Supreme Court & High Courts Weekly Round-Up

High Court

Bombay HC to Hear Plea Seeking Recognition of Same-Sex Couples as ‘Spouses’ Under Income Tax Act, Issues Notice to Attorney General

Payio Ashiho vs Union of India CITATION : 2025 TAXSCAN (HC) 1692

The Bombay High Court examined whether the term “spouse” under Section 56(2)(x) of the Income Tax Act, 1961 excludes same-sex couples, thereby denying them tax exemption on gifts and violating constitutional equality.

A division bench of Justice B. P. Colabawalla and Justice Firdosh Pooniwalla issued notice to the Attorney General of India and the Income Tax Department, making the matter returnable on September 18, 2025.

Secured Creditor’s Rights u/s 26E of SARFAESI Override State Sales Tax Claims: Bombay HC Clears Auction Sale in Canara Bank Case

Canara Bank vs Deputy Commissioner Sales Tax Office CITATION : 2025 TAXSCAN (HC) 1691

The Bombay High Court considered whether Section 26E of the SARFAESI Act, giving priority to secured creditors, overrides State sales tax claims recorded under the MVAT Act in respect of auctioned property.

A division bench of Justice B. P. Colabawalla and Justice Somasekhar Sundaresan directed deletion of the State’s encumbrance, upholding Canara Bank’s petition, and clarifying that the State may recover dues only from other assets.

IGST-Total Taxable Value Mistake in filing April 2019 GSTR-3B: Patna HC allows to Rectify GSTR-3B on par with GSTR-1

Om Traders vs Union of India CITATION : 2025 TAXSCAN (HC) 1686

The Patna High Court dealt with whether errors in reporting taxable value and IGST in GSTR-3B (April 2019), inconsistent with GSTR-1, can be rectified despite no portal mechanism, when such errors created undue tax liability.

A division bench of Justices P. B. Bajanthri and S. B. Pd. Singh quashed the demand and directed authorities to allow manual rectification of GSTR-3B in line with GSTR-1, holding that genuine clerical errors should not create undue tax liability.

Vintage Car Sale Liable to Capital Gains Tax if No Proof of Personal Use: Bombay HC

Mehool Narendra Bhuva vs Assistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 1684

The Bombay High Court examined whether the sale proceeds of a vintage car qualify as exempt “personal effects” under Section 2(14) of the Income Tax Act when the taxpayer fails to show proof of personal use.

A division bench of Chief Justice Alok Aradhe and Justice Sandeep V. Marne, upheld the ITAT’s decision, noting the absence of evidence such as parking at the taxpayer’s residence, maintenance or running expenses, or personal use, and confirmed that proceeds from the sale of the vintage car are taxable as capital gains.

Non-Filing of Part-B of E-Way Bill for Job Work Movement a Technical Lapse When Part-A Was Produced: Gujarat HC Reduces Penalty

M/S BORON RUBBERS INDIA vs UNION OF INDIA & ORS. CITATION : 2025 TAXSCAN (HC) 1672

The Gujarat High Court considered whether non-generation of Part-B of an E-Way Bill during the transit of goods for job work despite having produced Part-A constituted a mere technical lapse without intent to evade tax.

A division bench of Justice Bhargav D. Karia and Justice D.N. Ray reduced the penalty from ₹7.36 lakh to ₹25,000, treating the lapse as technical, and directed refund of the excess.

AO Cannot Go Beyond Net Profit in P&L Except as Permitted under Explanation to Section 115J: Bombay HC in Mahindra Case

M/s. Mahindra & Mahindra Ltd vs Commissioner of Income-tax CITATION : 2025 TAXSCAN (HC) 1675

The Bombay High Court considered whether an Assessing Officer can go beyond the net profit in the P&L account when computing book profits under Section 115J of the Income Tax Act.

A division bench of Chief Justice Alok Aradhe and Justice M. S. Karnik declared that the AO's actions exceeded his jurisdiction, emphasizing that only adjustments explicit in the Explanation are valid. Consequently, the ruling of the tribunal was set aside in favour of the assessee, Mahindra & Mahindra.

Expenditure on Subsidiary for Commercial Expediency Allowable as Business Deduction: Bombay HC in Mahindra Case

M/s. Mahindra & Mahindra Ltd vs Commissioner of Income-tax CITATION : 2025 TAXSCAN (HC) 1675

The Bombay High Court examined whether expenditure incurred on a subsidiary to protect goodwill or manage reputational risk qualifies as a deductible expense under the Income Tax Act.

A division bench of Chief Justice Alok Aradhe and Justice M. S. Karnik, allowed the appeal by Mahindra & Mahindra Ltd., setting aside the disallowance by the ITAT and affirming that such expenditures are deductible where incurred for business expediency.

Transfer or Assignment of Leasehold Rights of Industrial Plots Not Taxable Supply under GST: Gujarat HC

M/S BVM PHARMA THROUGH PARTNER ALKABEN PANERI vs UNION OF INDIA & ORS CITATION : 2025 TAXSCAN (HC) 1669

The Gujarat High Court considered whether transfer or assignment of leasehold rights in industrial plots amounts to a taxable supply under GST or is excluded as a transfer of land under Entry 5, Schedule III of the CGST Act.

A division bench of Justice Bhargav D. Karia and Justice D.N. Ray, quashed the GST demand, holding that such transfer is not a taxable supply.

IGST Credit in Electronic Ledger Can Be Utilised for CGST and SGST Liabilities and Vice Versa: Kerala HC

M/S.S &D SALES MARKETING vs THE DEPUTY COMMISSIONER OF STATE TAX CITATION : 2025 TAXSCAN (HC) 1670

The Kerala High Court examined whether Input Tax Credit (ITC) available as IGST in the electronic credit ledger can be utilised to discharge liabilities under CGST and SGST, and conversely, effectively treating the ledger as a unified pool across tax heads.

A single-judge bench of Justice Bechu Kurian Thomas held that the electronic credit ledger functions as a unified “wallet” with compartments for IGST, CGST, and SGST—permitting cross-utilisation. The court set aside both the determination order and the appellate order, directing the Deputy Commissioner to reconsider the matter in light of Rejimon Padickapparambil Alex v. Union of India, and to decide the case afresh within three months after giving the petitioner an opportunity to be heard.

