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

Evershine Enterprisesvs Union of India CITATION : 2025 TAXSCAN (HC) 2661

The Bombay High Court recently addressed the legal issue of determination of payable amounts under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, specifically concerning the failure to adjust pre-deposits and amounts recovered during investigation while issuing Form SVLDRS-3. The Court examined the statutory mandate under Section 124(2) of the Finance Act, 2019, which requires that any amounts already paid as pre-deposit or recovered must be deducted from the total tax liability while computing the sum payable under the scheme. The issue arose when Evershine Enterprises’ declaration under the scheme was mechanically processed without adjusting the substantial amounts it had already remitted or which were recovered during investigation, leading to an inflated demand.

The Division Bench comprisingJustice M. S. Sonak and Justice Advait M. Sethna allowed the writ petition filed by Evershine Enterprises. The Court quashed the impugned Form SVLDRS-3 to the extent it determined the payable amount at ₹1.12 crore and directed the designated committee to re-verify the petitioner’s claims of pre-deposit and recovery, after granting a fair hearing, and to pass a fresh determination in accordance with law within a stipulated timeframe. The judgment clarified that while verification under the Sabka Vishwas scheme is not an adjudicatory exercise, the authorities are nonetheless obligated to conduct a proper examination of records to ensure that the payable amount accurately reflects prior payments and recoveries.

SUMIT GUPTA vs UNION OFINDIA AND ORS CITATION : 2025 TAXSCAN (HC) 2662

The Delhi High Court addressed the legal issue of payment of interest on delayed re-credit of rejected GST refund amounts caused by technical glitches on the GST portal. The Court considered the statutory requirement that when a refund claim is rejected, the corresponding amount must be re-credited to the taxpayer’s Electronic Credit Ledger, and that any delay in such re-credit, not attributable to the taxpayer, attracts interest under the GST law. The issue arose when Sumit Gupta’s refund claims totaling Rs. 2,77,501 were rejected, but the GST department delayed re-crediting the amounts due to portal-related technical issues, prompting the petitioner to seek judicial intervention.

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain directed the GST authorities to process and sanction interest on the delayed refund re-credit in accordance with law and to pass a reasoned order within two months. The Court observed that the delay was admitted by the department and emphasized that the petitioner could not be deprived of interest merely because the re-credit occurred during the pendency of the writ petition. The petition was disposed of, while keeping all rights and remedies of the petitioner open.

M/s.Sennar Paper BoardsP Ltd vs The State Of Tamil Nadu CITATION : 2025 TAXSCAN (HC) 2663

The Madras High Court dealt with the legal issue of whether the Tamil Nadu Government could retrospectively curtail or impose new conditions on a VAT exemption already granted to paper board manufacturers under the TNGST Act, 1959 and TNVAT Act, 2006. The Court examined Notification No. II(1)/CTR/75(b-2)/2007 issued through G.O.Ms.No.198 dated 19.12.2007, which sought to restrict exemptions previously granted under G.O.Ms.No.176 dated 28.12.2006. The petitioners, Sennar Paper Boards Pvt. Ltd. and another, challenged the notification and the assessment orders relying on it, arguing that the State could not retrospectively alter or impose additional conditions on a validly granted exemption.

The Division Bench comprising Justice Dr. Anita Sumanth and Justice Mummineni Sudheer Kumar quashed the impugned notification insofar as it applied to the petitioners and set aside the assessment orders passed on its basis. The Court held that the government could not rely on assumed intent to add conditions retrospectively and that the notification exceeded statutory powers under the relevant VAT laws. The writ petitions were allowed, connected miscellaneous petitions were closed, and no order as to costs was made.

Pr. Commissioner ofIncome Tax-Central-1 vs Milan Kavin Parikh CITATION : 2025 TAXSCAN (HC) 2664

The Bombay High Court addressed the legal issue of whether a “base note” received from a foreign government under international information exchange arrangements can constitute incriminating material for making income tax additions under Section 153A of the Income Tax Act, 1961. The Court examined the case of Milan Kavin Parikh, where the Assessing Officer had relied solely on a base note received from the French authorities to make additions relating to alleged undisclosed foreign income, in the absence of any incriminating material found during a search under Section 132.

The Division Bench comprising Justice G.S. Kulkarni and Justice Aarti Sathe held that the base note obtained post-search could not be treated as incriminating material to sustain additions under Section 153A. The Court relied on the Supreme Court’s ruling in PCIT v. Abhisar Buildwell (P) Ltd (2023), which clarified that additions under Section 153A require incriminating material discovered during the search or requisition. Accordingly, the High Court dismissed the Revenue’s appeal, upholding the ITAT’s deletion of the additions.

Puspa Furniture Pvt.Ltd. & Anr. vs Union of India &Ors. CITATION : 2025 TAXSCAN (HC) 2665

The Calcutta High Court addressed the legal issue of whether cash can be treated as “goods” and seized or sealed by GST authorities under Section 67 of the Central Goods and Services Tax (CGST) Act, 2017. The case involved Puspa Furniture Pvt. Ltd., where GST officers sealed cash amounting to Rs. 24 lakh during search and seizure proceedings.

The Division Bench of Justice Om Narayan Rai held that cash cannot be treated as goods under the CGST Act and that Section 67 allows seizure of “things” only if they contain information or evidentiary value relevant to GST proceedings. The Court directed the GST authorities to immediately de-seal the Rs. 24 lakh, while clarifying that this did not bar other authorities, including the Income Tax Department, from taking lawful action. The Court allowed the investigation to continue and instructed the department to file an affidavit addressing the matter.

