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

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.

GST Cancellation Over Non-Filing of Returns Set Aside: Madras HC Grants Opportunity to Clear Dues Barring Adjustment from Unutilised ITC

Presannaraj vsThe Superintendent of GST and Central excise CITATION : 2025 TAXSCAN (HC) 1034

The Madras High Court has set aside the suo motu cancellation of a taxpayer’s GST ( Goods and Services Tax) registration on the ground of non-filing of returns for over six months, granting the petitioner an opportunity to regularise compliance subject to specific conditions.

Following that precedent, Justice Krishnan Ramasamy directed the petitioner to file all pending returns for the period prior to cancellation and pay applicable taxes, interest, fines, and late fees within 45 days.

The Court barred the use of unutilised ITC for such payments, mandating that dues be cleared in cash. Any unutilised ITC can only be applied after departmental scrutiny and approval.

Proviso to S.3-B(2)(d) of TNGST Act Not Applicable to Contractor Assigning Work to Registered Sub-Contractor: Madras HC

M/s. ChaitanyaBuilders & Leasing (P) Ltd. vs The Assistant Commissioner (CT) CITATION : 2025 TAXSCAN (HC) 1035

The High Court of Madras held that the proviso to Section 3-B(2)(d) of the Tamil Nadu General Sales Tax Act, 1959, would not apply where a contractor assigns work to a registered sub-contractor.

The Madras High Court noted that the same issue was already decided in Larsen & Toubro Ltd. v. Assistant Commissioner (CT), where the proviso was read down. That decision, based on Supreme Court rulings in Larsen & Toubro Ltd. and Builders Association of India, held that the proviso would not apply where the contractor assigned work to a registered sub-contractor.

Relying on that precedent, the Court partly allowed the petition and read down the proviso, clarifying that it would not apply when the sub-contractor was a registered dealer.

ED Search under PMLA Not Harassment: Madras HC Allows PMLA Proceedings Against TASMAC to Continue

Tamil NaduState Marketing Corporation Limited vs Directorate of Enforcement CITATION : 2025 TAXSCAN (HC) 1036

The High Court of Madras, held that the Enforcement Directorate’s search under the Prevention of Money Laundering Act (PMLA) was lawful and did not amount to harassment, allowing proceedings against TASMAC to continue.

Justice S.M Subramaniam and Justice K.Rajasekar held that TASMAC officials, as public servants, were duty-bound to cooperate with the ED during the search. It noted that valid authorisation was produced as per Rule 3(4) of the PMLA Rules, and the Panchnama showed the search was peaceful, without coercion or damage, and witnessed by independent parties.

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The Court rejected allegations of fundamental rights violations and said that only affected individuals, not the State, should have approached the Court. It criticised the petition as an attempt to obstruct the investigation.

GST Registration Cancelled Without Providing Proper Notice: Gauhati HC sets aside Order Rejecting Revocation Application

Devendra SinghRathore vs CGST and CX and Anr CITATION : 2025 TAXSCAN (HC) 1037

The Gauhati High Court set aside the order rejecting the revocation application on the grounds that the Goods and Services Tax registration was canceled without providing proper notice.

Considering the facts and circumstances on the record, the single bench of Justice Robin Phukan Court is inclined to allow the petition by setting aside the impugned cancellation order dated 04.12.2023. The respondent authorities are directed to verify whether any further amount is due from the petitioner and if any amount is found to be due.

Calcutta HC Permits to File Connected Application Against SCN u/s 74 of CGST and Adjudication Order

Tara MarineSyndicate Private Limited & Anr. vs The Superintendent CITATION : 2025 TAXSCAN (HC) 1038

In a recent case, the Calcutta High Court permitted the filing of a connected application against a show cause notice (SCN) under section 74 of the Central Goods and Service Tax (CGST) Act, 2017, and an adjudication order.

Considering the fact that an order in original has already been passed upon adjudication of the show cause notice,a single bench of Justice Raja Basu Chowdhury viewed that the petitioner cannot be permitted to challenge the same by way of a connected application as the same gives rise to a separate cause of action.

Since, the show cause has already been adjudicated and has merged with the final order, the court viewed that the above writ petition can be disposed of by permitting the petitioners to challenge not only the show cause but also the adjudication order in original dated 5th February, 2025 in a composite manner in accordance with law, if so advised.

Differences of ITC availed in Form GSTR-3B against Form GSTR-2A: Orissa HC Quashes GST Order on violation of Natural Justice Principle

M/s. D.R.Patnaik vs Commissioner, GST and Central Excise CITATION : 2025 TAXSCAN (HC) 1039

The High Court of Orissa in a case regarding the differences of Input Tax Credit (ITC) availed in Form GSTR-3B against Form GSTR-2A, quashed the Central Goods and Service Tax (CGST) order in violation of the Natural Justice Principle.

This Court is persuaded to believe that the proper authority has failed to consider the reply to show-cause notice in Form GST DRC-06 along with other documents uploaded. The bench set aside the Order-in- Original dated 20.02.2025 vide Annexure-7 as also Summary Order dated 24.02.2025 passed under Section 73 of the GST Act by the Additional Commissioner, GST & Central Excise, Commissionerate, Rourkela-Opposite Party No.1 on the ground of violation of principles of natural justice and remitted the matter to the said authority concerned for fresh adjudication.

“Sheer Ignorance of Law”: Himachal Pradesh HC Slams AO for Income Tax Order against Deceased Proprietor

V. EagleSecurities vs Joint Commissioner of State Taxes and Excise & anr. CITATION : 2025 TAXSCAN (HC) 1040

In a scathing rebuke to tax authorities, the Himachal Pradesh High Court has quashed an assessment order issued against a deceased individual, condemning the Assessing Officer (AO) for acting in "sheer ignorance of law" or under a "pre-determined mind" to pass the order despite knowing the legal impossibility of such action.

