Annual Tax and Corporate Law Digest 2025: High Court Cases [Part XL]

DipakkumarDharamsinhbhai Kakadiya vs Directorate of RevenueIntelligence CITATION : 2025 TAXSCAN (HC) 2301

The Bombay High Court considered the legal issue of whether anticipatory bail could be granted in a case involving allegations of misdeclaration and deliberate undervaluation of inshell walnut imports, an offence punishable under Sections 132 and 135 of the Customs Act, 1962. The Directorate of Revenue Intelligence (DRI) alleged that the applicants had suppressed the true transaction value by using fabricated invoices issued by Dubai-based entities, resulting in an alleged customs duty evasion of about ₹44 crore.

A single bench of Justice R.N. Laddha delivered the judgment in Anticipatory Bail Application No. 1808 of 2025, holding that the offences alleged were compoundable and that custodial interrogation was unnecessary given the documentary nature of the evidence already seized. The Court granted anticipatory bail to the applicants subject to conditions, noting their bona fide conduct, including the filing of a compounding application and their offer to jointly deposit ₹5 crore towards the alleged liability.

NASER ALI MONDAL vs THESTATE OF ASSAM CITATION : 2025 TAXSCAN (HC) 2302

The Gauhati High Court examined the legality of a GST demand raised without a valid and duly authenticated Show Cause Notice (SCN) under Section 73 of the CGST Act, 2017, holding that a mere summary issued in Form DRC-01 cannot replace the mandatory statutory SCN. The case concerned an assessee, Naser Ali Mondal of Alom Enterprise, who was served only with a DRC-01 summary lacking a proper digitally signed SCN, thereby violating Rule 26(3) of the CGST Rules, 2017 and depriving him of the opportunity to respond.

A single bench of Justice Sanjay Kumar Medhi set aside the demand order issued in Form DRC-07, ruling that the attachments to both DRC-01 and DRC-07 were unauthenticated and legally invalid, and that the proceedings suffered from violations of Sections 73 and 75(4) as no personal hearing was granted despite an adverse decision being proposed. The Court quashed the entire proceedings and granted liberty to the authorities to initiate fresh action under Section 73, directing that the limitation period would exclude the time between the issuance of the summary and delivery of the judgment.

COMMISSIONER OF CUSTOMSvs SHEHBAZ NASIR KHAN RIZWANI CITATION : 2025 TAXSCAN (HC) 2304

The Bombay High Court at Goa examined the legality of an order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) relating to confiscation and redemption of gold ornaments under Section 125 of the Customs Act, 1962. The legal issue concerned whether the Tribunal had validly exercised its authority by permitting redemption of confiscated gold and reducing penalty, despite the Customs Department’s contention that the respondent was not an eligible passenger and that the imported gold constituted “prohibited goods” under Section 2(33) of the Customs Act, read with Para 2.20 of the Foreign Trade Policy and provisions of the Foreign Trade (Development & Regulation) Act, 1992.

The Division bench comprising Justice M.S. Karnik and Justice Nivedita P. Mehta, which admitted the appeal and stayed the operation of the CESTAT order as an interim measure. The Bench held that the Tribunal’s findings required examination, particularly the allegation that it exceeded jurisdiction under Section 129DD of the Customs Act, and therefore stayed the relief of redemption and reduced penalty until final disposal of the appeal.

Neeyamo EnterpriseSolutions Private Limited vs The CommercialTax Officer CITATION : 2025 TAXSCAN (HC) 2306

The Madurai Bench of the Madras High Court examined whether reassessment proceedings could legally be initiated under Section 74 of the GST Act, 2017, which applies only in cases involving fraud, wilful misstatement, or suppression of facts. The legal issue before the Court was whether the tax department could invoke Section 74 without alleging or establishing these jurisdictional facts in the show-cause notice, particularly in the context of notices issued to Neeyamo Enterprise Solutions Private Limited following a Section 67 inspection.

The bench of Justice G.R. Swaminathan held that Section 74 cannot be triggered unless the statutory preconditions of deliberate wrongdoing are clearly asserted and supported by material in the notice. Finding that the show-cause notices lacked any allegation of fraud or suppression and even used the term “determined” instead of “specified,” the Court quashed both the notices and the consequent reassessment orders, while granting liberty to the department to proceed afresh under Section 73 if permissible.

M/S G N T ConstructionsCompany vs Union Territory of J&K CITATION : 2025 TAXSCAN (HC) 2307

The Jammu & Kashmir and Ladakh High Court addressed the legal issue of whether GST registration cancelled under Section 29 of the CGST Act, 2017 can be restored when the dealer commits to clearing all outstanding statutory dues. The petitioner, GNT Constructions Company, challenged the cancellation order and the dismissal of its appeal as time-barred, arguing that revocation should be permitted upon filing pending returns and depositing tax, interest, and penalties as mandated under the GST Act.

A Division Bench comprising Justice Sanjeev Kumar and Justice Sanjay Parihar held that, consistent with earlier decisions rendered in April 2024, GST registration must be restored when the dealer undertakes to comply with all statutory obligations. The Court directed the petitioner to approach the competent authority within seven days and ordered that the registration be restored immediately upon completion of formalities, failing which the relief would stand withdrawn.

M/S Tata Steel Limited(formerly Tata Steel BSL Limited) vsUnion of India & Ors. CITATION : 2025 TAXSCAN (HC) 2308

The Calcutta High Court dealt with a set of writ petitions filed by Tata Steel Limited challenging a common order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), which had held that the statutory appeals filed by the petitioner’s predecessor entity Bhusan Steel Ltd. (BSL) stood abated due to the initiation of corporate insolvency proceedings under the Insolvency and Bankruptcy Code, 2016. The core legal issue before the Court concerned the correctness of CESTAT’s decision to treat the appeals as abated and whether CENVAT credit reversals arising from disputes initiated through show-cause notices between 2005 and 2009 could be refunded or treated as surviving claims under the approved resolution plan. The matter also involved interpretation of Section 35F of the Central Excise Act, 1944, the provisions of the IBC relating to extinguishment of claims, and the scope of Articles 226 and 227 of the Constitution in exercising supervisory jurisdiction over tribunal orders passed within territorial limits.

The Division bench led by Justice Raja Basu Chowdhury dismissed the writ petitions, holding that CESTAT had not committed any jurisdictional error in recording the abatement of appeals and that the High Court could not re-evaluate the tribunal’s procedural interpretation in its supervisory capacity. The bench observed that the CENVAT credit reversal made by BSL was voluntary in nature and did not constitute a mandatory pre-deposit under Section 35F, and that such amounts could not be resurrected as claims once extinguished under the resolution plan approved in insolvency proceedings. While affirming that the High Court possesses supervisory powers to correct jurisdictional errors in orders passed within its territory, the Court concluded that CESTAT had acted strictly within its statutory mandate. Accordingly, the petitions were dismissed, with the Court affirming that the disputed claims had either not been included in the insolvency process or stood extinguished by operation of law.