Pr. Commissioner ofIncome Tax-19 Mumbai vs Avinash B. Jaising CITATION : 2025 TAXSCAN (HC) 2666

The Bombay High Court adjudicated a dispute concerning the assessee’s right to set off short-term capital loss (STCL) against long-term capital gains (LTCG) under the Income Tax Act, 1961. The matter arose from a block assessment initiated following a search and seizure action under Section 132 of the Income Tax Act, where the Assessing Officer denied a set-off of STCL of ₹5.18 crore against LTCG of approximately ₹5.21 crore, treating it as undisclosed income allegedly arising from non-genuine share transactions. The principal legal issue before the Court was whether the Department could deny a benefit under capital gains when identical transactions in connected cases involving the assessee’s father and brother had already been accepted without challenge, thereby invoking the doctrine of consistency in tax matters.

The Division Bench comprising Justice G.S. Kulkarni and Justice Aarti Sathe upheld the concurrent findings of the CIT(A) and the ITAT, both of which had accepted the genuineness of the transactions and permitted the set-off of STCL against LTCG for the block period. Emphasising the principle of consistency applicable to taxing statutes, the Court observed that once the Department had accepted the same tax treatment in factually-identical cases of the assessee’s close family members, it could not adopt a contrary stance in the present case. Finding no substantial question of law arising from the ITAT order, the Bombay High Court dismissed the Revenue's appeal and affirmed the assessee’s entitlement to set off losses against gains.

CLYDE PUMPS PRIVATELIMITED vs UNION OF INDIA & ORS CITATION : 2025 TAXSCAN (HC) 2667

The Delhi High Court examined whether transitional CENVAT credit could be denied to an Input Service Distributor (ISD) on the ground that the GST portal did not permit filing or utilisation of TRAN-1 during the transition to GST. The key legal issue concerned the scope and effect of Section 140(7) of the Central Goods and Services Tax Act, 2017, which expressly protects pre-GST ISD credit and permits its distribution “within such time and in such manner as may be prescribed.” Clyde Pumps Pvt. Ltd., an ISD with accumulated CENVAT credit of ₹99,18,972 for March-June 2017, had filed TRAN-1 on time but could not transition the credit due to the system’s failure to maintain an Electronic Credit Ledger for ISDs.

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain rejected the revenue’s objections and held that procedural or technical limitations on the GST portal cannot extinguish a vested statutory entitlement protected under Section 140(7). Relying on precedents including Siemens Ltd. v. Union of India (Bombay HC) and the Delhi HC ruling in Vision Distribution Pvt. Ltd., the Bench reiterated that taxpayers cannot be penalised for systemic shortcomings during GST transition. The Court accordingly directed the authorities to reflect Clyde Pumps’ acknowledged ITC in its Electronic Credit Ledger within three months, holding that legitimate transitional credit already declared in TRAN-1 cannot be denied on account of portal-based restrictions or “technical glitches or transitional creases.”

Jasmine Towels (P) Ltdvs Asst. Commissioner Of Income TaxCircle-I CITATION : 2025 TAXSCAN (HC) 2668

The Madras High Court examined whether reassessment proceedings under Section 147 read with Section 148 of the Income Tax Act, 1961 were valid when excessive deduction under Section 80HHC had been granted in the original scrutiny assessment under Section 143(3), despite the assessment order being entirely silent on the deduction claim. The core legal issue was whether the reassessment constituted a prohibited “change of opinion,” or whether the Revenue could invoke Explanation 2(c)(iii) to Section 147, which expressly deems excessive relief or deduction as income escaping assessment, thereby justifying reopening of the assessment.

The Division Bench comprising Justice Dr. Anita Sumanth and Justice Mummieni Sudheer Kumar upheld the reopening, holding that where the original assessment order contained no discussion, reference, or indication of application of mind regarding the Section 80HHC deduction, no opinion could be said to have been formed by the Assessing Officer. Therefore, the rule against change of opinion had no application. Distinguishing prior precedents, the Court ruled that the Revenue was justified in invoking Explanation 2 to Section 147 to remedy excessive relief, answered the substantial question of law in favour of the Department, and dismissed the assessee’s appeal, affirming that the reassessment proceedings were valid in law.

Krishnareddy Venkatesanvs Income Tax Officer, Ward 1,Tiruvallur CITATION : 2025 TAXSCAN (HC) 2670

The Madras High Court examined the legality of reassessment proceedings initiated under Section 148A read with Section 149 of the Income Tax Act, 1961, particularly concerning the threshold of income escapement exceeding ₹50 lakh required to invoke the extended limitation period. The core legal issue was whether the Assessing Officer could treat cash deposits and a fixed deposit created from the same funds as separate assets, and thereby aggregate them to artificially cross the ₹50 lakh ceiling for reopening beyond three years. The assessee argued that the fixed deposit of ₹27 lakh originated from the cash deposits of ₹25.90 lakh and therefore the alleged escapement could not be computed cumulatively.

The Single Judge Bench of Justice Senthilkumar Ramamoorthy held that the Assessing Officer failed to examine the bank statements and did not apply independent judgment before assuming income escapement above the statutory limit. The Court quashed the reassessment proceedings, setting aside both the notice under Section 148 and the order under Section 148A(d), ruling that mechanically clubbing cash and fixed deposits without verifying their source connection was legally untenable. The petition was allowed, and the matter was remitted to the Assessing Officer to reconsider the issue afresh, after providing proper opportunity to the assessee, and to pass a fresh order under Section 148A(d) within two months.

Naresh T. Jain &Ors vs The Union of India & Ors CITATION : 2025 TAXSCAN (HC) 2671

The Bombay High Court adjudicated the legality of continuing provisional attachment orders issued under Section 5 of the Prevention of Money Laundering Act, 2002 (PMLA) beyond the statutory ceiling of 180 days prescribed under Sections 5(1) and 5(3). The core legal issue before the Court was whether the limitation extensions granted by the Supreme Court during the COVID-19 pandemic issued through suo motu orders for exclusion of time could be invoked by the Enforcement Directorate to prolong the life of a provisional attachment order.