The division bench comprising Justice Tarlok Singh Chauhan and Justice Sushil Kukreja delivered the strong-worded judgment while hearing a writ petition filed by the legal heir of late Sanjeev Shyam, the sole proprietor of M/s V. Eagle Securities Services.

SIM Cards, Recharge Coupons, and Value-Added Services Not Taxable as Services: Madras HC

D.Sivanandam vsThe Assistant Commissioner CITATION : 2025 TAXSCAN (HC) 1041

The Madras High Court has dismissed a service tax imposition on the distribution of SIM cards, recharge coupons, and value-added services, reiterating that these do not constitute taxable services under the Finance Act, 1994.

The court also referred to the Supreme Court’s ruling in Commissioner of Customs, Central Excise & Service Tax vs. MS Suzlon Energy Ltd., which held that customized engineering drawings are not goods but services, supporting the non-taxability of SIM cards under service tax provisions.

The court directed the petitioner to submit a reply to the show cause notice within four weeks. The respondents were instructed to pass orders after considering the petitioner’s objections, providing a reasonable opportunity for a hearing, and adhering to the cited judicial precedents.

Madras HC Strikes Down Central Excise R.8(4) Ultra Vires, Quashes Demand Orders With Fresh Hearing

Salem TextilesLimited vs The Superintendent of Central Excise CITATION : 2025 TAXSCAN (HC) 1042

The Madras High Court has struck down Rule 8(4) of the Central Excise Rules, 2001 and 2002, declaring it inconsistent with Rules 3 and 4 of the Cenvat Credit Rules, 2001 and 2002, and ultra vires Section 37(2)(xxviii) of the Central Excise Act, 1944. The court also set aside a demand order and a recovery notice issued against Salem Textiles Limited, directing a fresh hearing.

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The Court directed the commissioner to pass orders within four weeks after hearing the petitioner’s submissions.

The court held that failure to appear on the specified date would result in the withdrawal of the benefits granted under the order. The writ petitions were disposed of with no costs, and the connected miscellaneous petitions were closed.

Madras HC Validates Reassessment Notices Issued Pre-Finance Act, 2021 Citing TOLA Extension

RamadossSrikanthi vs The Assistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 1043

The Madras High Court has dismissed a writ petition challenging reassessment notices and an order issued under the Income Tax Act, 1961, for the Assessment Year (AY) 2015-2016, ruling that the notices were validly issued within the extended limitation period provided by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA).

The court observed that TOLA extended the deadline for actions due between 20.03.2020 and 31.03.2021 to 30.06.2021. The court held that the period from the deemed notice’s issuance (31.03.2021) to the supply of information on 02.06.2022 and the two-week response period, was excluded from limitation calculations. The court dismissed the writ petition and connected miscellaneous petitions were closed.

Inadvertent Non-Compliance of Pre-Deposit Condition: Madras HC Restores GST Appeal on conditions

Tvl.ArunTraders vs The Union of India CITATION : 2025 TAXSCAN (HC) 1044

The Madras High Court has restored a Goods and Services Tax ( GST ) appeal considering the petitioner’s inadvertent failure to pay the mandatory 10% pre-deposit and directed the petitioner to deposit the pre-deposit amount within two weeks and ordered the appellate authority to hear and dispose of the appeal within three months thereafter.

Justice Vivek Kumar Singh observed that the petitioner’s failure to deposit the pre-deposit was due to inadvertence. The court directed the petitioner to pay the required pre-deposit within two weeks from the receipt of the court’s order in the interest of justice.

Customs Authorities Can Issue Notices Even If a Trade Agreement Exists: Bombay HC Upholds SCN Against Importers

Customs Authorities Can Issue Notices Even If a Trade Agreement Exists: Bombay HC Upholds SCN Against Importers

Purple ProductsPrivate Limited vs Union of India through CITATION : 2025 TAXSCAN (HC) 1045

In a recent ruling, the Bombay High Court held that the customs department has the power to issue show cause notices (SCNs) even when a Free Trade Agreement (FTA) like the ASEAN-India FTA is involved. The court rejected the importers’ plea that the customs authorities could not take action without first using the dispute resolution process under the trade agreement.

The court, led by Justice M.S. Sonak and Justice Jitendra Jain, observed that international treaties like the ASEAN-India FTA do not automatically become part of Indian law unless they are passed by Parliament. Since Article 24 had not been incorporated into any Indian law or rule, the court said it could not be enforced in Indian courts. The court also noted that the Customs Act clearly gave authorities the power to investigate and take action in cases involving fraud or misrepresentation.

Gujarat High Court upholds Validity of GST Summons without DIN issued by State GST Officers

M/S NRM METALS(INDIA) PRIVATE LIMITED & ANR vs UNION OF INDIA & ORS CITATION : 2025 TAXSCAN (HC) 1046

In a significant ruling for State Goods and Services Tax (GST) administrations, the Gujarat High Court has held that the absence of a Document Identification Number (DIN) on summons, notices or provisional-attachment orders issued by State GST officers does not make those instruments invalid.

Rejecting the DIN objection, the Bench observed that Circular 37/2019 is addressed solely to commissioners and officers of the Central tax administration. No parallel circular has been issued by the Gujarat GST commissionerate, nor do the GGST Act or its rules prescribe a DIN system. “Circular No. 37 of 2019 cannot be said to be applicable to communications issued by State Tax authorities,” the judges wrote, adding that there is currently “no mechanism” within the state framework to generate DINs.

