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

Milan TextileEnterprises vs Initiating Officer CITATION : 2025 TAXSCAN (HC) 2701

The Madras High Court addressed the issue of whether a National Company Law Tribunal (NCLT)‑approved Resolution Plan under the Insolvency and Bankruptcy Code, 2016 (IBC), Section 32A, can protect corporate debtor property from benami attachment under the Prohibition of Benami Property Transactions Act, 1988 (PBPT Act), Section 24. The Court examined whether benami property covered under a Resolution Plan constitutes the “property of the corporate debtor” and whether pre‑CIRP attachment orders could be enforced against such property.

The bench of Justice Swaminathan, who held that the Resolution Plan approved by the NCLT acts as an impregnable firewall preventing enforcement of benami attachment against the property. The Court rejected the Department’s argument that benami property is not “property of the corporate debtor” and clarified that a change in management under a Resolution Plan does not amount to a transfer of property.

M/S ACC Limited vs TheState of Bihar through the PrincipalSecretary CITATION : 2025 TAXSCAN (HC) 2702

The Patna High Court addressed the legal issue of whether cement and its packing materials can be taxed separately under Section 12 of the Bihar Finance Act, 1981. The Court examined whether amounts charged for gunny bags and HDPE bags used for packing cement could be treated as distinct taxable commodities or whether they must be included in the sale price of cement for sales tax purposes. The case arose from appeals filed by ACC Limited challenging consolidated tax treatment adopted by the Commercial Taxes Tribunal for A.Y.s 1996-97 to 2000-01.

The bench of Division Bench of Justice Dr. Anshuman and Justice Bibek Chaudhuri, upheld the Tribunal’s decision. The Court held that packing cement in bags is an integral part of the sale, occurring at or before delivery, and therefore falls within the statutory definition of “sale price” under Section 2(u) of the Bihar Finance Act. Since ACC Limited failed to produce evidence showing that packing materials were sold independently, the High Court dismissed all five appeals and affirmed that the value of packing materials must be included in the taxable turnover of cement.

PANKAJ SRIVASTAVA LIQUIDATORvs DINESH PULIPATI CITATION : 2025 TAXSCAN (HC) 2703

The Karnataka High Court dealt with the legal issue of forfeiture of Earnest Money Deposit (EMD) and Participation Deposit Money (PDM) under a liquidation auction, in the context of a successful bidder refusing to accept the Letter of Intent (LOI). The Court examined whether the liquidator had the authority to forfeit deposits under Clause 6.2 of the Auction Memorandum and applicable provisions of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, even when the bidder challenged the forfeiture before the Single Judge.

The Division Bench of Justice Vibhu Bhakru and Justice CM Poonacha, which reversed the Single Judge’s order directing a refund of ₹70 lakh. Relying on Supreme Court precedents including Shri Hanuman Cotton Mills v. Tata Air Craft Ltd. (1969), the Court held that the bidder’s refusal to accept the LOI amounted to a clear default, justifying forfeiture. Since no concluded contract arose, Section 74 of the Contract Act did not apply, and the liquidator was entitled to forfeit the entire EMD and PDM. The Court thus restored the liquidator’s decision, upholding forfeiture of approximately 5.08% of the bid value.

SRI PANKAJ SRIVASTAVALIQUIDATOR OF M/S SAMRUDHI REALTY LTD. vsSRI DINESH PULIPATI CITATION : 2025 TAXSCAN (HC) 2703

The Karnataka High Court addressed the legal issue of whether a liquidator can include forfeiture clauses in an Auction Memorandum under the IBBI (Liquidation Process) Regulations, 2016, even if Schedule I does not expressly provide for such forfeiture. The Court examined the scope of Regulation 33 and Schedule I of the Regulations, considering whether the liquidator’s power to prescribe stricter auction terms, including forfeiture of Earnest Money Deposit (EMD) and Participation Deposit Money (PDM), is consistent with the statutory framework.

The Division Bench of Justice Vibhu Bhakru and Justice CM Poonacha, which reversed the Single Judge’s order directing refund of ₹70 lakh to the bidder. The Court held that Schedule I applies only “ordinarily” and does not restrict the liquidator from imposing stricter conditions, such as mandatory acceptance of the Letter of Intent (LOI) and forfeiture upon refusal. Since the bidder had unconditionally accepted the Auction Memorandum and later refused to proceed, the forfeiture clause was valid and enforceable. Consequently, the forfeiture of EMD and PDM, totaling 5.08% of the bid value, was upheld in full.

NAVNEET BANSAL vsADDITIONAL COMMISSIONER CITATION : 2025 TAXSCAN (HC) 2704

The Delhi High Court dealt with the legal issue of whether writ jurisdiction can be invoked in a GST fraud case under Section 174 of the CGST Act, 2017 read with Rule 26 of the Central Excise Rules, 2002, where a penalty of ₹1.63 crore was imposed for alleged issuance of invoices without actual supply of goods. The Court examined the scope of writ remedies in cases involving disputed factual issues related to fraudulent availment of input tax or CENVAT credit and emphasized that statutory remedies under Section 107 of the CGST Act are ordinarily available to challenge such orders.

The Division Bench of Justice Prathiba M. Singh and Justice Renu Bhatnagar, which dismissed the writ petition but granted the petitioner, Navneet Bansal, a one-time opportunity to file a statutory appeal despite the expiry of the limitation period. The Court observed that the writ petition was filed with some procedural delay and, taking this into account, allowed the appeal to be filed on or before 31.01.2026, directing that it be considered on merits by the appellate authority. The Court clarified that its observations would not bind the appellate authority during adjudication.

PRINCIPAL COMMISSIONEROF INCOME TAX vs AVERY DENNISON (INDIA)PVT. LTD. CITATION : 2025 TAXSCAN (HC) 2705

The Delhi High Court addressed the legal issue of whether transfer pricing adjustments proposed by the Transfer Pricing Officer (TPO) could be upheld in respect of intra-group service payments under the Income Tax Act, 1961. The Court examined whether the payments made by M/s Avery Dennison (India) Private Limited for intra-group services could be re-characterised despite evidence showing that the services were rendered and commercially expedient. The dispute arose under Section 260A of the Act, where the Revenue challenged the ITAT’s deletion of transfer pricing additions for A.Y. 2012-13 and 2015-16.

The Division Bench of Justice V. Kameswar Rao and Justice Mini Pushkarna, which dismissed the Revenue’s appeal, holding that no substantial question of law arose. The Court relied on principles of consistency and noted that the TPO had failed to produce cogent evidence to prove that the intra-group services were not rendered. Consequently, the ITAT’s findings accepting the arm’s length nature of the payments were upheld, and the Revenue was denied relief.

Mahendra Suniani vs TheCommissioner of Commercial Taxes CITATION : 2025 TAXSCAN (HC) 2707

The Orissa High Court addressed the legal issue of whether a taxpayer can invoke writ jurisdiction to challenge a GST appellate order in the absence of an operational statutory forum. The matter arose under Section 74 and Section 112(8) of the Central Goods and Services Tax Act, 2017 (CGST Act), where the petitioner, Mahendra Suniani, challenged an adjudication order for the tax period April 2019 to March 2020, claiming that the Goods and Services Tax Appellate Tribunal (GSTAT) was not constituted when the appeal became due, thereby leaving him without a remedy.

The Division Bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman, which disposed of the writ petition, held that once the GSTAT became functional with staggered appeal timelines, writ jurisdiction could not be used to bypass the statutory pre-deposit requirement under Section 112(8). The Court directed the petitioner to deposit the statutory amounts, if not already paid, and file the appeal before the GSTAT within the prescribed timelines, clarifying that it did not express any opinion on the merits of the appellate order.

