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

Anish Kumar Sahu vsState Of Chhattisgarh CITATION: 2025 TAXSCAN (HC) 1763

The Chhattisgarh High Court has granted regular bail to Anish Kumar Sahu in a case involving possession of 23 liters of illegal Mahua liquor, noting that the applicant has been in custody since 02.06.2025 and a charge-sheet has already been filed. The case pertains to Crime No. 312/2025 registered at Sipat Police Station, Bilaspur, under Sections 34(2) and 59(a) of the C.G. Excise Act.

A Bench led by Chief Justice Ramesh Sinha observed that the applicants had no criminal antecedents, the alleged liquor was found in joint family premises, and the trial is likely to take time. Considering these factors, the Court granted regular bail on furnishing personal bonds with two local sureties each.

Ritik Kumar vs TheState of Bihar CITATION: 2025 TAXSCAN (HC) 1764

The Patna High Court considered an anticipatory bail application under Sections 30(a) and 37(b)(c) of the Bihar Prohibition and Excise Act, 2016, concerning the recovery of 80 litres of illicit country-made liquor from a scooter registered in the petitioner’s name. The legal issue revolved around the petitioner’s claim of innocence, as he was not present at the time of recovery and no incriminating material was found in his conscious possession.

A Single Bench of Justice Sunil Dutta Mishra directed that the petitioner be released on bail if arrested or upon surrender within six weeks, upon furnishing a bail bond of ₹10,000 with two sureties of the like amount. The Court considered the petitioner’s cooperation with the investigation, absence of criminal antecedents, and compliance with Section 482(2) of the Bharatiya Nagrik Suraksha Sanhita, 2023.

Rupdarshi Textiles Pvt.Ltd. & Anr. vs Deputy Director CITATION: 2025 TAXSCAN (HC) 1765

The Calcutta High Court addressed a legal issue concerning the investigation by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act, 2002 (PMLA), involving immovable property mortgaged to repay credit facilities exceeding ₹1 crore. The matter arose from transactions of shares in Rupdarshi Textiles Pvt. Ltd., where the ED contended that the share transfer was part of a money laundering process. The appellants, including a company and its majority shareholder, challenged the proceedings, claiming that the immovable property and share transactions were not connected to any proceeds of crime.

A Division Bench of Justice Debangsu Basak and Justice Md. Shabbar Rashidi held that the immovable property was mortgaged to obtain credit facilities that were never repaid, and the subsequent transfer of shares facilitated manipulation to extract the property. The Court observed that the share transfer transactions constituted a step in the laundering process, and therefore, the property could not be exempted from ED investigation. However, the original documents submitted by the appellants were permitted to be returned.

M/s. Kamla Construction& Co vs Principal Commissioner CITATION: 2025 TAXSCAN (HC) 1766

The Jharkhand High Court addressed a legal issue concerning the imposition of a substantial penalty of ₹9.01 crore by the Principal Commissioner, Central Goods & Service Tax (CGST), Ranchi, under the provisions of the CGST Act. The petitioners, M/s Kamla Construction & Co. and Swastik Enterprise (JV), challenged the ex-parte order on the grounds that it violated the principles of natural justice, as no show-cause notice or subsequent notices for personal hearing were served. The petitioners also contended that the works executed during FY 2014-15 and 2015-16 were exempt from service tax under Notification No. 25/2012-ST, and that VAT and Service Tax are mutually exclusive.

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A Division Bench comprising Chief Justice Tarlok Singh Chauhan and Justice Rajesh Shankar held that the impugned order was unsustainable, citing gross violation of natural justice. The Court quashed and set aside the order and remitted the matter back to the Adjudicating Authority to be decided afresh, after giving the petitioners an opportunity of hearing.

