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

M/s.Light Roofings Ltdvs The Tamil Nadu Sales Tax Appellate Tribunal CITATION : 2025 TAXSCAN (HC) 2251

The Madras High Court examined the legality of imposing purchase tax under Section 7A of the Tamil Nadu General Sales Tax Act, 1959, on a buyer solely because the selling dealers failed to remit tax on the transactions. The central issue before the Court was whether purchases from registered dealers whose sales were otherwise taxable under Section 3(2) of the Act could be treated as transactions made “in circumstances in which no tax is payable,” thereby triggering Section 7A liability against the purchaser.

A Division Bench of Justice S.M. Subramaniam and Justice Mohammed Shaffiq ruled that Section 7A is a distinct charging provision applicable only in exceptional circumstances where the purchase itself is non-taxable, and not where the seller defaults in paying tax. The Court held that the Revenue must proceed against the defaulting sellers rather than shifting liability to the buyer. Accordingly, the Bench quashed the STAT’s order, granting relief to the petitioner and affirming that non-remittance by a seller cannot justify a purchase tax levy on the buyer.

DIRECTORATE OFENFORCEMENT vs M/S PRAKASH INDUSTRIES LTD CITATION : 2025 TAXSCAN (HC) 2252

The Delhi High Court examined whether profits earned from a seemingly lawful transaction could still constitute “proceeds of crime” under the Prevention of Money Laundering Act, 2002 when their origin stems from an illegal act. The legal issue centred on the scope of Section 2(1)(u) of the PMLA, defining proceeds of crime, and whether gains made through the sale of shares at an inflated market value resulting from fraudulent misrepresentation before the Bombay Stock Exchange could be treated as tainted property even though the sale itself took place through a legitimate market channel.

A Division Bench comprising Justice Anil Kshetarpal and Justice Harish Vaidyanathan Shankar upheld the Enforcement Directorate’s Provisional Attachment Order of ₹122.74 crore against M/s Prakash Industries Ltd. The Court ruled that artificially inflated share gains formed part of a continuing laundering process linked to scheduled offences under the IPC and the Prevention of Corruption Act, thereby qualifying as proceeds of crime. Holding that lawful execution of a transaction cannot remove the taint of its criminal origin, the Bench restored the provisional attachment and dismissed the challenge raised by the company.

MUYASSAR YUSUPOVA vsCOMMISSIONER OF CUSTOMS CITATION : 2025 TAXSCAN (HC) 2253

The Delhi High Court addressed a matter concerning the release of seized gold under the Customs Act, 1962, specifically Section 125(3), which allows redemption of confiscated goods upon payment of a fine within a stipulated period. The legal issue involved the enforcement of an Order-in-Original dated 31 January 2025, permitting two Uzbek nationals, Muyassar Yusupova and Jasur Parmanov, to redeem and re-export 464 grams of gold jewellery valued at ₹21,21,831, despite their delayed payment due to Yusupova’s deportation prior to the issuance of the order.

A Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain directed the Customs Department to allow the petitioners to pay the redemption fine and complete the necessary formalities, emphasizing their bona fide intention to comply. The Court held that the deportation created genuine difficulty in adhering to the 120 day redemption window, and upon payment of the fine, the seized jewellery must be released and re-exported. The writ petition was accordingly disposed of in these terms, permitting appearance before the Customs Authority either personally or through an authorised representative.

M/S Singhal IronTraders vs Additional Commissioner And Another CITATION : 2025 TAXSCAN (HC) 2254

The Allahabad High Court dealt with a matter concerning the denial of Input Tax Credit (ITC) under the Goods and Services Tax Act, 2017, specifically Section 74, which deals with reversal of ITC in cases of fraudulent or non-existent suppliers. The legal issue arose when M/s Singhal Iron Traders, a registered purchaser of iron scrap, was served a show-cause notice seeking reversal of ITC and imposing a penalty because the supplier, M/s Arvind Metal Suppliers, was later found to have a cancelled GST registration. The Court examined whether ITC can be denied to a purchasing dealer when the supplier was validly registered at the time of the transaction.

A bench comprising Justice Piyush Agrawal observed that the supplier was a registered dealer at the time of sale, had filed the requisite GSTR-1 and GSTR-3B returns, and that payments were made through banking channels. The Court emphasized that the authorities should verify the status of the supplier at the time of the transaction before initiating punitive proceedings. Accordingly, the Court held that the proceedings under Section 74 were unwarranted, quashed the impugned orders, and allowed the writ petition, thereby affirming the petitioner’s entitlement to claim ITC.

M/S. SOPARIWALA EXPORTPVT. LTD.vs JOINT COMMISSIONER, CGST AND CENTRAL EXCISE & ORS. CITATION : 2025 TAXSCAN (HC) 2255

The Ahmedabad Bench of the Gujarat High Court dealt with a petition concerning the levy of Compensation Cess at 160% under the Goods and Services Tax Act, 2017, on supplies made to merchant exporters. The legal issue revolved around whether such supplies, which were manufactured by the petitioner and qualify as zero-rated exports under the IGST Act, 2017, should be subjected to full Compensation Cess when GST and IGST rates on the products were significantly lower. The petitioner, Sopariwala Pvt. Ltd., sought quashing of the levy and argued that the tax regime intended these supplies to be revenue neutral, with input tax credit claimable under Section 54.

A bench comprising Justice Bhargav D. Karia and Justice D.N. Ray held that the supplies to merchant exporters indeed fall under zero-rated exports and highlighted the revenue-neutral nature of the Compensation Cess. While refraining from granting a direct exemption due to the absence of a specific notification, the Court urged the GST Council to review the matter and align the Compensation Cess with applicable GST and IGST rates. The Court directed that no coercive action be taken until the Council examines the issue and recommends suitable relief, effectively putting the 160% Cess levy in abeyance pending resolution.

JANASEVA URBANCOOPERATIVE vs INCOME TAX OFFICER WARD CITATION : 2025 TAXSCAN (HC) 2256

The Bombay High Court at Goa addressed a petition filed by Janaseva Urban Cooperative Credit Society Limited challenging the assessment order for Assessment Year 2019–2020 under the Income Tax Act, 1961. The legal issue involved the disallowance of a deduction of ₹32,16,371 under Section 80P and the consequential addition of the same amount as business income. The petitioner contended that the assessment contained serious computational discrepancies, with inconsistencies in income from other sources, and that a substantial portion of the disputed demand ₹23,49,186 had already been recovered, making the demand unsustainable.

A Division Bench comprising Justices M.S. Karnik and Nivedita P. Mehta granted interim relief restraining the Income Tax Department from taking any coercive recovery action against the petitioner pending further consideration. The Court also directed that the petitioner’s request to operate its bank accounts would be considered on the next hearing date. The interim protection ensures that the cooperative credit society will not face enforcement measures while the discrepancies in assessment computations and the entitlement under Section 80P are fully examined.

PRAVIN BHATI vs INCOMETAX OFFICER CITATION : 2025 TAXSCAN (HC) 2257

The Bombay High Court at Goa addressed a batch of writ petitions challenging reassessment notices issued under Section 148 of the Income Tax Act, 1961, pertaining to assessment years prior to AY 2023-2024. The petitioners contended that the notices, issued under the pre-amendment regime, failed to comply with the faceless reassessment procedure introduced by the Finance Act, 2021, which amended Sections 147 to 151 with effect from April 1, 2021.

