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This Annual Digest of Supreme Court Cases analytically summarizes all Income Tax and Indirect Tax related cases heard by the Apex Court reported at taxscan.in during the year 2023.
In a major relief to Adani Power Maharashtra Limited, the Supreme Court dismissed the special leave petition (SLP) filed by the Income Tax Department. A Two-Judge Bench of Justice BV Nagarathna and Justice Ujjal Bhuyan observed that “Delay condoned. Having heard learned ASG appearing for the petitioner(s), we do not find any merit in the Special Leave Petition. Hence, the special leave petition is dismissed.”
in a major relief to Reliance Jio Infocomm, the Supreme Court dismissed an appeal filed by the Customs Department. A Two-Judge Bench of Justice BV Nagarathna and Justice Ujjal Bhuyan observed that “In the circumstances, learned senior counsel appearing for the respondent/caveator submitted that the appeal may be dismissed purely on the ground of delay and on that ground, the appeal may not be entertained. The counsel for the appellant also agrees that there is no averment as to what has happened between the aforesaid two dates.” “The Civil Appeal is hence dismissed on the ground of delay, keeping open the questions of law which arise, to be agitated in any other appropriate case” the Court concluded.
The Supreme Court directed to issue notice to M/S Wipro Limited Doddakannelli & Anr, in the matter of inclusion of Value Added Tax (VAT) in turnover. The appeal was disposed of after being answered against the Revenue. A Two-Judge Bench of Justice BV Nagarathna and Justice Ujjal Bhuyan observed that “Delay condoned. Issue notice to the respondents. Learned counsel Ms. Archana Sahadeva accepts notice on behalf of respondent(s).”
The Supreme Court has upheld that the reassessment notice issued behind the period prescribed under section 149 of the Income Tax Act, 1961 is invalid and dismissed the SLP which arose out of impugned final judgment and order passed by the High Court of Delhi. A two-judge bench of Justice B V Nagarathna and Justice Ujjal Bhuyan held that “However, the pendency of these special leave petitions would not come in the way of the A.O. passing orders pursuant to the issuance of notice under Section 148A of the Income Tax Act, 1961. It is needless to observe that the said order shall be subject to the result of these petitions.”
The Supreme Court dismissed review petition filed by the Income Tax Department in a major relief to ZTE Corporation. A Two-Judge Bench of Justice Sanjiv Khanna and Justice BR Gavai observed that “Delay condoned. We have carefully perused the review petition as also the grounds in support thereof. In our opinion, no case for review of the order dated 30.07.2021 is made out. The review petition is, accordingly, dismissed.
A Two-Judge Bench of the Supreme Court has upheld the Calcutta High Court judgment, rejecting the department’s appeal against the Calcutta High Court decision in Suncraft Energy Private Limited Case, which had held that Input Tax Credit (ITC) of the purchasing dealer cannot be denied by the department solely based on the supplying dealer’s non-remittance of tax. The Bench of Supreme Court Justices B V Nagarathna and Justice Ujjal Bhuyan rightly upheld the right of the buyers, who shall not be prejudiced and punished for the mistake of sellers. In short, the Supreme Court dismissal of the department’s appeal against the Calcutta High Court order brings relief to honest and compliant taxpayers, and no Input Tax Credit can be reversed from buyer for non-payment of tax by seller, quoting the inconsistency in GSTR-2A and GSTR-3B.
The Supreme Court of India has upheld the revocation of Article 370, a constitutional provision granting special autonomy to Jammu and Kashmir. Chief Justice D.Y. Chandrachud and a five-judge bench, including Justices Sanjay Kishan Kaul, Sanjiv Khanna, B R Gavai, and Surya Kant, affirmed the government’s constitutional validity in scrapping Article 370 in 2019, with significant implications across governance, including fiscal policies. Chief Justice Chandrachud emphasized that Article 370 is a temporary provision in the Indian Constitution. Even before its abrogation, the Income Tax Act, 1961, applied to Kashmir, as it extended to the entire country. The act was introduced in Kashmir through The Taxation Laws (Extension to Jammu & Kashmir) Act, 1954. The sole exemption from income tax in Kashmir, Section 269S concerning the “Acquisition of immovable properties in certain cases of transfer to counteract evasion of tax,” was repealed by the Central Government via the Jammu and Kashmir Reorganisation (Adaptation of Central Laws) Order, 2020, effective March 18, 2020. This elimination of provisions restricting the applicability of the Income Tax Act confirms Jammu and Kashmir’s integral status within India.