CCTV Footage Must Be Preserved Immediately after Seizure Complaints at Airport: Delhi HC in 250g Gold Kada Case

RAMDIYA VERMA vs COMMISSIONER OF CUSTOMS NEW DELHI & ANR CITATION : 2025 TAXSCAN (HC) 1665

The Delhi High Court examined whether customs authorities must preserve CCTV footage immediately after seizure in cases involving alleged smuggling, specifically concerning the seizure of a 250g gold kada at the airport.

The bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta held that CCTV footage, retained only for 30 days, must be preserved promptly to safeguard passengers’ rights. The Court directed disposal of the petitioner’s revision within a month and ordered an inquiry into the alleged illegal seizure of Thai Baht.

Fresh Refund Claim u/s 27(1-B) of Customs Act Not Required as Original Claim Filed in Time Madras HC Quashes Order

M/s.G.E.India Industrial Pvt. Ltd vs .The Commissioner (Appeals) CITATION : 2025 TAXSCAN (HC) 1694

The Madras High Court recently addressed the legal issue of whether a fresh refund claim under Section 27(1-B) of the Customs Act, 1962, is necessary when the original refund claim was already filed within the stipulated time limit. The case dealt with the validity of an order that mandated a fresh application for refund, despite an earlier claim being made in time.

A bench comprising Justice C.Saravanan pronounced the judgment, quashing the impugned order and holding that a new refund claim is not required if the original claim was submitted on time. The Court clarified that insisting on a fresh claim was unwarranted, setting aside the authorities' order to this effect.

Delhi HC Directs CESTAT to Hear Appeal on Duty Demand for Second Container Seized from Godown With 50% Pre-Deposit

ANUJ JAIN vs PRINCIPAL COMMISSIONEROFCUSTOMS CITATION : 2025 TAXSCAN (HC) 1689

The Delhi High Court considered the legal issue of whether the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) should hear an appeal concerning a duty demand imposed for a second container that was seized from a godown, provided that a 50% pre-deposit is made.

The bench comprising of Justice Prathiba M. Singh and Justice Shail Jain directed CESTAT to hear the duty demand appeal on a seized container after the petitioner pays Rs. 7,45,646 as a 50% pre-deposit within six weeks. The appeal will be heard on 6th October 2025, with all rights and contentions kept open for both sides.

Seven-Year Delay in Filing Appeals Due to Trustee’s Health: Karnataka HC Dismisses Appeal as No Substantial Question of Law Arises

CHILUME SOCIAL SERVICE SOCIETY vs THE INCOME TAX OFFICER CITATION : 2025 TAXSCAN (HC) 1681

The Karnataka High Court dealt with the legal issue of a seven-year delay in filing appeals, which was attributed to the ill health of the trustee. The primary question was whether the delay could be excused for this reason and if the appeal could proceed despite the long lapse of time.

The bench of Justice Vibhu Bakhru and Justice C M Joshi dismissed the appeal, upholding the decisions of the Income Tax Appellate Tribunal and the Commissioner of Income Tax (Appeals). The Court held that no substantial question of law arose from the delay, thereby affirming the earlier orders and rejecting the appeal.

Relief for Wipro Technologies: Karnataka HC Upholds CENVAT Credit Refund Despite Exported Software Services being Non-Taxable

THE PRINCIPAL COMMISSIONER OF CENTRAL TAX vs WIPRO TECHNOLOGIES CITATION : 2025 TAXSCAN (HC) 1680

The Karnataka High Court dealt with the issue of whether Wipro Technologies was entitled to a refund of CENVAT credit accumulated on exported software services, which were not taxable. The core legal question was whether such a refund claim could be upheld despite the exported services being non-taxable under the relevant laws.

The division bench comprising Justices S.G.Pandit and K.V.Aravind upheld the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) decision granting Wipro the CENVAT credit refund. The Court held that the refund was permissible as Wipro was not acting as an intermediary and had used input services for export on a principal-to-principal basis, thereby deserving the refund despite the non-taxability of exported software services.

Karnataka HC allows Conversion of MEIS Shipping Bills to DEPB Scheme stating Similar Examination Scale, Dismisses Revenue’s Appeal

PRINCIPAL COMMISSIONER OF CUSTOMS vs M/S LOUVERLINE BLINDS CITATION : 2025 TAXSCAN (HC) 1679

The High Court of Karnataka addressed the issue of whether shipping bills under the MEIS (Merchandise Exports from India Scheme) could be converted to the DEPB (Duty Entitlement Pass Book) scheme, considering that a similar examination scale applied to both. The legal question was whether such conversion was permissible and if the Revenue's appeal against this practice should be upheld.

The bench comprising of Justice S.G.Pandit and Justice K.V. Aravind upheld the Customs, Excise and Service Tax Appellate Tribunal’s (CESTAT) order allowing the conversion of MEIS shipping bills to the DEPB scheme. The bench dismissed the Revenue’s appeal, affirming that the similar examination scale warranted such conversion and the associated export benefits should not be denied.

Consideration for Software Resale/Use via EULAs Not Royalty, No TDS Liability u/s 195: Delhi HC

THE COMMISSIONER OF INCOME TAX vs XIOCOM (NZ) LTD CITATION : 2025 TAXSCAN (HC) 1693

The Delhi High Court addressed the legal issue of whether payment for the resale or use of computer software through End-User License Agreements (EULAs) amounts to "royalty" under the Income Tax Act, attracting TDS liability under Section 195. The Department contended that such payments were taxable as royalty, requiring TDS deduction by the Indian entity.

A division bench of Justices V. Kameswar Rao and Vinod Kumar upheld the view that these payments are not royalty since they confer only the right to use the software, not the copyright itself. The Court relied on the Supreme Court’s ruling in Engineering Analysis Centre of Excellence (2021) and ruled that no taxable income arises in India from such transactions, and hence no TDS liability under Section 195 exists. The Department’s appeal was dismissed accordingly.