SRI MUKESH GUPTATHE vsDEPUTY COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 2309

The Karnataka High Court examined whether an assessee could claim deduction of interest paid on borrowed funds under the Income Tax Act, 1961, when such funds were advanced to a company in which he was a Director. The central legal issues were (i) whether the amount received by the assessee from the company constituted professional fees or salary, and (ii) whether interest expenditure could be allowed as a deduction against salary income or as a business-related expense. The appeal was filed under Section 260A of the Act, with arguments touching upon Sections 194J, 206, and the general deductibility principles governing interest expenditure incurred “wholly and exclusively” for business purposes.

The Division bench comprising Justice D.K. Singh and Justice Rajesh Rai K dismissed the assessee’s appeal, affirming the findings of the Assessing Officer, the Commissioner (Appeals), and the Income Tax Appellate Tribunal. The Court held that the assessee had produced no material to show that he had rendered any professional or technical services and therefore rightly treated the receipt as salary. It further held that the assessee failed to establish any nexus between the borrowed funds and a business activity carried on by him, and that advancing money to a company where he was a Director did not constitute commercial expediency. Concluding that the tribunal had taken the correct view in disallowing the interest deduction, the bench answered all substantial questions of law against the assessee and dismissed the appeal.

P. Kulanthaisamy vs K.Murugan CITATION : 2025 TAXSCAN (HC) 2310

The Madurai Bench of the Madras High Court examined whether a cheque issued for returning a bribe amount could constitute a “legally enforceable debt or liability” under Section 138 of the Negotiable Instruments Act, 1881. The central legal issue before the Court was whether repayment of money given for an unlawful purpose specifically, securing a government job could attract penal consequences under Section 138. In doing so, the Court analysed the scope of Section 23 and Section 65 of the Indian Contract Act, 1872, which govern agreements involving unlawful consideration and restitution, respectively.

Justice K. Murali Shankar upheld the order of the Fast Track Judicial Magistrate Court, Srivilliputtur, confirming the acquittal of the accused, K. Murugan. The Court held that since the complainant had admitted that the ₹3 lakh payment was made as a bribe to procure employment, the transaction was illegal and void ab initio. Consequently, the cheque could not be treated as one issued towards discharge of a legally enforceable liability. The Court ruled that neither restitution nor enforcement could be claimed under criminal proceedings. Finding no error in the Magistrate’s conclusion, the High Court dismissed the appeal and affirmed the acquittal.

M/s.ShauryaInternational vs The Principal Commissioner ofCustoms (Chennai-III) CITATION : 2025 TAXSCAN (HC) 2311

The Madras High Court dealt with the issue of re-export of imported goods detained and seized under the Customs Act, 1962, particularly on allegations of misclassification and undervaluation attracting Section 111 of the Act. The case concerned 303114 SQM of “Textile Fabric Coated with Plastic” imported by Shaurya International from China, which was detained based on a CRCL test report and subsequently seized through a memo dated 18.02.2025. The petitioner sought permission to re-export the goods back to the supplier, citing undue delay in adjudication and the supplier’s willingness to take back the consignment.

The Bench of Justice N. Anand Venkatesh permitted the re-export, subject to conditions aimed at securing revenue interests. The Court held that continued retention of the goods in India was unnecessary and directed that the petitioner execute a bond for the full value of differential duty and furnish a bank guarantee equivalent to 20% of the re-determined value. Upon fulfilling these requirements, the goods were to be allowed re-export within twelve days.

M/s.Parry EnterprisesIndia Limited vs The AdditionalCommissioner of Customs CITATION : 2025 TAXSCAN (HC) 2312

The Madras High Court examined the legality of the Commissioner of Customs’ orders denying Duty Free Import Authorisation (DFIA) benefits for the import of wheat gluten, a dispute arising under the Foreign Trade Policy and the exemption notification dated 11.09.2009. The core issue was whether wheat gluten falls within the scope of “wheat flour” permitted for duty-free import under a DFIA issued for biscuit production. The petitioners had imported wheat gluten under a DFIA dated 14.08.2012 linked to biscuit exports, and the goods were initially assessed and cleared without duty. However, proceedings were later initiated alleging ineligibility of wheat gluten under the licence, leading to show cause notices proposing confiscation, duty, interest, and penalty.

The bench of Justice N. Anand Venkatesh, who held that the Commissioner was bound by consistent judicial precedent which had categorically recognised wheat gluten as a form of wheat flour eligible for DFIA benefits. The Court reiterates that lower authorities cannot disregard binding precedent. Concluding that the impugned orders suffered from lack of jurisdiction, the High Court quashed the orders passed by the Commissioner of Customs and allowed all writ petitions. No costs were imposed, with connected miscellaneous petitions closed.

Assessment Unit vs TheIncome Tax Officer CITATION : 2025 TAXSCAN (HC) 2313

The Madras High Court examined the legality of an ex-parte assessment order issued under the Income Tax Act for AY 2023–2024, arising from Wandse Solutions India Private Limited’s failure to respond to multiple show cause notices and departmental communications. The petitioner attributed the non-response to the resignation of its Accounts Executive, whose email account allegedly went unchecked. The Revenue, however, refuted this by demonstrating that the petitioner had actively used another primary email ID for filing returns for the subsequent AY 2024–2025, thereby undermining the explanation offered for missing statutory notices.

The bench of Justice C. Saravanan held that the petitioner’s explanation “could not be countenanced” but nevertheless granted one final opportunity since the assessment order had been passed without a proper reply. The Court quashed the ex-parte order on strict conditions, including payment of ₹50,000 as costs to the Adyar Cancer Institute within 15 days and submission of a complete reply to the show cause notice within 30 days in both physical and online form. It further directed the Assessment Unit to pass a fresh order on merits within nine months of compliance. The writ petition and related miscellaneous petition were accordingly disposed of.

M/s.Sri VinayakaIndustries Rep vs The State Tax Officer CITATION : 2025 TAXSCAN (HC) 2314

The Madras High Court addressed the issue of liability to pay interest on delayed remittance of tax under Section 50(1) of the respective Goods and Services Tax enactments, arising from Sri Vinayaka Industries’ challenge to a fresh adverse assessment order for the tax period 2018-2019. The Court reiterated that interest under Section 50(1) is automatic and mandatory where tax remains unpaid beyond the prescribed period and that neither the original authority nor the appellate authority has discretion to waive such statutory interest. The Court further clarified that the only relief available to the petitioner, in law, is the option to seek payment of interest in instalments by invoking Section 80 of the State GST Act, which allows the Commissioner to extend the time for payment or permit instalments subject to recorded reasons and continued liability to pay statutory interest.

The bench Justice C. Saravanan, who noted the petitioner’s repeated non-compliance, including failure to respond to the personal hearing notice dated 08.01.2025, which resulted in the passing of the fresh adverse assessment order on 11.03.2025 following a prior remand. Observing that the writ petition pertained solely to interest liability, an area with no scope for judicial interference under Section 50(1), the Court dismissed the petition. However, it granted liberty to the petitioner to approach the competent authority under Section 80 of the GST enactments to seek installment-based payment of the interest dues. The writ petition and connected miscellaneous petition were accordingly dismissed and closed.

