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

NFAC Failed to Obey Supreme Court Order while Dismissing Charitable Trust’s Appeal: Patna HC Imposes ₹10k Cost on Income Tax Department

Happy Science BodhgayaIndia vs The Principle Chief Commissioner CITATION : 2025 TAXSCAN (HC) 1243

The Patna HighCourt has set aside the dismissal of an income tax appeal after finding that the National Faceless Appeal Centre (NFAC) had completely ignored the judgments of the Supreme Court and the High Court regarding the limitation period for filing the appeal. The Court also imposed a cost of ₹10,000 on the Income Tax Department for “gross negligence”.

The High Court bench consisting of Justice Rajeev Ranjan Prasad and Justice Ashok Kumar Pandey, in an oral judgement, held that the contention of the department was factually incorrect. The petitioner had filed its limitation plea, referencing both the High Court and Supreme Court orders. The dismissal order was passed without referring to or examining these binding directions.

Assam HC Slams Tax Department for Denying Lawful Refunds under CST Act: Petitioner Wins Battle over VAT Reimbursement

Carbon Resources Pvt.Ltd. vs The State of Assam CITATION : 2025 TAXSCAN (HC) 1244

The Gauhati High Court slams the Assam Taxation Department for wrongfully rejecting the refund claims of Carbon Resources Pvt. Ltd. under Section 15(b) of the Central Sales Tax (CST) Act, 1956. The Court has quashed six identical orders dated 07.11.2022 passed by the Commissioner of Taxes, Assam, terming them legally unsustainable and based on erroneous interpretations of settled tax law.

Justice Manish Choudhury, dismissed every ground cited by the tax department and provided a detailed walkthrough of statutory provisions and case law. The Court held that the mere silence in the original assessments regarding reimbursement cannot be interpreted as rejection. No specific decision or reasons were recorded, hence no finality could be claimed.

Calcutta HC Dismisses Customs Department Appeal in Valuation Dispute with Supreme Petrochem

THE COMMISSIONER OFCUSTOMS vs M/S. SUPREME PETROCHEM LTD CITATION : 2025 TAXSCAN (HC) 1245

The Calcutta High Court has dismissed an appeal filed by the Commissioner of Customs (Port), Kolkata, against Supreme Petrochem Ltd., stating that the matter pertains to the valuation of imported goods, a domain expressly excluded from the High Court’s jurisdiction under Section 130(1) of the Customs Act.

In dismissing the appeal, the Court consisting of Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee (Das) left the Department’s proposed “substantial questions of law” open, making it clear that the ruling does not reflect a judgment on the merits of the Revenue’s claims. The bench also noted that the Department was free to explore “such remedies as may be available to them under the law.” This leaves the door open for the Revenue to consider moving the Supreme Court or seeking alternate statutory recourse, depending on the specific facts and grounds available.

Denial of Personal Hearing: Madras HC Sets aside GST S. 73 and 74 Orders on 10% Pre-deposit instead of Usual 25%

Tvl.Evershine Industriesvs The Assistant Commissioner CITATION : 2025 TAXSCAN (HC) 1246

The Madras High Court has set aside GST ( Goods and Services Tax ) orders issued under Section 73 and 74 of the GST Act without providing proper hearing opportunity on 10% pre-deposit instead of the usual mandatory deposit of 25%.

The bench observed that “Merely passing an ex parte order by fulfilling the empty formalities will not serve any useful purpose and the same will only pave way for multiplicity of litigations, not only wasting the time of the Officer concerned, but also the precious time of the Appellate Authority/Tribunal and this Court as well.”

Payments to Parent Company during Normal Course of Business Cannot Be Treated as Dividend or Advance: Telangana HC

M/s. Prasad FilmLaboratories Pvt. Ltd vs Asst. Commissioner ofIncome Tax CITATION : 2025 TAXSCAN (HC) 1247

The Telangana High Court has held that payments made by a subsidiary company to its parent company in the ordinary course of business cannot be treated as ‘deemed dividend’ or ‘advance’ under Section 2(22)(e) of the Income Tax Act, 1961.’

The Court also took note of CBDT Circular No. 19 of 2017, which clarified that trade advances in the nature of commercial transactions do not attract Section 2(22)(e). It referred to judgments such as CIT vs. Raj Kumar and CIT vs. Creative Dyeing & Printing Pvt. Ltd. and confirmed that payments made to give effect to genuine business activities cannot be deemed dividend.

GST Assessment Order Passed Beyond Limitation Period is Invalid, Even if by One Day: Telangana HC

M/s. Lakshmi BhanuSteel Traders vs The Assistant Commissioner CITATION : 2025 TAXSCAN (HC) 1248

The Telangana High Court ruled that a GST assessment order passed beyond the limitation period is invalid, even if by one day, and must be set aside along with any consequential bank attachment orders.

The division bench comprising Acting Chief Justice Sujoy Paul and Justice Renuka Yara observed that since the limitation period expired on 30.04.2024, the order passed on 01.05.2024 was beyond the statutory time limit. Hence, unsustainable in law. The court held that the GST assessment order dated 01.05.2024 and the consequential bank attachment, if any, must be set aside as the order was passed beyond the limitation period. The writ petition was allowed, with no order as to costs.

DRT not bound by CPC as it has Provision u/s 22 of RDB Act: Madras HC Dismisses Petition against The Central Bank

Nathu K.Patel vs TheRecovery Officer CITATION : 2025 TAXSCAN (HC) 1249

The Madras High Court in a recent case dismissed the petition against the Central bank holding that the Debt Recovery Tribunal (DRT) is not bound by the CPC, as it has a provision under Section 22 of the Recovery of Debts and Bankruptcy Act, 1993( RDB Act).

A division bench of Justice S.M.Subramaniam and Dr.Justice A.D.Maria Clete observed that the prime object of the establishment of Debts Recovery Tribunal is to provide expeditious adjudication of recovery of debts due to banks and financial institutions, therefore, Section 22 of the RDDB & FI Act has clothed the Tribunal with the power to regulate its own procedure guided by the principles of natural justice and is not bound by the procedure laid down by the Code of Civil Procedure.

