Half Yearly Tax Digest 2025: Supreme Court and High Court Cases [Part V]

This Half Yearly Digest analytically summarises all the Supreme Court and High Court Tax Decisions in the First Half of 2025, as reported at Taxscan.in.

High Court has No Jurisdiction to Direct ED to Register ECIR Merely on Prima Facie Finding Existence of Predicate Offence: Supreme Court

R. MADHAVAN PILLAI vs RAJENDRAN UNNITHAN. S & ORS.ETC. CITATION: 2025 TAXSCAN (SC) 135

The Supreme Court, in a recent case, held that High Court could not have passed an order to register an Enforcement Case Information Report (ECIR) merely on the basis of a prima facie conclusion that a predicate offence has been committed.

The Court observed that since breach of trust and cheating is a predicate offence as per the provisions of the Prevention of Money Laundering Act, a direction to register ECIR was warranted.The bench left it to the ED to take a call on the question of initiating proceedings under the PMLA.

Supreme Court to rule on taxability of Charger & Mobile Phone, Final Hearing on March 27

M/S. NARESH KUMAR GUPTA vs THE STATE OF PUNJAB & ANR. CITATION: 2025 TAXSCAN (SC) 134

Based on its prior ruling in Nokia India Pvt. Ltd. v. State of Punjab, the Supreme Court has granted leave in a petition against Punjab VAT rules. The case was scheduled for a final hearing on March 27, 2025, by the bench of Justices B.V. Nagarathna and Satish Chandra Sharma.

A possible change in India’s indirect tax jurisprudence is being closely watched by stakeholders in the business and legal communities as the final hearing is scheduled for March 27. While an affirmation might support the separate taxing of packaged items, a reversal of the Nokia verdict might result in substantial tax relief for corporations.

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Chargers Sold with Cell Phones cannot be Taxed Separately Under UP VAT Act: Supreme Court

M/S.NARESH KUMAR GUPTA vs THE STATE OF PUNJAB & ANR CITATION: 2025 TAXSCAN (SC) 133

The Supreme Court, in a recent judgment upheld the decision of the Allahabad High Court, which observed that the charger sold with a cell phone under the MRP cannot be taxed separately under the UP VAT Act 2008.

It further noted that Entry No. 28 of Schedule II, Part B clearly states that the MRP indicated on the mobile phone box with the charger serves as the exclusive basis for taxation. ‘Disjunctively’ does not imply that the Charger is a separately taxed item.

Citizens Entitled to Interest on Lost Stamp Paper Refund, Govt Cannot Retain Money Without Legal Basis: Supreme Court

DR. POORNIMA ADVANI & ANR vs GOVERNMENT OF NCT &ANR. CITATION: 2025 TAXSCAN (SC) 132

In a recent ruling, the Supreme Court of India ruled that citizens are entitled to interest on refunds for lost stamp paper. The court also explained that the government cannot retain money without a legal basis.

In light of the above-referred cases, the court directed the government to pay Rs. 4,35,968 in interest on the refund amount and clarified that even in the absence of an explicit statutory provision, principles of restitution and fairness necessitate the payment of interest.

TRAN-01 can be Filed via another State’s GST Portal in Case of Technical Glitch: SC Dismisses Revenue’s SLP against Standard Chartered Bank

THE PRINCIPAL COMMISSIONER OF CENTRAL TAX & ORS vs M/SSTANDARD CHARTERED BANK CITATION: 2025 TAXSCAN (SC) 131

The Supreme Court has recently dismissed the Special Leave Petition ( SLP ) filed by the Revenue against Standard Chartered Bank regarding the filing of TRAN-01 through another state’s Goods and Services Tax ( GST ) portal amid technical glitches.

Thus, the bench of Justices J.B. Pardiwala and R. Mahadevan refused to interfere with the judgment of the Telangana High Court and upheld the filing of TRAN-01 though another state’s GST portal when the designated portal experiences technical glitches.

Directors Not Automatically Liable for Company’s Wrongful Acts without Direct Involvement: SC Rules in Favor of Tata Realty Directors

SANJAY DUTT & ORS vs THE STATE OF HARYANA & ANR. CITATION: 2025 TAXSCAN (SC) 130

The Supreme Court has ruled that directors of a company cannot be held vicariously liable for wrongful acts unless there is clear evidence of their direct involvement in the alleged offence.

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Accordingly, the bench quashed the complaint and set aside the High Court’s order. However, the Court clarified that if the relevant authorities believe that the company itself violated the conditions of the land development license, they are free to take appropriate legal action against the company.

