The Delhi High Court examined whether imported body massagers and similar wellness products fall within the regulatory ambit of the Medical Devices Rules, 2017, particularly in light of the Customs Department’s insistence that such goods required regulatory approvals before release. The core legal issue involved determining whether these massagers could be classified as medical devices intended for therapeutic or disease-alleviating purposes, or whether they were merely general wellness products outside the scope of medical-device regulation.

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain held that there was no merit whatsoever in the Customs Department’s review petitions. The Court reaffirmed that, as per CDSCO FAQs, non-therapeutic wellness massagers are not regulated as medical devices, and further noted that Public Notice No. 46/2023 expressly permits importers to obtain the EPR certificate even after release of the goods. Observing that Customs had previously released identical consignments, the Bench found the review petitions to be frivolous and indicative of harassment.

Heavy Rainfall Valid Reason for Income Tax Delay: Karnataka HC Quashes Commissioner's Order

"R N SHETTY TRUSTvs THE PRINCIPAL COMMISSIONER OF INCOMETAX" CITATION : 2025 TAXSCAN (HC) 2453

The High Court of Karnataka examined whether a 36-day delay in filing income tax returns attributed to system failure caused by heavy rainfall constituted “genuine hardship” warranting condonation under Section 119(2)(b) of the Income Tax Act, 1961. The petition challenged the order dated 24.02.2021 and its corrigendum issued by the Principal Commissioner of Income Tax, which had rejected the assessee’s application for condonation of delay for A.Y. 2017-18. The central legal issue was whether the circumstances described by the petitioner satisfied the threshold for condonation as contemplated by CBDT Circular No. 9/2015, and whether the authorities had adopted an unduly technical approach in denying relief.

The Single Judge Bench of Justice S.R. Krishna Kumar allowed the petition and held that the delay was indeed supported by bona fide and unavoidable circumstances, amounting to “genuine hardship” under Section 119(2)(b). The Court found the Principal Commissioner’s order to be erroneous and hyper-technical, noting that the petitioner’s inability to file returns due to system failure was a sufficient and justifiable cause.

The Delhi High Court examined the legality of a demand raised through Form DRC-07 despite the petitioner having already discharged its tax liability prior to the issuance of the show cause notice (SCN). The core issue involved the correct interpretation and application of Section 74 of the Central Goods and Services Tax Act, 2017, particularly the distinction between Section 74(5) (payment before SCN) and Section 74(8) (payment after SCN). The petitioner, Delhi Sales Corporation, challenged the Order-in-Original and the subsequent DRC-07 demand, arguing that the tax and interest had been fully paid in August 2022 well before the SCN dated 7 June 2024 thereby rendering further proceedings unsustainable under the statutory scheme.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain held that the petitioner’s case was squarely covered under Section 74(5), since the tax and interest had been deposited prior to the issuance of the SCN. The Court ruled that once the pre-SCN payment mechanism under Section 74(5) is invoked, proceedings cannot be continued except for recovery of a 15% penalty. Accordingly, the Bench directed that upon the petitioner depositing 15% of the penalty within four weeks, the impugned order and the Form DRC-07 demand would stand quashed qua the petitioner.

The Chhattisgarh High Court dealt with the issue of whether an accused facing allegations of involvement in an interstate cyber-fraud racket was entitled to anticipatory bail under Section 438 of the Code of Criminal Procedure, 1973. The case arose from Crime No. 55/2021, registered for offences under Sections 420, 467, 468, and 471 of the Indian Penal Code along with Section 66-D of the Information Technology Act, 2000. The central question was whether pre-arrest bail could be granted to the applicant, Aazad Hussain, who was accused of participating in a cyber-crime conspiracy and was allegedly absconding when the charge sheet was filed.

The Single Judge Bench of Justice Deepak Kumar Tiwari rejected the anticipatory bail application, holding that no grounds existed to grant protection from arrest. The Court accepted the State’s contention that the applicant had not cooperated with the investigation, had absconded, and was implicated through financial traces and co-accused statements indicating his involvement in the cyber fraud.

The Madras High Court examined whether an assessment passed under the Tamil Nadu Goods and Services Tax Act, 2017 (TNGST Act) could be remanded for reconsideration when the assessee alleged that the order was ex parte. The dispute concerned an assessment order imposing interest under Section 50 of the TNGST Act and tax dues of ₹9,33,430 each under CGST and SGST, along with IGST interest of ₹7,688. The petitioner, APR Logistics, sought remand on the ground that it had not been afforded an effective opportunity to present its case.

The Single Judge Bench of Justice C. Saravanan refused to remand the matter, holding that the assessment was not ex parte but a detailed, reasoned order passed after considering the petitioner’s written submissions. Since the petitioner failed to avail a personal hearing or file an appeal within time, the Court declined to interfere with the merits. However, the Bench permitted the petitioner to file an appeal before the Appellate Authority subject to 100% pre-deposit of the disputed tax, with credit for any recovery already made.

The Gauhati High Court examined whether two excise appeals filed by the Commissioner of Central Excise & Service Tax were maintainable under Section 35G of the Central Excise Act, 1944, in a dispute concerning fixation of the special rate of value addition under Notification No. 32/99-CE and related amendments. The core legal issue was whether questions arising out of the methodology for computing value addition based on unit-wise apportionment of consolidated financial statements constituted a valuation dispute, which under Section 35L falls within the exclusive appellate jurisdiction of the Supreme Court, thereby barring High Court intervention.

The Division Bench comprising Justice Michael Zothankhuma and Justice Mitali Thakuria held that the appeals were not maintainable, as the questions raised directly pertained to the valuation of goods for assessment of duty, a category expressly excluded from the High Court’s jurisdiction under Section 35G. The Bench ruled that the dispute was valuation-centric, particularly since the Commissioner had accepted the same methodology for the prior year (2009-10).

The Gujarat High Court examined whether the assignment of long-term leasehold rights amounts to a transfer of immovable property and thus falls outside the scope of “supply” under the Central Goods and Services Tax Act, 2017. The core legal question was whether such assignment executed through two Deeds of Assignment transferring 99-year leasehold rights could be treated as a taxable supply of service under Section 7(1)(a) or whether it stood excluded from GST by virtue of Clause 5 of Schedule III, which removes sale of land from the ambit of supply. The matter arose from a show cause notice issued under Section 74 demanding GST of ₹34.83 crore on the transaction, which the petitioner contended was legally unsustainable.

