Half Yearly Tax Digest 2025: Supreme Court and High Court Cases [Part XV]
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
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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. Appeal on Service Tax for Educational Construction Not Maintainable: Delhi HC Directs Revenue to Approach Supreme Court u/s 35L of CEA COMMISSIONER OFSERVICE TAX vs M/S GLOBE CIVIL PROJECTS PVT LTD CITATION: 2025 TAXSCAN...
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.
Appeal on Service Tax for Educational Construction Not Maintainable: Delhi HC Directs Revenue to Approach Supreme Court u/s 35L of CEA
COMMISSIONER OFSERVICE TAX vs M/S GLOBE CIVIL PROJECTS PVT LTD CITATION: 2025 TAXSCAN (HC) 875
The Delhi High Court has dismissed an appeal filed by the Commissioner of Service Tax holding that the matter was not maintainable before the High Court and directing the Revenue to approach the Supreme Court instead.
Justices Prathiba M. Singh and Rajneesh Kumar Gupta observed that even though the Tribunal had limited its findings to issues like limitation and minor demands, the core subject matter pertained to the taxability of services, an issue falling squarely within the purview of Section 35L, thus beyond the appellate jurisdiction of the High Court. Consequently, the Delhi High Court dismissed the appeal as not maintainable, but granted liberty to the Department to approach the Supreme Court and seek appropriate remedies.
Failure to Issue Notice by VAT Dept before completion of Assessment Order: Calcutta HC Directs Denovo Proceedings
JHARNA SAHA vsJOINT COMMISSIONER OF SALES TAX CITATION: 2025 TAXSCAN (HC) 876
The Calcutta High Court, in its recent case, directs denovo proceedings under the Value Added Tax Act, 2005, as the department failed to issue notice before completion of the final assessment order.
A division bench of Chief Justice T.S. Sivagnanam and Chaitali Chatterjee (Das) allowed the writ petition and the judgment passed by the tribunal dated 7th March, 2025, to the extent it remands the matter to the appropriate assessing authority and direct de novo assessment proceeding for the period 2009-10 is quashed.
Charitable Institution Delayed Filing Form 10B Due to COVID-19 Disruption: Orissa HC Condones 76-Day Delay
Action Researchfor Health and Socio-economic Development vs Central Board of Direct Taxes(CBDT) CITATION: 2025 TAXSCAN (HC) 877
The Orissa High Court has condoned a 76-day delay in filing the Audit Report in Form 10B for the Assessment Year 2020-21 by Action Research for Health and Socio-economic Development, a charitable institution, due to disruptions caused by the COVID-19 pandemic. The court set aside the rejection order dated 17.02.2025 issued by the Commissioner of Income Tax (Exemption), Hyderabad, and directed the authority to consider the audit report on merits.
A division bench comprising Chief Justice Harish Tandon and Justice Murahari Sri Raman observed that the COVID-19 pandemic constituted a force majeure event, as recognized by government circulars and Supreme Court orders.
TOLA Extension Does Not Waive Mandatory Approval u/s 151 for Reassessment Beyond 3 Years: Delhi HC sets aside Notice against H&M India
HANDMHENNESANDMAURITZRETAILPRIVATE LIMITED vs THEASSISTANT COMMISSIONEROFINCOME TAX CITATION: 2025 TAXSCAN (HC) 878
In a recent ruling, the Delhi High Court has set aside a reassessment notice issued after 3 years without the statutory approval under Section 151 of the Income Tax Act, 1961 regardless of TOLA extensions. It does not waive the mandatory approval under the act.
The Bench comprising Justice Vibhu Bakhru and Justice Tejas Karia ruled in favour of the Swedish retail giant’s Indian subsidiary, holding that the reassessment proceedings initiated under Section 148 of the Act were legally unsustainable.
Delhi HC upholds Centralisation of Income Tax Proceedings for Coordinated Probe, Dismisses Jurisdictional Challenge
M/S ALTA VISTAINFO SOLUTIONS PVT LTD & ANR. vs PRINCIPAL COMMISSIONER OF INCOME TAX CITATION: 2025 TAXSCAN (HC) 879
In a recent ruling, the Delhi High Court dismissed a petition challenging the centralisation of income tax assessment proceedings following a search operation, upholding the validity of the jurisdictional transfer under Section 127(2) of the Income Tax Act, 1961.
However, the bench comprising Justice Vibhu Bakhru and Justice Tejas Karia rejected these contentions, observing that Pavel Garg was a director of the petitioner companies, had signed their income tax return for AY 2020-21, and had also stated the supporting affidavit for the present writ petition.
No Tangible Evidence to Prove GE Steam Power has PE in India: Delhi HC sets aside Reassessment Notices
M/S GE STEAMPOWER SYSTEMS vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION: 2025 TAXSCAN (HC) 880
The Delhi High Court, quashed a series of reassessment notices issued under Section 148 of the Income Tax Act, 1961 as there was not tangible evidence to prove GE Steam Power and its other group of entities has a Permanent Establishment ( PE ) in India.
A Division Bench comprising Justice Vibhu Bakhru and Justice Tejas Karia held that the income tax department failed to furnish tangible evidence demonstrating that the foreign petitioners had a Permanent Establishment (PE) in India during the relevant assessment years, which is a necessary condition to tax business income of non-residents in India.
No Consistency in Practice followed by GST Department: Delhi HC directs Revising Present Protocol or Prepare Fresh SOP Including Key 3 Issues
KHALEEQUE AHMEDPROP M/S MARK AD GRAFIX vs SUPERINTENDENT CGST CITATION: 2025 TAXSCAN (HC) 881
The Delhi High Court has expressed concern over the inconsistent procedural practices being followed by the Goods and Services Tax ( GST ) Department and directed to revise the present protocol followed by the department or to prepare a fresh SOP including 3 key issues listed.
