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

M/s Monolith ResortsPrivateLimited vs The Commissioner, State Tax CITATION : 2025 TAXSCAN (HC) 2201

The Uttarakhand High Court addressed the legal issue concerning the mandatory requirement of offering a personal hearing under Section 75(4) of the Goods and Services Tax Act, 2017, after the assessee submits a reply to a show-cause notice. The petition filed by M/s Monolith Resorts Private Limited challenged an assessment order passed without adherence to the statutory safeguards ensuring a fair opportunity of defense in GST adjudication.

A Single Bench led by Chief Justice G. Narendar applied its earlier ruling in M/s Modine Thermal Systems Pvt. Ltd. v. State of Uttarakhand (2025), reaffirming that scheduling a personal hearing prior to the submission of the reply defeats the statutory intent and violates principles of natural justice. The Court set aside the impugned order and remanded the matter to the authorities to recommence proceedings afresh from the stage of notice issuance.

PR. COMMISSIONER OFINCOME TAX-7 vs THAPAR HOMES PVT. LTD. CITATION : 2025 TAXSCAN (HC) 2202

The Delhi High Court examined the legal issue concerning the validity of penalty proceedings under Section 271E of the Income Tax Act, 1961, and specifically the computation of limitation under Section 275(1)(c). The case stemmed from Assessment Year 2009-10, where Thapar Homes Pvt. Ltd. challenged a penalty order imposed for alleged violation of Section 269T relating to repayment of loans or deposits otherwise than by account payee instruments. The core contention involved whether the statutory limitation begins from the Assessing Officer’s initiation of penalty proceedings in the assessment order or the later notice issued by the Additional Commissioner of Income Tax (ACIT).

A Division Bench comprising Justice V. Kameswar Rao and Justice Vinod Kumar reaffirmed its earlier ruling in Pr. CIT (Central-II) v. Thapar Homes Ltd. (2023) and upheld the findings of both the CIT(A) and the ITAT, holding that the penalty order passed on 30 December 2011 was time-barred. The Court ruled that the limitation period commenced from 31 December 2010, the date when the AO recorded satisfaction for initiating penalty proceedings, and not from the ACIT’s subsequent action. Emphasizing that the Revenue cannot artificially extend limitation at its convenience, the appeal filed by the department was dismissed.

M/S MICROSOFTCORPORATION(INDIA) PRIVATE LTD vs COMMISSIONER OF CUSTOMS (IMPORT) CITATION : 2025 TAXSCAN (HC) 2203

The Delhi High Court addressed the legal issue concerning whether officers of the Directorate of Revenue Intelligence (DRI) qualify as “proper officers” under Section 28 of the Customs Act, 1962, in connection with customs duty recovery proceedings. The matter arose from appeals filed by Microsoft Corporation (India) Pvt. Ltd. challenging the CESTAT’s remand orders, which had deferred adjudication pending the Supreme Court’s decision in Union of India v. Mangli Impex Ltd. The assessee also sought condonation of delay in filing the appeals under Section 130 of the Customs Act.

A Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain relied on the Supreme Court's rulings in Canon India Pvt. Ltd. v. Commissioner of Customs (2021) to hold that the issue of jurisdiction of DRI officers stands conclusively settled in their favour. The Court set aside the CESTAT’s orders and restored Microsoft India’s appeals to their original numbers for adjudication on the merits, with delay condoned on the condition of depositing ₹10,000 per appeal with the Delhi High Court Bar Association Natural Calamities Relief Fund. The High Court thus reaffirmed that DRI officers are proper officers under Section 28, enabling further proceedings before the Tribunal.

TPG SOFTWARE PVT LTD vsDEPUTY COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 2204

The Delhi High Court examined the legal issue of inadequate reasoning in transfer pricing adjudication under the Income Tax Act, 1961, particularly concerning the determination of comparables under the Transactional Net Margin Method (TNMM) for software development service providers. The dispute pertained to Assessment Year 2014-15 in the case of TPG Software Pvt. Ltd., where the Assessing Officer had completed assessment under Section 143(3) read with Section 144C(13) after making a reference to the Transfer Pricing Officer (TPO), resulting in an upward adjustment to the Arm’s Length Price.

A Division Bench comprising Justice Vibhu Bakhru and Justice Tejas Karia held that the Income Tax Appellate Tribunal (ITAT) failed to provide cogent reasons while upholding the inclusion of certain entities as comparables, despite the assessee’s objections based on Functional Asset Risk (FAR) differences. Noting that judicial scrutiny requires a reasoned order, the Court set aside the impugned ITAT order and remanded the matter for fresh adjudication on merits in accordance with law.

OFFICIAL LIQUIDATOROFAESCULAPIUS REMEDIES LTD. vs PUNJAB NATIONAL BANK CITATION : 2025 TAXSCAN (HC) 2205

The High Court of Gujarat adjudicated a matter concerning the distribution of funds to unsecured creditors during the liquidation of Aesculapius Remedies Limited, addressing compliance with Section 530 of the Companies Act, 1956. The issue before the Court related to whether the Official Liquidator could undertake final settlement of admitted unsecured creditor dues from the available funds, following verification of claims submitted pursuant to the winding-up order.

A Single Bench of Justice Mauna M. Bhatt permitted the Official Liquidator to disburse ₹90,00,000 among unsecured creditors Punjab National Bank and Gujarat Industrial Investment Corporation Limited in proportion to their admitted claims, subject to undertakings for refund if required upon future reconciliation. The Court further authorized the encashment of fixed deposits to facilitate the settlement and disposed of the liquidation report accordingly.

Pimpri ChinchwadMunicipal Corporation vs The Income Tax Officer CITATION : 2025 TAXSCAN (HC) 2206

The Bombay High Court dealt with the issue of applicability of Tax Deducted at Source (TDS) under Section 194LA of the Income Tax Act, 1961, in cases where compensation for land acquisition is granted in the form of Transferable Development Rights (TDR) instead of monetary payment. The writ petition was filed by Pimpri Chinchwad Municipal Corporation challenging the orders passed under Sections 201 and 201(1A), along with the related demand notice under Section 156 and penalty proceedings under Section 274 read with Section 271C, contending that Section 194LA applies only to monetary consideration and not to compensation issued in kind.

The Division Bench comprising Justice Amit S. Jamsandekar and Justice B.P. Colabawalla observed that the interpretation of the phrase “or by any other mode” in Section 194LA raised an arguable legal issue and held, prima facie, that issuance of TDRs in lieu of compensation did not attract TDS under the said provision. Accordingly, the Court stayed the impugned demand and penalty orders, issued Rule, and granted time to the Income Tax Department to file its reply, thereby remanding the matter for further adjudication.