Suman Chattopadhyay vsEnforcement Directorate CITATION : 2025 TAXSCAN (HC) 2709

The Calcutta High Court addressed the question of whether a former director can be compelled to represent a company in criminal proceedings under the Prevention of Money Laundering Act, 2002 (PMLA). The petitioner, Suman Chattopadhyay, challenged a CBI Court order dated 3 November 2022, which required him to represent M/s Disha Production & Media Pvt. Ltd. in a money laundering case linked to the Sarada Group, despite his resignation from the company in March 2013. The Court examined the interplay between Section 70 of the PMLA, which imposes liability on persons in charge of a company at the time of the offence, and Section 305 Cr.P.C., which governs company representation during trial.

The Bench of Justice Ajoy Kumar Mukherjee, held that a former director cannot be forced to represent a company, noting that corporate representation is a matter for the company to decide. Citing precedents including RC Cooper v. Union of India (1970), the Court clarified that while directors may be personally liable for offences committed during their tenure, this does not translate into an obligation to represent the company in trial. Consequently, the Court set aside the trial court order requiring Chattopadhyay to appear on behalf of Disha Production, directing that the company be summoned at its registered office to nominate its own representative, and if it fails, the magistrate may proceed under Section 305(4) Cr.P.C.

Ham Sabhi WelfareSociety & Ors. vs Union of India &Ors. CITATION : 2025 TAXSCAN (HC) 2711

The Calcutta High Court dealt with a case concerning alleged money laundering activities by the Prayag Group of Companies and its directors, addressing the scope of provisional attachment, seizure, and freezing of properties under the Prevention of Money Laundering Act, 2002 (PMLA). The matter arose from investigations by the Enforcement Directorate (ED) following FIRs filed by the CBI for offences including cheating, criminal breach of trust, and criminal conspiracy. The ED sought to attach and freeze properties of the Prayag Group under Sections 5 and 17 of the PMLA, citing prima facie violations and the risk of dissipation of assets critical for safeguarding depositors’ interests.

The Division Bench comprising Justice Uday Kumar and Justice Rajarshi Bharadwaj granted the ED leave to proceed with attachment and freezing of the Prayag Group’s properties, including those listed in a sealed cover by the One‑Man Committee headed by retired Justice S.P. Talukder. The Court emphasised that these powers are preventive and remedial, allowing action even where possession lies with another agency, provided due process is followed. The Bench directed the Committee to share a complete property list with the ED and instructed all concerned authorities to extend full cooperation, noting that ₹16 crore currently with the CBI could be used to refund depositors. The Court’s order establishes the prima facie authority of the ED to act under PMLA while investigations continue.

Arcelor Mittal NipponSteel vs State of Odisha CITATION : 2025 TAXSCAN (HC) 2712

The Orissa High Court addressed a case concerning the recovery of electricity duty arrears under the Odisha Public Demands Recovery Act, 1962 (OPDR Act), specifically examining the legality and procedural compliance of actions taken by the Certificate Officer under Sections 8 and 9 of the Act. The Court considered whether the Certificate Officer had violated principles of natural justice by confirming a recovery certificate prematurely, without providing the petitioner, Arcelor Mittal Nippon Steel India Ltd, with the certificate or supporting documents, and without giving a meaningful opportunity to contest the demand. The matter arose from arrears pertaining to Essar Power Orissa Ltd., following a SARFAESI auction of its generating assets.

The bench of Justice Sanjay Kumar Mishra found that the Certificate Officer had acted inconsistently and failed to adhere to statutory procedure, including considering the petitioner’s denial petition and evidence. The Court noted procedural lapses, including premature confirmation of the certificate, ignoring written objections, and failing to allow cross-examination of witnesses. The Court emphasized that violation of natural justice renders writ jurisdiction maintainable even in the presence of alternative remedies. Consequently, the High Court set aside the certificate orders, along with all consequential actions, and remitted the matter for fresh adjudication in strict compliance with Section 9 of the OPDR Act, directing that the petitioner’s denial petition and supporting documents be considered on merits.

GAURAV ENTERPRISES vsUNION OF INDIA AND ORS CITATION : 2025 TAXSCAN (HC) 2713

The Calcutta High Court addressed the scope of recovery of disputed income tax demands during the pendency of an appeal under the Income Tax Act, 1961, specifically under Sections 143(3), 144B, and 246A. The legal issue involved whether the Income Tax Department could adjust amounts from refunds exceeding the permissible limit while an appeal was pending before the Commissioner of Income Tax (Appeals). The petitioner, Gaurav Enterprises, challenged recovery of ₹5.01 crore from refunds pertaining to other assessment years, arguing that such recovery exceeded the 20% limit prescribed in CBDT Office Memoranda dated 29.01.2016, and 31.07.2017, which restrict recovery during appeal proceedings except in exceptional circumstances.

The bench of Justice Om Narayan Rai held that recovery beyond 20% of the disputed demand during pendency of appeal is impermissible unless the exceptional circumstances under paragraph 4B of the CBDT Office Memorandum are demonstrated. Distinguishing a Delhi High Court ruling cited by the Revenue, the Court noted that no such circumstances existed in this case. The High Court directed the Income Tax authorities to refund the excess amount recovered within eight weeks, allowing the petitioner an opportunity to clarify the quantum of recovery. The Court also requested the appellate authority to expedite disposal of the pending appeal, thereby emphasizing adherence to statutory limits on recovery and the importance of timely adjudication of tax appeals.

Tvl Voylla FashionsPrivate Limited vs The AssistantCommissioner (ST) (FAC) CITATION : 2025 TAXSCAN (HC) 2714

The Madurai Bench of the Madras High Court ruled that the Central Board of Indirect Taxes and Customs (CBIC) exceeded its statutory powers under Section 168A oftheCentral Goods and Services Tax Act, 2017 (CGST Act) by issuing Notifications No. 09/2023-Central Tax dated 31.03.2023 and No. 56/2023-Central Tax dated 28.12.2023. These notifications sought to extend the time limit for passing adjudication orders under Section 73 for A.Y. 2019-20, operating retrospectively and curtailing benefits from the Supreme Court's COVID-19 limitation extension directions.

Justice Krishnan Ramasamy followed a coordinate Bench's ruling from 12 June 2025, quashing both notifications and the consequential assessment order dated 28 August 2024 passed against Tvl. Voylla Fashions Private Limited. The Bench clarified that while GST authorities could exclude the COVID period as per Supreme Court orders under Article 142, the CBIC overstepped by extinguishing vested rights and misinterpreting those directions. It remanded the matter to the assessing authority, directing treatment of the impugned order as a show cause notice, with fresh opportunity for the assessee to file objections and be heard before a new order. The Court held the notifications ultra vires, arbitrary, and procedurally illegal, as they reworked the limitation period beyond force majeure scenarios, ignored the GST Council's mandatory role, and relied on invalid recommendations from the GST Implementation Committee instead.

M/S DURGA GOPAL SHINDESOLE PROPRIETORSHIP CONCERN OF DURGAGOPAL SHINDE Vs STATE OF GUJARAT & ORS CITATION : 2025 TAXSCAN (HC) 2715

The Gujarat High Court ruled that cancellation of GST registration under Section 29(2)(b) of the Central Goods and Services Tax Act, 2017 (CGST Act) and Gujarat Goods and Services Tax Act due to non-filing of returns is not irreversible. The legal issue centered on whether such cancellation serves punitive purposes or merely ensures tax compliance, holding that revocation is warranted once the taxpayer files pending returns and clears all dues including interest and late fees.