Mrs.M.Divya vs TheSenior Revenue Officer CITATION : 2025 TAXSCAN (HC) 2315

The Madras High Court examined the legality of reclassification of hostel properties as commercial units by municipal authorities in Coimbatore and Chennai, which resulted in enhanced property tax, water tax, and electricity charges. The core issue involved whether hostels accommodating working men and women who used the premises solely for residential purposes could be treated as commercial establishments without prior notice

The batch of writ petitions was adjudicated by Justice Krishnan Ramasamy, who rejected the municipal authorities’ contention that hostels were commercial ventures merely because rent was collected. Emphasising that taxation must be based on the functional use of the property, the Court held that the hostel rooms served as residential dwellings for their occupants and therefore could not be classified as commercial premises. The Court also found the impugned demand notices procedurally unsustainable due to the lack of prior notice and opportunity to be heard. Consequently, all reclassification orders and tax demand notices were quashed, with directions to reassess the properties strictly under the residential category.

BELLCO Industries Repvs The Commissioner Of Customs CITATION : 2025 TAXSCAN (HC) 2316

The Madras High Court addressed the issue arising under the Customs Act, 1962, concerning the encashment of a bank guarantee and the pending adjudication of a Show Cause Notice (SCN) issued to Bellco Industries. The petitioner, which had imported capital goods under the Export Promotion Capital Goods (EPCG) Scheme for export production, was issued the SCN proposing denial of customs duty exemption, recovery of interest, and penalty under Section 117 of the Act for alleged non-fulfilment of export obligations. Before adjudication could be completed, the respondents encashed the petitioner’s bank guarantee on the ground that the Export Obligation Discharge Certificate had not been produced, prompting the present challenge.

The Bench of Justice M. Dhandapani disposed of the writ petition with directions to the Assistant Commissioner of Customs to conclude the adjudication proceedings and pass a reasoned order on merits. The Court clarified that if the petitioner succeeds in the adjudication, the bank guarantee earlier encashed shall be refunded to them, making the final adjudication outcome determinative of the petitioner’s restitution rights.

M/S SHEEN GOLDEN JEWELS(INDIA) PVT LTD vs THE STATE TAX OFFICER CITATION : 2025 TAXSCAN (HC) 2317

The Kerala High Court examined a substantial constitutional question concerning the validity of Section 174 of the Kerala Goods and Services Tax Act, 2017 (“KGST Act”), which preserves pre-GST liabilities, assessments, and recovery proceedings under the Kerala Value Added Tax Act, 2003 (“KVAT Act”). The petitioners, including Josco Jewellers Pvt. Ltd. and other commercial entities, argued that the 101st Constitutional Amendment by restructuring fiscal powers and modifying Entry 54 of List II extinguished the State’s authority to enforce VAT liabilities beyond 16 September 2017, as contemplated under Section 19 of the Amendment Act.

Justice Dama Seshadri Naidu, presiding over the batch of writ petitions, upheld the validity of Section 174 KGST Act and dismissed the challenges. The Court held that constitutional amendments do not nullify accrued rights or liabilities unless expressly stated, and that the State retained legislative authority to enact a saving clause safeguarding past events under pre-GST statutes. It concluded that the omission of Entry 54 did not retrospectively invalidate VAT proceedings, including the notices issued under Section 67 of the KVAT Act to Josco Jewellers for A.Y.s 2009-2012. Emphasising fiscal continuity and federal discipline, the Court ruled that legacy tax liabilities can be lawfully pursued and are not erased merely due to the transition to the GST regime.

Savitribai PhuleShikshan Prasarak Mandal vs Directorate General of Income Tax Investigation(Investigation) Pune & Ors CITATION : 2025 TAXSCAN (HC) 2318

The Bombay High Court examined whether a delay of nearly 509 days in filing Form 9A for Assessment Year 2022-23 could be condoned under Section 119(2)(b) of the Income Tax Act, 1961, in light of the petitioner’s reliance on a misprint in the 67th edition of the Taxmann Income Tax Bare Act. The petitioner-trust, Savitribai Phule Shikshan Prasarak Mandal, contended that the publication incorrectly stated that the amendment to the Explanation below Section 11(7) mandating computation of “application of income” on actual payment basis was applicable only from A.Y. 2023-24. Acting on this erroneous information, the trust filed its return without Form 9A, believing no shortfall existed in meeting the 85% application requirement. The error surfaced only during scrutiny assessment under Section 143(3), prompting the trust to immediately file Form 9A and seek condonation of delay.

The Division Bench comprising Justices B. P. Colabawalla and Amit S. Jamsandekar quashed the income tax authorities’ rejection orders and condoned the delay, holding that the petitioner had demonstrated genuine and bona fide reasons. The Court emphasized that Taxmann is an authoritative publication extensively relied upon by tax practitioners, advocates, and chartered accountants across India, and an inadvertent misprint in such a source could not reasonably be expected to be detected by the petitioner or its advisor. The Bench held that denying condonation would cause grave hardship, contrary to the objective of Section 119(2)(b). Noting the petitioner’s prompt corrective steps and the absence of any undue benefit from the delay, the Court ruled that the trust should not be penalised for relying on a widely accepted yet erroneous publication.

Erangal Comtrade andConsultancy LLP vs Assistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 2319

The Bombay High Court dealt with the legal issue of whether a reassessment notice issued under Section 148 of the Income Tax Act, 1961 is valid when addressed to an entity that has ceased to exist due to conversion into a Limited Liability Partnership (LLP). The case arose after Erangal Comtrade and Consultancy Private Limited, which had converted into Erangal Comtrade and Consultancy LLP on 17 March 2016, was issued a reassessment notice for A.Y. 2017-18 despite its non-existence. The petitioner challenged the proceedings on the ground that the notice and subsequent reassessment order were issued to a defunct company, rendering them void ab initio in law.

A Division Bench comprising Justice B. P. Colabawalla and Justice Amit S. Jamsandekar held that the reassessment proceedings were unsustainable, reiterating that any notice or order issued to a non-existent entity is invalid. Relying on the Supreme Court’s decision in Principal CIT v. Maruti Suzuki India Ltd. (2020), the Court ruled that once a company ceases to exist upon conversion, its successor alone is the assessable entity. Consequently, the Bench quashed the impugned Section 148 notice and the resulting reassessment order, declaring the entire proceedings void.

PRINCIPAL COMMISSIONEROF INCOME TAX vs KRBL INFRASTRUCTURE LTD CITATION : 2025 TAXSCAN (HC) 2320

The Delhi High Court examined whether a loan received through regular banking channels and repaid with interest could be classified as a bogus transaction under Section 68 of the Income Tax Act, 1961. The issue arose from the Revenue’s challenge to the deletion of a ₹10 crore addition made by the Assessing Officer (AO) in respect of unsecured loans received by KRBL Infrastructure Ltd. from Shashi Foods India Pvt. Ltd. for A.Y. 2014-15. The AO had invoked Section 68 on the grounds that the lender lacked genuine business activity and that the transactions were allegedly part of a circular accommodation-entry network, further disallowing interest of ₹1.03 crore.