The Division Bench comprising Justice M.S. Sonak and Justice Advait M. Sethna held that the Supreme Court’s COVID limitation orders did not apply to executive actions under PMLA, particularly coercive measures like provisional attachment, which cease to have effect automatically after 180 days unless confirmed by the adjudicating authority. The Court observed that the ED continued to function during the pandemic and said that statutory protections embedded in Section 5 could not be diluted to extend attachment duration. It therefore declared that the provisional attachment dated 27 November 2020 lapsed on 26 May 2021 and was without legal effect thereafter, restraining further action based on the expired order. However, the Court clarified that ongoing adjudication proceedings under Section 8 PMLA would continue independently.

Pr Commissioner ofIncome Tax Central 4 vs Citron InfraprojectsLimited AADCC3735CCITATION : 2025 TAXSCAN (HC) 2672

The Bombay High Court examined the legality of search assessment orders passed under Section 153A read with Section 153D of the Income Tax Act, 1961, specifically addressing whether prior approvals granted under Section 153D were valid when issued in a mechanical and hurried manner. The legal issue before the Court was whether approvals granted within minutes or a few hours covering more than 30 assessment orders involving diverse assessees, facts, and issues could be considered a proper application of mind as mandated under Section 153D.

The Division Bench comprising Justice M.S. Sonak and Justice Advait M. Sethna upheld the findings of the Income Tax Appellate Tribunal (ITAT), dismissing over 25 Revenue appeals under Section 260A. The Bench held that identical, template-based approvals granted en masse failed to satisfy statutory requirements and rendered the corresponding search assessments unsustainable in law. The Court concluded that the mechanical exercise of approval defeated the very object of Section 153D, which is designed to ensure scrutiny and prevent arbitrary additions following search operations. Consequently, all Revenue appeals were rejected, and the High Court affirmed that such defective approvals vitiate entire Section 153A assessments irrespective of the merits of additions proposed.

PAZHASSI MOTORS vsSTATE OF KERALA CITATION : 2025 TAXSCAN (HC) 2673

The Kerala High Court examined the legal issue surrounding the statutory timelines for claiming Input Tax Credit (ITC) under the Central Goods and Services Tax Act, 2017, specifically whether the new timeline introduced in Section 16(5) overrides the earlier restriction under Section 16(4). The case involved the denial of ITC for F.Y. 2018-19 on the ground that returns were filed belatedly, but the petitioner contended entitlement based on Section 16(5) introduced through the Finance Act, 2024, which, by using a non-obstante clause, allows ITC where returns were filed on or before 30.11.2021. The core legal issue therefore was whether the introduction of Section 16(5) created a fresh statutory right that supersedes the earlier time bar under Section 16(4).

A single judge bench of Justice Ziyad Rahman A.A. ruled in favour of the taxpayer, holding that Section 16(5) overrides Section 16(4) and confers an independent right to ITC if returns were filed before 30.11.2021. The Court quashed the assessment order and directed the assessing authority to reconsider the claim afresh, applying Section 16(5) and granting an opportunity of hearing. The Court rejected the State’s objection based on the earlier dismissal of the petitioner’s constitutional challenge to Section 16(4), finding that the enactment of Section 16(5) created a new cause of action. The writ petition was accordingly allowed.

THE AUTHORISED OFFICERvs SHEELA FRANCIS PARAKKAL CITATION : 2025 TAXSCAN (HC) 2674

The Kerala High Court examined the legal issue of whether a private commercial bank falls within the ambit of writ jurisdiction under Article 226 of the Constitution of India, in the context of Article 12 defining “State.” The matter arose from a writ petition in which the borrowers sought a declaration that South Indian Bank, after closure of the loan account, had no authority to retain the original title deeds and sought release of the documents. The central legal question was whether a writ petition was maintainable against South Indian Bank, which is registered under the Companies Act and functions as a private commercial entity, and therefore not subject to writ jurisdiction except where discharge of a public duty is shown.

The Division Bench comprising Justice Sushrut Arvind Dharmadhikari and Justice Syam Kumar V.M. allowed the writ appeal filed by South Indian Bank and set aside the Single Judge’s order, holding that the writ petition was not maintainable against a private bank that is not “State” under Article 12. The Court relied on precedents including Federal Bank Ltd. v. Sagar Thomas (2003), reiterating that mere regulatory oversight by the RBI does not render private banks public authorities. The Bench held that the Single Judge erred in entertaining the writ petition and imposing costs without examining maintainability, and clarified that the borrowers are at liberty to pursue remedies before the appropriate forum as permitted in law.

Accost Media LLP vsDeputy Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 2675

The Bombay High Court addressed the legal issue concerning the computation of limitation for filing a rectification application under Section 254(2) of the Income Tax Act, 1961. The issue arose after Accost Media LLP’s rectification application was rejected by the Income Tax Appellate Tribunal on the ground that it was filed beyond six months from the date of passing of the original order dated 10.12.2024. The High Court examined whether the limitation period must be reckoned from the date the order is passed or from the date it is communicated/received by the taxpayer, particularly in the context of Tribunal Rules requiring a copy of the order to accompany the rectification application.

The Division Bench comprising Justice B. P. Colabawalla and Justice Amit S. Jamsandekar held that the limitation period begins from the date the Tribunal order is communicated to the assessee and not the date on which it is passed. The Court ruled that a contrary interpretation would cause injustice, since no rectification application can realistically be filed without obtaining a copy of the order. Consequently, the Bench found that the Tribunal erred in rejecting the rectification application as time-barred. However, since the petitioner had already filed a substantive appeal against the original order, the High Court declined remand and permitted the petitioner to raise all grounds in the pending appeal, disposing the writ petition without costs.

