Annual Tax & Corporate Law Digest 2025: Complete High Court Cases [Part III]

S.10A of IBC Doesn’t Bar CIRP Applications Where Default Continues Beyond Moratorium Period: Madras HC

Dharamshi K.Patel vs Indian Bank CITATION: 2025 TAXSCAN (HC) 201

According to the Madras High Court, situations in which the default persists after the moratorium term is not covered by the proviso to Section 10-A of the Insolvency and Bankruptcy Code (IBC), 2016. According to the court, Section 10-A merely places a temporary hold on the start of the Corporate Insolvency Resolution Process (CIRP).

While dismissing the appeal, the court held that there was no extraordinary circumstance warranting the Court to entertain a writ petition when there is an alternative remedy.

Paying Penalty for Willful Delay in Filing ITR does not Exempt Taxpayer from Prosecution: Karnataka HC

RAJKUMAR AGARWAL S/O RAGHULAL AGARWAL vs INCOME TAXDEPARTMENT CITATION: 2025 TAXSCAN (HC) 202

In a recent ruling, the Karnataka High Court ruled that merely paying a penalty for delayed filing of Income Tax Returns (ITR) does not exempt a taxpayer from criminal prosecution under Section 276CC of the Income Tax Act.

A bench led by Justice S. Vishwajith Shetty observed that delayed ITR filings, even if later accepted with penalties, do not exempt taxpayers from prosecution under Section 276CC of the Income Tax Act. The court held that the burden of proof lies on the taxpayer to rebut the presumption of guilt under Section 278E by presenting evidence before the trial court.

Recording of satisfaction u/s 271E insufficient for Income Tax Penalty proceedings u/s 271D: Rajasthan HC

Sunil Agrawal Son Of Ghanshyam Agarwal VS AssistantCommissioner Of Income Tax CITATION: 2025 TAXSCAN (HC) 203

In a recent decision, the High Court of Rajasthan has held that recording of satisfaction by DCIT under Section 271E of the Income Tax Act is insufficient for the initiation and imposition of proceedings and penalty under Section 271D of the Income Tax Act by Assessing Officers (AO).

It was thus noted that the issue involved in the present writ petition is squarely covered by the decision of the Supreme Court in Jai Laxmi Rice Mills (supra) and the notice issued under Section 271E and the proceedings in pursuance thereto are quashed, thereby allowing the assessee’s writ petitions.

Kerala HC Quashes Time-Barred Income Tax Penalty u/s 271B

M/S. VEE ESS HARDWARES vs ASSISTANT COMMISSIONER OF INCOMETAX CITATION: 2025 TAXSCAN (HC) 204

In the latest judgment that has been passed by the High Court of Kerala, the income tax order imposed a penalty under section 271 B of the Income Tax Act, 1961 as it was time-barred.

The bench allowed the writ petition and held that the penalty order is time-barred under Section 275(1)(c) and is invalid. The judgement was passed by Justice Bechu Kurian Thomas.

Madras HC directs Payment of 10% Disputed Tax and Reverification on ITC Mismatch between GSTR-3B and GSTR-2A

The Nilgiri Dairy Farm P.Limited vs The AssessmentCommissioner (ST) CITATION: 2025 TAXSCAN (HC) 205

In a recent ruling regarding mismatch in the claim of Input Tax Credit (ITC) as per Form GSTR-3B and the auto-populated GSTR-2A, the Madras High Court directed the Petitioner to pay 10% of the disputed tax amount while passing an order for re-adjudication by the tax authorities on the basis of new material.

The Madras High Court Bench presided over by Justice Mohammed Shaffiq set aside the impugned order and the consequential demand order while directing the Petitioner to deposit 10% of the disputed taxes along with other compliance measures, the fulfilment of which shall grant the Petitioner another opportunity to submit their objections towards the Respondent who shall pass a fresh order on the basis of any supporting documents or material that are to be produced by the Petitioner.

Fees Paid by Law Firm to use Name & Goodwill of Founder is Business Expense, Deductible u/s 37 of Income Tax Act: Delhi HC rules in Favour of Remfry & Sagar

PR. COMMISSIONER OF INCOME TAX -21 VS M/S.REMFRY &SAGAR CITATION: 2025 TAXSCAN (HC) 206

In a recent case, the Delhi High Court has held that the fees paid by IPR law firm Remfry & Sagar to acquire the goodwill of the founder is a business expense and are deductible under Section 37 of the Income Tax Act, 1961.

The primary purpose of referring to the total billing of the law firm was to provide a firm, definite and fixed basis to compute the consideration liable to be paid for use of goodwill.

Delhi High Court quashes GST Show Cause Notices Against Electricity Regulatory Commissions

CENTRAL ELECTRICITY REGULATORY COMMISSION vs THE ADDITIONAL DIRECTOR DIRECTORATE GENERAL OF GST INTELLIGENCE CITATION: 2025 TAXSCAN (HC) 207

In a significant ruling, the Delhi High Court has quashed the show cause notices (SCNs) issued to the Central Electricity Regulatory Commission (CERC) and the Delhi Electricity Regulatory Commission (DERC), holding that their regulatory functions do not constitute a taxable service under the Goods and Services Tax (GST) regime.

