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

Delhi HC Declines to Exercise Writ Jurisdiction in Fraudulent GST ITC Case, Follows Mukesh Kumar Garg Precedent

M/S JASMEETTRADING COMPANY vs ADDITIONAL COMMISSIONER CITATION : 2025 TAXSCAN (HC) 931

In a recent judgment, the Delhi High Court, relying on the Mukesh Garg Judgment ruled by the same court, ruled that writ jurisdiction cannot be exercised in the case involving fraudulent Input Tax Credit ( ITC ) under the Goods and Services Tax ( GST ).

The Bench comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta observed that writ jurisdiction under Article 226 is reserved for exceptional circumstances. Relying on the Supreme Court’s ruling in Assistant Commissioner (ST) v. Commercial Steel Ltd., the Court reiterated that writs may only be entertained where there is a breach of fundamental rights, violation of natural justice, jurisdictional excess, or constitutional challenge, none of which applied in the present case.

Delhi High Court Quashes Income Tax Reassessment Notice for AY 2015-16, Rules TOLA Cannot Extend Limitation Post-April 1, 2021

CHANDRA PRAKASHSRIVASTAVA EX DIRECTOR OF ATEN PORTFOLIO MANAGERS PRIVATE LIMITED vs INCOME TAXOFFICER CITATION : 2025 TAXSCAN (HC) 932

The Delhi High Court has quashed a reassessment notice issued under Section 148 of the Income Tax Act, 1961, for the Assessment Year (AY) 2015-16, ruling that the said notice issued after April 1, 2021, was time-barred and impermissible under the amended reassessment regime.

The Court noted that the reassessment was substantially revised by the Finance Act, 2021, and the transitional provisions under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) could not be invoked to sustain notices issued beyond the limitation period. The matter was decided based on the decision taken in Makemytrip India Pvt. Ltd. v. Deputy Commissioner of Income Tax Circle 16 (1) Delhi & Anr.

Proceedings u/s 148 A of Income Tax Act is Invalid when Rejecting Response furnished by Assessee Solely for Information on Portal : Delhi HC sets aside order

DEVAT AND RAMCOMPANY PRIVATE LIMITED vs INCOME TAX OFFICER CITATION : 2025 TAXSCAN (HC) 933

The Delhi High Court set aside the order passed under section 148 A of the Income Tax Act, 1961, holding that the proceedings become invalid when rejecting the response furnished by the assessee solely for information on portal. It was viewed that it is necessary for the AO, at the bare minimum, to examine the material placed by the petitioner and verify whether the same could be faulted.

A division bench of Justice Vibhu Bakhru and Justice Tejas Karia observed that it is necessary for the AO, at the bare minimum, to examine the material placed by the petitioner and verify whether the same could be faulted. However, the AO did not undertake any such exercise but rejected the overwhelming evidence furnished by the petitioner merely on assuming that information available on the portal was correct.

Writ Petition Against GST Demand Disposed: Orissa HC Grants Liberty to File Fresh Representation

M/s. AshrafPetrol Pump vs The Principal Commissioner of Central Goods and Service Tax CITATION : 2025 TAXSCAN (HC) 934

The Orissa High Court disposed of a writ petition filed by Ashraf Petrol Pump challenging a demand order under the Odisha Goods and Services Tax Act, 2017 (OGST Act). The Court granted liberty to the petitioner to file a fresh representation before the appropriate authority and seek a hearing under the law. The petitioner had approached the Court seeking to set aside the demand order issued under Section 74 of the OGST Act, alleging non-compliance with the principles of natural justice.

The matter was heard by Chief Justice Harish Tandon and Justice M.S. Raman, who observed that since the petitioner failed to appear on the date fixed and the order was passed thereafter, the Court would not be inclined to quash the impugned order on that ground alone.

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Reassessment Triggered by 175% Spike in Penny Stock Gains Allegedly Manipulating Capital Gains: Madras HC Quashes S. 148 Notice Issued Beyond Limitation

Mr.SohanrajPraveen Kumar vs Additional Commissioner of Income Tax (NFAC) CITATION : 2025 TAXSCAN (HC) 935

The Madras High Court has quashed a reassessment notice issued under Section 148under Income Tax Act, 1961 on the ground of limitation, despite the Revenue's allegations of manipulated capital gains through reversal trading in penny stocks.

JusticeC. Saravanan, after examining the submissions and statutory framework, noted that the reassessment notice dated 26.03.2021 was issued beyond the six-year limitation period under the old regime.

The Court also rejected the Revenue's justification that new information or insight warranted a re-opening, observing that the allegations were vague and pertained to transactions already scrutinized during the original assessment.

The Madras High Court has extended relief to an advertising and consulting firm after it failed to notice a show cause notice uploaded in the ‘Additional Notice’ tab on the GST ( Goods and Services Tax ) portal.

The Court found merit in the petitioner’s case and held that since the notice was not communicated through any physical mode and the petitioner was not aware of it due to its placement in a subsection of the portal, it could not be presumed that the assessee had been properly served or given a fair opportunity to respond.

The Madras High Court has set aside a GST ( Goods and Services Tax ) assessment order passed under Section 63 of the Tamil Nadu Goods and Services Tax Act, 2017, against the Udhagamandalam Municipality, owing to an inadvertent error in return filing by its previous auditor.