The bench observed the recurring lapses, the Bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta stated the need for standardization and transparency in the Department’s functioning.
The Court further instructed the GST Department to file a short affidavit addressing both the specific facts of this case and the proposed SOP. It also observed that while the Department claims to already have a protocol in place, such a protocol must be reviewed and revised, if necessary, to incorporate the above directions. In the meantime, the Court ordered that no coercive steps be taken against the petitioner.
Income Tax Notice Dispatch Date Prevails Over Digital Signature Date: Delhi HC upholds Notice issued on Basis of SC Judgment
RAJESH CHOPRAvs INCOME TAX OFFICER CITATION: 2025 TAXSCAN (HC) 882
In a recent ruling, the Delhi High Court has held that the date of dispatch of an income tax notice is determinative, not the date of its digital signature. The bench upheld the notice issued on the basis of the Supreme Court judgment in Union of India v. Ashish Agarwal.
A Division Bench comprising Justice Vibhu Bakhru and Justice Tejas Karia rejected the petitioner’s plea to quash the reassessment proceedings, observing that mere initial misconception over the notice’s validity would not invalidate proceedings that subsequently complied with Supreme Court-mandated procedures.
No Requirement to Explain Source of Unsecured Loan in Books of Account Prior To April 1, 2023 u/s 68: Delhi HC
SHEELA OVERSEASPRIVATE LIMITED vs PR COMMISSIONER OF INCOME TAX DELHI-08 DELHI CITATION: 2025 TAXSCAN (HC) 883
The Delhi High Court has clarified that the requirement to prove the “source of the source” under Section 68 of the Income Tax Act, 1961, in respect of unsecured loans, is prospective and applicable only from April 1, 2023, following the amendment introduced by the Finance Act, 2022.
The Division bench of Justice Vibhu Bakhru and Tejas Karia found that the assessee had satisfactorily discharged the burden under Section 68 by establishing the identity of the lender, the genuineness of the transaction through banking records, and the creditworthiness based on the overdraft facility secured against fixed deposits. The doubts regarding cash deposits in the director’s account, the Court observed, were a matter to be examined in the director’s assessment, not that of the assessee company.
Charges Received by Amazon Web Services for Cloud Computing not Taxable as ‘Equipment Royalty’ under India-US DTAA: Delhi HC
THECOMMISSIONER OF INCOME TAX vs AMAZON WEB SERVICES CITATION: 2025 TAXSCAN (HC) 884
The Delhi High Court held that payments received by Amazon Web Services Inc. (AWS) from Indian customers for cloud computing services are not taxable as “equipment royalty” under Article 12(3) of the India-US Double Taxation Avoidance Agreement ( DTAA ).
The Delhi High Court concurred with the ITAT’s analysis, observing that the Agreement between AWS and its customers only granted a limited, non-exclusive, non-transferable license to access the services. There was no right given to commercially exploit AWS’s intellectual property or hardware.
Limitation Applies in Proceedings Under Interest on Delayed Payments to Small Scale & Ancillary Industrial Undertakings Act: Telangana HC
TransmissionCorporation of Andhra Pradesh Limited vs M/s. Sri Gowri Shankar CableIndustries CITATION: 2025 TAXSCAN (HC) 885
The Telangana High Court have held that the provisions of the Limitation Act, 1963 are applicable to proceedings initiated under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993.
A division bench of Justice P. Sam Koshy and Justice N. Tukaramji held that the Facilitation Council’s conclusion regarding limitation and its judgment that the Limitation Act did not apply were not supported by the law. Regarding the question of limitation, the Court overturned the conclusions of the XIV Additional Chief Judge and the Facilitation Council.
Delhi HC directs to appeal under CGST Act against Allegations of availment of fraudulent ITC
STANDARDCARTONS PVT LTD vs OFFICE OF THE COMMISSIONER CENTRAL TAX CITATION: 2025 TAXSCAN (HC) 886
The Delhi High Court has directed the assessee to appeal under Section 107 of the Central Goods and Service Tax Act (CGST) 2017 against allegations of availment of fraudulent Input Tax Credit (ITC).
A division bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta held that in exercise of its writ jurisdiction, cannot adjudicate upon or ascertain the factual aspects pertaining to what was the role played by the Petitioner, whether the penalty imposed is justified or not, whether the same requires to be reduced proportionately in terms of the invoices raised by the Petitioner under his firm or whether penalty is liable to be imposed under Section 122(1) and Section 122(3) of the CGST Act.
Non-service of notice against Wrongful Availment of ITC Not raised in time of hearing : Delhi HC Directs Petitioner to File Appeal Under CGST Act
RAMESH KUMARWADHERA vs DEPUTY DIRECTOR INT DIRECTORATE GENERAL OF GST INTELLIGENCE CITATION: 2025 TAXSCAN (HC) 887
The Delhi High Court directed the petitioner to file an appeal under the Central Goods and Services Tax Act, 2017 (CGST) as the non-service of notice against wrongful availment of the ITC was not raised at time of hearing
A division bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta observed that the Show Cause Notice does not deserve to be quashed. When the above order was passed, the Petitioner had an opportunity to seek a hearing in the Show Cause Notice from the Court itself, which the Petitioner did not do. The factum of non-service of notice in time of hearing was also not raised when the Court decided the matter on 29th January, 2025.
Delay cannot be condoned in an appeal u/s 107 of CGST Act: Delhi HC Dismisses Review Petition
ADITYA MADAANvs COMMISSIONER CGST GST COMMISSIONERATE DELHI & ORS CITATION: 2025 TAXSCAN (HC) 888
In a recent case, the Delhi High Court has held that delay cannot be condoned in an appeal under section 10 of the Central Goods and Service Tax Act, (CGST ), 2017 and dismissed the review petition.
