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

No Entry Tax on Diesel Captive Generating Sets: Karnataka HC

M/S MANGALORE CHEMICAL AND FERTILIZERS LIMITED vs THESTATE OF KARNATAKA CITATION: 2025 TAXSCAN (HC) 228

The Karnataka High Court has held that Diesel Captive Generating Sets are exempt from tax under Section 11-A of the Karnataka Tax on Entry of Goods Act, 1979 r/w the provisions of Karnataka Value Added Tax, 2003.

Therefore, the question of law (b) & (c) are answered in favour of the Assessee and against the Revenue to the net effect that Diesel Captive Generating Sets are exempt from tax under Section 11-A of the Karnataka Tax on Entry of Goods Act, 1979 r/w the provisions of Karnataka Value Added Tax, 2003.

Karnataka HC Quashes Penalty for Non-Deduction of TDS on Professional Advice

THE COMMISSIONER OF INCOME TAX vs M/S JINDAL TRACTEBELPOWER CO. LTD CITATION: 2025 TAXSCAN (HC) 229

The Karnataka High Court has quashed the penalty for non-deduction of TDS on professional advice.

The court determined that the Chairman of the Advance Ruling Authority did not handle the regular assessee’s application for an advance ruling on September 11, 1997, for personal reasons. Another consideration is the potential benefit to the respondent of not deducting the tax at source. Since all of these are unquestionably valid reasons for not modifying TDS, orders that are in line with them are immune from challenge.

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Orissa HC Restores Pending Proceedings on Demand of GST on Suppression and Wilful Misstatement

M/s. Iliyas Granites, Baghajhari, Ganjam vs SuperintendentGST and CE, Berhampur and others CITATION: 2025 TAXSCAN (HC) 230

In a recent case, the High Court of Orissa restored the pending proceedings demand of Goods and Service Tax (GST) on suppression and wilful misstatement.

A division bench of Justice Arindam Sinha, Acting Chief Justice and Justice M.S. Sahoo set aside the impugned order, restoring the proceeding. The petitioner will communicate a certified copy of this order to the opposite party no. I by 10th February, 2025 and obtain a date of hearing. The authority will, on hearing the petitioner, pass a fresh order. The petitioner will not seek unnecessary adjournments. In event the communication is not made, the impugned order will stand automatically restored.

Orissa HC Sets aside Order Passed u/s 74 of CGST due to Jurisdictional Error

Narayanan Pradhan vs Asst. Commissioner, GST and CE CITATION: 2025 TAXSCAN (HC) 231

Mr. Harichandan, advocate appears on behalf of petitioner and submitted that the impugned is show-cause notice dated February, 2024 carrying purported finding of misstatement made by his client, to underpay the tax issued under sub-section (l) in section 74 of Central Goods and Services Tax Act, 2017. The provision was invoked to avail extended period of limitation but there was no allegation of misstatement in the show cause notice.

A jurisdictional error under GST arises when a tax authority initiates proceedings or takes action beyond its legally defined area of authority. If a state GST officer issues a notice for a case under the Central GST jurisdiction, or vice versa. If a lower authority handles a case meant for a higher authority. If an officer from a different state or region issues a notice. When a case related to a regular taxpayer is handled under the composition scheme.

GST Dept fails to consider some Payments made while Passing Adjudication Order passed u/s 74 of GST Act: Orissa HC sets aside Order

Simanchal Achary vs Joint Commissioner of State Tax CITATION: 2025 TAXSCAN (HC) 232

The petitioner, Simanchal Achary, is a works contractor, is challenging the first appellate order passed under section 107 of the Act related to the tax period from July 2017 to March 2018. The petitioner claims that some payments made were not considered in the adjudication order passed under section 74 of the Act as well as appellate order.

A division bench of Justice Arindam Sinha, Acting Chief Justice and Justice M.S. Sahoo directed the respondent, the Joint Commissioner of State Tax (Appeal) and others, to verify whether the claimed payments were indeed not considered by the appellate authority. For the same , the court listed the matter on 25th February, 2025.

ED has no Power to Arrest when Special Court takes Cognizance under PMLA: Patna HC

Ganesh Prasad Singh vs The Union of India CITATION: 2025 TAXSCAN (HC) 233

The Patna High Court has held that the Enforcement Directorate ( ED ) loses the power to arrest when a special court takes cognizance under Prevention of Money Laundering Act ( PMLA ), 2002.

In deciding the anticipatory bail application, the court determined that the ED never felt the need to arrest the petitioner during the course of the investigation and that, once the offense punishable under Section 4 of the PMLA is recognized based on a complaint under Section 44(1)(b) of the PMLA, the ED and its officers are not authorized to use Section 19 of the PMLA to arrest an individual listed as an accused in the complaint.

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Relief to Works Contractor Hi-LITE Projects: Kerala HC allows lower tax rate under KVAT Act over Central Sales Tax Act

M/S HI-LITE PROJECTS PVT.LTD vs STATE OF KERALA CITATION: 2025 TAXSCAN (HC) 234

In a significant ruling, the Kerala High Court has provided relief to M/s Hi-Lite Projects Pvt. Ltd., a works contractor, by allowing them to avail a lower tax rate under the Kerala Value Added Tax (KVAT) Act instead of the Central Sales Tax (CST) Act.