The Division Bench of Justice A.S. Supehia and Justice Pranav Trivedi held that the issue was fully settled by the Court’s earlier decision in Gujarat Chamber of Commerce & Industries v. Union of India, wherein it was conclusively ruled that assignment of leasehold rights for the unexpired lease term extinguishes the assignor’s interest and constitutes a transfer of immovable property. Reiterating this position, the Bench held that such transfer cannot be categorised as a supply of service under Section 7(1)(a) and squarely falls within the Schedule III exclusion relating to sale of land. As a result, the Court found the Section 74 show cause notice to be devoid of legal basis and quashed the notice, ruling that no GST is leviable on assignment of long-term leasehold rights.

The Madras High Court dealt with the legal issue arising from the erroneous duplicate allotment of a Permanent Account Number (PAN), which resulted in severe adverse credit consequences for the original allottee. The core question before the Court was whether an assessee could be compelled to retain a PAN that had been wrongly issued to another person who later defaulted on loans, thereby affecting the petitioner’s credit identity. The dispute also involved the Revenue’s reliance on Instruction No. 9 ITBA-PAN dated 25.03.2021, issued by the Directorate of Income Tax (Systems), which stipulates that the first allottee must retain the original PAN. The petitioner sought judicial intervention after continued hardship, arguing that the Department’s administrative error and rigid adherence to internal instructions violated his rights and required issuance of a fresh PAN under the Income-tax Act, 1961.

The bench of Justice C. Saravanan, who examined the sequence of events leading to the petitioner’s impaired credit profile and held that no assessee can be made to suffer lifelong financial repercussions due to the Department’s mistakes. The Court found that the petitioner’s financial identity remained unjustly linked to the defaults of the second allottee despite departmental corrections, and that strict application of Instruction No. 9 continued to cause prejudice. Concluding that equity and fairness required prompt remedial action, the Bench directed the Income Tax Department to issue a fresh PAN to the petitioner after verifying that no tax dues or liabilities were attached to the earlier PAN, and mandated that the entire exercise be completed within three months from receipt of the order.

The Kerala High Court examined whether interest paid on delayed Agricultural Income Tax (AIT) could be claimed as a deductible business expenditure under Section 37 of the Income Tax Act, 1961. The issue arose in an Income Tax Appeal filed by Aspinwall and Company Limited, which challenged the disallowance of ₹94,00,179 paid as interest on delayed AIT dues. The central legal question was whether such interest levied under the Kerala Agricultural Income Tax Act could be treated as a business expense "wholly and exclusively" incurred for business purposes under Section 37, particularly when agricultural income itself is exempt under Section 10(1) of the Act.

The Division Bench comprising Justice A. Muhammed Mustaque and Justice Harisankar V. Menon upheld the findings of the Income Tax Appellate Tribunal. The Bench ruled that interest paid for delay in remitting AIT cannot qualify as a business deduction, as postponing tax obligations is not an activity undertaken in the course of business. The Court emphasized that interest “takes its colour from the tax” to which it relates, and since AIT itself is not an allowable deduction, the corresponding interest is inherently non-deductible. Distinguishing the precedents relied upon by the assessee, the judges noted that in those cases the underlying tax was itself deductible, unlike in the present matter. Consequently, the High Court dismissed the appeal, answering the substantial question of law against the assessee and in favor of the Revenue.

JAIN AMAR CLOTHING PVTLTD vs STATE OF HARYANA AND ORS CITATION : 2025 TAXSCAN (HC) 2461

The Punjab & Haryana High Court dealt with the issue of whether a writ petition challenging a GST show-cause notice issued under Section 74 of the Haryana Goods and Services Tax Act, 2017 could be entertained when the taxpayer had not filed any reply to the notice. The legal question centered on the assessee’s challenge to the SCN alleging differences in Input Tax Credit (ITC) availed in GST returns, which the petitioner claimed was mechanical, vague, and issued merely to save limitation. Since Section 74 governs cases of tax not paid, short-paid, or ITC wrongly availed due to fraud or suppression, the core issue before the Court was whether the petitioner could bypass the statutory process without first responding to the notice.

The Division Bench comprising Justice Lisa Gill and Justice Parmod Goyal refused to entertain the writ petition, noting that the petitioner had not filed any reply to the show-cause notice. The Court accepted the State’s submission that despite the expiry of the original timeline, the petitioner would still be permitted one additional week to submit a reply, which the competent GST authority must consider strictly in accordance with law. Granting the petitioner liberty to raise all objections, the Bench disposed of the petition without examining merits, holding that there was no reason to continue writ proceedings at this premature stage.

The Bombay High Court adjudicated an issue concerning the refund of customs duty under Sections 13, 23, and 27 of the Customs Act, 1962, where the imported goods were never delivered to the importer and were found either short-landed or lost before clearance for home consumption. The core legal question was whether Customs could retain ₹35.37 lakh in duty paid by the petitioner, M/s Ajay Industrial Corporation Ltd, when the consignment of PVC Resin did not reach the importer, despite duty having been paid through banking channels and SCRIPs. The Court examined the interplay of statutory provisions dealing with pilferage (Section 13), loss or destruction before clearance (Section 23), and the refund mechanism (Section 27), holding that duty cannot be collected or retained where goods are not available for clearance.

The Division Bench of Justice M.S. Sonak and Justice Advait M. Sethna ruled firmly in favor of the importer, holding that the case fell squarely within Section 23 since the goods were never cleared for home consumption. The Court rejected the conflicting stands taken by Customs and the Mumbai Port Authority, emphasizing that the importer could not be penalized for a dispute between two public authorities. Noting that the petitioner had pursued the matter for nearly three years without redress, the Bench held that Customs was legally obligated to remit the duty and directed a refund of ₹35.37 lakh, along with applicable interest. The Court also criticized the insistence on a “closure letter” for the Bill of Entry as an improper and dilatory tactic, reiterating that the statutory scheme clearly shields importers from duty liability where goods are lost, short-landed, or unavailable before clearance.

The Bombay High Court examined whether prolonged suspension of trustees, sealed records, and administrative takeover of a charitable trust constituted “genuine hardship” for the purpose of condonation of delay under Section 119(2)(b) of the Income Tax Act, 1961. The dispute arose after the Commissioner of Income Tax (Exemptions) refused to condone delay in filing Income Tax Returns and statutory forms for six assessment years (A.Y. 2012-13 to 2017-18), despite the Trust’s inability to file due to proceedings under Section 41D of the Maharashtra Public Trust Act, 1950, during which its trustees were removed and records sealed.