A division bench of Justice Prathiba M. Singh and Justice Dharmesh Sharma viewed that the review petition is unmerited, both on the issue of lack of error apparent on the face of the record as also on merits and dismissed the petition.
Actual Loss Must be Proven for Automatic Recovery of Full Amount : Delhi HC
JAMMU &KASHMIR ECONOMIC RECONSTRUCTION AGENCY vs M/S SIMPLEX PROJECTS LIMITED CITATION: 2025 TAXSCAN (HC) 889
The Delhi High Court ruled that even if the statute contains a Liquidated Damages (LD) clause, it requires proof of actual loss and does not provide automatic recovery of the whole LD amount in the event of a breach.
The single bench of Justice Manoj Kumar Ohri noted that after carefully considering the Petitioner’s liquidated damages (LD) claim, the Arbitral Tribunal (AT) correctly determined that the Petitioner ought to have brought it up as a counterclaim. The Petitioner had to request a declaration confirming the unilateral adjustment when the Respondent objected to it.
Form 10-IC Condonation for AY 2020-21 Only Applicable to Company Opted for Lower Tax Rate u/s 115BAA: Delhi HC dismisses Petition
SARLA HOLDINGSPRIVATE LIMITED vs PR COMMISSIONER OF INCOME TAX CITATION: 2025 TAXSCAN (HC) 890
In a recent ruling, the Delhi High Court has reaffirmed that the condonation provided under Central Board of Direct Taxes ( CBDT ) circular for filing of Form 10-IC for Assessment Year ( AY ) 2020-21 is only applicable to companies opted for lower tax rate under Section 115BAAof Income Tax Act, 1961.
The Division bench of Justices Vibhu Bakhru and Tejas Karia ruled that the circular benefits only those companies that had actually opted for the concessional tax regime under Section 115BAA of the Income Tax Act, 1961, in their originally filed return of income.
Supreme Court Stays Madras HC Order Allowing Income Tax Reassessment Against Dalmia Bharat and Subsidiaries
M/S DALMIABHARAT LIMITED vs THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1 & ORS CITATION : 2025 TAXSCAN (SC) 182
In a recent development, the Supreme Court of India granted a stay in favour of Dalmia Bharat Limited and its subsidiaries, Dalmia Cement (Bharat) Limited and Dalmia Power Limited, against the judgment of the Division Bench of the Madras High Court dated April 23, 2025.
At the hearing on May 30, 2025, a bench comprising Chief Justice, Justice Augustine George Masih, and Justice A.S. Chandurkar issued notice and granted an interim stay on the impugned High Court order. The court permitted the petitioners to serve notice via the Standing Counsel in addition to the usual modes and tagged the matter with a related pending SLP.
Calcutta HC upholds ITAT Order Confirming Deletion of Addition made on Unexplained Cash Deposits during Demonetization Period
PRINCIPALCOMMISSIONER OF INCOME TAX 5 KOLKATA VS THE RIFLE FACTORY CO OPERATIVE SOCIETYLTD CITATION: 2025 TAXSCAN (HC) 891
In a recent case, the Calcutta High Court while dismissing the revenue’s appeal upheld the Income Tax Appellate Tribunal’s (ITAT’s) order confirming the deletion of addition made on account of unexplained cash deposits during demonetization period.
The first appellate authority while allowing the assessee’s appeal by order dated 11.05.2023 has elaborately considered the factual situation and perused the voluminous documents which the assessee placed before the CIT(A). The Tribunal noted that despite a direction issued by the CIT(A) to the Assessing Officer to file a remand report on the documents and details furnished by the assessee, the assessing officer failed to furnish any remand report.
The bench of Chief Justice T.S Sivagnanam and Justice Chaitali Chatterjee (Das) found that from the reasoning given by the Tribunal, the revenue miserably failed to do so and dismissed the petition.
GST ITC denied on Non-Compliance of Circular: Madras HC grants Hearing Opportunity Conditionally
BahadurGajendra Kumar Jain vs The Deputy State Tax Officer – II CITATION: 2025 TAXSCAN (HC) 892
In a recent ruling, the Madras High Court set aside an order, wherein the input tax credit ( ITC ) claimed by the petitioner/ assessee under the Goods and Services Tax ( GST ) Act was denied due to non-compliance with Circular.
During the hearing, the petitioner’s counsel expressed willingness to comply with the requirements of the said circular and requested a fresh opportunity to present the necessary documentation. The petitioner also volunteered to deposit 25% of the disputed tax demand as a condition for remand. Justice Senthilkumar Ramamoorthy, considering the circumstances and the petitioner’s readiness to comply, held that a fresh opportunity ought to be provided, albeit conditionally. Accordingly, the impugned order was quashed and the matter was remanded to the respondent authority for reconsideration, on the condition that the petitioner remits 25% of the disputed demand within four weeks from the date of receipt of the order.
Activity of Handling goods being part of composite agreement entered by third parties cannot be bifurcated under different heads for service tax Demand: Calcutta HC
COMMISSIONER OFSERVICE TAX KOLKATA vs M/S EMTA COAL LIMITED CITATION : 2025 TAXSCAN (HC) 893
The Calcutta High Court, in its recent order, held that the activity of handling goods being part of the composite agreement entered into by third parties, cannot be bifurcated under different heads for service tax demand.
It was held that the activity of loading, unloading, packing, unpacking, stacking, re- stacking and shifting of sugar bags from mill floor to godown or from one godown to another godown within the factory is not covered in cargo handling service as there being no activity of loading or unloading for movement outside the factory on public road or ship or aeroplane or trucks for any destination.