Indian Currency is ‘Goods’ Under Customs Act, Seizure without issuing SCN within Six Months is Illegal: Madras HC

Vikram Jain vsPrincipal Commissioner Of Customs CITATION : 2025 TAXSCAN (HC) 2676

The Madras High Court examined the legal issue of whether Indian currency seized during investigation constitutes “goods” within the meaning of Section 2(22) of the Customs Act, 1962, thereby attracting the mandatory procedural safeguards prescribed under Section 110(1) and 110(2). The petitioner, Vikram Jain, sought quashing of a seizure memo and return of the seized currency on the ground that the Customs Department failed to issue a show-cause notice within six months as required under Section 110(2). The Court analysed the statutory scheme and whether the seizure could be justified under Section 110(3), which applies to documents or things useful for investigation and is not subject to the same limitation period.

The bench of Justice Abdul Quddhose held that Indian currency expressly falls within the definition of “goods” and cannot be equated with mere investigational material under Section 110(3). Once currency is seized under the authority of Section 110(1), the Department is bound to comply with the statutory obligation under Section 110(2) and issue a notice under Section 124 within six months or obtain proper extension. As no show-cause notice was issued and no extension recorded, the seizure became illegal. The Court therefore quashed the seizure memo and directed that the seized currency be returned within eight weeks, while granting liberty to initiate fresh proceedings strictly in accordance with law.

The Commissioner OfIncome Tax vs Chennai. vs M/s MohanBreweries And Distilleries LtdCITATION : 2025 TAXSCAN (HC) 2677

The Madras High Court dealt with the legal issue of whether simultaneous deductions under Sections 80IA and 80HHC of the Income Tax Act, 1961 can be allowed in respect of the same business profits, particularly in the context of the restriction imposed under Section 80IA(9). The Revenue filed a tax case appeal under Section 260A challenging the order of the Income Tax Appellate Tribunal, which had set aside the Commissioner’s revision order passed under Section 263, wherein it was held that deduction under Section 80HHC ought to have been reduced by the amount already allowed under Section 80IA. The central question before the Court concerned whether Section 80IA(9) restricts computation or merely the allowability of deductions so as to ensure that total deduction does not exceed 100 percent of the profits.

The Division Bench comprising Justice Dr. Anita Sumanth and Justice Mummimeni Sudheer Kumar, held that Section 80IA(9) does not affect computation of deduction under other provisions, but merely restricts the aggregate deductions to ensure they do not exceed the profits of the business. Answering all substantial questions of law in favour of the assessee, the Court dismissed the Revenue’s appeal and upheld the Tribunal’s decision permitting simultaneous deductions under Sections 80IA and 80HHC, subject to the cap of 100 percent of profits.

PRANIJ HEIGHTS INDIAPVT LTD vs THE JOINT COMMISSIONER OFCUSTOMS CITATION : 2025 TAXSCAN (HC) 2678

The Delhi High Court adjudicated a writ petition involving the legal issue of limitation under Section 28(9) of the Customs Act, 1962, specifically whether an extension of time granted for completing adjudication must be communicated to the noticee. The petitioner, Pranij Heights India Pvt. Ltd., challenged the continuation of adjudication proceedings arising from a show cause notice relating to concessional duty claims under the ASEAN-India Free Trade Agreement for aluminium foil imports.

The Division Bench of JusticePrathiba M. Singh and Justice Shail Jain held that non-communication of the extension order does not vitiate the adjudication process, since Section 28(9) contains no statutory mandate requiring such communication. The Court distinguished the provision from Section 110(2) of the Act, where communication is explicitly required in case of extension. Observing that the petitioner had multiple opportunities to participate and that adjudication had culminated in an Order-in-Original, the Court declined to interfere in writ jurisdiction. The writ petition was disposed of, with liberty granted to the petitioner to pursue a statutory appeal against the Order-in-Original.

ADARSH SAMAJ KALYANSAMITEE vs THE UNION OF INDIA AND 4 ORS CITATION : 2025 TAXSCAN (HC) 2679

The Gauhati High Court dealt with the issue of coercive recovery of income tax dues during the pendency of statutory appeals before the Income Tax Appellate Tribunal (ITAT). The writ petition was filed by Adarsh Samaj Kalyan Samitee challenging assessment orders for A.Y.s 2021-22 and 2022-23 issued under the Income Tax Act, 1961, as well as consequential recovery measures undertaken by the Income Tax Department, including freezing of bank accounts. The petitioners argued that recovery should be stayed pending disposal of their second appeals before the ITAT, particularly since obtaining urgent interim relief before the Tribunal had become difficult owing to irregular sittings.

The Single Bench of Justice Soumitra Saikia held that since the ITAT is the designated statutory appellate forum and is presently functional, the proper course is to direct expeditious disposal of the assessee’s interim relief applications. The Court granted interim relief by staying further recovery proceedings during the pendency of the ITAT appeals and directed the Tribunal to take up and consider the interim applications without delay.

Tvl.KRM Construction vsThe Assistant Commissioner CITATION : 2025 TAXSCAN (HC) 2680

The Madras High Court dealt with the issue of cancellation of GST registration for continuous non-filing of GST returns under the Central Goods and Services Tax Act, 2017. The writ petition arose when Tvl. KRM Construction challenged the cancellation order after six consecutive months of default in filing returns. The core legal issue pertained to restoration of registration and permission to file pending returns on the GST portal, which falls within the framework of statutory obligations relating to return filing and technical enablement by the Goods and Services Tax Network (GSTN).