DAWN EXPRESS COURIERDEL PRIVATE LIMITED vs UNION OF INDIA CITATION: 2025 TAXSCAN (HC) 1767

The Delhi High Court addressed a legal issue concerning the issuance of a Show Cause Notice (SCN) under Section 74(5) of the Central Goods and Services Tax Act, 2017 (‘CGST Act’) and Rule 142 of the CGST Rules, 2017. The petitioner, M/s Dawn Express Courier Del Private Limited, challenged the SCN dated 29th June 2025 demanding GST of ₹32.82 crores along with penalties, arguing that one-day notice for hearing violated the principles of natural justice. The petitioner highlighted delays in communication of summons, lack of pre-notice consultation, and the practical impossibility of preparing a detailed reply within such short notice.

A Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain held that the GST department must grant at least 30 days for filing a reply to ensure compliance with natural justice. The Court directed that a proper personal hearing be provided and a reasoned order passed by the Adjudicating Authority, noting that the petitioner had already paid a portion of the tax and that no jurisdictional flaw existed in the SCN warranting writ interference.

Raj Kumar @ Raju vsState of Punjab CITATION: 2025 TAXSCAN (HC) 1768

The High Court of Punjab and Haryana dealt with a legal issue concerning the grant of regular bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (‘BNSS’), in connection with FIR No.77 dated 17.7.2025, registered under Section 61 of the Excise Act and Sections 111/123/62 of the BNSS, at Police Station Shahpurkandi, District Pathankot. The accused, Raj Kumar @ Raju, was arrested for possession of 27,000 ml (36 bottles) of illegal liquor containing poisonous/health-hazardous substances. The petitioner challenged his continued incarceration, citing his age, health issues, and alleged non-compliance with mandatory procedures under the BNSS during the recovery.

A single bench of Justice Sumeet Goel granted regular bail to the petitioner, noting that he had already suffered incarceration for one month and nine days. The Court directed his release upon furnishing bail/surety bonds to the satisfaction of the concerned Chief Judicial Magistrate or Duty Magistrate, while observing that investigation and trial would proceed, and that no concrete evidence suggested the petitioner would abscond or interfere with the prosecution.

M/S Mlv Constructionsvs State Of U.P CITATION: 2025 TAXSCAN (HC) 1769

The Allahabad High Court, Lucknow Bench, addressed a legal issue concerning the improper issuance of a seizure order under Section 129(3) of the Central Goods and Services Tax Act, 2017. In M/s MLV Constructions v. State of UP, the petitioner challenged the seizure of goods on 21 June 2025, arguing that no show cause notice had been issued to the owner, consignor, or consignee, contrary to the statutory requirement of affording an opportunity of hearing before imposing any penalty.

A division bench comprising Justice Sangeeta Chandra and Justice Brij Raj Singh found that the Assistant Commissioner of State Tax, Mobile Squad-I, Lucknow, acted without understanding the provisions of the Act. The Court quashed the impugned orders dated 27 June 2025 and 3 July 2025, directing the authorities to issue fresh show cause notices to the consignor/consignee within one week and to grant an opportunity of personal hearing before passing a reasoned and speaking order. The Court also ordered three months’ training for the officer involved to ensure familiarity with GST provisions before handling seizure matters again.

M/s Sahil Steels vsState Of Rajasthan CITATION: 2025 TAXSCAN (HC) 1770

The Rajasthan High Court addressed a legal issue under Section107 of the Rajasthan GST Act, 2017, concerning the limitation for filing appeals. In a case where a taxpayer’s GST registration had been managed by a consultant who withheld login credentials, the petitioner filed an appeal only after regaining access. The Appellate Authority, Bikaner, had rejected the appeal on the ground that the statutory 90-day period had lapsed, counting the limitation from the date the order was uploaded on the GST portal.

A Division Bench comprising Justice Dinesh Mehta and Justice Sangeeta Sharma held that the limitation period could not commence until the petitioner had actual access to the portal, either on 17 March 2025 when her credentials were updated or, at the latest, on 5 March 2025 when she received a bank attachment order. The Court quashed the Appellate Authority’s rejection order dated 22 April 2025 and directed restoration of the appeal for adjudication on merits, emphasizing that statutory rights should not be denied due to circumstances beyond the taxpayer’s control.