The Income Tax Appeal filed by M/s Vodafone Idea Limited, delayed by 2472 days, was dismissed by the Supreme Court of India. A Two-Judge Bench, including Justice BV Nagarathna and Justice Ujjal Bhuyan, granted relief to M/s Vodafone Idea Limited, condoning the delay in filing the special leave petition. The decision followed the order dated 30.10.2023 in SLP (C) Diary No.41228/2023, involving the same parties. The Special Leave Petition (SLP) arose from the final judgment and order dated 01-02-2023 in ITAT No. 3/2023 issued by the High Court at Calcutta.
The Supreme Court of India granted relief to Goa Carbon Limited by condoning the delay in filing the special leave petition. The current Special Leave Petition (SLP) is a result of the final judgment and order dated 31-07-2023 in TA No. 04/2023 and TA No. 05/2023 passed by the High Court of Judicature at Bombay at Goa. A Two-Judge Bench, including Justice BV Nagarathna and Justice Ujjal Bhuyan, observed, “Delay in filing the special leave petitions is condoned. Issue notice to the respondent.”
The Supreme Court of India granted leave in a case stemming from the challenged final judgment and order passed by the High Court of Judicature at Bombay. The high court had ruled that income tax is payable on the profit transferred under section 29(2) of the Small Industries Developments Bank of India Act, 1989 (SIDBI Act). The primary challenge revolves around Section 50 of the SIDBI Act, which exempts the petitioner from paying income tax on any income, profits, gains, or amounts received. Due to ambiguity regarding the petitioner’s liability under Section 115-O of the Act, the petitioner sought clarification from respondent on the matter. The petitioner had contended that, according to Section 50 of the SIDBI Act, it is not liable to pay additional income tax under Section 115-O. A two-judge bench, comprising Justice B V Nagarathna and Justice Ujjal Bhuyan, granted leave to the petitioner with regards to the matter.
The special leave petition (SLP) filed by the Income Tax Department was dismissed by the Supreme Court of India. The SLP arose from the challenged final judgment and order dated 24-02-2023 in ITA No. 238/2020, as passed by the High Court of Karnataka at Bengaluru. The Income Tax Appellate Tribunal (ITAT) had allowed the assessee’s appeal, stating that the payments made should not be treated as royalty or fees, and therefore, no TDS (Tax Deducted at Source) was required. Subsequently, the Income Tax Department had approached the Karnataka High Court to contest this decision. The Karnataka High Court concurred with the assessee’s position. In response, the Income Tax Department filed a Special Leave Petition challenging the Karnataka High Court’s decision. A Two-Judge Bench comprising Justice BV Nagarathna and Justice Ujjal Bhuyan dismissed the Special Leave Petition referencing a prior order dated 10.11.2023 in SLP (C) Diary No.43014/2023.
A Seven-Judge Bench of the Supreme Court of India has noted that arbitration clauses in unstamped agreements are enforceable. The bench, consisting of Chief Justice of India DY Chandrachud, Justice Sanjay Kishan Kaul, Justice Sanjiv Khanna, Justice B R Gavai, Justice Surya Kant, Justice JB Pardiwala, and Justice Manoj Misra, issued this judgment in the case “In Re Interplay Between Arbitration Agreements Under the Arbitration and Conciliation Act 1996 and the Indian Stamp Act 1899.” The petitioners contended that the existence of an arbitration agreement and the validity of the arbitration agreement were two distinct concepts. Moreover, under Section 11 of the Arbitration and Conciliation Act, 1996, the court’s power was limited to examining the existence of the agreement, not its validity. Chief Justice DY Chandrachud observed that, “Agreements which are not stamped or inadequately stamped are not void ab initio or unenforceable; they are inadmissible in evidence. Non-stamping or inadequate stamping is a curable defect. An objection as to stamping does not fall for determination under Sections 8 or 11 of the Arbitration Act. The concerned court must examine if an arbitration agreement prima facie exists. Any objection related to the stamping of the agreement falls within the ambit of the arbitral tribunal.