Rejecting GST ITC Refund on Basis of Extraneous Material: Patna HC Directs Rejection Order be treated as SCN for pursuing Proceedings

VaishnodeviAdvisory Private Limited vs The State of Bihar CITATION : 2025 TAXSCAN (HC) 1047

The Patna High Court recently dealt with the principles of natural justice under the Goods and Services Tax (GST) regime, setting aside an assessment order that rejected the refund of Input Tax Credit (ITC) that was concluded on the basis of extraneous material without giving the assessee an opportunity to respond.

The Division Bench further referenced the Supreme Court decision in Oryx Fisheries Private Ltd. vs. Union of India & Ors. (2010) where it was held that quasi-judicial authorities must base their decisions on disclosed materials and give affected parties an opportunity to respond. Another interesting observation in Oryx Fisheries (supra) was where the Apex Court held that “justice must not only be done it must also appear to be done as well”.

“Proceedings to Reopen Assessment not akin to Review Proceedings”: Bombay HC quashes Delayed Reopening due to Change of Opinion

GenesysInternational Corp. Ltd vs Assistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 1048

The Bombay HighCourt, in yet another instance has underscored the requisite jurisdictional parameters to be satisfied by the Income Tax Department to effectuate reopening of an income tax assessment after a period of 4 years from the relevant assessment year.

Observing that the revenue failed to satisfy the jurisdictional parameters for reopening the assessment beyond 4 years, the Bombay High Court stated that proceedings to reopen an assessment are not akin to review proceedings.

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In light of the circumstances, the Bombay High Court allowed the writ petition and made the rule absolute, thereby quashing the reassessment notice dated 30 March 2021, the order rejecting objections dated 8 February 2022, and the draft assessment order dated 14 March 2022.

Cash Credit Account Not Attachable u/s 83 of MGST Act as It Is Not Account Holder's Property: Bombay HC

Skytech RollingMill Pvt. Ltd. vs Joint Commissioner of State Tax Nodal CITATION : 2025 TAXSCAN (HC) 1049

The High Court of Bombay held that a cash credit account is not the property of the account holder and therefore cannot be provisionally attached under Section 83 of the Maharashtra Goods and Services Tax (MGST) Act,2017.

The division bench comprising Justice Jithendra Jain and Justice M.S Sonak noted that no contrary judgments were presented and reaffirmed that a cash credit account could not be considered the account holder’s property under Section 83 of the MGST Act.

It directed the authorities to withdraw the attachment letter dated 8 May 2025 issued to ICICI Bank and inform the bank within 24 hours.

Denial of CCS Benefits for Castor Oil Exports Due to New Technical Test Change Unjustified: Bombay HC

Sanjay KumarAgarwal vs Union of India CITATION : 2025 TAXSCAN (HC) 1050

In a recent ruling, the Bombay High Court held that benefits under the Cash Compensatory Support (CCS) Scheme could not be denied to a castor oil exporter merely because of a change in the method of quality testing. The court directed the government to refund over Rs. 4.33 crore to the petitioner, ruling that the change in test did not alter the nature of the product being exported.

A division bench led by Justice Jitendra Jain observed that the earlier ruling on duty drawback applied equally to the present case, as the core issue was the same. The court also referred to several judgments which held that benefits under government schemes could not be denied for export contracts executed before a change in rules or testing procedures.

GST Registration Suspended while Taxpayer Was Unable to Access Portal: Delhi HC Retracts Suspension and Directs SCN Reply Opportunity

MANSURA BRUSHWORKS THROUGH ITS PROPRIETOR MOHAMMAD HASHIM vs COMMISSIONER OF DELHI GOODS ANDSERVICE TAX DGST & ORS CITATION : 2025 TAXSCAN (HC) 1051

The Delhi HighCourt recently retracted the suspension of Goods and Services Tax (GST) registration of an appellant against whom the department had initiated action while he was unable to access the GST portal to reply to a show-cause notice.

The bench comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta, addressing the petitioner’s grievance regarding inability to access the GST portal, directed the restoration of access for a period of at least 30 days to enable the petitioner to file a reply to the Show Cause Notice. The Court further directed the authorities to take a decision within 30 days from the date of appellant's reply.

Madras HC Upholds GST Exemption on Revenue Share for Duty-Free Shops at Airport as Zero-Rated Supply

Union of Indiavs Flemingo Duty Free Shop Private Limited CITATION : 2025 TAXSCAN (HC) 1052

In a recent ruling, the Madras High Court held that the levy of GST on revenue share or minimum guarantee amounts paid by duty-free shop operators at airports is not valid under GST law, as such supplies qualify as zero-rated under the Integrated Goods and Services Tax (IGST) Act.

The court clarified that authorities are free to examine whether the transactions were genuinely revenue-neutral for the period before April 2021 and take action as per law if not. The direction requiring payment of GST with refund claims from April 2021 onwards was left undisturbed. The Airports Authority’s refund application was directed to be processed within four weeks, along with applicable interest. The writ appeal was dismissed.

ITC Denial Solely Due to Supplier’s Retrospective GST Cancellation Unjust Without Verifying Transactions’ Genuineness: Himachal Pradesh HC

M/s HimalayaCommunication Pvt. Ltd. vs Union of India and others CITATION : 2025 TAXSCAN (HC) 1053

The Himachal Pradesh High Court has held that denial of Input Tax Credit ( ITC ) solely on the ground of the supplier’s GST ( Goods and Services Tax ) registration being cancelled retrospectively, without verifying the genuineness of the underlying transaction, is unjustified.

The decision was made in response to a writ suit that the petitioner had filed contesting the GST authorities' rulings that denied ITC for the applicable tax period.

The Court noted that the sole reason for denial of ITC was the retrospective cancellation of the supplier’s registration, without any enquiry into whether the transaction was genuine.

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JusticesTarlok Singh Chauhan and Sushil Kukreja observed that the authorities failed to examine any documents to ascertain the authenticity of the transaction and had instead proceeded directly to issue notices under Section 16(2) of the CGST Act.