GSTIN Cancellation OTP Shared to Accountant misused Later Creating Fake Firms: Delhi HC Says not for Writ Jurisdiction

RADHEY TRADERS vs ASSISTANT COMMISSIONER LAXMI NAGAR DIVISION CITATION : 2025 TAXSCAN (HC) 1697

The Delhi High Court examined the issue of GSTIN cancellation where the OTP for cancellation was shared with the taxpayer's accountant and subsequently misused to create fake firms. The legal question was whether such misuse could be addressed under the writ jurisdiction of the High Court.

The Bench comprising Justice Prathiba M. Singh and Justice Shail Jain held that the matter was not maintainable under writ jurisdiction and thus declined to entertain the petition. It emphasized that such issues pertaining to misuse and cancellation are better suited for remedy through appropriate administrative or investigative mechanisms, rather than through writ petitions in the High Court.

Delhi HC Refuses to Entertain Writ in Fake GST ITC Case, Holds ITC Involves Series of Transactions Requiring Detailed Analysis

SD POLYMERS THROUGH ITS PROPRIETOR PROP. HEM LATA GUPTA vs COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX AND ANR CITATION : 2025 TAXSCAN (HC) 1695

The Delhi High Court addressed the issue of a writ petition challenging a demand order related to alleged fraudulent Input Tax Credit (ITC) availment under the Goods and Services Tax (GST) regime. The key legal issue was whether the High Court should entertain the writ petition or direct the petitioner to pursue statutory remedies through the appellate process under Section 107 of the CGST Act, 2017.

A bench led by Justice Prathiba M. Singh and Justice Shail Jain declined to entertain the writ petition, emphasized the settled legal position that writ jurisdiction should not support unscrupulous litigants and that the petitioner must avail himself of the remedy of appeal. The petition was dismissed, reinforcing that courts generally do not interfere in fraudulent ITC cases via writ petitions.

Relief to ITI Ltd: Gauhati HC Orders to Reconsider GST ITC and Related Demands as per Amended S. 16

M/S ITI LTD vs THE UNION OF INDIA AND 6 ORS CITATION : 2025 TAXSCAN (HC) 1690

The Gauhati High Court dealt with the issue of GST Input Tax Credit (ITC) and related demands imposed on ITI Ltd. The legal question arose due to the denial of ITC and demands raised without considering the amended provisions of Section 16 of the CGST Act, particularly Section 16(5), which protects certain credits.

A division bench of Justice Mridul Kumar Kalita and Justice Rajesh Mazumdar set aside the GST department's order that denied ITC, directing the authorities to reconsider the demands in light of the amendments to Section 16. The Court emphasized that the amended provisions had to be applied, granting ITI Ltd relief and remitting the matter for fresh adjudication after granting the company a fair opportunity of hearing.

‘Vigilantibus Non Dormientibus Jura Subveniunt’: Orissa HC Declines to Entertain Writ Filed against GST S. 73 Order after 11 Months without Explanation

Abhinandan Sahoo vs Chief Commissioner of CT & GST CITATION : 2025 TAXSCAN (HC) 1683

The Orissa High Court dealt with the legal issue of whether a writ petition filed against a GST Section 73 order after an 11-month delay without explanation could be entertained. The petitioner challenged the validity of the GST demand notice under Section 73, which pertains to tax recovery for periods of alleged tax evasion or short payment.

The Division Bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman declined to entertain the writ petition, invoking the maxim "Vigilantibus non dormientibus jura subveniunt" (the law helps those who are vigilant, not those who sleep on their rights). The Court held that undue and unexplained delay disentitles the petitioner from seeking relief through writ jurisdiction, emphasizing the need for timely action in such matters.

DIN Mandatory while Issuing GST SCN or Order: Andhra Pradesh HC Quashes Registration Cancellation Notice

ARHAAN FERROUS AND NON FERROUS SOLUTIONS vs THE SUPERINTENDENT CITATION : 2025 TAXSCAN (HC) 1682

The Andhra Pradesh High Court dealt with the legal issue of whether a GST show cause notice (SCN) or order can be issued without mentioning a Document Identification Number (DIN), which is mandatory under the GST rules. The petitioner challenged the cancellation of GST registration on the ground that the SCN and cancellation order were issued without a DIN.

The Division Bench of Justice R. Raghunandan Rao and Justice T.C.D. Sekhar quashed the registration cancellation notice, holding that the absence of a DIN rendered the SCN and cancellation order invalid. The Court emphasized that the issuance of DIN is a mandatory procedural requirement, and failure to comply with this requirement affects the legitimacy of the proceedings, warranting quashing of the impugned notice and order.

Classification of Goods: Madras HC Directs CESTAT to Consider Precedents Cited by BenQ India While Entertaining Appeal

BenQ India Private Limited vs The Commissioner of Customs CITATION : 2025 TAXSCAN (HC) 1674

The Madras High Court addressed the legal issue of classification of goods in a customs appeal filed by BenQ India Private Limited. The petitioner contended that the imported goods were wrongly classified by customs authorities, affecting the applicable duty rates and seeking relief through the appellate process.

The single bench of Justice Abdul Quddhose directed the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) to consider relevant judicial precedents cited by BenQ India while entertaining the appeal on merits. The Court emphasized that CESTAT must give due weight to established case law to ensure correct classification and adjudication, thereby safeguarding the petitioner’s rights during the appeal process.

Without Acknowledgement or Returned Cover from Customs Dept, Assessee’s Statement on Date of Receipt of Order Prevails: Madras HC

Jawath Ali MohamedAharib vs The Principal Commissioner & Ex-Officio CITATION : 2025 TAXSCAN (HC) 1673

The Madras High Court addressed the legal issue of determining the date of receipt of a customs adjudication order when there is no acknowledgment or returned postal cover from the customs department. The question was crucial for calculating the limitation period for filing an appeal against the order.

The single bench of Justice Abdul Quddhose ruled that in the absence of any acknowledgment or returned cover, the assessee’s statement regarding the date of receipt of the order would prevail. This ruling affirms that the limitation period for appeal starts from the date mentioned by the assessee, ensuring fairness in cases where formal proof of service by customs is unavailable.

