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

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.

Service Tax and Entertainment Tax on DTH Services Must Be Levied Separately: Karnataka HC Remands Case to Appellate Tribunal

DISH TV INDIA LIMITED vs THE JOINT COMMISSIONER OFCOMMERCIAL TAXES CITATION: 2025 TAXSCAN (HC) 408

The Karnataka High Court recently remanded a case involving the inclusion of service tax while levying the entertainment tax to the Karnataka Appellate Tribunal for reconsideration. The court ruled in favour of the petitioner observing that entertainment tax and service tax must be taxed separately.

The Court set aside the Tribunal’s order and remanded the case for fresh consideration, directing the Tribunal to address the petitioner’s claims, including the treatment of invoices and the constitutional implications of taxing service tax. The Tribunal was instructed to conclude the matter within three months, ensuring all parties are heard.

Discretionary Power cannot be Exercised to Halt Income Tax Assessments involving Huge Undisclosed Income: Bombay HC refuses to Entertain plea

DNH Spinners Private Limited vs Deputy Commissioner ofIncome-tax, Principal Commissioner, Union of India CITATION: 2025 TAXSCAN (HC) 409

In a recent ruling, the Bombay High Court has ruled that its discretionary powers cannot be exercised to prevent the officers from proceedings with income tax assessment cases involving huge undisclosed income.

The court made it clear that the present case requires factual based investigation and as the petitioner has alternate remedy, it may avail that. The bench reiterated its reluctance to interfere in matters requiring factual investigation and dismissed the petitions, directing the petitioner to raise all issues in appeal proceedings under the Act.

Validity of Circular No. 150/2021 under Challenge: Rajasthan HC stays GST Recovery on Highway Annuities

M/s Reengus Sikar Expressway Limited vs AdditionalDirector, Directorate General Of Goods And Services Tax Intelligence CITATION: 2025 TAXSCAN (HC) 410

In a recent ruling, the Rajasthan High Court stayed the recovery of GST on annuity payments received under the hybrid annuity model for highway construction considering the challenge to the validity of Circular No. 150/06/2021-GST dated 17.06.2021.

The Bench comprising Justice Dr. Pushpendra Singh Bhati and Justice Chandra Prakash Shrimali observed that the issue required consideration. The court directed that no coercive steps shall be taken against the petitioner in relation to the GST recovery proceedings initiated under the order dated 09.01.2025. The matter has been listed for further hearing after eight weeks.

IFCI Cannot Withhold Pledged Shares Once Loaned Amount is Cleared by Borrower: Delhi HC

BHUSHAN INFRASTRUCTURE PRIVATE LIMITED vs UNION OF INDIATHROUGH FINANCE SECRETARY CITATION: 2025 TAXSCAN (HC) 411

The Delhi High Court recently ruled that IFCI Limited (previously Industrial Finance Corporation of India) has no authority to withhold shares pledged by a borrower while availing a loan, once the borrower has fully repaid the loan.

Holding that IFCI’s actions amounted to unjust enrichment, the Delhi High Court directed IFCI to release to the petitioners all the pledged shares which had now been converted to Tata Steel shares within a period of six weeks.

BCI Must Respond to Representation Challenging AIBE Fee Structure: Punjab & Haryana HC

Tushar Tanwar vs Bar Council of India CITATION: 2025 TAXSCAN (HC) 412

In a recent order, the Punjab & Haryana High Court directed the Bar Council of India (BCI) to respond to a representation challenging the fee structure of the All India Bar Examination (AIBE).

The court explained the procedural fairness and accountability, leaving the substantive questions regarding the legality of the AIBE fee open for future adjudication. With these directions, the writ petition was disposed of.

‘Comedy of Errors’: Delhi HC Slams CESTAT for Issuing Contradictory Orders in Appeal Barred by Monetary Limits

JAI DURGA RUBBERISED FABRICS INDIA PVT. LTD CITATION: 2025 TAXSCAN (HC) 413

In a recent decision, the Delhi High Court criticized the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) for passing several contradictory calling it “comedy of errors” and pointed out that the Department’s appeal should not have been entertained at all because it involved a small amount much below the official limit for filing such appeals.

The Court stated that continuing the case would serve no useful purpose and the Department’s own rules didn’t support the appeal. So, the matter should be closed. The court invoked Article 227 of the Indian Constitution to dismiss the Department’s appeal once and for all. The Court also ordered that the bank guarantee, which Jai Durga had provided more than 14 years ago, should be returned within eight weeks.

Orissa HC Revokes Cancellation of GST Registration upon Petitioner’s Willingness to pay Missed Tax, Interest, Late Fee and Penalty

Rebat Kumar Sahu vs Superintendent, CGST, GanjamII Circle CITATION: 2025 TAXSCAN (HC) 415

In a significant ruling, the Orissa High Court directed the revocation of cancelled Goods and Services Tax (GST) registration of a registrant upon his express willingness to pay all outstanding tax, interest, late fee, penalty and any other sum required to be paid for the department to accept his GST forms.