The bench of Justice Krishnan Ramasamy, who found that the petitioner had furnished a bona fide explanation for the lapse caused by negligence of an engaged accountant. The Court revoked the cancellation of GST registration subject to strict compliance conditions, directing GSTN to enable filing of pending returns and payment of dues within four weeks. It further mandated payment of tax, interest, penalty, and late fees without adjusting unclaimed Input Tax Credit, warning that failure to comply would automatically revive the cancellation and other penal consequences.

SAYARA vs COMMISSIONEROF CUSTOMS CITATION : 2025 TAXSCAN (HC) 2681

The Delhi High Court addressed a matter concerning the unjustified detention of personal jewellery under the Customs Act, 1962, highlighting the Department’s failure to implement an adjudication order. The legal issue revolved around the release of a 21-gram gold ring seized from Ms. Sayara upon her arrival at IGI Airport, New Delhi, from Dubai. Despite an adjudication order declaring the ring as personal effects and directing its release, the Customs Department did not comply, compelling the petitioner to approach the High Court. The Court observed that detention of such a small item constituted an unreasonable and wasteful use of departmental resources.

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain, held that the adjudication order must be implemented immediately, directing the Customs Department to release the gold ring forthwith without requiring warehousing charges. The Court also appointed a Customs Nodal Officer to ensure compliance and imposed costs of ₹5,000 on the Department for forcing the petitioner to file the writ petition unnecessarily.

Agrim Wholesale PrivateLimited vs State Of U.P CITATION : 2025 TAXSCAN (HC) 2682

The Allahabad High Court dealt with the legality of penalty proceedings under Section 129(3) of the Goods and Services Tax Act, 2017, where the petitioner’s goods were seized for non-filing of Part B of the e-way bill. The legal issue centered on whether mere non-filing of Part B due to a technical glitch can attract a penalty, in the absence of any finding of intention to evade tax.

The bench comprising Justice Piyush Agrawal held that the authorities had failed to record any finding of intent to evade tax and that non-filing of Part B of the e-way bill alone does not warrant penalty under the GST Act. Relying on earlier precedents, the Court quashed both the penalty order dated 3 May 2025 and the appellate order directing the authorities to refund any amounts deposited by the petitioner within two months. The writ petition was allowed, emphasizing that penalties under GST require a demonstration of willful non-compliance or intent to evade tax.

JKC General TradingCompany Thr. Its Partner vs Union of IndiaThr. The Secretary And OrsCITATION : 2025 TAXSCAN (HC) 2683

The Bombay High Court addressed the failure of the Customs Department to pass a reasoned or “speaking” order under Section 17(5) of the Customs Act, 1962, even after the importer had paid disputed duty under protest. The legal issue revolved around whether Customs authorities can indefinitely delay issuing a speaking order after a remand by the Commissioner (Appeals), thereby frustrating the importer’s statutory right to challenge the assessment.

The Division Bench comprising Justice M.S. Sonak and Justice Advait M. Sethna held that the Customs authorities must issue a reasoned order within a fixed timeline and cannot rely on payment of duty voluntarily or under protest to bypass this obligation. The Court directed the officials to conduct a new personal hearing if necessary and pass the speaking order within two months. Additionally, the Bench imposed ₹25,000 costs on the Department payable to the petitioner, emphasizing accountability, and clarified that the Department may recover amounts internally from responsible officials.

Biranchi Narayan Kar vsState of Odisha & Ors CITATION : 2025 TAXSCAN (HC) 2684

The Orissa High Court addressed the issue of whether a vehicle owner must be allowed to deposit outstanding Motor Vehicle Tax and seek waiver of penalties under Section 13 of the Odisha Motor Vehicle TaxationAct, 1975 before the Transport Department initiates coercive action. The legal issue centered on ensuring that statutory procedures are followed and that the vehicle owner is given an opportunity to explain his case and comply with tax obligations before facing enforcement measures. The Court emphasised that uploading arrears on the department portal without giving an opportunity for reply or explanation is procedurally improper.

Justice Dr. Sanjeeb K. Panigrahi held that the petitioner, must be permitted to deposit the outstanding tax and file a reply seeking waiver of penalties. The Court directed the Transport Department to accept the tax payment and consider the petitioner’s request for waiver of penalties and issuance of permits and fitness certificate within a reasonable timeframe. The writ petition was disposed of with instructions that the tax be deposited within four weeks and the authority to consider the waiver application within four weeks thereafter.

Carbon ResourcesPrivate Limited vs Union of India CITATION : 2025 TAXSCAN (HC) 2685

The Jharkhand High Court dealt with the legal issue of whether a GST refund application can be rejected without affording the taxpayer the mandatory fifteen days’ time to file a reply and an opportunity of personal hearing under Rule 92(3) of the CGST and JGST Rules, 2017. The issue arose from writ petitions filed by Carbon Resources Private Limited, challenging the rejection of its GST refund claim and a subsequent rectification order by the Assistant Commissioner, CGST, Division Giridih.

The Division Bench comprising Chief Justice Tarlok Singh Chauhan and Justice Rajesh Shankar held that the refund rejection and rectification orders were unsustainable in law due to procedural non-compliance and violation of principles of natural justice. The Court set aside both orders and remanded the matter to the Assistant Commissioner for fresh consideration, directing that the petitioner be granted the full fifteen days to file a reply and be provided a personal hearing before any fresh order is passed. The parties were directed to appear before the authority on 10 December 2025, and the writ petitions were allowed.