Consequently, the Kerala High Court Bench of Justice A K Jayasankaran Nambiar and Justice Easwaran S set aside the tribunal’s order and restored the first appellate authority’s decision, allowing Hi-Lite Projects to avail the lower tax rate.

Charitable Trusts Eligible for S. 12-AA Registration Based on Proposed Activities, Not Just Actual Work: Supreme Court

COMMISSIONER OF INCOME TAX EXEMPTIONS vs M/S INTERNATIONALHEALTH CARE CITATION: 2025 TAXSCAN (SC) 124

The Supreme Court of India ruled that a trust’s eligibility for Section 12-AA registration should be determined based on its proposed activities rather than the actual charitable work undertaken before registration.

The court held that requiring trusts to show actual charitable work before registration would defeat the purpose of Section 12-AA. The Supreme Court dismissed the Revenue’s petition, upholding the Rajasthan High Court’s ruling in favor of the respondent.

ITC Benefit cannot be Reduced without Statutory Sanction: Supreme Court

STATE OF PUNJAB & ORS. VS TRISHALA ALLOYS PVT. LTD. CITATION: 2025 TAXSCAN (SC) 123

The Supreme Court in an important judgement held that the benefit of input tax credit (ITC) is traceable to the statute and the same cannot be reduced without the statutory sanction. It was viewed that there was no corresponding provision in Punjab VAT Act which permitted availing of ITC at the lower rate of tax on the existing stock in trade though the purchase of such input was already made at a higher rate of tax thereby reducing the quantum of credit.

“The benefit of input tax credit is traceable to the statute. If the same has to be reduced, which will have an adverse civil consequence upon the beneficiary, it must have the requisite statutory sanction. In this case, the statutory sanction came on and from 01.04.2014 with the amendment of the first provision to Section 13(1) of the Punjab VAT Act. Therefore, the High Court was justified in holding that prior to 01.04.2014, there was no statutory sanction to allow applicability of Rule 21(8) on the stock in trade i.e. on inputs already purchased for which transactions stood concluded at a higher rate of tax.”, the bench ruled while upholding the ruling of High Court.

Delayed Trial & Prolonged Custody of Accused of PMLA Offence: Supreme Court Grants Bail

UDHAW SINGH vs ENFORCEMENT DIRECTORATE CITATION: 2025 TAXSCAN (SC) 122

The Supreme Court granted bail to the accused of the offence under the Prevention of Money Laundering Act, 2002 (PMLA), citing prolonged incarceration and the likelihood of delay in the completion of the trial.

“The respondent-accused therein was arrested on 18th September, 2023 and the High Court granted him bail on 6th May, 2024. He was in custody for less than 7 months before he was granted bail. There was no finding recorded that the trial is not likely to be concluded in a reasonable time. In the facts of the case, this Court cancelled the bail granted by the High Court. Therefore, there was no departure made from the law laid down in the case of Union of India v. K.A.Najeeb and V.Senthil Balaji.”, the court observed

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AO must issue Speaking Orders Against Assessee’s Written Objections: Calcutta HC Upholds ITAT Order

PRINCIPAL COMMISSIONER OF INCOME TAX 13 KOLKATA vsCHAMPALAL OMPRAKASH CITATION: 2025 TAXSCAN (HC) 235

The Calcutta High Court recently affirmed an ITAT ruling that removed an assessee’s income addition of more than ₹4 crore made in a reassessment proceeding under the Income Tax Act, 1961. The Assessing Officer (AO) must give oral directions in response to the assessee’s written objections, the court said.

The assessing officer is then required to provide justifications in a fair amount of time. The Apex Court ruled that the assessee has the right to object to the notice being issued after receiving reasons, and the assessing officer must address the objections by issuing a spoken order.

Inappropriate Serving of SCN under CGST Act: Calcutta HC Dismisses Petition on Availability of Statutory Remedy

S. N. Tiwari vs The Union of India and Others CITATION: 2025 TAXSCAN (HC) 237

In a recent case, the Calcutta High Court dismissed the writ appeal on availability of statutory remedy against the inappropriate serving of show cause notice (SCN) under the Central Goods and Service Tax (CGST) Act, 2017.

In view of availability of efficacious alternative remedy, the single bench of Justice Saugata Bhattacharyya grants leave to the petitioner to prefer an appeal under section 107 of the said Act of 2017 against the order dated 7th December, 2023 by fortnight from date. If appeal is preferred within the aforesaid time, the appellate authority without raising the issue of limitation shall decide the same on merits in accordance with law by twelve weeks thereafter.

No Restriction on GST Registration to Assessee Belongs to Another State: Andhra Pradesh HC

Tirumala Balaji Marbles And Granites vs The AssistantCommissioner St and Others CITATION: 2025 TAXSCAN (HC) 238

The Andhra Pradesh High Court stated that Goods and Service Tax (GST) registration cannot be refused because the assessee belongs to another state. It was viewed that there does not appear to be any restriction for persons outside the State to come into the State of Andhra Pradesh(AP) and seek registration under the APGST Act, 2017.