A Division Bench of Justice Suresh Kumar Kait and Justice Neena Bansal Krishna upheld the findings of the CIT(A) and the Income Tax Appellate Tribunal, holding that the loan could not be treated as unexplained merely because the AO doubted the lender’s business activities. The Court noted that the identity of the lender, the loan confirmations, financial statements, and repayment with interest had all been duly established, shifting the burden back to the AO who failed to discredit the evidence. Observing that the assessee was not required to prove the “source of source” for the relevant year, the Bench held that no substantial question of law arose and accordingly dismissed the Revenue’s appeal, sustaining the deletion of the ₹10 crore addition and interest disallowance.

R.B. Construction vsThe State of West Bengal and Ors CITATION : 2025 TAXSCAN (HC) 2321

The Calcutta High Court addressed the issue of alleged excess deduction of Goods and Services Tax (GST) and the failure of the departmental authorities to process a corresponding refund claim. The writ petition, filed by R.B. Construction, challenged the inaction of the Assessing Authority in not acting upon the petitioner’s representation seeking refund of GST allegedly deducted beyond the lawful amount. While the State contended that no refund was due and argued that the claim was time-barred, the Court refrained from deciding these issues at this stage and confined itself to examining the administrative inaction.

The Single Judge Bench of Justice Om Narayan Rai, held that once a representation had been submitted, the authority was duty-bound to consider and dispose of it in accordance with law. The Bench accordingly directed Respondent No. 4 to pass a reasoned order on the petitioner’s representation after granting an opportunity of hearing within four weeks from receipt of the Court’s order. The Court clarified that the direction does not guarantee refund, nor does it allow the petitioner to circumvent any statutory limitation. All substantive issues were expressly left open for the competent authority to decide.

M/S. GUNNAM INFRAPROJECTS PRIVATE LIMITED vs THE UNION OF INDIA CITATION : 2025 TAXSCAN (HC) 2322

The High Court of Karnataka has ruled on the legality of amounts collected during search and investigation proceedings under the Central Goods and Services Tax Act, 2017, holding that such deposits cannot be treated as “voluntary” payments under Section 74(5) when no tax liability has been determined and statutory preconditions remain unfulfilled. The Court further examined the validity of deficiency memos issued under Rule 89 of the CGST Rules, 2017, observing that refund applications completed in all respects cannot be rejected or stalled by invoking technical deficiencies. The case arose from refund claims filed under Section 54 by Gunnam Infra Projects Private Limited to recover deposits made during search and summons operations conducted under Section 67(1) of the CGST Act.

The Single Judge Bench of Justice M. Nagaprasanna held that the payments extracted during the search and investigation absent any quantified demand, interest, or penalty could not be construed as voluntary under Section 74(5), particularly in light of CBIC Instruction No. 01/2022-23, which prohibits coercive recovery during search. The Bench also found that the petitioner’s refund applications complied with the documentation requirements under Rule 89(2), rendering the issuance of deficiency memos unsustainable in law. Consequently, the Court quashed the deficiency memos and directed that the refund claims be processed as per law, thereby allowing the writ petition.

Jitendra Shadija vsUnion Of India Through Secretary Ministry OfFinance CITATION : 2025 TAXSCAN (HC) 2323

The High Court of Chhattisgarh examined a writ petition under Articles 226/227 of the Constitution of India challenging the continued detention of imported goods on the ground of alleged BIS certification and labelling defects. The petitioner-importer sought directions for unconditional or conditional release of goods covered under two Bills of Entry, arguing that the purported defects were fully curable and that the customs authorities had neither adjudicated the objections nor taken a decision regarding release. The legal issue before the Court centred on whether the High Court should order release of goods directly or require the importer to pursue the statutory adjudication mechanism prescribed under customs law.

The Single Judge Bench of Justice Naresh Kumar Chandravanshi held that it would be inappropriate for the High Court to examine the merits of the BIS or labelling issues at the writ stage. The Court emphasised that the proper course was for the importer to submit detailed objections before the Adjudicating Authority, which is statutorily obligated to determine whether the alleged violations exist and whether the defects are curable in law. Accordingly, the Court disposed of the writ petition, directing the Adjudicating Authority to consider and decide all objections including those concerning curability of BIS and labelling deficiencies strictly in accordance with law.

PRIYA BLUE INDUSTRIESPVT. LTD vs UNION OF INDIA & ORS CITATION : 2025 TAXSCAN (HC) 2324

The Gujarat High Court has issued notice in a writ petition filed under Article 226 challenging the constitutional validity of the second and third provisos to Section 16(2) of the Central Goods and Services Tax Act, 2017, which mandate reversal of Input Tax Credit (ITC) where the recipient fails to pay the supplier within 180 days from the date of the invoice. The petitioner, Priya Blue Industries Pvt. Ltd., has questioned whether the statutory requirement of payment within 180 days as a condition for retaining ITC violates constitutional protections and is compatible with the overall design and framework of GST. The petition raises a direct challenge to the vires of Section 16(2) provisos, arguing that the payment-linked reversal mechanism imposes unreasonable and arbitrary restrictions on the right to avail ITC.

The Division Bench of Justice A. S. Supehia and Justice Pranav Trivedi noted that since the vires of a statutory provision is under challenge, the matter must proceed in terms of the earlier order dated 3 August 2022, which had recorded the requirement of appearance by the Additional Solicitor General. During the hearing, counsel for the respondents waived service of notice, and accordingly, the Bench issued notice returnable on 11 December 2025. The Court clarified that further consideration of the petition will take place after the government files its response, and thus the matter has been kept pending for detailed adjudication.

Dhananjoy De vsSuperintendent of Central Tax Audit CITATION : 2025 TAXSCAN (HC) 2325

The Calcutta High Court addressed the issue of condonation of delay and compliance with the statutory pre-deposit requirement under the Central Goods and Services Tax Act, 2017, in a writ petition filed by Dhananjoy De. The challenge arose from an order passed by the appellate authority under Section 107, dismissing the petitioner’s appeal against an order under Section 74 on two grounds: a 27-day delay beyond the prescribed three-month limitation period and alleged non-payment of the mandatory pre-deposit required for maintainability of the appeal.

The Single Bench of Justice Om Narayan Rai held that the petitioner had provided a reasonable and medically supported explanation for the 27-day delay, which fell within the condonable one-month period permitted under Section 107(4) of the CGST Act. Accordingly, the Court ruled that the marginal delay warranted condonation. On the issue of pre-deposit, the Bench noted that the petitioner’s contention that the 10% pre-deposit should apply only to the disputed tax component of ₹21,53,505, and not the entire demand required fresh evaluation.

Vukkem Rambabu vs Unionof India CITATION : 2025 TAXSCAN (HC) 2326

The Calcutta High Court dealt with the legal issue of whether a deputationist has a vested right to continue for the full tenure of deputation, in the context of a challenge to repatriation from the Armed Forces Tribunal (AFT) back to the parent department, the Income Tax Appellate Tribunal (ITAT). The matter involved interpretation of the principles governing deputation under the DoPT Office Memorandum dated 17 June 2010, which prescribes conditions for premature repatriation, including the requirement of approval from the competent authority.