Ex Parte order demanding GST based on Difference in Turnover from Earlier GST DRC-01A: Calcutta HC directs to provide Opportunity

Hotel Rudra & Anr.vs Deputy Commissioner CITATION : 2025 TAXSCAN (HC) 1250

The Calcutta High Court quashed the ex parte order demanding Goods and Services Tax (GST) based on the difference in turnover from earlier GST DRC-01A and directed the department to provide opportunity of hearing.

A single bench of Justice Smita Das De held that since the matter has been disposed of ex parte without considering the merits of the case, and for the sake of interest of justice and equity the matter should be remanded back to the authority concerned for proper adjudication of the same. The principles of natural justice warrants that a party should have a fair opportunity to present his or her case.

Imposition of Penalty though GST Paid: Madras HC Dismisses Petition and Allows 15 Days to File Appeal Despite Lapse of Limitation

M/s.M R Pro TechPrivate Limited vs The Additional Commissioner CITATION : 2025 TAXSCAN (HC) 1251

The Madurai Bench of the Madras High Court was recently met with a case regarding the imposition of penalty on a petitioner who claimed to have paid the requisite Goods and Services Tax (GST) due.

The bench of JusticeC. Saravanan, observed that there was no merit in the writ petition, especially as the petitioner had not exhausted the statutory remedy within the permitted time and proceeded to dismiss the petition. However, taking into account the petitioner’s request to pursue the alternate remedy by way of appeal, the Court exercised discretion and directed that if the petitioner filed an appeal before the Appellate Commissioner within fifteen days from the date of receipt of the present order and made the required pre-deposit, the appellate authority may entertain the same and adjudicate on merits.

Issuance of Reassessment Notice Under Income Tax Act Beyond Limitation Under TOLA: Gujarat HC Quashes It as Time-Barred

TYRONE PATRICK LEMOS vsTHE DEPUTY COMMISSIONER OF INCOME TAXCIRCLE 2(1)(1) CITATION : 2025 TAXSCAN (HC) 1252

The High Court of Gujarat quashed reassessment notices issued under Section 148 of the Income Tax Act,1961 on the ground that they were time-barred under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act (TOLA).

Justice Bhargav D Karia and Justice Pranav Trivedi observed that the notice dated 30.06.2021 left only one day for issuing a valid notice under Section 148 after giving 14 days to the petitioner to respond, as required by the Supreme Court’s ruling in Ashish Agarwal.

Failure to Follow SOP in Faceless Proceedings for Non-Responsive PAN Holder: Gujarat HC Quashes Income Tax Assessment

HIRABEN PRAGJIBHAI TALAvs ASSISTANT COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 1253

The High Court of Gujarat, quashed an income tax assessment order after finding that the Income Tax Department failed to follow the mandatory Standard Operating Procedure (SOP) in faceless proceedings for a non-responsive Permanent Account Number (PAN) holder

The bench found that this procedure was not followed. The department argued that the petitioner had earlier been unresponsive, so further communication was not required. The Court rejected this argument and held that the SOP made it mandatory to send physical communication if there was no response.

SCN Reply Lacks Supporting Documents Due to Non-availability: Madras HC Sets Aside Order and Remands for Fresh Consideration

M/S.Kasturi vs TheIncome Tax officer CITATION : 2025 TAXSCAN (HC) 1254

The High Court of Madras, set aside the impugned order and remanded the matter for fresh consideration after noting that the petitioner’s reply to the show cause notice lacked supporting documents due to their non-availability.

The bench directed the petitioner to file a detailed reply with documents within three weeks and instructed the respondent to give 14 days’ notice for a personal hearing before passing a fresh order on merits. The writ petition was accordingly disposed of.

Proceedings Cannot be Initiated Against a Company if Resolution Plan Approved u/s 31 by AA: Kerala HC Quashes Order

M/S. HEERA CONSTRUCTIONCOMPANY PVT. LTD. vs UNION OF INDIA CITATION : 2025 TAXSCAN (HC) 1255

The Kerala High Court has set aside a service tax show cause notice and subsequent Order-in-Original holding that proceedings cannot be initiated or continued against a company after a resolution plan is approved under Section 31 of the Insolvency and Bankruptcy Code, 2016 (IBC).

The bench comprising Justice Ziyad Rahman A.A. observed that the approval of the resolution plan on 31.03.2023 extinguished all claims not included in the plan, as per the Ghanashyam Mishra ruling. The court observed that although the show cause notice was issued on 10.10.2019, the Order-in-Original was passed on 19.07.2024, after the resolution plan’s approval. The court also observed that the resolution plan’s approval rendered the proceedings legally unsustainable.

GST SCN Merely Reproduced S. 29(2)(e) Instead of Stating Reason for Registration Cancellation: MP HC sets aside Notice & Order

M/S VIRENDRA SINGHTHAKUR vs THE STATE OF MADHYA PRADESH CITATION : 2025 TAXSCAN (HC) 1256

The Madhya Pradesh High Court has set aside a show cause notice (SCN) and GST registration cancellation orders as it failed to provide specific reasons for the cancellation, merely citing Section 29(2)(e) of the Goods and Services Tax Act, 2017.

The bench observed that the SCN lacked details and essential information, such as the issuing authority’s details or hearing schedule. The court held that a valid SCN must provide clear grounds to enable a response. The bench observed the contention of the respondents that the petitioner attempted to change his registered address but failed to submit a property tax receipt, and an inspection found him unavailable at the original address.

Excise Demands Extinguished by NCLT Order: Telangana HC Disposes CESTAT Appeal

M/S.SIRPUR PAPER MILLSLIMITED vs COMMISSIONER OF CUSTOMS ANDCENTRAL EXCISE CITATION : 2025 TAXSCAN (HC) 1257

The High Court of Telangana, disposed of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) appeal filed by petitioner noting that the excise demands raised in the proceedings stood extinguished under the resolution plan approved by the National Company Law Tribunal (NCLT).