While allowing the petition, the bench opined that mere apprehension, however well founded, cannot deprive the assessee of his right to carry on trade and business in the State of Andhra Pradesh. Article 19 of the Constitution of India, grants every citizen of this Country, the right to set up and do business anywhere in the country. In such circumstances, the order of rejection is clearly without any basis in law

No Cancellation of GST Registration on mere Allegation without providing Reasoning to Aggrieved Business: Delhi HC

RASHID PROPRIETOR OF MS ENTERPRISES vs UNION OF INDIA ANDORS CITATION: 2025 TAXSCAN (HC) 239

The Delhi High Court recently quashed an order cancelling the Goods and Services Tax ( GST ) registration of a business observing that such cancellation cannot be effected on mere allegations without providing adequate reasoning and evidence to the aggrieved Business.

In the light of such an event, the Bench set aside the cancellation of GST registration and ordered that the concerned letter be furnished to the Petitioner within four weeks while directing that the Petitioner be given due opportunity for hearing before any order is passed.

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GST SCN citing No Business at Premises conflicts with Physical Verification Report: Delhi HC quashes GST Registration Cancellation

RASHID PROPRIETOR OF MS ENTERPRISES vs UNION OF INDIA ANDORS CITATION: 2025 TAXSCAN (HC) 239

The Delhi High Court recently quashed an order cancelling the Goods and Services Tax (GST) registration of a business observing that the allegation of no actual business being conducted at the concerned premises contradicts the findings of the GST Inspector in the physical verification report.

The Bench proceeded to set aside the Order of Cancellation of GST Registration while directing the Revenue to give a reasonable opportunity of hearing to the Petitioner.

Karnataka High Court Remands Case, Grants Accused Final Opportunity to Defend Cheque Bounce Allegations

MR.K S AMEER JAN vs MR.MAQBOOL AHMED CITATION: 2025 TAXSCAN (HC) 240

The Karnataka High Court has set aside the conviction orders in three cheque bounce cases, granting the accused a final opportunity to cross-examine the complainant and present his defense. The court ruled that the principles of natural justice warranted a fresh hearing, provided the accused deposits 50% of the fine amount before the trial court.

In conclusion, the Karnataka High Court upheld the principles of natural justice by granting the accused a final opportunity to present his defense while imposing strict conditions to ensure timely proceedings. The court set aside the lower court’s conviction orders and directed the accused to deposit 50% of the fine amount before the case could be reheard.

No TDS on Payment to Facebook, Amazon Web-Services for Advertisements: Karnataka HC rules in Favour of Urban Ladder Home Décor

THE COMMISSIONER OF INCOME TAX vs THE ASSISTANTCOMMISSIONER OF INCOME TAX CITATION: 2025 TAXSCAN (HC) 241

In a recent case, the Karnataka High Court has upheld the order of Income tax appellate tribunal (ITAT) which was in favour of assessee and held that Tax Deduct at source (TDS) is not applicable on payments made to Facebook, Amazon Web-Services for advertisements.

The payments made to the three non-resident companies mentioned above do not qualify as “royalty” under the DTAA, the court ruled in rejecting the department’s appeal against the ITAT’s ruling.

GST on BOT Model Construction Agreement: Rajasthan HC directs Appeal before Proper Authority in light of Audit Reports and Govt. Circular

CG Tollway Ltd vs The Union Of India CITATION: 2025 TAXSCAN (HC) 242

The Rajasthan High Court recently directed a special purpose vehicle, indulged in the construction of governmental projects under a Build-Operate-Transfer (BOT) agreement to pursue an appeal against the impugned goods and services tax (GST) orders, while directing the adjudicating authority to consider relevant audit reports and a government circular clarifying taxability on toll collection rights under the BOT model.

A division bench of Justice Pushpendra Singh Bhati and Justice Chandra Prakash Shrimali disposed of the writ petitions, directing CG Tollway Ltd. to file an appeal within 15 days. It further instructed the revenue authorities to adjudicate the appeal within three months, considering the CBIC circular and audit reports.

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Cenvat Credit of Service Tax Refund Rejected in GST Regime: Madras HC directs to allow Recredit

M/s.SRC Projects Private Limited vs The AssistantCommissioner of GST and and Central Excise CITATION: 2025 TAXSCAN (HC) 244

In a recent case, the Madras High Court directed to allow recredit Cenvat Credit of service tax refund rejected in the GST regime. The taxpayer could not avail the cenvat credit due to the introduction of GST as the Service Tax paid for the period 2016-17, which was payable under RCM, on 30.12.2017.

A single bench of Justice C. Saravanan found that it is evident that although the petitioner was not entitled to cash refund under Section 142(3) of the CGST Act, 2017, the petitioner is entitled to recredit. While allowing the Writ Petition , the Court directed the respondent to allow the petitioner to take recredit of the amount paid by the petitioner on reverse charge basis belatedly on 30.12.2017 as the Input Tax Credit in its Electronic Credit Ledger.

