (DTVSV Act). The division bench comprising Justice K.R Shriram & Justice Dr. N.k. Gokhale observed that the prosecution against the petitioner has been initiated under section 276-C(2) of the Act because of the delayed payment of the balance amount of the self-assessment tax. Such delayed payment cannot be construed to be a tax arrear within the meaning of section 2(1)(o) of the Act. Therefore, such a prosecution cannot be said to be in respect of tax arrear. Further held that “the declaration of petitioner filed on 31st January 2021 for Assessment Years 2010-2011 and 2011-2012 would have to be decided by respondent no.1 in conformity with the provisions of DTVSV Act. The petition is accordingly allowed to the extent.”
In a recent ruling, a Division Bench of the Delhi High Court has urged the Central Government to expedite the implementation of National Litigation Policy. Observing that, “More than a decade has passed since the discussion on the issue of a litigation policy commenced and it is unclear as to when the proposed framework or guidelines will be in place”, the Delhi High Court ruled that “The government must prepare a time-bound action plan for implementation of the ‘National Litigation Policy’ or the guidelines that are under contemplation”, directing the registry to communicate a copy of the judgement to the Secretary, Ministry of Law & Justice, Government of India, for necessary action, also to transmit a copy of this judgement to Secretary, Department of Law, Justice & Legislative Affairs, Government of NCT of Delhi, for due consideration.
In a recent ruling, the Kerala high Court has stayed the Recovery cum Garnishee orders issued by the income tax authorities during the pendency of condonation applications on condition of pre-deposit 20% of the assessed tax amount. The bench of Justice Dinesh Kumar Singh took into account the petitioner’s submissions and directed them to make a 20% deposit of the assessed tax amount within a period of 1 month. Upon completion of the deposit, the appellate authority was further directed to promptly review the applications for condoning the delay and the pending appeals in accordance with law. It was further directed that until a final decision is reached concerning these applications and appeals, the contested demand notices and recovery cum garnishee orders are to be temporarily suspended and not enforced.
In a recent ruling, the Kerala High Court ruled that Input Tax Credit (ITC) cannot be denied solely based on the discrepancy between GSTR 2A and GSTR 3B. The High Court remitted the matter back for the evidence examination. The High Court, while allowing the writ petition, remitted the matter back to the file of the Assessing Authority to examine the evidence of the petitioner irrespective of the Form GSTR 2A for petitioner’s claim of the input tax credit. Furthermore, it was instructed that, subsequent to a thorough review of the evidence presented by the petitioner/assessee, the Assessing Authority should issue new orders in compliance with applicable regulations. The petitioner has been specifically advised to attend a meeting with the Assessing Officer on October 3, 2023, at 11:00 a.m., along with all supporting evidence to substantiate their input tax credit claim.
The Kerala High Court has recently held that Municipality should only issue demand notices for property tax from the date of issue of completion certificate.The Single Bench of Justice Dinesh Kumar Singh observed that, “the petitioner is liable to pay the tax for the period after issuance of the occupancy certificate and not prior to the said date, the present writ petition to that extent is allowed. The Municipality is entitled to recover the tax from the date of issuance of the occupancy certificate.”
The Punjab and Haryana High Court, while allowing the Goods and Services Tax (GST) refund, held that innovation and development services in the pharma provided to a German company amounted to an export of services.
The bench observed that the fact of non-issuance of SCN to the remaining 5 claims was not disputed in the reply filed by the respondents. It is not in dispute that issuance of show cause notice and granting of opportunity of hearing before rejecting any refund claim, is a statutory requirement. The petitioner claimed that they meet all the conditions for export of services as defined in Section 2(6) of the Integrated GST Act, 2017, and that they provide services directly to the German company without any intermediaries. The Punjab and Haryana High court has ruled in favor of the petitioner, setting aside the orders dated September 13, 2019, and March 4, 2021. The respondents have been directed to release the refund amount of Rs.25,74,16,653 for the specified period within four weeks.