PRINCIPAL COMMISSIONEROF INCOMETAX vs M/S. ZULU MERCHANDISE PRIVATE LIMITED CITATION : 2025 TAXSCAN (HC) 2207

The Calcutta High Court addressed the legality of set-off of losses arising from alleged penny-stock share trading transactions under the Income Tax Act, 1961. The issue pertained to whether the assessee, M/s Zulu Merchandise Private Limited, could legitimately set off a loss of ₹51,33,870 incurred in trading shares of Radford Global Limited and Shreenath Commercial against other income, despite the Assessing Officer having found such transactions to be sham and part of a circular trading scheme to generate bogus losses. The matter involved scrutiny proceedings under Sections 143(2) and 142(1) of the Act and the consequent disallowance upheld by the National Faceless Appeal Centre, Delhi.

The Division Bench comprising Chief Justice T.S. Sivaganam and Justice Chaitali Chatterjee held that the Income Tax Appellate Tribunal (ITAT), Kolkata committed a legal error by allowing the assessee’s claim without independently evaluating the factual findings recorded by the AO and appellate authority. Observing that the Tribunal merely relied on another case without establishing factual similarity or addressing the detailed reasoning on sham transactions, the Court set aside the ITAT’s order and restored the assessment. The Bench also rejected the assessee’s objection regarding low tax effect, holding that the case fell within the CBDT circular exception applicable to organised tax evasion.

DELHI MAHARASHTRIYAEDUCATIONALvs COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 2208

The Delhi High Court dealt with the issue of whether a charitable trust could be denied exemption under Sections 11 and 12 of the Income Tax Act, 1961 merely due to a minor delay in filing the mandatory audit report in Form 10B. The dispute arose when Delhi Maharashtriya Educational and Cultural Society, despite filing its return on time for Assessment Year 2018-19, was denied the benefit of exemption because its auditor submitted the Form 10B report 16 days late, leading to an adverse intimation under Section 143(1) and subsequent tax demand. The Commissioner of Income Tax (Exemptions) rejected the trust’s application for condonation under Section 119(2)(b), holding that the delay could not be justified.

A Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar held that a short, bona fide delay caused by an inadvertent mistake of a professional advisor could not deprive a charitable trust of substantive tax benefits intended under the Act. Emphasizing that Section 119(2)(b) exists to prevent genuine hardship, the Court found the Commissioner’s refusal to condone the delay unjustifiable and set aside the impugned order dated June 14, 2024. The High Court directed the Commissioner to reconsider and pass a fresh order on the condonation application within eight weeks, ensuring that the trust’s exemption claim is adjudicated in accordance with law.

COMMISSIONER OF INCOMETAXINTERNATIONAL TAXATION vs HYUNDAI ROTEM COMPANY CITATION : 2025 TAXSCAN (HC) 2209

The Delhi High Court adjudicated a limitation issue under Section 144C(13) of the Income Tax Act, 1961, concerning the validity of a final assessment order passed against Hyundai Rotem Company for Assessment Year 2018-19. The central question was whether the limitation period for passing the final assessment order should commence from the date the Dispute Resolution Panel (DRP) directions were uploaded on the ITBA portal, or from the date the Assessing Officer claimed to have physically received them. The Commissioner of Income Tax (International Taxation) challenged the Income Tax Appellate Tribunal’s finding that the order was time-barred.

A Division Bench comprising Justice V. Kameswar Rao and Justice Vinod Kumar upheld the ITAT’s ruling, holding that once DRP directions are uploaded on the portal with a valid Document Identification Number (DIN), they are deemed to be received for the purpose of computing limitation under Section 144C(13). Relying on its earlier decision in Louis Dreyfus Company India Pvt. Ltd., the Court concluded that the assessment order passed on July 1, 2022, was beyond the statutory deadline of June 30, 2022, making it invalid. Consequently, the Revenue’s appeal was dismissed as no substantial question of law arose for consideration.

Ved Prakash Yadav vsDirectorateOf Enforcement CITATION : 2025 TAXSCAN (HC) 2210

The Rajasthan High Court addressed the legal issue of whether prior sanction under Section 218 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), is necessary before prosecuting a public servant for offenses under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 (PMLA). The petitioner, Ved Prakash Yadav, challenged the cognizance order of the Special Judge (PMLA) on the ground that the alleged possession of ₹2.31 crore in unaccounted cash and a gold bar worth ₹61 lakh fell within his capacity as a public servant and thus required mandatory sanction before prosecution.

A Single Bench of Justice Anoop Kumar Dhand rejected the plea, holding that the alleged act of hoarding unaccounted wealth could not be considered an act performed in the discharge of official duties. Accordingly, the Court ruled that the protection under Section 218 of the BNSS did not apply and no prior sanction was required for initiating PMLA prosecution. Finding no merit in the petition, the Court dismissed it and clarified that its observations were limited to adjudicating the present petition, leaving all legal defenses open to be raised during trial.

M/s.JSR Infra ProjectsPvt.Ltdvs The Tax Recovery Officer CITATION : 2025 TAXSCAN (HC) 2211

The Madras High Court dealt with the legal issue concerning the continuance of property attachment under the Income Tax Act, 1961, after the assessee has succeeded before appellate authorities and no tax dues remain outstanding. The dispute arose under proceedings initiated pursuant to a search under Section 153A, followed by an attachment order dated 15.07.2022. The petitioner-assessee, JSR Infra Projects Pvt. Ltd., argued that once the Income Tax Appellate Tribunal (ITAT) confirmed the order of the Commissioner of Income Tax (Appeals) deleting the additions, and all demands stood paid, the attachment could not legally subsist.

A Single Bench of Justice Krishnan Ramasamy held that once the ITAT’s order being the final fact-finding authority attains finality in respect of factual determinations and tax liability stands wiped out, the Department is bound to lift the attachment. The Court reiterated that no further recovery could continue in such circumstances. Accordingly, the Court directed the Tax Recovery Officer to release the attached property within four weeks, allowing the writ petition without costs.

VIKAS KUMAR SIKARIA vsUNION OFINDIA CITATION : 2025 TAXSCAN (HC) 2212

The Delhi High Court addressed writ petitions filed under Article 226 of the Constitution seeking transfer of investigation into an alleged franchise scam involving Westland Trade Pvt. Ltd. to the Central Bureau of Investigation (CBI), the Enforcement Directorate (ED) under the Prevention of Money Laundering Act, 2002, and the Serious Fraud Investigation Office (SFIO) under Sections 210-213 of the Companies Act, 2013. The petitioners alleged large-scale diversion of investor funds and regulatory collusion, arguing that central agencies must intervene for a fair and comprehensive probe into the fraud spanning multiple states.

The Single Bench of Justice Neena Bansal Krishna dismissed the petitions, holding that no part of the cause of action arose in Delhi and that the Allahabad High Court was the appropriate jurisdictional forum. Taking note of the ongoing coordinated investigation by the Noida Police SIT and the ED, along with arrests, recoveries, and filing of charge sheets, the Court applied the principles laid down in Sakiri Vasu v. State of U.P. (2008) and CPDR v. State of West Bengal (2010), reiterating that transfer of investigation to the CBI is warranted only in rare and exceptional cases. As no investigative lapse or extraordinary circumstance was demonstrated, the Court declined to issue directions to the CBI, SFIO, or ED and disposed of all pending applications accordingly.