The court comprising the Chief Justice T.S Sivagnanam and Justice Chaitali Chatterjee (Das) held that the activity of handling of goods including loading and unloading thereof being part of the composite agreement entered into by the assessee with the third parties cannot be bifurcated under different heads for the purpose of demanding service tax.
Provision under IBC overrides Income Tax Act: Calcutta HC
SREI EQUIPMENTFINANCE LIMITED vs ASSESSMENT UNIT CITATION: 2025 TAXSCAN (HC) 894
In a recent case, the Calcutta High Court has held that the provision of the Insolvency and Bankruptcy Code (IBC), 2016, shall override the provision of the Income Tax Act.
The Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee (Das) have held that a conjoint reading of both the above provisions will clearly show that the provision of IBC shall override the provision of the Income Tax Act. The court held that the proceeding initiated by the respondent/department commencing from the issuance of notice under section 148A(b) of the Act and culminating in the order passed under section 148A(d) of the Act and the consequential notice issued under section 142(1) of the Act should ex facie without jurisdiction and unsustainable in law.
Allahabad HC Slams VAT Assessing Authority for Copy-Paste Orders Ignoring Remand Directions, Orders Appropriate Action by Pr. Secretary
M/s LifestyleInternational Private Limited vs State of U.P. and another CITATION: 2025 TAXSCAN (HC) 895
In a strong rebuke to the VAT ( Value Added Tax ) Assessing Authority, the Allahabad High Court has quashed a series of assessment orders for blatantly disregarding remand directions issued in earlier appellate proceedings.
Additionally, the Court ordered that a copy of the judgment be forwarded to the Principal Secretary, State Tax, Government of Uttar Pradesh, to examine the conduct of the Assessing Authority and take appropriate action.
No GST Input Mismatch Details or Hearing Given: Madras HC directs to Re-do Assessment Order on 10% Deposit
M/s.Alfa FlugsElectrodes vs The State Tax Officere-1 CITATION : 2025 TAXSCAN (HC) 896
The Madras High Court has quashed a Goods and Services Tax ( GST ) assessment order on the ground that the petitioner was not provided with the details of the alleged input tax credit ( ITC ) mismatch, nor given an opportunity of personal hearing before the order was passed.
Recognising the procedural lapses and lack of opportunity afforded to the petitioner, the Justice S. Srimathy held that the assessment order could not be sustained.
Uploading Summary of SCN on GST Portal Solely Not Fulfills S. 169: Patna HC Sets aside Order
M/s BinodTraders vs The Union of India through the Secretary CITATION : 2025 TAXSCAN (HC) 897
The Patna High Court has held that solely uploading a show-cause notice ( SCN ) on the GST portal is not sufficient service under Section 169 of the Bihar Goods and Services Tax ( BGST ) Act, 2017.
Accordingly, the bench of Justice P. B. Bajanthri and S. B. Pd. Singh set aside the impugned orders and remanded the matter to the assessing authority, directing it to issue a fresh SCN, grant the petitioner ample opportunity to reply and be heard, and pass a reasoned order within six months. The petitioner was also directed to cooperate in the fresh proceedings.
Entire GST Demand Confirmed Without Considering 58% Paid via ECRL: Madras HC Directs Reconsideration
Tvl. PrabhaDrug House vs The Assistant Commissioner (ST) (FAC) CITATION : 2025 TAXSCAN (HC) 898
In a recent decision, the Madras High Court set aside a GST assessment order after finding that the GST authorities failed to consider a substantial payment already made by the petitioner through the Electronic Credit Ledger ( ECRL ).
Accordingly, the bench of Senthilkumar Ramamoorthy set aside the assessment order and remanded the case to the adjudicating authority for reconsideration. The authority was directed to provide a reasonable opportunity to the petitioner and to duly take into account the payments already made via the electronic credit ledger before passing a fresh order.
As the second respondent had only been impleaded as a garnishee in connection with a bank attachment arising from the now-set-aside order, the writ petition was disposed of without issuing notice to them. Consequently, the Court ordered that the bank attachment be lifted and closed all connected miscellaneous petitions, with no order as to costs.
S.74 GST Demand Order issued Ex Parte : Madras HC provides Date and Exact Time to Appear for Hearing
South IndiaDevelopers LLP vs The State Tax Officer CITATION : 2025 TAXSCAN (HC) 899
The Madras High Court has set aside an ex parte GST demand order passed under Section 74 of the Tamil Nadu Goods and Services Tax ( TNGST ) Act, citing lack of adequate opportunity for hearing.
Justice G R Swaminathan observed that the petitioner had not been afforded sufficient chance to present their case, which led to the issuance of the order without proper representation.
All contentions of the petitioner were kept open for reconsideration. The Court directed the adjudicating authority to provide the petitioner with a reasonable opportunity to submit all relevant documents and to pass a fresh order on merits, strictly in accordance with law.
Personal Account of Club’s President Cannot Be Frozen for Club’s Default in GST Dues: Madras HC Orders De-freezing
M.Jaiganesh vsThe State Tax Officer CITATION : 2025 TAXSCAN (HC) 900
The Madras High Court has held that the personal bank account of an individual cannot be frozen for the Goods and Services Tax ( GST ) liabilities of a club, even if the individual happens to be the president of the said club.
Justice S. Srimathy concurred with the petitioner’s argument, stating that liability under GST must rest with the taxable entity in this case, the club and not with its office-bearers in their personal capacity, unless specific wrongdoing is established.
Madras HC Upholds Validity of GST Rule 36(4), Declares It Neither Ultra Vires Nor Violative of Article 14
M/s.L & TGeostructure LLP, vs The Union of India CITATION : 2025 TAXSCAN (HC) 901
The Madras High Court dismissed a constitutional challenge against Rule 36(4) of the Central and Tamil Nadu Goods and Services Tax ( CGST ) Rules, 2017, confirming its validity and holding that the provision is neither ultra vires the parent GST enactments nor violative of Article 14 of the Constitution.