A Division Bench comprising Justice Nivedita P. Mehta and Justice Bharati Dangre granted interim relief, staying the operation of the impugned Section 148 notices and all consequential reassessment proceedings pending the final disposal of the writ petitions. The Court noted the pendency of similar matters before the Supreme Court, including J.D. Printers Pvt. Ltd. v. Income Tax Officer (2024) and Hexaware Technologies Ltd. v. Asst. CIT (2024), and granted liberty to the parties to seek appropriate directions after the Apex Court’s pronouncements. The High Court reaffirmed that all reassessment proceedings must strictly comply with the faceless reassessment mechanism under the amended Income Tax Act.

MICHAEL AND SUSANDELLFOUNDATION vs ASSISTANT/ DEPUTY COMMISSIONER OF INCOME TAX CIRCLEINTERNATIONALTAXATION 2(2)(1) NEW & ANR. CITATION : 2025 TAXSCAN (HC) 2258

The Delhi High Court dealt with an income tax reassessment matter concerning the Michael and Susan Dell Foundation, specifically regarding a foreign remittance of approximately $90,000. The petition challenged a show-cause notice under Section 148A(1), an order under Section 148A(3), and a reassessment notice under Section 148 of the Income Tax Act, 1961 for AY 2019-20.

A Division Bench comprising Justice V. Kameswar Rao and Justice Vinod Kumar set aside the order dated 29.06.2025 and the reassessment notice under Section 148, remanding the matter to the Assessing Officer to pass a fresh, reasoned order after providing the foundation an opportunity of hearing. The Court emphasized the fundamental principle that taxpayers’ representations must be considered before any adverse action, directing that the reassessment process, including the hearing, be completed within six weeks from the date of the order. The petition was accordingly disposed of, upholding the foundation’s right to be heard.

M/S. APOLLO TYRES LTDvs THEPRINCIPAL COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 2259

The Kerala High Court examined the scope of the PrincipalCommissioner of Income Tax’s (PCIT) revisional powers under Section 263 of the Income Tax Act, 1961, in the context of deductions claimed by an assessee. The matter arose when M/s Apollo Tyres Ltd. claimed depreciation under Section 32AC for assets acquired during F.Y. 2013-14, which were duly examined and allowed by the Assessing Officer (AO) following detailed queries. The PCIT invoked suo motu revisional powers alleging that certain assets pre-dated April 1, 2013, and challenged the AO’s assessment, which was upheld by the Income Tax Appellate Tribunal (ITAT), Cochin Bench, prompting the appeal before the High Court.

A Division Bench comprising Justice A. Muhamed Mustaque and Justice Harisankar V. Menon held that the ITAT erred in confirming the revisional action. Observing that Section 263 empowers the Commissioner to revise orders only if they are both “erroneous” and “prejudicial to the interests of the revenue”, the Court concluded that the AO had properly investigated the claim, and the PCIT could not exercise revisional powers merely to remand the matter. The High Court set aside the ITAT order and remitted the matter to the PCIT for fresh consideration after providing Apollo Tyres an opportunity of being heard, emphasizing that any examination of amendments under Section 32AC(1A) should be conducted in accordance with law.

GOA UNIVERSITY vs JOINTCOMMISSIONER OF CENTRAL GOODS AND SERVICE TAX CITATION : 2025 TAXSCAN (HC) 2260

The Bombay High Court adjudicated on the issue of Goods and Services Tax (GST) applicability to educational activities, specifically affiliation fees collected by Goa University from its affiliated colleges. The petitioner challenged a show-cause notice dated 05.08.2024 issued under Section 74 of the CGST Act, 2017, which demanded ₹4.83 crore along with interest and penalties. The University argued that affiliation fees are statutory levies, collected as part of its regulatory and educational functions under the Goa University Act, 1984, and therefore do not constitute “consideration” for a “supply of services” under Sections 2(17) and 7 of the CGST Act, 2017, as the activities are non-commercial and exempt under Entry No. 66 of Notification No. 12/2017-CT (R) dated 28.06.2017.

The Bench comprising Justice M.S. Karnik and Justice Nivedita P. Mehta upheld the University’s contentions, ruling that its statutory and regulatory functions, including curriculum design, examinations, and degree conferment, are integral to education and not business activities. The High Court held that the affiliation fees do not qualify as taxable consideration and quashed the impugned GST demand. The Court also invalidated the circulars and press note relied upon by the revenue, observing that they could not restrict the scope of statutory exemptions, and emphasized that the University, as an educational institution, is entitled to exemption from GST on such activities.

Sivestar EducationalTrust vs Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 2261

The Madras High Court addressed a petition filed by Sivestar Educational Trust seeking condonation of a 151 day delay in filing its Income Tax Form 10B for the Assessment Year 2018-2019. The Trust, registered under Section 12A of the Income Tax Act, 1961, had filed its Audit Report along with its income tax return on 31.03.2019, past the extended due date of 31.10.2018. The delay was attributed by the Trust to “extenuating circumstances,” including the impact of the Gaja Cyclone, although the due date preceded the cyclone. The Commissioner of Income Tax (Exemption), under Section 119(2)(b), rejected the condonation request, noting that the reasons were not substantiated and were likely an afterthought.

The Bench comprising Justice C. Saravanan allowed the writ petition, emphasizing that procedural delays should not obstruct the Trust from claiming legitimate exemptions or deductions. The Court imposed a conditional order, directing the Trust to donate ₹25,000 to the Blue Cross of India within 30 days. Upon compliance, the impugned rejection order was deemed quashed, and the Assessing Officer was directed to proceed with the assessment in accordance with law. The decision relied on Supreme Court precedents recognizing that procedural requirements are “handmaids of justice and not mistress of law,” ensuring that the Trust’s substantive rights were protected despite the delay.

SHASHI KUMAR CHOUDHARYvs DEPUTYDIRECTOR DIRECTORATE GENERAL OF GST INTELLIGENCE DELHI ZONAL UNIT& ANR CITATION : 2025 TAXSCAN (HC) 2262

The Delhi High Court addressed a writ petition filed by Shashi Kumar Choudhary, Proprietor of SK Enterprises, challenging a communication dated 6th May 2025 issued by the Directorate General of GST Intelligence (DGGI), which computed GST and penalty amounting to Rs. 2,99,23,614 following a post-search letter by the assessee. The issue before the Court was whether such communication could be treated as a formal adjudication order under Sections 73 and 74 of the Central Goods and Services Tax Act, 2017, without issuance of a Show Cause Notice. The petitioner’s goods, comprising 4,97,070 Kgs of areca nuts, had been seized during a search on 1st May 2025, and the petitioner had offered to deposit the tax and penalty in a letter dated 2nd May 2025, seeking provisional release.

The Bench comprising Justice Pratibha M. Singh and Justice Rajneesh Kumar Gupta held that the impugned communication was merely a response to the assessee’s request and did not constitute an adjudication order. The Court clarified that a proper Show Cause Notice must be issued before any demand under Sections 73 or 74 can be legally raised. While the petitioner’s request for provisional release against a bank guarantee was declined in the writ, the Court directed the GST authorities to follow due process and permitted the assessee to approach the concerned authorities for provisional release in accordance with law. The writ petition was disposed of with directions to preserve the regular adjudication process.

UNITED SPIRITS LTD vsADDITIONAL COMMISSIONER OF STATE CITATION : 2025 TAXSCAN (HC) 2263

The Bombay High Court at Goa granted interim relief to United Spirits Ltd. in a writ petition challenging the levy of interest under Section 25(4) of the Goa Value Added Tax Act, 2005, amounting to ₹53,58,986, allegedly due to delayed payment of tax on Extra Neutral Alcohol (ENA). The petitioner contended that the levy was unjustified as there was continuing uncertainty regarding whether ENA fell under the VAT regime or the newly implemented GST framework, and the VAT dues had already been deposited on September 30, 2021. The case arose after a communication from the authorities on June 10, 2025, demanding payment of the disputed interest with a threat of coercive recovery, prompting the petitioner to seek protection from such measures.