SHAMINA vs COMMISSIONEROFCUSTOMS CITATION : 2025 TAXSCAN (HC) 2213

The Delhi High Court has quashed an order of absolute confiscation issued by Customs authorities under Sections 111(d), (i), (j), and (m) of the Customs Act, 1962, against petitioner Shamina, holding that personal jewellery worn by passengers cannot be treated as prohibited goods under the Baggage Rules, 2016. The case concerned four gold bangles weighing 100 grams that Shamina, an Indian citizen, wore as personal effects upon arrival at the Indira Gandhi International Airport, New Delhi, after travelling from Riyadh.

The Division Bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta found the confiscation order illegal for denying the petitioner a personal hearing and for improperly classifying the jewellery as non-personal items merely due to high purity. The Court directed the Customs Department to release the gold bangles within four weeks, subject to payment of applicable warehousing charges.

SHREE RADHE VALLABHTRADERS VsCOMMISSIONER CENTRAL GOODS AND SERVICE TAX, DELHI EASTCOMMISSIONERATE" CITATION : 2025 TAXSCAN (HC) 2214

The Delhi High Court adjudicated a writ petition concerning the denial of refund of Integrated Goods and Services Tax (IGST) under the provisions of the Central Goods and Services Tax Act, 2017. The petitioner-assessee, Shree Radhe Vallabh Traders, claimed refund entitlement of ₹1.19 crore on export transactions but failed to disclose the material fact that its GST registration had been cancelled with retrospective effect from 13 July 2018. The matter revolved around whether refund could be granted when the assessee’s GST registration itself had been annulled, and whether suppression of such crucial information impacted the maintainability of the petition.

A Division Bench of Justice Prathiba M. Singh and Justice Shail Jain dismissed the writ petition, holding that the concealment of registration cancellation rendered the petition not maintainable. The Court observed that since the petitioner stood classified as a risky exporter and was found non-existent upon physical verification, no IGST refund could be processed. The petition was rejected with costs of ₹25,000 payable to the Delhi High Court Bar Association, while granting liberty to the petitioner to seek restoration of GST registration before pursuing any refund claim.

KBS INDUSTRIES LTD& ANR. vsTHE CUSTOMS CENTRAL EXCISE AND SERVICE TAX SETTLEMENT COMMISSIONPRINCIPALBENCH NEW DELHI & ORS. CITATION : 2025 TAXSCAN (HC) 2215

The Delhi High Court examined the legality of Notification No. 18/2015-Cus dated April 1, 2015, issued under Section 25(1) of the Customs Act, 1962, prescribing a 15% interest liability on customs duties where exporters fail to fulfil their export obligations under the Advance Authorisation Scheme (AAS). The issue emerged from imports made by KBS Industries Ltd., which had availed duty-free imports of copper and copper alloy products against Advance Authorisations but did not meet the requisite export obligations, triggering proceedings for recovery of customs duty along with interest and penalty. A key question before the Court was whether the imposition of such interest applied even to components like CVD and SAD under the Customs Tariff Act was legally sustainable and within the power conferred upon the Central Government under Section 25(1).

A Division Bench of Justice Vibhu Bakhru and Justice Swarana Kanta Sharma upheld the validity of the notification and the order passed by the Settlement Commission under Section 127C(5), holding that the interest condition was an intrinsic component of the conditional exemption and not an arbitrary levy. The Court distinguished the Bombay High Court ruling in Mahindra & Mahindra Ltd., noting that the present case concerned the breach of a statutory condition attached to the exemption, whereas the cited precedent dealt with misdeclaration of value. Concluding that the petitioner, having voluntarily availed the benefit of duty-free imports, was bound by the condition to pay duty with interest upon default, the Court dismissed the writ petition and sustained the 15% interest liability.

AMEETA GOYAL vs THEASSESSMENTUNIT OF INCOME TAX & ORS CITATION : 2025 TAXSCAN (HC) 2216

The Delhi High Court has terminated the reassessment proceedings for Assessment Year (AY) 2013–14, ruling them to be barred by limitation under Section 153(2) of the Income Tax Act, 1961. The matter arose from a challenge filed by the petitioner, Ameeta Goyal, against the show-cause notice and the continuation of reassessment proceedings despite a prolonged judicial stay.

A Division Bench of Justice Vibhu Bakhru and Justice Tejas Karia held that the Revenue could not invoke Section 153(6) in the absence of any judicial directive mandating reassessment. Referring to the proviso to Explanation 1 under Section 153, the Court noted that since the interim stay on reassessment proceedings had ceased on 13 December 2023, the Assessing Officer was required to complete the proceedings within the remaining 60 days i.e., by 11 February 2024. As no reassessment order was passed within this time frame, the proceedings stood time-barred. While allowing the petition, the Court also clarified that the petitioner was entitled to seek a refund of excess tax paid for consideration by the authorities in accordance with law.

M/s. Glen IndustriesPrivateLimited & Anr vs The Deputy Director Directorate General ofGSTIntelligence & Ors. CITATION : 2025 TAXSCAN (HC) 2217

The Calcutta High Court has stayed a refund recovery order of ₹1.96 crore issued under Rule 96(10) of the CGST Rules, 2017, after noting that the provision had been omitted from the statute book with effect from 8 October 2024, without any saving clause. The writ petition was filed by Glen Industries Private Limited, a manufacturer and trader of plastic containers, challenging the confirmation of alleged wrongful IGST refund recovery under Section 74 of the CGST Act.

A single bench of Justice Raja Basu Chowdhury accepted the petitioner’s prima facie case, observing that Rule 96(10) no longer existed in law at the time the final demand order dated 30 January 2025 was passed, thereby depriving the authority of jurisdiction. The Court rejected the Revenue’s contention that the proceedings were valid merely because they were initiated before the omission. Relying on judicial precedent, the Court held that all actions under the omitted rule must cease as of the omission date. Consequently, the operation of the impugned demand order was stayed, with directions for filing affidavits within set timelines before listing the matter for further hearing.

NARENDER KUMAR vsDIRECTORATEGENERAL OF GST INTELLIGENCE CITATION : 2025 TAXSCAN (HC) 2218

The Delhi High Court dealt with the issue of continued judicial custody in an alleged ₹11.5 crore fake Input Tax Credit (ITC) fraud registered under Section 132(1)(b) and (c) of the CGST Act, 2017, which criminalises fraudulent availment or utilisation of ITC involving more than ₹5 crore. The accused, Nrendra Kumar, had been arrested on allegations of issuing invoices without actual supply of goods and causing loss to the revenue. He sought regular bail under Section 483 of the BNSS read with Section 439 CrPC.

A single bench of Justice Neena Bansal Krishna granted bail, holding that once the complaint is filed and investigation concludes, custodial interrogation serves no further purpose in offences predominantly supported by documentary records. The Court reiterated that bail is the rule and jail the exception, especially in economic offences tried by a Magistrate where the accused has cooperated, has no criminal antecedents, and poses no flight risk. The Court therefore directed release of the applicant on personal bond and surety, subject to conditions ensuring cooperation with trial and non-tampering of evidence.