The Bench comprising Justice B. P. Colabawalla and Justice Amit S. Jamsandekar set aside the rejection order, holding that the CIT(E) had ignored undisputed and compelling circumstances demonstrating genuine hardship. The Court emphasised that from 2012 to 2017, the Trust was legally incapacitated its Board suspended, its records inaccessible, bank operations restricted, and accounts finalized only by late 2018. The Bench further noted that although the application sought condonation for six years, the authority had inexplicably considered only one year, rendering the decision arbitrary. Accordingly, the High Court quashed the impugned order, condoned delay for all six assessment years, and directed the Department to process the Trust’s returns as though they had been filed within the prescribed time.

The Bombay High Court addressed the legal issue of whether a charitable hospital trust, governed by the Indigent Patient and Weaker Section Scheme, could exclude doctors’ fees from its “gross billing” while computing the mandatory 2% annual contribution to the Indigent Patient Fund (IPF). The dispute arose during A.Y. 2012-13, when the Assessing Officer invoked provisions relating to Section 11 of the Income Tax Act, 1961 to dispute the Trust’s computation, arguing that the entire billing including amounts directly paid to doctors should form part of the IPF calculation. The core legal question before the Court was whether the AO had jurisdiction to reinterpret the Scheme framed under the High Court’s supervision, and whether exclusion of doctors’ fees aligned with the statutory and scheme-based framework governing charitable hospital trusts.

The Division Bench comprising Justice R.I. Chagla and Justice Farhan P. Dubash upheld the concurrent findings of the CIT(A) and the Income Tax Appellate Tribunal (ITAT), confirming that the Trust had correctly computed its 2% contribution by excluding doctors’ fees. The Bench noted that the Tribunal had consistently applied the same principle in the assessee’s own cases for earlier years, and further emphasised that the Charity Commissioner alone possesses the authority to determine compliance with the IPF Scheme an area where the AO could not “usurp jurisdiction”. Finding no perversity or legal error in the ITAT’s reasoning, the High Court dismissed the Revenue’s appeal and affirmed the deduction of ₹11.9 crore, thereby sustaining the Trust’s method of computation under the IPF Scheme.

The High Court of Karnataka dealt with the legality of blocking a taxpayer’s Electronic Credit Ledger (ECL) under Rule 86A of the Central Goods and Services Tax (CGST/KGST) Rules, 2017, in a writ petition filed by Bee Jay Engineers. The core legal issue before the Court was whether the jurisdictional authority could restrict the petitioner’s Input Tax Credit (ITC), a statutory right under the CGST Act, 2017 without independently forming “reasons to believe” as mandated by Rule 86A. The petitioner contended that the blocking order was mechanically passed based solely on communications from other officials, without any inquiry, reasons, or application of mind, thereby violating statutory safeguards and principles of natural justice.

The bench of Justice M. Nagaprasanna, who held that the blocking of the ECL was unsustainable, being founded on “borrowed satisfaction” rather than an independent formation of opinion by the competent authority. The Court found the order to be cryptic, vague, and non-speaking, failing to disclose any material justifying invocation of Rule 86A. The Bench ruled that the action was ultra vires Rule 86A. Accordingly, the High Court allowed the writ petition, set aside the impugned order, and directed that the petitioner’s ITC ledger be unblocked.

The Gujarat High Court addressed the entitlement of 100% Export Oriented Units (EOUs) to claim refund of unutilised Input Tax Credit (ITC) on zero-rated exports made without payment of tax under Section 54(3) of the Central Goods and Services Tax Act, 2017, read with Rule 89(4) of the CGST Rules, 2017. The core legal issue was whether the administrative CBIC Circular No. 172/04/2022-GST dated 06.07.2022, which disallowed refund of ITC in respect of deemed exports, could override the statutory right of EOUs to claim refunds on genuine zero-rated supplies. The petitioners contended that the circular was not applicable as they had exported goods under a Letter of Undertaking (LUT) and had not received any deemed-export supplies.

The Division Bench of Justice Bhargav D. Karia and Justice Niral R. Mehta held that the petitioners were entitled to the refund of unutilised ITC, noting that Section 54(3) clearly provides for refund in the case of zero-rated supplies made without payment of tax. The Court observed that the refund formula under Rule 89(4) applies only to zero-rated exports and not to deemed exports. It further clarified that Paragraph 2.2 of CBIC Circular No. 172/04/2022-GST had no applicability to the petitioners’ case. Accordingly, the High Court quashed all recovery and rejection orders and directed the Revenue to pay the refund already sanctioned within 12 weeks from receipt of the judgment.

The Gujarat High Court addressed the issue of whether input tax credit (ITC) can be denied under Section 17(5)(b) of the CGST Act, 2017 when the insurance policy pertains to stock-in-trade, business premises, and manufacturing equipment rather than motor vehicles. The petition was filed by Arraycom (India) Limited, a manufacturer engaged in thick-film materials, solar power solutions, and system integration services, against the tax authorities’ classification of the insurance premium as ineligible for ITC. The Court examined whether the premium paid for standard fire and special perils policies covering business infrastructure could lawfully be disallowed under the restriction on ITC for motor vehicle insurance.

The Division Bench of Justice Bhargav D. Karia and Justice Pranav Trivedi held that the department’s demand was based on a factual misclassification, noting that the insurance policies clearly covered business premises, stock-in-trade, and plant machinery. The Court ruled that Section 17(5)(b)(iii) restricts ITC only for motor vehicle insurance, and therefore the petitioner was entitled to claim ITC on the said insurance premiums. Consequently, the High Court set aside the impugned demand dated 7 February 2025 and made the writ rule absolute to the extent of allowing ITC, while also emphasizing that the authorities could not assume jurisdiction to disallow credit for policies unrelated to motor vehicles.

The Bombay High Court considered the legality of the rejection of a rebate claim filed by India Yamaha Motor Private Limited under Rule 18 of the Central Excise Rules, 2002, relating to exports made in the pre-GST regime. The legal issue centered on whether the rebate claim pertaining to National Calamity Contingent Duty (NCCD) could be denied despite utilisation of pre-GST CENVAT credit, subsequent cash payment, and settlement under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS). The Court examined the applicability of Section 142 of the Central Goods and Services Tax Act, 2017, which governs lapsing of claims post-GST transition, and whether the rebate claim on exported goods remained valid and independent of such transition and settlements.