The Bench comprising Justice Bharati Dangre and Justice Nivedita P. Mehta observed that the question of interest liability for ENA required deeper judicial consideration. The Court granted an interim stay on all coercive recovery actions, including the disputed interest, until the pleadings were complete and the matter was finally adjudicated. Notice was issued to the Union of India, with timelines set for filing replies and rejoinders.

MS. PUJA JAYANT &ORS vs COMMISSIONER OF CUSTOMS CITATION : 2025 TAXSCAN (HC) 2265

The Delhi High Court addressed the unlawful disposal of seized gold jewellery by the Customs Department at Indira Gandhi International (IGI) Airport, involving passengers Puja Jayant, Jayant Shastri, and Manisha Shastri. The legal issue centered around the alleged violation of Section 111 and Section 125 of the Customs Act, 1962, whereby the department confiscated gold chains weighing 401 grams and disposed of them without following lawful procedures or allowing redemption within the statutory period. The petitioners had sought redemption, re-export, and refund of disposal proceeds, but the Customs Department refused, citing the expiry of the 120-day redemption period under Section 125.

The Bench, comprising Justice Prathiba M. Singh and Justice Shail Jain, condemned the Customs Department’s conduct and directed both the Central Board of Indirect Taxes and Customs (CBIC) and the Delhi Police (Economic Offences Wing) to conduct inquiries to ensure accountability. The Court ordered the department to file a detailed affidavit on the disposal methodology, realised proceeds, and refund calculation, while also addressing the lack of public access to Customs counters for submitting representations. The matter has been listed for further hearing on 25th November 2025, with the High Court emphasizing that the passengers are entitled to the market value of the disposed jewellery, referencing its earlier judgment in Jasvinder Kaur v. Commissioner of Customs (2025).

XY vs UNION OF INDIA CITATION : 2025 TAXSCAN (HC) 2266

The Delhi High Court addressed the legal issue concerning the entitlement of informers to rewards under the Goods and Services Tax (GST) anti-evasion framework, specifically referring to the Notification dated 31st July 2015 issued by the Central Board of Excise and Customs (CBEC), now the Central Board of Indirect Taxes and Customs (CBIC). The petitioner, “XY,” had provided information regarding alleged GST evasion by M/s Shakti Enterprises, which led to the issuance of a show-cause notice and subsequent order-in-original imposing substantial demands and penalties.

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain, who observed that the grant of a reward to an informer is a discretionary act of the Revenue and does not constitute a legal entitlement. The Bench highlighted that an informer cannot convert a discretionary reward into a legal claim against the Revenue and that any writ of mandamus in such circumstances would not be maintainable. The Court directed the petitioner to remain present for the next hearing and required a notarised affidavit containing her full particulars to be retained in a sealed cover by the Registry, while the issue of maintainability of the petition is to be addressed.

M/S ASSOCIATION OFMALAYALAMMOVIE ARTISTS vs COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 2267

The Kerala High Court addressed a legal issue concerning the requirement of a reasoned order under Section 250(6) of the Income Tax Act, 1961. The case involved the Association of Malayalam Movie Artists (AMMA), a charitable organization registered under Section 12A, which challenged the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), rejecting its appeal against the assessment order for Assessment Year 2014-15. AMMA contended that the appellate authority merely reproduced the findings of the Assessing Officer without offering independent reasoning, thereby violating its statutory duty to pass a speaking order addressing all points in dispute.

The matter was heard by Justice Ziyad Rahman A A, who observed that the impugned order failed to comply with Section 250(6) by not specifying the points for determination, the decision thereon, and the reasons for the decision. Citing precedent in Anandan N. v. Commissioner of Income Tax (Appeals) (2025), the Court held that mechanical reproduction of the Assessing Officer’s findings without independent analysis is unsustainable. Accordingly, the Kerala High Court quashed the impugned order and directed the Commissioner of Income Tax (Appeals), NFAC, to reconsider AMMA’s appeal afresh after providing an opportunity of hearing and to pass a reasoned order in accordance with law.

BANKERS CARDIOGY PVTLTD &ANR vs COMMISSIONER OF COMMERCIAL TAX & ANR CITATION : 2025 TAXSCAN (HC) 2268

The Gujarat High Court addressed a legal issue concerning the applicability of value-added tax on the supply of medicines and consumables during medical treatment. The Court held that the provision of medicines, stents, implants, and other consumables to indoor patients does not constitute a “sale” under Section 2(23) of the Gujarat Value Added Tax Act, 2003. The petitioners, including Bankers Cardiogy Pvt. Ltd. and other hospitals, challenged assessment orders and show-cause notices treating such supplies as taxable sales. The petitioners argued that the supply of goods during treatment forms part of an indivisible medical service contract and that charitable hospitals registered under Section 12AA of the Income Tax Act, 1961 are exempt from VAT under Section 2(10)(iii) of the Gujarat VAT Act.

The Bench comprising Justice Bhargav D. Karia and Justice D. N. Ray held that the transaction between a hospital and an indoor patient is an indivisible contract for medical treatment, applying the dominant nature test. The Court observed that such supplies cannot be severed and taxed separately and relied on precedents, including Larsen & Toubro Ltd. v. State of Karnataka (2014), the Gannon Dunkerley principle, and the Statement of Objects and Reasons of the Forty-Sixth Constitutional Amendment. Consequently, the High Court quashed the show-cause notices and assessment orders, confirming that charitable hospitals and medical services to indoor patients fall outside the ambit of VAT.

BANKERS CARDIOGY PVTLTD &ANR vs COMMISSIONER OF COMMERCIAL TAX & ANR CITATION : 2025 TAXSCAN (HC) 2268

The Gujarat High Court ruled on the legality of levying Value Added Tax (VAT) on the supply of medicines, implants, stents, and consumables provided to indoor patients during medical treatment, addressing constitutional limitations under the Gujarat Value Added Tax Act, 2003. The petitioners, Bankers Cardiogy Pvt. Ltd. and several hospitals, challenged assessment orders and show-cause notices treating the supply of such items as a “sale” under Section 2(23)(g) of the Act. The hospitals contended that the supply of drugs and consumables during treatment is not a severable commercial transaction and falls outside the categories of deemed sale under Article 366(29A) of the Constitution of India.

The Bench comprising Justice Bhargav D. Karia and Justice D. N. Ray held that the supply of medicines and consumables to indoor patients forms part of an indivisible medical treatment contract and cannot be taxed separately. Relying on precedents, including Bharat Sanchar Nigam Ltd. v. Union of India (2006) and the Gannon Dunkerley principle, the Court observed that such supplies do not fall within the specified categories of deemed sale under Article 366(29A). Accordingly, the Gujarat High Court set aside the show-cause notices and assessment actions, confirming that the levy of VAT on these transactions is constitutionally unsustainable.

M/S. SHYAM SUNDERSTRIPS vs UNION OF INDIA CITATION : 2025 TAXSCAN (HC) 2269

The Punjab and Haryana High Court ruled on the legality of creating negative balances in a taxpayer’s Electronic Credit Ledger (ECL) under the Central Goods and Services Tax (CGST) Act, 2017. The petitions were filed by Shyam Sunder Strips, Shivam Trading Company, and Kamaldeep Metalics Pvt. Ltd., challenging the blocking of their Input Tax Credit (ITC) and the creation of negative balances in their ECLs under Rule 86A of the CGST Rules, 2017. The petitioners contended that while Rule 86A permits the temporary blocking of credit that is fraudulently availed or ineligible, it does not authorize creating a negative balance beyond the available credit, which also violates Section 49 of the CGST Act governing the use of ECL.

