Supreme Court & High Courts Weekly Round-Up

Supreme Court

Bar Council Enrollment Fee Waiver Case: Supreme Court Issues Notice to BCI and BCUP

DEEPAK YADAV vs BAR COUNCIL OF INDIA CITATION : 2025 TAXSCAN (SC) 246

The Supreme Court of India, in a writ petition under Article 32, has taken up the issue of additional charges imposed by the Bar Council of Uttar Pradesh for the issuance of Certificate of Practice and ID cards. The petition challenges these levies as being contrary to Section 24(1)(f) of the Advocates Act, 1961, and violative of Articles 14 and 19(1)(g) of the Constitution.

A Bench of Justices J.B. Pardiwala and K.V. Viswanathan, noting a prima facie conflict with the Court’s 2024 ruling in Gaurav Kumar v. Union of India, issued notice to the Bar Council of India and the UP Bar Council. The matter has been posted for further hearing after replies are filed within four weeks.

Inadvertent Mistake in Shipping Bills cannot Deny MEIS Claim: Supreme Court says High Court fails to Address Statutory Entitlement

BM/S SHAH NANJI NAGSI EXPORTS PVT. LTD vs UNION OF INDIA CITATION : 2025 TAXSCAN (SC) 247

The Supreme Court has held that a clerical mistake in shipping bills cannot deprive a genuine exporter of benefits under the Merchandise Exports from India Scheme (MEIS). Shah Nanji Nagsi Exports Pvt Ltd was denied benefits after its broker wrongly marked “No” in 54 shipping bills, despite later correction under Section 149 of the Customs Act, 1962. The Bombay High Court dismissed the writ, holding the exporter’s remedy lay against the broker.

A Bench of Justices Aravind Kumar and N.V. Anjaria set aside the High Court’s ruling, quashed the PRC’s rejection, and directed the claim be processed within 12 weeks. Relying on precedents, the Court stressed that procedural lapses cannot defeat substantive entitlements under beneficial schemes and asked the government to adopt policy or technological reforms to prevent similar disputes.

Supreme Court Upholds Fees Collected by Electricity Regulators Are Not Liable to GST, Dismissing DGGI’s Challenge

ADDITIONAL DIRECTOR DIRECTORATE GENERAL OF GST INTELLIGENCE vs CENTRALELECTRICITY REGULATORY COMMISSION CITATION : 2025 TAXSCAN (SC) 248

The Supreme Court of India has upheld the Delhi High Court’s ruling that fees collected by electricity regulators such as the Central Electricity Regulatory Commission (CERC) and Delhi Electricity Regulatory Commission (DERC) are not liable to Goods and Services Tax (GST). The dispute arose from show cause notices issued by GST authorities demanding tax on tariff, licence, and filing fees, which were treated as “support services” to electricity transmission and distribution.

A Bench of Justices J.B. Pardiwala and R. Mahadevan dismissed the Revenue’s appeals, finding no reason to interfere with the Delhi High Court’s reasoning. The High Court had held that CERC and DERC’s statutory functions could not be split into adjudicatory and regulatory parts and, even if fees were considered consideration, they were not received in the course of business.

Supreme Court upholds Setting Aside Service Tax Demands on Mining Operations and Site Formation Services unsustainable

COMMISSIONER OF GST AND CENTRAL EXCISE vs M/S CORE MINERALS CITATION : 2025 TAXSCAN (SC) 249

The Supreme Court upheld CESTAT’s decision quashing service tax demands of over ₹11 crore on Core Minerals, where the Department alleged liability under site formation and mining services. The Tribunal held that site preparation was incidental to mining and not separately taxable before June 2007.

A Bench of Justices J.B. Pardiwala and K.V. Viswanathan, condoning a 151-day delay, dismissed the Revenue’s appeal, agreeing with CESTAT that tax was duly paid and undervaluation claims were untenable under Section 67 of the Finance Act, 1994.

Supreme Court to Decide if Chartered Flights are Passenger Transport or Aircraft Hire, Impacting GST ITC

THE COMMISSIONER OF SERVICE TAX vs M/S RELIANCE COMMERCIAL DEALERS LTD. CITATION : 2025 TAXSCAN (SC) 250

The Supreme Court will decide if chartered aircraft services qualify as “Non-Scheduled Air Transport (Passenger) Service” under Section 65(105)(zzzo) or as “Supply of Tangible Goods for Use (STGU)” under Section 65(105)(zzzzj) of the Finance Act, 1994. The case stems from RCDL’s agreements with RIL, where the Revenue demanded over ₹42 crore in tax, treating the arrangement as STGU, while RCDL argued it was passenger transport with no transfer of control.

CESTAT, through S.K. Mohanty and M.M. Parthiban, ruled in RCDL’s favour, holding that even full-charter operations remain passenger services under DGCA permits, not STGU. The tribunal quashed the tax demands, and the Supreme Court, in Civil Appeal No. 9743/2025, will now decide the correct classification with significant GST implications.