No Recovery of Outstanding GST Demand Once Pre-Deposit made and Undertaking Filed Pending Tribunal Setup: Chhattisgarh HC

M/s Archita Soap And Chemical LLP vs - Joint Commissioner (Appeals) State Tax CITATION : 2025 TAXSCAN (HC) 1671

The Chhattisgarh High Court held that no recovery of GST demand is allowed after a taxpayer makes the statutory pre-deposit and files an undertaking to approach the Appellate Tribunal, as clarified by CBIC Circular No. 224/18/2024-GST.

Justice Deepak Kumar Tiwari ruled that upon complying with these requirements, recovery proceedings must remain stayed; however, failure to deposit within 15 days renders the order ineffective and allows recovery to resume.

GST Refund on Ocean Freight Cannot be Denied on Limitation Grounds: Andhra Pradesh HC in Louis Dreyfus Case

M/s Louis Dreyfus Company Private Limited vs Union of India and Others CITATION : 2025 TAXSCAN (HC) 1668

The Andhra Pradesh High Court examined whether refund claims for GST paid on ocean freight could be denied on the ground of limitation after the levy was invalidated by the Supreme Court. The issue was whether the limitation period under the GST Act applies when the payment is not considered a “tax.”

A Division Bench of Justices R. Raghunandan Rao and Sumathi Jagadam allowed the petitioner’s refund claims, set aside rejections as time-barred, and directed reconsideration without regard to limitation, emphasizing that payment of an invalid tax is a payment under mistake of law.

Calcutta HC allows Physical Filing of Forms 1 & 2 within Time, Permits Availing DTVsV Scheme, 2024; Condones Dept’s Delay

PRINCIPAL COMMISSIONER OF INCOME TAX vs TANUJ PROPERTIES PRIVATE LIMITED CITATION : 2025 TAXSCAN (HC) 1666

The Calcutta High Court addressed whether an assessee could benefit from the Direct Tax Vivad Se Vishwas Scheme, 2024, by allowing physical submission of Forms 1 and 2 beyond the statutory deadline due to delay in the Department’s appeal filing.

A bench comprising Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee condoned the delay in the Revenue’s appeal, deemed the appeal filed within the limitation period as of 31 July 2024, and allowed the assessee to submit the required forms within 10 days physically. The Court directed the Department to process the application and facilitate payment within six weeks, emphasizing that assessees should not be prejudiced by Departmental delays.

ITAT Wrongly Dismisses Stay Petition on 20% Pre-Deposit Condition already Removed by High Court: Kerala HC Quashes Order

C PRASANNAKUMARAN UNNITHAN vs THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH CITATION : 2025 TAXSCAN (HC) 1662

The Kerala High Court examined whether the Income Tax Appellate Tribunal (ITAT) was correct in dismissing a stay petition for non-payment of a 20% pre-deposit, despite a prior Division Bench order having removed this requirement.

The Single-Judge Bench of Justice Bechu Kurian Thomas found that the ITAT erred in dismissing the stay petition based on a vacated condition. The Court set aside the ITAT’s order and directed it to reconsider the stay petition on merits within two months, partially allowing the writ petition.

Relief for Trust: Delhi HC Rules Trading in Land and Immovable Property Without Fixed Remuneration Does Not Attract Service Tax

THE COMMISSIONER OF CENTRAL TAX vs M/S GOVERNMENT OFFICIAL WELFARE ORGANISATION CITATION : 2025 TAXSCAN (HC) 1663

The Delhi High Court examined whether trading in land and immovable property without fixed remuneration attracts service tax. The issue arose from a trust facilitating allotment of residential flats without charging commission, but the revenue contended that the trust’s activities amounted to “real estate agent service.”

A bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta upheld the CESTAT’s decision, applying precedents to hold that the trust’s refundable deposits and absence of fixed remuneration mean no service tax liability arises. The Court dismissed the revenue’s appeal, emphasizing that taxing such activities years later would unfairly burden the trust and disrupt settled transactions.

WAPs with Only MIMO or Only LTE Eligible for BCD Exemption under Customs Notification Before 2021 Amendment: Delhi HC

PRINCIPAL COMMISSIONER OF CUSTOMS vs M/SGO IP GLOBAL SERVICES PVT. LTD CITATION : 2025 TAXSCAN (HC) 1664

The Delhi High Court considered whether Wireless Access Points (WAPs) with only MIMO or only LTE technology qualify for Basic Customs Duty exemption under the pre-2021 Customs Notification, focusing on the interpretation of “MIMO and LTE Products.”

A Division Bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta ruled that the notification’s wording requires both technologies to be present for the exclusion, so WAPs with only MIMO qualify for exemption. The Court dismissed the Revenue’s appeal, affirming the exemption for the company’s WAPs and relying on precedent from Ingram Micro India Pvt. Ltd.

Taxpayer Entitled to Interest on Refund Under DTVSV Act Despite Section 7 Bar: Kerala HC

ASSISTANT COMMISSIONER OF INCOME TAX VS SATWASHIL VASANT MANE CITATION : 2025 TAXSCAN

(HC) 1660

The Kerala High Court considered whether a taxpayer is entitled to interest on a refund under the Direct Tax Vivad Se Vishwas Act, 2020 despite Section 7 excluding statutory interest under Section 244A of the Income Tax Act.

A Division Bench of Justices A.K. Jayasankaran Nambiar and Baswaraj S. held that while Section 7 excludes statutory interest, courts retain the power to grant compensatory interest under general law. The Court ruled the petitioner was entitled to interest for the nearly two-year delay in refund and dismissed the Income Tax Department’s appeal.

Factual Correlation of Seized Material Must Be Done by Authorities, Court Cannot Step into AO’s Role: Bombay HC

DNH Spinners Private Limited vs Deputy Commissioner of Income-tax CITATION : 2025 TAXSCAN (HC) 1667

The Bombay High Court examined whether writ jurisdiction under Article 226 allows the Court to decide factual correlation of seized documents forming the basis of notices issued under Section 153C of the Income Tax Act. The petitioner challenged the validity and timing of notices issued based on material seized in a 2019 search of the Alankit group.