Madras HC Directs to Allow Refund of Wrongly Paid GST under RCM, treating it as supply of “service”

M/s.United Breweries Limited vs The Joint Commissioner ofGST CITATION: 2025 TAXSCAN (HC) 243

In a recent case, the High Court of Madras has directed to allow refund of wrongly paid Goods and service tax ( GST ) under the Reverse Charge Mechanism ( RCM ) treating it as supply of service.

The court directed the 2nd respondent to process the refund claims of the petitioner and refund the amounts paid by the petitioner, strictly in accordance with Section 54 of the respective GST Acts read with Rule 89 of the respective GST rules in the light of the above observations, within a period of 3 months from the date of receipt of a copy of this order.

Power to Arrest under PMLA: Punjab & Haryana HC rejects Bail Citing Prospective Applicability of Pankaj Bansal Verdict

RAVINDER vs STATE OF HARYANA CITATION: 2025 TAXSCAN (HC) 246

The accused was arrested without providing written justification, and the Punjab and Haryana High Court denied him bail, citing the potential applicability of the Supreme Court’s ruling in the Pankaj Bansal case, which held that simply reading out the grounds for arrest would not satisfy the requirements of Article 22(1) of the Constitution and Section 19(1) of the Prevention of Money Laundering Act, which deal with the authority to make arrests.

The petitioner argued that at the time of his detention, he was not informed of the grounds for his arrest. The trial of the current case was not anticipated to be finished anytime soon, and the petitioner was entitled to the concession of bail because he had been detained since February 23, 2022, and only two of the 29 prosecution witnesses had been questioned thus far. The current petition is dismissed because the court determined that the petitioner is not entitled to the concession of bail.

Relief to BCCI: Bombay HC quashes Revenue Order Prohibiting Income Tax Exemption for Lack of Statutory Power

The Board of Control for Cricket in India vs The AssistantCommissioner of Income Tax CITATION: 2025 TAXSCAN (HC) 245

The Bombay High Court delivered a significant ruling on Tuesday (18 February, 2025), quashing an order by the Commissioner of Income Tax (Exemptions) ( CIT(E) ) which deemed the Board of Control for Cricket in India ( BCCI ) ineligible for tax exemption under Section 12A of the Income Tax Act, 1961; the Bombay High Court observed the lack of statutory power exercisable by the CIT(E) to deny such exemption.

The Bombay High Court proceeded to quash the impugned December 28, 2009 communication while reiterating that the question of BCCI’’s eligibility for income tax exemption or cancellation of registration is one to be determined by the prescribed statutory authorities in the manner prescribed under the statute without being influenced by either the impugned communication of the Revenue or the ITAT order therein.

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Karnataka HC Confirms VAT on Set-Top Boxes, Says Providing Them to Customers is Taxable Transfer of Right to Use

M/S ATRIA CONVERGENCE TECHNOLOGIES LTD vs DEPUTYCOMMISSIONER OF COMMERCIAL TAX CITATION: 2025 TAXSCAN (HC) 248

In a recent ruling, the Karnataka High Court has upheld the imposition of Value Added Tax ( VAT ) on Set-Top Boxes ( STBs) provided by digital cable service providers, ruling that their supply to subscribers constitutes a “transfer of right to use”, making it a taxable sale under the Karnataka Value Added Tax Act, 2003 ( KVAT Act, 2003 ).

The court also clarified that VAT and Service Tax are not mutually exclusive, explaining that VAT applies to the sale of goods (STBs), whereas Service Tax applies to the broadcasting service. The court upheld the retrospective application of the Karnataka Goods and Services Tax (KGST) Act, 2017, stating that the law preserves tax liabilities under the repealed KVAT Act, allowing tax authorities to continue enforcing VAT demands.

GST Commissioner may Authorize Arrest w/o Assessment Order in S.132 Offences if Reasons Established to Degree of Certainty: Supreme Court

RADHIKA AGARWAL vs UNION OF INDIA AND OTHERS CITATION: 2025 TAXSCAN (SC) 129

In a recent judgment, the Supreme Court of India affirmed that the concerned Commissioner of the Goods and Services Tax (GST) Department may authorize the arrest of an individual booked for offences under specific provisions of Section 132 of the Income Tax Act, 1961 without a formal assessment Order, provided that the relevant reasons and evidences have been established to a ‘degree of certainty’.

Dismissing the petition, the Supreme Court held that Agarwal’s arrest was legally sustainable, given the Commissioner’s satisfaction that a cognizable offence had been committed. However, it emphasized that such arrests must not be made arbitrarily and must be backed by clear and compelling reasons recorded in writing.

New Criminal Law Provisions on Rights on Arrest Applicable to GST/Customs Act Arrests: Supreme Court

RADHIKA AGARWAL vs UNION OF INDIA AND OTHERS CITATION: 2025 TAXSCAN (SC) 129

The Supreme Court has delivered a major on the scope of arrest powers under the Goods and Services Tax (GST) Act and the Customs Act, affirming the applicability of procedural safeguards outlined in the Code of Criminal Procedure (now Bhartiya Nagrik Suraksha Sanhita, BNSS) to arrests made under these statutes.

