Top 30 Supreme Court Tax Judgements of 2022

TDS Deductible from LTC for Foreign Travel of SBI Employees In State Bank of India vs Assistant Commissioner of Income Tax, a division bench of the Supreme Court headed by Chief Justice Uday Umesh Lalit has delivered a significant ruling against State Bank of India (SBI), that TDS shall be levied on the leave travel allowance for the foreign travel of employees as the Leave Travel Concession ( LTC ) is allowed for the travel within the country only. Industrial Townships are 'Local Areas' for Levy of Entry Tax: Constitutionality of Orissa Act upheld In OCL INDIA LTD vs STATE OF ORISSA & ORS , a division bench of the Supreme Court, while upholding the Orissa Entry Tax Act, 1999, has held that the industrial townships are “local areas” for the purpose of levy of Entry Tax. TDS not Leviable on Non-Convertible Debentures and Fixed Deposit of Value less than Rs.5,000/- A two-judge bench of the Supreme Court in, JAI PRAKASH ASSOCIATES LTD. Vs COMMISSIONER OF INCOME TAX (TDS) , upheld a High Court order wherein it was held that TDS is not leviable on the non-convertible debentures and fixed deposit of the value less than Rs.5,000/-, under the provisions of the Income Tax Act, 1961. Service Tax is not leviable on Taxable service received in India from Non-Residents In a significant case, the Supreme Court held that Service Tax is not leviable on Taxable services received in India from non-residents. A bench consisting of Justice M R Shah and Justice Krishna Murari observed that the service tax liability on any taxable service provided by a non-resident or a person located outside India, to a recipient in India, would arise w.e.f 18-4-2006, i.e., the date of enactment of Section 66A of the Finance Act, 1994. Disputes on Tax concessions are not Arbitrable In a significant case, the Supreme Court has held that disputes related to tax concessions are not arbitrable. A two-judge bench of Justice Dhananjaya Y Chandrachud and Justice Hima Kohli has observed that the High Court was in error in holding that the terms of e-auction provided that any dispute was arbitrable. Educational Institutions making Profits and Gains cannot Claim IT Exemption u/s 10(23C) The Supreme Court of India, in a significant ruling, held that, where the objective of the institution appears to be profit-oriented, such institutions would not be entitled to approval of exemption under the Section 10(23C) of the Income Tax Act,1961, notably only to be applied prospectively, through the Division Bench of Chief Justice of India Uday Umesh Lalit, Justice S. Ravindra Bhat and Justice P S Narasimha. No Service Tax on Enhanced Rate of Tax on Premium of Insurance Policy covering Future Period: CESTAT order upheld In a major relief to M/S Bajaj Allianz General Insurance Company Ltd, the Supreme Court has upheld the order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) wherein the Tribunal deleted the addition of service tax on a premium in terms of the insurance policy covering the future period at revised rates on the entire premium was paid prior to 10.09.2004 i.e. before the change in the rate of tax. Setback to Hero Motocorp Ltd: Plea for 100% Budgetary Support rejected, Directs State Governments and the GST Council to consider representation The Supreme Court, on Monday, rejected the plea of Hero Motocorp Ltd wherein the Company pleaded to allow 100% Budgetary Support after the enactment of GST. While dismissing the plea, Justice B.R. Gavai and Justice B.V. Nagarathna directed the State Governments and the GST Council to consider such representations, if made, in accordance with what has been observed herein above in an expeditious manner. State is a 'Secured Creditor' under IBC: VAT Dept's Claim during Liquidation upheld The Supreme Court of India, upheld the Value Added Tax (VAT) Department’s claim for first charge over property of the corporate debtor, Rainbow Papers Limited and held that State is a ‘Secured Creditor’ under the Insolvency and Bankruptcy Code, 2016 (IBC). Tata Motors shall Pay CST to State of Jharkhand on Sale of Vehicles to APSRTC: State of Andhra Pradesh directed to Transfer Recovered Tax In Tata Motors Limited vs Central Sales Tax Appellate Authority , a two-judge bench of the Supreme Court held that the State of Jharkhand would be eligible to collect Central Sales Tax on the inter-state sale of vehicles/buses to the Andhra Pradesh State RTC (APSRTC) and has directed the State of Andhra Pradesh to transfer the CST collected to the State of Jharkhand. Income Tax Deduction Not Available for Delayed Deposit of Contributions towards EPF/ESI Funds In SUNDARESH BHATT vs CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, , the Supreme Court held that income tax deduction under Section 36(1)(va) and Section 43B of the Income Tax Act, 1961 shall not be available to the late deposit of contributions towards the Employees’ Provident Funds Scheme and the Employees’ State Insurance Act, 1948. Provision of IBC prevails over Customs Act on Execution of Moratorium A Division Bench of the Supreme Court of India held that, on execution of moratorium, Insolvency and Bankruptcy Code (IBC) Prevails over Customs Act to the extent that once moratorium proceedings begin under the Code, the customs authority does not have the power to initiate any recovery actions for dues from the corporate debtor. Service Tax cannot be levied on Sale of Software in CD Form as VAT is already Charged A two-judge bench of the Supreme Court has held that the sale of software in CD/DVD form cannot be subject to service tax under the provisions of the Finance Act, 1994 as the same is already subject to VAT. Direction to Open GST portal for claiming transitional credit for two months In a major relief to the taxpayers under the GST regime, the Supreme Court, in Union of India vs M/s Filco Trade Centre Pvt. Ltd. and Anr. , directed to open the GST system enabling taxpayers to claim transitional credit for two months. Earlier, various High Courts have expressed a similar view and directed the Government to open the portal. Setback to Wipro: Deduction to EOU u/s 10B can be denied on for Delay in filing Declaration A two-judge bench of the Supreme Court, while considering an appeal by Wipro Ltd., has held that the deduction to Export-oriented Units (EOU) under section 10(8) of the Income Tax Act, 1961 can be denied on the sole ground of delay in filing the mandatory declaration since the twin conditions mentioned in the provision are mandatory. 