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 has held that the Assessing Officer cannot trigger reassessment when a pending appeal on income tax addition is sustained.
The appellant had initiated an addition upon the filing of the Return of Income [ROI] by Shri Gautam Bhalla, the respondent/assessee. The assessment order dated 30.03.2015 was framed under Section 153A, in conjunction with Section 143(3) of the Act. It’s worth noting that Section 153A was invoked by the appellant/revenue in the context of search and seizure proceedings initiated around 16.01.2013 against Vatika Group and the respondent/assessee. The respondent/assessee, dissatisfied with the assessment order, appealed to the Commissioner of Income Tax (Appeals) [“CIT(A)”]. The CIT(A) deleted the aforementioned additions made the respondent/assessee primarily on the grounds that no incriminating material was found and the assessments for the relevant assessment years were already completed, rendering the Assessing Officer (AO) without jurisdiction to frame an assessment order.
A Single Bench of the High Court of Madhya Pradesh, presided over by Justice Dinesh Kumar Paliwal, has granted bail to Nakool Nishad, a 28-year-old transporter from Katni, who was detained since October 21, 2023 for alleged demand of Goonda Tax.
The complainant had harbored suspicions about Nishad’s involvement in the arson incident. Nakool Nishad, represented by his advocate Pankaj Tiwari, maintains his innocence, asserting that he has been falsely implicated in the case. The defense contends that there is no substantial evidence against Nishad and points to CCTV footage supporting his alibi, which places him at home during the alleged incident. Additionally, the defense argues that the accusation against Nishad is a result of his opposition to the illegal sand loading in the complainant’s trucks.
Nupur Dhameja, the State’s panel lawyer, presented that the applicant has a criminal background with 13 cases but acknowledged that CCTV footage indicates the bail applicant was at his home at the time of the offense. After considering arguments from both parties, Justice Dinesh Kumar Paliwal expressed the opinion that further pre-trial detention of the applicant is not justified. While refraining from commenting on the case’s merit, the court granted bail to Nakool Nishad.
A Single Bench of the Kerala High Court stayed Value Added Tax (VAT) recovery proceedings till disposal of pending appeal before the Kerala VAT Tribunal.
An appeal had been lodged by the petitioner in the KVAT tribunal against the decision of the Sales Tax department’s order. The Appellate Authority had granted a stay on the condition that the petitioner deposits 30% of the disputed tax amount and furnishes a simple bond for the remaining sum within one month, a condition the petitioner adhered to. After six months, the petitioner submitted another petition seeking an extension of the interim order previously granted by this Court. In the earlier case, the petitioner’s counsel argued that the petition filed by the petitioner before the Kerala VAT Tribunal remained unaddressed, awaiting orders. The petitioner expressed concern that without timely orders, irreparable harm and loss might be incurred.
The Bench of Justice Basant Balaji allowed the review petition taking into consideration the fact that the recovery proceedings were sought to be imposed against the petitioner.
A single bench of the Kerala High Court dismissed a writ petition challenging the assessment order and demand related to the assessment year 2016-2017. The petitioner, a cooperative society, failed to file returns for the said year, prompting the tax authorities to reopen the assessment.
The case gained attention due to significant cash deposits in the financial years 2015-2016 and 2016-2017, as detected through Multi-layer NMS cases in the AIMS module of ITBA. The Income Tax Department initiated the reopening of the petitioner’s case by issuing a notice under Section 148 of the Income Tax Act, 1961. Despite receiving the notice, the petitioner filed the return of income on 29.04.2021, declaring a total income of ‘Nil’ after claiming a deduction under Chapter VIA (80P) of Rs. 2,64,133/-.
Subsequent notices under Section 142(1) of the Income Tax Act dated 08.07.2021 and 18.11.2021 were issued, but the petitioner failed to respond. The final opportunity provided on 24.02.2022 also went unanswered. In response to the non-cooperation, the Income Tax Department passed an ex-parte assessment order under Section 144 of the Income Tax Act. The petitioner did not submit the return in response to the initial notice under Section 148.
Justice Dinesh Kumar Singh rejected the petitioner‘s claim of not having received the notice. The court found no grounds to entertain the writ petition against the impugned assessment order. Consequently, the writ petition was dismissed.
The Kerala High Court has directed a Non-Resident Indian, a United Arab Emirates Resident to pursue available statutory remedy, when he challenged the imposition of income tax penalty orders through a Writ Petition.
A Non-Resident Indian (NRI) residing in the United Arab Emirates has filed a writ petition challenging income tax notices issued by the respondents for the collection of Rs. 28,56,391/-. The petitioner challenges notices sent by the respondent, alleging unfair issuance. In response to the petitioner’s plea, the court issued an interim order on March 22, 2022, directing the petitioner to appear before the Tax Recovery Officer, following the submission of relevant documents and notices. The petitioner complied with the court’s directive and appeared before the Tax Recovery Officer, who handed over copies of assessment and penalty orders under Sections 144 and 147 of the Income Tax Act, 1961, dated December 23, 2019, and November 9, 2020, respectively. Despite the attachment of the petitioner’s property, the court has temporarily halted the sale proceedings.n
In response, Mr. Naveeth R. Nath, counsel for the Revenue, argued that the petitioner has not challenged the assessment and penalty orders through statutory means. He suggested that the court stay the sale of the attached property until the Appellate Authority reviews the appeal. Acknowledging the Revenue’s suggestion, the court disposes of the writ petition, granting the petitioner the liberty to file an appeal before the Appellate Authority within three weeks. The petitioner must include applications for condonation of delay and stay.
A single bench of the Kerala High Court has held that limitation under Section 17(D) of the Kerala General Sales Tax Act is not applicable to the notice of pre-assessment issued against the petitioner under the instructions of the High Court, in a major setback to Hindustan Coca Cola Beverages Private Limited.
he assessment order for the financial year 2004-05, under Section 17(D) of the Kerala General Sales Tax Act, 1963 (KGST Act), was contested by the petitioner. A Single Judge of the Kerala High Court granted the writ petition, setting aside the original assessment order and remanding the matter for a fresh order. A fast track team was formed to complete the assessment under Section 17(D) for the petitioner’s financial year 2004-05. Despite the petitioner’s response stating that the original assessment was set aside by the High Court in 2009, and the records were unavailable, a notice was issued on 02.12.2021, directing the petitioner to produce documents by 16.12.2021. The petitioner’s subsequent reply reiterated the objection, emphasizing the time lapse since the High Court’s order.