The Division Bench comprising Justice M.S. Sonak and Justice Advait M. Sethna held that the revisional authority had failed to consider critical statutory aspects, including: (i) the proper scope of Section 142(4) of the CGST Act regarding lapsing of claims, (ii) the independent nature of the rebate under Rule 18, and (iii) the impact of pre-GST CENVAT credit utilisation alongside subsequent cash payment. The Court observed that the impugned order lacked reasoning on whether the SVLDRS settlement extinguished the rebate claim and whether the claim could legitimately lapse. Consequently, the High Court set aside the revisional order and remanded the matter to the Principal Commissioner for fresh adjudication within six months, ensuring that all statutory provisions and prior payments were properly examined.

The Calcutta High Court addressed the legality of an income tax reassessment notice issued under Section 148A(b) of the Income Tax Act, 1961 in the name of a deceased assessee. The legal issue involved whether the Income Tax Department could continue reassessment proceedings against an individual who had passed away, without properly impleading the legal heirs. The Court examined whether such proceedings, initiated against a deceased person and subsequently continued without due recognition of the petitioner as the legal representative, were valid under the statutory framework.

The bench of Justice Om Narayan Rai held that the reassessment process was vitiated and legally unsustainable, noting that notices issued to the deceased and continuation without properly naming the legal heirs violated established legal principles. The Court set aside both the reassessment notice and the assessment order, while clarifying that the Income Tax Department is empowered to re-initiate reassessment proceedings in accordance with law, issuing fresh notices under Section 148 to the legal heirs. The petitioner was directed to provide names of other legal heirs if required, failing which the Department may proceed against him as the deemed sole legal representative.

The Delhi High Court dealt with the legality of a Show Cause Notice issued under the Central Goods and Services Tax Act, 2017 to a deceased taxpayer. The legal issue concerned whether GST proceedings initiated against a person who had already passed away could give rise to a valid demand. The Court examined the jurisdictional validity of the notice issued to Late Pushkar Goel, the proprietor of M/s Nand Plastics Industries, and the consequential demand order for ₹10,83,044.

The bench of Justice Prathiba M. Singh and Justice Shail Jain held that issuance of a Show Cause Notice to a deceased individual is void ab initio. The bench noted that since the very foundation of the proceedings was defective, the subsequent demand order could not survive. Accordingly, the Court set aside both the Show Cause Notice and the demand order, while clarifying that the GST Department may proceed against the estate of the deceased proprietor in accordance with Section 93(1)(b) of the CGST Act, 2017, if permissible under law.

The Rajasthan High Court addressed whether criminal proceedings under Section 276C(1) of the Income Tax Act, 1961 could be quashed even after a trial court had taken cognizance of the complaint. The legal question revolved around the High Court’s powers under Section 482 of the Code of Criminal Procedure (CrPC) to prevent abuse of process, particularly where the factual foundation for prosecution had been nullified by the Income Tax Appellate Tribunal’s removal of the penalty under Section 271AAB, which found no undisclosed income.

The bench of Justice Anand Sharma, who held that cognizance by a trial court does not oust the inherent powers of the High Court under Section 482 CrPC. The Court noted that continuation of the prosecution would constitute an abuse of process since the Tribunal had already determined that no concealment existed. Relying on Supreme Court precedents, the bench quashed the criminal proceedings in Criminal Case No. 140/2017, while granting the Income Tax Department liberty to revive the prosecution if its appeal against the Tribunal’s order succeeds.

The Bombay High Court considered whether notices issued under Sections 143(2) and 142(1) of the Income Tax Act, 1961 could be sustained against a corporate debtor for periods preceding the approval of a Corporate Insolvency Resolution Plan (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC). The legal issue revolved around whether pre-resolution claims are extinguished once a resolution plan is sanctioned, and if government authorities, including the Income Tax Department, can pursue claims not included in the approved plan.

The division bench of Justice B.P. Colabawalla and Justice Amit S. Jamsandekar held that the impugned notices for A.Y. 2024-25 were untenable, as the approved CIRP plan extinguished all pre-resolution claims. The Court affirms that an approved resolution plan binds all stakeholders, including revenue authorities. Observing that the notices sought to examine periods prior to the plan’s approval, the bench quashed the notices, upholding the ‘clean slate’ principle of the IBC.

The Allahabad High Court examined the validity of an order cancelling GST registration under the Goods and Services Tax (GST) regime, highlighting procedural lapses in tax administration. The legal issue centered on whether a cancellation order could be sustained when issued as a “non-speaking order” without providing reasons, thereby depriving the registered taxpayer of the ability to issue tax invoices, claim or pass on input tax credit (ITC), effectively causing the “economic death” of the business.

The division bench of Justices Saumitra Dayal Singh and Indrajeet Shukla held that the impugned cancellation order against M/s Anil Art and Craft was legally unsustainable. The Court observed that merely stating the petitioner’s reply was “not satisfactory” without recording reasons violated fundamental procedural law. The bench set aside the cancellation, underscoring the critical impact of such orders on business operations, and directed the Commissioner of Commercial Tax, Uttar Pradesh, to ensure that only competent officers issue reasoned orders, issuing administrative instructions to prevent recurrence and stipulating penal consequences for non-compliance.

The Delhi High Court addressed a challenge to a retrospective GST registration cancellation issued to the petitioner, Sakshi Goyal, at her old business address despite an approved change of address. The legal issue involved whether the GST authorities could proceed with cancellation without considering the updated place of business, and the Court exercised powers under Articles 226 and 227 of the Constitution of India to examine the procedural correctness of the Show Cause Notice and subsequent cancellation. The petitioner’s challenge highlighted that the order was passed without taking into account the amended address, approved on 9th October, 2024, even though the Show Cause Notice dated and the cancellation order had already been issued.

The bench comprising Justice Prathiba M. Singh and Justice Shail Jain held that the authorities erred in disregarding the petitioner’s amended business address. The Court directed a fresh inspection of the updated premises and permitted the petitioner to file a reply to the Show Cause Notice. It further ordered that the adjudication of the SCN must proceed in accordance with law, following a personal hearing and proper verification of documents. The High Court emphasized that procedural fairness required consideration of the new business location before passing any adverse orders and disposed of the writ petition with detailed directions to ensure compliance and cooperation during ongoing GST investigations.