Retaining Balance Amount After Reduction of VAT Demand Violative of Constitution: Jharkhand HC rules in Favour of Castrol India

M/s. Castrol India Limited vs The State of Jharkhand CITATION: 2025 TAXSCAN (HC) 273

In a ruling in favour of Castrol India Ltd, the Jharkhand High Court ruled that the department retaining balance amount after reduction of tax demand under Value Added Tax Act ( VAT ) is violative of the constitution.

The bench ordered the department to return the assessee’s submitted funds after deducting them from the tax that was ultimately assessed after the assessing authority remanded the case. The bench granted the petition in light of the aforementioned.

Orissa HC Rejects Pre-Arrest Bail of GST Officer Accused of Embezzling ₹71.03 Lakhs in Public Funds

Kamalakanta Singh vs State of Odisha CITATION: 2025 TAXSCAN (HC) 274

In a recent ruling, the Orissa High Court rejected the pre-arrest bail plea of a GST Officer, who was accused of misappropriating Rs. 71.03 lakh in public funds while serving in the Jatni Circle, Odisha.

After examining the case details, Justice V. Narasingh observed that the allegations were grave and warranted further investigation. Considering the nature of the economic offense and the petitioner’s alleged involvement, the court held that anticipatory bail was not justified and dismissed the pre-arrest bail application.

No Income Tax Reassessment Notice u/s 148 May be Issued after Statutory Limitation: Rajasthan HC refers SC Decision in Rajeev Bansal

Late Shri Rafiq Ahmed Querashi vs Central Board Of DirectTaxes CITATION: 2025 TAXSCAN (HC) 279

The Rajasthan High Court recently ruled referred to the Supreme Court decision in Union of India & ors. Vs. Rajeev Bansal (2024) to hold that reassessment notice under Section 148 of the Income Tax Act, 1961 cannot be issued beyond the permissible statutory limitation period.

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A Division Bench of Justice Avneesh Jhingan and Justice Shubha Mehta laid reference to the precedential nature of the Supreme Court decision in Rajeev Bansal to hold that the reassessment for A.Y. 2015-16 proposed in the present case could not be sustained due to time-limitation and proceeded to allow the writ petition holding that the impugned notices are liable to be quashed.

Madras HC Upholds 12% concessional rate of GST for contract services to Railway

STS-KEC(JV) vs The State Tax Officer CITATION: 2025 TAXSCAN (HC) 281

In a major ruling for railway project contractors, the Madras High Court rejected the tax department’s request for an 18% GST rate while retaining the 12 percent concessional rate of goods and services tax (GST) for contract services rendered to Rail Vikas Nigam Ltd (RVNL).

The bench of Justice Mohammed Shaffiq has held that “the contract for doubling of track between Vanchi Maniyachchi to Nagercoil, construction of roadbed, minor bridges, platforms, buildings, water and effluent treatment facilities, wagon / coaching maintenance infrastructure, supply of ballast, installation of tracks and other electrical, signalling and telecommunication infrastructure in Madurai and Thiruvananthapuram Divisions of Southern Railway, between the petitioner and RVNL would be covered by Notification 11 of 2017 CGST (RATE) dated 28.06.2017 as amended vide Notification No. 20/2017 dated 22.08.2017, Notification No.8 of 2017 Integrated Tax (Rate) dated 28.06.2017 and G.O.Ms.No. 94 dated 22.8.2017 CT & RE and liable to tax at 12%.”

Kerala HC Directs Income Tax Dept to Dispose of Income Tax Appeal Filed 8 Years Ago

M/S. JANAYUGAM PUBLICATIONS LTD vs THE ASSISTANTCOMMISSIONER OF INCOME TAX CIRCLE CITATION: 2025 TAXSCAN (HC) 280

In a recent case, the High Court of Kerala directed the Income Tax department to dispose of an Income Tax appeal filed 8 years ago.It was found that, though an intimation was received that the appeal has been transferred to the third respondent, thereafter no communication has been received.

In view of the above, respondents are directed to dispose of appeal against the assessment order for the year 2011-2012, as expeditiously as possible, at any rate, within a period of four months from today; provided the petitioner uploads the required documents within 30 days from today. Needless to mention that the appeal shall be disposed of, after granting an effective opportunity of hearing to the petitioner.

Denial of Cross-Examination Request in Income Tax Act Proceedings: Kerala HC Rejects Writ Petition as Premature

EKK INFRASTRUCTURE LIMITED vs THE ASSISTANT COMMISSIONEROF INCOME TAX CITATION: 2025 TAXSCAN (HC) 275

In a recent case related to denial of cross examination request in Income tax act proceedings, the Kerala High Court rejected the writ petition which was too premature a stage for considering its request.