The verdict was delivered by a bench comprising Chief Justice Sanjiv Khanna, Justice MM Sundresh, and Justice Bela M Trivedi, ruling on a batch of 279 petitions challenging penal provisions under the Customs Act, CGST/SGST Act, and their compatibility with the BNSS and the Constitution.

“There Are Several Options”: Supreme Court Dismisses PIL against Jio, Airtel Internet Tariff Hikes

RAJAT vs UNION OF INDIA & ORS CITATION: 2025 TAXSCAN (SC) 128

In a recent ruling, the Supreme Court dismissed a public interest litigation (PIL) seeking regulation of internet tariffs charged by telecom giants Jio and Airtel, stating that consumers have multiple options available in the market.

The PIL had named the Department of Telecommunications (DoT), the Telecom Regulatory Authority of India (TRAI), Reliance Jio, and Bharti Airtel as respondents. The petition’s dismissal comes amid ongoing discussions in the telecom sector regarding the frequency of tariff hikes.Industry leaders, including Vi CEO Akshaya Moondra, have justified recent increases, citing the need for returns on capital investments.

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Extending Limitation to Adjudicate GST SCN by Notification u/s.168A: Supreme Court Defers Matter observing Varying HC Opinions

M/S HCC-SEW-MEIL-AAG JV vs ASSISTANT COMMISSIONER OF STATETAX & ORS. CITATION: 2025 TAXSCAN (SC) 127

The Supreme Court of India has reserved its judgment in a matter regarding the legality of extending the time limit for the adjudication of a Goods and Services Tax (GST) Show Cause Notices (SCN) through notifications issued under Section 168A of the GST Act, 2017 observing differing opinions by State High Courts on the subject.

While recognizing that Section 168A was intended to address extraordinary circumstances, the Court acknowledged that various High Courts had interpreted its scope differently. Addressing the cleavage of opinion among different High Courts as mentioned by Senior Advocate S. Muralidhar for the Petitioner, the Bench directed the issuance of notice to the Respondents on the present SLP as well as the prayer for interim relief, with the matter to be returned on 07.03.2025.

Supreme Court Grants One Week Time to News Click Against Income Tax Demands

PPK NEWSCLICK STUDIO PVT. LTD. & ANR. vs DEPUTYCOMMISSIONER OF INCOME TAX (CENTRAL CIRCLE-1) CITATION: 2025 TAXSCAN (SC) 126

Regarding tax recovery requests, the Supreme Court awarded PPK Newsclick Studio Pvt Ltd, the firm that operates the news portal NewsClick, a week’s temporary protection. The corporation was given permission to petition the High Court after the court dismissed its Article 32 plea.

In a plea filed by Newsclick against the Delhi High Court‘s decision to reject a stay on the income tax claim, the bench of Justices BV Nagarathna and Nongmeikapam Kotiswar Singh issued the aforementioned verdict. The Court published a notice in the SLP on July 8. On November 18, the Top Court ordered ICICI Bank to de-freeze the Agency’s bank accounts in accordance with the order dated August 9.

Chhattisgarh HC Refuse to Grant Bail on Offence Committed Under PMLA citing link with Coal Scam

Manish Upadhyay vs State of Chhattisgarh CITATION: 2025 TAXSCAN (HC) 250

The Chhattisgarh High Court refused to grant bail for the accused who was arrested for the offence under the Prevention of Money Laundering Act, 2002 (“the PMLA”) as the prosecution has prima facie established the link between one of the accused in the coal scam. The court found the involvement of the applicant in commission of offence under Sections 7, 7A & 12 of the Prevention of Corruption Act, 1988 ( PC Act), which is an economic offence.

The court found that it is not a fit case where the applicant should be granted regular bail and rejected the instant bail application filed under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023.

Kerala HC Directs Revenue Authority to Refund Amount Deposited after Setoff Property Tax

M/S.SYNTHETIE INDUSTRIES LTD SYNTHITE VALLEY vs STATE OFKERALA REPRESENTED BY ITS SECRETARY CITATION: 2025 TAXSCAN (HC) 249

The Kerala High Court disposed of the writ petition directing the 2nd respondent to take appropriate steps to refund the amount deposited by the petitioner at the time of preferring the appeal after deducting the amounts due for the respective period as provided in Government orders.

The court disposed of the writ petition directing the 2nd respondent to take appropriate steps to refund the amount deposited by the petitioner at the time of preferring the appeal after deducting the amounts due for the respective period as provided in Government orders. The amounts shall be calculated and disbursed to the petitioner within a period of two months from the date of receipt of a copy of the judgment.

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Relief to Lupin Ltd: Bombay HC Quashes Arbitrary Reopening of Income Tax Assessment Citing Lack of New Evidence

Lupin Limited vs Deputy Commissioner of Income Tax-3(4) CITATION: 2025 TAXSCAN (HC) 251

In a recent ruling, the Bombay High Court quashed an arbitrary notice issued seeking to reopen the assessment for Lupin Limited without any fresh evidence.

The court allowed the petition and set aside the reopening notice dated 31 March 2021 and the order dated 30 November 2021, which had rejected the company’s objections.