The Division Bench comprising Justice Madhuresh Prasad and Justice Supratim Bhattacharya upheld the order of the Central Administrative Tribunal (CAT) repatriating the petitioner, holding that the decision was legally sound and procedurally valid. The Court found no irregularity in the issuance of the 90-day repatriation notice or in the approval granted by the Defence Minister, and accepted the CAT’s findings regarding the petitioner’s repeated disregard for administrative hierarchy. Reiterating the settled principle that a deputationist has no vested right to remain on a deputation post for the entire tenure, the Bench dismissed the writ petition and affirmed the repatriation order.

M/s. Digital PrintSolutions vs The Ministry of Electronics and Information Technology 6 LodhiRoad CITATION : 2025 TAXSCAN (HC) 2327

The Telangana High Court examined the legality of continued seizure and refusal of release of imported goods under the Customs Act, 1962, specifically addressing the importer’s right to provisional release pending adjudication. The issue arose from the seizure of 233 units of second-hand multifunction digital printing, copying, and scanning machines imported by M/s Digital Print Solutions through a declared Bill of Entry. The petitioner argued that the machines were fully compliant with the Import-Export Policy 2023, all required documents were furnished, and they were willing to pay applicable duties under the Act. They challenged the seizure as arbitrary and sought a direction for immediate provisional release, also requesting waiver of demurrage charges.

The Division Bench of Justice P. Sam Koshy and Justice Suddala Chalapathi Rao directed the Customs authorities to grant provisional release of the seized goods on the condition that the petitioner furnishes a 10% bank guarantee and complies with strict post-release disclosure requirements regarding subsequent sales. Observing that the case was factually identical to earlier writ petitions in which provisional release had been allowed and noting that those orders had withstood scrutiny before the Supreme Court the Bench held that the importer was entitled to similar relief.

Century Products vsState of West Bengal & Ors CITATION : 2025 TAXSCAN (HC) 2328

The Calcutta High Court dealt with the question of whether a writ petition under Article 226 could be invoked to challenge a refund rejection order passed under Section 54 of the Central Goods and Services Tax Act, 2017 and the West Bengal Goods and Services Tax Act, 2017, when the GST law provides an alternative statutory remedy. The issue arose in the context of a refund claim of ₹1,55,096 filed by Century Products for February 2025 under Section 54(3)(ii) read with Section 56 and Rule 89 of the CGST Rules.

A Single Bench of Justice Om Narayan Rai held that the writ court could not be invoked to challenge the refund rejection order when an appeal under Section 107 of the CGST Act was available. The Court observed that although writ courts may, in rare cases, set aside orders passed during the pendency of writ proceedings despite an alternative remedy, the present case did not warrant such extraordinary intervention.

Frozen Chicken from Other States being Sold at 0% GST Bill instead of 5%: Kerala HC directs to Investigate Evasion

LIYAKHAT ALI vsCOMMISSIONER CITATION : 2025 TAXSCAN (HC) 2329

The High Court of Kerala examined a writ petition alleging large-scale tax evasion under the Goods and Services Tax laws, specifically concerning the sale of frozen chicken, which attracts 5% GST under the rate schedule but was allegedly being billed at 0% GST by certain suppliers operating across State borders. The petitioner, a dealer in chicken meat at Manjeri, submitted that this contravention of GST rate notifications enabled evasion of tax legitimately due to the State and distorted fair market competition.

The Single Bench of Justice Ziyad Rahman A.A. noted that the GST Department had acknowledged receipt of the complaint, identified invoices showing billing at 0% GST, and confirmed that a preliminary enquiry and further investigation were already in progress. Observing that active steps had been initiated by Intelligence Unit I and the Deputy Commissioner (Enforcement), the Court held that the matter warranted continued statutory examination rather than judicial interference on merits.

Reassessment Against Non-Existent Entity Void: Bombay HC Quashes S.148 Notice & ₹16.57 Cr IT Demand Against Petitioner

Erangal Comtrade andConsultancy LLP vs Assistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 2330

The Bombay High Court examined the legality of a reassessment initiated under Section 148 of the Income Tax Act, 1961, against an entity that had ceased to exist due to conversion. The core legal issue was whether reopening proceedings and passing an order under the reassessment framework invoking Sections 147, 148, and 69 can be sustained when the notice is issued in the name of a dissolved or converted company.

The Division Bench of Justice B. P. Colabawalla and Justice Amit S. Jamsandekar held that reassessment proceedings initiated against a non-existent entity are a jurisdictional nullity. The Court reiterated that once an entity ceases to exist after amalgamation or conversion, any notice issued in its name is invalid and cannot be cured by the successor’s participation. The Bench found the Revenue’s justification that the erstwhile company had not filed its return for the relevant A.Y/ wholly untenable, as the entity was not in existence during that period.

Jharkhand HC Grants Anticipatory Bail to Agents in GST Non-Deposit Case citing Main Allegations were Against Firm’s Proprietor

Gida Jaydip Nanku Bhaivs Vala Kuldeep Gabharubhai CITATION : 2025 TAXSCAN (HC) 2331

The Jharkhand High Court considered an application for anticipatory bail arising from allegations relating to non-deposit of Goods and Services Tax (GST) in a commercial transaction. The case stemmed from Barsol P.S. Case No. 14 of 2025, registered under Sections 406, 420, 506, 34, and 120B of the Indian Penal Code, involving an agreement for the supply of base oil where GST collected was allegedly not deposited by the proprietor of the supplier-firm.

The bench of Justice Sanjay Kumar Dwivedi, who noted that the principal allegations in the FIR were directed against the Proprietor, Arvind Bhai Madhani of M/s Bapa Sitaram Enterprises, and not the petitioners-agents. Observing that the petitioners’ involvement was limited to acting on behalf of the firm and that they were not responsible for GST compliance, the Court held that custodial interrogation was unwarranted.

ANITA RANI vs INCOMETAX OFFICER AND ORS. CITATION : 2025 TAXSCAN (HC) 2332

The Punjab & Haryana High Court examined the legality of attaching the independent assets of a legal heir for tax dues arising under the Income Tax Act, 1961. The central issue before the Court was whether a legal representative of a deceased partner of a defaulting firm could be held personally liable beyond the value of the estate inherited from the deceased, particularly in the context of recovery proceedings initiated under Sections 159 (Liability of legal representatives) and 189 (Liability of partners of dissolved firms).

A Division Bench comprising Justices Jagmohan Bansal and Amarinder Singh set aside the attachment order, holding that the Revenue had acted beyond its statutory authority. The Court ruled that Sections 159 and 189 clearly restrict the liability of a legal heir only to the extent of the estate actually inherited from the deceased, and in the absence of any material showing such inheritance, the petitioner’s independent bank account could not be subjected to attachment.