Justice G.R. Swaminathan, presiding over the matter, quashed the impugned assessment order and remanded the case back to the Assessing Officer. The petitioner was directed to appear before the officer on 10.06.2025 at 4:00 PM, and was granted liberty to submit corrected GST returns and place all relevant materials on record.

Forged GST Notices and Aadhaar Card, Fictitious Petitioners: Delhi HC Exposes Organized GST Scam, Reminds Advocates to Verify Documents before Filing Petition

In a sensational turn of events, the Delhi High Court has unearthed a massive fraud involving forged GST ( Goods and Services Tax ) show cause notices, fake Aadhaar cards, and fictitious petitioners, exposing the huge GST scam. The bench reminded the legal professionals/advocates to verify the GST documents before filing the petition.

The Court sent out a stern reminder to advocates to confirm the legitimacy of the papers filed with GST petitions, particularly SCNs and Aadhaar cards. It added that “Let the present order be communicated to the Law Secretary, Government of National Capital Territory of Delhi as also to the Secretary, Ministry of Law & Justice, Union of India for considering whether taking of photographs ought to be insisted upon when affidavits are attested by the Oath Commissioner and Notaries, so as to ensure physical presence of deponents.”

In a recent decision, the Delhi High Court held that Integrated Goods and Services Tax (IGST) is not payable on services provided by the Head Office (HO) to its Branch Offices (BOs) when there is no cross-charging and the BOs are eligible for full input tax credit (ITC).

The court held that the authority must reconsider the matter, granting a fresh hearing to the petitioner and applying the correct legal framework. The court explained that failure to follow binding circulars and precedent rendered the original order unsustainable. The writ petition was disposed of with liberty to the petitioner to pursue further remedies, if needed.

GST Notice must be Issued to Legal Representative before Determination of Tax Liability Post-Death of Proprietor: Allahabad HC

M/s Agarwal KhilonaBazar vs State of U.P. and another CITATION : 2025 TAXSCAN (HC) 940

The Allahabad High Court has ruled that no GST (Goods and Services Tax) notice must be issued to the legal representative before determining the tax liability post-death of the proprietor as it is established that demand against a deceased in void ab initio. The representative must be informed before determining the demand.

The Court observed that “Once the provision deals with the liability of a legal representative on account of death of the proprietor of the firm, it is sine qua non that the legal representative is issued a show cause notice and after seeking response from the legal representative, the determination should take place.”

Orissa HC Grants Relief to GST Registrant, Orders Consideration of Revocation Application Despite Delay

Asis Ranjan Prusty vs Assistant Commissioner of State Tax CITATION : 2025 TAXSCAN (HC) 941

The Orissa High Court, in a recent case, directed the GST authorities to consider revoking the cancellation of a GST registration upon payment of dues, despite procedural delays in filing such an application. The matter titled Asis Ranjan Prusty v. Assistant Commissioner of State Tax was heard by a Division Bench comprising Chief Justice Harish Tandon and Justice Murahari Sri Raman. The petition was taken up on May 9, 2025, through a hybrid mode.

After hearing the arguments presented by both parties, the High Court observed that the facts of the present case were materially similar to those in Mohanty Enterprises, and that a similar direction was warranted to serve the broader interest of revenue collection and promote voluntary compliance.

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Orissa HC Negates Cancellation of GST Registration, Citing Precedent Pronounced by Coordinate Bench

Bimal Chandra Behera vs State Tax Officer CITATION : 2025 TAXSCAN (HC) 942

The Orissa High Court allowed the revival of a cancelled Goods and service Tax (GST) registration, observing that the taxpayer was willing to comply with the statutory obligations, including payment of dues and completion of formalities. The ruling was made in the case of Bimal Chandra Behra v. State Tax Officer, CT & GST.

The division bench, comprising Chief Justice Harish Tandon and Justice Murahari Sri Raman, referred to the precedent set in Mohanty Enterprises and quoted paragraph 2 of the said judgment, which condoned delay under Rule 23 of the OGST rules. The Court observed that:

“In that view of the matter, the delay in Petitioner’s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc., due and complying with other formalities, the Petitioner’s application for revocation will be considered by law.”

GST Relief: Orissa HC Directs Revocation of Cancelled Registration as Taxpayer Agrees to Pay Dues

Samita Panda vs The Commissioner of CT & GST CITATION : 2025 TAXSCAN (HC) 943

The Orissa High Court directed GST authorities to consider a revocation application despite delay, subject to the taxpayer clearing all statutory dues. The decision was made in the case of Samita Panda v. Commissioner of CT & GST.

The case was heard by a Division Bench comprising Chief Justice Harish Tandon and Justice M.S. Raman, with the matter being taken up through a hybrid mode on 16th May 2025. The Bench proceeded to pass a similar direction in this matter, stating that such relief was granted in the interest of revenue. By doing so, the Court underscored that the object of tax statutes must not be defeated by technicalities, especially when the taxpayer approaches with a willingness to comply.