Justice P.Sam Koshy and Justice Narsing Rao Nandikonda taking note of these developments, including the NCLT’s approval of the resolution plan, held that the present appeal also stood covered and disposed of the same.

No Consideration Given to Reply to GST DRC-01: Madras HC Remands Case without Pre-deposit Mandate, Directs to Defreeze Bank Account

M/s.Sri Srinivasa FarmService vs The State Tax Officer CITATION : 2025 TAXSCAN (HC) 1258

In a recent ruling, the Madras High Court set aside a GST ( Goods and Services Tax ) order and the consequential proceedings and remanded the case on the ground that the reply to the DRC-01 notice was not properly considered.

Justice Krishnan Ramasamy found that the Revenue failed to show that the petitioner’s detailed reply had been meaningfully considered. The Court noted that there was no finding or discussion regarding the reply submitted against the DRC-01 notice, nor was any personal hearing provided prior to finalization. Accordingly, the bench sets aside the impugned order dated 22.02.2025 and the consequential order dated 22.05.2025 and permits the petitioner to file a fresh reply or objection with all supporting documents within two weeks.

Delay in Granting Gazetted Status to Deputy State Tax Officers: Telangana HC Directs Authorities to Decide Representation in 8 Weeks

Tealngana CommerciatTaxes vs The Commissioner of CommercialTaxes CITATION : 2025 TAXSCAN (HC) 1259

The High Court of Telangana,while addressing the prolonged delay in granting Gazetted status to Deputy State Tax Officers, directed the concerned authorities to consider the petitioner’s representation and take a decision within eight weeks.

Justice Namavarapu Rajeshwar Rao considered the submissions made by both sides and, without going into the merits of the case, disposed of the writ petition. It directed respondent Nos. 2 and 4 to consider the petitioner’s representation dated 19.05.2025 and pass appropriate orders as per law within eight weeks from the date of receiving the order.

Failure to Send Income Tax Notices to Updated Email Address Denies Fair Hearing: Karnataka HC Quashes Assessment Order

MR. SURESH KUMARPARUCHURI vs THE COMMISSIONER OF INCOME-TAX(APPEALS) CITATION : 2025 TAXSCAN (HC) 1260

The High Court of Karnataka, quashed an income tax assessment order, holding that the department’s failure to send notices to the petitioner’s updated email address denied a fair hearing.

The Court observed that the petitioner had updated his email ID while filing Form No.35. However, the department continued to send notices to the old email address linked to the former auditor. Because of this, the petitioner was not aware of the proceedings and did not get a fair chance to respond. Justice Pradeep Singh Yerur held that once the updated email was provided, the department should have used it for all future communication. Ignoring this resulted in a denial of fair hearing, which violated the principles of natural justice. Therefore, the assessment order could not be sustained.

Business Closed, Unaware of GST Notices: Madras HC allows to Contest Order on Payment of Dues without Interest and Penalty

M.Velusamy vs . TheState Tax Officer CITATION : 2025 TAXSCAN (HC) 1261

Subject to depositing the entire GST due without penalty and interest, the court was permitted to contest the order in fresh.The Madurai Bench of the Madras High Court recently permitted an assessee to contest a GST ( Goods and Services Tax ) order on the condition of paying the tax dues without any interest and penalty.

After considering submissions from both sides, Justice C. Saravanan observed that the petitioner’s request appeared bona fide and that principles of natural justice warranted a fresh opportunity to contest the assessment, given the closure of the business and lack of notice.

AA Cannot Tax Entire Disputed Purchase Transactions as Bogus: Gujarat HC Limits Income Tax Addition to 6%

PRINCIPAL COMMISSIONEROF INCOME TAX 1 vs RAJESH SURESH CHOPRA CITATION : 2025 TAXSCAN (HC) 1262

Gujarat HC Limits Income Tax Addition to 6%, Holds AA Cannot Tax Entire Disputed Bogus PurchaseIn a recent ruling, the Gujarat High Court held that the Assessing Authority (AA) cannot tax the entire amount of disputed purchase transactions even if they are considered bogus or accommodation entries. The court limited the addition to just 6% of such purchases.

The bench comprising Justices Bhargav D. Karia and Pranav Trivedi observed that the law on this matter was already settled by earlier decisions of the same court, specifically referring to a judgment involving similar facts where the Court limited additions to only 6% of such bogus transactions. The court explained that taxing authorities should tax only the profit or benefit arising from such questionable transactions, rather than the entire transaction amount, as the objective was to prevent tax leakage rather than excessively penalizing taxpayers.

GST Payer alleges Overlap of Jurisdiction by Central and State Authority: Madras HC says No Case Made Out, Grants Partial Relief

M/s. IRISH Health Carevs The Appellate Deputy Commissioner (ST)(GST) CITATION : 2025 TAXSCAN (HC) 1263

In a recent order, the Madras High Court observed the petitioner’s plea alleging overlapping jurisdiction between the Central and State GST authorities, ruling that the facts did not support the claim and directing the petitioner to comply with statutory conditions to contest the assessment afresh.

However, Justice C. Saravanan noted that on the facts presented, no substantial overlap was demonstrated. The Court pointed out that the order of the Central authority dated 05.12.2023 related to the tax period from 1st July 2017 to 31st March 2018, whereas the State order under challenge pertained to the assessment year 2018-19, covering the same period but arising under distinct notices and proceedings.

Interest from Cooperative Banks Deductible u/s 80P(2)(d) as they Fall Under 'Cooperative Society': Gujarat HC

THE PRINCIPALCOMMISSIONER OF INCOME TAX vs RAJKOT LODHIKASAHAKARI KHARID VECHAN SANGH LTD CITATION : 2025 TAXSCAN (HC) 1264

In a recent ruling, the Gujarat High Court held that cooperative banks are entitled to deductions under Section 80P(2)(d) of the Income Tax Act, as these banks are essentially cooperative societies registered under the Gujarat State Cooperative Societies Act, despite the specific term 'cooperative banks' not explicitly appearing in the statutory provision.