M/s. Maa Sarala Steelvs State Tax Officer CITATION: 2025 TAXSCAN (HC) 1771

The Orissa High Court dealt with a legal issue under Section 130 of the Odisha GST Act, 2017, and the Central GST Act, 2017, concerning the challenge to a demand notice in Form DRC-07 issued for the period April 2023 to March 2024. The petitioner, Maa Sarala Steel, contended that the notice uploaded on the portal referred to a “detailed notice enclosed as separate attachment,” which was not actually provided, rendering the notice legally untenable.

A Bench comprising Chief Justice Harish Tandon and Justice Murahari Sri Raman dismissed the writ petition, noting that the petitioner had an alternative statutory remedy available. During the hearing, the Department served the detailed reasoned order dated 6 May 2025 on the petitioner’s counsel in Court. The Court advised the petitioner to pursue the matter before the appellate authority under the statute and disposed of the writ petition along with any pending interlocutory applications.

M/s Provident HousingLtd. vs Union of India CITATION: 2025 TAXSCAN (HC) 1772

The Bombay High Court addressed the legal issue under the Goods and Services Tax framework concerning liability arising from a Joint Development Agreement (JDA). Provident Housing Ltd. challenged the GST demand raised on a JDA executed on 13 October 2017, contending that liability cannot arise on the date of execution, but only upon conveyance or transfer of possession or rights, as clarified by Notification No. 4 of 2018. The petitioner argued that the JDA did not result in any transfer since the landowner subsequently sold the land outright.

A Division Bench comprising Justice M.S. Sonak and Justice Bharat P. Deshpande held that GST liability arises only on the transfer of possession or rights and not at the execution of the JDA. Observing that no such transfer occurred, the Court directed the department to refund Rs. 7 crores deposited under protest along with 6 percent interest per annum from the date of deposit, to be completed within six weeks. The writ petition was allowed, affirming that the petitioner had no GST liability on the JDA’s execution date.

Union of India vs SICPAIndiaPrivate Limited CITATION : 2025 TAXSCAN (HC) 1773

The Sikkim High Court addressed whether refund of unutilised Input Tax Credit (ITC) can be claimed on closure of business under the CGST Act, 2017. SICPA India Pvt. Ltd. sought refund of ₹4.37 crore under Section 49(6) read with Section 54(3) after discontinuing its operations, but the issue turned on whether such refund is permissible beyond the two scenarios expressly provided in Section 54(3).

The Division Bench of Chief Justice Biswanath Somadder and Justice Bhaskar Raj Pradhan set aside the Single Judge’s order, holding that refund is a statutory right limited strictly to the two conditions under Section 54(3). Relying on Union of India v. VKC Footsteps, the Court held that granting refund on closure would be judicial rewriting, and since SICPA failed to show proof of credit reversal under Section 29(5), the Union’s appeal was allowed.

UDAY JAIN & ANR.vsADDITIONAL COMMISSIONER CUSTOMS AIR CARGO AND IMPORT & ANR CITATION : 2025 TAXSCAN (HC) 1774

The Delhi High Court examined the confiscation and valuation of “The Scarecrow” by late Shri B.C. Sanyal under the Customs Act, 1962. Uday Jain & Anr. challenged the Commissioner’s order reclassifying the artwork, revising its value to ₹30 lakhs, ordering confiscation under Section 111(m), and imposing heavy duty demands and penalties.

The Bench of Justice Prathiba M. Singh and Justice Shail Jain ordered conditional release of the artwork to avoid damage, directing the petitioner to deposit ₹2 lakhs towards duty and ₹30,000 as redemption fee under Section 125. The release was made subject to further proceedings, with the Customs Department allowed to file its counter affidavit before the next hearing.

M.Sathish Babu vs Unionof IndiaCITATION : 2025 TAXSCAN (HC) 1775

The Madras High Court dealt with the issue of passport renewal for M. Sathish Babu, accused under Sections 132 and 135 of the Customs Act, 1962 read with Section 120B IPC. His renewal application was kept pending due to ongoing criminal proceedings before the Additional Chief Metropolitan Magistrate, EO-II, Chennai, where a non-bailable warrant had been issued against him.