Justice A.S. Supehia and Justice Pranav Trivedi emphasized that the provision's objective under Section 29(2)(b) is to secure revenue realization rather than permanently shutting down businesses ready to regularize defaults. In the case, M/s Durga Gopal Shinde registration was cancelled retrospectively from 1.04.2022 via order dated 20.09. 2022, the Division Bench directed restoration upon compliance. Noting the petitioner's deposit of ₹16.12 lakh covering self-assessed tax, interest, and late fees for April 2022 to December 2024 in the Electronic Cash Ledger per Section 49 and Rule 87, the Court permitted filing of all pending returns. It mandated payment of any additional demands arising from scrutiny, after which the cancellation order stands revoked, affirming that denying revival after full payment would be unjustified.

Viswa BharatiFoundation Trust vs The Chairman, Central Board ofDirect Taxes CITATION : 2025 TAXSCAN (HC) 2716

The Orissa High Court ruled that income tax authorities cannot advance a scheduled hearing date and pass an adverse rectification order under Section 154 oftheIncome Tax Act, 1961, without informing the assessee, as this violates principles of natural justice. The legal issue involved whether the Assessing Officer (AO) could reject a rectification application prejudicial to the assessee prior to the fixed hearing date without evidence of communication regarding the advancement.

Chief Justice Harish Tandon and Justice M.S. Raman held that Section 154(3) mandates a reasonable opportunity of being heard, and once a hearing is scheduled such as on 28 July 2025 at 11:00 a.m., the authority must ensure any change is duly intimated to the assessee before proceeding ex parte. Despite Revenue's concession on the procedural lapse, the Division Bench set aside the order, observing no material showed communication of the advancement. It remanded the matter to the Assistant Commissioner of Income Tax (Exemption Circle) for fresh adjudication after granting the Trust a proper hearing opportunity, emphasizing that such procedural adherence is obligatory to sustain orders under Section 154.

Bhupinder Singh vsPrincipal Commissioner of Income TaxChandigarh and othersCITATION : 2025 TAXSCAN (HC) 2717

The Punjab and Haryana High Court upheld the Principal Commissioner of Income Tax (PCIT), Chandigarh-I's order transferring assessment jurisdiction of Bhupinder Singh from Chandigarh to Panaji, Goa, under Section 127 of the Income Tax Act, 1961. The legal issue concerned whether such transfer was justified given alleged undisclosed cash transactions of ₹10 crore linked to the sale of Queen Distillers and Bottlers Pvt. Ltd., discovered during search and survey operations under Sections 132 and 133A against Blue Ocean Beverages Pvt. Ltd. (Panaji) and its distributor Aaroha Alcobev Distribution Pvt. Ltd. (New Delhi).

Justice Deepak Sibal and Justice Lapita Banerji dismissed Singh's challenge, affirming the PCIT followed due process by issuing show-cause notice under Section 131(1A), hearing objections, and recording reasons despite reliance on CBDT circulars against routine centralization. Citing Panalal Binraj v. Union of India (1956) on the provision's constitutionality and IDS Infotech Ltd. v. PCIT Central-1 (2020) on reasoned public interest transfers, the Court held that modern digital proceedings minimize hardship. It rejected discrimination claims regarding other parties' jurisdictions, emphasizing Section 127's administrative aim to prevent fragmented inquiries into interconnected matters. The Division Bench ruled the transfer served efficient tax collection and public interest, as WhatsApp chats and statements established a nexus to the centralized Blue Ocean investigation, overriding claims of hardship or lack of linkage.

M/S ERA INFRA ENGINEERINGLIMITED vs JOINT COMMISSIONER CGSTDELHI SOUTH COMMISSIONERATE & ORS CITATION : 2025 TAXSCAN (HC) 2718

The Delhi High Court quashed demand-cum-show cause notices and consequential orders issued by the GST Department against ERA Infra Engineering Limited, holding that statutory dues for periods prior to NCLT approval of a resolution plan under the Insolvency and Bankruptcy Code, 2016 (IBC) stand extinguished. The legal issue centered on whether government authorities could raise fresh demands exceeding ₹8-9 crore for F.Y. 2017-18 to 2019-20 after participating in the Corporate Insolvency Resolution Process (CIRP), where their ₹4.02 crore claim was crystallized to ₹1.94 crore and bindingly resolved.

Relying on Ghanashyam Mishra & Sons v. Edelweiss Asset Reconstruction Co. (2021) and Sundaresh Bhatt v. CBIC (2023), the Division Bench held that resolution plans achieve finality, extinguishing prior claims not included therein and shielding new management from legacy liabilities. It rejected the Department's argument for post-CIRP assessment jurisdiction, clarifying authorities may quantify operational debts during insolvency but cannot pursue fresh recoveries afterward. The impugned orders were set aside without examining merits, affirming that government participation in CIRP precludes subsequent demands for pre-resolution periods. Justice Prathiba M. Singh and Justice Shail Jain ruled that post-approval on June 11, 2024, by S.A. Infrastructure Consultants Pvt. Ltd., creditors including the GST Department are bound, preventing recovery beyond the plan's scope under Section 53 of the IBC.

PR. COMMISSIONER OFINCOME TAX (CENTRAL), vs DEEPAK KUMARAGGARWAL CITATION : 2025 TAXSCAN (HC) 2719

The Delhi High Court dismissed the Principal Commissioner of Income Tax (Central), Gurugram's appeal, upholding that the six-year limitation under Section 153C of the Income Tax Act, 1961, for "other person" assessments commences from the date seized documents are handed over to the assessee's Assessing Officer (AO), not the original search date. The legal issue arose from a November 2, 2017, search on Prahlad Kumar Aggarwal (Rajesh Jain Group), where documents pertaining to Deepak Kumar Aggarwal were seized and handed over to his AO only on June 24, 2021. This triggered a satisfaction note and assessment for A.Y. 2013-14, which CIT(A) and ITAT quashed as time-barred, covering only A.Y. 2016-17 to 2021-22 per the first proviso to Section 153C.

Justice V. Kameswar Rao and Justice Vinod Kumar rejected Revenue's plea to count from the 2017 search, affirming ITAT's reliance on PCIT v. Ojjus Medicare Pvt. Ltd. (2024)noting the latter awaits Supreme Court scrutiny but aligns with settled law. The Division Bench held no substantial question of law arose, emphasizing strict statutory timelines to prevent indefinite reopening and ensure taxpayer certainty.

SAUMYA CHAURASIA vsUNION OF INDIA & OTHERS CITATION : 2025 TAXSCAN (HC) 2720

The Delhi High Court ruled that criminal prosecution under Sections 276C and 278E of the Income Tax Act, 1961, for high-value tax evasion does not require confirmation of penalty proceedings or finality from the Income Tax Appellate Tribunal (ITAT). The legal issue arose from sanction orders dated February 10, 11, and 19, 2025, issued by the Principal Commissioner of Income Tax (Central-1), Delhi, under Section 279(1) following a February 2020 search under Section 153C, leading to assessments for A.Y. 2011-12 to 2022-23.

Justice V. Kameswar Rao and Justice Vinod Kumar held no statutory embargo exists linking prosecution to appellate outcomes, as assessment, penalty, and criminal proceedings operate independently, rejecting claims of prematurity despite pending CIT(A) appeals. Dismissing Saumya Chaurasia's writ petition challenging the sanctions and CBDT Circular No. 5/2020 dated January 23, 2020, the Division Bench affirmed Section 279(1) empowers PCIT to authorize prosecution notwithstanding appeal pendency. It found the sanctions reflected due application of mind, not unfettered discretion, violative of Article 14, emphasizing the circular's role in curbing evasion without mandating ITAT finality. The Court declined interference, holding prosecution valid for substantial evasion post-search, with criminal complaints properly filed before the Additional Chief Judicial Magistrate (Special Acts), Tis Hazari Courts, Delhi.