The judgment, delivered by a division bench comprising Justice Yashwant Varma and Justice Dharmesh Sharma, categorically stated that the statutory functions discharged by these commissions, including tariff regulation and licensing, cannot be equated with commercial activities that fall under the purview of GST.

GST on Royalty paid by Quarry Lessor Contracting with State Government: Gujarat HC stays Coercive Action

RAINBOW INFRASTRUCTURE vs UNION OF INDIA CITATION: 2025 TAXSCAN (HC) 209

The Gujarat High Court recently issued directives to the Revenue Department to refrain from undertaking all forms of coercive action in a dispute regarding the payability of Goods and Services Tax (GST) on royalties paid by an entity who had entered into a contract with the State Government for the lease of a mining quarry.

Granting temporary relief to the Petitioner, Rainbow Infrastructure, the Division Bench of the Gujarat High Court ordered that no coercive action may be taken by the Respondent Governmental Departments while the present petition remains pending before the High Court. The matter was posted to be heard at a later time alongside the similar matters.

No Mandate to approach GST Appellate Authority before Invoking Revisionary Provisions: Allahabad HC

M/S Buddha Resorts Private Limited vs Chief CommissionerOf Goods And Services Tax CITATION: 2025 TAXSCAN (HC) 210

The Allahabad High Court recently affirmed that the provisions under the Goods and Service Tax (GST) regime does not require a Petitioner aggrieved by an order of an adjudicatory body to first approach the appellate authority before seeking to invoke the revisionary provisions under the Act.

Consequently, the Allahabad High Court proceeded to restore the matter before the Revisional Authority for fresh adjudication in terms of the present decision.

Madras HC sets aside ITC VAT Order u/s Section 19(5)(c) of TNVAT Act observing Pendency of Supreme Court Decision

Tvl.Elgi Equipments Limited vs Assistant Commissioner CITATION: 2025 TAXSCAN (HC) 211

The Madras High Court recently set aside an Order passed by the Respondent Assistant Commissioner (State Taxes) rejecting the claim of Input Tax Credit (ITC) under Section 19(5)(c) of the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act), citing the pendency of a Supreme Court decision on a similar matter.

Observing precedence, the present Writ Petition was dismissed by the High Court averring that the impugned order cannot be sustained insofar as it invokes Section 19(5)(c) of the TNVAT Act, 2006, while keeping the door open for the Revenue to pursue the matter following the decision of the Supreme Court.

Vehicle Supplier unaware of GST Proceedings: Madras HC directs Re-assessment subject to payment of 25% Disputed Taxes

Tvl.Jainsons Castors and Industrial Products vs TheAssistant Commissioner (ST) CITATION: 2025 TAXSCAN (HC) 212

The Madras High Court recently granted relief to a supplier of purpose-built automotive vehicles, realizing their right to avail reassessment following their failure to participate in assessment proceedings due to not being aware of the initiation of such proceedings undertaken by the Revenue Department.

The Single-Judge Bench of Justice Mohammed Shaffiq observed the submissions and directed the Petitioner to pay 25% of the disputed taxes to be paid so as to provide them another opportunity of presenting their case, and objections if any, within four weeks from receiving a copy of the present order. Issuing a note of warning to the Petitioner, the Single-Judge advised that any failure to abide by the conditions set by the High Court would result in the restoration of the impugned Assessment Orde

Income Tax Department Cannot Recover Tax Arrears from Properties Auctioned Under KGST Act: Kerala HC

JOB G.OOMMEN vs UNION OF INDIA CITATION: 2025 TAXSCAN (HC) 213

The Kerala High Court ruled that the Income Tax Department cannot recover tax arrears from properties that were auctioned under the Kerala General Sales Tax (KGST) Act.

A Single Bench of Judge Harisankar V.Menon also referred to previous rulings, including one from the Supreme Court, which stated that the Income Tax Department doesn’t get priority over other claims unless clearly stated in law. The Court ultimately ruled that the Income Tax Department could not take any action against the properties and dismissed their claims.

Kerala High Court upholds Settlement Commission’s decision on Undisclosed Income

THOMAS PHILIP vs INTERIM BOARD FOR SETTLEMENT CITATION: 2025 TAXSCAN (HC) 214

The Kerala High Court has dismissed an appeal by businessman Thomas Philip against the Income Tax Interim Board for Settlement-II. The court ruled that loans availed by Philip from his companies should be treated as deemed dividend under Section 2(22)(e) of the Income Tax Act, 1961. It held that these transactions qualified as undisclosed income for tax purposes.

The Kerala High Court ruled that settlement orders are final and cannot be easily challenged in court. Loans from closely held companies to major shareholders can be taxed as dividends under Section 2(22)(e) of the Income Tax Act. In conclusion, the writ appeal was dismissed.