The Bombay High Court has held that the amendment under section 54 of the Income Tax Act, 1961 has no retrospective effect on restricting investment in India as the amended provision would come into force with effect from 1st April 2015 and therefore, would apply to future periods only and not before the date of amendment.
The bench of Justice K. R. Shriram and Justice N. K. Gokhale has observed that the amendment stated that the amended provision would come into force with effect from 1st April 2015 and therefore, would apply to future periods only and not before the date of amendment. “The language of Section 54(F) of the Act before the amendment is neither ambiguous nor vague. The intention of the legislature to insert the words ‘in India’ with effect from 1st April 2015 is not uncertain or confusing and hence the applicability of the amendment cannot but be prospective.”, the Bench held. It was also clear that Petitioner has not filed the revised returns under Section 139(5) of the Act but he has admitted to an inadvertent error in declaring total income as Nil vide a rectification application. The Court held that the petitioner is entitled to a refund of Rs.72,370/- for the excess amount of tax deduction at source. The order was quashed and set aside.
In a recent ruling, the Delhi High Court has directed the authorities to issue a refund of Rs. 22 crores along-with interest as per Section 42 of the Delhi Value Added Tax Act, 2004 from the date it fell due till realisation. It was observed that the VAT credit cannot be treated as a Pre-deposit for Goods And Services Tax (GST) Adjustments. Hence, the Court invalidated the challenged adjustment order dated November 18, 2022, and instructed the refund of Rs. 17,10,15,285/- for the fourth quarter of 2015-16 and Rs. 5,44,39,148/- for the initial quarter of 2017-18, inclusive of interest in accordance with Section 42 of the DVAT Act, to be calculated from the due date until it is realized. Furthermore, the court ordered that the refund should be processed within three weeks from the date of this judgment. However, concerning the contested default notices, unless under specific circumstances, the petitioner is granted the right to challenge them through a statutory appeal before the Appellate Tribunal, following the legal procedures.
The Madras High Court in a case of dishonour of cheque in relation to payment made to an Advocate and ruled that the contingent fee of and advocate is not a legal claim. A Single Bench of Justice G Ilangovan observed that “in the light of the Legal Practitioner’s Fees Rules 1973, the fee that has been claimed by the respondent prima facie shows illegal in nature. So, the illegal claim cannot be construed as legal claim. No legal liability can be fastened upon the petitioner to honour the above said cheque. So, this contention on the part of the respondent is rejected.” The Court commented that this is a classic case of legal practitioner’s abuse of the process of the court. So the continuation of proceedings amounts to illegal. “Legal process can be undertaken to advance or vindicate the grievance, but it should not be permitted to be taken as an act of aberration, abuse and that too by any legal practitioner. So, the entire process is liable to be quashed” the Bench concluded.
“There is not even a whisper in the entire communication trail as to what was not disclosed”, the Bombay High Court observed while quashing the penalty proceedings against the assessee under Section 148 of the Income Tax Act. Upon observing that, “There is not even a whisper in the entire communication trail as to what was not disclosed. In our view, thus, this is not a case where assessment should be permitted to be reopened on the reasonable belief that income has escaped assessment on account of failure of the assessee to disclose truly and fully or material information necessary for computation of income”, the Division bench of Justices Dr. N K Gokhale and K R Shriram quashed the notice dated 26th March 2021, the order disposing objections dated 24th March 2022, the impugned assessment order and the impugned notice of remand dated 24th March 2022 as well as the impugned show cause notice for levy of penalty dated 24th March 2022.