Since the view that there is no merit in this writ petition and it is dismissed. A single bench of Justice Bechu Kurian Thomas observed that it is too premature a stage for considering its request, petitioner’s liberty to raise these contentions subsequently, in case any adverse orders are issued against him, shall not stand foreclosed.

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Kerala HC directs Income Tax Commissioner to Dispose of Appeal against Income Tax Assessment Order

AJAS N SHAMSU vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION: 2025 TAXSCAN (HC) 276

In a recent case, the Kerala High Court directed the Income tax commissioner to dispose of the appeal against the Income Tax assessment order without undue delay in an expeditious manner.

A single Justice Bechu Kurian Thomas observed that the second respondent shall initiate appropriate steps to dispose of appeals without undue delay in an expeditious manner. Petitioner shall also cooperate in the disposal of the said appeal. It is, however, clarified that, if in case the petitioner fails to deposit 20% as stipulated by the Court in the order dated 30.01.2025, the competent authority will be entitled to initiate appropriate proceedings in accordance with law.

TDS Demand on consultant doctors of Muthoot Health Care: Kerala HC Stays Recovery Proceedings under Income Tax Act

MUTHOOT HEALTH CARE PRIVATE LIMITED vs THE INCOME TAXOFFICER (TDS) AYAKAR BHAVAN CITATION: 2025 TAXSCAN (HC) 278

In a recent case in favour of Muthoot Health Care, the Kerala High Court stayed the recovery proceedings under Income Tax Act, 1961 on Tax Deduct Service(TDS) demand over consultant doctors. The question is on consultant doctors are employees of the hospital/company and TDS has to be deducted under Section 192.

A single bench of Justice Murali Purushothaman held that “The petitioner was heard pursuant to series of notice, it is only just and proper to keep in abeyance the recovery proceedings pursuant to pending final disposal of the appeal. Accordingly, there will be a direction to the 2nd respondent to pass final orders on appeals as expeditiously as possible, at any rate, within a period of six months from the date of receipt of a copy of this Judgment. There will be a stay of further proceedings pursuant to appeals are disposed of. “

Invalid Bank Account in ITR Filed: Rajasthan HC Sets aside Proceedings u/s 148A of Income Tax Act due to Procedural Violation

Prateek Bulls And Bears Private Limited vs DeputyCommissioner Of Income Tax CITATION: 2025 TAXSCAN (HC) 282

In a recent case related to the validity of the bank account mentioned in the Income Tax Return (ITR) filed, the Rajasthan High Court set aside the proceedings initiated under 148A of the Income Tax Act, 1961, due to a procedural violation.

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A division bench of Justice Avneesh Jhingan and Justice Ashutosh Kumar observed that the objections were not decided in accordance with Section 148A and the guidelines issued for procedure to be followed in proceedings under Section 148A of the Act. E The department miserably failed to put an iota of evidence to even prima-facie show that the bank account mentioned in the notice belonged to the petitioner and the name of the bank of which account number belongs is not disclosed. While allowing the appeal, the court quashed the impugned order.

Valid Judicial Scrutiny cannot be done on GST SCN & Orders issued Without Signature of Proper Officer: Telangana HC

M/s. Bigleap Technologies and Solutions Pvt. Ltd. andothers. vs The State of Telangana and others. CITATION: 2025 TAXSCAN (HC) 283

The Telangana High Court ruled that orders under the GST and Show Cause Notices (SCN) that are not signed by the appropriate officer cannot withstand judicial review.

The court determined that the notification or order is vulnerable since the Rule and the prescribed forms require the Proper Officer’s signature. If the court takes a different stance regarding DRC-07 not being signed without taking into account the aforementioned norm and the necessary form, it must be held incuriam. The notices and orders were all revoked by the court.

Kerala HC dismisses Writ Petition Challenging Kerala Tax Luxuries Act on Availability of Statutory Remedy

M/S KRISHNA THEERAM AYUR HOLY BEACH RESORTS PV. LTD vsSTATE TAX OFFICER-II CITATION: 2025 TAXSCAN (HC) 277

In a recent case, the Kerala High Court dismissed the writ petition challenging Kerala Tax Luxuries Act, 1976 on availability of statutory remedy. Though the assessing officer was given the liberty to restore the earlier assessment order, it was an option given to the assessing authority. Therefore, the impugned order does not warrant any interference under Article 226 of the Constitution of India

A single bench of Justice Bechu Kurian Thomas court viewed that the application and the e-challan paid by the petitioner are all unilateral actions, which cannot bind the assessing authority or the Department from issuing order of assessment. Therefore, the contentions based on the Amnesty Scheme allegedly availed by the petitioner are not of any assistance to the petitioner. Since the matter requires to be appreciated based on the documents available and since the petitioner has the remedy of appeal, the court viewed that this is not a fit case to exercise the jurisdiction under Article 226 of the Constitution of India. The court dismissed the writ petition reserving the liberty of the petitioner to pursue the statutory appeal.