The Supreme Court of India granted condonation for the delay in the special leave petition (SLP) filed by the Income Tax Department. The SLP pertains to the issue of satisfaction of the Joint Commissioner not being obtained under Section 151(2) of the Income Tax Act, 1961 before issuing an income tax notice. A Two-Judge Bench, comprising Justice BV Nagarathna and Justice Ujjal Bhuyan, noted, “Delay in filing the special leave petition is condoned. Issue notice to the respondent.” Previously, the Bombay High Court had ruled on the matter, stating, “Having heard the learned counsel for the parties and having perused the relevant material, we are of the view that the impugned notice dated 30/03/2021 is liable to be set aside on the ground of the absence of jurisdiction with the issuing authority.”
A Two-Judge Bench of the Supreme Court comprising of Justice BV Nagarathna and Justice Ujjal Bhuyan, constituting, dismissed a special leave petition (SLP) due to a delay of 340 days. The SLP originated from the final judgment and order dated 29-08-2022 in WA No. 1081/2021, issued by the High Court of Judicature at Madras. The dismissal was based both on the ground of delay as well as on merits.
The Supreme Court granted condonation of delay in the special leave petition (SLP) filed by the Income Tax Department. The respondent in this case is M/s Indera Motors. The SLP originated from the final judgment and order dated 15-03-2023 in WP(C) No. 12628/2017 issued by the High Court of Orissa at Cuttack. A Two-Judge Bench comprising Justice BV Nagarathna and Justice Ujjal Bhuyan remarked, “Delay condoned. Issue notice to the respondent(s).”
A two member bench of the Supreme Court, comprising of Justice BV Nagarathna and Justice Ujjal Bhuyan, rejected the special leave petition (SLP) filed by Gowardhan Ayurfarma Pvt Ltd against the Income Tax Department, marking a setback for the company. The special leave petition was based on the final judgment and order dated 18-10-2023 in ITAL No. 28828/2022 issued by the High Court of Judicature at Bombay.
The Supreme Court, with a Two-Judge Bench led by Justices B V Nagarathna and Ujjal Bhuyan, has affirmed the decision of the Calcutta High Court in the Suncraft Energy Private Limited Case. The Calcutta High Court’s ruling, which the Supreme Court upheld, states that the Input Tax Credit (ITC) for the purchasing dealer cannot be denied solely based on the non-remittance of tax by the supplying dealer, as per Section 16(2) of the Central Goods and Services Tax (CGST) Act and State Goods and Services Tax (SGST) Act, 2017. In this case, compliant buyers who meet the conditions outlined in Section 16(2) are entitled to avail Input Tax Credit (ITC) and are not responsible for discrepancies in the Goods and Services Tax Return (GSTR) 2A and GSTR 3B due to the default of the seller. The Calcutta High Court justices, Chief Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya had criticized the reversal of ITC without taking action against the defaulting seller. They instructed the tax officer to prioritize actions against the seller, allowing proceedings against the buyer only in exceptional circumstances as per CBIC guidance.
The Supreme Court, in rejecting the bail appeal and imposing a cost of Rs. 1 Lakh for misrepresentation of facts, has clarified that there is no obligation to grant bail solely based on the accused being a woman, in accordance with Section 45 of the Prevention of Money Laundering Activities Act. This Appeal challenges the order of the High Court of Chhattisgarh at Bilaspur, which dismissed the bail application under Section 439 of Cr.P.C. The appellant, dissatisfied with the High Court’s decision, has approached the Supreme Court under Article 136 of the Constitution of India. Justices Aniruddha Bose and Bela M Trivedi, a Two-Judge Bench, observed that there was a bold attempt to misrepresent facts for challenging the impugned order. The court emphasized the need for discretion in granting the benefit of the first proviso to Section 45 PMLA to the specified category of persons. Considerations such as the extent of their involvement in the alleged offenses and the nature of evidence collected by the investigating agency should guide the court’s discretion. The bench concluded that, in this case, there is neither discharge nor acquittal nor quashing of the criminal case against Suryakant Tiwari in the predicate/scheduled offense, and therefore, the appeal lacks merit.
The Supreme Court clarified that an individual accused under Section 3 of the Prevention of Money Laundering Act (PMLA) is not required to face charges related to a scheduled offense. The Court highlighted the prerequisites for a section 3 offense under PMLA, emphasizing the occurrence of a scheduled offense and the presence of proceeds from the crime linked to the scheduled offense. It was noted that if the prosecution for the scheduled offense results in the acquittal or discharge of all accused, there would be no proceeds of crime, and Section 3 of the PMLA cannot be applied.Similarly, if the proceedings related to the scheduled offense are entirely quashed, the scheduled offense benefits from the quashing. Justices Abhay S. Oka and Pankaj Mithal emphasized that “It is not a requirement for an individual accused under Section 3 of the PMLA to be specifically named as an accused in the scheduled offense.”