The Punjab & Haryana High Court recently addressed the legality of blocking Input Tax Credit (ITC) under Rule 86A of the CGST Rules, 2017, in a case involving M/s Mannat Steels. The legal issue was whether the GST authorities could block an amount exceeding the credit available in the taxpayer’s Electronic Credit Ledger (ECL). The petitioner contended that the department’s negative blocking of ₹8,00,164/- despite an ECL balance of only ₹66/- was ultra vires Rule 86A and violated principles of natural justice. The Court examined the scope of Rule 86A and noted that the power to block ITC is contingent upon the credit actually available in the ECL, and any attempt to create a negative balance is impermissible.

The bench comprising Justice Lisa Gill and Justice Deepak Manchanda held that the GST authorities acted beyond their jurisdiction by attempting to block ITC in excess of the ECL balance. Relying on precedents, the Court clarified that Rule 86A allows blocking only to the extent of available credit. The High Court set aside the negative block order and directed that recovery of excess ITC, if any, must be pursued under Sections 73 or 74 of the CGST/PGST Act, 2017, following proper statutory procedures. The writ petition was allowed, upholding the taxpayer’s right to protection from arbitrary reduction of ECL balances.

The Delhi High Court recently examined an apparent contradiction in a GST demand order issued to Fedral Bank Ltd., relating to alleged excess claims of input tax credit (ITC) and other ineligible credits under the Central Goods and Services Tax Act, 2017. The legal issue revolved around the assessing authority’s treatment of certain demands: while some issues, including ITC to be reversed on non-business transactions, under-declaration of ineligible ITC, and ITC claimed from cancelled dealers, were formally “dropped,” the order simultaneously recorded that the officer “Not Agreed with Tax Payer.” The petitioner challenged the inclusion of these dropped demands in Form GST DRC-07 and the rejection of a rectification application without hearing.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain noted the prima facie inconsistency in the impugned order and directed the Department to explain why demands were dropped despite recording disagreement with the taxpayer. The Court also granted the petitioner liberty to approach the bench if any coercive action is initiated in the interim. The matter has been listed for further hearing on December 17, 2025.

The Delhi High Court recently recalled its earlier order permitting Ebix Technologies Limited (formerly EbixCash Limited) to operate its bank accounts after observing that the petitioner misrepresented the date of receipt of a provisional attachment letter issued under Section 83 of the Central Goods and Services Tax Act, 2017. The legal issue arose from the provisional attachment of bank accounts by the GST Department under Section 83 to protect revenue during pendency of proceedings under Sections 62, 63, 64, 67, 73, or 74, and the petitioner’s contention that the attachment letter was received only on WhatsApp on November 4, 2025.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain examined the GST Department’s dak records, which indicated that the provisional attachment letter dated September 25, 2025, was dispatched via speed post on October 8, 2025, and received on October 10, 2025, directly contradicting the petitioner’s claim. Noting a prima facie misrepresentation by the petitioner, the Court recalled its earlier order, while directing the petitioner to file an affidavit within two weeks clarifying the misrepresentation. The GST Department was instructed to provide proper reasons for the attachment within one week, and the requirement for the petitioner to maintain a balance of ₹1 crore in its accounts was upheld. The matter has been listed for further hearing on November 28, 2025.

The Gujarat High Court recently quashed a reassessment notice issued under Section148 of theIncome Tax Act, 1961 for Assessment Year 2017-18, holding it to be time-barred. The petitioner, Dahyabhai Narayandas Patel, challenged the notice under Article 226 of the Constitution of India, contending that the notice was issued beyond the permissible period even after considering the extended timelines under the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (TOLA).

The Division Bench of Justice A.S. Supehia and Justice Pranav Trivedi examined the timeline and found that the Assessing Officer issued the notice on 28.08.2022, whereas the “surviving time” to issue the notice expired on 11.07.2022. Relying on the Supreme Court precedents and the statutory framework under Section 148A(d) of the Act, the High Court held that the reassessment notice, all consequential proceedings including the order under Section 147 read with Section 144B dated 29.05.2023, and penalty notices dated 29.05.2023 were legally unsustainable. The Court quashed and set aside all actions, making the rule absolute to this extent.

The Delhi High Court addressed the legal issue of whether Customs officers can recover IGST refunds and export benefits from an exporter, and clarified the interplay between the Customs Act, 1962, the Integrated Goods and Services Tax Act, 2017 (IGST Act), and the Central Goods and Services Tax Act, 2017 (CGST Act). The petitioner challenged an Order-in-Original dated 25th June 2025 issued by the Commissioner of Customs (Export), which rejected claims for IGST refund, Drawback, and RoDTEP benefits, imposed redemption fines and penalties, and directed recovery of amounts under Sections 114(iii) and 114AA of the Customs Act, 1962.

The Bench of Justice Prathiba M. Singh and Justice Shail Jain allowed the petitioner to file an appeal on the classification issue within 30 days, waiving the limitation period. Recognizing the broader legal question regarding the jurisdiction of Customs versus CGST authorities in recovering IGST and export benefits, the Court directed the Customs and CGST Departments to file a joint affidavit within four weeks clarifying their respective powers. The matter has been listed before the Joint Registrar on 8th January 2026 and before the Court on 24th February 2026 for further hearing.

The Bombay High Court at Goa recently dealt with the acquittal of a former Income Tax Officer, Reddy, challenging his 2016 conviction under the Prevention of Corruption Act, 1988. The central legal issue was whether the prosecution could establish the essential elements of demand and acceptance of illegal gratification, which are prerequisites for conviction under the PC Act, including the applicability of the statutory presumption under Section 20. The CBI had alleged that Reddy demanded ₹1 lakh (later negotiated to ₹60,000) from partners of M/s Swastik Cruises during scrutiny of their income tax return for A.Y. 2007-08, leading to a trap operation in Panaji on 13 July 2009.

The bench of Justice Ashish S. Chavan held that the prosecution failed to prove the demand for illegal gratification, rendering the trap operation unreliable. The court highlighted serious inconsistencies in the testimony of the complainant, his brother, and the firm’s CA, alongside unexplained delays in lodging the complaint and lapses in the trap proceedings. The electronic evidence was also deemed inadmissible due to procedural defects and potential manipulation. Observing that mere recovery of money without proof of voluntary demand cannot sustain a conviction, the High Court set aside the 2016 conviction and acquitted the officer, holding that the Sessions Court had erred in relying on conjectures and inferences.