Maintaining precedence with the ruling of the coordinate Bench, Chief Justice Harish Tandon and Justice Arindam Sinha disposed of the writ petition, passing an order of the same effect in Mohanty Enterprises, providing the Petitioner relief in the interest of Revenue.

Expired Bank Guarantees Cannot be Sustained in Law: Kerala HC Dispels Customs’ Claim

M/S. ITMA HOTELS INDIA PRIVATE LIMITED vs THE ADDITIONALCOMMISSIONER OF CUSTOMS and ors. CITATION: 2025 TAXSCAN (HC) 417

The Kerala High Court recently held that the Customs Department does not have the liberty to invoke expired bank guarantees to recover any outstanding duties payable by an entity who had availed the benefits of the Export Promotion Capital Goods (EPCG) Scheme.

However, regarding the Customs’ claim that the Bank was contractually obliged to keep the Bank Guarantees alive, the Kerala High Court abstained from touching upon the specific questions of fact and proceeded to allow the Writ Petition while leaving open the rights of the Respondents to prefer recourse through appropriate proceedings.

Dual GST Orders for Same Period on Different Grounds: Gujarat High Court Stays Recovery

M/S D M JEWELLERS vs UNION OF INDIA & ORS. CITATION: 2025 TAXSCAN (HC) 414

In a recent order, the Gujarat High Court stayed coercive recovery proceedings due to two separate assessment orders passed for the same tax period on different grounds.

The court directed that no recovery or enforcement proceedings be taken during the pendency of the writ petition. Direct service through email was permitted to expedite communication.

Supreme Court Probes Customs Officer’s Locus Standi to file PIL against Abhishek Banerjee’s Wife on 2019 Incident

RAJKUMAR BARTHWAL vs THE STATE OF WEST BENGAL & ORS. CITATION: 2025 TAXSCAN (SC) 149

The Supreme Court recently dismissed a Public Interest Litigation (PIL) filed by customs officer Raj Kumar Barthwal, who had sought an investigation into an incident from 2019 at the Kolkata airport involving Rujira Banerjee, wife of Trinamool Congress leader Abhishek Banerjee, and her sister Maneka Gambhir.

Faced with this directive and sustained judicial skepticism from the Apex Court, Barthwal withdrew the petition. The Court formally dismissed the PIL as withdrawn, while granting liberty to the Union of India or the Customs Department to pursue the matter through appropriate legal channels, if they chose.

Creditor Not Required to Prove Financial Capacity to Extend Loan: Supreme Court Slaps ₹32 Lakh Fine on Defaulter in S.138 NI Act Case

ASHOK SINGH vs STATE OF UTTAR PRADESH & ANR CITATION: 2025 TAXSCAN (SC) 148

In a notable ruling, the Supreme Court of India has held that a creditor is not required to prove their financial capacity at the outset to establish a legally enforceable debt under Section 138 of the Negotiable Instruments Act, 1881 (NI Act).

In light of the observations made, the Supreme Court proceeded to impose a fine of ₹32,00,000 on the Accused which is to be paid within four months failing which the sentence imposed by the trial court in the prior stage would be upheld by the Supreme Court.

Supreme Court Ends 50-Year Dispute on CA Firm’s Undervaluation of Shares: Grants 6% Simple Interest from 1975 and 9% Interest Post-Decree

I.K. MERCHANTS PVT. LTD. & ORS. vs THE STATE OFRAJASTHAN & ORS. CITATION: 2025 TAXSCAN (SC) 147

The Supreme Court of india recently resolved a nearly five-decade old dispute regarding the undervaluation of the share price of a Chartered Accountancy (CA) firm, ordering the levy of 6% interest per annum on the estimated share price from 1975 onwards and another 9% interest per annum on the share price from the date of decree till the date of realisation.

Furthermore, the Bench directed the Government to pay the amount due towards the enhanced value of the shares after adjusting the amount already paid out, within a period of 2 months from the date of the judgment.

HSD-Classification Dispute: Supreme Court Directs Customs to Establish Requisite Testing Facilities to Avert Prolonged Litigation

GASTRADE INTERNATIONAL vs COMMISSIONER OF CUSTOMS CITATION: 2025 TAXSCAN (SC) 146

The Supreme Court of India recently directed the Customs Department to establish comprehensive testing facilities to prevent prolonged litigation arising from classification disputes of imported goods.

The Court emphasized that while expert opinions and laboratory reports play a crucial role in classification determinations, they cannot be treated as conclusive if they fail to account for all stipulated criteria.