SHIV KUMAR BHARDWAJ vsUNION OF INDIA & ANR CITATION : 2025 TAXSCAN (HC) 2721

The Delhi High Court ruled that criminal prosecution for alleged Companies Act, 2013 violations cannot be directly ordered through a writ petition under Article 226 of the Constitution, as such relief is not maintainable in writ jurisdiction. The legal issue involved whether Shiv Kumar Bhardwaj could seek judicial directions compelling the Registrar of Companies (ROC) to initiate prosecution against companies and directors despite his January 2024 complaint and reminders going unaddressed.

Dismissing the petition seeking direct prosecution orders, the Court clarified that writ jurisdiction does not extend to mandating criminal proceedings based solely on a complainant's allegations. It emphasized adherence to the Act's specific processes over collateral constitutional challenges for inaction. While declining interference with ROC functions, the Bench granted liberty to pursue lawful remedies under the Companies Act, upholding procedural sanctity in corporate enforcement. Justice Neena Bansal Krishna held that statutory mechanisms under the Companies Act govern complaint examination and prosecution initiation, rejecting reliance on Article 226 read with Section 482 CrPC to bypass prescribed procedures.

Principal Commissionerof Income Tax (Central), Kanpur vs RajanRajesh Kumar CITATION : 2025 TAXSCAN (HC) 2722

The Uttarakhand High Court ruled that sanctions granted or refused under Section 151 of the Income Tax Act, 1961, for reassessment proceedings attain finality, being neither appealable nor revisable under the Act. The legal issue concerned whether the Assessing Officer (AO) could repeatedly resubmit proposals for sanction after prior refusals by the competent authority, particularly when based on the same material like loose sheets from third-party searches.

Chief Justice G. Narendar and Justice Subhash Upadhyay held that Chapter XX (Sections 246, 246A, 253, 263, 264) provides no remedies against Section 151 orders, reflecting parliamentary intent for finality to prevent review-like mechanisms absent statutory conferral. Dismissing the Principal Commissioner of Income Tax's appeal against ITAT's quashing of reassessments for A.Y. 2015-16 and 2016-17, the Division Bench found the fifth sanction mechanically granted without fresh material or independent application of mind, despite earlier rejections for lack of corroboration. It emphasized strict compliance with Sections 147-151 safeguards, given reassessment's civil consequences, and clarified Section 263 revises only subordinate orders, not those of the sanctioning authority. Absent corroboration for Revenue assumptions contradicting prior Department records, the proceedings stood vitiated ab initio.

GUJARAT ENGINEERING ANDGENERAL KAMDAR UNION vs OFFICIALLIQUIDATOR, APS STAR INDUSTRIES LIMITED INLIQUIDATION & ANR CITATION : 2025 TAXSCAN (HC) 2723

The Gujarat High Court permitted interim disbursement of ₹50.22 crore from liquidation sale proceeds of APS Star Industries Limited (wound up in 2008) to secured creditors and workmen, while directing re-verification of Vadodara-based workers' claims under Sections 529 and 529A of the Companies Act, 1956. The legal issue involved objections by the Gujarat Engineering & General Kamdar Union to prior Chartered Accountant verification, alleging discrepancies in wages, allowances, gratuity adjustments, and inclusion of retired/deceased workers amid ₹58 crore additional proceeds from Nashik and Dharwad asset sales in 2024.

Justice Mauna M. Bhatt approved interim distribution per the January 2023 approved ratio (post-₹75 crore prior payouts), holding back ₹7.77 crore for Vadodara claims pending fresh scrutiny. The Court mandated appointment of an independent Chartered Accountant (distinct from the prior verifier) for transparent re-verification, granting unions opportunity to submit documents and be heard within a stipulated timeframe, followed by Official Liquidator's fresh report. Recipients must furnish refund undertakings with interest for any excess determined later. Justice Bhatt clarified the disbursement as purely interim, preserving all final distribution rights without prejudice, to be finalized post-remaining asset sales, balancing stakeholder equity with procedural fairness in prolonged liquidation.

M/S RR FASHION vs UNIONOF INDIA AND ORS CITATION : 2025 TAXSCAN (HC) 2724

The Delhi High Court ruled that the mere location of the Directorate of Revenue Intelligence (DRI) office or Central Revenue Control Laboratory (CRCL) in Delhi does not confer territorial jurisdiction over writ petitions challenging seizures of imported goods when the import, seizure, storage, and importer's location all occur outside Delhi. The legal issue arose from May 2025 seizure memos issued by DRI Delhi against RR Fashion, Yashi Fashion, and SS Impex for PVC-coated fabrics imported via a Tamil Nadu SEZ, warehoused there, and served in Chennai.

Justice Prathiba M. Singh and Justice Renu Bhatnagar held that samples sent to CRCL Delhi for testing represent an insignificant cause of action, as the real dispute of import, seizure, and service unfolded entirely in Tamil Nadu. Rejecting petitioners' reliance on DRI/CRCL presence under Article 226, the Division Bench applied the forum conveniens doctrine, emphasizing substantial cause of action over peripheral elements like testing at a specialized facility. It dismissed the petitions for lack of jurisdiction, granting liberty to approach the Madras High Court or appropriate forum, clarifying that writ relief must align with where core facts arise to prevent forum shopping in customs enforcement matters.

Arsha Vidya Paramparavs Union of India CITATION : 2025 TAXSCAN (HC) 2725

The Madurai Bench of the Madras High Court ruled that activities involving the study of the Bhagavad Gita, Vedanta philosophy, and Yoga do not automatically qualify as “religious activities” under Section 11 of the Foreign Contribution (Regulation) Act, 2010 (FCRA), disqualifying organizations from registration. The legal issue arose from the Ministry of Home Affairs' rejection of Arsha Vidya Parampara Trust's FCRA application in September 2025, citing unauthorized foreign fund receipts and perceived religious nature due to its teachings on these subjects.

Justice GR Swaminathan held that the Bhagavad Gita constitutes moral science and civilizational heritage are not confined to religion citing the Allahabad High Court's observation in Shyamal Renjan Mukherjee v. Nirmal Ranjan Mukherjee linked it to freedom struggle ideals under Articles 51-A(b) and (f) of the Constitution. Setting aside the rejection, the Court noted the trust's compounding of unauthorized receipts under Section 41 FCRA wiped the slate clean, precluding its use as grounds, while a new allegation of fund transfers violated natural justice by lacking prior notice. It mandated authorities to assess organizational nature per FCRA Section 11 with evidence-based conclusions, not assumptions. The matter stands remitted for fresh consideration, emphasizing administrative decisions require substantial evidence over superficial labels.

EASTERN BROADCASTSOLUTIONS PVT. LTD & ORS.vs THECOMMISSIONER OF CUSTOMSCITATION : 2025 TAXSCAN (HC) 2726

The Delhi High Court upheld a customs duty demand of nearly ₹9.8 crore against Eastern Broadcast Solutions Pvt. Ltd. for improperly removing broadcasting equipment from the Arshiya Free Trade and Warehousing Zone (SEZ) at Panvel, Maharashtra, into the Domestic Tariff Area by declaring it for “DEMO” purposes, when it was actually used for commercial IPL broadcasting under a BCCI contract with Broadcast Solutions Pvt. Ltd., Singapore. The legal issue centered on violation of SEZ exemption conditions, as investigated by the Directorate of Revenue Intelligence (DRI), which revealed revenue-generating live cricket broadcasts rather than mere demonstration, denying duty-free treatment and triggering full liability on imports from December 2012 to March 2013.