The Tripura High Court recently addressed the legality of retaining security deposits collected under the Tripura Value Added Tax Act, 2004 (TVAT Act) after the introduction of the Goods and Services Tax (GST) regime in July 2017. The legal issue revolved around whether the State authorities could continue to hold security deposits from transporters when the TVAT Act had been repealed by Section 174 of the Tripura State GST Act, 2017, and no corresponding provision under GST required such deposits. The petitioner, North East Carrying Corporation Ltd, had deposited ₹12 lakh in 2013 under Section 22(4) of the TVAT Act and sought its refund after the repeal of the Act.

The Division Bench comprising Chief Justice M.S. Ramachandra Rao and Justice S. Datta Purkayastha held that the retention of the deposit by the State authorities was unlawful. The Court observed that refund provisions under the repealed TVAT Act applied only to “tax” and not to security deposits, and directed the refund of ₹12 lakh with 7% interest from 5th April 2023, the date of the refund application.

Nine-Month Delay in Filing Revised ITR "Too Huge": Delhi HC refuse to Condone Delay

SANJAY KHURANA vsINCOME TAX DEPARTMENT MINISTRY OF FINANCE CITATION: 2025 TAXSCAN (HC) 2485

The Delhi High Court dealt with the issue of condonation of delay in filing a revised income tax return under Section 119(2)(b) of the Income Tax Act, 1961. The legal question concerned whether a nine-month delay in filing the revised ITR for A.Y.2021-22 could be excused, given the petitioner’s claims of errors in the original return, reliance on professional advice, and his status as a non-resident Indian.

The bench comprising Justice V. Kameswar Rao and Justice Vinod Kumar dismissed the petition filed by Sanjay Khurana, upholding the order of the Principal Commissioner of Income Tax (PCIT) dated 5th August 2025. The Court observed that the delay was “too huge” and that the petitioner had failed to demonstrate sufficient cause, noting that the e-filing portal was globally accessible and that ignorance of law or reliance on an advisor does not constitute adequate justification. Consequently, the petition was dismissed and the PCIT’s rejection of the condonation request was affirmed.

Mani Ram S/o Shri Luna Ram vs Principal Commissioner Of IncomeTax Jodhpur CITATION : 2025 TAXSCAN (HC) 2486

The Rajasthan High Court has examined the legal validity of a reassessment notice issued under Section 148 of the Income Tax Act, 1961, holding that such notices must mandatorily be issued only through the Faceless Assessing Officer (FAO) under the Notification, which operationalised the faceless reassessment architecture. The central legal issue before the Court was whether a Jurisdictional Assessing Officer (JAO) retains authority to issue reassessment notices, particularly in cases involving information arising from search and seizure under Sections 132 and 132A or whether the faceless regime has fully displaced such jurisdiction.

The Division Bench comprising Justice Sanjeet Purohit and Justice Pushpendra Singh Bhati quashed both the notice and the reassessment order. The Court held that the FAO is fully competent to issue reassessment notices even in search-related cases, and that no statutory exception exists in the 29 March 2022 faceless framework permitting a JAO to exercise such powers. Observing that the Gujarat High Court’s reasoning was based on an incomplete consideration of the CBDT’s 2021 orders and a mistaken assumption about the FAO’s limitations, the Bench concluded that a JAO issuing notice under Section 148 acts without jurisdiction. Consequently, the reassessment proceedings were quashed, with liberty to the Revenue to revive them if the Supreme Court later overturns the governing precedents.

LAKHMI CHAND TEJOO MALvs COMMISSIONER OF GST AND ANR CITATION : 2025 TAXSCAN (HC) 2487

The Delhi High Court examined whether a writ petition filed under Article 226 of the Constitution of India challenging a GST demand of ₹1,49,67,207 could be entertained despite an unexplained delay of more than four years from the date of the impugned order. The core legal issue before the Court was whether the challenge to the order dated 27 August 2021, passed pursuant to a Show Cause Notice (SCN) under the Goods and Services Tax regime, was barred by the doctrine of laches. .

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain rejected the explanation offered for the delay and dismissed the petition as barred by laches. The Court held that even if the existence of two GST numbers issued in 2017 was accepted, the petitioner ought to have sought cancellation of the duplicate registration at the relevant time. Noting that the petitioner had duly responded to the SCN on 4 March 2021 and that the impugned order was passed the same year, the Court found “no justification for not challenging the said order for a period of four years.” Accordingly, the writ petition was dismissed, with liberty granted to the petitioner to pursue any other remedies available under law.

M/S. MAIYAS BEVERAGESAND FOODS PVT. LTD vs REGIONAL PROVIDENTFUND COMMISSIONER AND RECOVERY OFFICER CITATION : 2025 TAXSCAN (HC) 2488

The Karnataka High Court examined whether a writ petition under Article 226 of the Constitution of India challenging a Warrant of Attachment of Movable Property dated 22 July 2025 issued by the Employees’ Provident Fund Organisation (EPFO) was maintainable when a specific statutory appellate remedy existed. The central legal issue was whether Maiyas Beverages, the petitioner, could bypass the statutory appeal mechanism provided under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, particularly the remedy of appeal under Section 7-I, against orders passed under Section 7A, and directly seek constitutional relief from the High Court.

The Single Bench of Justice Jyoti M. declined to exercise writ jurisdiction and dismissed the petition, holding that the petitioner must first exhaust the statutory remedy of appeal before the EPF Appellate Tribunal under Section 7-I of the Act. The Court reiterated that Article 226 is an extraordinary and discretionary remedy and cannot be invoked to circumvent legislatively mandated procedures, especially where the statute provides an effective alternative remedy. Finding no exceptional circumstances warranting interference, the Court dismissed the writ petition, discharged all interim orders, and disposed of connected applications.

M/s New Gee Enn &Sons vs Union of India & Ors. CITATION : 2025 TAXSCAN (HC) 2490

The Jammu & Kashmir and Ladakh High Court examined the legality of GST demands raised on traders engaged in the Cross-LoC barter trade, addressing the core legal issue of whether such barter transactions constituted an “intra-State supply” under the Central Goods and Services Tax Act, 2017, particularly with reference to Section 74(1) and the definitional provisions under Section 2(64) read with Section 8 of the IGST Act, 2017.