S. 153C Reassessment Invalid without Incriminating Evidence, Two-Tier AO Satisfaction Required Even Before 2015 Amendment: Delhi HC

M/S RIDGEVIEW CONSTRUCTION PVT. LTD vs PrincipalCommissioner of Income Tax CITATION: 2025 TAXSCAN (HC) 284

In a recent judgment, the Delhi High Court ruled that the reassessment proceedings initiated under Section 153C of the Income Tax Act were invalid as no incriminating material and that even before the 2015 amendment, the satisfaction of both the Assessing Officer (AO) of the searched person and the AO of the non-searched person was required to justify reassessment under Section 153C of the Income Tax Act.

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The court referenced precedents including CIT v. Sinhgad Technical Education Society (2018) and RRJ Securities Ltd. (2015) holding that concluded assessments cannot be reopened merely because a document was found during a search unless it directly establishes undisclosed income for the specified years. The provisional balance sheet did not link the petitioner to any undisclosed income for AYs 2004-05 and 2005-06 so, the court upheld the ITAT’s decision and dismissed the appeal filed by the Income Tax Department.

ITC Refund cannot be denied stating Non-Issuance of Credit Note by other party to Contract: Karnataka HC

THE JOINT COMMISSIONER vs M/S NAM ESTATES PRIVATE LIMITED CITATION: 2025 TAXSCAN (HC) 288

The Karnataka High Court directed the GST department to refund the Input Tax Credit ( ITC ) as it was viewed that the same cannot be denied on the ground of non-issuance of credit note by other party to contract.

While rejecting the petition, the division bench of Justice Krishna S Dixit and Justice G Basavaraja directed the appellant to refund the GST amount to the Respondent-Assessee within a period of eight weeks, failing which they run the risk of contempt proceedings and further they are liable to pay the interest at the statutory admissible rate, which may be recovered on such payment, from the erring officials.

GST Appeal cannot be Rejected for Minor Delay in Filing it If Pre-Deposit and Additional Amount Paid: Madras HC

Tvl. Chennais Pet vs The State Tax Officer CITATION: 2025 TAXSCAN (HC) 285

In a recent ruling, the Madurai bench of Madras High Court held that a minor procedural delay in filing a GST appeal should not be a ground for dismissal, particularly when the petitioner has made substantial payments toward the disputed tax liability.

Accordingly, the Court set aside the rejection order dated 03.01.2025 and remanded the matter back for fresh consideration, directing the appellate authority to decide the case on its merits within two months. The Writ Petition was disposed of without any order as to costs.

GST Amnesty for Late Fee Waiver on GSTR-9 & 9C Applies to Returns Filed Before Notification: Himachal Pradesh HC

M/s R. T. Pharma vs Union of India & Ors. CITATION: 2025 TAXSCAN (HC) 291

The Himachal Pradesh High Court has ruled that taxpayers who filed their ( Goods and Services Tax Returns ) GSTR-9 and GSTR-9C returns before the amnesty notification date can still avail of the late fee waiver benefit.

The matter was remanded to the third respondent, directing them to pass a fresh order on merit while extending the benefit of the notification in accordance with the law. The court also directed that the revised order be issued expeditiously, preferably within three months from the receipt of the judgment.

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ITC Denied Invoking S. 17(5) of GST Act without Indicating Reason: Madras HC Sets Aside Order

Sri Dhanalakshmi Steels vs The Assistant Commissioner (st)CITATION: 2025 TAXSCAN (HC) 290

The Madras High Court, in its judgment, set aside the Goods and Service Tax (GST) order denying Input Tax Credit (ITC) by invoking section 17(5) of the GST Act, 2017, without indicating reason.

A single bench of Justice Mohammed Shaffiq set aside the order allowed the respondent authority to issue a notice indicating the Clause under Section 17(5) of the act which gets attracted to enable the petitioner to respond and thereafter proceed in accordance with law after affording the petitioner a reasonable opportunity of hearing.