The Division Bench comprising Justice Lisa Gill and Justice Meenakshi I. Mehta held that the creation of negative balances in the ECL exceeds the powers conferred under the statute and is therefore unlawful and without jurisdiction. The court clarified that Rule 86A only allows for blocking existing credit and not for making deductions beyond the available balance. The Bench directed the GST authorities to restore the petitioners’ ledgers to their original state prior to the blocking orders and emphasized that administrative authorities must strictly act within the statutory framework.

M/s.Hind AluminiumCompany vsThe State Tax Officer CITATION : 2025 TAXSCAN (HC) 2270

The Madras High Court directed the State Tax Department to reconsider assessment orders issued under Section 74 of the Goods and Services Tax (GST) Acts, 2017, observing that the petitioner had failed to adequately substantiate its replies to show-cause notices with documentary evidence. The petitioner, M/s Hind Aluminium Company, challenged two assessment orders dated February 2, 2025, and February 19, 2025, for assessment years 2017-18 and 2018-19, contending that the authorities erroneously included turnover liable to tax under the Tamil Nadu VAT Act, 2006, in the GST demand for the pre-GST period from April 1, 2017, to June 30, 2017.

The Bench comprising Justice C. Saravanan remitted the matter to the assessing officer for fresh consideration, subject to pre-deposit conditions of 20% of the disputed tax for FY 2018-19 and 10% for FY 2017-18, after adjusting amounts already recovered. The petitioner was allowed to submit additional documents and a fresh reply within 30 days, and the assessing officer was directed to pass a reasoned order within three months.

Legitimate Trade Should Not Be Crippled: Madras HC Allows Revival of GST Reg Following Suguna Cut Piece Centre Ruling

Velu RamakrishnanProprietor vsThe Commissioner of Commercial Taxes CITATION : 2025 TAXSCAN (HC) 2271

The Madras High Court allowed the revival of a GST registration that had been cancelled by the tax authorities, emphasizing that procedural lapses should not unduly hinder legitimate trade. The petitioner, Velu Ramakrishnan, proprietor of M/s V.R.K. Equipments, challenged the cancellation dated February 13, 2025, issued by the Commercial Tax Officer, Kundrathur Assessment Circle, arguing that it disrupted his business operations. The Court relied on the precedent set in Tvl. Suguna Cut Piece Centre v. Appellate Deputy Commissioner (ST), Salem & Anr, underscoring that the GST Act aims to collect tax fairly without stifling genuine commerce.

The Bench of Justice C. Saravanan directed that the petitioner be allowed to revive his cancelled GST registration, subject to strict compliance with the conditions in the Suguna Cut Piece Centre ruling. These conditions include filing all pending GST returns prior to cancellation and remitting corresponding tax dues with interest, penalty, and late fees within 45 days, paying post-cancellation dues in cash, and ensuring unutilized input tax credit (ITC) is verified before use.

RAMAA ADVISORS PRIVATELIMITED vs ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE CITATION : 2025 TAXSCAN (HC) 2272

The Delhi High Court examined the validity of reassessment notices issued to Ramaa Advisors Private Limited under Section 153C of the Income Tax Act, 1961, focusing on whether the notices adhered to the mandatory ten-year limitation period prescribed under the provision. The writ petitions challenged multiple notices on the ground that the assessment years involved fell outside the statutorily permissible ten-year block.

The Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar reaffirmed its interpretation of the First Proviso to Section 153C, reiterating that the limitation period begins from the date of receipt of documents by the jurisdictional AO of the non-searched entity. Applying this benchmark, the Bench noted that materials were handed over only in FY 2021-22, limiting the permissible block period to AY 2016-17. Consequently, the notices issued for AYs 2010-11 to 2015-16 were held to be time-barred. The Court therefore quashed all impugned reassessment notices and allowed the writ petitions in full.

LOGIX HEIGHTS PRIVATELIMITED vs DEPUTY COMMISSIONER OF INCOMETAX CIRCLE 13(1) CITATION : 2025 TAXSCAN (HC) 2273

The Delhi High Court examined whether a reassessment proceeding under Sections 148A(1), 148A(3), and 148 of the Income Tax Act, 1961, could be initiated on a matter that had already been scrutinized and concluded by the tax department for the same assessment year. Logix Heights Private Limited challenged a notice and a subsequent order and notice pertaining to AY 2019-20, arguing that the reassessment was impermissible because the alleged non-genuine transactions with M/s Mekaster Finlease Limited had already been examined in an earlier reassessment order, where the transactions were treated as accommodation entries.

The Division Bench comprising Justice V. Kameswar Rao and Justice Vinod Kumar held that the reassessment could not be sustained since the Assessing Officer had ignored the petitioner’s categorical submission that the very same issue had been previously adjudicated by the department. Observing that reassessment cannot be invoked to revisit a matter already examined and decided, the Court set aside the impugned order passed under Section 148A(3) as well as the consequent notice issued under Section 148. The Bench remanded the matter to the Assessing Officer with directions to grant a proper hearing, permit submission of documents, and pass a fresh, reasoned order within eight weeks.

SANTOSH KUMAR SURI vsDEPUTY COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 2274

The Delhi High Court examined the issue of the Income Tax Department’s prolonged inaction in giving effect to an order passed by the Income Tax Appellate Tribunal (ITAT), highlighting a clear violation of the statutory mandate under Section 153(3) of the Income Tax Act, 1961. The writ petition, filed by Santosh Kumar Suri, challenged the department’s failure to complete the reassessment and process the refund arising from the ITAT’s order relating to AY 2016-17. The Tribunal had directed the Assessing Officer to grant the benefit of indexation on inherited property from the year in which the previous owner first held the asset, yet the tax authorities did not act for nearly three years despite several reminders.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain strongly criticised the department for its unexplained delay, observing that the officials appeared to have “got activated” only after the writ petition was filed. Noting that the department failed to comply with the ITAT’s directions within the mandated period and caused undue hardship to the assessee, the Court directed that the refund amount of ₹36,85,243 computed by the Assessing Authority in its order be released to the petitioner within one week, along with statutory interest at 3% under Section 244(1A). The Bench further warned that failure to comply would require the concerned official to appear personally before the Court.

Kehar Singh vs UnionTerritory of J&K CITATION : 2025 TAXSCAN (HC) 2275

The Jammu & Kashmir and Ladakh High Court examined whether GST registration or payment of tax could exempt brick dealers from obtaining a mandatory licence under the Jammu and Kashmir Brick Kiln (Regulation) Act, 2010, and the Brick Kiln (Regulation) Rules, 2017. The writ petition filed by Kehar Singh and others challenged seizure orders issued by the District Magistrates of Kathua and Samba, arguing that the licensing framework applied only to brick kiln owners, not to dealers trading in finished bricks. The petitioners claimed that their business was already regulated under the Goods and Services Tax Act, and that imposing additional licensing requirements violated their right to trade under Article 19(1)(g) of the Constitution.