The Commissioner ofIncome Tax vs M/s. The Madurai DistrictCentral Co-operative Bank Limited CITATION : 2025 TAXSCAN (HC) 2686

The Madras High Court dealt with the interpretation of Section 36(1)(viia) of the Income Tax Act, 1961, and Rule 6ABA of the Income-tax Rules, 1962, concerning the deduction for provision for bad and doubtful debts by banks. The legal issue arose from assessment proceedings for A.Y. 2010-11 involving M/s The Madurai District Central Co-operative Bank Limited, where the Revenue contended that the deduction should be computed only on incremental advances made during the year, rather than on the aggregate average of monthly outstanding advances of rural branches. The High Court was tasked with determining the correct method of computation under the relevant provisions.

The Division Bench comprising Justice Anita Sumanth and Justice Mummineni Sudheer Kumar noted that the issue was settled by earlier decisions, including Catholic Syrian Bank v. CIT (2012). The Court held that the deduction under Section 36(1)(viia) must be computed based on the cumulative outstanding advances of rural branches at the end of each month, subject to the proviso preventing double deduction. Upholding the ITAT’s computation method, the Madras High Court dismissed both appeals filed by the Income Tax Department, ruling in favour of the assessee.

KANCHAN LAL AGRAWAL vsCOMMISSIONER OF CUSTOMS CITATION : 2025 TAXSCAN (HC) 2687

The Delhi High Court addressed the issue of whether the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) can be compelled to restore a customs appeal after decades of inaction by the appellant, under Section 130 of the Customs Act, 1962. The case arose from the seizure of 702.78 kilograms of silver on 30 August 1991, with an Order-in-Original directing confiscation of the silver and a vehicle, along with a penalty of ₹15 lakh. The appellant, Kanchan Lal Agrawal, had repeatedly failed to comply with mandatory pre-deposit requirements despite multiple opportunities and extensions granted by CESTAT and the Delhi High Court.

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain held that, given the appellant’s repeated non-compliance and the final dismissal of a second Special Leave Petition by the Supreme Court, CESTAT could not be compelled to restore the appeal after decades of delay. The court emphasized that the mere fact that the seized silver remained with the department did not justify reopening the proceedings. Consequently, the High Court declined to interfere with CESTAT’s order, dismissed the appeal, and noted that the appellant retained liberty to approach the Supreme Court in accordance with law.

AGGARWAL TRADERSTHROUGH ITS PROPRIETOR MS JYOTI AGGARWAL vsSALES TAX OFFICER CLASS II / AVATO CITATION : 2025 TAXSCAN (HC) 2688

The Delhi High Court addressed the issue of whether a belated statutory appeal under Section 107 of the Central Goods and Services Tax Act, 2017 (CGST Act) can be entertained against an adjudication order raising a GST demand, where the delay was due to circumstances beyond the petitioner’s control. The petitioner, Aggarwal Traders, represented by Ms. Jyoti Aggarwal, challenged an adjudication order for the financial year 2019-20 demanding ₹35,61,082, and also questioned the validity of Notifications Nos. 09/2023 and 56/2023 (Central and State Tax), which extended limitation periods under Section 168A of the CGST Act. The delay in filing the appeal arose due to the sudden illness and subsequent death of the tax consultant entrusted with filing the appeal.

The Division Bench comprising Justice Prathiba M. Singh and Justice Renu Bhatnagar allowed the belated appeal, holding that the circumstances constituted sufficient cause for the delay and that the appeal could not be rejected solely on limitation grounds. The Court directed the petitioner to file the appeal along with the requisite pre-deposit by 15 January 2026, and clarified that the relief granted would remain subject to the final outcome of the Supreme Court proceedings regarding the validity of the limitation-extension notifications. The Court emphasized that the adjudication order itself did not warrant writ interference, as the petitioner had not participated in the proceedings, but granted an opportunity to be heard through the statutory appeal.

Indrajeet Singh Solankivs Union of India CITATION : 2025 TAXSCAN (HC) 2689

The Chhattisgarh High Court addressed the issue of whether sanctioning a bank loan on the same day as submission of the application, without any proven irregularity or fraudulent intent, can constitute criminal misconduct under Sections 120B, 420, 468, and 471 of the IPC and Section 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act. The appeals were filed by Indrajeet Singh Solanki, a former Branch Manager of Dena Bank’s Industrial Estate Branch, Raipur, and others, challenging their conviction in a decades-old CBI case alleging loan fraud during 1989-1992.

The bench comprising Justice Rajani Dubey held that mere same-day sanctioning does not indicate fraud or criminal intent, noting that standard banking practice allows loan approvals when documentation and compliance criteria are met. The Court observed that insurance of hypothecated stock was properly obtained, repayments were made, and no departmental enquiry was ever initiated. Applying the Supreme Court standards for criminal conspiracy, forgery, and cheating, the Court found no mens rea, dishonesty, or proof of falsified documents, and held that strong suspicion cannot substitute valid proof. Accordingly, the Chhattisgarh High Court set aside the convictions and sentences and acquitted all appellants of all charges.

NEELGIRI MACHINERY vsCOMMISSIONER DELHI GOODS CITATION : 2025 TAXSCAN (HC) 2690

The Delhi High Court addressed the issue of whether a GST taxpayer can be allowed to file a belated statutory appeal against an adjudication order under the Central Goods and Services Tax Act, 2017 (CGST Act), Section 107, particularly when legal uncertainty exists regarding limitation-extension notifications issued under Section 168A. The petition was filed by Neelgiri Machinery, through proprietor Mrs. Asha Devi, challenging a show cause notice dated 11 December 2023 and the subsequent adjudication order dated 30 April 2024 for the tax period April 2018 to March 2019. The petitioner also questioned the validity of certain notifications extending adjudication timelines, which were under consideration before multiple High Courts and the Supreme Court in M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors (SLP No. 4240/2025).