The petitioner raised objections, asserting that the notice was issued after the statutory assessment period. The petitioner argued that the High Court had fixed a two-month time frame for redoing the assessment. The counsel for the petitioner contended that issuing a notice after 12 years was against the time prescribed in Section 17D of the KGST Act.
Justice Dinesh Kumar Singh held that the limitation prescribed for assessment or revised assessment did not apply in this case.
The Delhi High Court directed the GST Department to refund Rupees 23 lakhs as there was no ascertainment of liability and non-issuance of notice as per the procedure contemplated in the Central Goods & Services Tax Act, 2017 (CGST Act)
The petitioner, Neeraj Paper Marketing Limited, has filed this petition seeking, among other things, a direction for respondent no.1 to refund the amount of ₹28,20,000/- deposited by the petitioner during the search and inspection conducted on 29.07.2022, along with a simple interest of 12% p.a. from the payment date. The petitioner contends that it was compelled to deposit the said amount and asserts that it cannot be considered a voluntary deposit under Section 74(5) of the Central Goods & Services Tax Act, 2017 (‘CGST Act’). The petitioner was seeking a refund for the amounts paid in cash and debited from the Electronic Credit Ledger (ECL) during the operations conducted by respondent no.1 under Section 67(2) of the CGST Act.
The central issue for consideration was whether the payments made can be deemed voluntary under Section 73(5) or Section 74(5) of the CGST Act. The counsel for the respondents contends that the payments were voluntary, as the petitioner acknowledged its liability during the inspection on 29.07.2022. It is asserted that the Director of the petitioner admitted a mismatch in the returns filed for the Financial Years 2018-2019 and 2019-2020.
The Delhi High Court recently ruled that the final assessment should be passed by the Assessing Officer (AO) in accordance with directions issued by DRP(Dispute Resolution Panel) on filing of objections against draft assessment order within time limit
he current writ petition has been initiated by Pepsico India Holdings Private Limited to challenge the order dated November 21, 2023, issued by Assessing Officer under Section 143(3) read with Section 144C(4) of the Income Tax Act, 1961, for the Assessment Year 2020-21. Additionally, the computation sheet and demand notice issued under Section 156 of the Income Tax Act are contested.
The petitioner also contested the notice dated November 21, 2023, issued under Section 274 in conjunction with Section 270A of the Income Tax Act, which initiated penalty proceedings. The petitioner requests directions for the DRP to address the objections dated October 20, 2023, in accordance with the law. The petitioner’s counsel noted that, although objections against the draft assessment order dated September 26, 2023, were promptly submitted to the DRP under Section 144C(2)(b)(i) read with Section 144B(1)(xxiv)(b)(I) of the Income Tax Act, the petitioner inadvertently omitted to inform the Assessing Officer about the objections as required by Section 144C(2)(b)(ii) of the Income Tax Act. As a result of this oversight, the Respondent Assessing Officer issued the contested final assessment order on November 21, 2023, thereby concluding the assessment for the relevant fiscal year.
The bench observed thus “This Court is further of the view that no prejudice will be caused to the Respondent-Department if the present petition is allowed and the impugned assessment order is set aside as Respondent-Department would be well within its rights to pass a fresh assessment order post the receipt of direction from the Respondent No. 3-DRP”
The Delhi High Court set aside denial of claims for refund of accumulated input tax credit (ITC), thereby granting relief to Indian Oil Corporation Limited (IOCL).
The petitioner (‘IOCL’) has initiated the present petition due to the denial of claims for the refund of accumulated Input Tax Credit (‘ITC’). The denial was based on the assertion that the tax rate on input supply and output supply is identical. The Revenue contends that the refund is impermissible under Clause (ii) of the proviso to Section 54(3) of the Central Goods & Service Tax Act, 2017 (‘the CGST Act’).
The petitioner argues that it accumulates unutilized ITC because the tax rate on certain inputs is higher than the rate charged on bottled Liquid Petroleum Gas (‘LPG’) – the petitioner’s output supply. Thus, the petitioner contends that the refund of unutilized ITC is not prohibited under the proviso to Section 54(3) of the CGST Act. The determination of whether IOCL’s claim for the refund of accumulated unutilized ITC is admissible needs to be made in accordance with the explicit provisions of Section 54 of the CGST Act.
Pursuant to Section 54(1) of the CGST Act, any person seeking a refund of tax and interest paid on such tax or any amount paid by him is entitled to submit an application for refund within two years from the relevant date, as defined under Explanation (2) to Section 54 of the CGST Act.
The Division Bench of Justices Vibhu Bakhru and Amit Mahajan held that It is not necessary for this Court to examine whether such clarification falls foul of Section 54(3) of the CGST Act as it is apparent that the same is inapplicable in the facts of the present case.
In a recent case, the Delhi High Court, while allowing the writ petition, held that material considered in prior reassessment proceedings should not be the subject matter of reassessment in fresh proceedings.
Petitioner PMC Fincorp Ltd, formerly known as Priti Mercantile Company Ltd., submitted its Return of Income (ROI) for the Assessment Year (AY) 2011-12 on 30.09.2011. The mentioned ROI underwent processing under Section 143(1) of the Income Tax Act. Nearly four years later, a notice dated 17.09.2013 was served on the petitioner under Section 148 of the Act. In response to this notice, the petitioner filed a ROI, mirroring the one submitted on 30.09.2011. Upon receipt of the reasons recorded by the Assessing Officer (AO) to initiate reassessment proceedings, the petitioner raised objections.
Following the disposal of the objections, the AO issued another notice dated 15.01.2015, indicating a search on Mr. S.K.Jain and disclosing the petitioner as a beneficiary of an accommodation entry from Transnational Growth Fund Ltd. In reply to the notice dated 29.01.2015, the petitioner clarified that it had received a loan of Rs. 50 lakhs from TGFL in FY 2010-11, with proper banking transactions and TDS deduction. Subsequently, the respondent/revenue issued an order on 22.11.2016 under Section 127 of the Income Tax Act
After reviewing the facts, the division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia allowed the writ petition filed by the petitioner.