5% Customs Duty applicable to Pomegranate Seeds: Direction to Centre to reconsider Import Policy A two-judge of the Supreme Court comprising Justice Sanjiv Khanna Justice Bela M. Trivedi has held that the product, pomegranate seeds attract Customs Duty at a lower rate of 5% and urged the Centre to consider having a policy decision on the classification of the same. Supply of Manpower by Overseas Entities is a Taxable Service A division bench of the Supreme Court has held that the supply of manpower by overseas entities is a taxable service. The Supreme Court held that “the impugned common order of the CESTAT is accordingly set aside. The commissioner’s orders in original are accordingly restored, except to the extent they seek to recover amounts for the extended period of limitation. The demand against the assessee, for the two separate periods, shall now be modified, excluding any liability for the extended period of limitation”. CBIC Notification imposing IGST on Importers is in Violation of GST Act A division bench of the Supreme Court has held that the levy of Integrated Goods and Services Tax on the importers as per the notifications of the Central Board of Indirect Taxes and Customs (CBIC) is in violation of Section 8 of the Central Goods and Services Tax Act. Levy of IGST on Ocean Freight quashed in UOI v Mohit Minerals The Supreme Court in Union of India v. Mohit Minerals Union of India & Anr. Vs Mohit Minerals Pvt. Ltd. Through Director , has held that the foreign exporter cannot claim input tax credit (ITC) in India as per the provisions of Section 12 of the Integrated GST Act, 2017. Over 90,000 Re-Assessment Notices upheld deeming them as Sec 148A Notices A two-judge bench of the Supreme Court comprising Justice M R Shah and Justice B V Nagarathna, on Wednesday, upheld the reassessment notices under Section 148 of the unamended Income Tax Act which were issued beyond 01.04.2021 (the effective date of amendment of the said provision by the Finance Act, 2021) to be deemed to have been issued under Section 148A of the IT Act as substituted by the Finance Act, 2021 and be construed as show cause notices in terms of section 148A(b). Loss due to Exchange Fluctuation is Revenue Expenditure: Relief to Wipro In a major relief to Wipro Finance Ltd., the Supreme Court observed that the loss suffered owing to exchange fluctuation can be regarded as revenue expenditure and thus an allowable deduction. The bench comprising Justices AM Khanwilkar, Abhay S. Oka, and C T Ravikumar was considering an appeal against the High Court judgment which had reversed the above view taken by Income Tax Appellate Tribunal. GST: Interest on Delayed Refund of IGST covered u/s 50 cannot Exceed 6% The Supreme Court observed that in case of delay in granting Integrated GST refund cannot exceed 6% as per the principal provisions of section 50 of the Central GST Act, 2017, especially when the delay was not inordinate. Constitutional Validity of Amendments related to Registration of Charitable Trust upheld A division bench of the Supreme Court has upheld the constitutional validity of the recent amendments made in the Finance Act, 2020 in relation to the new provisions regarding the registration of charitable and religious trusts under the Income Tax Act, 1961. Mere Amalgamation would not invalidate Income Tax Proceedings as It would not amount to Winding Up of Company The Supreme Court, held that whether corporate death of amalgamating entity upon amalgamation per se invalidates an assessment order issued under the Income Tax Act, 1961 cannot be determined on a bare application of Section 481 of the Companies Act, 1956 or its equivalent in the 2013 Act, which deals with the dissolution of the said company. Immunity under IDS is not available to Another Assessee other than the Declarant The Supreme Court has held that the immunity under the Income Declaration Scheme was available only to the declarant and not to another assessee. The immunity under Section 192 is available only to the declarant. 'Lotteries' is a State Subject: Validity of Karnataka & Kerala Tax on Paper Lotteries Act, 2005 upheld A two-judge bench of the Supreme Court has upheld the validity of the Lotteries Act enacted by the Karnataka and Kerala States by holding that ‘lotteries’ is a species of gambling activity and hence lotteries is within the ambit of ‘betting and gambling’ as appearing in Entry 34 List II. Pre-Deposit Mandatory under Section 129E Customs Act, 1962 The Supreme Court last week held that the benefit of the first proviso to Section 129E of the Customs Act, 1962 before substitution, whereby the Appellate Tribunal was vested with the power to dispense with the deposit of the penalty amount to be made during the pendency of the appeal, could not be extended to the appellants who had filed an appeal after the provision was substituted by the new Section 129E that came into effect on 06.08.2014. No Service Tax on Revenue Sharing by Theatres: Supreme Court upholds CESTAT Decision In a major relief to Inox Leisure Ltd., a two-judge bench of the Supreme Court has upheld the decision of the Customs, Excise and Service Tax Appellate Tribunal wherein Hyderabad Bench quashed the Service Tax Demand under Business Support Services for revenue sharing by theaters. Excise Duty cannot be Levied by State on Alcohol which is not Fit for Human Consumption The Supreme Court observed that States have power to levy excise duty only in respect of the alcoholic liquor for human consumption. Alcoholic liquors other than for human consumption have been left to the Central Legislature for levy of duty of excise. Dues of Secured Creditor under SARFAESI Act has priority over Central Excise Dues The Supreme Court two-member bench comprising Justices L. Nageswara Rao and Vineet Saran observed that the SARFAESI Act will have an overriding effect on the provisions of the Central Excise Act and therefore, the dues of the secured creditor will have priority over the dues of the Central Excise Department. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates.

Top 30 Supreme Court Tax Judgements of 2022

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