Madras HC slams Chennai Customs for Seizing Sri Lankan Bride’s Gold Thaali (mangalsutra)

Thanushika vs The Principal Commissioner of Customs CITATION: 2025 TAXSCAN (HC) 215

In a recent ruling, the Madras High Court criticized the Chennai Customs Department for unlawfully seizing gold jewelry from a Sri Lankan citizen, including her Thaalikodi ( mangalsutra ), and directed the customs authorities to return the jewelry. The court ordered an inquiry into the misconduct of the seizing officer and explained that worn jewelry does not qualify as baggage under customs laws.

The court quashed the confiscation order and directed the immediate return of the seized gold within seven days. The court ordered an inquiry against the customs officer, S. Mythili, and directed the Principal Chief Commissioner of Customs ( Tamil Nadu & Puducherry ) to take disciplinary action. The matter was also referred to the Department of Personnel & Training (IRS-Customs) for further investigation.

Income Tax Appeal Filed with Delay cannot be Disposed of Without considering Delay Petition: Kerala HC [Read Order]

MUHAMMED NETTIPARAMBIL BADHUSHA vs THE INCOME TAX OFFICER CITATION : 2025 TAXSCAN (HC) 216

The Kerala High Court has held that an income tax appeal filed with delay cannot be disposed of without first deciding the delay condonation petition, and that coercive recovery proceedings must be kept in abeyance until the stay petition is decided. The ruling came in a case where the petitioner, Muhammed Nettiparambil Badusha, challenged an assessment order for AY 2019–20 by filing an appeal with a delay of 105 days, along with applications seeking condonation of delay and stay of recovery.

Justice Bechu Kurian Thomas directed the appellate authority to decide the delay condonation petition within one month, and if the delay is condoned, to consider the stay petition within the same time frame and dispose of the appeal within two months thereafter. The Court further ordered that no coercive steps be taken pursuant to the assessment order until a decision is rendered on the stay petition, granting interim protection to the assessee.

Delhi HC directs Customs, GST Department, DRI and DGGI to Properly Instruct Counsel Appearing on Advance Service

M/S VISHAL VIDEO AND APPLIANCES PVT LTD vs COMMISSIONER OF CUSTOMS AC CITATION: 2025 TAXSCAN (HC) 217

The Delhi High Court has directed the Customs Department, the Central GST Department, the Directorate of Revenue Intelligence (DRI), and the Directorate of General GST Intelligence (DGGI) to make sure that counsel representing them on advance service are instructed properly.

Following this, the Customs Department, appearing in the matter, furnished a list of specific email addresses to which advance copies are to be served. The Court then directed its Registry to ensure that whenever cases relating to Customs and GST are filed before the Court, the advance copies are served at the relevant email addresses as mentioned in the list.

Complete Compliance is necessary under Direct Tax Vivad se Vishwas Scheme: Kerala HC

MAHALI ASSANAR AZEEZ vs THE INCOME TAX OFFICER CITATION: 2025 TAXSCAN (HC) 218

In a recent case, the Kerala High Court has observed that mere attempted compliance is not sufficient , but actual compliance is necessary under Direct Tax Vivad se Vishwas scheme and held that if the petitioner has, by now, remitted the full amount required to be remitted by the petitioner in terms of the provisions of the Direct Tax Vivad se Vishwas Act, 2020, the liability of the petitioner will be treated as settled.

A single bench of Justice Gopinath P while allowing the writ petition directed that if the petitioner has, by now, remitted the full amount required to be remitted by the petitioner in terms of the provisions of the Direct Tax Vivad se Vishwas Act, 2020, the liability of the petitioner for tax, penalty and interest for the assessment year 2009-2010 will be treated as settled and the petitioner will be eligible for all benefits under the Direct Tax Vivad se Vishwas Act, 2020.F

Court Cannot Condone Delay in Filing of Appeal Beyond Timeline u/s 107(1) and 107(4) CGST Act: Delhi HC

M/S ADDICHEM SPECIALITY LLP vs SPECIAL COMMISSIONER I CITATION: 2025 TAXSCAN (HC) 219

In a recent ruling, the Delhi High Court ruled that the statutory timeline for filing an appeal, as provided under Section 107(1) and the additional one-month condonable period under Section 107(4), is absolute and cannot be extended.

The court held that the appeals were filed beyond the prescribed limitation period, so the Appellate Authority was correct in rejecting them. The court also held that the High Court’s extraordinary jurisdiction under Article 226 could not be used to extend statutory time limits and that strict adherence to tax laws is necessary to maintain compliance and administrative efficiency.

“Personal Effects” u/s 2(vi) of Baggage Rules cannot exclude Personal Jewelry or Ornaments: Delhi HC

ANJALI PANDEY vs UNION OF INDIA AND ORS CITATION: 2025 TAXSCAN (HC) 220

The Delhi High Court recently noted that 3 gold bangles would have been worn by the petitioner as a part of her personal effects, and there was no requirement to declare the same.

The judgement was concluded by Justice Prathiba M Singh and Justice Dharmesh Sharma by directing the Customs to follow this decision in all cases where jewellery is seized or detained from tourists of either Indian or foreign origin

Delhi HC Upholds ITAT Order Allowing Deduction of Goodwill License Fee u/s 37

PR. COMMISSIONER OF INCOME TAX -21 vs M/S.REMFRY &SAGAR CITATION: 2025 TAXSCAN (HC) 221

The Delhi High Court has upheld an order by the Income Tax Appellate Tribunal (ITAT) allowing the deduction of a license fee paid for the use of goodwill under Section 37 of the Income Tax Act, 1961.