Justice Prathiba M. Singh and Justice Shail Jain affirmed the Customs, Central Excise and Service Tax Settlement Commission's order, holding exemptions conditional on accurate end-use declarations. Granting partial relief, the Division Bench restricted the penalty on the petitioner to ₹50 lakh, quashing remaining penalties subject to compliance. It emphasized SEZ procedural relaxations demand strict adherence, with inconsistent declarations vitiating benefits upon proven commercial deployment. The ruling reinforces that duty liability crystallizes on misuse, irrespective of settlement proceedings.

COMMISSIONER OF INCOMETAX vs CLIFFORD CHANCE PTE LTD CITATION : 2025 TAXSCAN (HC) 2727

The Delhi High Court ruled in favor of Clifford Chance Pte Ltd, holding that a "virtual service permanent establishment (PE)" is not recognized under Article 5(6) of the India-Singapore Double Taxation Avoidance Agreement (DTAA), rendering the firm's legal advisory receipts of ₹15.55 crore (AY 2020-21) and ₹7.97 crore (AY 2021-22) non-taxable in India absent a PE. The legal issue stemmed from the Assessing Officer's (AO) attribution of income to a service PE, claiming 120 employee days in India exceeded the 90-day threshold under Article 5(6)(a) for A.Y. 2020-21, and invoking a virtual PE for A.Y. 2021-22 despite no physical presence.

Justice V. Kameswar Rao and Justice Vinod Kumar upheld ITAT's deletion of additions, clarifying that only actual client services "furnished within India through employees or other personnel" count, excluding vacation (36 days), business development (35 days), and overlapping (5 days) yielding just 44 qualifying days below the threshold. Rejecting Revenue's pleas based on OECD reports, foreign precedents (South Africa, Spain, ABB FZ-LLC, Verizon, Hyatt), and domestic "Significant Economic Presence" amendments, the Division Bench emphasized Article 5(6)'s plain text mandates physical nexus and actual service rendition within India. Section 90(2) ensures DTAA precedence over unilateral changes, precluding judicial importation of virtual PEs absent treaty language. For A.Y. 2021-22, zero presence meant no PE whatsoever. Business connection profits thus escaped Indian tax, reinforcing treaty interpretation fidelity over policy expansions.

Manoj Kumar vs Jagdish CITATION : 2025 TAXSCAN (HC) 2728

The Rajasthan High Court denied bail to Manoj Kumar and Jagdish, accused of facilitating ₹95.77 crore GST evasion through online gaming revenues routed via payment aggregators under Sections 132(1)(i) and 132(5) of the Central Goods and Services Tax Act, 2017. The legal issue involved whether facilitators onboarding entities like M/s Invoestr Global Pvt. Ltd. and others with UPI/virtual payment addresses despite NIL returns and cancelled registrations qualified as "deemed suppliers," exceeding the ₹5 crore cognizable/non-bailable threshold.

Justice Sameer Jain held the economic offence's scale, electronic trails, cross-border links, and tampering risks (digital records, third-party intermediaries) justified denial, distinguishing it from ordinary crimes impacting national revenue. Rejecting claims of mere commission-based service provision and completed investigation, the Court noted statements under Section 70 CGST Act admitted credential exchanges for onboarding, with evasion escalating from ₹53.21 crore initial receipts to ₹342 crore total flows. It condemned the accused's "unclean hands" in minimizing evasion magnitude, emphasizing strict bail approach for deep financial conspiracies. Observations remain bail-stage limited, without prejudice to trial merits.

Monesh Bhajalal Hindujavs Commissioner of Customs CITATION : 2025 TAXSCAN (HC) 2729

The Madras High Court declined to directly mandate manual crediting of Drawback and RoSCTL benefits (Scheme Code 60) to exporter Monesh Bhajalal Hinduja (proprietor, Kartar Exim) despite ICEGATE portal failure, directing a prior formal representation to Customs authorities under the unchallenged Order-in-Original, by Commissioner of Customs, Chennai IV. The legal issue involved enforcement of converted shipping bills from Drawback Scheme (Code 19) to Drawback plus RoSCTL, where technical glitches prevented bank crediting post-finality.

Justice Abdul Quddhose held writ of mandamus premature absent exhaustion of administrative remedies. Instead, the Court ordered the petitioner to submit a fresh representation within two weeks, mandating Customs and Directorate General of Systems & Data Management to afford proper hearing and decide within a fixed timeframe per law. This procedural safeguard ensures technical implementation aligns with statutory mechanisms before judicial intervention, preserving departmental autonomy in benefit disbursal.

K.M.Mammen vs ThePrincipal Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 2730

The Madras High Court ruled that CBDT compounding guidelines, including the revised version dated 17.10.2024, cannot override or dilute final judicial orders attaining finality between parties, even as subordinate legislation under the Explanation to Section 279(6) of the Income Tax Act, 1961. The legal issue arose from a fresh ₹1.29 crore demand raised in June 2025 against senior citizen K.M. Mamen for prosecution compounding under Sections 276C and 277, despite prior Madras High Court and Supreme Court directives mandating application of 2008 CBDT Guidelines prevailing at the first application.

Justice C. Saravan held that such retrospective imposition nullifies crystallized rights, rejecting the Department's plea for guideline precedence. Relying on Supreme Court'sMadan Mohan Pathak v. Union of India, the Court observed that even parliamentary Acts cannot touch court orders, let alone circulars like F.No.285/08/2014-IT(Inv.V). It clarified Section 279(6) empowers administrative guidelines but not judicial override post-finality across litigation rounds. Setting aside the 11.06.2025 communication, the Bench directed recomputation strictly per 2008 Guidelines adjusting prior payments within three months, reinforcing judicial supremacy over executive revisions in tax prosecutions.

K.M.Mammen vs ThePrincipal Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 2730

The Madras High Court ruled that revised CBDT Compounding Guidelines dated 17.10.2024 cannot be retrospectively applied to pending or remanded proceedings under Section 279 of the Income Tax Act, 1961, applying only to fresh applications as per Paragraph 3.2 of the guidelines. The legal issue arose from a 2025 demand of ₹1.29 crore against senior citizen K.M. Mamen in his decade-long prosecution under Sections 276C and 277 (undisclosed foreign accounts), despite judicial finality across High Court, Division Bench, and Supreme Court directing application of 2008 CBDT Guidelines prevailing at his 2011 application post tax, interest, penalty payments, and age considerations.

Justice C. Saravanan held the Explanation to Section 279(6) enables administrative instructions but not override of vested rights from court orders. Setting aside the impugned communication, the Court clarified refiled applications per judicial remand do not constitute "fresh applications," precluding new guideline imposition. It directed recomputation strictly under 2008 Guidelines, adjusting prior payments, reinforcing that executive revisions yield to crystallized judicial entitlements in concluded matters.

COMMISSIONER OF CUSTOMSvs RAJESH KUMAR CITATION : 2025 TAXSCAN (HC) 2731

The Delhi High Court ruled that foreign-marked gold seized in a town area like Kucha Mahajani, Chandni Chowk, cannot be presumed smuggled absent corroborative evidence linking it to cross-border movement, and penalty proceedings under Section 112(b) of the Customs Act, 1962, abate upon the accused's death. The legal issue arose from the Commissioner of Customs (Preventive)'s appeal against CESTAT's order setting aside confiscation and penalty on 20 kg gold and currency seized from bullion broker Rajesh Kumar by the Directorate of Revenue Intelligence.