NITISH KHARBANDA vsCOMMISSIONEROF CUSTOMS CITATION : 2025 TAXSCAN (HC) 2219

The Delhi High Court examined the legality of detention of a passenger’s gold jewellery seized by Customs authorities at the Indira Gandhi International Airport, New Delhi, under Section 124 of the Customs Act, 1962, holding that the absence of a Show Cause Notice and denial of a personal hearing rendered the continued detention violative of principles of natural justice. The petitioner, Nitish Kharbanda, had arrived from abroad on 19 March 2024 carrying a gold kada (100 grams) and gold chain (75 grams), which were intercepted and detained by Customs without initiation of any due adjudicatory process.

A Division Bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta set aside the detention after finding that no SCN had been issued, no personal hearing afforded, and no Order-in-Original passed even after several months of seizure, despite the Court’s earlier rulings in Amit Kumar and Qamar Jahan mandating adherence to procedural safeguards. Holding the prolonged detention as unsustainable, the Court directed Customs to release the seized jewellery within four weeks, subject to applicable warehousing charges.

Tivoli Investment &TradingCo. Pvt. Ltd. vs The Assistant Commissioner of Income-tax CITATION : 2025 TAXSCAN (HC) 2220

The Bombay High Court, while adjudicating the issue of determining Annual Letting Value (ALV) under Section 23(1)(a) of the Income Tax Act, 1961, has clarified that notional interest on interest-free security deposits cannot be included while computing rental income for taxation. The dispute arose from the assessment of Tivoli Investment & Trading Co. Pvt. Ltd., wherein the Assessing Officer had enhanced the ALV based on market rent comparables for commercial property located at Nariman Point, Mumbai, despite the assessee declaring a significantly lower rental value supported by a large security deposit.

A Division Bench comprising Justice Alok Aradhe and Justice Sandeep V. Marne upheld the ALV determined by the tax authorities at ₹22 lakh and dismissed the appeals filed by the assessee. The Court affirmed that the Assessing Officer was justified in adopting comparable market rents where the municipal valuation was outdated and did not reflect prevailing rental conditions, while simultaneously reiterating that notional interest on security deposits cannot form part of ALV. The substantial question of law was thus answered in favour of the Revenue.

GAMELOFT SOFTWAREPRIVATELIMITED vs ASSISTANT COMMISSIONER OF CENTRAL TAX CITATION : 2025 TAXSCAN (HC) 2221

The Delhi High Court adjudicated a dispute concerning delayed IGST refund claims, specifically examining the statutory requirement under Rule 90(2) of the CGST Rules, 2017 that a deficiency memo must be issued within 15 days of filing a refund application. The case involved Gameloft Software Pvt. Ltd., which sought a refund of ₹1.87 crore for excess IGST paid, and challenged the belated deficiency memo and resultant delay in processing the refund, also invoking Section 56 of the CGST Act, 2017 relating to interest on delayed refunds.

A Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain held that a deficiency memo issued beyond the 15 day limit is invalid, and the refund application must be treated as duly filed on its original date. Emphasizing that undue delays impact taxpayers’ liquidity, the Court directed the Department to grant a hearing on 10 November 2025 and decide the refund claims within one month thereafter, in accordance with law.

Raman Kumar ChaurasiavsDirectorate General of GST Intelligence CITATION : 2025 TAXSCAN (HC) 2222

The Punjab and Haryana High Court has addressed the legal issue pertaining to grant of bail in cases involving alleged GST fraud under the Central Goods and Services Tax (CGST) Act, 2017. The case concerned offences registered under Section 132(1) of the CGST Act relating to generation of fake invoices and fraudulent Input Tax Credit (ITC) claims amounting to over ₹12 crore through the creation of 41 fictitious entities. The petitioners, who had been arrested on 15 May 2025 by the Directorate General of GST Intelligence (DGGI), Ludhiana, sought relief on the grounds that the alleged offences were documentary in nature and their continued detention was unwarranted.

The bench of Justice Manisha Batra, who granted the petitioners regular bail after noting that they had spent over five months in custody and the investigation was already complete. The Court reiterated that “bail is the rule and jail is the exception,” particularly when there is minimal risk of evidence tampering. The Bench imposed strict conditions for release submission of passports, non-disposal of assets, non-interference with prosecution witnesses, and continued cooperation with the trial while cautioning that violation of any term will result in immediate cancellation of bail.

PROLAY DEY SARKAR vsTHE STATEOF ASSAM CITATION : 2025 TAXSCAN (HC) 2223

The Gauhati High Court examined the legality of an adjudication order issued under Section 73(1) of the Assam Goods and Services Tax Act, 2017, specifically addressing the requirement of a valid show cause notice (SCN) before initiating proceedings for determination of short-paid tax. The petitioner, Prolay Dey Sarkar, a small trader running M/s Maa Laxmi Enterprise in Goalpara, Assam, argued that while he received a summary of show cause notice in Form GST DRC-01, no detailed SCN stating the factual or legal grounds of tax demand was ever served upon him, violating Section 73 read with Rule 142(1)(a) of the AGST Rules and the principles of natural justice.

The bench of Justice Manish Choudhury, relying on an earlier coordinate bench ruling dated 26 September 2024, held that Form DRC-01 cannot substitute a proper SCN, rendering the impugned order dated 18 April 2024 unsustainable in law. The Court set aside the adjudication order passed by the Assistant Commissioner of State Tax, Goalpara, and permitted the authorities to initiate de novo proceedings in strict compliance with Section 73 requirements including issuance of a detailed SCN and opportunity of hearing under Section 75(4). The Bench also directed that the limitation period be computed by excluding the duration between the earlier summary notice and this judgment.

Faiz Wahab vs TheIncome Tax Officer CITATION : 2025 TAXSCAN (HC) 2224

The Madras High Court dealt with the issue of coercive recovery of income tax demand arising from an assessment made under Section 147 read with Section 144 of the Income Tax Act, 1961, where the refund of property advance was treated as unexplained income. The petitioner, Faiz Wahab, challenged the assessment order dated 26 February 2024 and the consequential penalty proceedings initiated under Sections 271AAC(1) and 272(1)(d), contending that the refunded amount could not be classified as unexplained income since it originated from a failed real estate transaction backed by a favourable RERA order.

The Bench of Justice C. Saravanan granted interim relief by staying recovery proceedings for a period of 90 days to allow the petitioner to pursue the statutory appellate remedy effectively. The Court directed that the stay would remain operative subject to the petitioner filing an application under Section 220(6) seeking suspension of demand before the Commissioner (Appeals), and clarified that any failure to do so would permit the Revenue to resume recovery action in accordance with law.

Subrata Mondal vs Unionof India & Ors. CITATION : 2025 TAXSCAN (HC) 2225

The Calcutta High Court examined the legality of a bank account attachment imposed during recovery of service tax dues assessed under Section 73(1) of the Finance Act, 1994, read with Section 174(2)(e) of the CGST Act, 2017. The petitioner, Subrata Mondal, had challenged the order-in-original dated 28 February 2024 and sought relief from the attachment on his Punjab National Bank account, while expressing willingness to clear the adjudicated liability in installments.