M/s. J.M. Steel Tradersvs Assessing Officer Case Number : W.P.(C) No.9748 of 2025

The Orissa High Court examined whether alleged violations of the Faceless Assessment Standard Operating Procedure (SOP) issued under Section 144B of the Income Tax Act, 1961 could justify interference under Article 226 of the Constitution in a challenge to a faceless assessment order. The writ petition was filed by M/s J.M. Steel Traders against an assessment order passed under Section 143(3) read with Section 144B for A.Y. 2023-24, contending that the Assessing Officer had breached clause N.1.3 of the CBDT’s SOP by granting only six days to respond to the show-cause notice and by making an addition of ₹5.27 crore beyond the scope of the notice.

The Division Bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman declined to interfere, holding that the writ petition was not maintainable in view of the effective alternative remedy provided under the Income Tax Act. The Court noted that the petitioner had admittedly submitted its reply within the time specified in the show-cause notice, and therefore no prejudice could be claimed merely because the period was shorter than that prescribed in the SOP. Further, whether the Assessing Officer travelled beyond the notice was held to be a factual issue requiring appreciation of assessment records, which is outside the scope of writ jurisdiction.

Shriddha Kumari vs TheState Of Up And Another CITATION : 2025 TAXSCAN (HC) 2334

The Allahabad High Court has set aside the suspension of Smt. Shriddha Kumari, Deputy Commissioner, State Tax, Sector-12, Prayagraj, who had been suspended for allegedly failing to act against a fake GST-registered firm, M/s Kanhaiya Enterprises. Justice Vikas Budhwar held that continuation of the suspension was unjustified when the alleged lapses occurred during periods when the petitioner was on duly sanctioned child-care and medical leave, and was later transferred out of the concerned jurisdiction.

The Court noted that the State’s own records confirmed the petitioner’s leave and transfer dates, and the State Counsel could not dispute that she was not in a position to initiate cancellation proceedings, which require issuance of notice and due inquiry. Observing that her absence was authorised and that attributing inaction to her was prima facie unwarranted, the Court ruled that continuing her suspension served no administrative purpose and caused undue hardship. Accordingly, the suspension order dated 23 September 2025 was quashed. However, the High Court clarified that disciplinary proceedings may continue independently and directed that the inquiry be concluded within three months of submission of the certified copy of the order, with full cooperation from both sides.

CHOLAMANDALAM INVESTMENT & FINANCE COMPANY LIMITED vs HESTATEOF WEST BENGAL & ORS.

CITATION : 2025 TAXSCAN (HC) 2335

The Calcutta High Court, exercising its Constitutional Writ Jurisdiction, dealt with the issue of non-execution of an order passed under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The petitioner, Cholamandalam Investment & Finance Company Limited, complained that despite the SARFAESI order dated 10.06.2025 directing the State authorities to take possession of the secured property, respondent no. 2 the State of West Bengal had failed to implement the direction. The core legal question before the Court was whether the State, having received a valid and enforceable Section 14 order, could delay or deny execution on administrative grounds, thereby frustrating the creditor’s statutory rights under the SARFAESI framework.

Justice Reetobroto Kumar Mitra, noting the State’s explanation that the earlier Executive Magistrate had been transferred, held that such administrative contingencies cannot justify prolonged non-execution of a judicial order. The Court found that the petitioner had complied with all statutory requirements and made the requisite payments, and therefore the State was under an obligation to ensure that possession of the secured asset is handed over within a reasonable time. Directing strict compliance, the Court ordered respondent no. 2 to execute the Section 14 order within four weeks, after giving due notice to the petitioner. With these directions, the writ petition (WPA 25353 of 2025) was disposed of, with no order as to costs.

Sanjay Surekha vs TheDirectorate of Enforcement CITATION : 2025 TAXSCAN (HC) 2336

The Calcutta High Court dealt with a bail application arising under the Prevention of Money Laundering Act, 2002 (PMLA), involving alleged diversion and laundering of over ₹6200 crore. The prosecution stemmed from offences registered by the Central Bureau of Investigation under the Indian Penal Code and the Prevention of Corruption Act, forming the predicate offence for PMLA proceedings. The petitioner, Sanjay Surekha, sought bail on grounds including alleged violation of statutory safeguards under Section 19 of the PMLA, contending that the arrest was based primarily on his statement recorded under Section 50 and that continuation of PMLA proceedings was untenable since proceedings in the predicate offence had been stayed by a coordinate bench.

Justice Suvra Ghosh rejected the bail plea, holding that the petitioner failed to satisfy the twin conditions mandated under Section 45 of the PMLA. The Court found that the arresting officer had duly recorded detailed “reasons to believe” and supplied the grounds of arrest in compliance with Section 19. Upon examining the investigation materials, the Court noted prima facie evidence of the petitioner’s involvement in creating shell entities, diverting loan proceeds, and holding benami assets.

K.N. ANAND KUMAR vsSTATE OF KERALA CITATION : 2025 TAXSCAN (HC) 2337

The Kerala High Court considered a writ petition concerning the accused’s right to effectively avail bail under Article 21 of the Constitution of India, in the context of over 1200 criminal cases registered against a 70-year-old accused linked to an alleged CSR fund scam. The core legal issue concerned whether the standard bail condition requiring the execution of separate bail bonds with two solvent sureties in every jurisdictional court violated the constitutional guarantee of personal liberty by making compliance impossible.

Justice Bechu Kurian Thomas held that the circumstances were “exceptional” and that the cumulative effect of the standard bail conditions had imposed an insurmountable barrier to the petitioner’s release, amounting to a denial of liberty. Relying on the Supreme Court’s ruling in Girish Gandhi v. State of Uttar Pradesh which emphasizes that “excessive bail is no bail,” the Court found that the petitioner’s continued detention frustrated the purpose of granting bail. Accordingly, the Court allowed the writ petition and directed that the accused be permitted to execute a single consolidated surety bond of ₹5,00,000 per surety in one selected case within each district. This bond, along with supporting affidavits, would serve as sufficient security for all cases within that district, thus enabling the petitioner’s release.

Mohit Deora vs Union ofIndia through Directorate of Enforcement CITATION : 2025 TAXSCAN (HC) 2338

The Jharkhand High Court examined a bail application arising from allegations of fraudulent circulation of fake GST invoices and the laundering of proceeds of crime, offences falling under Section 132 of the Central Goods and Services Tax Act, 2017, provisions of the Indian Penal Code, 1860, and Sections 3, 19 and 45 of the Prevention of Money Laundering Act, 2002 (PMLA). The petitioner, Mohit Deora, sought bail on the ground that he was not named in the predicate offences and that statutory arrest safeguards under PMLA had not been followed. The Enforcement Directorate, however, alleged that he had participated in a large-scale GST fraud involving approximately 135 shell companies and had received over ₹10.31 crore of illicit funds through various bank accounts, making the matter a serious economic offence requiring strict application of the PMLA’s threshold conditions.