Justice Prathiba M. Singh and Justice Shail Jain upheld CESTAT's finding of no mens rea or smuggling proof for town seizures, distinguishing them from border/customs area cases. Noting Rajesh Kumar's death on 4 November 2025 during appeal pendency and prior gold disposal, the Division Bench held penalty abated entirely, while setting aside CESTAT's confiscation interference as moot neither party claimed ownership, rendering questions of law non-adjudicable. It rejected the Department's unclaimed possession argument, emphasizing evidentiary burden remains on Revenue. All pending applications closed, balancing procedural abatement with substantive evidentiary deficits.

Auroglobal ComtradePvt. Ltd vs Joint Commissioner CITATION : 2025 TAXSCAN (HC) 2732

The Orissa High Court ruled that GST authorities cannot invoke Section 73 of the Central Goods and Services Tax Act, 2017, to recover a refund already sanctioned and upheld on merits by the appellate authority, as subordinate officers remain bound by such decisions absent higher forum reversal. The legal issue arose from a demand-cum-show cause notice targeting Auroglobal Comtrade Pvt. Ltd.'s refund of accumulated ITC on zero-rated exports, initially partially rejected for short shipment but sanctioned post-response, affirmed by Additional Commissioner (Appeals) despite departmental appeal prompted by Commissioner's review under Section 107.

Chief Justice Chakradhari Sharan Singh and Justice M.S. Sahoo held the fresh proceedings bypassed judicial finality, attempting indirectly what appeal failure precluded directly. Quashing the notice and demand summary, the Division Bench clarified the Commissioner's review power under Section 107 serves only administrative appeal authorization, losing force post-adjudication. It condemned the maneuver as violating judicial discipline, fostering uncertainty and endless litigation contrary to the tax administration's statutory scheme. Subordinate authorities must honor appellate merits until overturned, preventing collateral nullification through parallel recovery.

SANDHYA RANI JANA ANDANR vs ICICI LOMBARD GENERAL INSURANCE CO.LTD. AND ANOTHER CITATION : 2025 TAXSCAN (HC) 2733

The Calcutta High Court enhanced compensation from ₹15.05 lakh to ₹39 lakh for a goldsmith killed in a 2014 road accident under Section 166 of the Motor Vehicles Act, 1988, holding Income Tax Returns (ITRs) as statutory, authentic proof of self-employed income that tribunals cannot arbitrarily disregard or review. The legal issue arose from the Fast Track Court, Paschim Medinipur's flat ₹10,000 monthly assessment despite three years' ITRs showing ₹3,18,470 annual income for A.Y. 2014-15, demanding unfiled bank passbooks.

Justice Biswaroop Chowdhury ruled ITRs filed lifetime preclude inflation scope, binding tribunals post-tax authority acceptance, distinguishing self-employed declarations from salaried slips. Relying on Supreme Court precedents including Surendar Kaur Singh v. United India Insurance Co. Ltd. (2020), the Court adopted A.Y. 2014-15 income, adding 40% future prospects and 17x multiplier, plus funeral expenses and filial consortium. It rejected insurer ICICI Lombard's bank statement insistence, as tribunals lack jurisdiction to reassess tax-verified earnings. The enhanced award carries 6% interest from claim filing, directing balance deposit.

Milan TextileEnterprises Pvt. Ltd vs The Initiating Officer CITATION : 2025 TAXSCAN (HC) 2734

The Madras High Court ruled that an NCLT-approved Resolution Plan creates an "impregnable firewall" under Section 32A(2) of the Insolvency and Bankruptcy Code, 2016 (IBC), shielding corporate debtor property including benami-attached assets from enforcement under Section 24 of the Prohibition of Benami Property Transactions Act, 1988 (PBPT Act). The legal issue involved Milan Textile Enterprises Pvt. Ltd.'s challenge to provisional (01.11.2019) and continuation (28.01.2020) attachments over "Milanem Mall," where new CIRP management invoked IBC Section 32A protection despite a pending PBPT Appellate Tribunal appeal by erstwhile promoters.

Justice Swaminathan upheld writ maintainability per S.J.S. Business Enterprises v. State of Bihar (2004), as the Tribunal lacks IBC jurisdiction, rejecting parallel remedy bars from Jai Singh v. Union of India (1977). Applying Solidaire India Ltd. v. Fairgrowth Financial Services Ltd. (2001), the Court held IBC's later enactment (2016) prevails over PBPT Act (1988) via Section 238's non-obstante clause against Section 67, reaffirmed inKotak Mahindra Bank Ltd. v. Girnar Corrugators Pvt. Ltd. (2023). Section 32A(2) bars "any action" on pre-CIRP offence-related "property of the corporate debtor", unqualifiedly encompassing benami holdings where the benamidar retains title pre-confiscation—like a "temple hundiyal" coin. Rejecting Revenue's exclusions and Section 57 nullification, the Bench clarified resolution management changes are not equal to "transfer."

The Kerala High Court declared the levy of service tax on "access to amusement facilities" unconstitutional, holding Parliament lacks legislative competence under Entry 97 of List I (residuary powers) when such activities fall squarely under the State's exclusive domain via Entry 62 of List II (entertainment tax). The Division Bench of Justice A. Muhamed Mustaque and Justice Harisankar V. Menon set aside a Single Judge's upholding of the demand against Vengad Resorts & Retreats Ltd., an amusement park operator, post the omission of Section 66D(j) from the Finance Act, 1994's negative list effective June 1, 2015. The Court ruled the Kerala Local Authorities Entertainments Tax Act, 1961, comprehensively covers admission and amusement itself, leaving no distinct "service" aspect for Union taxation.

Rejecting Revenue's "aspect theory" application, the Bench held it cannot justify double taxation where subject matter, incidence, and measure overlap substantially between state entry tax and proposed service tax. It emphasized taxing powers differ from regulatory ones, precluding re-characterization of state-assigned subjects as Union "services" absent statutory segregation mechanisms in the Finance Act. Citing Supreme Court principles on federal division, the ruling upholds states' primacy over entertainment/amusement levies, deeming the service tax effort an ultra vires encroachment.

RAJESH PRAFUL CHORDIYAvs THE STATE OF MAHARASHTRA CITATION : 2025 TAXSCAN (HC) 2736

The Bombay High Court ruled that for government tenders involving compulsory GST services like pendal, furniture rental for 2025 Zilla Parishad elections, a GST clearance certificate must emanate from the GST Department itself, not a Chartered Accountant, as the latter lacks verification of actual tax payments. The legal issue arose from rejection of Rajesh Praful Chordiya's technical bid by District Collector, Chhatrapati Sambhajinagar, solely for submitting a CA-issued certificate despite the tender mandating a "GST clearance certificate" valid to March 2025.

Justice Vibha Kankanwadi and Justice Hiten S. Venegavkar held this an ineliminable, substantial condition, rejecting pleas for flexibility despite petitioner's possession of a valid departmental certificate dated 17.10.2025 as unuploaded without explanation and acceptance elsewhere. Dismissing the writ at threshold, the Division Bench clarified CA certificates cannot substitute official ones, especially sans personal tax payment knowledge. It distinguished election tenders' strict compliance needs, unbound by other districts' leniency, and precluded challenge to rival bidder post-invalidity. Supreme Court tender rigidity precedents yielded to unambiguous departmental mandate, upholding bid disqualification.