Justice Raja Basu Chowdhury permitted conditional installment payments by directing an upfront deposit of ₹10 lakh within three weeks and allowing the remaining dues to be discharged in eight equal monthly installments. Subject to verification of the initial deposit, the bank account attachment was ordered to be lifted, with ₹10 lakh retained as security, and the appellate authority was instructed to decide the pending appeal on merits. The writ petition was accordingly disposed of.

DHANJIT KUMAR PATHAK vsTHE UNION OF INDIA CITATION : 2025 TAXSCAN (HC) 2226

The Gauhati High Court addressed the issue of violation of natural justice in a service tax proceeding initiated under Section 73(2) of the Finance Act, 1994. The petitioner, Dhanjit Kumar Pathak, challenged the levy of demand, interest, and penalties under Sections 77(1)(c) and 78(1) on the ground that the Order-in-Original confirming a demand of ₹16,37,501 for FY 2016-17 was passed without proper service of a show-cause notice, depriving him of an opportunity to respond.

A single judge Bench of Justice N. Unni Krishnan Nair set aside the Order-in-Original after finding that the department failed to produce any material proof of service of the alleged notice dated 22 October 2021. The matter was remanded to the adjudicating authority with a direction to serve the show-cause notice with due acknowledgment, allow 15 days’ time for filing a reply, and thereafter pass a fresh order in accordance with law.

AARTI MANGLA AGGARWALvs COMMISSIONER OF CUSTOMS NEW DELHI CITATION : 2025 TAXSCAN (HC) 2227

The Delhi High Court examined whether gold chains carried by passengers returning from abroad qualify as “personal effects” under the Customs Act, 1962, so as to be exempt from declaration and customs duty. The case arose under Section 110 of the Customs Act after seven gold chains weighing 455 grams were seized from five Indian nationals returning from Dubai at IGI Airport, New Delhi. The Petitioners contended that the ornaments were part of their personal belongings and that the Show Cause Notices were time-barred; however, the Court noted that passengers are obligated to declare dutiable goods upon arrival, particularly when such gold items are purchased abroad and not meant for regular daily use.

A Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain upheld the validity of the seizure and confirmed that the SCNs had been issued within the permissible limitation period, as evidenced from the dispatch register. Holding that identical gold chains purchased in Dubai cannot be treated as exempt personal effects, the Court ruled that the Petitioners were liable to pay applicable customs duty. The petitions were disposed of with directions to the Customs Department to provide a hearing and complete adjudication after considering the Petitioners’ willingness to pay duty in accordance with law.

JMD LIGHTENING ANDCABLE CO vsTHE ADDITIONAL COMMISSIONER DELHI CITATION : 2025 TAXSCAN (HC) 2228

The Delhi High Court adjudicated upon the legality of a GST demand order issued under the Central Goods and Services Tax Act, 2017, wherein a tax and penalty liability of ₹80.92 crore was imposed on JMD Lightening & Cable Co. The primary issue before the Court concerned the disallowance of Input Tax Credit (ITC) for alleged non-payment to suppliers within 180 days, as provided under GST law, and whether the adjudicating authority failed to consider crucial financial records, including credit ledgers and ITC deposits, already furnished by the taxpayer prior to the issuance of the show cause notice.

A Division Bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta observed that the adjudicating authority’s failure to consider ledgers submitted for FY 2018-19 to FY 2022-23 and the petitioner’s claim of ₹32 lakh already deposited as ITC vitiated the basis of the demand determination. Holding that such non-consideration of relevant material violated principles of natural justice, the Court set aside the Order-in-Original and remanded the matter for fresh adjudication. The petitioner was directed to file a comprehensive reply within 30 days, and the authority was instructed to grant a personal hearing before passing a fresh order in accordance with law.

COURTS ON ITS OWNMOTION IN CITATION : 2025 TAXSCAN (HC) 2229

The Delhi High Court addressed the legal issue of debarring law students from examinations solely on grounds of attendance shortage, particularly in institutions regulated by the University Grants Commission (UGC) and Bar Council of India (BCI). The Court emphasised the need for a reassessment of attendance-related regulations to ensure they do not adversely impact students’ mental well-being or educational access, especially in cases involving genuine personal or medical difficulties.

The Bench of Justice Prathiba M. Singh, which held that rigid attendance enforcement without considering individual circumstances can be harsh and inconsistent with the fundamental objectives of education. The Court directed the UGC to conduct a comprehensive review of its mandatory attendance requirements and similarly instructed the BCI to examine its regulations for law colleges. It also underscored the necessity for effective student grievance redressal mechanisms and mental-health support systems within educational institutions.

G.D.R Cylinders PrivateLimitedvs Borra Bhanu Vardhan Reddy CITATION : 2025 TAXSCAN (HC) 2230

The Andhra Pradesh High Court examined the legality of GST recovery proceedings initiated under Section 79(c) of the CGST Act, where tax dues of MM Cylinders Pvt. Ltd. were wrongly recovered from individuals and entities associated with GDR Cylinders Pvt. Ltd. The petitioners argued that they had no connection with the defaulting company and challenged the unlawful adjustment of Input Tax Credit (ITC) and freezing of personal bank accounts, which resulted in severe hardship, including disruption to the second petitioner’s overseas academic plans.

The Division Bench comprising Justice Harinath N and Dr. Justice Y. Lakshmana Rao, which noted that the petitioners were unrelated to the taxable entity named in the recovery order. Observing that such coercive recovery was unauthorised, the Court granted interim relief, staying the bank recovery notice and directing the re-credit of Rs. 12.55 lakh to the second petitioner and Rs. 3.92 lakh to the ex-director within seven working days. The Bench further required the respondents to file a counter before proceeding with the ITC recovery of Rs. 14.57 lakh, highlighting that GST enforcement must correctly identify the liable entity to avoid undue prejudice.

PR. COMMISSIONER OFINCOME TAX(CENTRAL)-2 vs R B FARMS AND ESTATES PVT. LTD CITATION : 2025 TAXSCAN (HC) 2231

The Delhi High Court examined the issue of whether unsecured loans already disclosed and taxed in proceedings before the Income Tax Settlement Commission could again be assessed as unexplained cash credits under Section 68 of the Income Tax Act, 1961. The case arose from additions made during the assessment of R B Farms and Estates Private Limited for AY 2015-16, where the Assessing Officer treated ₹10.96 crores introduced through group entities as bogus loan entries, despite the underlying funds having been declared as undisclosed income and taxed during settlement proceedings.

A Division Bench of Justice Vibhu Bakhru and Justice Tejas Karia upheld the concurrent findings of the CIT(A) and the ITAT that the same income cannot be subjected to tax twice. The Bench held that the Settlement Commission’s order, which verified the source of funds as application of undisclosed income already brought to tax in the hands of a group company, could not be disregarded. Accordingly, the Court dismissed the Revenue’s appeal, affirming the deletion of the addition under Section 68.