Subsidy Received by BOI from RBI Cannot be Treated as 'Interest' Chargeable u/s 4 of Income Tax Act: Bombay HC

Bank of Indiavs Deputy Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 1054

The Bombay High Court held that the amount of subsidy received by the Bank of India (BOI) from RBI cannot be treated as 'interest' chargeable under Section 4 of the Income Tax Act, 1961.

The issue before the bench was whether the amount of subsidy received by the Assessee from RBI under the Scheme can be treated as 'interest' as defined under Section 2(7) of the Income Tax Act.

The Division Bench of Chief Justice Alok Aradhe and Justice Sandeep V. Marne stated that “the amount of subsidy received by the Assessee is not relatable in loan or advance given by the assessee to the RBI and therefore, the amount of subsidy can neither be treated as commitment charges nor discount on promissory notes on bill of exchange drawn or made in India.”

ITC Denied Without Reasoning for One Supplier: Calcutta HC Stays GST Demand Until December 2025

Amar NathJaiswal vs The Assistant Commissioner of State Tax CITATION : 2025 TAXSCAN (HC) 1055

In a recent case, the Calcutta High Court stayed a GST demand issued against a taxpayer after input tax credit (ITC) was denied for one supplier without any reasoning. The court found the denial arbitrary and also questioned whether the demand was issued within the time limit set by law.

A single bench led by Justice Raja Basu Chowdhury found that the petitioner had raised serious concerns, both about the limitation period and the lack of justification in the ITC denial. The court directed that the impugned GST demand be stayed until December 2025 or until further orders. The court also allowed the State six weeks to file an affidavit in opposition, and permitted the petitioner to file a reply within four weeks thereafter.

GST Demand of Rs. 16.67Cr Mechanically Confirmed on Mismatch in ITC Claim: Madras HC Quashes Order

Sri BalajiTollways (Madurai) Private Limited vs The Deputy State Tax Office CITATION : 2025 TAXSCAN (HC) 1056

The Madras High Court has set aside a GST ( Goods and Services Tax ) demand of ₹16.67 crore raised against a tollway company, holding that the proceedings were mechanical and failed to consider the assessee’s reply.

Observing that the demand had been affirmed in a mechanical manner, without due consideration of the appellant’s submissions or evidence, the Court ruled that the assessment order violated principles of natural justice.

The Court accordingly quashed the order and remitted the matter back to the respondent for fresh adjudication in accordance with law, clarifying that it had not expressed any opinion on the merits.

GST Appeal filing Delayed by 58 Days due to Pendency in Rectification Application: Madras HC Grants Relief

Sas Hotels AndEnterprises Limited vs Deputy Commercial Tax Officer CITATION : 2025 TAXSCAN (HC) 1057

The Madras High Court has condoned a 58-day delay in filing a GST ( Goods and Services Tax ) appeal, caused by the pendency of a rectification application, and directed the authorities to hear the appeal on merits.

JusticeKrishnan Ramasamy, after examining the facts, found the explanation for the delay to be genuine and held that a party’s bonafide reliance on pending rectification proceedings is a valid ground for delay.

Observing that justice would be served by allowing the appeal to be heard, the Court set aside the rejection order and condoned the delay, subject to the petitioner depositing an additional 5% of the disputed tax amount. The Deputy Commissioner was directed to admit the appeal and dispose of it on merits after granting an opportunity of hearing.

Income Tax Deduction u/s 80HHC Had to Be Given Without Reducing S. 80IB Deduction: Madras HC Follows SC Ruling

Commissioner ofIncome Tax vs M/s.Rane Brake Lining Ltd CITATION : 2025 TAXSCAN (HC) 1058

The Madras High Court has reaffirmed that deduction under Section 80HHC of the Income Tax Act, 1961 must be granted without reducing the amount allowed under Section 80IB.

The Court also ruled on a second issue concerning the inclusion of scrap sales in total turnover for computing 80HHC benefits. Referring to the Supreme Court’s judgment in CIT v. Punjab Stainless Steel Industries, it held that proceeds from scrap sales cannot form part of total turnover for the purpose of 80HHC computation.

With these findings, the High Court answered both substantial questions of law in favour of the assessee and dismissed the appeal filed by the Revenue.

Reopening of Assessment Without Complying with S. 143(2) Procedure Is Bad in Law: Madras HC

Siva Industries& Holdings Limited vs The Assistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 1059

The Madras High Court has held that reopening of an income tax assessment without issuing a mandatory notice under Section 143(2) of theIncome Tax Act, 1961 is invalid in law.

The bench of Chief Justice K.R. Shriram and Justice Sunder Mohan restated that if a notice under Section 143(2) is not issued prior to completing a reassessment, the entire process is invalidated referring to its previous decisions in Sapthagiri Finance & Investments v. ITO and CIT v. Alstom T & D India Ltd.

Accordingly, the Court held the reopening of assessment to be legally untenable and allowed the appeal in favour of the assessee. Since the reopening itself was declared bad in law, the Court declined to examine the merits of the case.

At Least One GST Reminder Must Be Sent via RPAD Before Passing Ex-Parte Order : Madras HC

M/s. PioneerProducts vs The State Tax Officer (FAC) CITATION : 2025 TAXSCAN (HC) 1060

The Madras High Court has held that before passing an ex-parte order, the tax authority must send at least one reminder notice through Registered Post Acknowledgement Due (RPAD) or any other valid mode as prescribed under Section 169 of the GST ( Goods and Services Tax ) Act.

The High Court stated that mere uploading of notices on the GST portal without any attempt to reach the assessee through physical service undermines the requirement of due process.