Gurugram Court Grants Bail in Rs. 7.13 Crore GST ITC Fraud Case as Alleged Individual Gains Fall Below Rs. 5 Crore Threshold

State. Vs. Rahul Dhingra CITATION: 2025 TAXSCAN (HC) 418

In a recent ruling, a Gurugram court granted bail to two accused in a Rs. 7.13 crore GST Input Tax Credit (ITC) fraud case, primarily on the ground that their alleged individual gains fell below the Rs. 5 crore threshold required to attract non-bailable provisions under the CGST Act.

The bail was granted on furnishing a bond of Rs. 50,000 with one surety of the same amount. The court clarified that its findings were limited to the bail stage and would not influence the merits of the case during trial.

No Reasoned Appellate Order for Rejecting GST Appeal: Calcutta HC Remands Matter for Fresh Consideration

Madhusudan Banik vs State of West Bengal & Ors CITATION: 2025 TAXSCAN (HC) 419

The Calcutta High Court recently set aside an appellate order rejecting a Goods and Services Tax (GST) appeal, citing the absence of a reasoned decision provided by the Respondent Commissioner of Revenue, and remanded the matter for fresh consideration.

The Appellate Authority was directed to set a date for personal healing wherein the Appellant may make his presence in person or through an authorized representative and present his written submissions without seeking adjournment.

Wrongful ITC Claim: Calcutta HC Exempts Wilhelmsen Port Services from Paying 10% Disputed Tax Observing Revenue Neutrality

WILHELMSEN PORT SERVICES INDIA PRIVATE LIMITED AND ANR. vsSTATE OF WEST BENGAL AND ORS. CITATION: 2025 TAXSCAN (HC) 420

The Calcutta High Court recently ruled in favor of Wilhelmsen Port Services India Private Limited, exempting the company from making a 10% payment of the disputed Input Tax Credit (ITC) amount, observing that the ITC claim in question was revenue-neutral and did not lead to any loss to the government exchequer.

However, the Bench clarified that the present decision was passed purely in light of the unique facts and circumstances of the present case and thus should not be treated as a precedent for future matters.

Service Charge on Restaurant Bills is Not a Mandatory Tax: Delhi HC Directs CCPA To Revise Misleading Terminology

NATIONAL RESTAURANT ASSOCIATION OF INDIA & ORS vsUNION OF INDIA & ANR CITATION: 2025 TAXSCAN (HC) 421

The Delhi High Court recently reaffirmed that the service charge levied by restaurants and hotels is not a mandatory tax, while directing the Central Consumer Protection Authority (CCPA) to consider revising the terminology on bills to avoid misleading unassuming consumers.

While dismissing the writ petitions, the Delhi High Court also slapped costs of ₹1 Lakh each on the Petitioners that are to be deposited with Central Consumer Protection Authority to be utilized for consumer welfare.

Automation and AI Cannot Disregard Natural Justice: Bombay HC on CPC Rejecting ITR Without Reasoning

TPL – HGIEPL Joint Venture vs Union of India CITATION: 2025 TAXSCAN (HC) 422

In a recent decision, the Bombay High Court held that automated systems, including AI-driven tax portals, must adhere to the principles of natural justice and cannot reject tax returns without providing proper reasoning.

The court directed that if such an application is filed within four weeks, the Commissioner must dispose of it within three months, after giving the petitioner a proper hearing and passing a reasoned order. The writ petition was dismissed

SCN u/s 110 Customs Act cannot be Issued After 1 Year: Delhi HC Directs to Release Detained Goods

MOHAMMAD ARHAM vs COMMISSIONER OF CUSTOMS CITATION: 2025 TAXSCAN (HC) 423

The Delhi High Court has held that detention of goods by the Customs Department cannot continue beyond a period of one year, if a show cause notice under section 110 of the Customs Act, 1962 was not issued to the assessee within such period. The court directed to release detained goods.

A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta cited Section 110 of the Customs Act, 1962 which prescribes a period of six months. Further, subject to complying with certain formalities, a further extension for a period of six months for the Department to issue a show cause notice can be given in terms of Section 110(5).

Benefit of Monetary Limits Guidelines Not Applicable In Dispute related to Classification of Product for Customs Duty: Delhi HC

M/S GOURISHANKAR POLYMER INDUSTRIES VS COMMISSIONER OFCUSTOMS CITATION: 2025 TAXSCAN (HC) 424

The Delhi High Court has held that the benefit of monetary limits guidelines is not applicable in disputes relating to the product classification for customs duty.

The division bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta remanded the matter to Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi for a fresh adjudication on the classification issue itself and not to dispose of the matter on merely the monetary limit. The court held that this is an old matter, CESTAT, Principal Bench, New Delhi shall dispose of the matter within three months.