The Court observed that the restriction in availing ITC in the absence of supplier compliance is consistent with the legislative objective of curbing tax evasion and preventing fraudulent credit claims, which plagued the pre-GST regime.
The bench also noted that ITC is a statutory concession, not a vested right, and its availment can be subject to conditions to protect revenue interest. Rule 36(4), which initially allowed 20% ITC on mismatched invoices and was gradually tightened to nil tolerance, was held to be a reasonable and proportionate measure.
Mere Uploading GST notice on Portal Repeatedly without Ensuring Receipt by Taxpayer Cannot be Considered as Effective Service: Madra
AlagappanPalaniappan Proprietor vs The Deputy State Tax Officer CITATION : 2025 TAXSCAN (HC) 902
In a recent judgment, the Madras High Court set aside a GST ( Goods and Services Tax ) assessment order, holding that merely uploading a notice on the GST portal without ensuring its receipt by the taxpayer cannot be treated as valid service under the law.
The Court noted that while the law permits service of notices through electronic modes, it also requires authorities to act diligently if no response is received. It observed that repeated uploading of notices without verifying their receipt by the assessee reflects a mechanical and ineffective mode of compliance, leading to unnecessary litigation and hardship.
“Mere uploading notice repeatedly without ensuring their receipt by the petitioner cannot be considered as effective service. Such mechanical compliance does not serve any useful purpose and the same will only lead to multiplicity of litigations, wasting not only the time of the Officer concerned, but also the precious time of the Appellate Authority / Tribunal and this Court as well. Thus, when there was no response from the tax payer to the notice uploaded in the portal, the Officer should have sent the notice through RPAD, which would have served the purpose” said Justice N. Mala.
GST SCN Issued Based on Unshared Verification Report: Madras HC Declines to Quash SCN, Orders Dept to Provide Report
Tvl.Sri SaiCompany Prop. G.Kathiravan vs State Tax Officer CITATION : 2025 TAXSCAN (HC) 903
The Madras High Court, while declining to quash the Show Cause Notice ( SCN ) ordered the Goods and Services Tax ( GST ) department to provide the copy of the verification report which was the basis of the show cause notice.
The Court, after hearing both sides, declined to quash the show-cause notices but directed the department to provide the copy of verification report on representation submitted by the petitioner. The petitioner would then have a further two weeks to file a detailed reply to the show-cause notices.
Income Tax AO Can Grant Relief u/s 220(6) Even Below 20% Tax Deposit: Madras HC Remands Matter
M/s.VMEInfrastructure Private Limited vs Income Tax Officer CITATION : 2025 TAXSCAN (HC) 904
The Madras High Court has clarified that an Assessing Officer ( AO ) is empowered to grant relief under Section 220(6) of the Income Tax Act, 1961, even when the assessee has deposited pre-deposit below 20% of the total amount.
Justice G R Swaminathan held that “Applying the aforesaid ratio, the order impugned in the present writ petition is set aside and the matter is remitted to the file of the respondent. The respondent will bear in mind the principles laid down in the aforesaid decision and pass appropriate orders after hearing the petitioner.”
No Service Tax on Supply of Food Stuff by Private Universities to Students: Himachal Pradesh HC rules in favour of JUIT
M/s JaypeeUniversity of Information Technology vs State of H. P. & Ors. CITATION : 2025 TAXSCAN (HC) 905
In a ruling in favour of Jaypee University of Information Technology (JUIT), the Himachal Pradesh High Court has held that private universities are not liable to pay tax on the supply of foodstuffs to students.
The division bench of Justices Tarlok Singh Chauhan and Sushil Kukreja has noted that the Tribunal erred in concluding that the petitioner must pay taxes on the provision of food and other items to students on its property, despite the petitioner's primary purpose being education.
The court ruled that there was insufficient evidence to prove that the petitioner(s) had an independent intention to engage in business related to the auxiliary activities of providing canteen facilities to the children. As a result, in this instance, the auxiliary activity of offering university convicts cafeteria amenities would not qualify as business under the Act. After that, the petitioner was manifestly exempt from paying any taxes related to the aforementioned actions.
GST DRC-01 cannot be Substitute to Show Cause Notice Issued u/s 73 (1) of CGST Act: Gauhati HC
AMAN GUPTA vsTHE UNION OF INDIA AND ORS CITATION : 2025 TAXSCAN (HC) 906
The Gauhati High Court has held that a summary of the Show Cause Notice in GST DRC-01 is not a substitute to the Show Cause Notice to be issued in terms of Section 73 (1) of the CGST Act as well as the SGST Act.
The bench of Justice Arun Dev Choudhury has relied on the decision in the case of Construction Catalysers Pvt. Ltd. Vs. the State of Assam in which it was held that the Summary of the Show Cause Notice, the Summary of the Statement under Section 73 (3) and the Summary of the Order passed in terms with Section 73 (9) are to be issued in GST DRC-01, GST DCR-02 and GST DRC-07 respectively.
The court has ruled that in order to implement the provisions of Section 73, the Proper Officer must issue a Show Cause Notice regardless of whether the Summary of the Show Cause Notice has been issued. The summary of order and the summary of show cause notice were set aside by the court in its decision to dismiss the writ petition.
Challenge based on factual dispute against KVAT Act is not approachable under writ jurisdiction: Kerala HC
SMT. MAJUSHASANJITH vs SALES TAX OFFICER CITATION : 2025 TAXSCAN (HC) 907
In a recent case, the Kerala High Court observed that a challenge based on factual dispute against Section 25(1) of the Kerala Value Added Tax Act ( 'the KVAT Act'), 2003 is not approachable under writ jurisdiction.