Designated Committee under SVLDRS May Reject Application for Compounding Tax over Bogus Documents: Andhra Pradesh HC

M/s Diwakar Road Lines vs The Union Of India and Others CITATION: 2025 TAXSCAN (HC) 252

A writ petition contesting the denial of an application to compound all prior service tax through a one-time settlement was dismissed by a division bench of the Andhra Pradesh High Court composed of Justices R. Raghunandan Rao and Harinath. The bench held that a designated committee may reject an application for compounding tax over bogus documents under the Sabkha Vishwas (Legacy Dispute Resolution) Scheme 2019.

According to the court, the Designated Committee has the authority to reject applications that were submitted using forged documents. Any other opinion would imply that anyone seeking the program’s benefits might provide any type of paper, and the designated committee would not be allowed to investigate whether or not the document is authentic. Extreme circumstances would arise from such a viewpoint.

Writ Jurisdiction Not Invokable Against SCN Issued u/s 74 of CGST Act at Preliminary Stage: Kerala HC

THE DEPUTY COMMISSIONER vs MINIMOL SABU CITATION: 2025 TAXSCAN (HC) 253

The Division bench of the Kerala High Court, which was composed of Justices A.K. Jayasankaran Nambiar and Easwaran S., declared that a show cause notice issued at the preliminary stage under Section 74 of the Central Goods and Service Tax (CGST) Act, 2017 cannot be challenged using writ authority under Article 226.

The court instructed the first respondent/assessee to appear before the adjudicating officer on 10.2.2025 and issue a further directive to the proper officer under Section 74 of the CGST Act/SGST Act to complete the hearing on 10.2.2025 itself and pass a composite final order on or before 15.2.2025, since the assessee had already been given notice to appear before the adjudicating authority/proper officer on that date.

Delhi HC Quashes ₹2,000 Cr Income Tax Notice against Maruti Suzuki, Declares It Time-Barred

MARUTI SUZUKI INDIA LTD. vs DEPUTY COMMISSIONER OF INCOMETAX CITATION: 2025 TAXSCAN (HC) 254

In a recent ruling, the Delhi High Court quashed Rs. 2,000 crore income tax notice by the Income Tax Department against Maruti Suzuki India Ltd. (the petitioner), holding that the reassessment notice was time-barred and based solely on a change of opinion rather than new or tangible information.

The court quashed the reassessment proceedings and the notice issued on April 1, 2016, holding that the notice was invalid and time-barred. The court confirmed that any action under Section 147 must be based on new and tangible information and not on a reassessment of previously disclosed facts. The writ petition was allowed.

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Lack of E-Tax Invoice due to GST Portal Glitch does not To Establish Tax Evasion when Rest of Transit Documents Presented: Allahabad HC

M/S Agarwal Steels vs Additional Commissioner Grade 2 AndAnother CITATION: 2025 TAXSCAN (HC) 255

The Allahabad High Court has ruled that the mere absence of an e-tax invoice due to a technical glitch in the Goods and Services Tax (GST) portal does not amount to tax evasion if all other transit documents are in place.

Consequently, the Bench quashed both the impugned orders while directing the authorities to refund the amount deposited by the petitioner within two months from the submission of a certified copy of the order.

Active involvement of Accused in Money Laundering proved by Material Evidence: Chhattisgarh HC Rejects Bail on PMLA Offence

Mr. Laxmikant Tiwari vs Anti-Corruption Bureau/economicOffence Wing CITATION: 2025 TAXSCAN (HC) 257

The Chattisgarh High Court rejected the bail application against an offence registered under the Prevention of Money Laundering Act, 2002 and the Prevention of Corruption Act, 1988. The court’s rejection was due to the material evidence which shows active involvement of the accused in the crime.

Considering the material evidence which shows the active involvement of the applicant with the offence, the single bench of Justice Narendra Kumar Vyas viewed that it is not a fit case where the applicant should be granted regular bail. The court rejected the instant bail application filed under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023.

Chhattisgarh HC refuses to Grant Bail under PMLA on failure to Fulfil Twin condition of S. 45

Nikhil Chandrakar vs Directorate of Enforcement ThroughIts Deputy Director CITATION: 2025 TAXSCAN (HC) 256

The Chattisgarh High Court refused to grant bail under the Prevention of Money Laundering Act, 2002 (PMLA) on failure to fulfil the condition of section 45 of the act. It was found that the applicant has not prima facie reversed the burden of proof and dislodged the prosecution case which is a mandatory requirement to get bail.

Since the applicant is unable to fulfill twin conditions for grant of bail as per Section 45 of the PMLA, 2002 and also considering the submission that the applicant has not prima facie reversed the burden of proof and dislodged the prosecution case which is mandatory requirement to get bail, the single bench of Justice Narendra Kumar Vyas refused to grant bail.

Bombay HC Quashes Income Tax Reassessment Order Against Oxford University Press Merely of Future Expected Change in Tax Rate

Oxford University Press vs DCIT CITATION: 2025 TAXSCAN (HC) 259

In a recent case on Oxford University Press, the Bombay High Court has ruled that unless the “jurisdictional parameters” of Section 148 of the Income Tax Act, 1961 are met, the mere fact that the tax rate that applies to an assessee increases in subsequent assessment years (AYs) does not serve as justification for initiating a reassessment action against it for prior AYs.