"When an ex-parte order is passed, the respondent should have sent at least one reminder notice through RPAD or by way of any other mode as specified under Section 169 of the Act," the Court observed.

The Madras High Court rejected the challenged assessment judgment and sent the case to the assessing authority for further review, taking into account the petitioner's offer to pay 25% of the contested tax.

Failure to examine legality of ITC availed: Calcutta HC Remands Appeal of Bajaj Wheels to GST adjudicating authority

Bajaj WheelsPrivate Limited & anr. vs The Union of India & ors. CITATION : 2025 TAXSCAN (HC) 1061

In a recent case, the Calcutta High Court remanded the appeal of Bajaj Wheels to the Goods and Services Tax (GST) adjudicating authority on finding that the authority failed to examine the legality of the ITC. The court found that no fruitful purpose would be served by keeping the matter pending.

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A single bench of Justice Raja BasuChowdhury, while setting aside the order impugned, including the order passed by the adjudicating authority dated 30th October, 2023, let the matter stand remanded back before the adjudicating authority for a fresh decision on merits.

The adjudicating authority is directed to decide upon the aforesaid within a period of eight weeks from the date of communication of this order by issuing an appropriate notice of hearing and by affording an opportunity of hearing to the petitioner.

Relief to Mahindra & Mahindra Ltd, AO Has No Jurisdiction to Alter Net Profit in P & L Account Except Under S. 115J of Income Tax Act: Bombay HC

M/s. Mahindra& Mahindra Ltd. vs Commissioner of Income-tax CITATION : 2025 TAXSCAN (HC) 1062

In a ruling in favour of Mahindra & Mahindra Ltd, the Bombay High Court stated that assessing officers do not have the jurisdiction to go behind net profit in profit and loss (P&L)account except as per explanation to Section 115J of Income Tax Act, 1961.

The Division Bench, consisting of Chief Justice Alok Aradhe and Justice M.S. Karnik observed that Section 115 J of the 1961 Act stipulates that, after certain adjustments, the total income chargeable to tax for a company whose total income as calculated under the Act 1961's provisions is less than 30% of the book profit will be 30% of the book profit as shown in the profit and loss account prepared in accordance with Part II and III of Schedule VI of the Companies Act 1956.

Rule 96(10) of CGST Rules Omission Operates Prospectively But Applies to Pending Proceedings: Gujarat HC

MESSRS ADDWRAPPACKAGING PVT. LTD. vs UNION OF INDIA & ORS. CITATION : 2025 TAXSCAN (HC) 1063

The Gujarat High Court in a recent case held that the omission of Rule 96(10) of Central goods and Service Tax (CGST) Rules, 2017 operates prospectively but applies to all pending proceedings.

The Division Bench of Justices Bhargav D. Karia and D.N. Ray viewed that the 2024 Rules have been issued by Notification No.20/2024, and Rule 10 of those Rules has eliminated Rule 96(10) of the CGST Rules with immediate effect. This would lead to three scenarios: first, whether it would apply retroactively; second, whether it would apply prospectively; or third, whether it would apply prospectively but also to "pending proceedings." Additionally, Rule 10 of the Rules, 2024, applies to ongoing cases as well as prospectively.

Claim of Breach under Article 265 cannot be from an interlocutory order by Assessing Officer: Bombay HC

FcbulkaAdvertising Pvt Ltd. vs Assistant Commissioner of Income Tax Circle CITATION : 2025 TAXSCAN (HC) 1064

The Bombay High Court held that a claim of breach of Article 265 of the constitution cannot be alleged or sustained based upon a preliminary, prima facie, or interlocutory order and not a final order by assessing officer.

The Division Bench, consisting of Justices M.S. Sonak and Jitendra Jain observed that if the communication dated 29 November 2018 is an order, it being like a preliminary, prima facie, or interlocutory order and not a final order, the Petitioner cannot base their claim on this communication to allege breach of Article 265 of the Constitution. The communication dated 29 November 2018 is based on preliminary verification and is subject to processing, and therefore, it is in the nature of a preliminary/prima facie/interlocutory order.

RLDA Not a Juristic Entity, Madras HC sets aside Property Tax by Municipality on Railway Land Being Unconstitutional

Madurai MultiFunctional Complex Private Limited vs The Madurai Corporation CITATION : 2025 TAXSCAN (HC) 1065

The Madras High Court has held that the Railway Land Development Authority (RLDA) is not a juristic entity and set aside the property tax imposed by the municipality on railway land being unconstitutional.

A division bench of Justice G.R.Swaminathan and Justice M.Jothiraman observed that RLDA is not a separate entity at all. It is an alter-ego of Railways. RLDA cannot hold properties in its own name. At no point of time, the title over the site was transferred from Railways to RLDA or from RLDA to Ircon or from Ircon to the MMFC (the petitioner herein). Merely because Ircon was permitted to construct the building or the petitioner herein was permitted to develop it further would not result in vesting of the title over the building either in Ircon or in the petitioner. The expression “vesting” has a technical meaning.

Bombay HC directs Income Tax Commissioner to decide Royalty on Payment for Transponder Services

VIACOM 18 MEDIAPVT LTD vs Deputy Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 1066

In a decision affecting how payments for satellite transponder services are taxed, the BombayHigh Court has ordered the Income Tax Commissioner (Appeals) to closely examine whether fees paid for such services should be classified as “royalty” under Indian tax laws and the India-USA Double Taxation Avoidance Agreement (DTAA).

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Highlighting this gap, the Court held that deciding such a complex tax question requires a thorough factual inquiry, which can only be done by the tax authorities themselves.

The Court sent the matter back to the Commissioner of Income Tax (Appeals) with clear instructions to verify if Intelsat Corporation was held liable to pay tax in India for the years in question. If Intelsat is not taxable, Viacom 18 should not face withholding tax liability.