Madras HC Upholds Seizure of 3 Kg Crude Gold Bars Due to Carrier’s Inability to Prove Legitimate Source u/s 123 of Customs Act

The Madras High Court recently ordered the permanent confiscation of 3.097 kg of crude gold bars seized upon the respondent’s inability to prove a legitimate source of acquisition of, or ability to own the gold.

The Division Bench of Justice R. Suresh Kumar and Justice C. Saravanan observed that adjudication under the Customs Act is governed by the “principle of preponderance of probability”; it found the respondent’s shifting stand “bundled with contradictions”, held that he “has not discharged the burden of proof cast on him under Section 123”, and accepted that the Additional Commissioner was correct in ordering confiscation.

GST on Transfer of Leasehold Rights: Allahabad HC Stays Recovery, Says Matter Needs Consideration

M/s BKP Media Vision Private Limited vs Union of India and5 others CITATION : 2025 TAXSCAN (HC) 945

With regards to the applicability of Goods and Services Tax ( GST ) on the transfer of leasehold rights, the Allahabad High Court has stayed the recovery of tax until further orders, observing that such transactions may fall outside the ambit of supply under Section 7(1)(a) of the CGST Act, 2017.

However, the Division Bench comprising Chief Justice Arun Bhansali and Justice Kshitij Shailendra observed that the Bombay High Court’s decision pertained to lease deeds executed by authorities in favor of lessees, whereas the present matter related to the transfer of rights after the lease was already executed. The Court found the Gujarat High Court’s reasoning more directly applicable to the petitioner’s case.

GST Appeal Dismissed as Time-Barred: Madras HC remands Matter on 25% Pre-deposit noting Ex-Parte Assessment Order

Tvl.Manikandan-SKR Agency vs The Appellate DeputyCommissioner (ST) CITATION : 2025 TAXSCAN (HC) 946

In a recent ruling, the Madras High Court granted relief to a taxpayer whose GST ( Goods and Services Tax ) appeal was dismissed as time-barred, stating that the underlying assessment order was passed ex parte and in violation of principles of natural justice.

The High Court observed that while the Appellate Authority’s decision to dismiss the appeal as time-barred could not be faulted, it was also apparent that the original assessment was rendered ex parte without granting the petitioner an opportunity of hearing. Given this breach of natural justice, the Court set aside the assessment order.

Justice G R Swaminathan considered the petitioner’s undertaking to deposit 25% of the disputed tax demand within a four-week period and showed indulgence and directed the assessing authority to re-do the proceedings.

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GST Authorities Cannot Treat Personal Hearing as Mere Formality: Allahabad HC Sets Aside GST Order

M/S Vedika Guest House vs State Of U.P. And 2 Others CITATION : 2025 TAXSCAN (HC) 947

The Allahabad High Court has held that personal hearing under Section 75 of the GST ( Goods and Services Tax) Act, 2017 is not a mere formality, and tax authorities must ensure both prior notice and a fair opportunity to be heard before finalizing assessments.

The Court ruled that even if a taxpayer does not respond to a show cause notice, the right to a personal hearing remains, and authorities must give them a chance to provide oral and documentary evidence.

Import of Solar Inverters Without Photovoltaic Cells Not Eligible for Exemption Under Notification: Kerala HC

In a recent ruling, the Kerala High Court ruled that the import of solar inverters without photovoltaic (PV) cells does not qualify for customs duty exemption under Notification No. 12/2012-Central Excise dated 17.03.2012.

The court held that the petitioner’s import of only solar inverters did not meet the conditions of Notification No. 12/2012-CE, which was clearly intended to apply to a composite import of an entire solar power generating system. The court also observed that exemption notifications promoting renewable energy are beneficial in nature, but they must be interpreted in line with their stated scope and purpose. The court dismissed the appeals filed by Solgen Energy Pvt. Ltd. and upheld the CESTAT’s decision.

Writ Jurisdiction Not Applicable in cases involving fraudulent availment of ITC: Delhi HC Dismisses Petition on Availability of Statutory Remedy

M/S MAHAVIR METAL HOUSE vs ADDITIONAL COMMISSIONER, CGST CITATION : 2025 TAXSCAN (HC) 950

In a recent case, the Delhi High Court held that where cases involving fraudulent availment of ITC are concerned, considering the burden on the exchequer and the nature of impact on the GST regime, writ jurisdiction ought not to be usually exercised in such cases. Further directed to avail appellate remedy under the statute.

A division bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta found that an appeal before the appellate authority is a full-fledged remedy provided under Section 107 of the Central Goods and Service Tax Act, 2017.

Issue on Availing ITC on Sweetmeat Shop: Delhi HC Directs to File Appeal before Appellate Authority

The Delhi High Court, in the case of the issue of availing Input Tax Credit (ITC) on sweet meat shops , directed the assessee to file an appeal before the appellate authority.

A division bench of Justice Prathiba M.Singh and Justice Rajneesh Kumar Gupta viewed that there would be duplication of two demands as demand qua reversal of availed ITC and demand qua utilisation of ITC would be one and the same thing. But both have been separately demanded in the impugned order. Accordingly, in the peculiar facts of the case, the Petitioner is relegated to the Appellate Authority. However, the predeposit shall be only in respect of demands under paragraphs (ii), (iii) & (iv) of the operative part of impugned order.