The Supreme Court of India observed that the National Company Law Tribunal (NCLT) must pass reasoned order for rejection of resolution plan under Section 31(2) of the Insolvency and Bankruptcy Code, 2016 (IBC). A Two-Judge Bench, comprising Justice Vikram Nath and Justice Ahsanuddin Amanullah, observed that the Adjudicating Authority holds jurisdiction solely under Section 31(2) of the Code. This authority possesses the power to disapprove only when the Resolution Plan fails to meet the stipulated requirements outlined in Section 31(1) of the Code, necessitating the issuance of a reasoned order. The court additionally observed that Committee of Creditors has full authority over determining the course of action regarding the Corporate Debtor’s entire debt.
The civil appeal by Gujarat State Fertilizer challenging the dismissal of the appeal by the Excise Commissioner due to non-prosecution has been disposed of by the Supreme Court of India. Gujarat State Fertilizers and Chemicals Ltd., the petitioner, had filed the civil appeal against the Excise Commissioner’s order. A two-judge bench comprising Justice B V Nagarathna and Justice Ujjal Bhuyan stated, “Considering the order dated 05.03.2019 dismissing the appeal for non-prosecution, there is no further action required in this matter as per the order. Any pending application(s) shall be deemed disposed of.”
The Supreme Court dismissed the Special Leave Petition (SLP) arising from the final judgment and order of the High Court of Gujarat. The challenge pertained to the reopening of the assessment based on an allegation of bogus purchase supported by a statement. A two-judge bench consisting of Justice B V Nagarathna and Justice Ujjal Bhuyan stated, “With the dismissal of the SLP Diary No.29859/2023 in accordance with the mentioned order, this special leave petition is also deemed dismissed.”
A Two-Judge Bench comprising Justice BV Nagarathna and Justice Ujjal Bhuyan of the Bombay High Court observed that the notice for reopening the assessment lacked reference to any new information and amounted to a change of opinion based on the same material considered in the initial assessment. The court deemed this action impermissible under Section 147 of the Income Tax Act. Additionally, the High Court noted that the notice failed to address the objections raised by the petitioner, and there was no indication of suppression of material or newly discovered facts leading to the alleged escapement of income. The notice under Section 148 of the Income Tax Act was quashed. The Income Tax Commissioner has preferred the present appeal impugning the judgment of the Bombay High Court. The court observed that “Although, there is a delay of 128 days in filing the Special Leave Petition, nevertheless, we have heard learned Additional Solicitor General on merits of the case. Delay condoned.”
The petitioner’s counsel argued that despite a delay of 422 days in SLP (C) Dy.No.29859/2023, 524 days in SLP (C) Diary No(s). 45805/2023, and 524 days in SLP (C) Dy. No.45797/2023 in filing these special leave petitions, the matters are governed by the Supreme Court’s order in SLP (C) No.13121/2023 dated 03.07.2023, where similar special leave petitions were dismissed. Justices BV Nagarathna and Ujjal Bhuyan, a Two-Judge Bench, observed, “Hence, appropriate order may be made in these special leave petitions. The special leave petitions are dismissed both on the ground of delay as well as on merits following the order referred to above.”
The Supreme Court of India directed Renault Nissan Automotive India Pvt Ltd to pay 10 Crores to the Sales Tax Department. The Special Leave to Appeal (SLP) arose from the final judgment and order of the High Court of Judicature at Madras, which addressed the challenge related to the assessment under the Central Sales Tax Act, 1956. The assessee had explicitly stated that they were not disputing the merits of the assessments but were challenging the assessment orders based on jurisdictional issues and violations of the principles of natural justice. A two-judge bench comprising Justice B V Nagarathna and Justice Ujjal Bhuyan ruled that “there shall be a stay of any coercive action against the petitioner herein, subject to the deposit of a further sum of Rs.10,00,00,000/- (Rupees Ten Crores only) by the petitioner with the respondent-Department within four weeks from today.”