Design & Engineering Services to Foreign Entities Are Zero-Rated Supplies: Bombay HC Allows Refund of Unutilized ITC u/s 54 of CGST Act

Sundyne Pumpsand Compressors India Pvt Ltd vs The Union of India CITATION : 2025 TAXSCAN (HC) 1067

The Bombay High Court ruled that engineering and design services provided to foreign organizations are zero-rated supplies and allowed the assessee to a reimbursement of any unutilized the ITC under Section 54 of the Central Goods and Services Tax (CGST), 2017.

The bench said that the assessee for the same services applied for and received a refund for the April 2020–March 2021 and April–June 2021 periods. The responders chose not to appeal the two previous orders that gave the assessee a refund. The assumption for the refunds was that the assessee's services qualified as "export of services." Finality has been obtained on these orders. After this, the department cannot deny the refund claim on the grounds that the assessee's services do not constitute "export of service," particularly if the client agreements and all other relevant information are still the same.

Supreme Court rejects Revenue’s plea against Delhi HC’s reversal of ECrL “negative blocking” order under Rule 86A

DIRECTORGENERAL OF GOODS AND SERVICE TAX INTELLIGENCE & ANR. vs SUPER PRODUCTS CITATION : 2025 TAXSCAN (SC) 187

The Supreme Court has dismissed the Directorate General of GST Intelligence’s (DGGI) Special Leave Petition (SLP) seeking a review of the Delhi High Court’s judgment that quashed a “negative blocking” of the taxpayer’s electronic credit ledger (ECrL) under Rule 86A of the CGST Rules.

The Delhi HC had earlier held that Rule 86A serves only as a provisional safeguard for tax authorities—not for permanent suspension or recovery of input tax credit (ITC)—and, crucially, negative blocking of the ECrL (creating a debit balance when none existed) is impermissible.

Chhattisgarh HC Disposes of Income Tax Appeal as Tax Effect Falls Below Revised ₹2 Cr Threshold

Dy.Commissioner Of Income Tax vs M/s Sanjay Agrawal CITATION : 2025 TAXSCAN (HC) 1068

The Chhattisgarh High Court (HC) disposed of an income tax appeal filed by the Department against M/s Sanjay Agrawal, after the appellant cited a recent CBDT circular that revised the monetary threshold for departmental appeals.

The Bench found the submission fair and reasonable, and proceeded to quote relevant portions of the September 2024 circular. Importantly, the Court highlighted paragraph 5 of the circular, which explicitly states that the revised monetary thresholds are to be applied not only to future appeals but also to those currently pending before various judicial forums, including High Courts.

Himachal Pradesh HC Dismisses Appeal in ₹10 Lakh Cheque Bounce Case: Upholds Acquittal

Bharat Bhushanvs Bharat Bhushan CITATION : 2025 TAXSCAN (HC) 1069

The Himachal Pradesh High Court has dismissed an appeal filed by the petitioner Bharat Bhushan, challenging the acquittal of Umesh Kumar by the Chief Judicial Magistrate, Mandi, in a cheque bounce case under Section 138 of the Negotiable Instruments Act, 1881.

The High Court bench, consisting of Judge Rakesh Kainthla, held that the trial court’s view could not be said to be unreasonable. As two possible views were available based on the evidence, the High Court declined to interfere, citing the settled principle that appellate courts should not overturn acquittals unless there is a gross miscarriage of justice. As a result, the appeal was dismissed, and the respondent's acquittal was upheld.

Cheque Bounce over Apple Sale: Himachal Pradesh HC Confirms Conviction in NI Act Case

Ramesh Hetta vsJyoti Badehta CITATION : 2025 TAXSCAN (HC) 1070

The Himachal Pradesh High Court has dismissed a revision petition filed by Ramesh Hetta, affirming his conviction under Section 138 of the Negotiable Instruments Act, 1881, in a cheque dishonour case involving payment for apple produce.

Justice Rakesh Kainthla, hearing the matter, observed that once the issuance of cheque is admitted, a presumption arises under Sections 118(a) and 139 of the NI Act that it was issued in discharge of a legally enforceable debt or liability. The burden then shifts to the accused to rebut this presumption on a preponderance of probabilities.

Jharkhand HC Grants Rs. 90,000 Monthly Alimony per month After RTI Reveals Husband’s Rs. 21 Lakh Annual Income

Susmita Prasadvs Raju Prasad CITATION : 2025 TAXSCAN (HC) 1071

The Jharkhand High Court has granted Rs. 90,000 as monthly alimony after an RTI disclosure revealed that the husband earns an annual income of Rs. 21 lakhs.

The High Court held that the alimony must be increased due to the husband’s monthly income of Rs. 2.3 lakhs after deductions of Provident Fund, Professional Tax, Income Tax, etc.

The bench, by going through the on RTI-based income details, noted that in the financial year 2021-22 and 2022-23, the respondent husband has a net annual income of Rs. 18.51 lacs and 21.00 lacs respectively, which means he earned more than 1.5 lakhs per year.

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Complainant Fails to Disclose Loan in ITR or Prove Financial Capacity: Gujarat HC Denies Appeal in Rs. 15 Lakh Cheque Bounce Case

BHAVUBHABECHARSINH CHAVDA vs STATE OF GUJARAT & ANR CITATION : 2025 TAXSCAN (HC) 1072

The Gujarat High Court denied leave to appeal in a Rs. 15 lakh cheque bounce case, observing that the complainant had failed to disclose the alleged loan in his income tax returns (ITR) or establish his financial capacity to advance such a sum.

The High Court noted that during cross-examination, the complainant admitted he files income tax returns but did not record the Rs. 15 lakh transaction or maintain any books of accounts.