The Delhi High Court, comprising Justice Yashwant Varma and Justice Ravinder Dudeja, dismissed the Revenue’s appeals, upholding the ITAT’s decision to allow the deduction of the license fee under Section 37 of the Income Tax Act.

Kerala HC sets aside Direction to Pay 20% Assessed Income Tax Considering the stay applications/condonation of delay applications

THE CENTRE FOR MANAGEMENT DEVELOPMENT vs THE COMMISSIONER OF INCOME-TAX (EXEMPTIONS) CITATION: 2025 TAXSCAN (HC) 222

The High Court of Kerala sets aside the direction to pay the 20% assessed Income Tax as the assessee made stay applications/condonation of delay applications. While upholding the direction to the 1st respondent to dispose of the series of applications within a prescribed time, the court modified the latter part of the judgment of the Single Judge and directed that the 5th respondent shall consider the stay applications/delay condonation applications preferred by the appellant,

The recovery of the amounts confirmed against the appellant by the 6 assessment orders impugned in the appeals before the 5th respondent, shall be kept in abeyance till such time as orders are passed by the 5th respondent in the delay condonation applications/stay applications referred above.

Failure to Give Opportunity of Hearing: Kerala HC Sets Aside Income Tax Order Against Kerala Minerals & Metals

KERALA MINERALS AND METALS LIMITED vs THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX CITATION: 2025 TAXSCAN (HC) 223

In a recent case, the Kerala High Court set aside the income tax order against Kerala Minerals and Metals as the department failed to give the opportunity of a hearing while passing the order.

In such circumstances, the court found that the impugned orders have been issued in violation of the principles of natural justice, entitling the petitioner to invoke the jurisdiction under Article 226 of the Constitution of India. The bench set aside the orders and the 3rd respondent Appellate Authority shall hear the matter afresh and pass appropriate orders in accordance with law, after granting an opportunity of hearing to the petitioner, as expeditiously as possible.

Mere Absence of GSTN in Supplier Certificate Not Sufficient to Deny ITC Claim: Allahabad HC

M/S Bhagwan Das Agrahari VS State Of U.P. And 2 Others CITATION: 2025 TAXSCAN (HC) 224

In a recent ruling, the Allahabad High Court ruled that the absence of GSTN in a supplier’s certificate alone is not a valid ground for denying the Input Tax Credit ( ITC ) and directed the tax authorities to reconsider the petitioner’s claim.

The court set aside the impugned orders and remanded the matter to the original authority for fresh adjudication. The court directed the tax department to consider all submitted materials and issue a reasoned and speaking order within three months. The court also clarified that any amount deposited by the petitioner would be subject to the final decision of the tax department. The writ petition was allowed.

Delay in Issuing Requisition u/s 132A: Delhi HC Upholds Validity and Links Seized Cash to Undisclosed Income

GAUTAM THADANI vs DIRECTOR INCOME TAX (INVESTIGATION) AND ANR CITATION: 2025 TAXSCAN (HC) 225

In the recent ruling,the High Court of Delhi,upheld the validity of the requisition under Section 132A of Income Tax Act,1961 and linked the seized ₹98,00,000 to undisclosed income, finding the assessee’s explanation about the cash unconvincing.

The two member bench comprising Vibhu Bakhru(Additional Chief Justice) and Swarana Kanta Sharma(Judge) found the petitioner’s explanations unconvincing and upheld the requisition, agreeing with the Income Tax Authorities that the cash was linked to undisclosed income. To Read the full text of the Order CLICK HERE

Delhi HC upholds Constitutionality of S. 132 Companies and NFRA Rules in Challenge by CA Firms, quashes SCNs

DELOITTE HASKINS & SELLS LLP vs UNION OF INDIA &ANR CITATION: 2025 TAXSCAN (HC) 226

The Delhi High Court recently rejected a challenge to the constitutional validity of Section 132(4) of the Companies Act, 2013, and Rules 3, 8, 10, and 11 of the National Financial Reporting Authority ( NFRA ) Rules, 2018.

In result, the Delhi High Court upheld the constitutional validity of Section 132(4) and the NFRA Rules while emphasizing the importance of procedural fairness and the separation of functions within regulatory bodies.

Cross-Examination not Absolute Right in Customs Cases, But Necessary for Fair Trial in Certain Circumstances: Delhi HC [Read Order]

SUSHIL AGGARWAL vs PRINCIPAL COMMISSIONER OF CUSTOMS CITATION : 2025 TAXSCAN (HC) 227

The Delhi High Court has held that while cross-examination is not an absolute right in customs adjudication, it becomes mandatory when statements of co-accused form the primary basis for imposing penalties. While CESTAT upheld the penalty against Aggarwal, it granted relief to Aidasani on the ground that the department had failed to comply with Section 138B of the Customs Act while relying on a co-accused’s statement.