Appeal by Medical Trust Against Income Tax Order issued u/s 201: Kerala HC Stays Recovery Proceedings Initated

PULIKKAL MEDICAL FOUNDATION vs THE INCOME TAX OFFICER(TDS) CITATION: 2025 TAXSCAN (HC) 286

In a ruling on the appeal filed by the Medical trust against Income Tax order issued under section 201 of the Income Tax Act, 1961, the Kerala High Court stayed the recovery proceedings initated by the department till the disposal of the appeals by the tribunal.

The recovery proceedings are kept in abeyance for a short period till the appeal is disposed of. In fact, the appeals have become ripe for hearing, ought to be disposed of in a time bound manner. The single bench of Justice Bechu Kurian Thomas stayed the orders till the appeals filed are disposed of.

S. 129 of GST Act not Attracts If Goods Quantity or Weight are Correct on Physical Verification: Calcutta HC directs to Release Vehicle

Ashok Sharma vs The State of West Bengal & Ors CITATION: 2025 TAXSCAN (HC) 292

The Calcutta High Court directed the Goods and Services Tax (GST) department to release vehicle and held that department cannot seize goods under section 129 of GST Act, 2017 when quantity or weight of goods is found correct on physical verification.

In light of observation, the bench directed the department to release the vehicle along with the goods within four days from the order.

Unfair to Charge Toll on Poor Roads: J&K High Court Orders 80% Reduction

Sugandha Sawhney vs Union of India CITATION: 2025 TAXSCAN (HC) 293

In a recent ruling, the Jammu & Kashmir High Court ruled that charging tolls on bad roads is unfair and ordered an 80% reduction in toll fees at 2 key toll plazas.

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The court directed that toll charges at Lakhanpur and Ban Toll Plazas should be reduced to just 20% of the original rate until the Delhi-Amritsar-Katra Expressway is fully completed. It also ordered that all toll plazas must follow the National Highways Fee Rules, 2008, especially regarding the required 60 km distance between toll plazas.

CBDT cannot Impose Arbitrary Time Limits to Deny Taxpayers’ Refund Rights under Income Tax Act: Delhi HC

SUN PHARMACEUTICAL INDUSTRIES LTD vs INCOME TAX OFFICER& ANR CITATION: 2025 TAXSCAN (HC) 295

In a recent ruling, the Delhi High Court held that the Central Board of Direct Taxes (CBDT) cannot impose arbitrary time limits to deny taxpayers their right to claim refunds under the Income Tax Act and ruled CBDT Circular No. 07/2007 which set a two-year deadline for refund applications is ultra vires.

The court quashed the rejection order and directed the Income Tax Department to process the refund. The court clarified that CBDT’s attempt to restrict taxpayers’ refund rights through an arbitrary limitation period was unlawful and that taxpayers cannot be denied legitimate refunds based on procedural barriers that lack legal authority. The writ petition was allowed. To Read the full text of the Order CLICK HERE

SARFAESI Proceedings to Recover Loan can be Initiated by Bank if it wasn’t Party to Resolution Plan: Kerala HC

ASHOK HARRY POTHEN vs THE AUTHORISED OFFICER CITATION: 2025 TAXSCAN (HC) 294

The Kerala High Court ruled that if a bank was not a party to the resolution plan authorized under the Insolvency and Bankruptcy Code, 2016, it may still pursue recovery of unpaid debts under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).

The court dismissed the petition, ruling that the resolution plan had no bearing whatsoever on the respondent bank’s ability to pursue the property that the petitioner had mortgaged, particularly since the respondent bank was not even involved in the NCLT proceedings or the resolution plan.

Kerala HC Stays Recovery Proceedings under Income Tax Act Till Disposal of Pending Appeal before ITAT

SML FINANCE LIMITED BETHANY COMPLEX vs THE DEPUTYCOMMISSIONER OF INCOME TAX CIRCLE1(1) CITATION: 2025 TAXSCAN (HC) 289

In a recent case, the Kerala High Court stayed the recovery proceedings under the Income Tax Act, 1961 till the disposal of the pending appeal before the Income Tax Appellate Tribunal (ITAT). The stay was made as the appeal filed against the order of assessment for the year 2012-13 is under consideration before the tribunal and already hearing of the appeal has been concluded with orders awaited

Since the appeal filed against the order of assessment for the year 2012-13 is under consideration before the 3rd respondent and already hearing of the appeal has been concluded with orders awaited, the recovery proceedings pursuant to the aforesaid order of assessment shall be kept in abeyance till the above referred appeal is disposed of.