The Delhi High Court has held that daughters can be “Karta” of Hindu Undivided Family (HUF) and represent the HUF before the competent authorities like tax departments.
The appellant and the respondents, being Hindus and governed by the Mitakshara Law, are descendants of Late Shri D.R. Gupta, son of Late Shri Sunder Das Gupta, who passed away on 01.10.1971. Late Shri D.R. Gupta established a Hindu Joint Family (HUF) known as D.R Gupta and Sons (HUF) on 05.01.1963, comprising himself and his five sons.
The following Civil Suit was filed in 2006 by respondent Sujata Sharma, seeking a Declaration that she is the Karta of “D.R. Gupta & Sons HUF.” It was held that the Amendment in Section 6 of the Act, 1956, by the Amendment Act, 2005, does not impose any restriction on the right of a woman to be a coparcener, and she cannot be denied the status of Karta to manage the affairs, including the property of HUF. The Suit was decided in favor of the plaintiff/respondent No.1, declaring her the Karta of “D.R. Gupta & Sons HUF.”
The challenge to the judgment by the Manu Gupta is essentially based on the ground that his cousin sister, i.e., Sujata Sharma was married on 28.02.1969 and had become an active member of the HUF in her marital home. It was claimed that Kartaship owes its provenance to Hindu customs and laws, which cannot be outmaneuvered by the opinion or acts of the family members. It was further stated that Section 6 of the Act, 1956 (as amended in 2005) only recognizes the right of daughters to have an interest in the coparcenary, and the same cannot be equated with her right to become a Karta.
The Amicus Curiae submitted that, “On the basis of the recommendations of the Law Commission of India in its 174th Report on “Properly Rights of Women: Proposed Reforms under the Hindu Law”, the Legislature has not included the distinction drawn in State Amendments between a married and an unmarried daughter in the 2005 Amendment. Thus, all daughters of Coparceners are entitled to become a Coparcener, which also entitled them to become a Karta.”
The Delhi High Court’s ruling affirmed a daughter’s eligibility to be ‘Karta’ for HUF heralds a new era of empowerment and representation. This pivotal decision not only redefines traditional roles but also underscores the evolving legal dynamics within family structures.
The Bombay High Court directed to appeal before the Customs Excise Service Tax Appellate Tribunal (CESTAT) against the anti-dumping duty imposed based on lapsed excise notification.
M/s. Sarla Performance Fibres Ltd., the petitioner, has contested the legality of the notifications dated January 13, 2012, and January 19, 2017, issued by the Government of India under Section 9A(5) of the Customs Tariff Act, 1975, imposing anti dumping duty on Nylon Filament yarn. The petitioner highlighted in the petition that a show cause notice was issued on December 27, 2016, to which responses were submitted on March 30, 2017, and April 20, 2017. Following a personal hearing, on December 18, 2017, the Commissioner of Central Excise and GST issued an order imposing anti dumping duty of Rs. 4,31,05,000/- on the petitioner based on the impugned notifications.
The petitioner’s challenge to the Commissioner’s orders encompasses various grounds, including the applicability of the notifications. The petitioner argued that the court has the authority to strike down the notifications, a power not vested in the Tribunal. It was contended that it is now an established legal principle that when the primary notification lapses upon the expiry of the specified period, there is no scope for amending a non-existent notification.
The court referenced Union of India vs. M/s. Kumho Petrochemicals Co. Ltd in its verdict. The court observed that the verdict merely states that the petitioners are entitled to a refund of the amount of anti-dumping duty paid till date would not do away with the requirement of the petitioner’s therein satisfying the doctrine of unjust enrichment, if at all applicable in the facts of that case. A division bench of Justice G S Kulkarni & Justice Jitendra Jain observed that the CESTAT has already seized the matter.
In these writ appeals, the appellants are aggrieved by the identical orders passed by the Commissioner of Income Tax (Appeals).
Both appellants are taxpayers under the Income Tax Act, 1961 (hereinafter referred to as the IT Act). Dissatisfied with the assessment order, they initiated statutory appeals before the Commissioner of Income Tax (Appeals). Concurrently, the appellants submitted an application under Section 220(6) of the Income Tax Act to the Commissioner of Income Tax (Appeals).
In response to this application, the Commissioner of Income Tax (Appeals).directed the appellants to remit 20% of the demanded amount to be considered as individuals not in default. Disagreeing with this condition, the appellants filed writ petitions challenging its imposition. The Single Judge of the Kerala High Court, after considering both parties’ arguments, dismissed the writ petitions. Subsequently, the appellants contested the judgments in the writ petitions.
It was held that, “if the appellants prefer stay applications before the Commissioner of Income Tax (Appeals) within one week from today, he shall consider and dispose of either the stay applications or the appeals itself within a period of three weeks after the receipt of the stay applications after hearing both sides.”
In a recent case, the Delhi High Court directed the Income Tax Department to release a refund amounting to Rs. 87,89,440/- for the Assessment Year (AY) 2018-19, which had been adjusted against outstanding demand for AY 2011-12.
The petitioner, Tirupati Buildings And Offices Private Limited, filed a writ petition seeking a directive for the release of a refund totaling Rs. 87,89,440/- for the Assessment Year (AY) 2018-19. This amount had been adjusted against the outstanding demand for AY 2011-12. The background of the petition involves a total
demand of Rs. 14.90 crores raised against the petitioner for AY 2008-09, 2009-10, and 2011-12. Referring to the Office Memorandum (OM) dated 31.07.2017 issued by the CBDT, which allows for a stay of demand on payment of 20% of the disputed demand when the outstanding demand is contested before the Commissioner of Income Tax [CIT(A)], the petitioner asserts its entitlement to seek such a stay by paying 20% of the disputed demand, which, in this case, amounts to Rs. 2.98 crores [20% of Rs. 14.90 crores].
In response, the Assessing Officer (AO) added a specific amount to each assessment year—AY 2008-09, AY 2009-10, AY 2011-12. Subsequently, the petitioner appealed the AO’s decision by approaching the CIT(A). The issue of staying the outstanding demand becomes pivotal in this context.
After reviewing the facts and records, the division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia allowed the writ petition filed by the petitioner.