Directing the respondent to surrender, a Single Bench of the Calcutta High Court has quashed and set aside the order of acquittal granted by the magistrate owing to misreading of evidence. The court found, perusing the entire evidence on record, that the learned Magistrate recorded an order of acquittal on misreading of evidence and the evidence on record is sufficient to hold the respondent No.2 liable for committing offense under Section 138 of the N.I Act. The order of acquittal was thus set aside. The respondent No.1 was held guilty for committing offense under Section 138 of the N.I Act. The order of acquittal passed in favour of respondent No.3 was not interfered with and the order acquitting the respondent No.3 passed by the Magistrate was affirmed. The respondent No.2 was convicted accordingly and sentenced to undergo simple imprisonment for a period of six months. The respondent No.2 was also directed to pay compensation of Rs.36 lakhs being double the cheque amount with simple interest thereon at the rate of 9% per annum to the appellant/complainant in default of payment of said compensation, the respondent will have to undergo simple imprisonment for further period of six months, the Single Bench of Justice Bibek Chaudhuri held.
In a ruling by Justice Dinesh Kumar Singh of the Kerala High Court, it was determined that the District Collector does not have the authority to approve installment plans for sales tax liabilities under the Kerala General Sales Tax Act. Instead, the High Court granted permission for individuals to submit applications directly to the Sales Tax Officer (STO) in order to settle the petitioner’s dues in six installments.
Additionally, the High Court has instructed that the Sales Tax Officer (STO), who is the fourth respondent in this matter, should render a decision on the application in accordance with the law within 15 days from the date of the directive. Moreover, for a duration of one month, the challenged notices should not be enforced.
A Division Bench of the Bombay High Court issued notice to the Attorney General of India, R. Venkataramani, in a plea challenging the constitutional validity of provision on Resolution Professional. The Court of Justice MM R. Venkataramani and Justice BP Colabawalla observed that “Once this is the case, we are of the view, at least prima facie, that the ‘Chairperson’ is a separate and distinct category from a ‘Whole-Time Member’. Admittedly the present impugned order has not been passed by a Whole-Time Member but by the Chairperson.” “Since the constitutional validity of Sections 7(5) and 9(5) of the IBC, 2016 are also challenged in the present Petition, notice is issued to the Attorney General of India returnable on 27th September, 2023” the Bench noted.
The Gujarat High Court has dismissed the First Information Report (FIR) against a Chartered Accountant firm related to the GSLDC scam. The court noted that the firm’s involvement in the matter was limited to auditing vouchers and records and was not directly linked to the misconduct in the fieldwork of the Khet Talavadi project, which was the subject of the allegations.
The High Court observed that officers and staff of the Gujarat State Land Development Corporation had filed fraudulent applications to benefit from the ‘Khet Talavadi’ Scheme initiated by the State Government. Importantly, the court found no direct connection between the applicant, the Corporation’s officers/staff, or the contractors, and there were no financial transactions other than the firm’s fees involved. Additionally, provisions within the Chartered Accountant Act address the appointment of unqualified personnel for audit work. Based on these considerations, the court found no prima facie evidence of an offence by the applicant and consequently quashed and set aside the FIR against the CA firm.
In a recent judgment, the Kerala High Court dismissed the writ petition and directed the appeal before the statutory authority as the order was passed without considering the document due to the failure of the assessee to submit on Re-adjudication process under the Kerala Value Added Tax (KVAT) Act,2003.
The Court dismissed the petition and held that “However if the petitioner files appeals before the Appellate Authority within fifteen days from today against the impugned Assessment Orders, the Appellate Order shall proceed to decide the appeals on merit by the law without going into the question of delay if any. For fifteen days, no coercive measures shall be taken in pursuance of the recovery notices.”
The Kerala High Court granted one month to file an Income Tax Return (ITR) as the notice issued under section 148 of the Income Tax Act, 1961 on grounds of concealment of income and the assessee failed to file an ITR.
The Counsel for the petitioners submitted that these petitions may be disposed of with liberty to the petitioners to file the return of income and take all the pleas which are available to them under the law in respect of their claim for their income being jumped under Section 80P of the Income Tax Act. Considering the plea, the single bench comprising Justice Dinesh Kumar Singh held that “If the petitioners file their return of income within one month from today, the assessing authority will examine the return by the law and pass the final assessment orders expeditiously.”