Wrongful Availment of ITC Upon fake document Corroborated with statement of Directors of Company: Calcutta HC Directs to File Appeal u/s 107 of CGST Act

M/S FORGING INDIA IRON AND STEEL LIMITED vs UNION OF INDIAAND ORS CITATION: 2025 TAXSCAN (HC) 425

In a recent case, the Calcutta High Court has directed to file appeal under section 107 of the Central Goods and Service Tax (CGST) Act, 2017 against the wrongful availment of Input Tax credit ( ITC ) upon fake document corroborated with statement of directors of the company.

In the light of the fact that the time for preferring the appeal has already expired, the bench directed the assessee to file the appeal within 45 days from the date of receipt of server copy of this order and the assessee shall comply with the pre-deposit condition. The assessee shall be permitted to file the appeal manually as the online filing may not be possible as appeal is belated.

Customs Duty Drawback Evasion: Madras HC upholds CESTAT’s Pre-Deposit Condition

M.Vijay Anand Kalandar Seeni Ahmed vs The Customs, Exciseand Service Tax Appellate Tribunal CITATION: 2025 TAXSCAN (HC) 426

The High Court of Madras, upheld the Customs, Excise, and Service Tax Appellate Tribunal’s (CESTAT) pre-deposit condition in a customs duty drawback evasion case, citing the assessee’s prolonged delay and non-compliance.

Observing that the assessee kept the appeal pending for over eight years without pursuing them or paying the pre-deposit, the Court dismissed the appeals for lack of merit. It directed the appellants to pay the pre-deposit within six weeks if they wished to continue. Otherwise, the Department was permitted to take legal action against them.

No Suppression or Fraud: Delhi HC Rejects GST Dept’s Service Tax Demand on Subcontractor Beyond Limitation

THE COMMISSIONER OF CENTRAL TAX vs M/S SIMPLEXINFRASTRUCTURE LIMITED CITATION: 2025 TAXSCAN (HC) 429

The Delhi High Court recently reiterated the bounds of power exercisable by the Goods and Services Tax (GST) Department, dismissing an appeal filed by the Commissioner of Central Tax, CGST Delhi East, seeking to invoke the extended period of limitation under Section 73(1) of the Finance Act, 1994, to impose service tax liability on a company for the period between 2004 and 2009.

In light of the observations made, the Delhi High Court proceeded to dismiss the matter and all pending applications.

Technical breach in obtaining Provisional ID for GST migration: Calcutta HC directs to reconsider Claim of Transitional Credit

Javed Ahmed Khan vs Deputy Commissioner of Revenue CITATION: 2025 TAXSCAN (HC) 428

The Calcutta High Court has directed to reconsider the claim of transitional credit considering the technical breach faced by assessee in obtaining provisional ID for GST migration.

The court set aside the order and the matter is remanded back to the Respondent No.1, Deputy Commissioner of Revenue, State Tax, Ballygunge to consider the application filed by the appellant/writ petitioner afresh bearing in mind the observations made in the preceding paragraphs which are to the effect that the application filed by the appellant/writ petitioner for new GST registration was not voluntary but on the direction issued by the department. In this regard, appropriate order be passed after affording an opportunity of personal hearing to the appellant/writ petitioner within three weeks from the date of receipt of server copy of the order.

14 Year Delay to Issue Tax Notice: Kerala HC Holds No Protection u/s 17D KGST Act on “Fast Track Assessments”

FAST TRACK ASSESSMENT TEAM NO.2 vs K. SASILAL CITATION: 2025 TAXSCAN (HC) 430

The Kerala High Court recently delivered a judgment clarifying the scope of limitation exercisable by the Revenue in terms of the Kerala General Sales Tax (KGST) Act, 1963.

In light of the observations made, the Kerala High Court proceeded to dismiss the appeal, reaffirming that the absence of a limitation period under Section 17D does not imply that tax authorities have unchecked discretion to act arbitrarily, in contravention of statutory principles.

SCN Cannot Be Challenged Prematurely before Final Adjudication unless it Pertains to Jurisdiction or Lack of Authority: Madras HC

M/s. S and T Plastic Machines Private Limited vs TheCommissioner of Customs CITATION: 2025 TAXSCAN (HC) 427

The Madras High Court dismissed the premature challenge made by the assessee to the Show Cause Notice (SCN) and directed the respondent authorities to adjudicate the matter after considering the assessee’s reply. The bench observed that SCN cannot be challenged prematurely unless it pertains to jurisdiction or lack of authority

The single bench of the High Court of Madras, comprising Justice Abdul Quddhose, noted that the only limited relief that can be granted to the petitioner in the writ petition was to direct the respondents to consider the reply dated 03.01.2025 submitted by the petitioner to the impugned show cause notice dated 30.10.2024 on merits.

Big Win for Rooftop Solar Users: Madras HC Rules No Separate Network Charges, Already Included in Tariff

The South India Spinners Association vs The Chairman cumManaging Director Tamil Nadu Generation and Distribution CITATION: 2025 TAXSCAN (HC) 431

In a recent ruling, the Madras High Court held that network charges cannot be levied separately on rooftop solar power users, as such charges are already factored into the existing electricity tariff structure.