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain held that, although the adjudication order had been passed after considering the petitioner’s reply, the ongoing legal uncertainty justified granting relief. The Court permitted the petitioner to file a statutory appeal within the time allowed by the High Court and directed that the appeal should not be treated as barred by limitation. The Court emphasized that the appeal must be decided on merits by the appellate authority and clarified that the outcome would remain subject to the Supreme Court’s final decision on the validity of the limitation-extension notifications, ensuring that the petitioner’s right to statutory remedy was preserved.

THE PRINCIPALCOMMISSIONER OF CUSTOMS vs LUCKY EXPORTS CITATION : 2025 TAXSCAN (HC) 2691

The Karnataka High Court dealt with the issue of whether the benefit of customs duty exemption under the Export-Import Policy, 1997-2002, could be availed when the claimed value addition on exported goods was minimal and licence conditions were misrepresented. The dispute arose from exports of ventilator systems to Russia, where the respondents claimed exemption under advance licences obtained from the Directorate General of Foreign Trade (DGFT), asserting that imported components were manufactured or processed in India before export. The Customs Department alleged that only 5.18% value addition had occurred, significantly below the minimum 33% required under the policy, and that the assembly and manufacturing processes were largely superficial.

The Division Bench comprising Justice D. K. Singh and Justice Venkatesh Naik T held that exemption under the policy and relevant notifications could only be granted when all conditions, including minimum value addition and compliance with licence conditions, were fully satisfied. The Court found that the Tribunal had ignored evidence of misrepresentation, lack of intrinsic value addition, and violation of DGFT licence conditions, and had mechanically applied precedents without considering the factual distinctions. Consequently, the Karnataka High Court set aside the Tribunal’s Final Order, restoring the original duty demand, confiscation, and penalties imposed by the Commissioner of Customs, Bengaluru, under Sections 28, 111, 114, and 114A of the Customs Act, 1962.

M/S Vodafone SouthLimited vs The Commissioner CITATION : 2025 TAXSCAN (HC) 2692

The Allahabad High Court addressed the issue of whether value added tax (VAT) under the Uttar Pradesh Value Added Tax Act, 2008 (UP VAT Act) could be levied on diesel consumed in diesel generator sets used for telecom towers. The petitioner, M/s Vodafone South Limited, operates mobile telecommunication services and installed diesel generator sets at its towers to ensure uninterrupted power supply. During the assessment year 2008-09, the Assessing Authority treated diesel consumed in these generator sets as taxable purchases from unregistered dealers, imposing VAT and entry tax on the ground that Vodafone failed to furnish evidence that the diesel had been purchased from registered dealers and had already suffered tax. The Commercial Tax Tribunal, Meerut, upheld the assessment in second appeal, prompting Vodafone to seek revision before the High Court.

Justice Piyush Agrawal held that Vodafone, as the assessee, bore the onus of proving that the diesel used in running the generator sets had been purchased from registered dealers and had already been taxed. The Court observed that mere contractual arrangements with third-party service providers responsible for refuelling could not substitute for documentary proof such as bills or invoices. Since Vodafone failed to provide any cogent evidence to substantiate its claim, the High Court dismissed the sales tax revisions, upholding the levy of VAT and confirming that the impugned orders were neither perverse nor violative of natural justice, thereby ruling in favor of the revenue.

THE PR. COMMISSIONER OFINCOME TAX -7 vs STERIA INDIA PVT. LTD. CITATION : 2025 TAXSCAN (HC) 2693

The Delhi High Court dealt with the legal issue of whether foreign exchange gains or losses arising from international transactions should be treated as operating or non-operating for tax purposes. The appeal was filed by the Revenue against the ITAT’s order in favor of Steria India Pvt. Ltd. for Assessment Years 2010-11 and 2011-12.

The Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar observed that the foreign exchange fluctuations arose from international transactions forming part of the assessee’s regular business operations and, therefore, must be treated as operating in nature, following the reasoning in Ameriprise India Pvt. Ltd. The Court noted that the ITAT had correctly applied this settled legal position and that the Revenue’s appeal suffered from an unexplained delay of 1,265 days. Consequently, the High Court dismissed the appeal and the pending application, reaffirming that foreign exchange gains or losses in such business transactions are operating in nature.

Kerala StateElectronics Development Corporation Limited VsKeltron Power Devices LimitedCITATION : 2025 TAXSCAN (HC) 2694

The Kerala High Court allowed applications filed by the Kerala State Electronics Development Corporation (Keltron) to recall the winding‑up orders passed in 2005 and 2006 against its subsidiaries, Keltron Power Devices Ltd. (KPDL) and Keltron Rectifiers Ltd. (KRCL). The Court considered the State Government’s approval of a revival proposal, which involved transferring part of the companies’ land to the Centre for Materials for Electronics Technology (C‑MET) to settle outstanding dues and developing the remaining land jointly for a Common Facility Centre for sensor manufacturing, calibration, testing, and electronics production.

The Official Liquidator, while not opposing the revival, required Keltron to assume responsibility for all present and future liabilities of the companies, which Keltron undertook through a formal affidavit. The Court noted that both the Government and the Liquidator supported the scheme, and that no secured creditors were affected. Accordingly, the High Court recalled the winding‑up orders, permitting Keltron to take over the assets, liabilities, records, pending cases, decrees, and surplus funds of KPDL and KRCL. This decision enables the operational revival of the subsidiaries and implementation of the C‑MET–Keltron development project on the reclaimed land.

M/s Simran Constructionvs State Of Chhattisgarh Through TheSecretary CITATION : 2025 TAXSCAN (HC) 2695

The Chhattisgarh High Court dealt with the legal issue concerning the statutory right of a taxpayer to file an appeal under Section 112 of the Chhattisgarh Goods and Services Tax Act, 2017, despite the GST Appellate Tribunal in the State being non-operational due to the non-appointment of the President and Members. The Court examined whether administrative delays in constituting the Tribunal could bar a taxpayer from pursuing a statutory appeal and considered the applicability of CBIC Order No. 09/2019-Central Tax, which clarifies that the limitation period for filing such an appeal commences only when the President or State President assumes office.