A single judge bench of Justice Wasim Sadiq Nargal held that licensing under Rule 3 of the 2017 Rules is compulsory not only for manufacturers but for all persons engaged in the sale, storage, or distribution of bricks, including dealers. The Court emphasized that GST registration is merely a fiscal compliance requirement and cannot override sector-specific regulatory statutes governing trade. Observing that the petitioners had bypassed the statutory appellate remedy under Section 20 of the Act, the Court upheld the actions of the Deputy Commissioners as lawful and proportionate. Concluding that payment of tax does not legalize unlicensed business, the High Court dismissed the writ petition and directed that dealers importing or selling bricks in the Union Territory must obtain a valid licence under the Brick Kiln Regulation framework.

M/s. Bhilwara TradingCompany vs Bank Of Baroda CITATION : 2025 TAXSCAN (HC) 2276

The Rajasthan High Court at Jodhpur examined whether a bank can freeze a trader’s current account solely on the ground that the trader’s GST registration has been voluntarily cancelled, particularly when the trader deals in goods exempt from GST under Chapter 10 of the Harmonized System of Nomenclature (HSN). Bhilwara Trading Company, filed a writ petition challenging the Bank of Baroda’s action of freezing its account, arguing that the business was lawfully exempt from GST and that cancellation of registration approved by the department with effect from 31 January 2025 could not justify such coercive action.

A single judge bench of Justice Nupur Bhati held that the petitioner must be accorded a fair opportunity to explain its position before the bank proceeds with any adverse measures. The Court directed the petitioner to file a comprehensive representation within ten days, supported by documents establishing the GST-exempt nature of the goods and evidence of voluntary cancellation of registration. The Bank of Baroda was instructed to consider the representation and pass a reasoned, speaking order within one month. Importantly, the Court directed that until such a decision is made, Bhilwara Trading Company must be permitted to operate its current account without restriction. The writ petition was disposed of on these terms.

Tvl. Red Rose Garmentsvs Assistant Commissioner (ST) CITATION : 2025 TAXSCAN (HC) 2277

The Madras High Court examined whether the blocking of Input Tax Credit (ITC) under Rule 86A of the CGST Rules could continue indefinitely when the taxpayer was already facing adjudication proceedings under Sections 73 and 74 of the Central Goods and Services Tax Act, 2017. Red Rose Garments, the petitioner, challenged the order of the Assistant Commissioner (ST), Tiruppur, which had blocked ITC on the allegation that credit was availed on invoices issued by non-existent suppliers, including Tvl. Sri Vishweshwara Knits. With a total of ₹62,33,318 blocked, the petitioner argued that the negative balance had prevented it from filing GSTR-3B returns and paying tax for June to September 2025, and that authorities lacked the power to demand replenishment of utilized ITC.

A single judge bench of Justice C. Saravanan held that, in view of pending proceedings under Sections 73 and 74 and the need to balance revenue protection with the petitioner’s ability to discharge current tax liabilities, a partial stay of the impugned order was warranted. The Court stayed 50% of the petitioner’s tax liability and directed that the negative blocking continue to the extent of ₹37,05,811, while permitting the assessee to debit ₹11,87,740 from the blocked ITC. The petitioner was also required to replenish the blocked credit before the next tax due date. Further, the authorities were directed to complete proceedings under Rule 86A and Sections 73/74 within 30 days. The writ petition was disposed of with partial relief on these terms.

Sri Sarguru Associatesvs The Joint Commissioner (CT) CITATION : 2025 TAXSCAN (HC) 2278

The Madras High Court examined the validity of an assessment order passed under Section 73 of the Tamil Nadu Goods and Services Tax Act, 2017, read with the CGST Act, after allegations surfaced that the petitioner’s auditor had fraudulently generated invoices and uploaded them in the petitioner’s GSTR-1 without authorization. Sri Sarguru Associates, challenged the assessment order contending that the fictitious invoices for November 2018 and January 2019 showing sales to Janse Manpower Services were created without any actual supply of goods. These fraudulent entries allegedly enabled the fifth respondent to claim wrongful ITC and resulted in tax liability being fastened on the petitioner, who had also lodged a police complaint documenting the manipulation.

A single judge bench of Justice C. Saravanan held that the question of whether any genuine supply had taken place could not be conclusively determined in writ proceedings and therefore required proper adjudication by the assessing authority. The Court set aside the impugned assessment order and remitted the matter to the Deputy State Tax Officer, for a fresh decision on merits. It further permitted the GST Department to initiate appropriate action against the fifth respondent if no actual supply was found and clarified that the petitioner was free to recover amounts from the fifth respondent based on admissions made before the police. The writ petition was accordingly disposed of.

K.Rethinam vs The TaxRecovery Officer CITATION : 2025 TAXSCAN (HC) 2279

The Madras High Court examined whether the Tax Recovery Officer (TRO) could continue recovery and attachment proceedings under Section 222 of the Income Tax Act, 1961, after the order of the Income Tax Appellate Tribunal (ITAT) had attained finality and the assessee had fully discharged the resultant tax liability. The writ petition was filed by K. Rethinam, who challenged multiple attachment orders issued despite the appellate process concluding in his favour. The ITAT, through its order, upheld the relief granted by the Commissioner of Income Tax (Appeals), and the petitioner had already paid the entire demand, yet the TRO continued to retain attachment over the petitioner’s properties.

A single judge bench of Justice Krishnan Ramasamy held that once the ITAT being the final authority has issued an order that has attained finality and the tax demand stands fully satisfied, no further recovery can be pursued. The Court reiterated that the TRO is bound to lift attachments and cancel recovery certificates, as mandated under Section 225(2) of the Act, when the tax demand is reduced or extinguished. The Court further clarified that even if the Revenue files an appeal on a substantial question of law, coercive recovery cannot continue unless such appeal succeeds and a fresh demand arises. Accordingly, the TRO was directed to release the attached properties within four weeks and return the original documents to the petitioner.

M/s. Laxmi JewelleryChennai Private Limited vs he DeputyCommissioner (GST) Appeal CITATION : 2025 TAXSCAN (HC) 2280

The Madras High Court examined whether the assessment order issued under Section 73 of the TNGST/CGST Act, 2017, for FY 2018-2019 was valid when the alleged discrepancy in Input Tax Credit (ITC) between Form GSTR-9A and the audited financial statements had not been properly reconciled. The legal issue centred on the department’s confirmation of tax liability on account of a reported “negative ITC difference” between Tables 8A and 8B of GSTR-9 and the allegation that the dealer, Laxmi Jewellery Chennai Private Limited, had claimed excess ITC of ₹40.57 lakh.

The Bench of Justice C. Saravanan held that the petitioner’s detailed reply dated January 3, 2024, had not been duly considered while confirming the demand, and noted that the entire disputed tax amount had already been recovered. The Court therefore remitted the matter back to the assessing authority to pass a fresh order after verifying the recovery and directed that any unrecovered balance, if found, must be deposited by the petitioner.

M/s.A.S.R Constructionsvs The State Tax Officer CITATION : 2025 TAXSCAN (HC) 2281

The Madras High Court examined whether the State Tax Officer (STO) had correctly levied interest and partially denied Input Tax Credit (ITC) while passing the assessment order under the GST enactments. The legal issue arose from the challenge by A.S.R. Constructions to the order, which confirmed demands proposed in the DRC-01 notice relating to defects in GSTR-9 reporting and ITC entitlement. The petitioner argued that since the entire tax of ₹4,14,998 was paid on 19.12.2022 through the electronic credit ledger well before issuance of the notice the levy of interest under the provisions corresponding to Section 50 of the GST Act was unjustified, and that their ITC claim had not been properly examined.