The court further clarified that Section 80P(2)(d) is a beneficial provision intended to support and encourage cooperative societies, so it should be interpreted broadly and liberally in favor of such entities. The court observed that merely because cooperative banks are involved in banking activities, they do not cease to be cooperative societies eligible for such benefits.

S. 79 GST Recovery Notice issued to Bank without Prior Notice to Assessee void: Bombay HC

M/s. GalaxyInternational vs Union of India & Ors CITATION : 2025 TAXSCAN (HC) 1265

In a significant ruling concerning GST recovery procedures, the Bombay High Court has held that a recovery notice issued under Section 79 of the Central Goods and Services Tax (CGST) Act, 2017, directly to a bank without prior notice to the assessee, is invalid and liable to be quashed.

The Court found that in this case, no such notice was served on Galaxy International before the recovery notice was sent to the bank. This failure denied the petitioner its statutory right to be heard and deprived it of the opportunity to demonstrate that it did not owe any amount to the defaulter or that the bank did not hold any funds belonging to the petitioner in relation to the dues.

GST Dept Must Grant Time Extension for Submitting Additional Documents When Sought: Madras HC

Tvl Ashta Gold vs StateTax Officer CITATION : 2025 TAXSCAN (HC) 1266

In a recent ruling, the Madras High Court has held that when a taxpayer requests an extension of time to submit additional documents in response to a show cause notice, the GST Department must grant a reasonable extension before finalizing the assessment order.

However, the single bench of Justice Krishnan Ramasamy observed that although the authorities had provided notices and hearing opportunities, once the petitioner made a specific request for extra time to submit relevant documents, it was the duty of the department to grant reasonable time for proper compliance. It observed that “In this case, there is no doubt that the respondent had provided number of opportunities to the petitioner. Normally, when the petitioner requested for extension of time to file their reply, the respondent was supposed to have acceded the said request by providing sufficient time for filing the reply.”

ITAT Can Allow 10% LTCG Rate on Unlisted Shares Despite No Revised Return if Facts Are on Record: Gujarat HC

COMMISSIONER OF INCOMETAX INTERNATIONAL TAXATION AND TRANSFERPRICING vs BRIDGESTONE CORPORATION CITATION : 2025 TAXSCAN (HC) 1267

In a recent ruling, the Gujarat High Court held that the Income Tax Appellate Tribunal (ITAT) can allow a 10% tax rate on long-term capital gains from the sale of unlisted shares even if the taxpayer has not filed a revised return, as long as the facts are already on record.

The division bench comprising Justice Bhargav D. Karia and Justice Pranav Trivedi observed that the Supreme Court in the National Thermal Power Co. Ltd case had held that the ITAT could consider new legal claims during appeal if the facts were on record. The court also observed that the retrospective amendment allowed the 10% rate from the assessment year 2013-14 onwards, and the Tribunal was right in granting the benefit.

Allahabad HC Grants Anticipatory Bail as Delayed Tax Payment Lacks Embezzlement Allegation

Tanveer Asharaf vs State of U.P. and Another CITATION : 2025 TAXSCAN (HC) 1268

In a recent ruling, the Allahabad High Court held that anticipatory bail can be granted in a case of delayed tax payment when there is no allegation of embezzlement.

The single-judge bench comprising Justice Neeraj Tiwari observed that the case related only to delayed tax payment and that the applicant had no criminal antecedents. The court observed that anticipatory bail can be considered in cases where custodial interrogation is not required, following the principles laid down by the Supreme Court in Sushila Aggarwal vs. State (NCT of Delhi).

GST Orders on Portal Valid Without Visible Signature If Uploaded Using DSC: Gujarat HC

RADHE ENTERPRISE vsASSISTANT COMMISSIONER OF STATE TAX CITATION : 2025 TAXSCAN (HC) 1269

In a recent ruling, the Gujarat High Court held that GST orders uploaded on the GST portal cannot be treated as unsigned and invalid merely because they do not display a visible digital signature when uploaded, as uploading itself confirms authentication by the officer under Rule 26(3) of the CGST Rules.

The division bench comprising Justice Bhargav D. Karia and Justice D.N. Ray observed that under Rule 26(3) of the CGST Rules and the advisory dated 25.09.2024, orders uploaded on the GST portal are authenticated through the officer’s login and digital signature. The court observed that there was no material to show that the orders were unsigned and explained without authentication, orders could not be uploaded on the portal.

Supply of Computer Hardware on Hire is ‘Transfer of Right to Use’, Not ‘Supply of Tangible Goods’: Calcutta HC Quashes Service Tax Demand

COMMISSIONER OF SERVICETAX vs M/S COMPUTER EXCHANGE PRIVATELIMITED CITATION : 2025 TAXSCAN (HC) 1270

The Calcutta HighCourt recently clarified that the supply of computer hardware on hire amounts to a ‘transfer of right to use’ and does not not constitute the service of ‘supply of tangible goods’.

The Bench of Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee (Das) examined the terms of the rental agreement and applied the tests laid down by the Supreme Court in BSNL v. Union of India (2006). In its decision, the Calcutta High Court applied the five-prong test laid down by the Supreme Court in the BSNL case to determine whether the hiring of computer equipment amounted to a ‘transfer of right to use’.

Loan Dispute Settled via OTS: Allahabad HC quashes Charge Sheet Against Accused Who Had Business Dealings with Borrower

Apresh Garg vs Union Of India CITATION : 2025 TAXSCAN (HC) 1271

In a recent ruling, the Allahabad High Court held that criminal proceedings arising from a loan transaction can be quashed if the dispute between the borrower and the bank has been settled under a One Time Settlement (OTS), even if the accused is not the borrower but had business dealings with the borrower.

The single-judge bench comprising Justice Sanjay Kumar Singh observed that the petitioner was not a borrower or guarantor and that the settlement between the borrower and the bank had resolved the financial dispute, leaving the bank with no grievance. The court observed that the possibility of conviction was remote and that continuing the criminal proceedings would cause unnecessary hardship to the petitioner. The court relied on the Supreme Court’s decisions in K. Bharthi Devi, Tarina Sen, and N.S. Gnaneshwaran, which held that criminal proceedings in similar circumstances could be quashed after a settlement.