The Supreme Court stayed the Income Tax Proceedings against the public charitable trust as donation voluntarily paid to the educational trust does not amount to a capitation fee. The Special Leave Petition(SLP) arose out of the impugned final judgment and order passed by the High Court of Judicature at Madras. A two-judge bench of Justice B V Nagarathna and Justice Ujjal Bhuyan held that “following the order dated 24.11.2023 passed in SLP (C) arising from the same batch of cases disposed of by the Madras High Court, there shall be an interim stay of further proceedings of the impugned judgment and order in these matters also.” Relief to Jindal Steel:
The Supreme Court has upheld the computation of market value of electricity for deduction under Section 80IA of the Income Tax Act, 1961. Due to the inadequacy of electricity supplied by the State Electricity Board to meet its industrial units’ requirements, the assessee established captive power generating units to fulfill its industrial needs. The surplus power generated was supplied by the assessee to the State Electricity Board. In response to this appeal, the assessee, the respondent, filed a return of income on October 29, 2001, declaring nil income. The assessed total income at nil was determined after claiming various deductions, including under Section 80 IA of the Income Tax Act. Despite the substantial book profit of the assessee, amounting to Rs. 1,11,43,36,230.00, income tax was imposed under Section 115 JB of the Act at a rate of 7.5 percent, along with surcharge and interest. Section 80 IA of the Income Tax Act provides deductions for profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc. The Supreme Court Bench of Justice B V Nagarathna and Justice Ujjal Bhuyan held that the Tribunal had rightly computed the market value of electricity supplied by the captive power plants of the assessee to its industrial units after comparing it with the rate of power available in the open market i.e., the price charged by the State Electricity Board while supplying electricity to the industrial consumers.
The Supreme Court has upheld the deletion of addition made on payments made to S K Gupta and group of companies Assessee claimed allowance of expenditure of about Rs. 3.39 crores on account of payments made to one SK Gupta and his group of companies. The assessing officer vide the assessment order dated 19.03.2008 passed under Section 143 (3) of the Income Tax Act, referred to the statement of S.K. Gupta recorded during the search operations and held that the said person had not rendered any service to the assessee so as to receive such payments. Therefore, the assessing officer disallowed such claim of expenditure of the assessee and added the same to the income of the assessee. The Supreme Court bench of Justice Ujjal Bhuyan and B V Nagarathna observed that there is no admissible material to deny the claim of expenditure made by the assessee.
The Supreme Court has refrained from providing a verdict on whether Carbon Credit constitutes a revenue or capital receipt, as the department did not press the issue in a series of income tax appeals against Jindal Steel and Power Limited. Carbon credit arises from technologies, plant, and machinery that contribute to the reduction of greenhouse gases. Additionally, carbon credits are designed to promote environmentally sound investments, which are inherently of a capital nature. Consequently, the Tribunal had previously determined that carbon credit is a capital receipt. Noting that the revenue did not raise or argue the issue related to carbon credit, the two-judge bench of the Supreme Court held that “the revenue would be estopped from raising the said issue before this Court at the stage of final hearing. That apart, there is no decision of the High Court on this issue against which the revenue can be said to be aggrieved and which can be assailed.” Therefore, the Supreme Court declined to address this question raised by the revenue and left it open for determination in a suitable proceeding.
The Supreme Court of India upheld the adoption of Written Down Value (WDV) method in place of the straight line method while computing depreciation on the assets used for power generation by assessee. It was observed by the Supreme Court that, “After obtaining the clarification of the assessee, assessing officer held that since the assessee did not exercise the option of adopting WDV method, therefore, in view of the provision of Rule 5(1A) of the Income Tax Rules, 1962 , it would be entitled to depreciation on the straight line method.” Finding no merit in the question proposed by the revenue, the Supreme Court, answered the question of law in favour of the assessee and against the revenue.
A two-judge bench of the Supreme Court of India has held that no deduction under Section 80HHC of the Income Tax Act is allowable for gains from foreign exchange fluctuations. It was thus held that, “Hence, for the above reasons, we hold that the gain from foreign exchange fluctuations from the EEFC account does not fall within the meaning of “derived from” the export of garments by the assessee. The profit from exchange fluctuation is independent of export earnings, and the impugned judgment correctly answers the point.” In conclusion, the Apex Court affirmed that Section 80 HHC deductions are specifically intended for profits from the business of exporting goods, and including other income would be counterproductive to the section’s purpose.