The Bench of Justice N. Anand Venkatesh allowed renewal of the passport subject to strict conditions. The petitioner was directed to file an affidavit undertaking to return to India, surrender before the magistrate on 5 November 2025, and cooperate in early disposal of the case. The Court further ordered communication of its directions to the Consulate General in the UAE and mandated that the petitioner must seek permission from the jurisdictional court for any future travel outside India.

SONARAM BAGADARAM MALIvs THECOMMISSIONER OF CUSTOM & ORS. CITATION : 2025 TAXSCAN (HC) 1776

The Delhi High Court heard Sonaram Bagadaram Mali’s challenge to the Customs Department’s seizure of tempered glass labeled “Made in China” from Karol Bagh. He claimed the goods were locally purchased, but Customs treated them as illegally imported, valued them at ₹56 lakhs, and ordered provisional release against bonds and a bank guarantee under the Customs Act, 1962.

The Bench of Justice Prathiba M. Singh and Justice Shail Jain declined to interfere, citing lack of invoices and misleading foreign labels, but allowed the petitioner to join the investigation and seek remedies under Section 128 of the Customs Act. It clarified that its observations would not affect the case’s final merits.

THE PR. COMMISSIONER OF INCOMETAX vs M/S. ALPHA ELSEC DEFENCE AND AEROSPACE SYSTEMS PVT. LTD CITATION : 2025 TAXSCAN (HC) 1777

The High Court of Karnataka considered whether a draft assessment order under Section 144C(1) of the Income-tax Act, 1961 is mandatory when the Transfer Pricing Officer (TPO) re-determines the Arm’s Length Price (ALP). The dispute arose in Alpha Elsec Defence & Aerospace Systems Pvt. Ltd. (AY 2010–11) after the TPO adjusted ALP and the Assessing Officer passed an order dated 22.11.2016 giving effect to that variation.

The Bench of Justice S.G. Pandit and Justice K.V. Aravind upheld the ITAT and held the AO’s order dated 22.11.2016 void ab initio for failure to issue the mandatory draft assessment order where there was a variation in ALP. The Court rejected Revenue’s plea that no draft was necessary, and dismissed the appeal.

THE COMMISSIONER OFINCOME TAXvs CSP FOUNDATION CITATION : 2025 TAXSCAN (HC) 1778

The Karnataka High Court examined whether the assessee could seek Section 80G registration despite an earlier rejection as time-barred under the Income-tax Act, 1961. CSP Foundation, a charitable trust registered under Section 12A, had filed Form 10AB on 22.11.2023, which the Commissioner of Income Tax (Exemptions) rejected as delayed. The ITAT Bengaluru remanded the matter after noting the CBDT press release and Circular No. 7/2024 dated 25.04.2024, which extended the deadline to 30.06.2024.

The Bench of Justice S.G. Pandit and Justice K.V. Aravind upheld the ITAT’s order, holding that the CBDT’s circular permitted filing afresh despite earlier rejection. It ruled that the Tribunal was correct in remanding the matter for reconsideration and dismissed the Revenue’s appeal.

M/S Suraj EnterprisesvsAssistant Commissioner CITATION : 2025 TAXSCAN (HC) 1779

The Uttarakhand High Court held that taxpayers may seek instalment relief under Section 80 of the GST Act, 2017, and barred coercive action until the authority’s decision. Suraj Enterprises, a garment firm, challenged a penalty order and demand notice of ₹17.21 lakh, citing financial hardship and seeking payment in instalments.

The Bench of Chief Justice G. Narendar and Justice Subhash Upadhyay directed that if the petitioner applies under Section 80 within ten days, the Commissioner must decide within two weeks, during which no recovery action shall be taken; otherwise, the department may proceed as per law.