The Kerala High Court Directed Kerala Value Added tax Tribunal to pass appropriate application for 400 days of delay condonation.
In accordance with the provisions of the Kerala Value Added Tax Act, 2003 (KVAT Act), a dealer, identified as the petitioner, has filed returns for the assessment year 2009-2010, disclosing a total sales turnover of Rs.1, 24, 14,283/-. Following the submission of returns, a show cause notice has been issued by the commercial tax officer to the petitioner, as indicated by Mrs. Reshmitha Ramachandran, counsel for the Respondent.
An order dated 26.11.2014 has been issued, rejecting the petitioner’s contentions and resulting in a total demand of Rs.14, 72,170/-, which includes Rs.5, 28,471/- in interest. In response to the assessment order, the petitioner’s counsel filed an appeal with the Deputy Commissioner(Appeals) – II, State GST department.
The first appellate authority partially allowed the appeal, remanding the matter to the assessing authority for modifications. Instead of participating in the remand proceedings, the petitioner filed a delayed appeal before the Kerala Value Added Tax Appellate Tribunal, spanning 450 days. Currently, the petitioner seeks relief through this writ petition. The single bench of the Tribunal, consisting of Mr. Dinesh Kumar Singh (Judicial) member, concluded that the appeal before the State Tribunal will not be expedited, citing the petitioner’s 400-day delay.
The Patna High Court has confirmed a penalty imposed under Bihar Value Added Tax Act for clerical mistake in invoice resulting in failure to prove genuineness of transport.
Ceat Limited, the petitioner, is involved in the manufacturing and sale of tyres, tubes, and flaps and is currently challenging a penalty order issued under Section 60(4) (b) read with Section 56(4) (b) of the Bihar Value Added Tax Act, 2005 (referred to as ‘the Act’), following the detention of a truck carrying goods at the integrated check post in Dhobi, Gaya. The alleged offense pertains to the clandestine removal of goods.
The petitioner operates a main Warehouse located in Patna and additional branch Warehouses in nearby states, one of which is situated in Ranchi, Jharkhand. According to the petitioner, a stock transfer was made to the Ranchi Warehouse
Although the value and quantity matched the invoice, a clerical error was noted in the invoice number, which was mistakenly recorded. The petitioner asserted that this was a minor clerical mistake. However, the detaining authority rejected the petitioner’s explanation and imposed the maximum penalty under Section 60(4) of the Act. The documents submitted by the petitioner, according to the learned Government Advocate, do not sufficiently establish the authenticity of the transportation.
The detention occurred in the early hours of 02.01.2015, and the invoices along with supporting documents, were generated after the detention—clearly in response to the awareness of the check-post detention and the identified mistake in the invoice number, as revealed by the SUVIDHA Form.
The bench observed that while the value consistency is apparent between the invoice and the SUVIDHA Form, the quantity, as noted in the notice, is handwritten and lacks the authorized signatory’s confirmation.
A single bench of the Kerala High Court dismissed a writ petition directed against the denial of transitional credit as the petitioner had already availed the statutory appellate remedy available.
The assessee, Satyam Steels, contested the order that denied transitional credit under Section 140(3) of the Central Goods and Services Tax Act. This writ petition challenged the order dated 10.3.2023, which denied transitional credit under Section 140(3) of the Central Goods and Services Tax Act (CGST).
The petitioner pointed out that, during the pendency of this writ petition, the Central Board of Indirect Taxes and Customs issued a notification on 31.7.2023, extending the limitation for filing an appeal by three (3) months from the date of issuance of the notification.
It was further noted that, taking advantage of the said notification, the petitioner has already filed an appeal under Section 107 of the Central Goods and Services Tax Act, 2017, challenging the impugned order before the Additional Commissioner (Appeals) of CGST, Kochi. Justice Dinesh Kumar Singh deemed it inappropriate to keep the writ petition pending since the petitioner has already pursued the statutory remedy.
A single bench of the Madras High Court ruled that the director is not liable to pay GST when it is not determinable that the company is unable to pay during liquidation proceedings.
State GST Officers conducted an inspection at the factory premises of SKMPL, recovering certain documents. Subsequently, a show cause notice dated 15.06.2020 was issued under Section 74 of the CGST & SGST Act, alleging various infractions and demanding the recovery of input tax credit and tax for the year 2018-19 based on the seized documents. According to the petitioner, K. Malathi, she sought legal advice and discovered that she has no standing to represent SKMPL after the NCLT’s order of liquidation. Consequently, she did not respond to the show cause notice. The first respondent then informed the Official Liquidator and offered an opportunity for a hearing. However, the Official Liquidator neither replied nor attended the hearing, leading the State Tax Officer to pass ex parte orders, demanding substantial taxes, interest, and penalties against SKMPL.
The counsel for the petitioner argued that the impugned demand orders were issued in the name of the company in liquidation, and the first respondent was aware of the company’s liquidation status. He emphasized that, given the appointment of the Official Liquidator, the petitioner cannot respond to the impugned orders. Unfortunately, the Official Liquidator also failed to participate or file any reply during the adjudication by the first respondent, resulting in the ex parte issuance of the impugned orders. Therefore, the petitioner contends that the impugned orders are unsustainable and should be set aside.
The court observed that the company in liquidation lacks sufficient funds, making it impossible to retrieve the sales tax dues from the said company, a new legal basis would emerge to pursue the recovery of sales tax dues from the former Directors of the company in liquidation. In the ongoing matter, the determination of the availability of funds with the Official Liquidator for settling claims is still pending. Consequently, there is currently no legal basis to initiate proceedings against the former Directors for the recovery of sales tax dues owed by the company in liquidation.
The Delhi High Court directed the Income Tax Department to remit Rs 44.6 lakhs of refund already crystallized on deposit of 20% of demand.
Abhishek Maratha, senior standing counsel representing the respondents/revenue, has returned with instructions indicating that the respondents/revenue have calculated the refundable amount for the petitioner/assessee. It has been specified that the amount refundable to the petitioner/assessee is Rs. 44.60 lakhs. Pankaj Aggarwal, representing the petitioner/assessee, stated that the amount claimed for refund is Rs. 46 lakhs, as mentioned in the prayers of the writ petition. Additionally, it was emphasized that the petitioner/assessee should also be entitled to interest.