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Clerical Errors in Reassessment Notices can be Rectified but Ignoring Apparent Mistakes in Assessment Order is Unsustainable: Delhi HC

MONISH GAJAPATI RAJU PUSAPATI vs ASSESSMENT UNIT INCOMETAX DEPARTMENT & ANR CITATION: 2025 TAXSCAN (HC) 296

In a recent ruling, the Delhi High Court stated that clerical mistakes in reassessment notices can be corrected, but ignoring clear errors in assessment orders is not acceptable.

The court quashed the order, which rejected the petitioner’s objections. The reassessment notice was not completely canceled, but the tax department was ordered to correct the mistake and provide the petitioner with the correct financial details within a week. The petitioner was given a fresh opportunity to respond before reassessment could proceed. The writ petition was partly allowed.

Husband and Wife cannot be Taxed Equally for Income Earned out of Wife’s Sole Property: Delhi HC

SMT. SHIVANI MADAN vs PR. COMMISSIONER OF INCOME TAX CITATION: 2025 TAXSCAN (HC) 298

The court found that the AO view that the property would be liable to be viewed as being jointly owned in equal share by the appellant and her spouse and thus taxed in accordance with Section 23(1)(a) of the Act is not proper.

While allowing the appeal , the court viewed that the question of taxability would necessarily have to be answered bearing in mind the individual who had in fact obtained benefits from the property. The court set aside the order of the Tribunal.

Govt. Approval Not Mandatory for Enterprises Claiming S. 80IC Income Tax Deductions in Notified Special Zones: Delhi HC

M/S LEGACY FOODS PVT. LTD vs DEPUTY COMMISSIONER OF INCOMETAX, & ANR. CITATION: 2025 TAXSCAN (HC) 297

In a recent judgment, the Delhi High Court ruled that enterprises claiming deductions under Section 80IC of the Income Tax Act are not required to obtain government approval if they operate in notified special zones.

The court set aside an order by the Income Tax Appellate Tribunal (ITAT)and allowed the appeal. The tribunal directed that the appellant’s deduction claim under Section 80IC be restored. To Read the full text of the Order CLICK HERE

Counsel on Record’s Demise Delayed GST Appeal Filing: Madras HC grants Two Weeks for Filing

M/s.STAR YARN vs The State Tax Officer (INT) CITATION: 2025 TAXSCAN (HC) 300

The Madras High Court granted liberty to the petitioner to file a delayed appeal due to the demise of counsel on record and granted 2 weeks for filing the appeal.

Justice Krishnan Ramaswamy of the Madras High Court granted liberty to the petitioner to file an appeal before the Appellate Authority within two weeks from the date of receiving a copy of the court’s order. The court also directed the Appellate Authority to consider the appeal on its merits and in accordance with the law, without insisting on the limitation aspect. The Appellate Authority was instructed to hear the petitioner and pass appropriate orders as expeditiously as possible. The writ petition was disposed of, and no order as to costs was issued.

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Failure to Consider GST Circular: Madras HC Directs Fresh Review of matter Imposing 200% Penalty on Non-Generation of E-Invoice

M/s.Urmilla Enterprises Pvt. Ltd vs State Tax Officer-I CITATION: 2025 TAXSCAN (HC) 299

The Madras High Court, in a recent decision, noted that there was a failure on the part of the department to consider relevant GST circular and directed a fresh review of the matter imposing a 200% penalty on the non-generation of e-invoice.

The bench further observed that “it is made clear that if the respondent has come to the conclusion that the benefit available by virtue of the said circular is not applicable for the petitioner, the respondent shall release the vehicle upon the deposit of sum of Rs.10 Lakhs (Rupees Ten lakhs only) by the petitioner, and if the detained vehicle is kept idle, it would get damaged and its value also get deteriorated till final orders being passed, if the said order is challenged, attains finality.”

Reduced Bullion TRQ Allocation without Providing Hearing Opportunity to Gold Importers: Delhi HC Allows to File Review Application

M/S MANJALLY JEWELLERS vs DIRECTOR GENERAL OF FOREIGNTRADE & ORS. CITATION: 2025 TAXSCAN (HC) 301

The Delhi High Court allowed the gold importers to file review application against the DGFT’s order reducing the rate of Bullion Tariff Rate Quota (TRQ) allocation .

It was further held that “In the event that the respondents are inclined to accept the petitioners’ requests, the DGFT may introduce additional conditions to ensure that the petitioners comply with the TRQ allocation and carry out the imports, in accordance with law. “

Principal Can Claim ITC on Capital Goods Sent Directly for Job Work: Kerala HC directs GST Dept to Allow Benefit u/s 16(5) of GST Act

KUTTUKARAN ANTONY ANTO vs THE STATE TAX OFFICER CITATION: 2025 TAXSCAN (HC) 287

The Kerala High Court directed the Goods and Service Tax (GST) department to allow claims of benefit under section 16(5) of GST Act, 2017. By virtue of an amendment effected, sub-clause (5) to Section 16 of the Act, the principal can take Input Tax Credit (ITC) on capital goods if capital goods are directly sent to a job worker for job work.