The bench of Justice C. Saravanan remitted the matter to the State Tax Officer with explicit directions to recompute interest by comparing the delay, if any, with reference to the monthly GSTR-3B returns filed under Section 39, taking into account the debit entry dated 19.12.2022. The Court further directed that the petitioner be given an opportunity to substantiate the balance ITC claim by producing supplier certificates within thirty days. The STO was instructed to redo the assessment for defect Nos. 1 and 3 and pass a fresh order on merits after granting the petitioner a hearing, upon which the writ petition was disposed of.

M/S Dabur India Ltd vsUnion Of India CITATION : 2025 TAXSCAN (HC) 2282

The Allahabad High Court considered the legal issue of product classification and applicable GST rate for Dabur India Ltd.’s “Hajmola Candy Tablets,” arising from a show-cause notice proposing a higher tax rate under the GST laws. The petitioner contended that the classification dispute was already settled under the earlier Central Excise and Customs regime, culminating in a Supreme Court ruling that upheld Hajmola’s classification under a lower duty bracket. Dabur argued that the shift to the GST regime had not materially altered the statutory framework on classification and therefore the settled legal position must continue to apply, asserting that the authorities could not reopen the issue through Section 73 proceedings or a classification-based show-cause notice.

The Division Bench of Justice Saumitra Dayal Singh and Justice Indrajeet Shukla granted interim relief to the petitioner by staying all proceedings pursuant to the impugned show-cause notice. The Bench observed that Dabur had made out a strong prima facie case, particularly given the finality of the Supreme Court’s earlier decision on identical classification issues and the need for judicial consistency. The Court held that international developments, including changes in the World Customs Organisation (WCO) classification in foreign jurisdictions, could not override binding domestic precedent. Accordingly, the proceedings under the show-cause notice were ordered to remain stayed until the next date of listing.

A H EngineeringContractors vs The Income Tax Officer CITATION : 2025 TAXSCAN (HC) 2284

The Madras High Court dealt with the legality of an ex parte reassessment order passed under Section 147 read with Section 144B of the Income Tax Act, 1961, after the assessee failed to respond to a statutory notice issued under Section 148. The petitioner, A H Engineering Contractors, challenged the reassessment proceedings on the ground that they violated principles of natural justice, arguing that the order was based on uncorroborated third-party data from Form 26AS and was passed without granting a proper opportunity of hearing. The Court examined whether the reassessment proceedings were conducted in accordance with the statutory framework and whether the petitioner could invoke writ jurisdiction despite the availability of a statutory appellate remedy.

A single judge bench of Justice C. Saravanan held that the reassessment proceedings were validly initiated and that the notice under Section 148 had been duly served, but the petitioner failed to participate despite opportunities provided. Observing that the Income Tax Act provides an effective alternate remedy through an appeal before the Commissioner (Appeals), the Court ruled that the writ petition was not maintainable. It concluded that any factual disputes regarding contract receipts or the correctness of the assessment were matters for the appellate authority to examine. Consequently, the Court dismissed the writ petition and granted liberty to the petitioner to avail the statutory appellate remedy.

M/S Ashok Auto SalesLimited vs Union Of India And 2 Others CITATION : 2025 TAXSCAN (HC) 2285

The Allahabad High Court examined the legality of a GST adjudication notice issued under Section 76 of the Central Goods and Services Tax Act, 2017, which was challenged by Ashok Auto Sales Limited. The petitioner contended that the impugned notice was inconsistent with earlier departmental communications from the Director General of GST Intelligence and contrary to established judicial precedent under the Central Excise framework. The key legal issue before the Court was whether such alleged inconsistencies justified the exercise of writ jurisdiction at a pre-adjudication stage.

A division bench of Justice Saumitra Dayal Singh and Justice Indrajeet Shukla declined to interfere, observing that the challenge raised factual issues best addressed during adjudication. Emphasising the availability of a statutory remedy and the ongoing nature of the proceedings, the Court held that writ intervention was unwarranted at this stage. The bench refrained from expressing any opinion on the merits of the dispute and granted liberty to the petitioner to contest the matter before the proper authority. Accordingly, the writ petition was disposed of.

Cae Simulation TrainingPrivate Limited vs Commissioner Of CgstGreater Noida CITATION : 2025 TAXSCAN (HC) 2286

The Allahabad High Court addressed a Goods and Services Tax (GST) exemption dispute concerning whether DGCA-approved pilot training qualifies as an “educational service” under Notification No. 12/2017-Central Tax (Rate) issued under the CGST Act, 2017. CAE Simulation Training Pvt. Ltd., a DGCA-approved training organisation offering simulator-based Aircraft Type Rating (ATR) courses mandated by the Aircraft Act, 1934 and the Aircraft Rules, 1937, had approached the Authority for Advance Ruling (AAR) under Section 97 of the CGST Act seeking exemption. The AAR rejected the claim, holding that CAE was not an “educational institution” within the meaning of the notification, prompting the writ petition.

A single judge bench of Justice Rohit Ranjan Agarwal set aside both the AAR order and the appellate order, noting that the Ministry of Finance’s clarificatory circular dated 11 October 2024 expressly recognised DGCA-approved pilot training as exempt educational services. Observing that the curriculum is one recognised by law and that the circular directly applies to the petitioner’s courses, the Court remanded the matter to the AAR for fresh consideration in light of the updated clarification. The writ petition was disposed of with directions to reconsider the exemption claim afresh.

M/S 360 Realtors Llp vsThe Department Of Revenue And 2 Others CITATION : 2025 TAXSCAN (HC) 2287

The Allahabad High Court examined a GST dispute involving the validity of a demand order issued under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017, against M/s 360 Realtors LLP. The central legal issue concerned violation of the principles of natural justice, arising from the assessee’s claim that the show cause notice and adjudication order were never effectively served, as they were uploaded only under the “Additional Notices and Orders” tab on the GST portal and not displayed on the main dashboard. The petitioner argued that this technical lapse prevented timely knowledge of the proceedings, ultimately leading to an appeal being dismissed as time-barred.

The Division Bench comprising Justice Saumitra Dayal Singh and Justice Indrajeet Shukla set aside the demand order after noting widespread and genuine difficulties faced by taxpayers in receiving GST portal communications. The Court observed that such procedural deficiencies undermine access to justice, particularly when strict appeal limitation periods and the absence of remand powers under GST law leave taxpayers remediless. Holding that dismissal of the appeal as time-barred did not constitute a decision on merits, the bench exercised writ jurisdiction and remitted the matter for fresh adjudication. The petitioner was directed to deposit ₹1,00,000, and the adjudicating authority was instructed to grant a fresh opportunity to respond and issue a reasoned order by 31 March 2026.

Ankit Automobiles vsAssistant Commissioner, Cgst & CentralExcise CITATION : 2025 TAXSCAN (HC) 2288

The Allahabad High Court examined the legality of a GST confiscation and tax demand order passed against Ankit Automobiles, holding that the adjudication suffered from jurisdictional defects and violated the principles of natural justice. The dispute arose under Sections 130, 122, and 74 of the Central Goods and Services Tax Act, 2017, as the show cause notice issued under Sections 130 and 122 was later used to confirm demand under Section 74 despite the fact that proceedings under Section 74 had never been initiated. The Court found that the authorities also failed to provide a fair hearing, having passed the final order nearly four months after the last hearing without any further communication or opportunity to respond.

A Division Bench comprising Justice Saumitra Dayal Singh and Justice Indrajeet Shukla set aside the impugned order, observing that the adjudicating authority exceeded the scope of the show cause notice and violated fundamental fairness in quasi-judicial proceedings. The Court held that no useful purpose would be served by directing the petitioner to pursue an alternative remedy when the order itself was jurisdictionally unsustainable and rendered in breach of natural justice. The matter was remanded to the adjudicating authority to pass a fresh order strictly in accordance with law after granting the petitioner a proper opportunity of hearing.