SAYAD ALI LASKAR vs THEUNION OFINDIA CITATION : 2025 TAXSCAN (HC) 1780

The Gauhati High Court granted anticipatory bail to Sayad Ali Laskar, owner of a truck seized by the DRI for allegedly carrying foreign cigarettes. He argued that offences under the Customs Act do not exceed seven years’ punishment, making custodial interrogation unnecessary.

Justice Mridul Kumar Kalita noted the limited punishment and directed that bail be granted on a ₹30,000 bond, subject to cooperation with the investigation, non-interference with witnesses, and appearance before the DRI within ten days.

M/S AHLCONS INDIAPRIVATELIMITED vs PRINCIPAL COMMISSIONER CITATION : 2025 TAXSCAN (HC) 1781

The Delhi High Court held that the GST Department cannot revive demands dropped in earlier adjudication unless specifically challenged or remanded. Ahlcons India Pvt. Ltd. challenged a 2025 order that reconfirmed such demands despite CESTAT remanding the case only on limited issues like mobilisation advance and service classification.

The Bench of Justices Prathiba M. Singh and Shail Jain ruled that reopening settled demands exceeded the scope of remand and noted the six-year delay in adjudication. It allowed the petitioner to pursue remedies before CESTAT without further pre-deposit on dropped demands, permitting adjustment of prior deposits, and directed CESTAT to decide the case on merits.

M/s Minha And Riza Agrovs JointCommissioner Of Customs IV CITATION : 2025 TAXSCAN (HC) 1782

The Madras High Court dismissed a writ petition by a meat exporter challenging Customs proceedings after consignments declared as buffalo meat for export to the UAE were found, on testing, to be prohibited ox/bull meat. The petitioner argued sampling was invalid under Section 144 of the Customs Act and sought immediate release of perishable goods.

Justice N. Anand Venkatesh upheld confiscation and penalty, holding no error warranting writ interference. The Court noted that statutory appeal before the Commissioner of Customs was the proper remedy, while allowing the exporter to apply separately for release of seized goods for consideration on merits.

Bharat AluminiumCompany Limitedvs State of Chhattisgarh CITATION : 2025 TAXSCAN (HC) 1783

The Chhattisgarh High Court held that electricity supplied by BALCO to its employee township was not “in the course or furtherance of business” under Section 16(1) of the CGST Act, 2017, thereby disallowing ITC on coal used for that portion. BALCO’s claim for refund of ₹40.14 lakh was rejected on the ground that township supply was a welfare activity, not business-related.

Justice Sanjay K. Agrawal ruled that ITC is a concession subject to strict conditions and township electricity supply could not qualify as business use. The Court also held that Explanation 1(d) to Rule 43 of the CGST Rules was prospective from 5 July 2022, not retrospective, and dismissed BALCO’s writ petitions upholding the ITC reversal.

M/s.Sree Aravind SteelsLimitedvs The Assistant Commissioner CITATION : 2025 TAXSCAN (HC) 1784

The Madurai Bench of the Madras High Court ruled that Section 173(5) Cr.P.C., which applies to police report cases, cannot be invoked in excise prosecutions launched through private complaints. The case involved Sree Aravind Steels Ltd., where prosecution was based on a 2005 adjudication order later quashed by CESTAT, with a fresh 2023 order sought to be introduced without new sanction.

Justices G.R. Swaminathan and P.B. Balaji held that the 2006 sanction, tied to the quashed 2005 order, could not support prosecution on the basis of the 2023 adjudication. The Court set aside the CJM’s order allowing the 2023 order to be marked, holding that fresh sanction was necessary, while permitting the department to restart prosecution after obtaining it.

M/S.KAL Media ServicesPvt Ltdvs The Joint Commissioner Of Central Taxes CITATION : 2025 TAXSCAN (HC) 1785

The Madras High Court held that the GST Department cannot issue consolidated show cause notices covering multiple financial years, as each year must be treated as a separate “tax period” under the GST Act. The ruling came in a petition by M/s. KAL Media Services Pvt Ltd challenging notices that clubbed six years (2018–2024) into one proceeding.