‘HCs Should Refrain from Entertaining Article 226 Petitions Where SARFAESI Remedy Exists’: Patna HC in Indian Bank Case

M/s Maa KatyayniMercantile Pvt. Ltd vs Indian Bank CITATION : 2025 TAXSCAN (HC) 1272

The Patna High Court affirmed that the High Courts should refrain from entertaining petitions under Article 226 of the Constitution when there is an alternative remedy under the SARFAESI Act, 2002.

The high court, by going through the various precedents of the Supreme Court, reached the conclusion that it should entertain an application under Article 226 of the Constitution if there is an effective remedy available to the aggrieved persons under the provisions of the SARFAESI Act and held that the writ petition was not maintainable.

Telangana HC Dismisses State Bank of India's Writ Plea: Upholds Auction Invalidation Over SARFAESI Violations

State Bank of lndia vs Union of lndia CITATION : 2025 TAXSCAN (HC) 1273

The Telangana High Court dismissed a writ petition filed by the State Bank of India (SBI) seeking to uphold an auction sale of secured assets that had been struck down by the Debt Recovery Appellate Tribunal (DRAT), Kolkata. The Court held that SBI's actions in the conduct of the auction blatantly violated Rules 9(3) and 9(4) of the Security Interest (Enforcement) Rules, 2002, thereby vitiating the entire sale process.

The Division Bench comprising Justice Moushumi Bhattacharya and Justice B.R. Madhusudhan Rao firmly rejected SBI's contentions. The Court observed that clause 10 of the auction notice clearly barred payments via cheque, and yet SBI accepted them, undermining the transparency and certainty of the auction.

Telangana HC Upholds DRAT's Cancellation of Auction: Petitioner’s Writ Fails Amid SARFAESI Rule Violations

M/s Classic ChemicalsLimited vs Debts Recovery AppellateTribunal CITATION : 2025 TAXSCAN (HC) 1274

The Telangana High Court has dismissed a writ petition filed by M/s Classic Chemicals Ltd., upholding the Debts Recovery Appellate Tribunal (DRAT) Kolkata’s decision to cancel an e-auction conducted by State Bank of India (SBI) in 2013. The Court held that the auction process violated key provisions of the SARFAESI Rules, specifically Rules 9(3) and 9(4), making the entire transaction legally unsustainable.

The court upheld the doctrine of lis pendens, adding that improvements made by Classic Chemicals on the property did not entitle it to equity, as the auction occurred amid ongoing litigation. Classic Chemicals argued that it had invested in the property and paid substantial taxes and improvement costs. The Court ruled that equity cannot override the law, citing multiple Supreme Court decisions, and dismissed the writ petition.

S.73 GST Order Rejected Petitioner’s Reply Without Considering Evidence: Allahabad HC Quashes Order for Violating Natural Justice

M/S V. K. Pustak BhandarAnd Stationers Thru. vs State Of U.P.Thru CITATION : 2025 TAXSCAN (HC) 1275

The High Court of Allahabad, quashed an order passed under Section 73 of the Goods and Service Tax ( GST ) Act,2017, for rejecting the petitioner’s reply without considering the evidence, holding that it amounted to a violation of natural justice.

Justice Pankaj Bhatia observed that the order under Section 73 seemed to hold the petitioner guilty without properly considering the defence and lacked application of mind. It held that the order did not meet the requirements of natural justice.

Reassessment Notices Invalid if Issued Beyond Surviving Period, Even If 14-Day Reply Procedure Followed: Gujarat HC

SHEETAL DHAMRESHBHAIPATEL vs THE INCOME TAX OFFICER WARD 2SURENDRANAGAR CITATION : 2025 TAXSCAN (HC) 1276

The Gujarat High Court quashed a reassessment notice as invalid for being issued beyond the limitation period despite following the 14-day reply process under Ashish Agarwal.In a recent ruling, the Gujarat High Court held that reassessment notices issued under Section 148 of the Income Tax Act are invalid if issued beyond the surviving limitation period, even if the 14-day reply procedure under the Supreme Court’s guidelines is followed.

The division bench comprising Justice Bhargav D. Karia and Justice Pranav Trivedi observed that under the Rajeev Bansal ruling, the limitation period for issuing the reassessment notice had expired on 17.06.2022, and the issuance of the notice on 29.07.2022 was beyond the surviving period. The court observed that following the 14-day reply procedure did not extend the limitation period under the law, and any notice issued after the cut-off date would be invalid.

Dept Fails to Issue Mandatory Fresh 148A(b) Notice Post Faceless Reassessment Transition: Gujarat HC Quashes as Time-Barred

SAUMIL AVINASH BAHETIvs INCOME TAX OFFICER CITATION : 2025 TAXSCAN (HC) 1277

In a recent ruling, the Gujarat High Court held that a reassessment under the Income Tax Act is invalid if the department fails to issue a fresh notice under Section 148A(b) after the faceless reassessment transition, as required by the Supreme Court in Ashish Agarwal.

The court found that the petitioner was denied the statutory protection of the new procedure under Section 148A, which requires the issuance of a show-cause notice, an opportunity to reply, and a reasoned order before issuing a reassessment notice. The court found that without complying with these mandatory steps, the reassessment initiated against the petitioner was invalid.

“Litigating for months together for condoning a day’s delay in making payment not worthwhile.”: Calcutta HC Directs SEBI to accept One day delayed Payment

Priya Ranjan Sah vs Securities and Exchange Board of India &Anr. CITATION : 2025 TAXSCAN (HC) 1278

The Calcutta High Court has directed the Securities and Exchange Board of India (SEBI) to accept one day delayed payment and observed that “Litigating for months together for condoning a day’s delay, if any, in making payment does not appear to be worthwhile.”

It was observed by the court that” a single day’s delay, if at all, may be condoned by the authority to save future efforts on the part of SEBI to conduct fresh auction for selling off the secured assets. Litigating for months together for condoning a day’s delay, if any, in making payment does not appear to be worthwhile. The same is sure wastage of time, energy and money.” The single bench of Justice Amrita Sinha directed the SEBI to accept the payment of the petitioner and take all necessary consequential steps in the matter. Further set aside the order dated 30th May, 2025 passed by the Recovery Officer & Dy. General manager, SEBI.