M/S SAKSHI TRADINGCOMPANY vsADDITIONAL COMMISSIONER, APPEAL-I CENTRAL TAX, EAST AND ANR CITATION : 2025 TAXSCAN (HC) 2232

The Delhi High Court addressed the issue of cancellation of GST registration due to the assessee not being found at the registered premises, examining compliance obligations under Section 28 of the Central Goods and Services Tax (CGST) Act, 2017 read with Rule 19 of the CGST Rules, 2017 relating to amendment of registration details. The Court dealt with whether the petitioner, Sakshi Trading Company, could seek restoration of its cancelled GST registration after shifting business premises and subsequently furnishing the requisite supporting documents including the rent agreement and proof of existence at the new location.

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain, which directed the concerned authorities to conduct a fresh inspection of the petitioner’s new business premises and thereafter take a decision on restoration of registration within one month of such inspection. The High Court disposed of the petition with the observation that reinstatement of GST registration would depend on verification of documents and confirmation of the petitioner’s operations at the changed address.

PR. COMMISSIONER OF INCOME TAXvs THIRD GENERATION TRADERS PVT. LTD CITATION : 2025 TAXSCAN (HC) 2233

The Delhi High Court examined whether additions toward unexplained cash credits under Section 68 of the Income Tax Act, 1961 and presumed commission income could be sustained against an assessee alleged to be a mere conduit in accommodation entry transactions. The issue revolved around assessments framed under Section 153C for multiple years, where the Revenue claimed that the assessee facilitated routing of funds to ultimate beneficiaries and should be taxed on presumed commission.

A Division Bench of Justice Vibhu Bakhru and Justice Tejas Karia upheld the findings of the CIT(A) and the ITAT that no real taxable income accrued to the assessee, as it functioned solely as a pass-through entity and substantive additions had already been made in the hands of the actual beneficiaries. Holding that protective additions could not survive without evidence of genuine commission earnings, the Court dismissed the Revenue’s appeals in entirety.

FIVEBRO WATER SERVICESPVT LTDvs BIJAY MURMURIA CITATION : 2025 TAXSCAN (HC) 2234

The Gujarat High Court dealt with the issue of whether the National Company Law Tribunal (NCLT) has jurisdiction under Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 to direct a lessee to vacate a property forming part of the liquidation estate of a corporate debtor. The petitioners challenged the NCLT’s order directing them to vacate the corporate debtor’s premises, arguing that disputes concerning possession and rent fall within civil or arbitral jurisdiction and not within the powers of the NCLT under the IBC.

A Single Bench of Justice Niral R. Mehta upheld the NCLT’s jurisdiction and dismissed the writ petition, holding that the dispute clearly arose in relation to liquidation proceedings and that writ jurisdiction under Article 226 of the Constitution of India would not be exercised in favour of parties who engaged in conduct amounting to a fraudulent attempt to defeat insolvency proceedings. Affirming the Liquidator’s authority to recover assets for the liquidation estate, the Court vacated all interim relief and directed the petitioners to pursue the statutory appellate remedy under Section 61 of the IBC before the NCLAT, if so advised.

Tvl. DHANALAKSHMISRINIVASANSUGARS (P) LTD vs The State Tax Officer CITATION : 2025 TAXSCAN (HC) 2235

The Madurai Bench of the Madras High Court examined the legal issue of whether a second assessment order could be issued under the Goods and Services Tax (GST) Act for the same defect and assessment year. The petitioner, Tvl. Dhanalakshmi Srinivasan Sugars (P) Ltd., challenged the assessment order dated 16 May 2025, arguing that an earlier order dated 2 February 2024 for Assessment Year 2021–2022, issued on the ground of delayed filing of GSTR-3B returns, had already addressed and rectified the alleged defect. It was therefore contended that the second order was arbitrary and without jurisdiction.

A Single Bench of Justice G. R. Swaminathan allowed the writ petition and quashed the impugned assessment order, holding that two assessments cannot be passed for the same cause and same assessment year. The Court clarified that once an assessment is completed for a particular defect, any subsequent order for the same reason would amount to duplication and is unsustainable in law.

MOHAMAD JAFAR vs TheDeputy Commissioner of State Tax CITATION : 2025 TAXSCAN (HC) 2236

The Telangana High Court dealt with the legal issue of revocation of cancellation of GST registration under Section 29(2)(c) of the Central Goods and Services Tax Act, 2017, concerning non-filing of GST returns. The petitioner, Mohamad Jafar, challenged the cancellation order dated 5 February 2024, submitting that the alleged non-compliance resulted from a miscommunication between his Chartered Accountant and the State Tax Department, and that the entire tax liability had already been discharged. He sought permission to invoke Rule 23(1) of the CGST Rules, 2017 to apply for revocation of the cancellation.

A Division Bench of Chief Justice Aparesh Kumar Singh and Justice G.M. Mohiuddin allowed the writ petition, granting two weeks’ time to file a detailed revocation application and directing the competent authority to consider and decide it in accordance with law. While the Court refrained from expressing any view on the merits, it noted that the cancellation appeared to stem from inadvertent procedural issues rather than wilful default, and therefore permitted the assessee to pursue revocation of GST registration.

PR. COMMISSIONER OFINCOME TAXvs M/S AGROHA FINCAP LTD CITATION : 2025 TAXSCAN (HC) 2237

The Delhi High Court adjudicated on the legal issue concerning the validity of approval granted under Section 151 of the Income Tax Act, 1961, in the context of reopening assessments under Section 147. The dispute arose from reassessment proceedings initiated against M/s Agroha FinCap Ltd. for Assessment Year 2009-10, wherein the Assessing Officer treated alleged accommodation entries amounting to ₹25,00,000 as unexplained credits under Section 68. The ITAT had previously quashed the reassessment on the ground that the sanction granted by the Principal Commissioner under Section 151 was merely mechanical and thus insufficient in law.

A Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar set aside the ITAT’s order, holding that the approval stating “Yes, I am convinced it is a fit case for re-opening of the assessment” fulfilled the satisfaction requirement prescribed under Section 151. the Court emphasized that the present case reflected a clear application of mind by the competent authority and aligned with the principle laid down in PCIT v. Meenakshi Overseas Pvt. Ltd.. The appeal of the Revenue was accordingly allowed, and the substantial question of law was answered in its favour.

Vedanta Limited vsUnion of India CITATION : 2025 TAXSCAN (HC) 2238

The Bombay High Court (Goa Bench) adjudicated upon the legal issue concerning eligibility for concessional purchase of High Speed Diesel (HSD) against Form-C under Section 8(3)(b) of the Central Sales Tax Act, 1956, post-implementation of the GST regime. The petitions were filed by Vedanta Ltd. and Sesa Mining Corporation Ltd., challenging denial of Form-C for procurement of HSD required for mining activities. Vedanta contended that since HSD remained outside GST’s scope, CST provisions continued to apply, and that the fuel was used for iron ore extraction, processing, and movement, thereby qualifying as “use in mining.”