Justice Krishnan Ramasamy ruled that such “bunched” notices are without jurisdiction and liable to be quashed. The Court struck down the impugned notices but allowed the Department to initiate fresh proceedings for each financial year separately, subject to limitation.

COMMISSIONER OF CUSTOMSvs M/SJAISWAL IMPORT CARGO SERVICES LTD CITATION : 2025 TAXSCAN (HC) 1786

The Delhi High Court applied the principle of proportionality to restrict the suspension of M/s Jaiswal Import Cargo Services Ltd.’s Customs Broker License, noting that the broker had already suffered business loss for 13 months. The license had been revoked for alleged violations of the Customs Brokers Licensing Regulations, 2018 (CBLR), after cosmetic imports were diverted to the local market instead of bonded storage. While the Department alleged complicity, the CESTAT had earlier set aside the revocation, holding that the broker had duly verified the importer’s KYC documents and was not responsible for the diversion.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain held that, though brokers carry significant responsibility under CBLR 2018, the 13-month suspension already served was sufficient punishment. Accepting the respondent’s offer to contribute ₹4 lakh for a good cause, the Court ruled that the suspension period, coupled with this payment, would conclude the proceedings, and declined to reinstate the revocation.

THE COMMISSIONER OFCENTRALEXCISE vs M/S. J K TYRE INDUSTRIES LTD CITATION : 2025 TAXSCAN (HC) 1787

The Karnataka High Court dealt with appeals filed by the Revenue under Section 35G of the Central Excise Act, 1944, challenging the final order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), South Zonal Bench, Bengaluru. The legal issue revolved around whether Section 12B of the Central Excise Act, 1944, and Rule 7 of the Central Excise Rules, 2002, are applicable in cases of provisional assessment where goods are cleared to depots and adjustments for short-paid or excess duty are claimed by the assessee.

The Division Bench comprising Justice S.G. Pandit and Justice K.V. Aravind upheld the CESTAT ruling in favour of J K Tyre Industries Ltd., holding that Section 12B and Rule 7 are not applicable in provisional assessments. The Court noted that the substantial questions of law had already been settled in CEA No.39/2018, and found no reason to take a different view. Consequently, all appeals filed by the Revenue were dismissed.

PR. COMMISSIONER OFINCOME TAX-2vs TOYOTA TSUSHO INDIA PRIVATE LIMITED CITATION : 2025 TAXSCAN (HC) 1788

The Karnataka High Court, under Section 260-A of the Income Tax Act, 1961, addressed whether Toyota Tsusho India Pvt Ltd could be classified as a “wholesale trader” under CBDT Notification dated 29.10.2015, affecting the tolerance range for transfer pricing adjustments under Section 92C(2). The Court examined if the assessee met both conditions for wholesale trading—80% purchase cost of total trading costs and average monthly inventory ≤10% of sales.

The Division Bench of Chief Justice Vibhu Bakhru and Justice C.M. Joshi upheld the ITAT ruling, finding the assessee did not meet the wholesale trading criteria. The Court concluded the matter was fact-specific with no substantial question of law and dismissed the appeal.

News Logistix vsSuperintendentOf Gst And Central Excise CITATION : 2025 TAXSCAN (HC) 1789

The Madras High Court addressed the legality of reversing Input Tax Credit (ITC) under Section 16 of the CGST Act, 2017, for delayed filing of GSTR-3B returns. The petitioner, News Logistix, challenged the Superintendent of GST and Central Excise’s order denying ITC on the ground of delayed filing, invoking hardships such as COVID-19 and other genuine difficulties.

The Bench of Justice Krishnan Ramasamy relied on earlier precedents and legislative amendments, including Section 16(5) inserted by Finance Act (No.2) of 2024, allowing retrospective ITC claims. The Court quashed the impugned order to the extent it barred ITC based on limitation, directed de-freezing of bank accounts, and permitted refund or utilisation of collected amounts, while leaving room for departmental action in cases of wrongful claims.