The Supreme Court of India has issued notice to Pepsico India, advancing the revenue’s appeal against the Rajasthan High Court’s decision regarding the classification of Potato Chips under the Rajasthan VAT Act, 2003. However, the Rajasthan High Court, taking into account the settled nature of the issue by a Coordinate Bench, declined to entertain the revision petitions on the same question of law. In line with principles of judicial discipline, the court dismissed all revision petitions and corresponding pending applications. In the present case before the Apex Court bench of Justice B V Nagarathna and Justice Ujjal Bhuyan, notice was issued to respondents, and the matter was tagged with SLP (C) No.18731 of 2023.
The Supreme Court directed the Reserve Bank India(RBI)to revoke the banking license and struck down the State declaration on Kerala State Co-Operative Agricultural And Rural Development Bank Ltd(KSCARDB) as a Cooperative Bank. A two-judge bench comprising Justice Nagarathna and Justice Ujjal Bhuyan observed that “Although the appellant society is an apex cooperative society within the meaning of the State Act, 1984, it is not a co-operative bank within the meaning of Section 5(b) read with Section 56 of the BR Act, 1949.” The Court set aside the order of the Kerala High Court and allowed the appeal.
The Supreme Court of India in a recent judgement has held that the classification of Installation cables, outlet modules, and fibre Optic cables Under Part E of the Second Schedule under the Karnataka Sales Tax Act, 1957 is correct. A two-judge bench comprising Justice S Ravindra Bhat and Justice Aravind Kumar was “satisfied that the final decision classifying all the items in question, as falling in Part ‘E’ of the Second Schedule to the Karnataka Sales Tax Act,1957 is correct.”
The Supreme Court has recently allowed an appeal, directing the written statements filed by the defendants after the extended period of limitation during record to be taken on record and proceed with the court/tribunal proceedings. The Apex Court bench of Justices J.K. Maheshwari and K.V. Viswanathan observed that, “When the whole world was in the grip of devastating pandemic, it could never have been said that the parties were sleeping over their rights. It is, at this juncture, that this Court stepped in and after taking suo motu cognizance passed orders under Article 142 of the Constitution of India extending the deadlines. The extraordinary situation was dealt with rightly by extraordinary orders protecting the rights of parties by ensuring that their remedies and defenses were not barred.” The Apex Court thus allowed the written statement filed belatedly by the appellants/defendants to be taken on record.
Expressing its view against the Enforcement Directorate (ED), the Supreme Court of India commented that the actions of ED should be fair and not vindictive thereby granting bail to M3M Directors Pankaj Bansal and Basant Bansal in a Prevention of Money Laundering Act, 2003 (PMLA) case. Granting bail to the M3M Directors, the Apex Court remarked that “On the above analysis, to give true meaning and purpose to the constitutional and the statutory mandate of Section 19(1) of the Act of 2002 of informing the arrested person of the grounds of arrest, we hold that it would be necessary, henceforth, that a copy of such written grounds of arrest is furnished to the arrested person as a matter of course and without exception.”
The Supreme court dismissed the special leave petition of income tax department against the Karnataka renewable energy development which was filed with a delay of 104 days. The Court held “the direct income and expenses under the power generation from Wind Mills alone is to be taken into I consideration while arriving at profit to be claimed as deduction under the Section 80IA of the Act.” Section 80IA of the Income Tax Act provides tax benefits to businesses that operate in infrastructure, power, telecommunication, and other specified sectors. This provision offers tax deductions and exemptions to encourage businesses to invest in the mentioned sectors. Investments in these sectors help our country’s economic growth, thus, the Income Tax department encourages it by providing tax exemptions. Even though the Court condoned the delay, Justice B V Nagarathna and Justice Ujjal Bhuyan refused to interfere in the matter.
The Supreme Court of India upheld the order of the Customs and Excise Service Tax Appellate Tribunal (CESTAT) as no service tax demandable on additional service of mounting of printed material or boards already paid. Taxable services are specified in Section 65(105) of the Finance Act,1994. Generally, the liability to pay service tax has been placed on the ‘service provider’. However, in respect of the taxable services notified under Sec.68(2) of the Finance Act,1994, the service tax shall be paid by such person and in such manner as may be prescribed at the rate specified in Sec.66 of the Act and all the provisions of Chapter-V shall apply to such person as if he is the person liable for paying the service tax. There is no provision to demand service tax additionally once the assessee already paid it. A two-judge bench comprising Justice Vikram Nath and Justice Ahsanuddin Amanullah didn’t find any infirmity in the final order of the Tribunal and dismissed the appeal.