The court noted that the accused raised reasonable doubt, and the applicant failed to prove that the cheque amount was a legally recoverable debt. Since the case wasn’t proven beyond reasonable doubt, the trial court’s acquittal was found to be proper.

The High Court noted that the applicant clearly admitted he had not shown the Rs. 15,00,000 loan in his income tax returns, and there was no evidence to prove he had the financial capacity to give such a large amount in cash to the accused.

A person cannot pursue remedy under Income Tax Act and Extraordinary remedy simultaneously: Calcutta HC

SRI PRASANTASARKAR vs UNION OF INDIA & ORS. CITATION : 2025 TAXSCAN (HC) 1073

In a recent case, the Calcutta High Court has held that a person cannot pursue remedy under the Income Tax Act , 1961 and an extraordinary remedy simultaneously.

A single bench of Justice Raja Basu Chowdhury observed that the writ petition challenging the aforesaid order has been filed on 3rd April, 2025 and there appears to be no explanation of the delay. No disclosure has been made as regards the outcome of the stay application filed before the CIT appeal.

It is well settled that a party cannot be permitted to pursue the statutory remedy and the extraordinary remedy simultaneously.

Gujarat HC upholds Acquittal order under NI Act as Applicant failed to Submit ITR proving Financial capacity

BHAVUBHA BECHARSINH CHAVDA vs STATE OF GUJARAT & ANR. CITATION : 2025 TAXSCAN (HC) 1074

The Gujarat High Court upheld the acquittal order under the Negotiable Instrument Act (NI) , 1881 as the applicant failed to submit Income Tax Return (ITR) proving the financial capacity.

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A single bench of Justice S.V. Pinto observed that the applicant has categorically stated that he has not shown the amount in his Income Tax Returns and there is no evidence on record to suggest that the applicant had the financial capacity and he could advance the huge amount of Rs.15,00,000/- in cash to the accused. Moreover, the applicant has stated that the power of attorney for the immovable property of the accused was executed on the date when the amount was advanced, but no such document has been produced on record.

Kolkata Municipal Corporation cannot Levy Advertisement Tax on CAB without framing appropriate Regulations: Calcutta HC

THE CALCUTTAMUNICIPAL CORPORATION & ORS. vs THE CRICKET ASSOCIATION OF BENGAL & ORS CITATION : 2025 TAXSCAN (HC) 1075

In a recent case, the Calcutta High Court ruled that the Kolkata Municipal Corporation cannot levy Advertisement Tax on the Cricket Association of Bengal (CAB) without framing appropriate regulations.

A division bench Justice Arijit Banerjee and Justice Kausik Chanda observed that without framing Regulations or without the budget estimate prescribing the rates at which advertisement tax may be levied by KMC, computation and imposition of such tax would be arbitrary. It would have no rational basis. It would then be open to KMC to quantify such tax as per its sweet will. This cannot be countenanced under the rule of law. There must be a guiding factor following which the advertisement tax can be assessed and imposed.

Even if CAB has earlier paid advertisement tax demanded by KMC, CAB cannot be prevented from arguing the point of absence of Regulations, etc, since there can be no estoppel against a statute.

Constitutional Exemption for Railway Property survives Leasing Out and Commercial Use, No Property Tax Leviable: Madras HC

Madurai MultiFunctional Complex Private Limited vs The Madurai Corporation CITATION : 2025 TAXSCAN (HC) 1076

In a significant judgment reaffirming the constitutional immunity accorded to Union Government property, the Madurai Bench of the Madras High Court has held that no property tax can be levied on buildings situated on railway land, even if such properties are leased out to private entities and put to commercial use.

The Division Bench comprising Justices G.R. Swaminathan and M. Jothiraman allowed a writ appeal filed by Madurai Multi Functional Complex Private Limited, thereby setting aside an earlier order passed by a single judge which had upheld the Madurai Corporation’s property tax demand of ₹10.07 lakh for the complex located at the Madurai Railway Station premises.

15 Lines Extracted from 10-Page GST Reply: Madras HC Criticises Dept for Not Considering Reply Properly or Seeking Additional Documents

Tvl.R.R FireSolutions vs The State Tax Officer CITATION : 2025 TAXSCAN (HC) 1077

In a recent ruling, the Madras High Court criticised the GST ( Goods and Services tax ) department for not considering reply properly or seeking additional documents. The court observed that out of 10 paged GST replies, the department only noted the 15 lines.

Justice Krishnan Ramasamy observed that “Normally, when an Assessee filed his reply, the respondent was supposed to have duly considered the same and elaborately discussed with regard to the objections raised therein. Thereafter, if it is necessary, the respondent shall direct/intimate to the petitioner to file additional documents for further clarification. However, in this case, the respondent had neither considered the reply in a proper manner nor sought for any additional documents from the petitioner. Therefore, this Court is of the view that the respondent had committed a serious error while passing the impugned order.”

Single GST SCN for Multiple Financial Years Prima Facie Invalid: Orissa HC Grants Interim Stay

M/s. BajwaInfrastructure Pvt. Ltd. vs The Chief Commissioner CT & GST CITATION : 2025 TAXSCAN (HC) 1078

In a recent order, the Orissa High Court granted interim relief to Bajwa Infrastructure Pvt. Ltd. by staying a consolidated GST show cause notice that covered multiple financial years. The court found that issuing a single notice under Section 74 of the CGST Act, 2017, for five different financial years appeared to go against the structure and timelines prescribed under the law.

A division bench led by Chief Justice Harish Tandon and Justice M.S. Raman stated that the petitioner had made a prima facie case by relying on a judicial precedent from a coordinate High Court. The bench held that the issue required further examination and directed the department to file a reply by 25.07.2025. The petitioner was given time to file a rejoinder thereafter.