A Division Bench comprising Justices Rajiv Shakdher and Girish Kathpalia observed, that the respondents/revenue will disburse the crystallized refund amount [i.e., Rs. 44.60 lakhs] to the petitioner/assessee within the next two (2) weeks. (ii) The petitioner is free to pursue a statutory remedy for the payment of interest and the remaining refund claimed by them.
The Delhi High Court dismissed Newsclick’s plea seeking stay of income tax demand during pendency of appeal before the Commissioner of Income Tax.
The present petition challenges the orders issued by the respondents, wherein the petitioner’s request for a stay of demand during the pendency of the appeal before the Commissioner of Income Tax (Appeals), against the assessment order dated December 30, 2022, has been rejected. The petitioner also seeks a stay of demand during the pendency of their appeal before the Commissioner of Income Tax (Appeals). The senior counsel for the petitioner argued that the impugned order fails to recognize that the petitioner has a strong prima facie case on merits, as evidenced by the petitioner’s Service Agreement with Justice and Education Fund Inc. (‘JEF’), the disclosure of contents in the ITR, receipts through proper banking channels, and the undisputed legitimacy of the petitioner’s business activity or expenditure.
Furthermore, the senior counsel contended that there is no requirement for a pre-deposit for granting a stay of deposit under Section 220(6) of the Income Tax Act, 1961, and that the Office Orders of the CBDT on this matter are not binding and do not restrict the discretionary powers vested under Section 220(6), as held by the Supreme Court in CIT V. LG Electronics India (P) Ltd.
A Division Bench of Acting Chief Justice Manmohan and Justice Mini Pushkarna observed that this Court is of the view that the petitioner has not been able to make out a prima facie case in its favour.Accordingly, the writ petition was dismissed.
A Division Bench of the Delhi High Court comprising Justices Vibhu Bakhru and Amit Mahajan Delhi High Court ruled that the orders under Rule 86A of the Central Goods and Services Tax (CGST) Rules, 2017 can be passed by Commissioner or duly authorized officer on reason to believe that input tax credit (ITC) available in electronic cash ledger (ECL) has been fraudulently availed.
The respondents contended that the department’s relevant officers visited both the principal place of business and additional locations. The respondents assert that the petitioner granted access to its supplementary place of business; however, the pertinent documents were not found at that particular location.
The petitioner acknowledged depositing a sum of ₹18,72,000/- at 2:06 am by debiting the ECL. The search and inspection proceedings were ongoing during this period. The petitioner underwent the search/inspection operations well beyond regular business hours and was asked to furnish copies of various books of accounts. The statement recorded on that date, relied upon by the respondents, explicitly states that the petitioner provided multiple documents, including the Trading Account, to the concerned officers. In the current scenario, the petitioner disputes any obligation to pay tax, and there is no definitive determination regarding the petitioner’s tax liability. In light of these circumstances, the tax deposited by the petitioner cannot be deemed voluntary and in accordance with the provisions of Section 73(5) of the CGST Act.
The Kerala High Court, in a single-bench ruling, decided not to entertain a writ petition challenging the show cause notice issued by the income tax department. The court emphasized that there are still nine days remaining for the assessee to respond to the show cause notice and concluded that there is no justification to annul the notice.
Justice Dinesh Kumar Singh observed the absence of any breach of natural justice principles. Puliyoor Service Co-operative Bank, the petitioner, failed to submit an income tax return for the assessment year 2015-16, leading the Commissioner of Income Tax to issue a show cause notice. Although the petitioner was given an opportunity to be heard under Section 148A Clause (d) of the Income Tax Act, 1961, there was no response to the notice.
The initiation of the process by the Income Tax department began with the first notice on April 6, 2022, followed by subsequent notices and a final notice on April 30, 2022. In reaction, the petitioner approached the High Court seeking relief and the annulment of the show cause notice. Justice Dinesh Kumar Singh concluded, “The petitioner still has nine days remaining to respond to the said show cause notice. This Court finds no reason to intervene with the writ petition. Therefore, the writ petition is dismissed, as there is no jurisdictional error or violation of principles of natural justice.
A division bench of Patna High court comprising of Chief Justice K. Vinod Chandran and Justice Partha Sarthy of the Patna High Court granted relief to Mahavir Sharmik and Nirman Swalambi Sahkari Samiti Limited (a Cooperative Society) and ruled that solid waste management activity exempt from Bihar Goods and Service Tax (BGST).
The petitioner has contested an assessment order dated 11.01.2021, as affirmed by the first Appellate Authority under the Bihar Goods and Services Tax Act, 2017 (“BGST Act”) through a writ petition. This challenge is particularly significant since the Tribunal under the BGST Act has not been established yet, thereby denying the petitioner the opportunity for consideration in the second appeal, as stipulated by the statute.
According to the government’s notification, there is a stay on recovery pending the establishment of the Tribunal, provided that 20 percent of the disputed amounts is paid, as indicated in the assessment order. However, in the current case, the petitioner argues that the imposition is untenable based on a specific notification that exempts the petitioner’s activity—removal of solid waste—from the scope of the levy. The petitioner asserts that this activity does not qualify as a works contract, and there is no supply of goods as required by the definition of ‘works contract’ under the BGST Act.
In the appeal, the petitioner specifically highlighted Notification No. 12/2017 issued by the Government of India, granting an exemption from tax payment related to a function entrusted to a Municipality under Article 243W of the Constitution of India. The argument put forth was that the exercise of jurisdiction under Section 74 was illegal, lacked authority, and was entirely improper. Despite a similar appeal from another assessee being allowed by the same Appellate Athority, the petitioner’s appeal was dismissed repeatedly.
Expansion of Telecommunication Service with Internet Service does Not change Infrastructure: Delhi HC upholds Deletion of Disallowance of Deduction u/s 80IA of Income Tax Act
A division bench of the Delhi High Court has held that the expansion of Telecommunication service with internet service does not change infrastructure and upheld the deletion of disallowance of deduction under section 80IA of the Income Tax Act, 1961.