A Two-judge bench of Justice B.V. Nagarathna and Justice Ujjal Bhuyan of Supreme Court have restricted the ruling of Bombay High Court on the prevailing time limit of Rs. 153 over Section 144C of the Income Tax Act as the precedent until further orders. The Supreme Court stated that “We have heard learned Additional Solicitor General for the petitioners and learned Senior Counsel Shri J.D. Mistri for the respondent-assessee. Having heard the respective senior counsel for the parties, we observe that the impugned judgment shall not be cited as a precedent in any other subsequent matter until further orders.” The apex court also clarified that that the operative portion of the judgment shall apply only insofar as the respondents herein are in question.
The Supreme Court of India in a recent judgement has held that the classification of Installation cables, outlet modules, and fibre Optic cables Under Part E of the Second Schedule under the Karnataka Sales Tax Act, 1957 is correct. A two-judge bench comprising Justice S Ravindra Bhat and Justice Aravind Kumar was “satisfied that the final decision classifying all the items in question, as falling in Part ‘E’ of the Second Schedule to the Karnataka Sales Tax Act,1957 is correct.”
The Supreme Bench, while entertaining the appeal filed by the East India Udyog Ltd, has directed the SPML Infra Ltd (respondents) to submit the affidavit disclosing the Goods and Services Tax (GST) Input Tax Credit (ITC) benefits and also the utilisation of the transformer usage details. The parties are required to furnish these affidavits and the corresponding documents and balance sheets within six weeks from the present date. The case is scheduled for re-listing in January 2024.
The Supreme Court has recently allowed an appeal, directing the written statements filed by the defendants after the extended period of limitation during record to be taken on record and proceed with the court/tribunal proceedings. The Apex Court bench of Justices J.K. Maheshwari and K.V. Viswanathan observed that, “When the whole world was in the grip of devastating pandemic, it could never have been said that the parties were sleeping over their rights. It is, at this juncture, that this Court stepped in and after taking suo motu cognizance passed orders under Article 142 of the Constitution of India extending the deadlines. The extraordinary situation was dealt with rightly by extraordinary orders protecting the rights of parties by ensuring that their remedies and defenses were not barred.” The Apex Court thus allowed the written statement filed belatedly by the appellants/defendants to be taken on record.
Expressing its view against the Enforcement Directorate (ED), the Supreme Court of India commented that the actions of ED should be fair and not vindictive thereby granting bail to M3M Directors Pankaj Bansal and Basant Bansal in a Prevention of Money Laundering Act, 2003 (PMLA) case. Granting bail to the M3M Directors, the Apex Court remarked that “On the above analysis, to give true meaning and purpose to the constitutional and the statutory mandate of Section 19(1) of the Act of 2002 of informing the arrested person of the grounds of arrest, we hold that it would be necessary, henceforth, that a copy of such written grounds of arrest is furnished to the arrested person as a matter of course and without exception.”
The Supreme court dismissed the special leave petition of income tax department against the Karnataka renewable energy development which was filed with a delay of 104 days. The Court held “the direct income and expenses under the power generation from Wind Mills alone is to be taken into I consideration while arriving at profit to be claimed as deduction under the Section 80IA of the Act.” Section 80IA of the Income Tax Act provides tax benefits to businesses that operate in infrastructure, power, telecommunication, and other specified sectors. This provision offers tax deductions and exemptions to encourage businesses to invest in the mentioned sectors. Investments in these sectors help our country’s economic growth, thus, the Income Tax department encourages it by providing tax exemptions. Even though the Court condoned the delay, Justice B V Nagarathna and Justice Ujjal Bhuyan refused to interfere in the matter.
The Supreme Court of India upheld the order of the Customs and Excise Service Tax Appellate Tribunal (CESTAT) as no service tax demandable on additional service of mounting of printed material or boards already paid. Taxable services are specified in Section 65(105) of the Finance Act,1994. Generally, the liability to pay service tax has been placed on the ‘service provider’. However, in respect of the taxable services notified under Sec.68(2) of the Finance Act,1994, the service tax shall be paid by such person and in such manner as may be prescribed at the rate specified in Sec.66 of the Act and all the provisions of Chapter-V shall apply to such person as if he is the person liable for paying the service tax. There is no provision to demand service tax additionally once the assessee already paid it. A two-judge bench comprising Justice Vikram Nath and Justice Ahsanuddin Amanullah didn’t find any infirmity in the final order of the Tribunal and dismissed the appeal.