A Division Bench of Justices Bharati Dangre and Nivedita P. Mehta dismissed the writ petitions and upheld the tax authorities’ decision denying Form-C issuance. The Court held that concessional rate benefits were available only where HSD was used directly in mining and processing operations, and not where substantial quantities were resold to private transporters, falling outside the statutory purpose. Distinguishing Supreme Court precedents cited by Vedanta, the Bench concluded that the company had failed to demonstrate exclusive consumption of HSD for mining machinery and thus was not entitled to the claimed concession.

COMMISSIONER OF DELHIGOODS ANDSERVICE TAX DGST DELHI vs GLOBAL OPPORTUNITIES PRIVATE LIMITED CITATION : 2025 TAXSCAN (HC) 2239

The Delhi High Court dealt with the classification of educational consultancy services under the Integrated Goods and Services Tax Act, 2017, specifically concerning whether such services fall within the scope of “intermediary services’’ under Section 2(13) of the IGST Act or qualify as “export of services’’ eligible for GST refund. The issue arose in petitions filed by the Commissioner of DGST challenging the refund granted to Global Opportunities Pvt. Ltd. for the periods between FY 2018-19 and 2021-22, wherein the Department alleged that the consultancy entity acted as an intermediary facilitating admissions for foreign universities and was therefore not entitled to export benefits.

A Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain upheld the Appellate Authority’s decision and ruled that the respondent was not an intermediary, as it directly provided marketing and consultancy services to foreign universities, who were the actual recipients and payors of consideration. The Court confirmed that such services constitute export of services, making the respondent eligible for GST refunds. Accordingly, the petitions were dismissed, and the tax authorities were directed to process and disburse the refund along with statutory interest within two months.

M/S SIDDHI VINAYAKIMPORTERS vs COMMISSIONER OF CUSTOMS CITATION : 2025 TAXSCAN (HC) 2240

The Delhi High Court examined the issue of condonation of delay in filing an appeal before the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) under the Customs Act, 1962, specifically the interpretation of Section 129A(5) which empowers the Tribunal to condone delay upon sufficient cause being shown. The matter arose from a challenge by Siddhi Vinayak Importers, whose request for amendment of Bills of Entry under Section 149 of the Act was rejected, and whose subsequent appeal before the CESTAT was dismissed solely on the ground of a 273 day delay in filing.

A Division Bench comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta observed that there was no gross negligence, deliberate inaction, or lack of bona fides on the part of the appellant, noting the delay resulted from procedural circumstances including a change of counsel.The Court adopted a justice-oriented approach and condoned the delay, subject to payment of ₹50,000 as costs to the Department. The impugned order was set aside, and the appeal was restored before the CESTAT for adjudication on merits.

Mr.Amit Manilal Hariavs The Joint Commissioner of CGST CITATION : 2025 TAXSCAN (HC) 2241

The Bombay High Court dealt with a crucial issue concerning the retrospective applicability of penalties under Section 122(1A) of the Central Goods and Services Tax Act, 2017, in relation to GST liability for periods beginning July 2017. The writ petition, filed by top executives of Shemaroo Entertainment Limited, challenged an Order-in-Original imposing a penalty of approximately ₹133 Crores, alleging wrongful availment of Input Tax Credit and GST short payment. The Petitioners argued that Section 122(1A), which came into effect only from 1 January 2021, could not be retroactively used to penalise actions prior to its enactment and that they were not “taxable persons” capable of retaining benefits contemplated under the statute.

A Division Bench comprising Justice B.P. Colabawalla and Justice Firdosh P. Pooniwalla granted complete ad-interim relief, observing that one of the issues was already covered by the decision in Shantanu Sanjay Hundekari v. Union of India. The Court stayed the ₹133 Crore penalty, quashed its retrospective application for earlier tax periods, and restrained the GST authorities from taking any coercive action against the Shemaroo Directors pending final adjudication. The matter has been posted for further hearing on 10 June 2025, with directions for filing affidavits within specified timelines.

Commissioner of Customsvs M/s.Vedanta Ltd CITATION : 2025 TAXSCAN (HC) 2242

The Orissa High Court examined the legality of withholding interest on excess customs duty retained by the Department for an excessively prolonged period, arising under Section 18 and Section 27A of the Customs Act, 1962. The issue stemmed from a provisional assessment of imported goods, wherein Vedanta Ltd. had deposited duty that was later found to be in excess, but the refund was issued only after 14 years, without any interest. The primary legal question before the Court was whether the Customs Department could deny compensatory interest by relying on statutory technicalities when it had failed to finalize assessment within the mandated time.

A Division Bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman upheld the CESTAT’s order granting interest to Vedanta, holding that the Department’s unexplained delay violated procedural fairness and the Customs Manual’s timelines. The Court ruled that authorities cannot unjustly retain taxpayers’ money for years and then evade liability for compensation. However, modifying the rate awarded by the Tribunal, the Bench directed payment of interest at 6% per annum, as prescribed under Notification No. 75/2003-Customs (N.T.), and dismissed the Department’s appeal.

THE KARNAL COOP. SUGARMILLS LTDvs COMMISSIONER OF INCOME TAX AND ANR CITATION : 2025 TAXSCAN (HC) 2243

The Punjab and Haryana High Court examined the legal issue concerning the levy of interest on delayed payment of tax under Section 220(2) of the Income Tax Act, 1961, specifically whether such interest accrues automatically from the date on which tax becomes due or only upon expiry of the time limit mentioned in the demand notice issued under Section 156. The dispute arose out of a demand raised against The Karnal Cooperative Sugar Mills Ltd., which challenged the imposition of ₹74.68 lakh as interest on the ground that the earlier demand notice had ceased to exist once the assessment order was set aside and tax was refunded pursuant to the first appellate decision.

The Division Bench comprising Justice Jagmohan Bansal and Justice Harpreet Kaur Jeewan, which ruled that the liability to pay interest under Section 220(2) arises only when the assessee defaults in paying the amount specified in a valid and operative demand notice issued under Section 156, and not automatically from the original date of assessment. Rejecting the Revenue’s reliance on a 1982 CBDT circular, the Court held that administrative circulars cannot override statutory provisions or judicial interpretation.

VARIAN MEDICAL SYSTEMSINTERNATIONAL INDIA PVT. LTD vs UNION OF INDIA CITATION : 2025 TAXSCAN (HC) 2244

The Delhi High Court examined the legality of the issuance of a Show Cause Notice (SCN) under the Central Goods and Services Tax Act, 2017, particularly with respect to Section 65 dealing with audit proceedings and adherence to the principles of natural justice. The case concerned Varian Medical Systems International India Pvt. Ltd., which challenged the issuance of the SCN dated 27 November 2024 on the ground that the department had denied reasonable opportunity to respond to the pre-SCN dated 25 November 2024, wherein time was granted to file submissions until 28 November 2024.