The court while allowing the appeal quashed the reassessment order passed against Oxford University Press, merely because its tax status was changed from ‘resident’ to ‘non-resident’, making it subject to a 40% tax rate instead of 30%.

GST Paid Voluntarily before Issuance of Demand Order: Madras HC Calls it Ex Parte, Sets aside Orders

M/s. AKM Beverages and Manikandan Contractor vs TheAssistant Commissioner (ST) Ranipet SIPCOT Assessment Cirlcle CITATION: 2025 TAXSCAN (HC) 258

In a recent ruling, the Madras High Court quashed GST (Goods and Services Tax) demand orders, terming them “ex parte.” The court observed that the taxpayer had voluntarily paid the GST liability before the issuance of the demand order, yet the authorities failed to provide an opportunity for a hearing. It was evident that the order was passed without considering the updated status of the case, leading to a violation of natural justice.

The court allowed the writ petition and emphasized that taxpayers must be given a fair opportunity to present their case before any demand orders are finalized.

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GST Show Cause Notice uploaded Belatedly in Portal: Madras HC remands Matter for Fresh Consideration

M/s. MATAJI HARDWARE vs Deputy State Tax Officer CITATION: 2025 TAXSCAN (HC) 261

The Madras High Court has set aside a GST ( Goods and Services Tax ) assessment order due to procedural lapses, including the belated upload of the show cause notice on the GST portal, which deprived the petitioner of a fair opportunity to respond. The case has been remanded for fresh consideration, subject to a pre-deposit condition.

Additionally, the bench directed the petitioner to file a reply with supporting documents within two weeks thereafter. The tax authorities are directed to issue a 14-day notice for a personal hearing before passing a fresh order in accordance with the law. Accordingly, the writ petition was allowed and the impugned GST demand order was set aside.

No Violation of Fundamental or Statutory Rights: Delhi HC Rejects Husband’s Request to Inquest ₹2 Crore Income Tax Discrepancy by Wife’s Kin

ATEESH AGARWAL vs UNION OF INDIA AND ORS CITATION: 2025 TAXSCAN (HC) 262

The Delhi High Court has dismissed a writ petition filed by a husband seeking an inquiry by the Income Tax Department into an alleged ₹2 crore cash transaction and other financial dealings by his estranged wife’s family.

While dismissing the Petition, the Delhi High Court commented that the petition has been lodged in terms of a matrimonial feud between the Petitioner and his wife (Respondent No.3) and concerns issued outside the jurisdiction of the Income Tax Department, the same not being under statutory scheme or a regulatory mechanism available under the Income Tax Act, 1961, thus the question of non-response to such complaint constituting violation of fundamental right or even a civil or statutory right of the petitioner is non-existent.

Only Superintendent or JAC Had Authority: Andhra Pradesh HC Rejects SVLDRS Application Over Unauthorized Notice

M/s Diwakar Road Lines vs The Union Of India and Others CITATION: 2025 TAXSCAN (HC) 264

The Andhra Pradesh High Court has upheld the rejection of M/s Diwakar Road Lines’ application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS), ruling that the petitioner relied on an unauthorized tax notice issued by an official without jurisdiction.

The High Court ruled that the rejection of the petitioner’s SVLDRS application was justified. It stated that fraudulent or unauthorized documents could not be used to claim benefits under the scheme and that allowing such claims would set a dangerous precedent. The court dismissed the writ petition, stating that the petitioner was ineligible for relief under SVLDRS.

Kerala HC rules on Distinguishment between ‘Non-Service of Notice’ and ‘Lack of Knowledge of Service of Notice’ under GST

M/S. RAMANATTU MOTOR CORP vs STATE OF KERALA CITATION: 2025 TAXSCAN (HC) 268

The Kerala High Court, in a recent ruling, distinguished between the terms ‘Non-Service of Notice’ and ‘Lack of Knowledge of Service of Notice’ under Goods and Service Tax (GST).

It cannot be assumed that taxpayers have been effectively informed that the first notice regarding determination under section 73 or 74 of the GST Act will be uploaded only in the tab meant for “Additional Notices and Orders” if there are no specific notes or instructions provided on the same page meant for “Notices and Orders” or “Additional Notices and Orders.” The court observed that the petitioner was not given enough time to challenge the issue, nor was there any appropriate notice served.

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Allahabad HC Rejects Plea to Quash FIR Against ‘Zoom Baba’ Citing Evidence of Inducing Investors in Ruby Coin Crypto Fraud

Mahendra Pratap Srivastava vs State Of U.P. Thru. Addl. Chief Secy CITATION: 2025 TAXSCAN (HC) 269

In a recent ruling, the Allahabad High Court, Lucknow Bench, dismissed a writ petition filed by Mahendra Pratap Srivastava, popularly known as “Zoom Baba,” seeking to quash an FIR registered against him in connection with the Ruby Coin cryptocurrency fraud citing he was actively involved in inducing investors through online meetings.