The court set aside the impugned order and held that no further charges could be collected beyond what was already stipulated in the tariff, and that any such attempt would amount to double recovery. The writ petitions were allowed, and all connected miscellaneous petitions were closed.

Legal Action not initiatable over any claims that are not included in resolution plan: Bombay HC

Garden Silk Mills Limited vs Gayatri Industries CITATION: 2025 TAXSCAN (HC) 432

The Bombay High Court dismissed an Interim Application filed by the Appellant seeking the release of the bank guarantees, holding that all claims which are not part of the Resolution Plan shall stand extinguished, and no person will be entitled to initiate or continue any proceedings in respect of any such claim.

While dismissing the petition, the court held that the debt of respondent stand extinguished and no right vests in the Respondent in respect of the bank guarantees or to oppose the release of bank guarantees.

Relief To Lufthansa Airlines: Delhi HC Sets Aside Order Denying ‘Nil’ TDS Certificate

LUFTHANSA CARGO AG vs ASSISTANT COMMISSIONER OF INCOME TAX& ORS CITATION: 2025 TAXSCAN (HC) 433

As a relief to German cargo airline Lufthansa Cargo AG, the Delhi High Court set aside the revenue’s order denying nil TDS certificate to the company for the financial year 2024-25.

A division bench of Justice Vibhu Bakhru and Justice Tejas Karia allowed the petition and directed the issuance of the certificate for nil withholding tax under Section 197 of the Act. It was further held that issuance of the certificate shall not preclude the AO from examining whether the income/receipts of the petitioner are chargeable to tax in India in assessment proceedings, uninfluenced by the order.

Specific Provision u/s 40A(7)(b) prevails over S. 43B in Approved Gratuity Fund Deduction: Madras HC

M/s. Sanmar Speciality Chemicals Limited No.9 vs TheAssistant Commissioner of Income-Tax Company Circle CITATION: 2025 TAXSCAN (HC) 434

In a recent ruling, the Madras High Court clarified the legal interplay between Section 40A(7)(b) and Section 43B of the Income Tax Act, ruling that where contributions are made to an approved gratuity fund, the specific provision under Section 40A(7)(b) would prevail over the general provision of Section 43B, despite both sections containing non-obstante clauses.

The court answered all substantial questions of law in favor of the assessee and allowed the appeal. The court set aside the disallowance and confirmed the legitimacy of deductions made under Section 40A(7)(b) of the Income Tax Act in relation to an approved gratuity fund.

Delhi HC directs Customs to Sensitize Officials on Detention of Personal Gold and Old Jewellery of Air Travellers

QAMAR JAHAN vs UNION OF INDIA, REPRESENTED BY SECRETARY,MINISTRY OF FINANCE & ORS. CITATION: 2025 TAXSCAN (HC) 436

The Delhi High Court, while adjudicating a recent matter, directed the Customs Department to sensitize its officials and implement immediate measures to prevent the unlawful detention of personal gold and old jewellery carried by air travellers, both Indian and foreign.

The court further instructed the CBIC and Customs Department to implement sensitization initiatives to educate officials on the distinction between personal jewellery and commercial gold imports while demanding that a compliance report on the directives be submitted before the next hearing; alternatively if the Baggage Rules cannot be amended by the next date of hearing, a Standard Operating Procedure (hereinafter “SOP”) shall be placed on record by then,

No S.263 Notice after Resolution Plan Approval on Extinguishment of Corporate Debtor’s Tax Liabilities: Gujarat HC

AMW AUTO COMPONENT LIMITED vs PRINCIPAL COMMISSIONER OFINCOME TAX RAJKOT 1 CITATION: 2025 TAXSCAN (HC) 435

The Gujarat High Court recently ruled that the Principal Commissioner of Income Tax (PCIT) could not issue a notice under Section 263 of the Income Tax Act, 1961 to revise the assessment order of an assessee once the Corporate Insolvency Resolution Plan (CIRP) is approved, which extinguishes all prior tax liabilities.

In such regard, the Notice issued by the Revenue stood legally untenable and lacked merit, prompting the Gujarat High Court to quash the notice issued under Section 263.

Lack of Corroborative Evidence for Criminal Conspiracy and Bribery: Delhi HC quashes FIR against CA

M/S PRAKASH INDUSTRIES LTD & ANR vs DIRECTORATE OFENFORCEMENT CITATION: 2025 TAXSCAN (HC) 437

The Delhi High Court recently quashed a First Information Report (FIR) registered against Chartered Accountant (CA), who was working as a financial consultant for Prakash Industries Ltd. (PIL), upon observing the lack of corroborative evidence to prove allegations of criminal conspiracy and bribing.