The Division Bench comprising Justice Sanjeev Kumar and Justice Sanjay Parihar dismissed the petitions and held that the Cross-LoC barter trade was an intra-state supply, fully taxable under the GST regime. The Court relied on statutory definitions including Section 2(56) of the CGST Act defining “India” and Section 2(103) of the J&K GST Act defining “State” to hold that Pakistan-occupied Kashmir formed part of the territory of the erstwhile State of Jammu & Kashmir. Since both the supplier's location and the place of supply (PoK) fell within the same State, the transactions were intra-state in nature. The Bench emphasized that no exemption had been issued under Section 11 of the CGST Act for Cross-LoC barter trade, making GST liability unavoidable. Accordingly, all connected writ petitions challenging the GST demands were dismissed.

CHARTERED ACCOUNTANTSASSOCIATION, SURAT (CAAS) vs UNION OF INDIA CITATION : 2025 TAXSCAN (HC) 2491

The Gujarat High Court has been approached wherein the Chartered Accountants Association of Surat (CAAS) has challenged the persistent technical failures of the Income-tax e-filing portal and the repeated delay in release of statutory Income-tax Return (ITR) forms, utilities, and schemas by the Central Board of Direct Taxes (CBDT). The petition raises substantial legal issues relating to systemic portal malfunctions, delayed statutory utilities, and statutory compliance hardship, alleging violations of Articles 14, 19(1)(g), 21, and 265 of the Constitution of India. It specifically questions the legality of excessive Category-A validations, interest imposition under Section 234C, and the CBDT’s repeated non-compliance with timely release of ITR forms arguing that these actions are unconstitutional, ultra vires, and cause undue burden on taxpayers and professionals.

While the matter is yet to be adjudicated, the petition lays out extensive evidence of portal outages between 10-16 September 2025, delays in utilities for A.Y. 2025-26, and exponential rise in portal-blocking validations, claiming that these failures crippled statutory compliance, including filing of returns, uploading audit reports, e-verification, and even payment of advance tax. CAAS has prayed for multiple directions, including mandating release of all ITR forms and utilities by 1 April each year, restricting pre-filing validations to basic checks only, automatic waiver of interest and late fees arising from system failures, and creation of an independent technical monitoring committee comprising ICAI, NIC, industry, and technology experts. The petition also seeks disciplinary action against responsible officials/vendors and a specific waiver of interest and late fees for the blackout period of 10-16 September 2025, during which compliance was rendered impossible due to portal failures.

M/s.Sunanda Enterprisesvs Chief Commissioner of CT & GST CITATION : 2025 TAXSCAN (HC) 2492

The Orissa High Court considered a writ petition f challenging an order dated 26th August 2025 issued by the First Appellate Authority under the Central Goods and Services Tax Act, 2017 (CGST Act). The legal issue pertained to the petitioner’s inability to file a statutory appeal due to the non-constitution of the Appellate Tribunal and sought directions for staying the impugned order. The case involved interpretation of Section 112(1) of the CGST Act, 2017, which prescribes the time frame for filing appeals before the Appellate Tribunal against orders under Sections 107 and 108 of the Act.

The Two-Member Bench of Chief Justice Harish Tandon and Justice M.S. Raman allowed a stay of the first appellate order upon the petitioner depositing 10% of the disputed tax amount within four weeks. The Court also extended the deadline for filing the statutory appeal to 30th June 2026 and directed that the appeal be filed through the GSTAT e-Filing Portal as per prescribed procedures. The petitioner was thus permitted to pursue the appeal in accordance with the notification while ensuring compliance with the deposit requirement for maintaining the stay of the impugned order.

Ms Telco ConstructionEquipment Company Limited vs CommissionerCommercial Tax CITATION : 2025 TAXSCAN (HC) 2493

The Allahabad High Court upheld the levy of sales tax on parts replaced under warranty by M/s Telco Construction Equipment Company Ltd., finding that such transactions constitute a “sale” under the Central Sales Tax Act, 1956 when consideration, direct or indirect, is involved. The legal issue centered on whether parts replaced during the warranty period, which were claimed to be “free of cost,” could be considered exempt from sales tax.

The bench of Justice Piyush Agrawal dismissed the revision petition. The Court relied on factual findings from the first appellate authority and the Tribunal, noting that dealers acted as consignees, invoices reflected prices and quantities for the parts, and reimbursements or credit notes effectively involved consideration. The Court also observed that parts supplied under Annual Maintenance Contracts (AMC) involved monetary consideration and could not be treated as gratuitous. Justice Agrawal emphasized that unchallenged evidence showing realization of amounts through direct or indirect consideration renders such warranty replacements taxable sales. Accordingly, the revision was dismissed, affirming the State’s imposition of sales tax.

M/S CorrtechInternational Pvt. Ltd vs The CommissionerCommercial Tax CITATION : 2025 TAXSCAN (HC) 2494

The Allahabad High Court held that merely using the term “supply” in a contract does not convert an indivisible composite works contract into separate sale transactions. The legal issue centered on whether the goods imported into Uttar Pradesh for execution of the contract could be taxed as intra-State sales, or whether the deduction under Section 3(F)(2)(b) of the UP Trade Tax Act applied for goods brought in for consumption under a pre-existing inter-State contract.

The bench of Justice Piyush Agrawal set aside the orders of the Assessing Authority, First Appellate Authority, and Commercial Tax Tribunal, which had wrongly treated the contract as divisible. The Court emphasized that the contract, when read in its entirety, was an indivisible works contract, and the supply of components was merely an integral element of the contract. Citing precedents such as Santosh & Company and Heera Electrodes, the Court held that goods brought into the State for execution of a works contract under a prior agreement qualify for deduction under Section 3(F)(2)(b), as their movement constitutes an inter-State sale under the CST Act. Accordingly, the bench quashed the impugned orders and allowed the assessee to claim the statutory benefit.

Ashwini Kumar vsCentral Board of Direct Taxes CITATION : 2025 TAXSCAN (HC) 2495

The Punjab and Haryana High Court addressed writ petitions challenging delays in the issuance of audit report formats and e-filing utilities by the Central Board of Direct Taxes (CBDT) under the Income Tax Act, 1961. The core legal issue was whether the delay justified extending the income tax return due date for audit cases, in light of statutory requirements that mandate a one-month gap between the filing of audit reports and income tax returns.