The appellant, representing the revenue, contested the decision of the Income Tax Appellate Tribunal (Tribunal) in favor of Verizone Communications India Pvt Ltd, the respondent-assessee. The key issue pertained to whether the Tribunal was mistaken in eliminating the addition of Rs. 5,89,34,508/- due to the disallowance made under Section 80IA of the Income Tax Act, 1961. The respondent was established on 11.01.2002 with the primary objective of providing telecommunication services. In May 2002, the respondent obtained an Internet Service Provider (ISP) License from the Department of Telecommunication (DOT) to further its primary objective. Consequently, the respondent claimed a tax holiday under Section 80IA of the Act, initially at a rate of 100% for profits earned up to AY 2011-12, and subsequently at a rate of 30% from AY 2012-13 to AY 2016-17.
The Commissioner of Income Tax (Appeals) after affirming the Assessing Officer’s view, prompted the respondent/assessee to appeal to the Tribunal seeking redress. It was determined that Section 80IA, the main provision, applies to any undertaking that started providing telecommunication services, including internet services, on or after 01.04.1995 but on or before 31.03.2005. The AO’s denial of deduction to the respondent/assessee under Section 80IA for AY 2011-12 was based on the argument that acquiring two new licenses, enabling NLD and ILD services for a specific group of private users, constituted an expansion of the existing undertaking beyond the cut-off date, i.e., 31.03.2005. The contention was that the term mentioned in Sub-Section (4) Clause (ii) of Section 80IA of the Act is “undertaking,” and since the undertaking remained the same, the respondent should not be deprived of the deductions provided before the AO’s assessment order.
A division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia observed that there was no material brought on record by the appellant/revenue to back its claim that a separate undertaking had been established to provide the NLD and ILD services offered by the assessee.
The Delhi High Court, while disposing of the notice issued by the Income Tax Department (ITD), held that no Tax Deduction at Source should be made towards the management fee paid to Associated Enterprises (AE) that could not be categorized as Fee for Technical Service (FTS).
The petitioner, Intertek India Private Limited, filed a writ petition challenging the notice issued by the Income Tax Department alleging non-deduction of Tax at Source (TAS) for the remittance of management fees totaling Rs. 2,06,29,647/-. In the assessment proceedings, the Assessing Officer (AO) disallowed the amount under Section 40(a)(i) of the Income-Tax Act. Subsequently, the matter was brought before the CIT(A), who decided to eliminate the addition made by the AO.
The CIT(A) had reasoned that the management fees paid by the petitioner/assessee to its Associated Enterprises (AEs) did not fall under the category of “Fee for Technical Services” (FTS), and therefore, it was not subject to tax deduction at source under Section 195 of the Income Tax Act. The tribunal, in line with the CIT(A)’s decision, upheld it by noting that the AO had not provided a list of the “highly technical services” rendered by the AEs to the petitioner/assessee. Additionally, the AO failed to reference the relevant clause in the agreement indicating that the expertise of the AEs was “made available” to the petitioner.
After reviewing the facts and records, the division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia disposed of the notice issued by the Income Tax Department, holding that no Tax Deduction at Source should be made towards the management fee paid to Associated Enterprises (AE) that could not be categorized as Fee for Technical Service (FTS).
The Delhi High Court emphasized that the determination of carrying forward business losses and offsetting them against profits should be addressed by Assessing Officers (AO) handling assessments for subsequent years. The assessee, Burda Druck India Pvt. Ltd, filed its Return of Income (ROI) for the relevant assessment year, i.e., AY 2014-15, on 29.11.2014, declaring a current loss of Rs. 17,56,64,494/-. The AO, during scrutiny, disallowed the carryforward of losses. Dissatisfied with this decision, the respondent appealed to the CIT(A), who upheld the AO’s decision. Subsequently, the respondent approached the tribunal, which allowed the appeal and directed the AO to remove the concluding remark stating that the “brought forward loss is not allowed to be carried forward.”
Revenue, aggrieved by this, appealed to the court. Vipul Agrawal, senior standing counsel for revenue, argued that the Tribunal’s view is legally unsustainable because a change in shareholding of over fifty-one percent had occurred in the respondent. Thus, the determination of whether business losses could be carried forward fell within the AO’s jurisdiction. Upon scrutinizing Section 79 of the Income Tax Act, the court noted that Section 79 prohibits the carryforward and setoff of losses from periods before the previous year when there is a change in shareholding, unless any of the provisos mentioned therein apply.
After reviewing the facts and records, the division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia held that the carryforward of business loss and setoff against profit should be decided by Assessing Officers (AO) who deal with the assessment concerning the subsequent year.
Justice Dinesh Kumar Singh in single bench verdict of the Kerala High Court granted the input tax credit claims made by the assessee. The assessee had made the claim with regard to purchase of capital goods which would be used for electricity production. This claim had been denied by the GST department.
The petitioner, Kerala Mineral and Metals Ltd(a Government of Kerala undertaking) had approached the court contesting the decision of the GST department to deny the input credit claim. The Court instructed the assessing authority to adjudicate on the petitioner’s application in Form No.25, ensuring compliance with Rule
13(3) of the Kerala Value Added Tax Rules.
The Kerala High Court emphasized the limits of the National Company Law Tribunal’s (NCLT) authority in directing companies to submit statements of affairs during winding-up petitions.
Justice C. Jayachandran issued the order after a meticulous examination of Section 274(1) of the Companies Act, which precisely delineates the “directions for filing statements of affairs.” The case originated from the NCLT, Kochi Bench’s instruction to a petitioner to furnish a copy of the statement of affairs, accompanied by a specified payment of Rs.50,000/-. However, the petitioner contested this directive, invoking Section 274(1) of the Companies Act, 2013. According to the petitioner, this section only allows such directives against the company itself and not individual shareholders.
Section 271(1) of the Companies Act stipulates that, “(1) Where a petition for winding up is filed before the Tribunal by any person other than the company, the Tribunal shall, if satisfied that a prima facie case for winding up of the company is made out, by an order direct the company to file its objections along with a statement of its affairs within thirty days of the order in such form and in such manner as may be prescribed.
The court held that “The winding-up proceedings will continue in accordance with the law, directing the company to produce the statement of affairs if found necessary to proceed with the matter,” stated the Single Bench of Kerala High Court while disposing of the case.
This ruling establishes a clear delineation of NCLT powers, ensuring that directives for filing statements of affairs are appropriately aligned with the Companies Act’s provisions, providing a crucial precedent for future legal proceedings.