The Delhi High Court has held that Customs House Agent (CHA) cannot be held liable for illegal acts of importer firms after clearance of goods from the customs station.
“A penalty of revocation of license for failing to collect the KYC forms unjustly restricts the Appellant’s ability to undertake the business CHA for the entire life.”, the court viewed. Keeping in view the proportionality doctrine and keeping in view that the Appellant has already been unable to work for 4½ years, the division bench comprising Justice Yashwant Varma and Justice Manmeet Pritam Singh Arora set aside the impugned order of the Tribunal as well as the order-in-original.
The Kerala High Court directed to decide refund application in the matter of excess tax amount paid under the Kerala Value Added Tax Act (KVAT), 2003.
A Single Bench of Justice Dinesh Kumar Singh observed that “Considering the aforesaid submission, the present writ petition is disposed of with direction to the 1st respondent to decide Ext.P7 application for refund within a period of three weeks, in accordance with law.” The Counsels Narayani Harikrishnan, R Jaikrishna, CS Arun Shankar and Anish P appeared for the petitioner and Reshmita Ramachandran, Government Pleader appeared for the State.
In a recent decision the Kerala High Court dismissed a writ petition as there was delay of 9 years in filing appeal against assessment order.
A Single Bench of Justice Dinesh Kumar Singh observed that “The petitioner had filed appeal against the assessment order with inordinate delay only on 11.08.2023. The appellant authority has not taken any decision till date on the application for condonation of delay. considering the inordinate delay and filing the appeal, this Court cannot grand any relief in this Writ Petition.” “However, the appellant authority is directed to decide the application for condonation of delay in accordance with law within a period of one month. For a period of one month, no further proceedings may be initiated in pursuance to the impugned notice” the Bench concluded. Counsels Muhammed Kabeer S and C Sheeba appeared for the petitioner and Jasmin.M.M, Government Pleader, appeared for the state.
The Kerala High Court directed the Commissioner Goods and Service Tax to process refund claim in the matter of refund of Integrated Goods and Service Tax (IGST) on shipping bills.
A Single Bench of Justice Dinesh Kumar Singh observed that “Considering the aforesaid facts and circumstances of the case, the present writ petition is disposed of with direction to the 4 th respondent to take into consideration of Exhibits P-5 and P-6 and process the claim of the petitioner for refund of Integrated Goods and Service Tax in respect of the shipping bills in accordance with law.” “The petitioner may be afforded an opportunity of being heard to substantiate his claim for refund of Integrated Goods and Service Tax for the exports reflected in the shipping bills. The necessary order should be passed within a period of two months” the Bench concluded.
The Kerala High Court dismissed writ petition as there was relinquishment of right to prove claim for Input Tax Credit (ITC) by the assessee, Ansil Ibrahim.
A Single Bench of Justice Dinesh Kumar Singh observed that “If there is a difference between GSTR 2A and GSTR 3B, then it is for the assessee/dealer to prove his claim of input tax credit by leading cogent and credible evidence for his claim regarding input tax credit.” “In the present case, the petitioner, despite show cause notice, chose not to provide any evidence in respect of his claim for the input tax credit, nor did he appear for a hearing on the date fixed. When the petitioner himself has given up his right to prove his claim for the input tax credit, this Court cannot help such an assessee by entertaining this writ petition.”
The Calcutta High Court ordered for refund of penalty as the time between expiry of the e-way bill and the interception of the vehicle in question was proved.
A Single Bench of Justice Md. Nizamuddin observed that “In view of the facts and circumstances of the case which appears from record and considering the aforesaid two orders of this Court, this writ petition being WPA 22612 of 2023 is disposed of by setting aside the aforesaid impugned order of the appellate authority and adjudicating authority and as a consequence, petitioner will be entitled to get the refund of the penalty in question subject to compliance of legal formalities.” Counsels Ankit Kanodia, Megha Agarwal, Jitesh Sah appeared for the petitioners and counsels A. Ray, T. M. Siddiqui, T. Chakraborty appeared for the state.