A Division Bench of Justice Prathiba M. Singh and Justice Dharmesh Sharma reconciled earlier Supreme Court rulings, observing that although cross-examination may be dispensed with in certain cases, denial of the same violates natural justice when the statement of a co-accused is the sole or substantive basis for penalties. The Court directed the Customs Department to permit cross-examination of the key witness in respect of both assessees before re-adjudication, waived the pre-deposit requirement, and disposed of the appeals accordingly.

No Entry Tax on Diesel Captive Generating Sets: Karnataka HC

M/S MANGALORE CHEMICAL AND FERTILIZERS LIMITED vs THE STATE OF KARNATAKA CITATION: 2025 TAXSCAN (HC) 228

The Karnataka High Court has held that Diesel Captive Generating Sets are exempt from tax under Section 11-A of the Karnataka Tax on Entry of Goods Act, 1979 r/w the provisions of Karnataka Value Added Tax, 2003.

Therefore, the question of law (b) & (c) are answered in favour of the Assessee and against the Revenue to the net effect that Diesel Captive Generating Sets are exempt from tax under Section 11-A of the Karnataka Tax on Entry of Goods Act, 1979 r/w the provisions of Karnataka Value Added Tax, 2003.

Karnataka HC Quashes Penalty for Non-Deduction of TDS on Professional Advice

THE COMMISSIONER OF INCOME TAX vs M/S JINDAL TRACTEBELPOWER CO. LTD CITATION: 2025 TAXSCAN (HC) 229

The Karnataka High Court has quashed the penalty for non-deduction of TDS on professional advice.

The court determined that the Chairman of the Advance Ruling Authority did not handle the regular assessee’s application for an advance ruling on September 11, 1997, for personal reasons. Another consideration is the potential benefit to the respondent of not deducting the tax at source. Since all of these are unquestionably valid reasons for not modifying TDS, orders that are in line with them are immune from challenge.

Orissa HC Restores Pending Proceedings on Demand of GST on Suppression and Wilful Misstatement

M/s. Iliyas Granites, Baghajhari, Ganjam vs SuperintendentGST and CE, Berhampur and others CITATION: 2025 TAXSCAN (HC) 230

In a recent case, the High Court of Orissa restored the pending proceedings demand of Goods and Service Tax (GST) on suppression and wilful misstatement.

A division bench of Justice Arindam Sinha, Acting Chief Justice and Justice M.S. Sahoo set aside the impugned order, restoring the proceeding. The petitioner will communicate a certified copy of this order to the opposite party no. I by 10th February, 2025 and obtain a date of hearing. The authority will, on hearing the petitioner, pass a fresh order. The petitioner will not seek unnecessary adjournments. In event the communication is not made, the impugned order will stand automatically restored.

Orissa HC Sets aside Order Passed u/s 74 of CGST due to Jurisdictional Error

Narayanan Pradhan vs Asst. Commissioner, GST and CE CITATION: 2025 TAXSCAN (HC) 231

Mr. Harichandan, advocate appears on behalf of petitioner and submitted that the impugned is show-cause notice dated February, 2024 carrying purported finding of misstatement made by his client, to underpay the tax issued under sub-section (l) in section 74 of Central Goods and Services Tax Act, 2017. The provision was invoked to avail extended period of limitation but there was no allegation of misstatement in the show cause notice.

A jurisdictional error under GST arises when a tax authority initiates proceedings or takes action beyond its legally defined area of authority. If a state GST officer issues a notice for a case under the Central GST jurisdiction, or vice versa. If a lower authority handles a case meant for a higher authority. If an officer from a different state or region issues a notice. When a case related to a regular taxpayer is handled under the composition scheme.

GST Dept fails to consider some Payments made while Passing Adjudication Order passed u/s 74 of GST Act: Orissa HC sets aside Order

Simanchal Achary vs Joint Commissioner of State Tax CITATION: 2025 TAXSCAN (HC) 232

The petitioner, Simanchal Achary, is a works contractor, is challenging the first appellate order passed under section 107 of the Act related to the tax period from July 2017 to March 2018. The petitioner claims that some payments made were not considered in the adjudication order passed under section 74 of the Act as well as appellate order.

A division bench of Justice Arindam Sinha, Acting Chief Justice and Justice M.S. Sahoo directed the respondent, the Joint Commissioner of State Tax (Appeal) and others, to verify whether the claimed payments were indeed not considered by the appellate authority. For the same , the court listed the matter on 25th February, 2025.

ED has no Power to Arrest when Special Court takes Cognizance under PMLA: Patna HC

Ganesh Prasad Singh vs The Union of India CITATION: 2025 TAXSCAN (HC) 233

The Patna High Court has held that the Enforcement Directorate ( ED ) loses the power to arrest when a special court takes cognizance under Prevention of Money Laundering Act ( PMLA ), 2002.

In deciding the anticipatory bail application, the court determined that the ED never felt the need to arrest the petitioner during the course of the investigation and that, once the offense punishable under Section 4 of the PMLA is recognized based on a complaint under Section 44(1)(b) of the PMLA, the ED and its officers are not authorized to use Section 19 of the PMLA to arrest an individual listed as an accused in the complaint.