A Division Bench of Justices M.S. Sonak and Jitendra Jain held that determining whether incriminating material exists is a factual matter for the Assessing Officer and cannot be decided in writ proceedings. The Court refused to quash the notices and dismissed the petitions, allowing the petitioner to raise objections before the Assessing Officer and on appeal.

Without Acknowledgement or Returned Cover from Customs Dept, Assessee’s Statement on Date of Receipt of Order Prevails: Madras HC

Jawath Ali MohamedAharib vs The Principal Commissioner & Ex-Officio CITATION : 2025 TAXSCAN (HC) 1673

The Madras High Court examined whether the limitation period for filing a customs appeal can be determined based on the assessee’s statement of receipt in the absence of postal acknowledgment or returned cover from the Customs Department.

Justice Abdul Quddhose held that without evidence proving earlier receipt, the assessee’s claim of receiving the adjudication order on 16 August 2017 must be accepted. The Court quashed the orders dismissing the appeal as time-barred and directed the authorities to reconsider the matter on merits within three months.

Classification of Goods: Madras HC Directs CESTAT to Consider Precedents Cited by BenQ India While Entertaining Appeal

BenQ India Private Limited vs The Commissioner of Customs CITATION : 2025 TAXSCAN (HC) 1674

The Madras High Court considered whether the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) should take judicial precedents into account in a classification dispute raised by BenQ India regarding imported goods.

Justice Abdul Quddhose directed that although the writ petition was not entertained on merits, CESTAT must consider the petitioner’s cited precedents while deciding the statutory appeal. The Court allowed BenQ India two weeks to file the appeal and dismissed the writ petition as not pressed.

Telephone Handsets to Subscribers Amounts to Transfer of Right to Use Goods, 10% of Rental Receipts Taxable: Allahabad HC in BSNL Case

M/S Bharat Sanchar Nigam Ltd vs Commissioner Trade Tax Commercial Govt. of U.P CITATION : 2025 TAXSCAN (HC) 1676

The Allahabad High Court examined whether providing telephone handsets to subscribers constitutes a transfer of the right to use goods, and if 10% of rental receipts could be taxed under Section 3F of the U.P. Trade Tax Act. BSNL challenged the Trade Tax Tribunal’s order which estimated a portion of rent attributable to handsets due to lack of bifurcation in records.

A bench headed by Justice Piyush Agrawal upheld the Tribunal’s decision, observing that BSNL failed to produce agreements or records despite opportunities. The court ruled that the estimation was justified, and BSNL is liable to pay trade tax on 10% of rental receipts as consideration for the right to use telephone handsets.

Income Tax Deduction u/s 80 P allowable for Interest Earned on Surplus Lending Funds to Banking Business: Calcutta HC

THE WEST BENGAL STATE CO-OPERATIVE AGRICULTURE & RURAL vs DEPUTY COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 1678

The Calcutta High Court considered whether interest earned on surplus lending funds by a cooperative bank is attributable to its banking business and thus deductible under Section 80P of the Income Tax Act. The issue also involved whether interest on personal loans to members and house building loans to staff qualifies for such deduction.

A bench of Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee held that interest earned on surplus funds invested temporarily is integral to the bank’s lending business and deductible under Section 80P(2)(a)(i). However, interest on house building loans to staff was disallowed as per the Assessing Officer and CIT(A). Regarding personal loans to certain members (Class D), the deduction under Section 80P was allowed.

Seven-Year Delay in Filing Appeals Due to Trustee’s Health: Karnataka HC Dismisses Appeal as No Substantial Question of Law Arises

CHILUME SOCIAL SERVICE SOCIETY vs THE INCOME TAX OFFICER CITATION : 2025 TAXSCAN (HC) 1681

The Karnataka High Court considered whether the seven-year delay in filing appeals caused by the trustee’s health issues justified condonation of delay, after the Income Tax Appellate Tribunal (ITAT) and Commissioner of Income Tax (Appeals) [CIT(A)] had rejected the appeals on delay grounds.

A bench of Justices Vibhu Bakhru and C.M. Joshi upheld the ITAT and CIT(A) orders, finding no abuse of discretion and holding that no substantial question of law arose. The Court dismissed the appeal.

DIN Mandatory while Issuing GST SCN or Order: Andhra Pradesh HC Quashes Registration Cancellation Notice

ARHAAN FERROUS AND NON FERROUS SOLUTIONS vs THE SUPERINTENDENT CITATION : 2025 TAXSCAN (HC) 1682

The Andhra Pradesh High Court ruled that issuance of a Document Identification Number (DIN) is mandatory for show cause notices (SCNs) and orders under the GST Act, 2017, failing which such notices/orders are invalid. The issue arose when the petitioner challenged a cancellation notice and order that did not contain a DIN.

A Division Bench of Justices R. Raghunandan Rao and T.C.D. Sekhar relied on Supreme Court and High Court precedents holding that absence of DIN renders proceedings invalid. The Court set aside the defective SCN and cancellation order but allowed the department to issue fresh notices with a valid DIN after hearing the petitioner, excluding the delay period from limitation.

No Constitutional Violation in GST RCM u/s 17(2) and 17(3) of CGST Act on Security Services: Bombay HC

M/s. Eagle Security vs Union of India, through the Secretary CITATION : 2025 TAXSCAN (HC) 1685

The Bombay High Court examined the constitutional validity of Sections 17(2) and 17(3) of the CGST Act, 2017, challenging the denial of Input Tax Credit (ITC) on security services under the Reverse Charge Mechanism (RCM). The petitioner argued this treatment violated Articles 14 and 19(1)(g) by unfairly discriminating against proprietorship entities and increasing their costs.

A Division Bench of Justices M.S. Sonak and Jitendra Jain upheld the provisions, ruling that classification between corporate and non-corporate entities is permissible and ITC is a statutory concession subject to conditions. The Court held that the right to carry business does not guarantee competitiveness, and deferred to legislative policy in taxation, dismissing the petition for lack of constitutional infirmity.