M/s. Mobis IndiaLimited vs ThePrincipal Commissioner of Customs CITATION : 2025 TAXSCAN (HC) 1790

The Madras High Court considered a delay in filing an appeal under Section 129A of the Customs Act, 1962 by Mobis India Limited, a subsidiary of Hyundai. The company had filed its appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) 145 days after the prescribed deadline, due to the misplacement of the order and the prolonged medical leave of the responsible employee.

The Bench of Justice Dr. Anita Sumanth and Justice N. Senthilkumar held that the delay was neither deliberate nor mala fide and arose from circumstances beyond the company’s control. The Court set aside the Tribunal’s order refusing condonation of delay and restored the appeal before CESTAT, fixing 3 September 2025 as the first hearing date, without requiring fresh notice to the petitioner.

Power Builders vsSuperintendentOf Gst And Central Excise CITATION : 2025 TAXSCAN (HC) 1791

The Madras High Court addressed the entitlement of registered taxpayers to claim Input Tax Credit (ITC) under Section 16(4) of the CGST Act, 2017, for financial years 2017-18 to 2020-21. The issue arose where the petitioner, Power Builders, had their ITC claim denied on the ground of delayed filing of GSTR-3B returns, and the assessment order also imposed tax, interest, and penalty.

Justice Krishnan Ramasamy held that the denial of ITC on limitation grounds was unsustainable in view of retrospective insertion of Section 16(5) by the Finance Act (No.2) of 2024, supported by CBIC notifications and circulars. The Court quashed the assessment order insofar as it related to limitation, barred the Department from recovery on this basis, directed defreezing of bank accounts if frozen, and permitted refund or re-credit of amounts to the petitioner’s cash/credit ledgers. The Department retains the right to act only in cases of wrong or fake ITC claims.

M/s.Renaatus ProjectsPrivateLimited vs The Joint Director CITATION : 2025 TAXSCAN (HC) 1792

The Madras High Court addressed the issue of whether a writ petition could be entertained to quash a show cause notice (SCN) issued under the IGST Act, 2017, for a project executed entirely in Mauritius. The petitioner, Renaatus Projects, contended that the SCN demanding GST on the construction of the new Supreme Court building at Port Louis was beyond the territorial and legal jurisdiction of Indian authorities.

Justice Krishnan Ramasamy held that the petition was premature, emphasizing that the proper course is for the assessee to file a detailed reply with supporting documents before the authorities. The Court dismissed the writ petition but granted liberty to the petitioner to submit its reply within 30 days and directed the Department to consider it on merits and decide in accordance with law.

Simon Sagayaraju vsAssistantCommissioner CITATION : 2025 TAXSCAN (HC) 1793

The Madras High Court addressed the condonation of delay in filing an appeal under the GST Act, specifically concerning an assessment order under Section 73 of the CGST/TNGST Act for FY 2018-19. The petitioner, Simon Sagayaraju of Tvl. Euphoria Green Technologies, sought relief for a 150-day delay in filing the appeal due to severe medical reasons.

Justice Krishnan Ramasamy held that the delay was genuine and bona fide, condoning it on the condition that the petitioner deposit an additional 5% of the disputed tax (over and above the statutory 10% pre-deposit). The Court set aside the rejection order and directed the appellate authority to admit and dispose of the appeal on merits, after granting the petitioner an opportunity of hearing.

The Commercial TaxOfficer vsMudhra Fine Blanc Private Limited CITATION : 2025 TAXSCAN (HC) 1794

The Madras High Court addressed the reversal of Input Tax Credit (ITC) under Section 19(2)(v) of the Tamil Nadu Value Added Tax Act, 2006. The State challenged the quashing of an assessment order against Mudhra Fine Blanc Private Limited, concerning disallowance of ITC by the assessing authority. The legal issue pertained to whether the assessment could be sustained or must follow the binding precedent set in The State of Tamil Nadu v. M/s. Everest Industries Limited (2022).