Relief to Works Contractor Hi-LITE Projects: Kerala HC allows lower tax rate under KVAT Act over Central Sales Tax Act

M/S HI-LITE PROJECTS PVT.LTD vs STATE OF KERALA CITATION: 2025 TAXSCAN (HC) 234

In a significant ruling, the Kerala High Court has provided relief to M/s Hi-Lite Projects Pvt. Ltd., a works contractor, by allowing them to avail a lower tax rate under the Kerala Value Added Tax (KVAT) Act instead of the Central Sales Tax (CST) Act.

Consequently, the Kerala High Court Bench of Justice A K Jayasankaran Nambiar and Justice Easwaran S set aside the tribunal’s order and restored the first appellate authority’s decision, allowing Hi-Lite Projects to avail the lower tax rate.

AO must issue Speaking Orders Against Assessee’s Written Objections: Calcutta HC Upholds ITAT Order

PRINCIPAL COMMISSIONER OF INCOME TAX 13 KOLKATA vs CHAMPALAL OMPRAKASH CITATION: 2025 TAXSCAN (HC) 235

The Calcutta High Court recently affirmed an ITAT ruling that removed an assessee’s income addition of more than ₹4 crore made in a reassessment proceeding under the Income Tax Act, 1961. The Assessing Officer (AO) must give oral directions in response to the assessee’s written objections, the court said.

The assessing officer is then required to provide justifications in a fair amount of time. The Apex Court ruled that the assessee has the right to object to the notice being issued after receiving reasons, and the assessing officer must address the objections by issuing a spoken order.

Income Tax Dept. Cannot Reopen Old Assessments Using Future Amendment Banning Goodwill Depreciation: Gujarat HC [Read Order]

GTPL HATHWAY LIMITED vs DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 2(1)(1) & ANR CITATION : 2025 TAXSCAN (HC) 236

The Gujarat High Court has held that a subsequent amendment disallowing depreciation on goodwill with effect from April 1, 2021 cannot be relied upon to reopen an assessment for an earlier year. The assessee contended that all issues raised in the notice had already been examined during the original scrutiny assessment under Section 143(3) and that no new tangible material existed to justify reopening.

The Division Bench of Justice Bhargav D. Karia and Justice D. N. Ray observed that the reassessment was based solely on existing records and amounted to a mere change of opinion, which is impermissible under law. The Court further noted that the amendment disallowing depreciation on goodwill could not be applied retrospectively to reassess income for FY 2017-18. Accordingly, the High Court quashed the reassessment notice, holding the reopening to be invalid.

Inappropriate Serving of SCN under CGST Act: Calcutta HC Dismisses Petition on Availability of Statutory Remedy

S. N. Tiwari vs The Union of India and Others CITATION: 2025 TAXSCAN (HC) 237

In a recent case, the Calcutta High Court dismissed the writ appeal on availability of statutory remedy against the inappropriate serving of show cause notice (SCN) under the Central Goods and Service Tax (CGST) Act, 2017.

In view of availability of efficacious alternative remedy, the single bench of Justice Saugata Bhattacharyya grants leave to the petitioner to prefer an appeal under section 107 of the said Act of 2017 against the order dated 7th December, 2023 by fortnight from date. If appeal is preferred within the aforesaid time, the appellate authority without raising the issue of limitation shall decide the same on merits in accordance with law by twelve weeks thereafter.

No Restriction on GST Registration to Assessee Belongs to Another State: Andhra Pradesh HC

Tirumala Balaji Marbles And Granites vs The AssistantCommissioner St and Others CITATION: 2025 TAXSCAN (HC) 238

The Andhra Pradesh High Court stated that Goods and Service Tax (GST) registration cannot be refused because the assessee belongs to another state. It was viewed that there does not appear to be any restriction for persons outside the State to come into the State of Andhra Pradesh(AP) and seek registration under the APGST Act, 2017.

While allowing the petition, the bench opined that mere apprehension, however well founded, cannot deprive the assessee of his right to carry on trade and business in the State of Andhra Pradesh. Article 19 of the Constitution of India, grants every citizen of this Country, the right to set up and do business anywhere in the country. In such circumstances, the order of rejection is clearly without any basis in law

No Cancellation of GST Registration on mere Allegation without providing Reasoning to Aggrieved Business: Delhi HC

RASHID PROPRIETOR OF MS ENTERPRISES vs UNION OF INDIA ANDORS CITATION: 2025 TAXSCAN (HC) 239

The Delhi High Court recently quashed an order cancelling the Goods and Services Tax ( GST ) registration of a business observing that such cancellation cannot be effected on mere allegations without providing adequate reasoning and evidence to the aggrieved Business.

In the light of such an event, the Bench set aside the cancellation of GST registration and ordered that the concerned letter be furnished to the Petitioner within four weeks while directing that the Petitioner be given due opportunity for hearing before any order is passed.