The appeal is permitted to be filed by 15th July, 2025 along with the requisite pre-deposit. If any deposits have already been made by the Petitioner, adjustment thereof shall be given qua the pre-deposit. If the same is filed within the time stipulated, the appeal shall be heard on merits and shall not be dismissed on the ground of being barred by limitation.

Delhi HC sets aside GST SCN as assessee did not get a proper opportunity to be heard

MENKACHATURVEDI vs THE SALES TAX OFFICER CLASS II AVATO WARD 63 ZONE 6 DELHI &ORS CITATION :2025 TAXSCAN (HC) 952

The Delhi High Court set aside the Goods and Service Tax (GST) Show cause notice (SCN) issued on finding that the assessee did not get a proper opportunity to be heard and remanded the matter back to the concerned Adjudicating Authority.

The Petitioner is granted time till 15th July 2025, to file the reply to the SCN. Upon filing of the reply, the Adjudicating Authority shall issue a notice for personal hearing to the Petitioner.

However, it is made clear that the issue in respect of the validity of the impugned notifications is left open. Any order passed by the Adjudicating Authority shall be subject to the outcome of the decision of the Supreme Court in S.L.P No 4240/2025 titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors. and of this Court in W.P.(C) 9214/2024 titled Engineers India Limited v. Union of India &Ors.

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Prima Facie Duplication in GST ITC Demands: Delhi HC Flags Dual Recovery of Reversed and Utilised ITC, Allows Appeal with Limited Pre-Deposit

M/S LALA SHIVNATH RAI SUMERCHAND CONFECTIONER PRIVATELIMITED vs ADDITIONAL COMMISSIONER, CGST CITATION : 2025 TAXSCAN (HC) 953

The Delhi High Court observed that there is a duplication in the demand under Goods and Services Tax ( GST ) Input Tax Credit ( ITC ) on the sweet shop-cum-restaurant. It has directed to approach the appellate forum in limited pre-deposit.

The court recognized that the Order-in-Original is appealable, but they believed the dual demand issue was sufficiently important to merit a protective remedy.

Accordingly, the it directed that the petitioner may approach the appellate authority by 15th July 2025, and that the mandatory pre-deposit requirement would be limited only to specific components of the demand namely, those arising from short payment, additional ITC claimed in GSTR-3B over GSTR-2A, and the demand discussed under para (iii) of the order.

Accordingly, the it directed that the petitioner may approach the appellate authority by 15th July 2025, and that the mandatory pre-deposit requirement would be limited only to specific components of the demand namely, those arising from short payment, additional ITC claimed in GSTR-3B over GSTR-2A, and the demand discussed under para (iii) of the order.

Delhi HC Rules Seizure of Gold Jewellery and Used iPhone from UAE Resident Qualify as Personal Effects, Directs Their Release

YOGESH ANAND vs COMMISSIONER OF CUSTOMS CITATION : 2025 TAXSCAN (HC) 954

The Delhi High Court, while hearing a plea by UAE resident Yogesh Anand, held that the seizure of his gold jewellery and used iPhone brought from Dubai qualified as personal effects and directed their release.

After reviewing the documents, including photographs showing the petitioner wearing the jewellery, the Court held that the items appeared to be used for personal effects. Referring to Rule 2(vi) read with Rule 3 of the Baggage Rules, 2016, the Court noted that used personal effects carried by a passenger in bona fide baggage are exempt from customs duty. It clarified that while jewellery is generally excluded from personal effects, courts have consistently distinguished between “jewellery” and “personal jewellery” used by a passenger.

GST Demand Beyond Show Cause Notice is Legally Unsustainable: Allahabad HC

M/s Vrinda Automation vs State of Uttar Pradesh andanother CITATION : 2025 TAXSCAN (HC) 955

In a recent ruling, the Allahabad High Court ruled that a Goods and Services Tax ( GST ) demand order should not exceed beyond the scope of the show cause notice ( SCN ). The court found it as a violation of Section 75(7) of GST Act.

Chief Justice Arun Bhansali and Justice Kshitij Shailendra rejected the state's claim that the disparity was the result of a clerical error involving the interest rates and IGST penalty, ruling that such oversights could not excuse judicial overreach.

Accordingly, the High Court quashed the demand order and remanded the matter back to the Deputy Commissioner of State Tax, Ghaziabad, directing that the petitioner be given a proper opportunity to respond to the SCN. It was directed to pass a fresh decision in compliance with the law after granting a personal hearing.

GST Payer Not Obligated to Monitor Portal for 2018-19 Notice Post- Registration Cancellation on 31st March 2019: Allahabad HC

M/s Micasa vs Union of India and 3 others CITATION : 2025 TAXSCAN (HC) 956

Recently, the Allahabad High Court has observed that a GST payer whose registration stood cancelled as of March 31, 2019, cannot be expected to monitor the GST portal for any electronic notices pertaining to tax period 2018-19.

The bench found that the revenue had neither alleged nor established that any physical notice had been served prior to passing the impugned order. The High Court revoked the adjudication order and gave the petitioner another chance to respond to the show cause notice after recognizing the failure to adhere to natural justice standards.