A Two-judge bench of Justice B.V. Nagarathna and Justice Ujjal Bhuyan of Supreme Court have restricted the ruling of Bombay High Court on the prevailing time limit of Rs. 153 over Section 144C of the Income Tax Act as the precedent until further orders. The Supreme Court stated that “We have heard learned Additional Solicitor General for the petitioners and learned Senior Counsel Shri J.D. Mistri for the respondent-assessee. Having heard the respective senior counsel for the parties, we observe that the impugned judgment shall not be cited as a precedent in any other subsequent matter until further orders.” The apex court also clarified that that the operative portion of the judgment shall apply only insofar as the respondents herein are in question.
The Supreme Court of India directed Rajasthan High Court to consider urgent interim relief sought by the petitioner, Kaushal Export and Another, in the matter of confiscation of goods of perishable nature under the Goods and Service Tax Act, 2017. A Two-Judge Bench of Justice Nagarathna and Justice Ujjal Bhuyan and observed that “Having heard the counsel for the petitioners and having regard to the nature of confiscated goods and bearing in mind the perishable nature of the same, the petitioners are permitted to move the High Court for expeditious interim relief in the matter.” “It is needless to observe that if the petitioners request for urgent interim relief, the High Court would consider the same in accordance with law and having regard to the nature of the goods, which are confiscated” the Court concluded.
The Supreme Court of India directed the petitioner, M/s Classic Decorators, to make payment before the Appellate Authority within two weeks in the matter of payment of mandatory pre-deposit. A Two-Judge Bench of Justices BV Nagarathna and Ujjal Bhuyan observed that “The special leave petition is accordingly dismissed as withdrawn. It is noted that the High Court had granted two weeks’ time from 29.05.2023 to make the pre-deposit. Hence, we also grant two weeks’ time from today to make the pre-deposit before the appellate authority.”
On October 13, the Supreme Court is scheduled to consider an appeal filed by the National Financial Reporting Authority (NFRA), which is the audit watchdog in India. This appeal is in response to a decision by the Telangana High Court that stayed NFRA’s proceedings against an audit firm. The High Court further stated that “The obvious basis of the principle against retrospectively is the principle of “fairness”, which must be the basis of every legal rule as was observed in L’Office Cherifien des Phosphates v. Yamashita Shinnihon Steamship Co.Ltd. Thus, legislations which modified accrued rights or which impose obligations or impose new duties or attach a new disability have to be treat as prospective unless the legislative intent is clearly to give the enactment a retrospective effect; unless the legislation is for purpose of supplying an obvious omission in a former legislation or to explain a former legislation”.
“We are not inclined to interfere with the impugned judgment as the criminal prosecution relates to delayed payment of self-assessment tax and the application under the Direct Tax Vivad Se Vishwas Act, 20201 relates to the additions made in the assessment order”, the Supreme Court noted, disposing appeals against the assessee by the Revenue. The Bombay High Court had thus held that “the clarification given by respondent by way of answer to question No.73 vide circular No.21/2020 dated December 4, 2020 is not in consonance with section 9(a)(ii) of the Vivad se Vishwas Act and, therefore, the same would stand set aside and quashed. Declaration of the petitioner would have to be decided by respondent in conformity with the provisions of the Vivad se Vishwas Act dehors the answer given to question No.73 which is set aside and quashed.”
The Supreme Court bench of Justice Surya Kant and Justice Dipankar Datta has granted interim relief to the petitioner by ruling not to levy border tax on the vehicles owned by the petitioners for which a valid All India Tourist Bus permit has been granted. Presently, the Supreme Court has provided temporary assistance to tourist bus operators by directing states not to levy border taxes.
A Division Bench of the Supreme Court has stayed the operation of the Delhi High Court Judgement against HDFC Bank Ltd. with regard to the service tax demand on the bank to the tune of Rs.27,87,374/- on renting of immovable property for commercial purposes. Subject to deposit of the sum quantified by the High Court for the entire service tax i.e. Rs.27,87,374/-, the operation of the High Court judgment is stayed, the bench stated, granting interim relief to the bank.
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