GST SCN citing No Business at Premises conflicts with Physical Verification Report: Delhi HC quashes GST Registration Cancellation

RASHID PROPRIETOR OF MS ENTERPRISES vs UNION OF INDIA ANDORS CITATION: 2025 TAXSCAN (HC) 239

The Delhi High Court recently quashed an order cancelling the Goods and Services Tax (GST) registration of a business observing that the allegation of no actual business being conducted at the concerned premises contradicts the findings of the GST Inspector in the physical verification report.

The Bench proceeded to set aside the Order of Cancellation of GST Registration while directing the Revenue to give a reasonable opportunity of hearing to the Petitioner.

Karnataka High Court Remands Case, Grants Accused Final Opportunity to Defend Cheque Bounce Allegations

MR.K S AMEER JAN vs MR.MAQBOOL AHMED CITATION: 2025 TAXSCAN (HC) 240

The Karnataka High Court has set aside the conviction orders in three cheque bounce cases, granting the accused a final opportunity to cross-examine the complainant and present his defense. The court ruled that the principles of natural justice warranted a fresh hearing, provided the accused deposits 50% of the fine amount before the trial court.

In conclusion, the Karnataka High Court upheld the principles of natural justice by granting the accused a final opportunity to present his defense while imposing strict conditions to ensure timely proceedings. The court set aside the lower court’s conviction orders and directed the accused to deposit 50% of the fine amount before the case could be reheard.

No TDS on Payment to Facebook, Amazon Web-Services for Advertisements: Karnataka HC rules in Favour of Urban Ladder Home Décor

THE COMMISSIONER OF INCOME TAX vs THE ASSISTANT COMMISSIONER OF INCOME TAX CITATION: 2025 TAXSCAN (HC) 241

In a recent case, the Karnataka High Court has upheld the order of Income tax appellate tribunal (ITAT) which was in favour of assessee and held that Tax Deduct at source (TDS) is not applicable on payments made to Facebook, Amazon Web-Services for advertisements.

The payments made to the three non-resident companies mentioned above do not qualify as “royalty” under the DTAA, the court ruled in rejecting the department’s appeal against the ITAT’s ruling.

GST on BOT Model Construction Agreement: Rajasthan HC directs Appeal before Proper Authority in light of Audit Reports and Govt. Circular

CG Tollway Ltd vs The Union Of India CITATION: 2025 TAXSCAN (HC) 242

The Rajasthan High Court recently directed a special purpose vehicle, indulged in the construction of governmental projects under a Build-Operate-Transfer (BOT) agreement to pursue an appeal against the impugned goods and services tax (GST) orders, while directing the adjudicating authority to consider relevant audit reports and a government circular clarifying taxability on toll collection rights under the BOT model.

A division bench of Justice Pushpendra Singh Bhati and Justice Chandra Prakash Shrimali disposed of the writ petitions, directing CG Tollway Ltd. to file an appeal within 15 days. It further instructed the revenue authorities to adjudicate the appeal within three months, considering the CBIC circular and audit reports.

Madras HC Directs to Allow Refund of Wrongly Paid GST under RCM, treating it as supply of “service”

M/s.United Breweries Limited vs The Joint Commissioner ofGST CITATION: 2025 TAXSCAN (HC) 243

In a recent case, the High Court of Madras has directed to allow refund of wrongly paid Goods and service tax ( GST ) under the Reverse Charge Mechanism ( RCM ) treating it as supply of service.

The court directed the 2nd respondent to process the refund claims of the petitioner and refund the amounts paid by the petitioner, strictly in accordance with Section 54 of the respective GST Acts read with Rule 89 of the respective GST rules in the light of the above observations, within a period of 3 months from the date of receipt of a copy of this order.

Cenvat Credit of Service Tax Refund Rejected in GST Regime: Madras HC directs to allow Recredit

M/s.SRC Projects Private Limited vs The AssistantCommissioner of GST and and Central Excise CITATION: 2025 TAXSCAN (HC) 244

In a recent case, the Madras High Court directed to allow recredit Cenvat Credit of service tax refund rejected in the GST regime. The taxpayer could not avail the cenvat credit due to the introduction of GST as the Service Tax paid for the period 2016-17, which was payable under RCM, on 30.12.2017.

A single bench of Justice C. Saravanan found that it is evident that although the petitioner was not entitled to cash refund under Section 142(3) of the CGST Act, 2017, the petitioner is entitled to recredit. While allowing the Writ Petition , the Court directed the respondent to allow the petitioner to take recredit of the amount paid by the petitioner on reverse charge basis belatedly on 30.12.2017 as the Input Tax Credit in its Electronic Credit Ledger.

Relief to BCCI: Bombay HC quashes Revenue Order Prohibiting Income Tax Exemption for Lack of Statutory Power

The Board of Control for Cricket in India vs The AssistantCommissioner of Income Tax CITATION: 2025 TAXSCAN (HC) 245

The Bombay High Court delivered a significant ruling on Tuesday (18 February, 2025), quashing an order by the Commissioner of Income Tax (Exemptions) ( CIT(E) ) which deemed the Board of Control for Cricket in India ( BCCI ) ineligible for tax exemption under Section 12A of the Income Tax Act, 1961; the Bombay High Court observed the lack of statutory power exercisable by the CIT(E) to deny such exemption.