Taxability of Software Fee under India-UAE DTAA: Karnataka HC Disposes Revenue's Appeal after AO Treats Receipts as Royalty

THE PRINCIPAL COMMISSIONER OF INCOME TAX vs M/S. OASIS CENTRE LLC CITATION : 2025 TAXSCAN (HC) 1688

The Karnataka High Court dealt with the taxability of software fees under the India-UAE Double Taxation Avoidance Agreement (DTAA) after the Assessing Officer (AO) treated Rs.13.26 crores received by Oasis Centre LLC as royalty under Section 9(1)(vi) of the Income Tax Act.

A bench of Justices S.G. Pandit and K.V. Aravind disposed of the Revenue’s appeal against the ITAT’s remand for examining the taxability under the DTAA. Since the AO passed an order during the appeal proceedings holding the receipt as royalty, the Court found the challenge to the remand irrelevant and disposed of the appeal without addressing substantive questions.

Rajasthan HC Condones 700-Day Delay in Filing Audit Report by Charitable Trust considering Lack of Malafide Intention

Manav Seva Samiti vs Principal Chief Commissioner Of Income Tax (Exemptions) CITATION : 2025 TAXSCAN (HC) 1696

The Rajasthan High Court condoned a 700-day delay in filing the audit report by Manav Seva Samiti, a public charitable trust, due to the severe illness and subsequent death of its President, affecting the trust’s functioning. The Court set aside the order rejecting the condonation application under Section 119(2)(b) of the Income Tax Act.

A Division Bench of Justices K.R. Shriram and Sandeep Taneja found no mala fide intention in the delay and emphasized the trust’s bona fide charitable activities. The Court held that such an assessee should not be denied exemption solely on limitation grounds and allowed condonation, quashing the impugned order.

GSTIN Cancellation OTP Shared to Accountant misused Later Creating Fake Firms: Delhi HC Says not for Writ Jurisdiction

RADHEY TRADERS vs ASSISTANT COMMISSIONER LAXMI NAGAR DIVISION CITATION : 2025 TAXSCAN (HC) 1697

The Delhi High Court declined to entertain a writ petition challenging GST demands arising from misuse of a GSTIN, where the proprietor shared a cancellation OTP with an accountant who allegedly created multiple fake firms for fraudulent Input Tax Credit claims.

A bench of Justice Prathiba M. Singh and Justice Shail Jain held that the petitioner could not claim complete innocence due to sharing the OTP, and that such factual and criminal matters require police investigation. The Court dismissed the petition, directing the petitioner to pursue alternate remedies while noting the ongoing police inquiry.

Category III AIFs Not Automatically Indeterminate if Investor names are Absent from Original Trust Deed: Delhi HC

EQUITY INTELLIGENCE AIF TRUST vs THE CENTRAL BOARD OF DIRECT TAXES & ANR CITATION : 2025 TAXSCAN (HC) 1698

The Delhi High Court ruled that Category III Alternative Investment Funds (AIFs) are not indeterminate trusts simply because investor names are absent from the Trust Deed, as long as beneficial interests are determinable through other means. The Court read down CBDT Circular No. 13/2014 to align with binding judicial precedents.

A Division Bench of Justices Yashwant Varma and Purushaindra Kumar Kaurav set aside the Board for Advance Rulings’ order taxing the AIF at the maximum marginal rate, holding that SEBI regulations prevent inclusion of investor names in the Trust Deed at registration and that investor interests can be identified via contribution agreements and records. The Court allowed the writ petition and clarified that the absence of investor names in the Trust Deed alone does not warrant maximum marginal rate taxation.

No Criminal History and willingness to Pay Compounding Fee: Allahabad HC Grants Bail to Accused in GST Evasion Case

Nitin Dwivedi vs State Of U.P CITATION : 2025 TAXSCAN (HC) 1699

The Allahabad High Court granted bail to Nitin Dwivedi, accused in a GST evasion case under Section 132 of the CGST Act, noting the offence is compoundable, the applicant has no criminal antecedents, and is willing to pay the compounding fee.

A bench of Justice Subhash Vidyarthi held that these factors warranted bail without prejudice to the case merits. The court allowed bail on furnishing personal bond and sureties, imposing conditions including no tampering with evidence or witness pressure, and attendance at trial unless exempted.

E-Way Bill Stamped at Interception Confirms Goods Movement: Allahabad HC upholds ITC Claim Despite Supplier’s GST Reg. Cancelled After Transaction

M/S Kesarwani Traders vs State Of Up CITATION : 2025 TAXSCAN (HC) 1701

The Allahabad High Court addressed whether Input Tax Credit (ITC) can be denied to a purchasing dealer despite proof of goods movement through a stamped e-Way bill during transit, when the supplier’s GST registration was cancelled after the transaction date. The issue arose from Kesarwani Traders’ challenge to orders under Section 74 of the U.P. GST Act and subsequent recovery notices.

A Division Bench comprising Justice Piyush Agrawal held that the e-Way bill confirmed actual transit and the supplier was registered at the time of the transaction. The Court found that the authorities failed to controvert the petitioner’s evidence, quashed the impugned orders and recovery notice, and directed refund of amounts paid during litigation, allowing the writ petition.

Commercial Tax Dept is Secured Creditor under IBC: Madras HC Directs Auction Purchaser to Recover Purchase Price from CD and Remit for VAT Dues

Avenue Realty vs Assistant Commissioner CITATION : 2025 TAXSCAN (HC) 1703

The Madras High Court ruled that the Commercial Tax Department qualifies as a ‘secured creditor’ under the Insolvency and Bankruptcy Code (IBC) when statutory charges exist on a corporate debtor’s property. The Court addressed the issue of whether statutory tax dues could be settled through liquidation sales, directing the auction purchaser to recover the purchase price and remit it toward long-pending VAT arrears.

A bench of Justice C. Saravanan held that statutory VAT dues create a secured charge under the IBC, making the Commercial Taxes Department a secured creditor. The auction purchaser bought the property with full knowledge of existing charges and must recover the purchase price from the corporate debtor and settle the VAT arrears. The liquidator is to assist in this recovery, and upon payment, the attachment will be lifted. The writ petition was dismissed.