The bench of Justice Naresh Kumar Chandravanshi, held that the petitioner, M/s Simran Construction, could file a statutory appeal under Section 112 as soon as the President or State President of the Tribunal took charge, subject to making the prescribed pre-deposit. The Court directed that the Tribunal shall decide the appeal strictly on merits and in accordance with law, and clarified that the statutory stay under Section 112(9) would protect the petitioner from coercive recovery proceedings until the appeal is disposed of. The judgment ensures that taxpayers are not left without a remedy due to administrative delays in constituting the GST Appellate Tribunal.

PR. COMMISSIONER OFINCOME TAX -7 vs STERIA INDIA PVT. LTD. CITATION : 2025 TAXSCAN (HC) 2696

The Delhi High Court addressed the legal issue of transparency and accountability in Customs orders, emphasizing that every order must clearly indicate the name and designation of the officer who actually passes it. The Court observed that a shortage of staff cannot justify the omission of this information, as failing to identify the decision-maker affects accountability and the very purpose of judicial oversight.

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain, which directed that all Customs orders and communications must clearly state the officer’s name and designation, whether signed physically or digitally, to ensure authenticity. While acknowledging administrative convenience in having another official communicate the order, the Court held that the identity of the actual decision-maker cannot be misrepresented. The petitioner, Guru Kirpa Enterprises, was granted four weeks to file a rejoinder, and the matter was scheduled for further hearing on 23.04.2026.

SMS INDIA PRIVATELIMITED VS ASSESSMENT UNIT INCOME TAXDEPARTMENT CITATION : 2025 TAXSCAN (HC) 2697

The Delhi High Court dealt with the issue of validity of income tax assessment proceedings initiated against a non-existent entity under Section 144C of the Income Tax Act, 1961. The Court held that an assessment cannot be sustained if issued in the name of a company that has ceased to exist due to amalgamation, as such action amounts to substantive illegality rather than a mere procedural defect. The ruling relied on the principles established by the Supreme Court in Principal Commissioner of Income Tax v. Maruti Suzuki India Limited (2019), affirming that post-merger assessments must be addressed to the successor entity.

The Division Bench comprising Justice V. Kameswar Rao and Justice Vinod Kumar, which set aside the draft assessment order issued in the name of Paul Wurth India Private Limited for A.Y. 2022-23. The Court granted the Revenue liberty to initiate proceedings against SMS India Private Limited, the successor company, in accordance with law, emphasizing that assessment actions post-amalgamation must recognize the legal existence of the successor entity.

Soumyendu Bikash Janavs The State of West Bengal & Ors CITATION : 2025 TAXSCAN (HC) 2698

The Calcutta High Court addressed the issue of Input Tax Credit (ITC) reversal under the GST Act and clarified that an appellate order cannot be sustained unless the appellate authority conducts a proper scrutiny of the taxpayer’s records and supporting documents. The case involved Sections 73 and 107 of the WBGST/CGST Act, 2017, relating to short payment of tax and ITC reversal claims.

The bench of Justice Om Narayan Rai, who set aside the appellate order dated 18 July 2025 passed against Soumyendu Bikash Jana and remanded the case for fresh consideration. The Court directed that the petitioner be allowed to file additional submissions and instructed the appellate authority to decide the appeal within six weeks after duly examining all documents on record, ensuring that reversal of ITC is based on reasoned evaluation rather than perfunctory confirmation of the original adjudication.

Eximpo Tea Limited vsAdditional Commissioner of Revenue CITATION : 2025 TAXSCAN (HC) 2699

The Calcutta High Court addressed the issue of condonation of delay in filing a GST appeal under Sections 73 and 107 of the CGST/WBGST Act, 2017. The case concerned Eximpo Tea Limited, whose appeal against an adjudication order under Section 73 was rejected by the appellate authority solely on the ground of limitation.

The bench of Justice Om Narayan Rai, who condoned the 35-day delay, set aside the appellate order dated 29 October 2025, and restored the appeal for fresh adjudication on merits. The Court noted that the appellate authority had failed to consider medical grounds specifically, the serious illness of the mother of the promoter-director, the authorised signatory which explained the delay. The Court also observed that the delay was marginal and not due to gross negligence, and it lifted the attachment on the petitioner’s bank account, ensuring that the appeal could proceed fairly.

Chhattisgarh StateBeverages Corporation Limited vs Office OfThe Commissioner CGST And CentralExcise GST Bhawan CITATION : 2025 TAXSCAN (HC) 2700

The Chhattisgarh High Court dealt with the issue of invocation of writ jurisdiction at the show cause notice (SCN) stage under Article 226 of the Constitution of India. The matter involved Chhattisgarh State Beverages Corporation Limited (CSBCL), which challenged a service tax demand for the year 2006-07, proposed by the Central GST and Excise authorities, claiming it could not be treated as a “Clearing and Forwarding Agent” under the Finance Act, 1994. The Court emphasized that a writ petition is premature at the SCN stage, as the petitioner must first participate in the adjudication process and raise all factual and legal objections before the statutory authority.

The bench of Justice Naresh Kumar Chandravanshi, who dismissed the writ petition as premature while granting liberty to the petitioner to raise all contentions, including reliance on prior judicial precedents, before the adjudicating authority. The Court held that interference at the SCN stage is ordinarily unwarranted, especially when no final order has been passed, and emphasized that the petitioner could later seek legal remedies if aggrieved by the adjudication outcome.