S.93 GST Act Does not Permit to Determine Demand Against Deceased and Recovery from Legal Heir: Allahabad HC

M/S Atishay Traders vs State of U.P. CITATION : 2025 TAXSCAN (HC) 957

The Allahabad High Court has held that GST ( Goods and Services TAx ) proceedings cannot be initiated or continued against a deceased person under the Goods and Services Tax Act, 2017.

The Court stated that initiating proceedings in the name of a dead person is a legal nullity and violative of natural justice. It further clarified that determination of liability, if any, must be preceded by a valid show cause notice issued to the legal representative, who must be given an opportunity to be heard before any adverse order is passed.

Accordingly, the High Court allowed the writ petition, quashed the impugned order, and granted liberty to the tax authorities to initiate appropriate proceedings in accordance with law, this time against the legal heir, if so advised.

APL Apollo Tubes’ Plea Against ₹14 Crore GST Demand Dismissed: Allahabad HC Says No Grounds to Bypass Statutory Remedy

APL Apollo Tubes Limited vs Commissioner, State Tax GST,UP, Commercial CITATION : 2025 TAXSCAN (HC) 958

The Allahabad High Court has dismissed a petition filed by APL Apollo Tubes Limited challenging a ₹14.01 crore GST demand, ruling that the petitioner cannot bypass the statutory appellate remedy under the Uttar Pradesh Goods and Services Tax ( UPGST ) Act, 2017.

The Division Bench, comprising Chief Justice Arun Bhansali and Justice Kshitij Shailendra, held that there were no extraordinary or exceptional circumstances that would justify invoking the court's jurisdiction under Article 226 of the Constitution.

Delhi High Court Upholds ITAT Order: Dismisses Revenue's Appeal Against DCF-Based Valuation of Unquoted Shares

PRINCIPAL CHIEF COMMISSIONER vs A.H. MULTISOFT PVT. LTD. CITATION : 2025 TAXSCAN (HC) 959

The Delhi High Court upheld the Income Tax Appellate Tribunal (ITAT)’s order and dismissed the revenue’s appeal against the discounted cash flow (DCF) method-based valuation of unquoted shares.

The Delhi High Court observed that the Assessing Officer (AO) had already calculated the share value under Rule 11UA and found it to be negative. So, even if we go by the AO’s calculation, since the Assessee’s valuation is higher and backed by evidence, it should be accepted.

The bench noted that the assessee had valued the unquoted equity shares held by the assessee in SAFL by the DCF method and that the same was permissible under Rule 11UA(2) of the Rules.

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Delay in GST Appeal Filing: Madras HC allows to File appeal Physically as Registration Cancelled

M/s.Thirumalai Balaji Constructions vs The DeputyCommissioner (ST) CITATION : 2025 TAXSCAN (HC) 960

The Madras High Court has permitted physical filing of time-barred Goods and Services Tax ( GST ) appeal on 25% pre-deposit as the registration was cancelled.

Justice C. Saravanan observed, while granting liberty to file appeal on pre-deposit observed that “Although the Hon’ble Supreme Court has held that there is no scope of entertaining the Writ Petition after the expiry of the limitation, this Court has taken consistent stand to allow the petitioner under the similar circumstances to file an appeal, subject to pre-deposit of 25% of the disputed tax. This stand has not been deviated and has been followed regularly.”

The court observed that since the petitioner’s GST registration had already been cancelled, electronic filing of appeal was not possible through the common portal. Recognizing this practical impediment, the Court allowed the petitioner to file physical appeals before the Appellate Commissioner.

GST Demand raised on Non-Reflection of Credit Note Values and its ITC Reversal in GSTR 2A: Madras HC grants Liberty to File Late GST Appeal with 15% Pre-Deposit

M/s.Tuskers Associate vs The State Tax Officer CITATION : 2025 TAXSCAN (HC) 961

The Madras High Court has granted liberty to file a time-barred appeal against a GST ( Goods and Services Tax ) assessment order, provided they make a 15% pre-deposit of the disputed tax amount.

Justice Krishnan Ramasamy held that while the assessment proceedings were conducted with due process, the petitioner’s willingness to comply financially warranted a pragmatic solution. Accordingly, the Court dismissed the writ petition but granted liberty to the petitioner to file an appeal within 30 days from receipt of the order, on the condition of depositing 15% of the disputed tax. The Court directed the appellate authority to entertain the appeal on merits, without insisting on limitation.

Pledge Shares to Support Sister Concern’s Loan is Business Activity: Madras HC Backs Writing off of ₹8.46 Crore Bad Debt

Commissioner of Income Tax vs M/s.Star Investments Pvt.Ltd CITATION : 2025 TAXSCAN (HC) 962

The Madras High Court has upheld the write-off of ₹8.46 crore as a valid business loss ruling that pledging shares to secure a loan for a sister concern was a legitimate business activity.

The bench observed that “As regards the submission of the Revenue that the pledging of shares of BDL by assessee to ICICI is not in the course of business activity, the fact is, the assessee was a promoter of BICL. The shares were pledged, so as to enable the sister concern/group company to avail the loan from ICICI. Therefore, certainly, it has to be in the course of business.”