The Single Bench of Justice Sujit Narayan Prasad held that the materials collected bank statements, fund transfers from entities involved in fake ITC generation, and unexplained credits prima facie established the petitioner’s involvement in money laundering under Section 3 of the PMLA. The Court found that the arrest complied with Section 19, that the petitioner’s explanations lacked evidentiary support, and that the magnitude and pattern of transactions prevented any conclusion of innocence at the bail stage. Observing that the stringent twin conditions under Section 45 were not satisfied, the Court ruled that the petitioner had failed to show reasonable grounds for believing he was not guilty or that he would refrain from further offences if released. Accordingly, the High Court dismissed the bail plea.

Smt. Neetu Sharma vsPr. Commissioner Of Income Tax Income TaxOfficer CITATION : 2025 TAXSCAN (HC) 2339

The Chhattisgarh High Court examined the legality of additions made on account of excess stock and cash during assessment proceedings, specifically addressing whether statements recorded during a survey under Section 133A of the Income Tax Act, 1961 can form the sole basis for such additions. Relying on the established legal position that survey statements have no evidentiary value since officers conducting surveys are not empowered to administer an oath the Court considered whether the Assessing Officer was justified in sustaining additions under Section 143(3) despite the assessee’s retraction and absence of corroborative evidence.

The Division Bench of Justice Rajani Dubey and Justice Amitendra Kishore Prasad held that the assessment was unsustainable, noting that both the AO and the appellate authorities had relied exclusively on the assessee’s survey statement without any independent material to substantiate discrepancies in stock or cash. The Bench reiterated that statements recorded under Section 133A do not possess evidentiary value and cannot, by themselves, justify additions. Consequently, the Court quashed the orders of the AO, CIT(A), and ITAT.

M/s. Indian Oil AdaniVentures Limited vs State of Odisha CITATION : 2025 TAXSCAN (HC) 2340

The Orissa High Court examined the legality of an assessment initiated under Section 42 of the Odisha Value Added Tax Act, 2004, holding that the proceeding was vitiated because the foundational Audit Visit Report had been submitted well beyond the statutory seven-day period prescribed under Section 41. The primary legal issue before the Court concerned whether an invalid Audit Visit Report submitted more than three months late could confer jurisdiction upon the Assessing Officer to initiate an audit assessment, particularly when an escaped turnover assessment for the same period under Section 43 had already been completed.

The Division Bench of Justice B. P. Routray and Justice S. K. Mishra ruled that the delayed Audit Visit Report was invalid and incapable of forming the basis for any action under Section 42, thereby rendering the entire assessment without jurisdiction. The Bench further held that once an assessment under Section 43 is concluded, a fresh assessment under Section 42 for the same period cannot be initiated, and clarified that Section 49(2) was inapplicable since the remand order relied upon was not issued by a Court or Tribunal. Accordingly, the Court quashed the assessment and tax demand in their entirety and allowed the petition.

SHIV KUMAR SARAF vsPRINCIPAL CHIEF COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 2341

The Calcutta High Court dealt with the question of whether a reassessment initiated under Section 147 of the Income Tax Act, 1961 was without jurisdiction on the ground that proceedings ought to have been initiated under Section 153C instead. The Court examined the statutory requirements under Section 153C, which mandates dual satisfaction by the Assessing Officer of the searched person and the Assessing Officer of the “other person,” and held that the petitioner failed to demonstrate any jurisdictional defect or non-compliance with the statutory preconditions for invoking Section 153C. As the reassessment was founded on information received from the Investigation Wing and not on incriminating material seized from the petitioner, the Court concluded that Section 153C was not attracted.

The Bench of Justice Om Narayan Rai dismissed the writ petition, upholding the reassessment order dated 10 June 2024 passed under Section 147 read with Sections 260 and 144B. The Court found that no document, book or asset belonging to the petitioner was discovered during the search, and therefore the statutory requirements for initiating proceedings under Section 153C were absent. It further held that the petitioner had failed to raise the jurisdictional objection at earlier stages, and that invoking writ jurisdiction for the first time at this stage amounted to circumventing the appellate remedy. Consequently, the Court refused to interfere under Article 226 and directed the petitioner to approach the appellate authority under Section 246.

M/S SRI LAKSHMIAGENCIES vs THE STATE OF KARNATAKA CITATION : 2025 TAXSCAN (HC) 2342

The Karnataka High Court addressed a legal issue concerning the violation of principles of natural justice in the context of a GST demand under Section 73 of the Central Goods and Services Tax Act, 2017 (CGST) and the Karnataka Goods and Services Tax Act, 2017. The matter involved M/s Sri Lakshmi Agencies, a Bengaluru-based partnership firm, which challenged the adjudication order confirming ineligibility of Input Tax Credit (ITC) claimed under Section 16(2) of the CGST Act. The petitioner contended that it had filed detailed clarifications and supporting documents, but the authorities had passed the order without granting a personal hearing as mandated under Section 75(4) of the CGST Act, 2017, thereby violating its statutory and constitutional rights.

The bench of Justice S.R. Krishna Kumar held that the adjudication order was legally unsustainable due to the failure of the department to consider the petitioner’s reply and provide a personal hearing. The Court set aside the impugned GST demand order and directed the petitioner to appear before the adjudicating authority for fresh adjudication, allowing it to submit all clarifications and supporting documents. The judgment reinforces the mandatory requirement of providing a reasonable opportunity of hearing before passing adverse GST orders.

SHRI GOUTAM MUKHERJEEvs THE COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX CITATION : 2025 TAXSCAN (HC) 2343

The Calcutta High Court dealt with a legal issue concerning the liability of co-owners for service tax on consolidated rental income under Notification No. 06/2005-ST and Section 73(1) of the Finance Act, 1994. The case arose from a tripartite arrangement where Goutam Mukherjee and two co-owners let out jointly owned premises, routing consolidated rent through a common bank account for repayment of a housing loan. The petitioner challenged the service tax demand on the ground that each co-owner was a distinct person with separate PANs and assessments, and that the consolidation of rent into a single account should not create a single taxable unit.

The bench of Justice Rajarshi Bharadwaj and Justice Uday Kumar, who upheld the Tribunal’s decision. The Court noted that while previous separate leases fell below the exemption threshold, the consolidated lease with Vishal Retail Ltd. involved rent exceeding the statutory limit, making it taxable. The Tribunal had remanded the matter to the adjudicating authority solely for quantification of service tax liability, directing verification of whether co-owners received any other rent. The High Court observed that no substantial question of law arose, and accordingly dismissed the appeal and connected application.

M/S Uflex Limited vsUnion Of India CITATION : 2025 TAXSCAN (HC) 2344

The Allahabad High Court addressed the legal issue regarding the mandatory issuance of Form GST MOV-09 under Section 129 of the CGST Act, 2017, irrespective of whether the penalty is deposited under protest or otherwise. The writ petition was filed by M/s Uflex Limited, challenging an order dated 22 March 2024 refusing to issue MOV-09 after the petitioner had deposited the penalty to secure release of goods. The petitioner contended that issuance of MOV-09 is required under both law and Circular No. 41/15/2018-GST, as the form constitutes the operative penalty order that enables a taxpayer to file an appeal.