Neelam Tripathi vsState Of U.P CITATION : 2025 TAXSCAN (HC) 2289

The Allahabad High Court examined the legality of a cancellation of Goods and Services Tax (GST) registration carried out without adherence to the mandatory statutory procedure under Rule 22(1) of the CGST Rules, 2017. The central legal issue before the Court was whether a taxpayer’s GST registration could be cancelled solely on the basis of a voluntary application filed in Form REG-16, without issuance of the compulsory notice in Form GST REG-17, which is required under Rule 22(1) before any cancellation action is taken. The challenge arose after the petitioner, Neelam Tripathi, contested the cancellation order and the subsequent appellate order, both of which were passed without following the mandatory procedural safeguards incorporated in the CGST Act and Rules.

The bench of Justice Piyush Agrawal held that the cancellation order was vitiated for non-compliance with the mandatory procedure prescribed under Rule 22(1) of the CGST Rules, particularly since the department itself admitted that no notice in Form GST REG-17 had been issued prior to cancellation. The Court concluded that cancellation based merely on a voluntary application filed by counsel without issuing the required show-cause notice was unsustainable in law and contrary to statutory mandate. Consequently, both the original cancellation order and the appellate order were quashed, and the matter was remitted to the proper officer to initiate fresh proceedings by issuing a proper notice, granting adequate opportunity to respond, and passing a reasoned order within the stipulated timeline.

M/S Meerut Steels vsUnion Of India And 3 Others CITATION : 2025 TAXSCAN (HC) 2290

The Allahabad High Court examined whether parallel proceedings initiated by both the State and Central GST authorities violated the jurisdictional bar contained in Section 6(2)(b) of the CGST Act, 2017, read with the coordination mechanism prescribed under the CBIC Circular dated 5 October 2018. The legal issue centred on whether the subsequent proceedings initiated by the Central GST authorities under Section 74 of the CGST Act, 2017 (read with Section 74 of the UPGST Act and Section 20 of the IGST Act), were without jurisdiction, given that earlier proceedings on the allegedly same subject matter had already been concluded by the State GST department under Sections 73 and 74 of the UPGST Act. The petitioner, M/s Meerut Steels, invoked the Court’s writ jurisdiction under Article 226, challenging the order dated 17 January 2025 passed by the Central authority.

The Division Bench comprising Justice Saumitra Dayal Singh and Justice Indrajeet Shukla declined to exercise writ jurisdiction, holding that the jurisdictional objection raised by the assessee was not a pure question of law but required factual examination regarding whether the “subject matter” of both proceedings was identical. Observing that the Central proceedings pertained to amounts different from those adjudicated by the State authorities, the Court held that the dispute was fact-intensive and therefore unsuitable for determination under Article 226 when an effective statutory remedy existed. The petition was dismissed with liberty to the assessee to file a statutory appeal within three weeks, with a direction to the appellate authority to entertain the appeal on merits without rejecting it on limitation grounds.

M/S PilconInfrastructure Pvt. Ltd vs State of U.P CITATION : 2025 TAXSCAN (HC) 2291

The Allahabad High Court examined the legality of blocking Input Tax Credit (ITC) under Rule 86A of the Central Goods and Services Tax (CGST) Rules, 2017, and held that credit cannot be frozen merely on suspicion or on the basis of generic allegations without recording specific and written “reasons to believe” as mandated under the statutory framework. The case arose from a challenge filed by M/s Pilcon Infrastructure Pvt. Ltd., whose ITC amounting to ₹13,96,220 had been blocked solely on the basis of an email from the GST Network (GSTN) citing “Supplier found non-functioning,” without any written order or reasoned satisfaction recorded by the proper officer as required under Rule 86A(1) of the CGST Rules.

The Division Bench comprising Justice Saumitra Dayal Singh and Justice Indrajeet Shukla ruled that the blocking of ITC was wholly unsustainable, as the department had relied only on a generic DGGI alert regarding the supplier and had failed to record any specific, written “reasons to believe” connecting the petitioner to any fraudulent activity. The Court held that Rule 86A confers an extraordinary, ex parte power that must be exercised with strict adherence to statutory safeguards, and that vague suspicion or departmental alerts cannot justify freezing ITC. Finding a complete absence of jurisdictional foundation and application of mind, the Bench quashed the ITC blockage and directed the authorities to immediately restore the petitioner’s credit.

M/s. NationalAssociation of Container Freight Stations vs TheJoint Commissioner of Customs CITATION : 2025 TAXSCAN (HC) 2292

The Madras High Court examined the legality of a Public Notice issued by the Customs Department prohibiting custodians from collecting Goods and Services Tax (GST) on auctioned goods, holding that the Customs authority had acted beyond its jurisdiction. The issue centered on whether the Customs Department, while exercising powers under Section 48 of the Customs Act, 1962, could direct custodians not to collect GST on auction sales despite such sales being taxable supplies governed exclusively by the Central Goods and Services Tax (CGST) Act, 2017.

The single judge bench of Justice N. Anand Venkatesh allowed the writ petitions, ruling that the Customs Department had no authority to issue directions regulating GST collection and that the Public Notice was ultra vires and legally unsustainable. The Court held that the CGST Act is a complete code for GST levy and administration, reaffirmed that auction sales of uncleared cargo are taxable supplies on which custodians must collect and remit GST, and accordingly quashed the Public Notice issued by the Joint Commissioner of Customs.

Jignesh KishorbhaiPatadiya vs The Principal Commissioner ofCustoms CITATION : 2025 TAXSCAN (HC) 2293

The Madras High Court in a writ petition concerning the delayed adjudication of a gold seizure under the Customs Act, 1962, examined the legal issue of departmental inaction despite a clear remand direction issued by the Commissioner of Customs (Appeals). The dispute pertained to confiscation proceedings initiated under the Act, which had been set aside on appeal with instructions for fresh adjudication. Despite the petitioner’s representation seeking expeditious disposal, the Customs Department failed to act, prompting the Court to address whether such inaction violated the binding force of appellate orders and warranted issuance of a writ of mandamus.

A single judge bench of Justice N. Anand Venkatesh, who held that the delay was wholly unjustified and contrary to the statutory obligation of the adjudicating authority to comply with appellate directions. The Court issued a writ of mandamus directing the Deputy Commissioner of Customs to complete the adjudication within four weeks from the date of receipt of the order, cautioning that any further delay would be viewed seriously and may attract judicial consequences.

The Commissioner ofCustoms vs Indian Oil Corporation Ltd CITATION : 2025 TAXSCAN (HC) 2294

The Madras High Court determined concerning the interpretation of Section 149 of the Customs Act, 1962, and struck down the three-month time limit prescribed in CBEC Circular No. 36/2010-Cus for conversion of shipping bills, holding it ultra vires the parent statute and violative of Articles 14 and 19(1)(g) of the Constitution. The case arose from Indian Oil Corporation Limited’s (IOCL) request for conversion of 698 shipping bills, of which 104 were rejected by the Commissioner of Customs solely on the basis of the circular-imposed time bar. The High Court affirmed that Section 149 contains no statutory time restriction for such amendments and that delegated legislation cannot curtail a substantive right conferred by the Act.

ThE Madras High Court in an appeal under Section 130 of the Customs Act, where the bench upheld the CESTAT’s order and directed reconsideration of the 104 rejected bills on merits, without applying the circular’s time limitation. With the Department’s appeal dismissed, the Court directed the Original Authority to grant a personal hearing and dispose of the matter within 12 weeks. The Customs Department has since filed a Special Leave Petition, and the issue now awaits final determination before the Supreme Court.