A single-judge bench of the Kerala High Court has ordered a stay on proceedings initiated by the Income Tax department against Kalyan Jewelers. The assessee argues that, dissatisfied with the assessment order, they have filed an appeal, stay petition, and delay petition with the respondent. Kalyan Jewelers India Ltd, the petitioner, is concerned that, while the appeal and condonation petitions are pending, the respondents might proceed with the enforcement of the assessment order. Hence, the filing of this writ petition.
Justice C.S. Dias, in his judgment, directed the Commissioner of Income Tax (Appeals) to review and address the delay petition in compliance with the law and with promptness, preferably within three months from the receipt of a certified copy of this judgment, ensuring the petitioner is granted an opportunity to present their case.
The Kerala High Court observed that the Intelligence Wing of the VAT Department is not issuing rectification orders, leading to a stay on coercive actions.
The key question at hand was whether the filed writ petition can be approved to instruct the second respondent to promptly review and address the copy of the representation submitted by the petitioner before the issuance of the Respondents DTD letter. The petitioner asserts a considerable delay in receiving orders following the objection to the Section 66 notice under the KVAT Act. Concurrently, a coercive notice from the third respondent
prompts the petitioner’s plea. With a deferral request already submitted, the petitioner, concerned about potential coercive measures, seeks judicial intervention through a writ petition. This case underscores bureaucratic challenges, emphasizing the need for timely adjudication and transparency in tax matters.
The single bench of the Kerala High Court, comprising Justice C.S. Dias, directed that the concerned authority in the Intelligence Wing of Value Added Tax (KVAT) Department shall pass orders on copy of reply filed by the petitioner after affording the petitioner an opportunity of being heard.
The Karnataka High Court issued a mandamus to the Institute of Chartered Accountants of India (ICAI) to consider addressing the grievance of the petitioner in accordance with law and enrolling her as a Member of the Institute bearing in mind the observations made in the course of the order.
The filed writ petition challenges an order dated 1-05-2023 issued by the Institute of Chartered Accountants of India (ICAI), which refused the petitioner’s request for membership to practice as a Chartered Accountant. The petitioner, a student, enrolled in B.Com degree at ASC Evening Degree College in May 2017. Simultaneously, she joined a CMA Foundation course, completing it along with the intermediate course in June 2018. Additionally, she pursued the CS-Executive Course, which concluded in June 2018. While enrolled in various courses, the petitioner commenced Chartered Accountant Articleship training on 27-08-2018. She sought and obtained permission to continue her B.Com. degree course by submitting the necessary application in Form No.112 under the Chartered Accountants Regulations, 1988.
After completing her B.Com degree in September 2020, the petitioner sought permission to write the CMA final exam, which was granted by the respondent. In December 2020, she completed the CMA final exam and subsequently, on 30-03-2021, sought permission to pursue an additional course – CS professional, once again submitting an application in Form No.112, and permission was granted. Upon completing all the courses and Articleship, the petitioner applied for enrollment as a Member of the ICAI to become a Chartered Accountant. The ICAI sought clarifications regarding how she pursued multiple courses through Form No.112. After obtaining responses from the petitioner, on 01-05-2023, the membership was categorically denied, and the petitioner, a student, challenged this action before the Karnataka High Court in the subject petition.
The petitioner contended that the petitioner consistently sought and obtained permission to pursue multiple courses. There is no instance where she pursued courses without proper authorization. Therefore, there should be no obstacle preventing the petitioner from practicing as a Chartered Accountant, and the Institute should register the petitioner accordingly
Justice E M Nagaprasanna allowed the petition quashing the order issued against the student by the ICAI
The Bombay High Court granted bail to an accused of Prevention of Money Laundering Act, 2002 (PMLA) and observed that the period of house arrest can be considered while calculating total period of custody.
The petitioner in this case is Mohammed Farooq Mohamemed Hanif Shaikh, also known as Farooqe Shaikh. The senior counsel representing the petitioner argued that he was arrested on April 23, 2018, in connection with the current crime and has been in custody for approximately 5 years and 8 months. The counsel contended that the petitioner is charged with money laundering under Section 3, punishable under Section 4 of the Prevention of Money-Laundering Act (P.M.L.A.), with a maximum prescribed punishment of 7 years. On the other hand, the counsel for the Enforcement Directorate asserted that the period of house arrest should not be considered in calculating the total period of the petitioner’s custody and should be excluded.
The court, however, disagreed with this argument, stating that house arrest essentially constitutes a form of arrest, where the individual’s liberty to be a free person is legally restricted. The Division Bench of Justices AS Gadkari and Shyam C Chandak emphasized that prolonged custody violates the accused person’s rights under Article 21 of the Constitution of India, which guarantees personal liberty.
The Delhi High Court dismissed writ petition as amount being meagre in the matter that the income chargeable to tax which has escaped assessment is not more than Rs. 12,800.
The petitioner, Bholi Kumar argued that the income subject to tax, which has allegedly escaped assessment, does not exceed Rs. 12,800. Even if the revenue’s presented case is considered, the taxable income cannot surpass the aforementioned amount.
A Division Bench consisting of Chief Justice Satish Chandra Sharma and Justice Tushar Rao Gedela noted, that considering the representations by Maratha, Senior Standing Counsel, along with the letter placed on record on behalf of the Revenue, we resolve the present writ petition based on the fact that the Revenue has decided not to pursue the case due to the nominal amount involved.
A Single bench of the Madras High Court quashed an order initiated by Revenue against assessee. Revenue had taken action against the assessee for the non filing of returns. Revenue had also canceled the respondent’s GST license citing non response of the assessee for the show cause notice.
Due to the failure to submit GST returns, an error made by the petitioner’s consultant resulted in the cancellation of the petitioner’s GST registration by the respondent. Subsequently, on 09.07.2021, a show cause notice and a notice for a personal hearing were issued, both of which were uploaded on the common GST Portal. However, since the petitioner’s GST registration was canceled, they were unable to access the GST Portal and remained unaware of the notices. The petitioner, Thirumalai Sales Corporation argued that the respondent was aware of the GST registration cancellation but neglected to serve the show cause notice and the notice for a personal hearing through conventional physical means, relying solely on the GST Portal.