The Division Bench of Justice Lisa Gill and Justice Meenakshi I. Mehta observed CBDT’s repeated last-minute circulars and delays, noting that waiting until late October to act was unreasonable. The Court directed CBDT to extend the return filing due date for audit-case assessees to 30 November 2025, in line with the statutory framework requiring a gap between audit report and return filings. The bench accepted CBDT’s clarification regarding Section 12A renewal applications and held no extension was needed there. All connected writ petitions were disposed of with the direction to issue the circular, ensuring compliance relief for assessees.

M/S Madhukesh GAssociates vs The Commissioner Commercial Tax CITATION : 2025 TAXSCAN (HC) 2496

The Allahabad High Court addressed a revision petition concerning the refund of unutilised Input Tax Credit (ITC) accumulated under the UP VAT Act, which was claimed after the introduction of Goods and Services Tax (GST). The legal issue before the Court was whether an assessee could claim refund of VAT-era capital-goods ITC post-GST implementation without filing TRAN-1, the statutory form prescribed under the CGST Act, 2017 for transitional credit.

The bench of Justice Piyush Agarwal upheld the Commercial Tax Tribunal’s order denying a refund of ₹3,84,730 claimed by M/s Madhukesh G Associates for A.Y. 2017-18. The Court observed that the assessee neither carried forward the ITC through TRAN-1 nor identified any provision under the UP VAT Act permitting such a refund. It emphasized that transitional ITC claims must strictly follow statutory provisions under the CGST Act, and failure to file TRAN-1 results in the lapse of unutilised VAT ITC. Accordingly, the revision petition was dismissed, reinforcing that ITC and refunds are strictly subject to legislative provisions.

M/S ATTAR FULLERS EARTHREPRESENTED BY ITS PARTNER vs THE STATEOF KARNATAKA REPRESENTED BY ITSSECRETARY (MSME AND MINES) CITATION : 2025 TAXSCAN (HC) 2497

The Karnataka High Court addressed the legal issue of imposing penalties and collecting compounding fees from mineral traders without following proper adjudication procedures, in violation of Article 265 of the Constitution of India, which mandates that no tax shall be levied or collected except by authority of law. The case involved alleged violations under Section 4(1) of the Mines and Minerals (Development & Regulation) Act, 1957, read with Rules 42 and 43 of the Karnataka Minor Mineral Concession Rules, 1994, where vehicles transporting legally purchased minor minerals were seized and a penalty of Rs. 87,750 per vehicle was coercively collected.

The bench comprising Chief Justice Vibhu Bakhru and Justice C.M. Poonacha observed that no formal adjudication or seizure orders had been issued, rendering the penalty collection without legal authority. The Court quashed the Rs. 2,63,250/- penalty, directed the immediate refund of the amount with interest, and allowed the authorities to issue a reasoned show cause notice for any future alleged violations, safeguarding the petitioners’ rights to natural justice and proper legal procedure.

Failure to Consider ITC Claimed in GSTR‑9 and Written Representation: Calcutta HC Sets Aside Order and Remands

The Calcutta High Court, in a recent case, has set aside an appellate order under Section 107 of the CentralGoods and Services Tax (WBGST/CGST) Act, 2017, finding that the Appellate Authority failed to consider the petitioner’s written representation and her claim of Input Tax Credit (ITC) in the annual return (GSTR‑9).

The Court held that the appellate order was unsustainable as it neither explained why the petitioner’s plea was illogical nor identified the missing documents. The failure to consider the written representation and GSTR‑9 claim vitiated the order. On these grounds, the High Court set aside the appellate order and remanded the matter to the Appellate Authority for fresh consideration in accordance with the law. The petitioner was granted liberty to submit further representations or clarifications within two weeks. The Court also noted that the petitioner had already paid the differential tax amount of ₹83,608.07 after disposal of the appeal, and she was free to bring this fact to the notice of the Appellate Authority.

The Bombay DiocesanTrust Association Private Limited vsCommissioner of Income Tax (Exemptions) andOrs CITATION : 2025 TAXSCAN (HC) 2499

The Bombay High Court addressed a case involving condonation of delay under Section 119(2)(b) of the Income Tax Act, 1961, concerning the filing of Income Tax Returns and statutory forms by a charitable trust. The petitioner, Bombay Diocesan Trust Association Private Limited, challenged the order of the Commissioner of Income Tax (Exemptions) [CIT(E)], which had refused to condone the delay despite prolonged trustee suspension, sealed records, and administrative takeover under Section 41D of the Maharashtra Public Trust Act, 1950. The legal issue revolved around whether genuine hardship due to circumstances beyond the trust’s control justified condoning the delay for multiple assessment years.

The bench of Justice B. P. Colabawalla and Justice Amit S. Jamsandekar held that the CIT(E) had failed to consider undisputed facts showing that the Trust was unable to function from December 2012 to October 2017, with bank accounts accessible only from March 2018. The Bench noted that the rejection of condonation for only one assessment year, despite the application covering six years, was flawed. The Court quashed the CIT(E) order, condoned the delay for all six assessment years, and directed that the Income Tax Returns be processed as if filed within time, recognizing the substantial hardship faced by the Trust.

M/S New Tech Engineersvs Commissioner Of Commercial Tax CITATION : 2025 TAXSCAN (HC) 2500

The Allahabad High Court dealt with a case concerning the imposition of a VAT penalty under Section 48(5) of the Uttar Pradesh Value Added Tax (UP VAT) Act, 2008. The legal issue revolved around whether a temporary delay in producing transit documents could justify initiating penalty proceedings. The Court examined whether the Commercial Tax Tribunal erred in overturning the factual findings of the First Appellate Authority and initiating penalty proceedings despite proper entries in the books of account, reliance on Form-C, and supporting affidavits.

The bench of Justice Piyush Agrawal held that initiating penalty proceedings solely due to temporary non-production of documents, without verifying entries or conducting a provisional assessment, was improper and violated the statutory framework. The Court observed that immediate submission of documents during transit and maintained books of account precluded the levy of penalty. Consequently, the High Court set aside the impugned order, allowed the revision, and ruled in favour of the petitioner, affirming that mere delay in producing documents cannot form the basis for Section 48(5) penalties.