Detention of 100-Gram Gold Kada: Delhi HC Orders Release Citing Invalidity of Pre-Printed SCN Waiver

AMAN VERMA vs COMMISSIONER OF CUSTOMS CITATION : 2025 TAXSCAN (HC) 1704

The High Court of Delhi addressed the legality of detaining a 100-gram gold kada by Customs without issuing a proper Show Cause Notice (SCN), ruling that a pre-printed waiver signed by the petitioner cannot substitute for the mandatory SCN under the Customs Act.

A bench comprising Justice Prathiba M. Singh and Justice Shail Jain held that written notice and an opportunity to be heard are essential before confiscation. They set aside the detention order as unlawful and directed Customs to release the jewelry upon payment of applicable warehousing charges.

Magistrate Issued Non-Bailable Warrant for Offence u/s 276C(2) of Income Tax Act, Punishable Max 3 Years: Bombay HC Quashes Order

Arjun Amarjeet Rampal vs Income Tax Department & Anr CITATION : 2025 TAXSCAN (HC) 1707

The Bombay High Court addressed the legality of issuing a non-bailable warrant for a bailable offence under Section 276C(2) of the Income Tax Act, which prescribes a maximum punishment of three years. The issue arose from an order by the Additional Chief Metropolitan Magistrate, Mumbai, issuing a non-bailable warrant against Arjun Amarjeet Rampal without proper application of mind.

Justice Advait M. Sethna, presiding over the Vacation Court, held that the offence is bailable and the Magistrate’s cryptic order lacked reasons and ignored the petitioner’s advocate’s presence and exemption application. The Court quashed the non-bailable warrant while allowing the merits of the case to proceed. Further proceedings on earlier process issuance were directed to be heard by a regular bench, with the department required to file a reply before the next hearing.

Refund of Compensation Cess ITC Cannot be Denied When Goods are Exported on Payment of IGST: Gujarat HC

PATSON PAPERS PRIVATE LIMITED vs UNION OF INDIA & ORS CITATION : 2025 TAXSCAN (HC) 1708

The Gujarat High Court addressed whether refund of unutilised compensation cess input tax credit (ITC) is permissible when goods are exported on payment of Integrated Goods and Services Tax (IGST). The issue arose from the refusal to refund unutilised compensation cess credit paid on inputs used in exported goods.

A Division Bench comprising Justice Bhargav D. Karia and Justice D.N. Ray held that since the exported goods were not subject to compensation cess, the unutilised credit was refundable as per the statute. The Court quashed the rejection orders and directed the refund to be processed, emphasizing that statutory provisions prevail over conflicting circulars.

GST Appeals cannot be Dismissed by Slipshod Orders: Chhattisgarh HC condones 26-Day Delay by Gannon Dunkerley

Gannon Dunkerley and Co Limited vs State Of Chhattisgarh Through Secretary Commercial Tax CITATION : 2025 TAXSCAN (HC) 1700

The Chhattisgarh High Court addressed whether a GST appeal filed with a delay of 26 days can be condoned and whether summary rejection of such an appeal without examining the cause of delay and without providing a hearing is permissible under the CGST Act. The issue arose from the rejection of Gannon Dunkerley’s appeal against a demand order, where the authorities dismissed the appeal solely on the ground of delay without considering the merits or reasons for the delay.

A Bench comprising of Justice Deepak Kumar Tiwari held that delays within the condonable period must be liberally construed unless negligence or mala fide is shown. The Court set aside the summary rejection order, condoned the delay, and directed the Appellate Authority to decide the appeal on merits after affording a proper hearing. The judgment emphasized the requirement for reasoned and speaking orders and cautioned against issuing slipshod orders in the pursuit of quick disposal.

No Technical Yardstick applied while issuing S. 73 Order against Brick Manufacturer: Patna HC Directs for Fresh Assessment

Rounak Int Udyog vs The State of Bihar CITATION : 2025 TAXSCAN (HC) 1702

The Patna High Court addressed the validity of a demand order issued under Section 73 of the Bihar Goods and Services Tax Act, 2017 (BGST Act) against a brick manufacturer, focusing on whether the assessment was based on any technical or factual basis. The issue arose when the Department raised a tax demand for FY 2021-22 against Rounak Int Udyog, a brick manufacturing firm, relying solely on an estimation of coal consumption relative to brick production without correlating this with sales invoices, GST returns, or industry standards.

A Division Bench comprising Justice P. B. Bajanthri and Justice G. Anupama Chakravarthy held that the assessment lacked any technical yardstick, noting the Department failed to apply accepted norms for coal usage or verify its assumptions against supporting documents. The Court set aside the impugned demand order and directed the Department to conduct a fresh reassessment based on technical criteria, granting the petitioner proper hearing within six months. The judgment emphasized the necessity of reasoned, evidence-based assessments and mandated cooperation between parties during reassessment.

Detention of 90-Gram Gold Chain and 10-Gram Gold Wire Without SCN: Delhi HC Orders AA to Consider Re-Export

ASHILY MUHAMMED SHAMEER vs COMMISSIONER OF CUSTOMS CITATION : 2025 TAXSCAN (HC) 1705

The High Court of Delhi addressed whether the petitioner was entitled to a personal hearing and lawful consideration of his request to re-export a 90-gram gold chain and a 10-gram gold wire detained by Customs without the issuance of a Show Cause Notice (SCN). The issue arose when Ashily Muhammed Shameer challenged the detention of these gold items, arguing that no SCN had been served prior to the detention by the Customs Department upon his arrival from the UAE.

A Division Bench comprising Justice Prathibia M Singh and Justice Shail Jain directed the Adjudicating Authority to grant the petitioner a personal hearing and consider his request for re-export. Observing that the matter did not warrant interference at the writ stage and noting the petitioner’s willingness to re-export the gold, the Court instructed the petitioner to appear before Customs and the nodal officer to facilitate the process.