Revenue contended that the petitioner’s GST registration was revoked due to non-filing of returns. Despite the cancellation, the petitioner continued business operations, prompting the issuance of a show cause notice on 09.07.2021. As no response was received and the petitioner did not attend the personal hearing, the respondent confirmed the demand, leading to the issuance of the impugned orders and consequential attachment orders.
Justice Krishnan Ramaswamy set aside the impugned orders on violation of natural justice. Consequential proceedings initiated against the petitioner, including property attachment notices were also set aside.
Madras High Court’s single bench quashed the order passed against East Coast Constructions and Industries Limited. The assessee’s grievance stems from the fact that, since the inception of GST on, all notices and communications were consistently sent/hosted on the petitioner’s Dashboard under “View Notices and Orders.” However, recently, the respondent has started placing these notices/communications under a different head in the Dashboard.
The single bench held that the petitioner deserves a fair chance since there appears to be a discrepancy in the turnover indicated in Form GST ASMT-10 dated 21.03.2022 and in Form GSTR-1 and Form GSTR-3B.
Justice C. Sharavanan in his judgment set aside the impugned order, and instructed the reconsideration of the case by the respondent.The court instructed the respondent to address the issue arising from hosting information in the Dashboard menu while reconsidering the matter.
The Delhi High Court directed to consider the application of cancellation of Goods and Service Tax (GST) Registration as the GST department failed to do so due to Technical Glitches.
The petitioner, Delhi Metal Company requested a directive to compel the respondent to approve the petitioner’s application for the cancellation of its Goods and Service Tax (GST) registration. The petitioner, engaged in the trading of aluminum and copper scrap, initially applied for GST registration, later opting for cancellation on 12.04.2023, as the business had been closed since that date. Subsequently, on 02.06.2023, the petitioner reapplied for GST registration cancellation.
However, the respondent raised queries similar to those in their communication dated 10.05.2023, once again on 08.06.2023. The petitioner contended that its constituent partners participated in discussions at the GST Commissionerate’s office on 27.07.2023 and 01.08.2023 concerning an ongoing investigation.
A Division Bench comprising Justices Vibhu Bakhru and Amit Mahajan held that “in view of the above, we consider it apposite to dispose of the writ petition by directing that the respondent shall take steps for cancellation of the petitioner’s GST registration in terms of its application.
The Delhi High Court rejected Newsclick’s petition requesting a halt to the income tax demand while the appeal is pending before the Commissioner of Income Tax. The current petition challenges the decisions of the respondents, who dismissed the petitioner’s application for a stay on demand during the appeal before the Commissioner of Income Tax (Appeals) against the assessment order dated December 30, 2022. The petitioner also sought a stay on demand during the pendency of the appeal before the Commissioner of Income Tax (Appeals).
A Division Bench comprising Acting Chief Justice Manmohan and Justice Mini Pushkarna stated that the court believes the petitioner has not been able to establish a prima facie case in its favor.
“Accordingly, the writ petition is dismissed. However, this Court clarifies that the findings given by this Court are only in the context of the present writ proceedings and shall not prejudice either of the parties at the stage of the appellate proceedings.” The Court c
Recently, the Bombay High Court has overturned the customs deputy commissioner’s decision that diverged from the ruling issued by the Authority of Advance Ruling (AAR).
The court underscored the assessee’s right to invoke writ jurisdiction under Article 226 of the Constitution, even with an alternative statutory remedy available. Grounds for invoking writ jurisdiction include breaches of fundamental rights, natural justice violations, orders passed without jurisdiction, or challenges to the statute’s vires. The court determined that the department’s action, contrary to Section 28J provisions, lacked jurisdiction, rendering the Order in Original invalid. As a result, the writ petition was deemed maintainable by the Division Bench of Justices G.S. Kulkarni and Jitendra Jain, and the petitioner was not compelled to pursue an appellate remedy.
The Delhi High Court directed to refund 90% of stamp duty and observed that period of limitation for cases covered under Section 49(a) of the Stamp Act, 1899 is six months from date on which stamp paper was spoiled.
A Division Bench of Justices Vibhu Bakhru and Amit Mahajan observed that “The period of limitation for cases covered under Section 49(a) of the Act would be six months from the date on which the stamp paper was spoiled. No enquiry as to when the stamp paper was spoiled was undertaken by the respondents. However, the petitioner’s contention that the stamp paper had been marked just prior to making an application for refund is also not seriously contested. It must, therefore, be accepted.” “In view of the above, we consider it apposite to
dispose of the present petition by directing the respondents to refund 90% of the stamp duty, that is
₹13,50,000/-, along with interest, at the rate of 6% per annum, from the date of application till the date of payment. It is so directed” the Court concluded.
The Delhi High Court upheld the blacklisting of US citizen and observed that collecting money ostensibly for charitable activity is not permitted when foreigners come to India on business visa.
“It is well settled that a Court can exercise its jurisdiction under Article 226 of the Constitution of India only where there is a violation of a right. In the absence of any right, a writ cannot be issued. Since the Petitioner has not been able to establish violation of any rights granted to the Petitioner, this Court is not inclined to exercise its jurisdiction under Article 226 of the Constitution of India to interfere with the decision taken by the authorities” the Court concluded.
The Bombay High Court has quashed the re-opening of assessment under section 147 of the Income Tax Act, 1961 as the income was already declared in the Income Tax Return filed by the assessee and there is no failure in disclosing fact.
A division bench comprising Justice K R Shriram & Justice Dr Neela Gokhale observed that re-opening the assessment is permissible only if there was a failure to disclose fully and truly material facts. Reason to believe itself indicates that the amount of Rs.2,84,19,039/- which the AO claims to have escaped assessment has been obtained from the return of income filed by Petitioner. “Return of income, copy whereof is annexed to the Petition, itself indicates that income from hall charges is Rs.2,29,49,250/-, other charges recovered from auditorium users is Rs.8,17,216/- and compensation received for use of premises Rs.46,52,573/-. Therefore, by no stretch of imagination, it is a failure to truly and fully disclose. When Petitioner’s case is they are not carrying out any commercial activity, Petitioner cannot be accused of not disclosing that they were carrying out commercial activity.”, the court Concluded.
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