A Division Bench of Justice Prathiba M. Singh and Justice Shail Jain held that although the audit report was communicated within the statutory period prescribed under Section 65 of the CGST Act, the issuance of the SCN a day prior to the expiry of the time granted for response amounted to a “complete violation of the principles of natural justice.”

C.H. ROBINSON WORLDWIDEFREIGHTINDIA PRIVATE LIMITED vs ADDITIONAL COMMISSIONER, CGST-DELHI-SOUTH &ORS CITATION : 2025 TAXSCAN (HC) 2245

The Delhi High Court has set aside a Show Cause Notice (SCN) issued to C.H. Robinson Worldwide Freight India Private Limited, holding that it was barred by limitation under Section 73(2) of the Central Goods and Services Tax (CGST) Act, 2017. The Revenue attempted to justify the delayed issuance and service of the SCN dated 31st May 2024 by citing a “technical glitch” that allegedly prevented timely generation of the DRC-01 form. Rejecting this contention, the Court reiterated that the statutory three-month period for providing notice to the assessee before finalising demand is mandatory and not merely procedural.

A Division Bench of Justice Prathiba M. Singh and Justice Shail Jain, relying on the Court’s own ruling in Tata Play Limited, held that administrative or technical issues cannot override legislative intent designed to safeguard the assessee’s right to respond effectively. The Court noted that not only was the SCN served well beyond the permissible timeline on 12th August 2024 but it was also sent to an outdated address.

Dineshwar Saw vs TheState of Jharkhand CITATION : 2025 TAXSCAN (HC) 2246

The Jharkhand High Court examined the legality of arrest proceedings initiated against a GST-registered scrap dealer in a case involving the alleged unlawful possession and sale of iron scrap. The matter arose under Sections 303(2), 317(2), and 317(5) of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023, wherein the petitioner, a legitimate scrap trader holding a valid GST registration, contended that the seized iron scrap was lawfully owned and sold to a registered buyer, thus negating any criminal intent or offence.

A Single Bench of Justice Sanjay Kumar Dwivedi, noting that the petitioner had no criminal antecedents and operated a genuine business, held that custodial interrogation was unnecessary. The Court therefore allowed the application for anticipatory bail, directing the petitioner to surrender before the competent court within three weeks, whereupon he shall be released on bail on furnishing a bond of ₹25,000/- with two sureties of like amount, in compliance with conditions stipulated under Section 482(2) BNSS, 2023.

S. Ashok Kuma vs TheCommissioner of Customs and Central Tax CITATION : 2025 TAXSCAN (HC) 2247

The Telangana High Court dealt with the issue of maintainability of a writ petition in light of the operational status of the Goods and Services Tax Appellate Tribunal (GSTAT), and addressed the legal question concerning pre-deposit requirements under Section 112(8) of the CGST Act, 2017, as amended by the Finance Act, 2025. The petitioner, aggrieved by the penalty confirmed under the CGST Act, sought adjustment of tax paid during investigation (via Form GST DRC-03) toward the mandatory pre-deposit of 10% of the penalty, applicable when an appeal concerns penalty alone without any tax demand.

A Division Bench comprising Chief Justice Aparesh Kumar Singh and Justice G.M. Mohiuddin disposed of the writ petition, directing the petitioner to avail the statutory appellate remedy before the GSTAT, now functional and governed by the notified timelines under Rule 123 of the GST Appellate Tribunal (Procedure) Rules, 2025. The Court rejected the request to adjust DRC-03 payments against the penalty pre-deposit, agreeing with the Revenue that tax paid during investigation cannot be offset toward penalty liability.

Faiz Ahmed vs The Stateof AP CITATION : 2025 TAXSCAN (HC) 2248

The Gauhati High Court addressed a case concerning alleged large-scale GST fraud involving fake GST registrations, forged judicial seals, and fraudulent documents, leading to wrongful availment of Input Tax Credit (ITC) under the GST regime. The matter related to offences registered under Sections 120B, 420, 467, 468, 471, 473 and 474 of the Indian Penal Code, involving fake invoices of over ₹658 crores and potential ITC fraud of ₹99.31 crores. The petitioner, Faiz Ahmed, a small businessman, sought anticipatory bail asserting that he had no direct role in the creation or operation of the fictitious firm involved in the scam.

A Single Bench of Justice Kardak Ete, after noting that the principal accused had already been granted bail and finding no evidence establishing Ahmed’s direct involvement in the forgery or fraudulent GST activities, made the earlier interim bail order absolute. The Court observed that the applicant had cooperated with the investigation and that his interactions with the main accused were limited to repayment of a personal loan. Concluding that custodial interrogation was unnecessary and his role appeared only peripheral, the High Court granted pre-arrest bail to the applicant.

Commissioner of Customs(Preventive), Bhubaneswar vs M/s. S.M. Niriyat Pvt. Ltd. CITATION : 2025 TAXSCAN (HC) 2249

The Orissa High Court adjudicated upon the legal issue of whether the iron (Fe) content in iron ore fines (IOF) for the purpose of customs duty assessment under the Customs Act, 1962 should be computed on the basis of Wet Metric Ton (WMT) or Dry Metric Ton (DMT). The Customs Department alleged evasion of duty by exporters through misdeclaration of Fe content and classification of cargo into different categories below and above 58% iron content. However, the High Court confirmed that Fe content for duty purposes must be determined based on WMT, which aligns with prevailing industry practice and earlier legal precedents.

A Division Bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman upheld the findings of the CESTAT, Kolkata, which had set aside the penalties imposed on M/s S.M. Niriyat Pvt. Ltd. and its directors. Relying on its previous decision in Commissioner of Customs (Preventive) v. Chamong Tee Exports Pvt. Ltd. (2025), the Court held that the department failed to produce any new evidence or substantial question of law to warrant interference under Section 130 of the Act. Accordingly, the High Court dismissed the department’s appeal and affirmed the Tribunal’s ruling favouring the exporter.

Modi Rubber Limited vsUnion Of India CITATION : 2025 TAXSCAN (HC) 2250

The Allahabad High Court dealt with the legal issue concerning the validity and limitation of a show cause notice issued under Section 11A of the Central Excise Act, 1944, seeking to reopen a dispute regarding the utilisation of Additional Excise Duty (AED) credit for payment of Basic Excise Duty (BED) under the MODVAT scheme. The Court examined whether the 2021 notice, issued decades after the original dispute (1993-1998 transactions), could lawfully revive a matter already adjudicated and finalized under the earlier Rule 57F(12) of the Central Excise Rules governing MODVAT.

A Division Bench comprising Justice Saumitra Dayal Singh and Justice Indrajeet Shukla held that the 2021 show cause notice issued by the Commissioner of Central Excise was both jurisdictionally defective and hopelessly time-barred, noting that the issue had attained finality with the CEGAT’s 2000 decision, subsequently affirmed by the High Court in 2016. Accordingly, the Court quashed the notice, ruling that the authorities could not invoke CENVAT provisions to re-agitate a settled MODVAT dispute after an unjustified delay of over 16 years.