Reiterating that a criminal conviction requires a higher threshold of evidence and that the prosecution failed to demonstrate Agarwal’s direct involvement in the alleged bribery scheme, the Bench concluded that the FIR could not be sustained and accordingly quashed the proceedings against him.

Uttarakhand HC Criticizes GST Dept. for Arbitrary Action Against Businesses Prior to Issuance of SCN

M/S KOTDWAR STEEL LIMITED vs OFFICE OF THE DEPUTYCOMMISSIONER CITATION: 2025 TAXSCAN (HC) 438

The Uttarakhand High Court has criticized the Goods and Service Tax (GST) department for arbitrary action against businesses by blocking Input Tax Credit (ITC) before the issuance of show cause notice (SCN).

When the matter was listed on April 29, 2025, the court ruled that an interim order would be granted as requested and that any action would need to be properly compliant with the GST Act’s rules.

Bombay HC sets aside Duty Drawback Demand under Customs Act made After Approval of Resolution Plan

Karthik Alloys Limited vs Union of India CITATION: 2025 TAXSCAN (HC) 441

The Bombay High Court set aside duty drawback demand under Customs Act, 1962 as it was after approval of the resolution plan. It was observed that a claim brought to the fore during the pendency of the moratorium period after the claims have been recorded by the adjudicating authority would stand waived off in terms of Section 31A of the Insolvency Bankruptcy Code (IBC), 2016.

A division bench of Justice M. S. Karnik and Justice Nivedita P. Mehta found that the respondents did not lodge their demand in respect of the duty drawbacks against the petitioner during the CIRP. Admittedly, the claim of the respondents is not a part of the approved resolution plan. It is, therefore, abundantly clear that a claim brought to the fore during the pendency of the moratorium period after the claims have been recorded by the adjudicating authority would stand waived off in terms of Section 31A of the code. The court quashed and set aside the impugned order and allowed the writ petition.

Corruption Case Against Public Servant Cannot be Quashed, Stating Absence of Preliminary Inquiry before FIR Registration: Supreme Court

STATE OF KARNATAKA vs SRI CHANNAKESHAVA.H.D. & ANR CITATION: 2025 TAXSCAN (SC) 155

The Supreme Court reaffirmed that, under the Prevention of Corruption Act, 1988 (“PC Act”), a preliminary investigation is not a necessary step before filing a corruption complaint against a public official. It further stated that the mere fact that no preliminary investigation was carried out prior to the filing of the FIR does not exonerate a case against a public official.

The court observed that drawing sustenance from the case of CBI v. Thommandru Hannah Vijayalakshmi, (2021) it was specifically stated that an accused public servant does not have any right to explain the alleged disproportionate assets before the filing of an FIR.While allowing the appeal, the bench set aside the impugned order.

No Bail in Corporate Fraud u/s 447 of Companies Act Without Satisfying Two Key Conditions: Supreme Court

SERIOUS FRAUD INVESTIGATION OFFICE vs ADITYA SARDA CITATION: 2025 TAXSCAN (SC) 154

The Supreme Court of India ruled that bail under Section 447 of the Companies Act, 2013, which deals with corporate fraud, cannot be granted unless the twin conditions prescribed under Section 212(6) are strictly satisfied.

The Supreme Court set aside the High Court’s bail orders and directed the accused to surrender before the Special Court within one week. The court dismissed appeals against anticipatory bail granted by the Special Court itself in a few cases where no non-bailable warrants or proclamation proceedings were involved.

No ITC for Dealer on Tax-Exempt Sales: Supreme Court Upholds Disallowance u/s 7(c) of UP VAT Act

NEHA ENTERPRISES vs COMMISSIONER CITATION: 2025 TAXSCAN (SC) 153

The Supreme Court of India held that a dealer is not entitled to claim Input Tax Credit (ITC) on sales that are exempt from tax under Section 7(c) of the Uttar Pradesh Value Added Tax (UP VAT) Act, 2008, even if such sales are made to manufacturer-exporters using Form-E.

The court dismissed the civil appeal and held that the prohibition under Section 13(7) is a legislative mandate that cannot be overridden by policy considerations or administrative circulars.

Supreme Court upholds Piramal’s Resolution Plan For DHFL

PIRAMAL CAPITAL AND HOUSING FINANCE LIMITED vs 63 MOONSTECHNOLOGIES LIMITED & OTHERS CITATION: 2025 TAXSCAN (SC) 152

The Supreme Court ruled in favor of the Resolution Plan put forth by Piramal Capita and Housing Finance for the former Dewan Housing Finance Corporation Ltd (DHFL) and decided that Piramal Capital & Housing Finance Ltd would receive the money recovered from the fraudulent activities at Dewan Housing Finance Corporation Ltd (DHFL).

The bench overturned the NCLAT order that ordered the creditors of Dewan Housing Finance Corporation Limited (DHFL) to reevaluate the resolution plan put forth by Piramal Capital and Housing Finance and upheld the resolution plan that was approved by the COC in 2021, according to which a national value of Rs. 1 was assigned to potential recoveries of Rs. 45,000 crores.