M/S Trimble MobilitySolutions India Private Limited vs State OfUp And 2 Others CITATION : 2025 TAXSCAN (HC) 2295

The Allahabad High Court while examining the legal issue of whether the expiry of an e-way bill amounts to an intention to evade tax under Section 129 of the Central Goods and Services Tax Act, 2017, held that mere lapse of validity does not automatically establish tax evasion. The case concerned M/s Trimble Mobility Solutions India Pvt. Ltd., whose goods were intercepted after the e-way bill expired due to an unforeseen vehicle breakdown during transit. Although fresh e-way bills were generated before the seizure order, the Proper Officer proceeded to seize the goods under Section 129(3), prompting the petitioner to challenge the action as arbitrary and unsupported by any evidence of intent to evade payment of tax.

A single judge bench of Justice Piyush Agarwal ruled that the expiry of an e-way bill, when accompanied by bona fide circumstances such as an admitted mechanical breakdown, cannot justify severe penal action under Section 129. The Court emphasised that the goods were covered by genuine invoices and valid e-way bills at all material times, and that the delay was neither deliberate nor indicative of evasion. Setting aside the seizure and penalty orders, the High Court held that technical lapses must be distinguished from intentional violations, and quashed the orders passed by the authorities as unsustainable in law.

Yesh Arya vs State ofU.P CITATION : 2025 TAXSCAN (HC) 2296

The Allahabad High Court while dealing with issues arising under the GST framework and the broader offence of cyber-enabled financial fraud, examined whether an accused allegedly involved in fraudulent transactions using fake GST registration documents and bank accounts was entitled to bail. The case stemmed from an FIR detailing recovery of multiple mobile phones, ATM cards, cheque books, passbooks and GST registration papers in different names material that the police claimed linked the applicant, Yesh Arya, to a cyber-fraud network operating shell entities and bogus GST transactions. The Court was called upon to assess the seriousness of offences involving misuse of GST documentation, digital financial manipulation, and technological tools, in the context of a bail plea.

A single judge bench of Justice Ashutosh Srivastava rejected the bail application, holding that the evidence including WhatsApp communications, screenshots of cheques, and GST papers seized from the applicant prima facie connected him to the cyber-fraud racket. The Court described cybercrime as a “silent virus” eroding public trust and financial stability, observing that the scale and impact of such offences require strict judicial scrutiny. Noting the rampant rise in phishing, fake transactions and digital financial fraud across the country, the bench concluded that it was not inclined to release the applicant on bail, and accordingly dismissed the application.

M/S Agarwal AromasPrivate Limited vs Union Of India CITATION : 2025 TAXSCAN (HC) 2297

The Allahabad High Court examined the legal issue of whether a taxpayer’s statutory right to appeal under Section 107 of the GST Act can be curtailed due to technical or software-based restrictions on the GSTN portal, particularly when the portal auto-populates the “disputed tax” as Nil. The case arose when M/s Agarwal Aromas Pvt. Ltd. was prevented from filing an appeal against an order passed under Section 74 of the UPGST Act because the GST system displayed an error stating that the “disputed amount cannot be zero.” Since the petitioner had already deposited the disputed tax at the show-cause stage, the portal reflected no outstanding tax, thereby blocking the filing process. The Court held that technological limitations or program design cannot override or restrict statutory appellate rights.

The Division bench of Justice Saumitra Dayal Singh and Justice Indrajeet Shukla held that GSTN’s digital architecture cannot eclipse substantive legal rights and directed the GSTN to modify its software within one month to permit filing of appeals even when the disputed tax appears as Nil. The Judges observed that under the earlier manual system, every appeal had to be accepted at the filing stage, and the shift to an electronic regime does not authorize GSTN to exercise discretion or impose restrictions inconsistent with the Act. The Court also permitted the petitioner to file the appeal manually within two weeks and directed the appellate authority to register and decide it on merits without raising objections regarding limitation or mode of filing.

M/S Vintage Engineers& Consultants Private Limited vs UnionOf India CITATION : 2025 TAXSCAN (HC) 2298

The Allahabad High Court examined the legal issue of whether an amount deposited “under protest” during investigation can be treated as compliance with the mandatory pre-deposit requirement under Section 107(6) of the GST Act, 2017 for filing an appeal. The dispute arose when M/s Wintage Engineers & Consultants Pvt. Ltd., which had deposited ₹31,95,976 under protest through DRC-03 as IGST refund on export transactions, later faced an adverse order under Section 74 of the CGST Act. Its statutory appeal was dismissed on the ground that the assessee had not made the mandatory 10% pre-deposit. The petitioner contended that the earlier unadjusted protest deposit ought to have been appropriated toward the pre-deposit condition, a claim supported by judicial precedent.

A single judge bench of Justice Piyush Agrawal held that any amount deposited under protest can indeed be adjusted toward the statutory pre-deposit required for entertaining an appeal under Section 107(6). The Court observed that a protest deposit made prior to adjudication cannot be ignored when it remains unadjusted. Setting aside the orders of the appellate authority, the Court remanded the matter with directions to accept the protest deposit toward the pre-deposit requirement, decide the appeal on merits, and permit the petitioner to make up any shortfall within 15 days if necessary.

Dhiraj Nath Gupta vsUnion of India CITATION : 2025 TAXSCAN (HC) 2299

The Allahabad High Court examined whether an accused charged under Sections 132(1)(c), (f) and (h) of the GST Act, 2017 for allegedly availing and passing on fake Input Tax Credit (ITC) worth ₹32 crores was entitled to bail once investigation had been completed. The case concerned businessman Dhiraj Nath Gupta, who had been in judicial custody since June 22, 2025. The allegations were based entirely on documentary and electronic evidence, and the applicant argued that the offences were triable by a Magistrate, carried a maximum sentence of five years, and that continued custody was unwarranted after the filing of the complaint. The High Court was required to determine whether pre-trial detention served any further purpose under the statutory framework governing GST offences.

A single judge bench of Justice Sameer Jain granted bail after noting that the investigation was complete, the charge sheet had been filed, and the nature of evidence did not justify further incarceration. The Court held that in economic offences based on documents, prolonged custody is ordinarily unnecessary once investigation concludes. Observing that the applicant had already spent four months in custody and that the trial would take considerable time, the Court ruled that no exceptional circumstances existed to deny bail and directed his release on furnishing a personal bond and two sureties, subject to standard conditions.

Chhatar Pal Sharma vsUnion of India CITATION : 2025 TAXSCAN (HC) 2300

The Allahabad High Court examined the question of bail in a prosecution under Section 132(1) of the GST Act, 2017, arising from allegations that the applicant, Chhatar Pal Sharma, had formed multiple shell companies and fraudulently availed and passed on fake Input Tax Credit (ITC) exceeding ₹185 crore. With the investigation complete, the complaint filed, and the trial still at its nascent stage, the Court was required to determine whether pre-trial incarceration was necessary within the statutory framework governing economic offences under GST law.

A single judge bench of Justice Sameer Jain granted bail, reiterating the fundamental principle that “bail is a rule and bail rejection is an exception,” and noting that an accused remains presumed innocent until proven guilty. The Court emphasized that prolonged custody of nearly one year in this case cannot be justified when the trial has not progressed and the maximum punishment is limited. Holding that economic offences do not automatically mandate denial of bail, the Court directed the applicant’s release upon furnishing a personal bond and two sureties, subject to standard conditions relating to appearance, non-tampering, and good conduct.