The Division Bench of Justices M. Subramiam and C. Saravanan dismissed the State’s appeal, upholding the single bench’s order to quash the assessment. The Court held that revival of the assessment is contingent on the Supreme Court’s decision on Everest Industries, and any revival by the assessing authority must be completed within four weeks of the Supreme Court’s judgment, failing which the opportunity would lapse.

M/s.Almonard LimitedvsCommercial Tax Officer CITATION : 2025 TAXSCAN (HC) 1795

The Madras High Court addressed writ petitions challenging the higher sales tax levy on air curtains under the Tamil Nadu General Sales Tax Act, 1959. The legal issue concerned whether air curtains should be classified as “electrical fans” taxable at 8% under Entry 17 of Part C, or as “electrical instruments, apparatus and appliances of all kinds” taxable at 12% under Entry 22 of Part DD of the First Schedule.

The Division Bench of Justices M. Subramaniam and C. Saravanan upheld the Tamil Nadu Sales Tax Appellate Tribunal’s decision, dismissing the petitions. The Court observed that air curtains are specialized equipment designed for environmental separation, energy conservation, and handling conditioned air, distinguishing them from ordinary fans. Consequently, the 12% sales tax levy was confirmed on the petitioner’s turnover of ₹8,44,370/-, and both writ petitions were dismissed without costs.

Union of India vsV.Kannathasan CITATION : 2025 TAXSCAN (HC) 1796

The Madras High Court addressed the legality of an order by the Central Administrative Tribunal (CAT), Chennai Bench, which had quashed disciplinary proceedings and granted notional promotions to a senior Customs officer. The issue concerned whether the Tribunal had the jurisdiction to interfere with ongoing departmental disciplinary proceedings under Rule 18 of the Central Civil Services (Conduct) Rules, 1964, and Rule 15(1) of the CCS (CCA) Rules, 1965, before their natural conclusion.

The Division Bench of Justices M.S. Ramesh and V. Lakshminarayanan set aside the CAT’s order, holding that the Tribunal had overstepped its jurisdiction. The Court directed the disciplinary authorities to complete the proceedings within three months, taking into account the CBI acquittal and relevant Central Vigilance Commission guidelines. It further clarified that if the officer is ultimately exonerated, he shall be granted notional promotions and retirement benefits without the need to re-approach the Tribunal.

PRINCIPAL COMMISSIONEROF INCOMETAX - 4 DELHI vs MITSUBISHI CORPORATION (INDIA) PVT LTD CITATION : 2025 TAXSCAN (HC) 1797

The Delhi High Court addressed an appeal under Section 260A of the Income Tax Act, 1961, challenging the ITAT’s order on disallowance of certain expenditures under Section 40(a)(i) of the Act for Assessment Year 2016-17. The issue concerned whether payments made by Mitsubishi Corporation (India) Pvt Ltd to its group companies without tax deduction at source (TDS) could be disallowed, particularly when such payments were made to resident vendors and subject to double taxation avoidance agreements (DTAAs).

The Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar upheld the ITAT’s ruling in favour of the assessee, Mitsubishi Corporation (India) Pvt Ltd. Observing that the substantial questions of law did not arise, the Court dismissed the Revenue’s appeal, noting that the payments made for purchases to resident vendors were not liable for disallowance under Section 40(a)(i) prior to the 2015 amendment and that the issue was covered by the earlier majority view in Commissioner of Income Tax II vs. Mitsubishi Corporation (India) Pvt. Ltd., ITA 180/2014.

WOODLAND (AERO CLUB)PRIVATELIMITED vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 1798

The Delhi High Court dealt with the allowability of employee contributions to PF, ESI, and Labour Welfare Fund under Section 36(1)(va) of the Income Tax Act, 1961. The issue was whether contributions deposited after the statutory due date but before filing the return for AY 2019-20 could be claimed as a deduction.

A Division Bench of Justices V. Kameswar Rao and Vinod Kumar held that such delayed contributions are not deductible, reaffirming the Checkmate Services (P) Ltd. ruling. The Court upheld the ITAT’s disallowance and dismissed the assessee’s appeal, noting Section 143(1) adjustments apply only to claims apparent from the return.