Read More: https://www.taxscan.in/supreme-court-upholds-piramals-resolution-plan-for-dhfl/505354/

Limitation Period under IBC Starts From Date of Judgment Pronounced in Open Court: Supreme Court

A RAJENDRA vs GONUGUNTA MADHUSUDHAN RAO & ORS CITATION: 2025 TAXSCAN (SC) 151

The Supreme Court held that the incident which triggers the running of the limitation period under the Insolvency and Bankruptcy Code (IBC) 2016 is the the date of pronouncement of the Order and in case of non-pronouncement of the Order when the hearing concludes, the date on which the Order is pronounced or uploaded on the website.

The bench rejected the appeals against the orders of the National Company Law Appellate Tribunal as time-barred. The Court also held that when no certified copy was applied, the benefit of Section 12(1) of the Limitation Act cannot be claimed.

Supreme Court Condones Delay in S.151 Matter on Sanction for Notice in Terms of Judgment in Rajeev Bansal Case

ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE VS SANGEETASAILESH BHOOLABHAI CITATION: 2025 TAXSCAN (SC) 150

The Supreme Court of India recently condoned delays in the Income Tax Department’s appeal against the Bombay High Court’s quashing of reassessment notices issued to an Assessee, while calling on the Revenue to follow the guidelines laid down in Union of India & Ors. vs Rajeev Bansal (2024).

In light of such observations, the Supreme Court directed that the Assessing Officers shall dispose of the objections in terms of the law laid down by the Court in the Rajeev Bansal judgment, while reaffirming that aggrieved parties may pursue the appellate remedies in law except for the issues which have already reached finality on the basis of the law.

Tax Authorities must Adhere to Official Clarifications from Higher Authority and Cannot Reclassify Arbitrarily: Madras HC

M/S.Aathees Wetcasting Materials (P) Ltd vs The CommercialTax Officer CITATION: 2025 TAXSCAN (HC) 440

In a recent judgement, the Madras High Court held that tax authorities must follow official clarifications from higher officials and cannot reclassify tax liabilities arbitrarily.

The court found the AO’s action to be a colorable exercise of power, as it disregarded a valid directive from a higher official. Therefore, the court quashed the impugned assessment order.

Relief to Malabar Institute of Medical Sciences: Kerala HC Rules Order U/s 263 as Open Remand Not Needing Independent Challenge

MALABAR INSTITUTE OF MEDICAL SCIENCES LTD vs THE DEPUTYCOMMISSIONER OF INCOME TAX CITATION: 2025 TAXSCAN (HC) 442

By overturning the Income Tax Appellate Tribunal (ITAT) decision, the Kerala High Court held that the orders made under section 263 of the Income Tax Act, 1961 can’t be construed as a closed remand under any circumstances.

The court ruled that the Section 263 order was an open remand, meaning the assessee was not required to challenge it separately. As a result, it was held that the tribunal erred in dismissing the appeal on this ground.Based on this finding, the court set aside the tribunal’s decision and restored the appeal for reconsideration on merits.

₹2,500 Crore GST Demand on Coca Cola: Bombay HC Stays Revenue Proceedings after Noting Infirmity in Undervaluation Claims

Hindustan Coca-Cola Beverages Pvt. Ltd. vs Union of India& Ors CITATION: 2025 TAXSCAN (HC) 443

The Bombay High Court recently stayed a Goods and Services Tax (GST) demand of approximately ₹2,500 crore raised against Hindustan Coca-Cola Beverages Pvt. Ltd., observing that the revenue authorities’ interpretation of the statutory provisions in claiming that Coca Cola had undervalued its goods was prima facie flawed.

Furthermore, the Bench prima facie observed infirmity with the impugned order and thus granted an ad-interim relief staying the implementation of the order and preventing any coercive steps pursuant to the show-cause notice or the final order. The Bombay High Court proceeded to post the matter to 29 April, 2025 for admission and possible disposal.

Reassessment Notice Beyond 10 Years Limit: Delhi HC Quashes Notice u/s 149 of Income Tax Act

JANUS INFRASTRUCTURE PROJECTS PRIVATE LIMITED vs ASSISTANTCOMMISSIONER OF INCOME TAX CITATION: 2025 TAXSCAN (HC) 444

In a recent ruling, the Delhi High Court quashed a reassessment notice issued under Section 148 of the Income Tax Act, 1961, as it was issued beyond the permissible 10-year limit under the amended Section 149 of the Income Tax Act.

The court clarified that for non-searched persons, the ten-year period is to be computed from the date the seized materials are handed over to the jurisdictional Assessing Officer, not the date of the search itself. As the notice dated 06 February 2024 attempted to reassess AY 2014–15, the court found it clearly beyond the statutory timeframe. The court allowed the writ petition.