Assessing Authority Cannot Impose Demand Beyond the Amount Proposed in GST Show Cause Notice: Allahabad HC

M/S Vibhuti Tyres vs State of U.P. CITATION : 2025 TAXSCAN (HC) 1709

The Allahabad High Court addressed whether an assessing authority can impose a GST demand exceeding the amount specified in the show cause notice under Section 73 of the GST Act, 2017. The issue arose when Vibhuti Tyres, the petitioner, received a show cause notice dated 29 September 2023 proposing a demand of ₹8,81,080 for the period July 2017 to March 2018, but the final order dated 18 November 2023 demanded ₹32,97,336, including tax, penalty, and interest, without the petitioner filing a reply or appearing before the authority.

A Division Bench comprising Chief Justice Arun Bhansali and Justice Kshitij Shailendra held that Section 75(7) clearly restricts the demand in the adjudication order to the amount specified in the show cause notice. Observing that the final demand was over three times the notice amount, the Court quashed the order and remanded the matter back to the assessing authority. It directed the authority to grant the petitioner an opportunity to reply and pass a fresh order in accordance with law.

GST Offline Rectification u/s 161 Plea Valid, Taxpayer must also file Online Application as Procedural Requirement: Madras HC

Tvl Raj Computer vs The Deputy State Tax Officer -1 CITATION : 2025 TAXSCAN (HC) 1710

The Madurai Bench of the Madras High Court addressed whether a rectification application filed offline within the prescribed time under Section 161 of the GST Act, 2017, can be disregarded for not being filed online as mandated by the CBIC Circular. The issue arose when Tvl Raj Computer, through its proprietor Monaram, filed an offline rectification petition challenging an order under Section 73, which the Deputy State Tax Officer declined to consider citing non-compliance with the online filing requirement.

A bench of Justice C. Saravanan, held that the offline rectification application filed within the statutory time must be considered valid and cannot be rejected on procedural grounds alone. However, in line with the CBIC Circular dated 15.10.2024, the petitioner was directed to additionally file the rectification application online within 30 days. The Court further directed the authority to decide the petition on merits once the online filing is completed, without invoking limitation under Section 161, thereby preserving the petitioner’s substantive rights. The writ petition was disposed of accordingly.

Unverified Documents from France About Foreign Bank Account Cannot Support Income Tax Prosecution Without Swiss Authentication: Delhi HC

ANURAG DALMIA vs INCOME TAX OFFICE CITATION : 2025 TAXSCAN (HC) 1711

The Delhi High Court addressed whether unauthenticated documents received from France under the Double Taxation Avoidance Agreement (DTAA), without verification from Swiss authorities, can form the basis for criminal prosecution under the Income Tax Act. The issue arose when Anurag Dalmia faced criminal complaints alleging undisclosed foreign bank accounts in Switzerland, based solely on unverified information provided by French authorities.

A bench comprising of Justice Neena Bansal Krishna held that documents lacking authentication or independent verification cannot sustain criminal charges under Sections 276C(1)(i), 276D, and 277 of the Income Tax Act. The Court noted that the ITAT had already quashed the related assessment order due to lack of evidence and that no incriminating material was found during the search. The Court quashed the criminal complaints, ruling that prosecution could not proceed on uncorroborated foreign information and insufficient evidence, thereby allowing the petitioner’s petitions.

Supreme Court

RBI Directs KYC Reforms in Finance Sector for Persons With Disabilities: Follows Supreme Court Mandate in Pragya Prasun & Amar Jain

PRAGYA PRASUN & ORS vs UNION OF INDIA & ORS. CITATION : 2025 TAXSCAN (SC) 242

The Supreme Court of India addressed barriers faced by persons with disabilities in completing digital KYC processes, following petitions by acid attack survivors and a blind individual who were denied access due to inaccessible biometric checks.

A bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan ruled that all entities must comply with accessibility standards, conduct audits involving disabled users, establish grievance redressal mechanisms, and provide disability sensitization training, reinforcing constitutional rights under Article 21 and the Rights of Persons with Disabilities Act, 2016, to promote financial inclusion.

Renewal or Second of Provisional Attachment u/s 83 CGST Act Not Permissible Beyond One Year: Supreme Court

KESARI NANDAN MOBILE vs OFFICE OF ASSISTANT COMMISSIONER OF STATE TAX (2) CITATION : 2025 TAXSCAN (SC) 243

The Supreme Court of India ruled that under Section 83 of the CGST Act, 2017, provisional attachment orders cannot be renewed or re-issued beyond one year, and such attachment cannot be used as a recovery tool. The case arose from Kesari Nandan Mobile’s challenge to provisional attachment orders issued after earlier ones had already lapsed by operation of law.

A bench of Justices Dipankar Datta and Augustine George Masih held that the power of provisional attachment is draconian and must be strictly construed. The Court emphasized that Section 83(2) mandates cessation after one year without provision for renewal, and any contrary practice would amount to abuse of power. It declared the renewed attachment orders invalid and ordered immediate de-freezing of the appellant’s accounts while permitting the Revenue to continue investigations legally. The civil appeal was allowed.

Imposition of 100% Penalty under GST Without Proving Fraud: Supreme Court Restores Review Petition for Fresh Consideration

M/S GODWAY FUNICRAFTS vs THE STATE OF ANDHRA PRADESH CITATION : 2025 TAXSCAN (SC) 244

The Supreme Court of India directed the Andhra Pradesh High Court to reconsider a review petition challenging the imposition of 100% penalty under Section 74 of the CGST Act, 2017, on the ground that fraud or willful concealment had not been established by the department. This arose after the Andhra Pradesh High Court had dismissed both the writ petition and the review petition, holding that the contention on penalty was not properly raised earlier.

A bench of Justices B.V. Nagarathna and K.V. Viswanathan observed that the contention regarding the 100% penalty was raised in the writ petition memorandum and therefore deserved to be considered on merits in the review application. The Supreme Court set aside the High Court’s order, restored the review petition for fresh adjudication, and allowed the appellant to raise all relevant contentions, including penalty and interest issues. The Court reserved liberty to revisit the penalty aspect if needed.

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