Calcutta HC upholds ITAT’s Order setting aside income tax reassessment even When all accounts are clarified by supporting documents

PRINCIPAL COMMISSIONEROF INCOME TAX-2 vs GILLANDERS ARBUTHNOTAND CO. LTD. CITATION : 2025 TAXSCAN (HC) 1279

The Calcutta High Court upheld the Income Tax Appellate Tribunal ( ITAT)’s order setting aside the income tax reassessment even when all accounts are clarified by supporting documents.

The court of Chief Justice T.S Sivagnanam and Justice Bivas Pattanayak found that the Tribunal took note of these factual details and held that the reopening of the assessment is bad in law. In more than one place the Tribunal has pointed out that the books of accounts have not been rejected. The transaction cannot be doubted and assessment could not have been reopened.

Taxpayer Can Raise Objections Before PCIT: Gujarat HC Declines to Quash Section 263 Notice on Demonetisation Cash Deposits

DAYARAM BRIJBHUKHANDASvs THE PRINCIPAL COMMISSIONER OF INCOMETAX, VALSAD CITATION : 2025 TAXSCAN (HC) 1280

In a recent ruling, the Gujarat High Court declined to quash a Section 263 notice, holding that the taxpayer has the opportunity to raise objections before the Principal Commissioner of Income Tax (PCIT) regarding cash deposits made during the demonetisation period.

The court found that the petitioners could submit their objections before the PCIT, so the writ petitions challenging the Section 263 notices were not maintainable. The court held that the petitions were not required to be entertained at this stage and dismissed them while allowing the petitioners to submit objections before the PCIT within four weeks, which the PCIT was directed to consider in accordance with law.

Allegation of Illegal Search and Seizure: Calcutta HC Directs ED to issue Summons u/s 50 of PMLA

Praveen Kumar vs Union of India & Ors. CITATION : 2025 TAXSCAN (HC) 1281

The Calcutta High Court, in a petition challenging the illegal search and seizure conducted by enforcement Department(ED) , directed the ED to issue summons under section 50 of the Prevention of Money Laundering Act(PMLA), 2002.

Since there are no summons under Section 50 of the PMLA, the single bench of Justice Tirthankar Ghosh directed that the Enforcement Directorate would issue fresh summons upon the petitioner granting 15 days’ time to appear before the authorities. The fresh summons, if possible, should accompany the ECIR number as well as the predicate offence which led to the registration of the ECIR.

No Longer Force Majeure! Madras HC quashes Notifications Extending Limitation u/s 168A of CGST Act

Ms Tata Play Limited vsUnion of India Through its Secretary CITATION : 2025 TAXSCAN (HC) 1282

In a landmark judgment, the Madras High Court has struck down Notification Nos. 9/2023 and 56/2023, which extended the time limits for passing orders under Section 73 of the Central Goods and Services Tax (CGST) Act, declaring them illegal and vitiated.

The Single Bench of Justice Mohammed Shaffiq noted that it was submitted by the revenue that the expression "otherwise", employed in Section 168A of CGST Act, must be understood as taking within its fold any event which causes difficulty/inability thereby affecting implementation of the provisions of the Act, though not covered by the events of force majeure preceding the expression "otherwise" in the said Explanation.

₹24 Lakh Tax, Penalty and Interest against Notice Demanding ₹4 Lakh: Allahabad HC quashes GST Order Demand in Excess of Amount in Notice

M/S Pavan Traders vsState of U.P. CITATION : 2025 TAXSCAN (HC) 1283

The Allahabad HighCourt recently set aside a Goods and Services Tax (GST) demand order amounting to over ₹24 lakh upon finding that the demand was vastly in excess of the amount specified in the original show cause notice.

The Division Bench of Justice Shekhar B. Saraf and Justice Praveen Kumar Giri observed that Section 75(7) of the GST Act expressly provides that the amount of tax, interest, and penalty in the final order cannot exceed what is specified in the show cause notice.

Allahabad HC Grants Bail in GST Receipt Forgery Case as Accused was Not Named in FIR

Antu Alias Umar vs State of U.P CITATION : 2025 TAXSCAN (HC) 1284

In a recent ruling, the Allahabad High Court held that bail can be granted in a GST receipt forgery case when the accused was not named in the FIR and was later implicated based only on a co-accused’s statement.

The single-judge bench comprising Justice Arun Kumar Singh Deshwal observed that the accused was not named in the FIR and had no criminal history. The court observed that continued custody was not necessary for the investigation and that the applicant could be released on bail while ensuring he cooperated with the proceedings.

Failure to Deposit 2 Month License Fee as Bank Guarantee as Per Tender: Chhattisgarh HC Disposed of Petition Considering Time Extension Given

Deepak Mashrani S/o vsState of Chhattisgarh CITATION : 2025 TAXSCAN (HC) 1285

The Chhattisgarh High Court observed that failure to deposit 2 months license fee as a bank guarantee as per tender for running Ahata in Ganjpara composite liquor shop, and disposed of the petition considering the time extension given.

A division bench of Ramesh Sinha,Chief Justice and Bibhu Datta Guru observed that they have already taken initiative against the persons who are involved in selling of food items and other articles near the liquor shop and Ahata and further considering the fact that the time has also been extended for payment of license fee, this petition is disposed of.

Assessee Itself wasn't Diligent in Responding to SCN or Attending Hearing Delhi HC refused to Interfere GST Order passed without Hearing

PRETSTUDYBYJANAKFASHIONSPRIVATELIMITED vs ASSISTANTCOMMISSIONER CITATION : 2025 TAXSCAN (HC) 1286

The Delhi High Court noted that the assessee itself was not diligent in replying to the show cause notice or attending the personal hearing notwithstanding notice, therefore it declined to intervene in a demand order issued by the GST Department without first hearing the assessee.