Kerala HC Directs Income Tax Commissioner to Expeditiously Dispose of Rectification Petition filed u/s 154 of Income Tax Act

UNITAC ENERGY SOLUTIONS (INDIA) PVT. LTD vs ASSISTANTCOMMISSIONER OF INCOME TAX CITATION: 2025 TAXSCAN (HC) 445

The Kerala High Court directed the Income Tax Commissioner to expeditiously dispose of the rectification petition filed under section 154 of the Income Tax Act, 1961.

The single bench of Justice Kurian Thomas viewed that the writ petition can be disposed of with a direction and directed the first respondent to consider and pass appropriate orders on rectification petition, as expeditiously as possible, at any rate, within a period of three months from the date of receipt of a copy of this judgment. To Read the full text of the Order CLICK HERE

Karnataka HC Quashes Rejection of GST Appeal Filed on 90th Day, Finds It Within Limitation

S K TAKAPPA S/O KALAPPA vs THE ASSISTANT COMMISSIONER OFCOMMERCIAL TAXES CITATION: 2025 TAXSCAN (HC) 446

The Karnataka High Court quashed the rejection of a Goods Service Tax (GST) appeal filed on the 90th day, holding that it was within the time limit prescribed under Section 107 of the CGST Act,2017.

A single member bench comprising S.G.Pandit (Judge) also noted that the petitioner had filed a rectification application along with an affidavit seeking condonation of delay, if any. Since the appeal was within the condonable period, the second respondent should have considered it properly. Instead, it failed to apply its mind and rejected the appeal without giving the assessee a chance to be heard. In short,the petition filed was disposed of.

Post-Sale Discounts allowed u/s 15(3) of GST Act: Bombay HC in Interim Relief to Hindustan Coca-Cola

Hindustan Coca-Cola Beverages Pvt. Ltd vs Union of India& Ors. CITATION: 2025 TAXSCAN (HC) 443

The Bombay High Court has made a preliminary observation that Post-Sale Discounts are allowable under section 15(3) of the Goods and Services Tax Act, 2017 in a case pertaining to alleged contraventions of the Goods and Services Tax Act by way of discounts on the basis of past transactions by Hindustan Coca-Cola.

The bench of Justices Firdosh P. Pooniwalla and B. P. Colabawalla noted that, “As far as the interim relief is concerned, we find that the strong prima facie case is made out for staying the effect and implementation of the impugned order. We say this because as recorded earlier, we do not find at least prima facie that the reasoning employed by the 3rd Respondent is correct.” The case is now listed for hearing to 29th April, 2025.

Bombay HC Quashes Income Tax Reassessment Over Change of Opinion and No Failure to Disclose Facts

Tata Communications Limited vs Deputy Commissioner ofIncome Tax CITATION: 2025 TAXSCAN (HC) 450

The High Court of Bombay, quashed an income tax reassessment proceedings initiated against the assessee for Assessment Year(AY) 2014–15, holding that the reopening was based on a mere change of opinion and lacked any failure to fully and truly disclose material facts.

The assessee had also asked the department to treat its earlier return as a response to the Section 148 notice, which the court accepted as valid compliance.As the reassessment proceedings lacked legal basis, the court quashed both the reassessment notice and the assessment order.

GST Rate Hike on Pre-Existing Work Order: Karnataka HC Directs Consideration of Representation in Eight Weeks

ATHREYA CONSTRUCTIONS vs THE EXECUTIVE ENGINEER CITATION: 2025 TAXSCAN (HC) 452

The High Court of Karnataka, directed the concerned authorities to consider the assessee’s representation within eight weeks regarding the applicable Goods and Service Tax ( GST ) rate on a work order issued before the rate hike, noting that the work was carried out when the GST rate stood at 12% and a supporting circular backed the assessee’s claim.

Respondents were directed to consider the representation in light of the Circular and pass appropriate orders within eight weeks.In short,the writ petition was disposed of.

Non-response to GST Notices due to Father’s Illness: Karnataka HC quashes Ex-parte Order

M/S. NAKODA AUTO DISTRIBUTORS vs THE ASSISTANTCOMMISSIONER OF COMMERCIAL TAX CITATION: 2025 TAXSCAN (HC) 449

The High Court of Karnataka, quashed the ex-parte order and the summary order after noting that the petitioner could not respond to Goods and Service Tax(GST) show-cause notices due to his father’s prolonged illness and eventual demise on 13.02.2024.

Considering these circumstances, the Court quashed the ex-parte orders dated 31.10.2023 and 16.11.2023 and granted the petitioner thirty days to file objections. It directed the petitioner to appear before the respondent authority on 06.03.2025. The Court clarified that the petitioner could not raise the issue of limitation and that any amount recovered through attachment would be subject to the final decision of the authority.

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