Denial of Tax Payment in Installments: Gauhati HC stays Coercive Steps against Petitioner before Disposal of Representation

Smti Gichak Daniam vs The Union of India and 2 Ors CITATION : 2025 TAXSCAN (HC) 963

The Gauhati High Court has granted short-term relief to a GST-registered trader, telling tax officials not to resort to “coercive action” until they pass a reasoned order on the request to clear arrears in instalments.

“The respondents shall dispose of the representation dated 26-05-2025 within three weeks, keeping in mind Section 80 and the petitioner’s financial liability,” the court ordered, adding that no coercive step may be taken in the meantime. The petitioner must serve a certified copy of the order to the department within seven days to trigger the timeline.

GST DRC-01 cannot be Substitute to Show Cause Notice Issued u/s 73 (1) of CGST Act : Gauhati HC

AMAN GUPTA vs THE UNION OF INDIA AND ORS CITATION : 2025 TAXSCAN (HC) 964

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.

Delhi HC upholds Income Addition deleted by CIT(A) based on True Disclosure by Assessee

PR. COMMISSIONER OF INCOME TAX vs M/S K.R. PULP AND PAPERSLTD CITATION : 2025 TAXSCAN (HC) 965

In a recent case, the Delhi High Court upheld the income addition deleted by CIT(A) based on true disclosure by assessee. It was found that there was no failure on the part of the Assessee in disclosing fully and truly all material facts necessary for completion of the assessment.

A division bench of Justice Vibhu Bakhru and Justice Tejas Karia observed that the reasons recorded by the AO did not specify the names of any particular share applicants, the details of the cheques or the amount paid. It is also necessary to note that the issue of share capital, and the details of various shareholders had already been examined during the assessment proceedings. Therefore, the AO was required to have some additional information, beyond what had already been examined, in order to form reasons to believe that the Assessee‘s income had escaped assessment.

Delhi HC Quashes Reassessment Notice Issued on failure to follow Procedure as prescribed u/S 148A of Income Tax Act

CHANDRAPRAKASHSRIVASTAVA vs INCOMETAXOFFICER CITATION : 2025 TAXSCAN (HC) 966

The Delhi High Court quashed the reassessment notice issued on failure to follow the procedure as prescribed under section 148A of the Income Tax Act, 1961.

A division bench of Justice Vibhu Bakhru and Justice Tejas Karia set aside the impugned notice and the proceedings. As the revenue made a concession in the decision that described above is for the assessment year 2015-2016, all notices issued on or after 1st April, 2021 will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provisions Act, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021.

SCN Issued on Email Address Mentioned in MCA Website: Delhi HC Upholds Penalty Proceedings Initiated u/s 270 A of Income Tax Act

KALKAJEE KRAFT PAPER PRIVATE LIMITED vs ASSESSMENT UNIT CITATION : 2025 TAXSCAN (HC) 967

The Delhi High Court upheld the penalty proceedings initiated under section 270A of the Income Tax Act, 1961 as the show cause notice (SCN) was issued to the email address mentioned on the MCA website.

A division bench of Justice Vibhu Bakhru and Justice Tejas Karia accepted that the impugned order has been passed in violation of principles of natural justice on the ground that the petitioners have not been afforded a sufficient opportunity to represent its case. There is also no dispute that the notices have been duly put up on the ITBA Portal and the petitioner was aware of the assessment proceedings.

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Vessel Engaged Under SEAIOCM Agreement Qualifies As 'Foreign Going Vessel' , Exemption u/s 87 of Customs Act: Kerala HC

THE COMMISSIONER OF CUSTOMS vs M/S.ASEAN CABLESHIP PVT.LTD CITATION : 2025 TAXSCAN (HC) 968

The Kerala High Court ruled that a vessel hired via a SEAIOCM agreement was eligible for an exemption under section 87 of the Customs Act since it was a "foreign going vessel."

The division bench consists of Justices A.K. JayasankaranNambiar and P.M. Manoj held that the vessel can be categorized as a foreign going vessel for the purposes of claiming exemption under Section 87 of the Customs Act.

The bench disagreed with the department's assertion that the vessel would lose its status as a "foreign going vessel" due to the agreement made between the assessee and the Cochin Port Trust, which committed the assessee to berthing the vessel in Cochin Port for a certain number of days in a calendar year in order to receive a concessional rate of berthing charges. In reality, the vessel remained within territorial waters for a significant portion of the year.

Income Tax Appeal cannot be rejected solely on Non-Appearance of Assessee: Kerala HC

ANANDAN N. vs THE COMMISSIONER OF INCOME TAX (APPEALS) CITATION : 2025 TAXSCAN (HC) 969

The Kerala High Court stated that there is no provision of rejecting the appeal merely on non-appearance of assessee and the appellate authority must decide an appeal by strictly following the mandate contemplated under Section 250(6) of the Income Tax Act, 1961.

The bench noted that although the reasons for dismissing the appeal are stated in the contested decision, they pertain to the assessee's failure to present for hearings on several days.

"Evidently, going by Subsection 6 of Section 250, no other meaning can be assigned to the words "points for decision" as it obviously leads to the question that arises for consideration based on the contentions raised in the appeal," noted the division bench of Justice Ziyad Rahman A.A. As a result, the appellate authority was required to consider the issues brought up in the appeal and make a decision while providing justification.