The court noted that even after the purported access to the personal hearing was denied, it is evident that no reply was sent to the show cause notice. Beyond that, the Petitioner made no attempt to physically file the documents or submit the reply. The Petitioner's lack of diligence in attending the hearings and filing the reply is evident.

Continuity of Proceedings under Income Tax Act before Competent Authority While pendency of matter before Supreme Court leads to multiplicity of litigation: HP HC

Aradhana Wines vs DCITCircle CITATION : 2025 TAXSCAN (HC) 1287

The Himachal Pradesh High Court has held that continuity of proceedings under the Income Tax Act, 1961, before competent authority while pendency of the matter before the Supreme Court leads to multiplicity of litigation.

A division bench of Justice Tarlok Singh Chauhan and Justice Sushil Kukreja directed that the present petition shall be governed by the judgment passed by the Supreme Court and the decision thereto shall be binding on this case also. The continuity of proceedings before the competent authority, in view of the pendency of the matter before the Supreme Court is bound to lead multiplicity of litigation. The court deem it appropriate to stay such proceedings till the time issue is finally decided by the Supreme Court.

In Absence of Concrete Material Revision u/s 263 of Income Tax Act Not Possible on Assessment Based on DVO's Valuation: Kerala HC

THE PRINCIPALCOMMISSIONER OF INCOME TAX vs M/S. AYYAPPA ROLLERFLOUR MILLS LTD CITATION : 2025 TAXSCAN (HC) 1288

The Kerala High Court ruled that, in the absence of tangible evidence, an assessment based on the Department Valuation Officer's (DVO) valuation cannot be changed under Section 263 of the Income Tax Act, 1961.

The bench noted that, in any event, the Assistant Engineer, Valuation Cell did not receive the clarifications that were requested in the letter, and no final decision regarding the merits of the questions raised was made prior to the issuance of a show cause notice dated 08.02.2021, which invoked the authority granted by Section 263 of the Income Tax Act.

GST Order Invalid if SCN Issued Only via Portal After Registration Cancellation: Allahabad HC

M/S KesarwaniEnterprises vs Commercial Tax Officer CITATION : 2025 TAXSCAN (HC) 1289

In a recent ruling, the Allahabad High Court held that a GST assessment order is invalid if a show cause notice is issued only through the GST portal after the taxpayer’s registration has been cancelled, without serving a physical notice.

The division bench comprising Justice Shekhar B. Saraf and Justice Praveen Kumar Giri observed that the petitioner’s GST registration had been cancelled and was never revived, and that the revenue did not claim that any physical notice was issued.

The court observed that the petitioner was not required to check the GST portal after the cancellation of its registration and could not have responded to the show cause notice issued only through the portal.

Service Valid, Dismisses Petition Citing Alternate Remedy

M/S D.R. Hotels Pvt.Ltd vs Deputy Commissioner CITATION : 2025 TAXSCAN (HC) 1290

The High Court of Allahabad, upheld the validity of Goods and Service Tax (GST) notice served via email and dismissed the petition, citing availability of alternate remedy through appeal under Section 107 of the GST Act,2017.

Justice Arun Kumar Singh Deshwal and Justice Alok Mathur considered both sides and found that the case mainly involved service of notice during assessment proceedings. It referred to Section 169 of the GST Act, which allows notices to be served through various modes, including email. In this case, notices were sent to the email address provided by the petitioner at the time of registration.

Allahabad HC Quashes GST Orders for Not Granting Proper Hearing Prior to S.73 Order

M/S Native Estate Pvt.Ltd vs - U.O.I. CITATION : 2025 TAXSCAN (HC) 1291

The High Court of Allahabad, quashed the Goods and Service Tax ( GST ) assessment and appellate orders dated 22.08.2024 and 28.03.2025, noting that the petitioner had not been granted a proper opportunity of hearing before the order under Section 73 of the GST Act, 2017 was passed.

The High Court of Allahabad, quashed the Goods and Service Tax ( GST ) assessment and appellate orders dated 22.08.2024 and 28.03.2025, noting that the petitioner had not been granted a proper opportunity of hearing before the order under Section 73 of the GST Act, 2017 was passed.

Income Tax Dept. has no Material to Prove Existence of Order under “View Notices and Orders” on Portal: Allahabad HC Allows Assessee to Treat SCN as Final Notice

M/S Shri Bala Ji StoneWorks vs State of U.P CITATION : 2025 TAXSCAN (HC) 1292

The Allahabad High Court recently granted relief to an assessee, ruling that the Income Tax Department had no material to establish that the impugned assessment order was actually available under the “view notices and orders” tab on the Goods and Services Tax (GST) portal at the disposal of the Assessee.

The Bench further noted that it was ambiguous whether all replies and annexures submitted by the assessee had been duly displayed to and considered by the assessing officer. Noting that the entire disputed amount was already deposited with the State Government and that no outstanding demand remained, the Court concluded that no useful purpose would be served by keeping the petition pending or by keeping this petition pending or calling for a counter affidavit or even relegating the petitioner to the available statutory remedy.

Section 50C Income Tax Addition Not Applicable When Registered Sale Agreement Precedes Circle Rate Hike: Delhi HC

PR. COMMISSIONER OFINCOME TAX vs M/S THOMSON PRESS CITATION : 2025 TAXSCAN (HC) 1293

In a recent ruling, the Delhi High Court held that an addition under Section 50C of the Income Tax Act cannot be made when a registered sale agreement was executed before the circle rate was increased.

The bench led by Justice Vibhu Bakhru and Justice Tejas Karia observed that the transaction value matched the circle rate at the time of the registered agreement and that the later increase did not warrant the application of a higher value under Section 50C of the Income Tax Act. The court referred to its earlier judgment in Principal Commissioner of Income Tax v. Modipon Ltd, which had held that Section 50C does not apply where the transaction is based on a registered agreement preceding a circle rate hike.