The Kerala High Court set aside the assessment order passed in violation of section 75 (4) of the Goods and Service Tax (GST) Act, 2017. The section mandates an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.
Considering the aforesaid provision and facts, the single judge bench comprising Justice Dinesh Kumar Singh found that “there has been violation of Sub Section 4 of Section 75 of the GST Act and, therefore, the impugned order is hereby set aside and the matter is remitted back to the file of the 1st respondent for passing fresh assessment order after affording an opportunity of personal hearing to the petitioner. The petitioner is directed to appear before the 1st respondent on 20.09.2023 and make his submission with respect to the Show Cause Notice issued to him for finalization of the assessment order. It is made clear that no notice of hearing shall be given to the petitioner.” The court set aside the impugned order and allowed the writ petition.
In a major ruling the Calcutta High Court observed that the land once vested with State cannot be de-requisitioned and no further acquisition proceedings lie under the Land Acquisition Act, 1894.
A Division Bench comprising Justices Debangsu Basak and Md. Shabbar Rashidi observed that “We find from the records that, NHAI issued a notification under Section 3C of the Act of 1956 did not proceed to include the plots involved in the subsequent notification under Section 3D of the Act of 1956. NHAI, therefore, corrected themselves with regard to the plots concerned. Land once vested with State cannot be derequisitioned nor any further acquisition proceedings lie. In the present case, land stood vested under the Act of 1894 and as such revocation of the Act of 1956 was non-est. No right flows from the revocation of the Act of 1956.”
The Calcutta High Court observed that GST payment should be made on receipt of payment against execution of work contracts.
A Single Judge Bench of Justice Ravi Krishan Kapur observed that “The impugned order is well reasoned and categorically records that the petitioner has received the entire payment against execution of work contracts in the post GST regime. Hence, the petitioner was obliged to pay GST on such payment and the same ought to have been made after filing the proper form. The plea of the appellant that the tax has not been paid by the Department, is also not tenable in law and non-payment of GST by the petitioner is in contravention of the provision of the Act.”
The Kerala High Court stayed recovery proceedings as appeal and stay application pending before the First Appellate Authority (FAA).
A Single Bench of Justice Dinesh Kumar Singh observed that “Considering the aforesaid facts, the Commissioner of Income Tax (Appeals)/3rd respondent is directed to take up the appeal filed by the petitioner expeditiously and decide the same within a period of three months. However, if it is not possible to decide the appeal within the period of three months, at least the stay application of the petitioner should be decided in accordance with the law within the said period of three months. “Counsels Divya Ravindran and C.A. Jojo appeared for the petitioner and Jose Joseph SC-IT appeared for the respondents.
In a significant case, the Kerala High Court quashed the reassessment order as the 4 days time allowed to file the reply to the show cause notice (SCN) is not valid as per mandatory provision under Income Tax Act, 1961.
The single judge bench of Justice Dinesh Kumar Singh viewed that only four days’ time was granted to the petitioner to reply to the show cause notice under Section 148A(b) of the Income Tax Act. While allowing the petition the court quashed the assessment order and the respondents are directed to issue a fresh notice under Section 148A(b), giving seven days or more time to the petitioner, but not more than thirty days’ time as prescribed under Section 148A(b) for filing the reply and hearing.
The Kerala High Court granted one week time as the assessee failed to file appeal. As the assessee opted to file appeal using reference number of Penalty order under Goods and Service Tax (GST) Act, 2017. The single judge bench of Justice Dinesh Kumar Singh disposed of the writ petition with liberty to the petitioner to approach the officer concerned to get the reference of the order imposing penalty and file the appeal thereafter within a period of fifteen days which shall be considered and decided expeditiously.