The Bombay High Court proceeded to quash the impugned December 28, 2009 communication while reiterating that the question of BCCI’’s eligibility for income tax exemption or cancellation of registration is one to be determined by the prescribed statutory authorities in the manner prescribed under the statute without being influenced by either the impugned communication of the Revenue or the ITAT order therein.

Power to Arrest under PMLA: Punjab & Haryana HC rejects Bail Citing Prospective Applicability of Pankaj Bansal Verdict

RAVINDER vs STATE OF HARYANA CITATION: 2025 TAXSCAN (HC) 246

The accused was arrested without providing written justification, and the Punjab and Haryana High Court denied him bail, citing the potential applicability of the Supreme Court’s ruling in the Pankaj Bansal case, which held that simply reading out the grounds for arrest would not satisfy the requirements of Article 22(1) of the Constitution and Section 19(1) of the Prevention of Money Laundering Act, which deal with the authority to make arrests.

The petitioner argued that at the time of his detention, he was not informed of the grounds for his arrest. The trial of the current case was not anticipated to be finished anytime soon, and the petitioner was entitled to the concession of bail because he had been detained since February 23, 2022, and only two of the 29 prosecution witnesses had been questioned thus far. The current petition is dismissed because the court determined that the petitioner is not entitled to the concession of bail.

Income Tax Dept or GST dept cannot Retain Cash Seized Prior to Finalisation of Proceedings: Kerala HC [Read Order]

CENTRE C EDTECH PRIVATE LIMITED vs THE INTELLIGENCE OFFICER CITATION :2025 TAXSCAN (HC) 247

The Kerala High Court has held that neither the GST Department nor the Income Tax Department can retain cash illegally seized before the completion of statutory proceedings initiated under their respective laws. The appellants challenged the seizure of cash by State GST Authorities during proceedings under Section 74 of the CGST/SGST Act, contending that the GST authorities had no power to seize cash unless it formed part of stock-in-trade.

A Division Bench of Justices A.K. Jayasankaran Nambiar and Easwaran S held that the initial seizure by the GST Department was without authority of law and therefore illegal, making continued retention of the cash impermissible. The Court directed the Income Tax Department to release the seized amounts within 10 days to the appellants while clarifying that proceedings under Section 74 of the GST law and Sections 132A, 153A and 153C of the Income Tax Act may continue independently in accordance with law after granting an opportunity of hearing.

Karnataka HC Confirms VAT on Set-Top Boxes, Says Providing Them to Customers is Taxable Transfer of Right to Use

M/S ATRIA CONVERGENCE TECHNOLOGIES LTD vs DEPUTY COMMISSIONER OF COMMERCIAL TAX CITATION: 2025 TAXSCAN (HC) 248

In a recent ruling, the Karnataka High Court has upheld the imposition of Value Added Tax ( VAT ) on Set-Top Boxes ( STBs) provided by digital cable service providers, ruling that their supply to subscribers constitutes a “transfer of right to use”, making it a taxable sale under the Karnataka Value Added Tax Act, 2003 ( KVAT Act, 2003 ).

The court also clarified that VAT and Service Tax are not mutually exclusive, explaining that VAT applies to the sale of goods (STBs), whereas Service Tax applies to the broadcasting service. The court upheld the retrospective application of the Karnataka Goods and Services Tax (KGST) Act, 2017, stating that the law preserves tax liabilities under the repealed KVAT Act, allowing tax authorities to continue enforcing VAT demands.

Kerala HC Directs Revenue Authority to Refund Amount Deposited after Setoff Property Tax

M/S.SYNTHETIE INDUSTRIES LTD SYNTHITE VALLEY vs STATE OF KERALA REPRESENTED BY ITS SECRETARY CITATION: 2025 TAXSCAN (HC) 249

The Kerala High Court disposed of the writ petition directing the 2nd respondent to take appropriate steps to refund the amount deposited by the petitioner at the time of preferring the appeal after deducting the amounts due for the respective period as provided in Government orders.

The court disposed of the writ petition directing the 2nd respondent to take appropriate steps to refund the amount deposited by the petitioner at the time of preferring the appeal after deducting the amounts due for the respective period as provided in Government orders. The amounts shall be calculated and disbursed to the petitioner within a period of two months from the date of receipt of a copy of the judgment.

Chhattisgarh HC Refuse to Grant Bail on Offence Committed Under PMLA citing link with Coal Scam

Manish Upadhyay vs State of Chhattisgarh CITATION: 2025 TAXSCAN (HC) 250

The Chhattisgarh High Court refused to grant bail for the accused who was arrested for the offence under the Prevention of Money Laundering Act, 2002 (“the PMLA”) as the prosecution has prima facie established the link between one of the accused in the coal scam. The court found the involvement of the applicant in commission of offence under Sections 7, 7A & 12 of the Prevention of Corruption Act, 1988 ( PC Act), which is an economic offence.

The court found that it is not a fit case where the applicant should be granted regular bail and rejected the instant bail application filed under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023.