GST Registration Cancelled Due to 6-Month Default in GSTR-3B Filing: Orissa HC Quashes Rejection of Revocation Application

M/s. Maa Lobhi PaniPanchayat vs Assistant State Tax Officer CITATION : 2025 TAXSCAN (HC) 1294

In a recent decision, the Orissa High Court set aside an order rejecting the application for revoking the cancellation of the Goods and Services Tax (GST) registration of a taxpayer who defaulted for a continuous period of six months in filing their GSTR-3B returns.

The Court directed the petitioner to appear before the Assistant Commissioner of State Tax or the State Tax Officer, Angul Circle, no later than 4 July 2025 with all required documents and records as instructed previously. The Court further directed that the authority consider the documents and pass an appropriate order regarding restoration of the registration certificate within two weeks.

Commissioner of IncomeTax vs Samsung Heavy Industries Company Limited CITATION: 2025 TAXSCAN (HC) 1295

The Uttarakhand High Court, while dismissing the income tax appeal against Samsung Heavy Industries Company Limited, upheld the Income Tax Appellate Tribunal (ITAT) order holding section 40(a)(ia) of the Income TaxAct, 1961 cannot apply to short deduction of TDS.

Mr. Arijit Prasad, Senior Counsel assisted by Mr. Pulak Raj Mullick, learned counsel for the respondent (assessee) submitted that the Income Tax Appellate Tribunal has rightly relied on the law laid down by Calcutta High Court in the case of Commissioner of Income Tax Vs. S.K. Tekriwal.

PRINCIPAL COMMISSIONEROF INCOMETAX CENTRAL- 1 vs RUNGTA MINES LIMITED CITATION: 2025 TAXSCAN (HC) 1296

The Calcutta High Court upheld the applicability of the internal CUP method as adopted by the assessee and ruled that deductions under section 80IA of the Income Tax Act, 1961 must be computed market value as per the rate supplied by state electricity boards to consumer.

The Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee (Das) held that the State Electricity Boards rate when it supplies power to the consumer have to be taken as market value for computing the deduction under Section 80IA of the Act.

M/s Chandra Shekar Joshi vs Commissioner, State Goods and Services CITATION: 2025 TAXSCAN (HC) 1297

The High Court of Uttarakhand, allowed the petitioner to seek revocation of Goods and Service Tax (GST) registration cancelled for non-filing of returns, noting that the issue was identical to those already decided in Writ Petitions

Chief Justice G.Narendar and Justice Alok Mahra taking note of these submissions disposed of the writ petition on the same terms as stated in Paragraph 8 of the earlier order dated 24.02.2025. No order as to costs was passed.As a result, all pending miscellaneous petitions stood closed.

Chandra Sekhar Singh vsUnion of India CITATION: 2025 TAXSCAN (HC) 1298

The High Court of Calcutta, dismissed a writ petition against an ex parte service tax order for non-appearance, citing availability of an alternate remedy.

Justice Partha Sarathi Chatterjee heard both sides and went through the records.It found that the petitioner was given hearing dates on 9th December 2021, 23rd December 2021, and 19th January 2022 through letters sent to the registered address. Despite receiving the notices, the petitioner did not appear, leading to the ex parte order dated 21st January 2022.

ST. TOMAS EDUCATION ANDWELFARESOCIETY INDORE vs REVENUE DEPARTMENT CITATION: 2025 TAXSCAN (HC) 1299

The High Court of Madhya Pradesh allowed condonation of delay in filing Form 10, Form 10B, and the income tax return by a charitable society, noting that the delay occurred during the COVID-19 pandemic and fell within the limitation period extended by the Supreme Court.

Justice Vivek Rusia and Justice Binod Kumar Dwivedi heard both parties and reviewed the records.It noted that the due date for filing the income tax return was 15.02.2021, but the petitioner filed it on 09.03.2021. The delay occurred during the period affected by the Covid-19 pandemic.

M/S SISLA LABORATORIESvs THE DEPUTY COMMISSIONER OF CGST CITATION: 2025 TAXSCAN (HC) 1300

The refund application, originally filed in June 2019, had remained unprocessed as the Department claimed a deficiency memo had been issued but later admitted it could not be traced.The High Court of Delhi,directed the Goods andService Tax (GST) Department to process a refund of ₹10.65 lakh along with statutory interest, noting there was no valid ground to withhold the claim.

Justice Prathiba M.Singh and Justice Rajneesh Kumar Gupta observed that refund applications under Section 54 of the CGST Act had to be filed within two years from the relevant date and must include supporting documents, unless the refund amount was below two lakh rupees.

MUSHTAQ AHMAD BHAT vsU.T OFJAMMU & KASHMIR CITATION: 2025 TAXSCAN (HC) 1301

The High Court of Jammu and Kashmir,held the Home Ministry liable to pay Goods and Service Tax (GST) in addition to the fixed rent for hotel accommodation rented from the petitioner.

Justice Sanjeev Kumar and Justice Sanjay Parihar ordered that from August 2025, the Department of Home must pay GST with rent, and the landlord had to complete GST registration by July 31, 2025. It also suggested revising the rent through a new committee.

M/s Suraj Agency vs TheUnion of India CITATION: 2025 TAXSCAN (HC) 1302

The Patna High Court refused to interfere in the GST dispute under writ jurisdiction, citing the availability of a statutory appeal before the tribunal, as the bench did not find scope of interference with the impugned orders in the Court's extraordinary writ jurisdiction

The High Court, comprising Justice Rajeev Ranjan Prasad and Justice Ashok Kumar Pandey, dismissed the appeal and held that the petitioner was at liberty to avail the alternative statutory remedy.

M/s. Carona Limited vsDeputyCommissioner of Income Tax CITATION: 2025 TAXSCAN (HC) 1303

The Bombay High Court recently set aside a penalty of ₹12,82,700 imposed on Carona Limited, noting that merely claiming deduction on unpaid ad-hoc bonus could not attract penalty under Section 271(1)(c) of the Income Tax Act, 1961 in the absence of any malafide or false statement to prove otherwise.

The Bench of Chief Justice Alok Aradhe and Justice Sandeep V. Marne noted that the assessee’s claim was based on a plausible understanding of its accounting liability and there was no evidence of any false or malafide statement.