Absence of Formal Demand Notice for Property Tax Does not Let off Assessee's Obligation to Pay: Kerala HC

VINU KOSHY ABRAHAM vs CORPORATION OF COCHIN CITATION : 2025 TAXSCAN (HC) 970

The Kerala High Court ruled that the assessee is still obligated to pay property taxes even if there isn't a formal demand notice for them while the case is pending.

The Division Bench, which consists of Justices A.K. Jayasankaran Nambiar and P.M. Manoj, stated that the assessee bears the responsibility for paying the tax after it is assessed. In the event that the assessee continues to pay the tax based on the assessment, the Corporation's failure to issue a demand notice during a period when the assessee chose not to pay the tax due to ongoing litigation between the parties, and the lack of an order halting the demand for such tax, cannot be a reason to stop the Corporation from collecting the tax amounts subsequently.

Untimely Issuance of Deficiency Memo not Grounds to Refuse Interest on Delayed GST ITC Refund: Delhi HC

M S G S INDUSTRIES vs COMMISSIONER OF CENTRAL TAX AND GSTDELHI WEST CITATION : 2025 TAXSCAN (HC) 971

20th May, 2025The Delhi High Court recently clarified that a delay by the tax authorities in issuing a deficiency memo to a taxpayer cannot be used as a reason to refuse or limit the payment of interest on delayed refunds on Input Tax Credit (ITC) on Goods and Services Tax (GST).

The Division Bench comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta observed that the Petitioner cannot be denied the benefit of interest for delay caused due to the deficiency memo not having been issued within the stipulated period. Furthermore, the Bench also observed that the Petitioner had taken about 74 days to respond to the deficiency memo.

Relief to Bhima Jewels, Limitation Act Applicable on Proceedings u/s 25A of KVAT Act: Kerala HC

M/S. BHIMA JEWELS PVT. LTD vs STATE TAX OFFICER CITATION : 2025 TAXSCAN (HC) 972

In a recent case, the Kerala High Court has ruled in favor of Bhima Jewels, holding that the Limitation Act is applicable to proceedings under section 25A of the Kerala Value Added Tax Act , 2003.

A single bench of Justice Ziyad Rahman A A observed that, even in respect of proceedings under Section 25A of Kerala Value Added Tax Act the limitation prescribed under the Act would be applicable. Evidently, since the assessment year pertaining to which the proceedings are initiated is 2012 -13, by the time notice was issued, the statutory period of limitation had already expired.

In such circumstances, in the light of the principles laid down by the Court in judgment, an interference is required, as the proceedings which culminated in order are not legally sustainable. The court quashed the orders holding that the proceedings initiated therefrom are time-barred.

Income Tax Authorities Must Consider Genuine Extension Requests: Madras HC Sets aside Order Passed Without Hearing

Manoj Kiron Kumar Lulla vs Assessment Unit CITATION : 2025 TAXSCAN (HC) 973

The Madras High Court has set aside an income tax assessment order passed by the Tax Authorities after finding that the assessee’s genuine request for additional time to file a reply was not properly considered.

Justice Krishnan Ramasamy observed that, “Normally, when an Assessee requests for time extension to file their reply, the respondents are supposed to have duly considered the said request and granted sufficient time to the petitioner.”

Under the cover of the principles of natural justice, the Madras High Court held that the order was passed without giving the petitioner a fair chance to file their reply or to be heard in person. As a result, the Court set aside the assessment order and directed the authorities to reconsider the matter.

ITR Refund of AY 2016-17 Pending: Madras HC Orders Authorities to Consider Fresh Representation filed by Taxpayer within 6 weeks

M.Sundarapandian vs The Income tax Officer (HQ) (PR) CITATION : 2025 TAXSCAN (HC) 974

In a recent ruling, the Madras High Court directed income tax authorities to consider the taxpayer’s fresh representation regarding the delayed income tax refund within six weeks. The court issued this directive without examining the merits of the case, focusing solely on ensuring timely administrative action by the authorities.

Without examining the merits and considering the limited relief sought by the petitioner, Justice Krishnan Ramasamy directed that the petitioner must submit a new representation to the second respondent, who must then forward it to the proper authority. Within six weeks of receiving the representation, the authorities were ordered to review and decide on it.

Madhya Pradesh HC Dismisses Writ Alleging Denial of Witness Cross-Examination in Bogus GST ITC Case, Directs to Pursue Appellate Remedy

M/S GOYAL TRADING CO vs UNION OF INDIA AND OTHERS CITATION : 2025 TAXSCAN (HC) 975

The Madhya Pradesh High Court has dismissed a batch of writ petitions alleging denial of cross-examination of witnesses in a case involving alleged bogus Input Tax Credit ( ITC ) under GST ( Goods and Services Tax) Act, directing the petitioners to pursue the statutory appellate remedy instead.