The Single Judge found that the factual dispute raised by the appellant could not be appreciated in proceedings under Article 226 of the Constitution of India and hence relegated the appellant to his statutory remedy of filing an appeal before the First Appellate Authority. The Judge also took note of the period spent by the appellant in pursuing the Writ Petition and directed that the said period would stand excluded while calculating the period of limitation for filing the statutory appeal before the First Appellate Authority.
GST ITC Refund Withheld Without Challenging Appellate Order: Delhi HC Directs Department to Release Refund with Interest
M/ S JVGTECHNOLOGY PRIVATE LIMITED vs COMMISSIONER CGST, DELHI WEST AND ANR CITATION : 2025 TAXSCAN (HC) 908
The Delhi High Court directed the Department to release the Goods and Service Tax (GST) Input Tax Credit (ITC) refund with interest, ruling that the refund could not be lawfully withheld since no appeal or stay was filed against the Appellate Authority (AA) ’s order allowing the refund.
The Court stated that the Department’s opinion alone was not enough to stop the refund. Since no appeal had been filed against the AA’s order and there was no stay, the Department could not lawfully withhold the refund.
The Court also relied on the case of G.S. Industries, where it was held that merely planning to file an appeal could not justify delaying the refund, especially when the refund was already allowed on appeal.
Accordingly, the Court directed the Department to release the refund with interest under Section 56 of the CGST Act within two months. It also clarified that if the Department later succeeded in any legal challenge, it could recover the refunded amount as per law. The petitioner was permitted to file an application if the refund was not credited by 10th July 2025.
GST S.73 Demand Order issued Without Proper Hearing Quashed: Madras HC Directs Hearing and Lifting of Bank Attachment on 25% Deposit
M/s. Rajvijayand Co. vs Deputy Commercial Tax Officer CITATION : 2025 TAXSCAN (HC) 909
In a recent ruling, the Madras High Court quashed a demand order issued under Section 73 of the Tamil Nadu Goods and Services Tax ( TNGST ) Act, 2017, on the grounds that it was passed without affording the petitioner a proper opportunity for hearing.
The petitioner’s bank account had been provisionally attached due to the earlier order. The High Court directed that upon payment of 25% of the demand by June 12, 2025, the said bank attachment must be lifted forthwith by the third respondent.
However, the Court made it clear that if the petitioner fails to comply with the undertaking, the benefit of this order would automatically stand recalled. The writ petition was accordingly allowed, with no order as to costs, and all connected miscellaneous petitions were closed.
Delhi HC Upheld Acquittal Order of Offence u/s 276B of Income Tax Act on Finding Committed Bonafide Mistake, Dismisses Income Tax Officers Appeal
INCOME TAXOFFICER WARD 73(2) NEW DELHI vs MKY CONSTRUCTIONS PRIVATE LIMITED CITATION : 2025 TAXSCAN (HC) 910
In a recent case, the Delhi High Court has upheld the acquittal order of the offence under section 276B of the Income Tax Act, 1961 on finding a committed bona fide mistake and dismissing the Income Tax Officer's Appeal.
A single bench of Justice Amit Mahajan viewed that the Trial Court rightly observed that the financial difficulty stemmed from the fact that substantial, legally recoverable payments due to the respondent company from contracting parties had remained unpaid, resulting in a liquidity crunch. This root cause was adequately substantiated by the documents and explanations placed on record, and provided the reasonable cause envisaged under Section 278AA of the Income Tax Act.
No TDS was required to be deducted from Payment EDC made to HUDA: Delhi HC Allows Appeal
SWIFTRANSINTERNATIONAL PVT. LTD vs INCOME TAX OFFICER WARD 77 4 CITATION : 2025 TAXSCAN (HC) 911
The Delhi High Court has held that TDS was required to be deducted from external development charges [EDC] payment made to Haryana Urban Development Authority [HUDA]
A division Justice Vibhu Bakhru and Justice Tejas Karia had allowed the writ petition and had set aside the orders passed under Section 201(1) and 201(1A) of the Act as well as an order imposing penalty under Section 271C of the Act, which was premised on the allegation that the petitioner had failed to deduct TDS under Section 194-I of the Act in respect of payments of EDC to HUDA.
The Court had also clarified that respondents were not precluded to proceed further in accordance with law as well as the observations made by this Court in Puri Constructions Private Limited v. Additional Commissioner of Income Tax and Ors.: 2024 SCC OnLine Del 939. It is clear from the above that the liberty granted to the Revenue to proceed further was qualified by the expression “in accordance with law”.
Costs cross-charges are not FTS and FIS: Delhi HC Sets aside order rejecting Application for ‘NIL’ withholding tax
AECOM TECHNICALSERVICES INC. vs INCOME-TAX OFFICER CITATION : 2025 TAXSCAN (HC) 912
The Delhi High Court has set aside the order rejecting application for ‘Nil’ withholding tax holding that costs cross- charge are not technical services [FTS] within the meaning of Section 9(1)(vii) of the Act or ‘fees for included services’ [FIS] under Article 12(4) of the India USA Double Taxation Avoidance Agreement [India-US DTAA].
The petitioner, Aecom Technical Services Inc. has filed the present petition, inter alia, impugning an order dated 26.07.2024 [impugned order] passed by the Assessing Officer [AO] under Section 197 of the Income Tax Act, 1961 [Act], whereby the petitioner’s application for ‘NIL’ withholding tax, was rejected. However, the AO had held that the deductors are authorised to withhold tax at the rate of 15% (including surcharge and cess) on the payment of ₹114,90,00,000/-.
A division Justice Vibhu Bakhru and Justice Tejas Karia set aside the impugned order and directed the AO to issue the necessary certificate or ‘NIL’ withholding Tax Certificate in respect of the cross-cost charges as received by the petitioner from AIPL and AIGSPL.