Nitin Mahadev Kale vsUnion Of India & Ors CITATION : 2025 TAXSCAN (HC) 2737

The Bombay High Court refused to quash summons issued by the Anti-Corruption Bureau (ACB) to Nitin Mahadev Kale during an ongoing enquiry triggered by his own 22.08.2018 complaint, holding judicial intervention premature absent conclusion or coercive action. The legal issue involved whether writ relief under Article 226 was warranted at the enquiry stage for summons by an ACB Police Officer.

Justice M.S. Karnik and Justice Ajit B. Kadethankar ruled enquiries must proceed to logical conclusion without interference, as no finality exists and the process stems from the petitioner's initiation. Dismissing the writ, the Division Bench clarified ACB summons facilitate legitimate investigation, not harassment, while directing the petitioner to pursue his separate Income Tax complaint against his brother through appropriate departmental remedies.

Commissioner of CentralExcise Bolpur Commissionerate vs SteelAuthority of India LimitedCITATION : 2025 TAXSCAN (HC) 2738

The Calcutta High Court upheld CESTAT's order denying interest under Section 11AB of the Central Excise Act, 1944, on belated duty payments exceeding ₹15 crore confirmed under Section 11A for excisable goods cleared by Steel Authority of India Limited (SAIL) to job workers, where the situation remained revenue-neutral due to full Cenvat credit availability to downstream units. The legal issue post-Supreme Court remand centered on whether mandatory interest survives as compensatory despite no exchequer loss, following valuation disputes attaining finality.

Justice Rajarshi Bharadwaj and Justice Uday Kumar affirmed CESTAT's factual finding of revenue neutrality, rejecting Revenue's reliance on SKF India Ltd. and SAIL v. CCE, Raipurfor automatic levy irrespective of credit flow. Dismissing the Commissioner of Central Excise, Bolpur's appeal, the Division Bench held interest presupposes pecuniary prejudice absent in credit-neutral chains, distinguishing it from non-waivable duty demands (where refund stood barred). CESTAT appropriately confined relief to interest alone, committing no error in waiving it where no compensatory purpose serves, reinforcing that revenue-neutral delays warrant no penal accretion.

Equate PetrochemicalCompany K.S.C.C. vs Directorate General ofTrade Remedies (DGRT) & Anr CITATION : 2025 TAXSCAN (HC) 2739

The Calcutta High Court dismissed a writ petition by Kuwait-based Equate Petrochemical Company K.S.C.C. challenging DGTR's final findings, recommending anti-dumping duty (ADD) on Mono Ethylene Glycol (MEG) imports from Kuwait, Saudi Arabia, and Singapore under the Customs Tariff Act, 1975, and Anti-Dumping Rules, 1995. The legal issue centered on territorial jurisdiction under Article 226, where the petitioner alleged procedural lapses like non-disclosure of facts, arbitrary dumping margins, and natural justice violations, claiming downstream business injury in West Bengal via Haldia Port imports.

Justice Om Narayan Rai held no part of the cause of action arose in the State, as DGTR's Delhi-headquartered investigation, communications, and findings occurred entirely outside West Bengal. Rejecting the commercial injury argument as mere "consequential effect" rather than legally cognizable cause of action, the Court distinguished anticipated Kolkata business loss from core lis involving Article 14 fair treatment claims tied to out-of-state proceedings. It clarified import destinations or customer locations hold no jurisdictional weight against Designated Authority's location and recommendatory nature, with statutory appeals lying to CESTAT under Section 9C. Without merits adjudication, the petition stood dismissed on threshold maintainability grounds.

RUMAN KHAN vs UNION OFINDIA & ORS CITATION : 2025 TAXSCAN (HC) 2740

The Delhi High Court upheld the confiscation of a 250-gram undeclared gold bar and ₹1,40,000 penalty imposed on passenger Ruman Khan under the Customs Act, 1962, for passing through the green channel at Indira Gandhi International Airport (Terminal-3) after arriving from Saudi Arabia. The legal issue involved whether the gold qualified as a "personal effect" under Baggage Rules, 2016, absent declaration, and procedural challenges to Section 110(2) compliance, including alleged inconsistencies in oral/written show cause notice and waiver.

Justice Prathiba M. Singh and Justice Shail Jain affirmed the Order-in-Original dated 14 October 2025, holding green channel misuse evidenced smuggling intent, with the bar's weight precluding personal effect status. Rejecting procedural lapse claims, the Division Bench noted the petitioner received personal hearing, filed submissions during writ pendency (where disposal was stayed), and himself requested written notice waiver findings supported by statements, travel history, and airport conduct. It emphasized deliberate non-declaration triggers absolute confiscation, warranting no interference absent material perversity. The writ stood dismissed, preserving appellate remedies.

ZUBAIDA AZIZ THROUGHSPA PARVEZ MALIK vs THE COMMISSIONER OF CUSTOM CITATION : 2025 TAXSCAN (HC) 2741

The Delhi High Court ruled that gold bent into the shape of a kada constitutes raw gold, not jewellery, upholding confiscation of 116 grams seized from pilgrim Zubaida Aziz at Indira Gandhi International Airport on 29 February 2024, while directing her to pursue statutory appeal against the Order-in-Original by Assistant Commissioner of Customs, Terminal-3. The legal issue involved classification under Baggage Rules, 2016, and procedural claims of no show cause notice or personal hearing under Section 110(2) of the Customs Act, 1962.

Justice Prathiba M. Singh and Justice Shail Jain physically inspected the items, confirming raw form absent ornamentation, rejecting jewellery status. Dismissing writ interference post-adjudication, the Division Bench noted waiver of notice/hearing, with Revenue producing records. It granted liberty to appeal to the Commissioner (Appeals) by 31.01.2026, condoning limitation for merits hearing, preserving natural justice.

PAWAN SHARMA vs THECOMMISSIONER OF CUSTOMS CITATION : 2025 TAXSCAN (HC) 2742

The Delhi High Court ruled that an old, used gold chain qualifies as a personal effect exempt from confiscation under Baggage Rules, 2016, and one new iPhone 15 Pro Max is permissible for import without duty, ordering immediate release of both items seized at Indira Gandhi International Airport on 10 January 2024. The legal issue challenged the Order-in-Original by Commissioner of Customs, imposing absolute confiscation of the chain, ₹15,000 redemption fine on the iPhone, and ₹55,000 penalty.

Justice Prathiba M. Singh and Justice Shail Jain physically inspected the sealed items, confirming the chain's worn condition as personal use not commercial and the phone's single-unit allowance. Setting aside the order, the Division Bench held confiscation, fine, and penalty unsustainable absent smuggling intent or excess quantity, distinguishing used personal effects from new/dutiable goods. Release stands directed sans duty/penalty-warehousing charges only, with petitioner to complete formalities by 7.01.2026. The writ disposed preserves Customs' procedural discretion while enforcing evidentiary classification.

RANVIR SRA vsCOMMISSIONER OF CUSTOMS CITATION : 2025 TAXSCAN (HC) 2743

The Delhi High Court ruled that a worn Rolex watch qualifies as a "personal effect" under Baggage Rules, 2016, exempt from detention or customs import treatment, directing its immediate release to Canadian OCI cardholder Ranvir Sra seized at Indira Gandhi International Airport. The legal issue challenged prolonged detention absent show cause notice, supported by purchase invoice and serial number match confirming pre-travel ownership and personal use.