Further directed that the order shall passed as expeditiously as possible, at any rate, within a period of 30 days from today. The revenue recovery proceedings initiated against the petitioner shall be kept in abeyance till orders are passed by the first respondent as directed above. If the petitioner is given the benefit of amended provisions of Section 16(5) of the Act, necessarily consequences will follow.

TNRDC as ‘Tax Deductor’ not Liable to Pay GST: Madras HC sets aside Demand Order directing to File Objection

M/s.Tamilnadu Road Infrastructure Development Corporationvs The State Tax Officer CITATION: 2025 TAXSCAN (HC) 302

The Madras High Court held that Tamil Nadu Road Infrastructure Development Corporation (TNDRC) was not liable to pay Goods and Service Tax (GST) asit was was registered under the category “Tax Deductor.”. The bench set aside the GST demand order and directed the petitioner to file objections within 2 months.

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Justice Krishnan Ramaswamy of the Madras High Court set aside the impugned order, which was passed by the respondent, and directed the petitioner to file required documents within a period of 2 months from the copy of the order. The respondent was directed to provide the petitioner with a fair opportunity of hearing and pass an order in accordance with the law.

Noida Sports City Scam Case: Allahabad HC issued Guidelines on Rights of Other Members of Consortium When one Member Goes Into Insolvency

M/S Three C Green Developers Pvt. Ltd. vs State Of U.P CITATION: 2025 TAXSCAN (HC) 303

In the Noida Sports City scam, the Allahabad High Court issued guidelines regarding the rights of other consortium members in the event that one of them becomes insolvent.The court laid down the guidelines as the same is not provided in the Insolvency and Bankruptcy Code, 2016.

The Court ordered the Central Bureau of Investigation to file a complaint against all the deceitful NOIDA officials, as well as the builders and allottees involved in the approval, development, and allocation of the Sports City Project, as well as any other individuals who might be connected to the fraud, while dismissing the writ petition.

Refund of Unutilized GST ITC: Gujarat HC upholds Priorly Granted Refund u/s.54(3) to Patanjali Foods

PATANJALI FOODS LTD vs UNION OF INDIA & ORS CITATION: 2025 TAXSCAN (HC) 306

The Gujarat High Court recently ruled in favor of Patanjali Foods Ltd. (Patanjali), upholding the refund of unutilized Input Tax Credit ( ITC ) amounting to ₹1,70,07,091 which was initially granted but later sought to be recovered by the revenue.

Additionally, the Court quashed the impugned Order-in-Original holding that once the refund sanction order dated January 12, 2024 attains finality, no subsequent show cause notice revoking the benefits of a quasi-judicial order could be instated.

GST: Gauhati HC upholds Constitutional Validity of Rule 36(4) of CGST Rules

M/S HIGH TECH ECOGREEN CONTRACTORS LLP vs THE JOINTDIRECTOR CITATION: 2025 TAXSCAN (HC) 307

The Gauhati High Court affirmed constitutional validity of Regulation 36(4) of the Central Goods and Services Tax/Assam Goods and Services Tax Rules, 2017. For a registered person to claim an input tax credit ( ITC ), the law lays forth the circumstances and documentation required.

The eligibility requirements and documentation needed to receive an input tax credit are obviously different from the process of filing a return to receive the benefit. Section 164 makes it clear that the Central Government may establish regulations for any or all of the subjects covered by the CGST Act.

Inadequate Notice Service Makes GST Order Unenforceable: Madras HC

Tvl.Silver Cloud Estates Private Limited vs The State TaxOfficer CITATION: 2025 TAXSCAN (HC) 304

The Madras High Court has recently ruled that a Goods and Services Tax ( GST ) order is unenforceable if the taxpayer is not properly served with notices. The court emphasized that merely uploading notices on the GST portal without personal delivery or registered post does not constitute valid service.

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Failure to comply with this condition will result in the reinstatement of the original order. Additionally, the court directed that any bank account attachments or recovery actions be lifted once the partial payment is made.

Madras HC sets aside Cryptic Tax Assessment Order, Directs Reassessment with Fair Hearing

Tvl.K.P.Trading Corporation vs The Assistant Commissioner(ST) CITATION: 2025 TAXSCAN (HC) 308

In a recent judgment, the Madras High Court set aside a cryptic tax assessment order and directed a reassessment with a fair hearing, highlighting the importance of procedural fairness and natural justice in tax proceedings.