ITAT Erred in Holding Vedanta’s Block Assessment Order Time-Barred: Madras HC Restores 25 Years Pending Matter to Tribunal
TheCommissioner of Income Tax vs M/s.Vedanta Limited CITATION : 2025 TAXSCAN (HC) 913
The Madras High Court has overturned the Income Tax Appellate Tribunal’s ( ITAT ) decision that had held the block assessment order issued against Vedanta Limited as time-barred and restored the 25-year old pending matter back to the tribunal.
However, the bench of Justices R. Suresh Kumar and C. Saravanan found fault with the ITAT’s reasoning. Based on the Income Tax Search and Seizure Manual and Supreme Court precedents, the Court determined that prohibitory orders under Section 132(3) are different from considered seizures and do not signal the conclusion of a search.
Delay in filing reply against CGST Notice Due to Under Going Medical Treatment : Orissa HC allows opportunity of hearing
Arjun Nayak vsChief Commissioner of Commercial Taxes (C.T.) CITATION : 2025 TAXSCAN (HC) 914
In a recent case, the Orissa High Court condoned the delayin filing reply against the Central Goods and Service Tax (CGST ) notice due to under going medical treatment during that period and allowed opportunity of hearing.
The court is of the considered view that the petitioner is required to be given one opportunity to justify that the delay occurred due to circumstances beyond his control. There appears to be sufficient cause for the petitioner to file an appeal beyond the period stipulated under sub-section (1) of Section 107 of the GST Act.
GST Appeal Dismissed for 27-Day Delay Restored by Madras HC, Orders Disposal on Merits
TVL. KandasamiBalasubramaniam vs The Appellate Deputy Commissioner (S.T.) CITATION : 2025 TAXSCAN (HC) 915
In a relief to a GST ( Goods and Services Tax ) appellant, the Madras High Court has set aside an order dismissing an appeal due to a 27-day delay, holding that such a minor delay ought to be condoned in the interest of justice. The Court directed the appellate authority to restore and hear the appeal on merits.
The Court observed that delay in such matters, especially when it falls within the statutorily condonable period, must be viewed with leniency. It stated that the appellate authority ought to be liberal and indulgent in cases of short delays, the Court found the reasons provided in the petitioner's affidavit to be satisfactory.
Selective Personal Interaction for GSTAT Judicial Member Post: Orissa HC Issues Notice
Pranaya KishoreHarichandan vs Union of India and Others CITATION : 2025 TAXSCAN (HC) 916
The High Court of Orissa issued notice in a challenge against the Search-cum-Selection Committee’s method of conducting selective personal interactions for the Judicial Member post of the Goods and Services Tax Appellate Tribunal (GSTAT).
The division bench of Justice K.R.Mohapatra and Justice M.S. Sahoo found that the matter needed attention and issued notice. Since Mr. Parhi accepted notice for the opposite parties, the Court asked the petitioner to give him three extra copies of the brief within three days to get instructions.The matter was listed for 20th June 2025, and the Court asked that instructions be taken before then.
In the interim application, the Court saw a prima facie case in the petitioner’s favour and allowed the selection process to go on but directed that no final decision be made until the next hearing.
DMK Trust Gets Relief from Madras HC, Quashes Income Tax Transfer Orders u/s 127 on Lack of Procedural Issues
DMK CharitableTrust vs The Principal Chief Commissioner CITATION : 2025 TAXSCAN (HC) 917
The Madras High Court has quashed transfer orders issued against DMK Charitable Trust and the Dravida Munnetra Kazhagam (DMK) Party under Section 127 of the Income Tax Act, 1961 citing procedural lapses.
The court ruled that reasons must be explicit, communicated, and based on material facts when exercising quasi-judicial powers. It concluded that the impugned orders did not meet these standards and were therefore liable to be quashed.
Accordingly, the High Court allowed the writ petitions and set aside the impugned transfer orders, restoring jurisdiction to the original assessing officers. The court added that “It is needless to state that the respective petitioners may be given an opportunity of being heard to explain the case as the respective petitioners are likely to loose out the benefit of faceless assessment under Section 144B of the IT Act.”
GST S. 74 Proceedings' Closure Does Not Absolve Penalty u/s 122: Allahabad HC refuses to Quash Penalty against Patanjali Ayurved
M/S PATANJALIAYURVED LTD. vs UNION OF INDIA AND OTHERS CITATION : 2025 TAXSCAN (HC) 918
In a recent ruling, the Allahabad High Court has refused to interfere with the show cause notice ( SCN ) issued to M/s Patanjali Ayurved Ltd., proposing a penalty of ₹273.5 crore under Section 122 of the Central Goods and Services Tax (CGST) Act, 2017.
Patanjali contended that Section 122 involves "offences" as defined under the General Clauses Act and should therefore be tried by a criminal court under proper procedural safeguards, especially when it entails a quasi-criminal penalty of ₹273.5 crore.
However, the High Court did not accept this contention. The Court held that Section 122, though placed under the chapter on "Offences and Penalties," is essentially a civil provision dealing with administrative penalties, distinct from criminal prosecution under Section 132. It observed that the penalty under Section 122 can be adjudicated by a proper officer and need not await or depend upon the outcome of proceedings under Section 74.
Delhi HC Sets aside Reassessment Notice issued against CPI(M) after 31.03.2021 without following Procedure u/s 148A of Income Tax Act
COMMUNIST PARTYOF INDIA (MARXIST) vs INCOME TAX DEPARTMENT CITATION : 2025 TAXSCAN (HC) 919
The Delhi High Court set aside the reassessment notice issued after 31.03.2021 without following the procedure under section 148A of the Income Tax Act, 1961.