Non-Consideration of Credit Note and Supporting Documents: Karnataka HC Sets Aside GST Order and Directs Fresh Consideration

SAIT NAGJEEPURUSHOTHAM AND COMPANY PRIVATE LTD vs COMMERCIAL TAX OFFICER CITATION : 2025 TAXSCAN (HC) 1079

The High Court of Karnataka,set aside the impugned GST ( Goods and Services Tax) order after finding that the petitioner’s credit note and supporting documents, submitted in response to a show cause notice, were not duly considered by the authority.

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A single member bench S.R.Krishna Kumar (Judge ) found that in the present case as well, the credit note and related documents were not appreciated or addressed by Respondent No. 1 while passing the impugned order. Relying on the reasoning in the Madras High Court judgment, the Court held that the impugned order deserved to be set aside and the matter remitted back for fresh consideration.

Accordingly, the bench set aside the impugned order dated 26.12.2024 and remitted the matter to Respondent No. 1 for reconsideration in accordance with law, after affording a reasonable opportunity of hearing to the petitioner.

SCN Demanded IGST, But Final Order Imposes CGST & SGST with Penalty: Allahabad HC Finds Order wholly Contrary to Original SCN

Ntt Cloud VoiceAnd Communications India Private Limited vs State of U.P. CITATION : 2025 TAXSCAN (HC) 1080

The Allahabad High Court stayed the operation of a final GST adjudication order that imposed Central and State GST (CGST and SGST) demands along with penalties, despite the original Show Cause Notice ( SCN ) raising demand only for Integrated GST ( IGST ).

The Court stated that the matter "requires consideration" and directed the State to file a counter affidavit within six weeks, with liberty to the petitioner to file a rejoinder within two weeks thereafter. Meanwhile, the Court ordered that the effect and operation of the impugned adjudication order dated 20.02.2025 shall be stayed until the next date of listing.

The matter came up before the Division Bench comprising the Justices Sandeep Jain and S.D. Singh who heard submissions from the petitioner’s counsel Mr. Utkarsh Srivastava, assisted by Mr. Prem Narayan Singh, Ms. Surabhi Bhaskar, and Mr. Sisir Kumar Dash. The State was represented by Mr. Ravi Shankar Pandey.

Income Tax Job Fraud: Allahabad HC grants Bail to Accused without Expressing Opinion on Merits with Conditions

Kumari ChandaniChauhan vs State of U.P CITATION : 2025 TAXSCAN (HC) 1081

The Allahabad High Court has granted bail to the accused in a case involving claims of fraudulent money collection under the guise of promising a job in the IncomeTax Department, without considering the case's merits with conditions.

The Court, while considering the rival submissions and stating the principle of presumption of innocence at the pre-conviction stage, referred to the Supreme Court’s decision in Vinod Bhandari v. State of M.P., citing that detention should not be punitive and that the seriousness of allegations alone cannot justify denial of bail.

Considering the nature of accusations, duration of custody, and all surrounding circumstances, Justice Raj Beer Singh found it a fit case for bail.

Taxpayer Willing to Pay GST Dues and Interest: Orissa HC Condones Delay in Filing Revocation of GST Cancellation

Ajit KumarParida vs The Commissioner of CT & GST CITATION : 2025 TAXSCAN (HC) 1082

In a recent order, the Orissa High Court allowed the revocation of GSTregistration cancellation for a taxpayer who expressed readiness to pay all outstanding dues. The court condoned the delay in filing the revocation application, stating that the petitioner’s willingness to comply with statutory requirements served the interest of revenue.

A division bench led by Chief Justice Harish Tandon and Justice M.S. Raman referred to the precedent in M/s. Mohanty Enterprises and applied the same reasoning to the present case. The court stated that the delay in invoking the proviso to Rule 23 of the OGST Rules could be condoned, and the revocation request could be processed if all dues were paid and legal formalities complied with.

Non-Participation in Income Tax Proceedings Due to PAN Mismatch from Trust to Society Conversion: Madras HC Grants Fresh Hearing

PE65 TheModakkurichi Circle Teachers vs The Principal Commissioner of Income Tax-1 CITATION : 2025 TAXSCAN (HC) 1084

In a recent decision, the Madras High Court set aside income tax assessment and penalty orders passed against PE65 The Modakkurichi Circle Teachers and Public Servants Cooperative T&C Society, granting them a fresh opportunity to present their case. The court accepted the petitioner’s explanation that they failed to participate in the proceedings due to a mismatch between their old and new PAN numbers following the conversion of the entity from a trust to a cooperative society.

The single-judge bench comprising Justice Krishnan Ramasamy observed that the petitioner should not be denied the chance to present their case simply because they failed to respond during the assessment stage. The court accepted that the change in the entity’s legal status and PAN might have led to genuine confusion. The court further observed that denying the petitioner relief under Section 264 on procedural grounds would be unjust, particularly in the context of an entity that had undergone structural changes.

GST Order Must Set Out Relevant Facts and Decision Basis: Allahabad HC Says Mere Reference to Previous Notices Insufficient

M/S AgarwalKirana Store vs Union Of India CITATION : 2025 TAXSCAN (HC) 1085

The Allahabad High Court has quashed an order passed under Section 73(9) of the CGST (Central Goods and Services Tax Act) , 2017, for failing to comply with the statutory requirement under Section 75(6), which mandates that adjudication orders must set out relevant facts and the basis of the decision.

Accordingly, the High Court allowed the writ petition, quashed the impugned order, and remanded the matter back to the Commercial Tax Officer. The officer has been directed to provide the petitioner an opportunity to file a detailed reply to the Section 73 notice within four weeks, and thereafter pass a fresh, reasoned order in accordance with law. The Court further directed that a personal hearing be granted to the petitioner on a date fixed by the authority.

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