Reinforcing the principles of natural justice, the Court not only set aside the flawed order but also directed the Commissioner of State Tax to issue a new circular warning tax officials against issuing vague assessments. It further stated that in future cases where assessment orders fail to determine tax liability or lack proper reasoning, disciplinary action should be taken against the responsible officer.

Seizure under GST Act can be made on ground of Under-Valuation: Allahabad HC

M/S Jaya Traders vs Additional Commissioner Grade-2 CITATION: 2025 TAXSCAN (HC) 310

The Allahabad High Court in its recent judgment, has held that the seizure under Goods and Service Tax (GST) Act, 2017can be made on the ground of under-valuation.

Judge Piyush Agrawal’s single bench has noted that if undervaluation is intentional and done to avoid paying taxes or to circumvent the GST Act’s provisions, the seizure may still be conducted on that basis. The dealer purposefully devalued the items in order to take advantage of Rule 138, which stipulates that an e-way bill must be included with the goods and cannot be spared, the court said.

Repeated Placing and Removing from Call Book, Not a valid justification for Non-Adjudication of Customs SCN for 15 years: Delhi HC

TILAK RAJ JAIN AND ANR VS ADDITIONAL DIRECTOR GENERAL CITATION: 2025 TAXSCAN (HC) 309

In a recent case, the Delhi High Court ruled that repeated placing and removing from the call book is not a valid justification for non-adjudication of the impugned SCN for about 15 years.

Relying upon the decision of Shri Balaji Enterprises v. Additional Director General New Delhi & Ors., Justice Prathiba M. Singh and Justice Dharmesh Sharma quashed the impugned SCN and set aside the order.

Denial of Eligibility Certificate Renewal impose Liability for Payment of Output Tax on Dealer: Calcutta HC

CRESCENT MANUFACTURING PVT. LTD vs THE FAST TRACKREVISIONAL AUTHORITY CITATION: 2025 TAXSCAN (HC) 311

The Calcutta High Court has held that the rejection of the renewal of the eligibility certificate will render the petitioner/dealer ineligibility for output tax for discharging the liability the dealer will have to pay the taxes.

Further held that the output liability for the rejected period, namely, from 4.3.2015 to 31.3.2015 was to be paid by the writ petitioner within 30 days of such rejection in terms of Rule 180 of the said Rules and having not done so, the authorities were justified in demanding the same by passing the impugned order.

Non-Consideration of evidence in Reassessment: Madras HC Directs Petitioner to Seek Appellate Remedy

Palpandi Shanthi Priya vs Income Tax Officer CITATION: 2025 TAXSCAN (HC) 312

The High Court of Madras in a recent ruling, directed the petitioner to seek an appellate remedy over the non-consideration of evidence in a reassessment proceeding.

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A single member bench of Vivek Kumar Singh(Justice) noted that the petitioner had an alternative remedy before the Appellate Commissioner and allowed a challenge to the impugned order within 30 days of receiving a copy. It directed the Appellate Commissioner to consider and decide the appeal on merits within three months if filed under Section 246A(1)(d) of the Act.

Madras HC Sets Aside Assessment Order Over Lack of Proper Notice to Non-Resident Taxpayer

Madhubala Narayanasamy vs The Income Tax Officer CITATION: 2025 TAXSCAN (HC) 313

The High Court of Madras , in a recent ruling, set aside an assessment order for violating natural justice, citing improper notice to a non-resident taxpayer.

In the interest of justice, the court set aside the impugned order for violating natural justice, subject to a payment of ₹7,500 to the Cancer Institute, Adyar, Chennai.

No Corrupt Motive Found: Madras HC quashes Disciplinary Case against GST Deputy Commissioner

Y.Kayalvizhi vs The Secretary, Commercial Taxes andRegistration Department, Government of Tamil Nadu, St.George Fort, Secretariat,Chennai CITATION: 2025 TAXSCAN (HC) 305

The Madras High Court has set aside disciplinary action against the Deputy Commissioner of GST, noting that there was no evidence of misconduct or corruptive motive on the part of the petitioner.

Bench further observed that “the order of the Original Authority, as well as the Appellate Authority, will clearly establish the fact that both of them have not considered the defense of the writ petitioner that she had called for the master files and she had perused the cancelled E way bills and after being satisfied with the availability of cancelled E way bills, she had passed the said order. Both the authorities have not recorded any finding that the petitioner should pass orders only based upon the appeal files presented by the dealer and should not look into the master file.”

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