A division bench of Justice Vibhu Bakhru and Justice Tejas Karia observed that the order dated 29.07.2022 passed under Section 148A(d) of the Act is not sustainable. Consequently, the subsequent proceedings, including the assessment order dated 23.05.2023, cannot be sustained. Accordingly, the impugned order passed under Section 148A(d) of the Act, the notice issued under Section 148 of the Act as well as the assessment order dated 23.05.2023 and the demand raised pursuant thereto, are hereby set aside.
GST Notices Must Be Effectively Served: Madras HC Says RPAD Required If No Response to Portal Upload
Tvl. Sri Mathuru Eswarar Traders vs The Deputy State TaxOfficer CITATION : 2025 TAXSCAN (HC) 920
The Madras High Court ruled that GST ( Goods and Services Tax ) notices must be effectively served, and held that if there is no response to a notice uploaded on the GST portal, the authorities are required to serve the notice through Registered Post with Acknowledgement Due ( RPAD ).
The Court observed that merely uploading a notice on the GST portal, without ensuring its receipt, does not constitute valid service under Section 169 of the CGST Act. It stated that when there is no response to portal notices, tax officers must explore alternate methods of service such as registered post, to ensure effective communication.
The mechanical act of uploading notices without follow-up was deemed a violation of the principles of natural justice and could lead to unnecessary litigation. The court observed that “Mere uploading notice repeatedly without ensuring their receipt by the petitioner cannot be considered as effective service. Such mechanical compliance does not serve any useful purpose and the same will only lead to multiplicity of litigations, wasting not only the time of the Officer concerned, but also the precious time of the Appellate Authority / Tribunal and this Court as well. Thus, when there was no response from the tax payer to the notice uploaded in the portal, the Officer should have sent the notice through RPAD, which would have serve the purpose.”
Order under CGST Act passed without Providing Opportunity of Hearing : Delhi HC Directs to avail Appellate Remedy
M/S JAIN BHADRI GRAPHICS vs ADDITIONAL COMMISSIONER CITATION : 2025 TAXSCAN (HC) 921
The Delhi High Court has directed to avail appellate remedy under the Central Goods and Services Tax Act, 2017 against an order passed without providing an opportunity for a hearing.
A division bench Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta held that the jurisdiction having been established by the said notifications and the opportunity for personal hearing having been granted, the Petitioner ought to be relegated to the Appellate Authority for availing the appellate remedy under Section 107 of the Central Goods and Services Act, 2017.
CGST SCN for Personal Hearing Issued on old Address: Delhi HC Allows
THE PUNJAB STATE COOPERATIVE MILK PRODUCERS FEDERATION LTDvs ADDITIONAL COMMISSIONER CENTRAL GST DELHI WEST WARD 45 DELHI & ORS CITATION : 2025 TAXSCAN (HC) 922
The Delhi High Court has allowed one more opportunity to the Milk Producers Federation Ltd for personal hearing as the Central Goods and Service Tax (CGST) Act, 2017 show cause notice (SCN) for personal hearing was issued on old address of the director of firm.
It is made clear that if the email is received and the personal hearing is not attended, no further opportunity shall be granted to the Petitioner Federation. Only one opportunity is being granted in the unique facts of this case. The limitation in respect of passing of the order pursuant to the SCN, shall not apply in the facts of this case as well. The Petitioner is directed to get all its details corrected on the GST portal within 15 days failing which the Department would not be blamed for future notices being sent at the wrong address.
GST Appeal Filing Delayed due to Confusion in GST Rate: Madras HC Orders Department to Hear Govt Civil Contractor’s Case
Tvl.SSB Construction vs Deputy Commissioner (CT) CITATION : 2025 TAXSCAN (HC) 923
The Madras High Court has allowed a writ petition challenging the rejection of a delayed appeal and an ex parte assessment order issued under the Goods and Services Tax ( GST ) Act.
Justice N. Mala concurred with the petitioner’s submission, observing that the delay had been reasonably and satisfactorily explained.
Holding that the first respondent’s rejection order warranted interference, the Court set aside the impugned order and directed the first respondent to entertain the petitioner’s appeal without reference to the delay. The respondent was further instructed to dispose of the appeal on merits and in accordance with law at the earliest.
Challenge against order passed by Liquidator is Appealable under IBC : Madras HC Dismisses Writ petition
T.Sivasankar vs The Managing Director CITATION : 2025 TAXSCAN (HC) 924
The Madras High Court in its recent judgment has dismissed the writ petition holding that a challenge against order passed by Liquidator is appealable under the Insolvency and Bankruptcy Code, 2016.
It must be noted that Section 42 of the IBC, 2016 provides a specific statutory mechanism for appeal against an order passed by the Liquidator, which must be preferred before the Adjudicating Authority within a period of fourteen days. In the present case, the impugned order of the Liquidator is dated 20.01.2021, whereas the writ petition has been filed only on 23.03.2021, beyond the prescribed period of limitation. The petitioners, having failed to avail the remedy under Section 42, cannot now invoke the writ jurisdiction of this Court, particularly when an efficacious and statutorily prescribed remedy was available.
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GST Cancellation Recall Denied Due to Unpaid Dues Found Later, SCN & Demand known Belatedly: Delhi HC directs to take Alternate Remedy
CHETAN ASRANI vs THE SALES TAX OFFICER CLASS II WARD 96 CITATION : 2025 TAXSCAN (HC) 925
The Delhi High Court declined to quash a GST ( Goods and Services Tax ) demand order arising from, holding that the proper remedy lies in statutory appeal.
The Court, after considering the facts, observed that its earlier direction to recall the cancellation was conditional upon verification of outstanding dues. Since the impugned demand had emerged and stood in the way of such recall, the Court held that the petitioner should avail the statutory remedy under Section 107 of the CGST Act, 2017.
The Bench, comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta, ruled that the demand order was appealable and not fit for interference under writ jurisdiction.
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