The court held that there was no legal basis to quash the FIR, as it disclosed a cognizable offense that warranted further investigation. The High Court dismissed the writ petition.

Andhra Pradesh HC Grants Anticipatory Bail on Accused in UPI Fraud, Benami, and Hawala Transactions

Routhu Sai Kondala Rao @ Sai vs The State of AndhraPradesh CITATION: 2025 TAXSCAN (HC) 263

Anticipatory bail has been granted by the Andhra Pradesh High Court in cybercrime instances involving UPI, benami, and hawala transactions. The court found that the Cyber Crime Police, on credible information, commenced the investigation and crores of rupees with a number of bank accounts, UPI transactions including binami and hawala transactions was involved in the case.

The petitioner herein shall appear before the Station House Officer concerned one in a week 4 i.e. on every Saturday between 10.00 a.m. and 1.00 p.m., till filing of the charge sheet. 6. Accordingly, the Criminal Petition is allowed As a sequel thereto, the miscellaneous petitions, if any, pending in this Criminal Petition shall stand closed.”

Consolidated SCN Involving Multiple Assessment Years can be Issued in Existence of Common Period of Adjudication: Kerala HC

JOINT COMMISSIONER (INTELLIGENCE & ENFORCEMENT) vsM/S. LAKSHMI MOBILE ACCESSORIES CITATION: 2025 TAXSCAN (HC) 270

The Kerala High Court stated that consolidated show cause notice involving multiple assessment years can be issued when a common period of adjudication exists.

While dismissing the appeal, the bench opined that a consolidated notice would also result in a consolidated adjudication order covering several financial/assessment years and in the event of it being adverse to the assessee, the fee/predeposit required to be paid by an assessee for preferring a statutory appeal would also be higher.

Subsequent Sale of Liquor to Customers not Exigible to Tax: Andhra Pradesh HC Sets Aside Assessment order under VAT Act

M/s Paradise Bar And Restaurant vs The State Of AndhraPradesh CITATION: 2025 TAXSCAN (HC) 266

The Andhra Pradesh High Court has held that subsequent sale of liquor to customers not exigible to Value Added Tax ( VAT ) and set aside the assessment order dated 06.01.2022 and rectification order dated 25.02.2022 and remanding the matter back to the assessing authority to pass fresh assessment orders by excluding the turnover of Rs.4.54 crores arising out of sale of liquor from the turnover on which tax is levied.

The court allowed the writ petition partly allowed by setting aside the assessment order dated 06.01.2022 and rectification order dated 25.02.2022 and remanding the matter back to the assessing authority to pass fresh assessment orders by excluding the turnover of Rs.4.54 crores arising out of sale of liquor from the turnover on which tax is levied.

50% Disputed GST Demand deposited in Wrong Head: Madras HC sets aside Matter on 10% Pre-deposit out of remaining 50%

M/s.Kayram Builders vs The Deputy state Tax Officer-I CITATION: 2025 TAXSCAN (HC) 260

The Madras High Court recently quashed a GST demand order, citing procedural lapses and violations of natural justice. Even though the 50% disputed tax was deposited in the wrong head, the court noted severe procedural lapses in the matter.

The court also directed the petitioner to submit their objections and relevant documents within two weeks of making the pre-deposit. Upon receiving the reply, the GST authorities must provide a 14-day notice for a personal hearing before issuing a fresh order in accordance with the law.

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Delhi High Court Quashes Reassessment Notice Issued to a Merged Entity

SONANSH CREATIONS PVT LTD. vs ASSISTANT COMMISSIONER OFINCOME TAX AND ANR. CITATION: 2025 TAXSCAN (HC) 271

The Delhi High Court has set aside a reassessment notice issued under Section 148 of the Income Tax Act, 1961, ruling that a notice issued in the name of a non-existent entity due to merger is legally invalid. The court held that the Assessing Officer (AO) failed to consider that the entity had ceased to exist post-amalgamation, making the reassessment proceedings void.

In its final ruling, the Delhi High Court Acting Chief Justice Swarna Kanta Sharma quashed the reassessment notice and set aside the proceedings, holding that the initial notice was issued to a non-existent entity, making the entire process legally invalid.

Chhattisgarh HC sets aside Income Tax Dept’s Order Demanding 20% Deposit Amount for Stay of Tax Demand

Maa Danateshwari Maize Processing And MarketingCooperative Society Limited vs . Central Board Of Direct Taxes CITATION: 2025 TAXSCAN (HC) 265

The Chhattisgarh High Court set aside the Income Tax department’s order demanding 20 % deposit amount to stay the demand of tax under section 156 of the Income Tax Act, 1961. It was viewed that the deposit of 20% of the disputed demand has been made a condition precedent for hearing the application for stay which is not contemplated either under the Act of 1961 or the CBDT guidelines dated 29-22016 modified by the office memorandum dated 31-7-2017.

The court set aside the impugned order and remitted the matter to the competent authority to consider it afresh in light of the guidelines as stated above and pass a reasoned order within a period of 4 weeks from the date of receipt of the order.

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