Justice Prathiba M. Singh and Justice Shail Jain physically inspected the sealed item, verifying its worn condition not new/commercial distinguishing it from dutiable imports.Setting aside detention, the Division Bench held customs must differentiate personal valuables/jewellery for individual use from commercial goods, with settled law precluding arbitrary seizure of worn items. It waived warehousing charges, mandating formalities completion. The writ disposed reinforces evidentiary thresholds for personal effects, barring indefinite holds sans proceedings.

VARNER RETAIL SERVICESSOUTH ASIA PVT. LTD vs ASSISTANTCOMMISSIONER DIVISIONCITATION : 2025 TAXSCAN (HC) 2745

The Delhi High Court ruled that Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR) benefits cannot extend to show cause notices issued after the 30 June 2019 cut-off, even if linked to earlier disputes like CENVAT credit refunds under 2004 Rules, upholding rejection of Varner Retail Services South Asia Pvt. Ltd.'s declaration for a second notice dated 19.12.2019 . The legal issue challenged Designated Committee's 2.03.2020 rejection and adjudication order dated 30.06.2023 confirming ₹46.86 lakh service tax demand plus interest/penalties, arguing the second notice continued the first.

Justice Prathiba M. Singh and Justice Shail Jain held eligibility hinges strictly on issuance date and pre-cut-off quantification, not factual overlap or CBIC circular/FAQs permitting post-deadline filings in limited cases. Affirming independent notice status despite refund origins, the Division Bench rejected "splitting" claims, as the second SCN quantified fresh demands leading to separate adjudication. It clarified mere references to prior proceedings do not merge them for SVLDR purposes. Granting procedural relief for prolonged writ pendency, the Court permitted statutory appeal against the 2023 order by 31.01.2026.

Dharmapuri DistrictCo-operative vs Deputy Commissioner ofIncome Tax CITATION : 2025 TAXSCAN (HC) 2746

The Madras High Court directed the Income Tax Department to treat ₹3.5 crore government grant-in-aid under the Central Sector "Assistance to Cooperatives" scheme as a capital receipt, not taxable revenue, for Dharmapuri District Co-operative Milk Producers Union Ltd for A.Y. 2007-08. The legal issue challenged ITAT/CIT(A) treatment of rehabilitation subsidies equally funded by Union/State governments as performance-linked income, despite administrative approval explicitly for liability clearance (DCS loans, other unions, employers) amid financial distress.

Chief Justice Manindra Mohan Shrivatsava and Justice G. Arul Murugan applied the Supreme Court's "purpose test" from CIT v. Ponni Sugars & Chemicals Ltd., holding grant nature determined by object (rehabilitation via debt payoff), not disbursement mechanisms or oversight conditions. Rejecting Revenue's performance-link argument, the Division Bench viewed stipulations as utilization safeguards, not revenue character-alterers. The Union's farmer-support role (milch animals, infrastructure, veterinary services) reinforced capital infusion for revival, pulling it from crunch without trading augmentation. Reversing assessment under Section 143(1), the Court allowed the appeal, mandating capital receipt classification over revenue, aligning with subsidy precedents prioritizing rehabilitative intent.

NLC Tamil Nadu PowerLimited vs Centralized Processing Centre CITATION : 2025 TAXSCAN (HC) 2747

The Madras High Court directed the Centralized Processing Centre (CPC) to issue a fresh intimation under Section 143(1) of the Income Tax Act, 1961, following a rectification order dated 01.06.2023 under Section 154(3) passed without prior notice to NLC Tamil Nadu Power Limited. The legal issue stemmed from defects in the original Form No.3CD filed under Section 44AB on 29.12.2020, leading to rectification of a prior 143(1) intimation dated 29.12.2021 itself uncommunicated due to technical glitches.

Justice C. Saravanan excluded the writ pendency period until proper notification from Section 153 limitation calculations, noting the petitioner's post-order revised Form 3CD filing on 02.03.2024. Acknowledging departmental concessions on procedural lapses via Senior Standing Counsel Mrs. S. Premalatha, the Court remitted the matter for fresh CPC intimation, ensuring compliance with notice requirements. It disposed of the writ without costs, balancing taxpayer rectification rights against administrative delays while preserving statutory timelines post-remand.

M/s.TamilnaduTransmission Corporation Ltd. vs The CommissionerOf GST Central Excise (audit) CITATION : 2025 TAXSCAN (HC) 2748

The Madras High Court ruled that the pre-consultation process under CBIC Master Circular No.1053/02/2017-CX is mandatory for Central Excise disputes except where fraud, collusion, willful misstatement, suppression, or tax evasion intent is proven precluding unilateral departmental exemption claims. In a batch of 30 matters, Dr. Justice Anita Sumanth and Justice Mummineni Sudheer Kumar quashed impugned show cause notices/assessment orders, remanding proceedings to the pre-consultation stage. The legal issue challenged Revenue's bypass of this alternate dispute resolution mechanism, assuming evasion without evidence.

Relying on Bombay HC's Rochem Separation Systems (India) Pvt. Ltd. v. Union of India mandating pre-consultation as non-formal, the Division Bench held CBIC circulars binding per precedents including Back Office IT Solutions Pvt. Ltd. v. Union of India. It clarified extended limitation invocation under the Central Excise Act, 1944, requires factual proof of evasion intent, not unilateral assumption, affording assessees judicial challenge opportunity. Absent such evidence, pre-consultation remains obligatory, preventing circumvention via self-serving classifications.

M/s J.B. Rolling MillsLimited vs Union of India & others CITATION : 2025 TAXSCAN (HC) 2749

The Himachal Pradesh High Court addressed parallel proceedings under Section 6(2)(b) of the Central Goods and Services Tax Act, 2017, directing State Excise and Central GST authorities to coordinate and avoid multiple adjudications on the same subject matter. The legal issue arose from M/s J.B. Rolling Mills Limited's challenge to overlapping summons/notices State and Central issuing, and a SCN under Section 74 CGST Act. Justice Vivek Singh Thakur and Justice Sushil Kukreja applied Supreme Court's Armour Security (India) v. Commissioner, CGST, Delhi East (2025 TAXSCAN (SC) 240), prohibiting duplicate probes once one authority commences.

Mandating compliance per Armour Security paragraphs 97(a)-(c), the Division Bench instructed the petitioner to honor State summons, disclose Central SCN, and prompt State-Central verification. It preserved all merits contentions without opining on notice validity, emphasizing intelligence-based initiation permissible but parallel adjudication barred. Respondents affirmed statutory adherence, ensuring coordinated enforcement absent forum shopping.

RAMA RAJU vs JOINTSECRETARY COFEPOSA GOVERNMENT OF INDIA CITATION : 2025 TAXSCAN (HC) 2750

The Karnataka High Court upheld a preventive detention order under Section 3 of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA), against Tarun Konduru Raju for alleged abetment in transnational gold smuggling involving 14.21 kg foreign-marked bars worth ₹12.56 crore intercepted at Kempegowda International Airport, Bengaluru. The legal issue challenged the detaining authority's subjective satisfaction, claiming false implication via co-accused statements under Section 108 of the Customs Act, 1962, absent independent evidence, procedural lapses as incomplete/ untranslated documents, representation delays, and no live nexus to past acts violating Baggage Rules, 2016.

Justice Anu Sivaraman and Justice Vijaykumar A. Patil dismissed Smt. Rama Raju's habeas corpus writ, finding cogent material statements, electronic/travel records, seizure documents, establishing syndicate role in Dubai-linked operations evading customs duty. Rejecting Article 22 violations, the Division Bench held courts cannot re-appraise material sufficiency in preventive detention, with all safeguards complied: evidence supplied, representations timely considered, Advisory Board opinion obtained, and confirmation by Central Government.