In a significant ruling the Delhi High Court observed that the High Court has writ jurisdiction under Article 226 of the Constitution of India to waive statutory pre-deposit for filing appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).
A Division Bench comprising Justice Yashwant Varma and Justice Dharmesh Sharma observed that “We find ourselves unable to hold that his case would fall in the category of rare and exceptional cases. Prima facie, and solely for the purposes of examining whether waiver is merited, we have delved through the relevant record and find that the conclusions drawn by the respondents insofar as the petitioner is concerned can neither be said to be wholly perverse or unsustainable. The Court thus concluded by noting that the circumstances do not warrant the invocation of the extraordinary power conferred by Article 226 of the Constitution.” Counsels Deepak Gandhi and Bhavneet Arora appeared for the petitioner and Senior Standing Counsel along with Ms Vaishali Goyal appeared for the respondent.
In a recent case, the Kerala High Court stayed the recovery proceeding against the cooperative society which was initiated after rejecting the claim of exemption under section 80(P) of the Income Tax Act, 1961 as the assessee failed to prove as a cooperative society which follows the Kerala Co-operative Society Act Rules.
The single judge bench of Justice Dinesh Kumar Singh disposed of the writ petition with a direction to the 2nd and 4th respondents to take the hearing appeals and dispose of them expeditiously within two months. The disposal of the appeals is subject to the cooperation of the assessee or the petitioner. For two months, no coercive measures shall be taken against the petitioner for realization of the tax assessed in this Writ Petition.
The Calcutta High Court ordered to file statutory appeal as the contract executed for West Bengal State Rural Development Agency (WBSRDA) did not provide for GST payment.
The Court of Justice Ravi Krishan Kapur observed that “In view of the subsequent events which have transpired after the filing of the writ petition and more particularly in view of the final order dated 18 September, 2023, the instant writ petition has become infructuous. The petitioner has an efficacious statutory remedy against the order dated 18 September, 2023 by way of preferring a statutory appeal.”
The Kerala High Court quashed the order passed under section 148 of the Income Tax Act, 1961 denying the opportunity to file an objection on Show Cause Notice (SCN) as sending real-time alert is a mandatory requirement under the Income Tax Act.
The single judge bench of Justice Dinesh Kumar Singh quashed the notice and assessment order and directed to serve the petitioner with a fresh notice following the mandate under Section 148A(b) of the Act.
The Calcutta High Court directed the petitioner to file appropriate representation for the reconsideration of the matter before the Additional Chief Secretary, Finance Department, Government of West Bengal in respect of the additional Goods and Service Tax (GST) liability for execution of government contracts.
The Court disposed the writ petition by giving liberty to the petitioner to file appropriate representation before the Additional Chief Secretary, Finance Department, Government of West Bengal within four weeks and held that the Finance Department should take a final decision within four months from the date of receipt of such representation after consulting with all other relevant departments concerned. A single-member bench comprising Nizamuddin. J directed the petitioner to file representation for reconsideration of the additional tax liability.
The Kerala High Court directed the Income tax department to decide the condonation application for 277 days in filing the Income tax Appeal and the stay application.
The single judge bench of Justice Dinesh Kumar Singh disposed of the writ petition with a direction to the 3rd respondent to take up the application for condonation of delay and if the delay is condoned, then decide the application for staying the demand in pursuance to the assessment order. The third respondent is granted one month to decide the application for condonation of delay and application for stay.
The Kerala High Court directed the National Faceless Appeal Centre (NFAC) to consider interim stay order before initiating the recovery proceeding under Income Tax Act, 1961.
The single judge bench of Justice Dinesh Kumar Singh disposed of the writ petition with the following directions “(i) The National Faceless Appeal Centre (NFAC), Delhi, to provide a link to the petitioner within two weeks allowing the petitioner to upload the interim application for staying the demand notice (Ext.P4) dated 23.09.2022. (ii) The petitioner should upload the interim application on the same day when the link is provided.