JusticesVivek Rusia and Gajendra Singh observed that “The petitioner is alleging the violation of principle of natural justice solely on the ground that the opportunity to cross-examine the witnesses was not given. The petitioner has failed to point out when the request was made for cross-examination of the witnesses. By not giving an opportunity to cross-examine the witnesses, whether any prejudice was caused, is liable to be examined by the appellate authority after examining the record and the relevancy of the deposition of the witnesses. The appellate authority would be competent to decide all the issues and grounds raised in the writ petition. There should not be an avoidance of pre-deposit conditions for the entertainment of a statutory appeal.”

Unexplained Delay of Over Three Years in Finalizing Service Tax Order: Patna HC Sets Aside Demand for Lack of Justification

M/s Akash Tour and Travel vs The Union of India CITATION : 2025 TAXSCAN (HC) 976

The Patna High Court, set aside a service tax demand after finding an unexplained delay of over three years in finalizing the tax order, ruling that the department failed to justify the prolonged delay.

The Division Bench of Justice Rajeev Ranjan Prasad and Justice Ashok Kumar Pandey referred to earlier judgments in Kanak Automobiles, Pawan Kumar Upmanyu, and Power Spectrum, which held that while the one-year time limit wasn’t strict, the department still had to show why the delay occurred. Courts had made it clear that delays without valid reasons, like simply keeping the case pending were not acceptable.

No Automatic Bail for Magistrate-Triable PMLA Cases: Himachal Pradesh HC dismisses bail Application

Kulveer vs State of Himachal Pradesh CITATION : 2025 TAXSCAN (HC) 977

The Himachal Pradesh High Court has firmly held that offences triable by a Judicial Magistrate under the Prevention of Money Laundering Act (PMLA) do not attract automatic bail, dismissing the interim bail application of an accused businessman arrested in a cyber fraud and money laundering case.

The High Court noted that out of 12 prosecution witnesses, five had testified and the trial was scheduled to resume on June 9, 2025. The police expressed concerns that Kulveer, if released, could intimidate or influence witnesses and abscond given his out‐of‐state connections.

Rejecting the bail plea, Justice Singh underscored the gravity of laundering large sums of money. He held that individual liberty must be balanced against societal interest, and that the mere triability of an offence by a Magistrate does not confer an automatic right to bail.

GST Appeal Limitation Calculated from Physical Dispatch of Order: Madras HC rules Appeal Well Within Period

Thankiyan Georgestephen vs The Joint Commissioner of GST CITATION : 2025 TAXSCAN (HC) 978

The Madras High Court has ruled that the limitation period for filing an appeal under GST ( Goods and Services Tax Act calculated from the date of physical dispatch of the assessment order is well within the period of limitation.

The Court also noted in the submission of the petitioner that 10% of the disputed tax had already been deposited by the petitioner, and hence no additional deposit was required at this stage.

JusticeKrishnan Ramasamy observed that “The earlier assessment order was physically dispatched on 31-05-2023. If that is also taken into account, the petitioner's appeal is well within the period of limitation. Therefore, as such, there is no question of delay in filing at all. Therefore, the impugned orders are set aside. The respondents are directed to take the appeal on file and hear it on merits and pass orders at the earliest.”

Illegal Mining and Money Laundering Case: Delhi HC denies Bail Plea on Medical Grounds

VEDPAL SINGH TANWAR vs DIRECTORATE OF ENFORCEMENT CITATION : 2025 TAXSCAN (HC) 979

In a detailed order running to 22 pages, the Delhi High Court on Monday denied both regular and interim bail to businessman Vedpal Singh Tanwar, the alleged mastermind in a ₹78-crore illegal-mining and money-laundering racket linked to Dadam hills in Haryana’s Bhiwani district. Justice Girish Kathpalia ruled that Tanwar failed to cross the “twin-test” of Section 45 of the Prevention of Money Laundering Act (PMLA): the court was not satisfied that he was prima facie innocent, nor that he would refrain from further offences if released.

Adopting the Supreme Court’s benchmark in Vijay Madanlal Chaudhary, Justice Kathpalia observed that money-laundering is “an aggravated form of crime” requiring stringent bail standards. The judge noted that investigation by the Enforcement Directorate (ED) has quantified alleged proceeds of crime at ₹78.14 crore, of which ₹22.81 crore is attributed directly to Tanwar. The court agreed with prosecutors that, given the scale of the purported fraud and Tanwar’s “kingpin” role, there was a substantial risk he could abscond or tamper with evidence if freed.

GST ITC Claimed under CGST/SGST Instead of IGST during GSTR 3B Filing: Calcutta HC stays Order Directing to Reverse Excess ITC

Agro Trade Centre and Anr vs Additional Commissioner ofState Tax (Appeals) CITATION : 2025 TAXSCAN (HC) 980

The Calcutta High Court stayed the appellate authority’s order directing reversal of Input Tax Credit ( ITC ) claimed under the wrong tax heads, observing that the error caused no loss to the government and was revenue neutral.

Justice Hiranmay Bhattacharyya observed that the present case also appears to involve no actual loss to the exchequer. It was, therefore, prima facie satisfied that the circumstances warranted interim relief.

It was observed that “This Court is of the prima facie view that there is no loss of revenue to the Government and it is revenue neutral. In view thereof the order impugned dated 22.10.2024 passed in Appeal Case No. GST/APP/224/2024-2025 shall remain till the disposal of the writ petition.”