The Bench comprising Justice Saumitra Dayal Singh and Justice Indrajeet Shukla relied on the Division Bench’s earlier decision in M/s Aries Agro Limited v. State of Uttar Pradesh (30 April 2025), which held that authorities cannot avoid passing MOV-09 once the penalty is paid. The High Court quashed the impugned order and directed the proper officer to issue Form GST MOV-09 within three weeks, emphasizing that failure to do so would deprive the taxpayer of the statutory right to appeal.

M/S. SHREE CONTRACTORvs STATE OF KERALA CITATION : 2025 TAXSCAN (HC) 2345

The Kerala High Court addressed the legal issue of reimbursement of increased GST rates under a contract and the release of the contractor’s security deposit by the Kerala Water Authority (KWA). The writ petition was filed by M/s Shree Contractor, seeking payment of Rs. 65,58,361 as differential GST after the rate increased from 12% to 18%, and the release of a security deposit of Rs. 1,71,42,000 for a completed water supply project.

A single bench comprising Justice Ziyad Rahman A.A. held that the contract clearly entitled the contractor to reimbursement of GST differential, regardless of when the bills were initially paid. The court directed the respondents to release the claimed tax differential within three months upon proof of payment and to reconsider the release of the security deposit by examining whether contractual conditions for completion of pipeline work were fulfilled. The writ petition was disposed of with these directions, upholding the contractor’s contractual rights.

The Pr. Commissioner OfIncome Tax Raipur vs M/s Aaryan RiceIndustries Llp A-8 602, Offizo CITATION : 2025 TAXSCAN (HC) 2346

The Chhattisgarh High Court dealt with the issue of departmental appeals under the Income Tax Act, 1961, specifically in light of revised monetary thresholds prescribed by the CBDT for filing appeals before High Courts. The appeal was filed by the Principal Commissioner of Income Tax, Raipur-1, against M/s Aaryan Rice Industries LLP, challenging an income-tax assessment. The case involved a tax effect below ₹2 crore, which fell short of the revised monetary limit under Section 268A of the Income Tax Act, as per the CBDT’s circular dated 17 September 2024, intended to reduce non-essential tax litigation.

A Division Bench comprising Justice Rajani Dubey and Justice Amitendra Kishore Prasad noted that continuation of the appeal would be contrary to the CBDT’s policy, which mandates withdrawal of pending appeals not meeting the threshold. The Revenue conceded that the appeal could not be pursued, and the High Court accordingly disposed of the appeal, terminating proceedings in line with the updated CBDT guidelines.

Sir Jamsetjee JejeebhoyCharity Fund vs Income Tax, Officer CITATION : 2025 TAXSCAN (HC) 2347

The Bombay High Court examined the scope of compliance under Section 11(2) and the limits of reassessment powers under Section 148 of the Income Tax Act, 1961. The matter arose from notices issued to a charitable trust registered under Section 12A, seeking to reopen its assessment for AY 2018–19. The petitioner had filed its return claiming exemption under Section 11 and submitted Form 10 along with a trustee resolution specifying accumulation of ₹3.17 crore for medical, educational, and social relief of the Zoroastrian community and for upkeep of trust properties. The AO issued notices under Sections 148A(b), 148A(d), and 148, alleging that the Form 10 did not adequately specify the purposes, thereby justifying reassessment.

The Bench of Justice B. P. Colabawalla and Justice Amit Satyavan Jamsandekar held that the petitioner had complied with Section 11(2) by furnishing Form 10 along with the trustee resolution and that reopening the assessment on the same grounds amounted to a mere change of opinion, which is impermissible. The Court observed that audit objections alone do not constitute “information” warranting reassessment under Section 148. Consequently, the High Court quashed the notices and reassessment order under Sections 148A(b), 148A(d), and 148.

M/S Vimlesh KumarContractor vs State of U.P. CITATION : 2025 TAXSCAN (HC) 2348

The Allahabad High Court addressed the issue of jurisdiction under Section 73 of the CGST Act, 2017, in a case involving taxation of civil works executed entirely during the VAT regime. The petitioner, Vimlesh Kumar Contractor, had executed contracts for UP Jal Nigam in A.Y. 2015-16 and 2016-17, with VAT deducted at 4% and corresponding certificates issued. Despite the works being completed pre-GST, the GST department issued a notice under Section 73 for F.Y. 2018-19, alleging a mismatch between Form 26AS and GSTR-3B, and passed an ex parte assessment order imposing tax, interest, and penalty. The petitioner’s appeal had also been dismissed by the authorities.

The Bench of Justice Piyush Agarwal held that the GST authorities had exceeded their jurisdiction, as no services were rendered under the GST regime and the payments related solely to pre-GST contracts. The Court observed that any doubts should have been referred to the VAT authorities instead of initiating GST proceedings.

S. 130 Proceedings under GST cannot be Initiated against Excess Stock Found During Survey: Allahabad HC

Vidyarthi Dresses vsState Of Uttar Pradesh Through PrincipalSecretary CITATION : 2025 TAXSCAN (HC) 2349

The Allahabad High Court addressed the legal scope of Section 130 of the Central Goods and Services Tax Act, 2017, which governs confiscation of goods. The petitioner, Vidyarthi Dresses, challenged two orders dated 30 September 2019 and 24 October 2024, in which GST authorities initiated confiscation proceedings solely on the basis of a survey alleging excess stock, without any physical verification. The Court observed that the proper statutory mechanism to address discrepancies in stock is under Sections 73 or 74, which govern tax not paid, short paid, erroneously refunded, or irregularly availed ITC, and that Section 130 cannot be invoked as a substitute for assessment.

The Bench of Justice Piyush Agrawal held that the confiscation orders were legally unsustainable. Relying on prior Allahabad High Court precedents, including M/s Vijay Trading Company v. Additional Commissioner, the Court emphasized that assessment procedures under Sections 73 or 74 must be followed, providing statutory notice and opportunity of hearing. Consequently, the High Court quashed the Section 130 orders and directed the authorities to refund any amounts deposited pursuant to these orders within one month of producing a certified copy of the judgment.

KOHINOOR EDUCATIONALSERVICES PVT. LTD vsUNION OF INDIA &ORS. CITATION : 2025 TAXSCAN (HC) 2350

The Delhi High Court dealt with a writ petition concerning the issuance of Form 26A under Section 201 of the Income Tax Act, 1961. The petitioner, Kohinoor Educational Services Pvt. Ltd. (KESPL), sought a mandamus directing the Airports Authority of India (AAI) to issue the accountant’s certificate for payments made under a licence agreement executed on 3 April 2009 for operating facilities at Salem Airport. The Court observed that the claim was raised nearly a decade after the termination of the agreement on 2 April 2015, and that the statutory conditions under Section 201 did not apply to most of the assessment years in question, rendering the request untenable.

The Division Bench upheld the Single Judge’s findings, noting that KESPL had failed to explain the extraordinary delay and that essential verification records were irretrievably destroyed. The Court further held that the first proviso to Section 201, which allows relief from being treated as an assessee-in-default subject to Form 26A issuance, came into effect only on 1 July 2012 and therefore did not cover the core period of the petitioner’s claim. Consequently, the High Court dismissed the petition, refusing to direct AAI to issue Form 26A.