High Court

Filing Form 67 Before Final Income Assessment is Sufficient Compliance: Madras HC Rules Rule 128 Directory, Not Mandatory

Venkatanarayanan Somayaji Lakshminarasimha vs The Principal Commissionerof Income Tax-8 CITATION : 2025 TAXSCAN (HC) 1719

The Madras High Court has held that filing Form 67 before completion of final assessment is sufficient compliance for claiming Foreign Tax Credit (FTC), ruling that Rule 128 of the Income Tax Rules is directory and not mandatory. The case concerned Venkatanarayanan Somayaji Lakshminarasimha, whose FTC claim of ₹18.85 lakh for AY 2018–19 was denied on the ground that Form 67 was not filed along with his return, though he later submitted it before assessment was completed.

Justice Krishnan Ramasamy, relying on Duraiswamy Kumaraswamy v. PCIT and CIT v. G.M. Knitting Industries (P) Ltd., set aside the rejection order, observing that a procedural lapse could not defeat a substantive right. The Court condoned the delay, imposed costs of ₹10,000 payable to a government hospital, and directed the Deputy Commissioner to reconsider the FTC claim once proof of payment was furnished.

Taxpayer Pursued Rectification Petition First: Madras HC Condones 108 Days Delay in Filing Appeal

Tvl.Pasura Crop Care Private Limited vs The Deputy Commissioner CITATION : 2025 TAXSCAN (HC) 1720

The Madras High Court condoned a 108-day delay in filing an appeal under the TNGST Act, 2017, after noting that the petitioner, Tvl. Pasura Crop Care Pvt. Ltd., had first pursued a rectification petition under Section 161 against an assessment order for AY 2019-20 before approaching the appellate authority. The Deputy Commissioner, Salem, had dismissed the appeal as time-barred despite the petitioner’s explanation and part-payment of the disputed tax.

Justice Krishnan Ramasamy observed that the delay was bona fide and not deliberate, holding that justice would be served by allowing the appeal on terms. The Court set aside the order dated 13 March 2025, directed the petitioner to deposit an additional 5% of the disputed tax within four weeks, and instructed the appellate authority to entertain the appeal and decide it on merits after hearing the petitioner.

GST Rectification Order must be Passed by Same Authority that passed Original Order: Delhi HC

M/S GANPATI INTERNATIONAL vs COMMISSIONER OF CGST CITATION : 2025 TAXSCAN (HC) 1722

The Delhi High Court held that rectification of a GST order must be done by the same authority that issued the original order. Ganpati International had challenged an order-in-original (OIO) of 31 January 2025, raising a demand of ₹6.65 lakh over alleged bogus ITC from M/s Swagat Enterprises. The petitioner sought rectification of the OIO, but instead of the CGST Department, the Delhi GST Department passed a rectification order on 24 June 2025.

A Division Bench of Justices Prathiba M. Singh and Shail Jain found the order unsustainable as (1) no personal hearing was given in violation of Section 161 proviso, and (2) rectification was made by the wrong authority. Setting aside the order, the Court directed the CGST Department to rehear the rectification application and grant the petitioner a personal hearing before passing a fresh order.

S. 69 and 70 under GST is not Violative of Article 20(3) or 21, Parliament Competent to Enact such Provisions: Delhi HC follows SC Ruling

DHRUV KRISHAN MAGGU vs UNION OF INDIA CITATION : 2025 TAXSCAN (HC) 1723

The Delhi High Court dismissed writ petitions challenging Sections 69 and 70 of the CGST Act, holding that Parliament has legislative competence under Article 246-A to enact arrest and summons provisions. Petitioners had argued these powers went beyond GST’s “levy and collection” scope and violated Articles 20(3) and 21.

Relying on the Supreme Court’s ruling in Radhika Agarwal v. Union of India (2025), the Court held that prosecution mechanisms to check tax evasion are ancillary to GST laws. The apex court clarified that Article 246-A is comprehensive, covering all incidental matters, and upheld the validity of Sections 69 and 70. Consequently, the petitions were disposed of.

Duplicate GST Demand u/s 63 and 73 Issued for Same Period: Orissa HC declares writ Infructuous as Order Rectified to ‘Nil’ by Dept

Chandra Jakeshika vs Chief Commissioner of CT & GST CITATION : 2025 TAXSCAN (HC) 1724

The Orissa High Court declared a writ petition by Chandra Jakeshika infructuous after GST authorities corrected a duplicate demand. The petitioner had challenged an assessment order dated November 7, 2024, under Section 63 of the GST Act, which raised tax liability for April 2020–March 2021 despite the same period already being assessed under Section 73 by a prior order dated September 24, 2024.

During the hearing, the Department admitted the error and confirmed that the November order was rectified, reducing the demand to nil. Noting that the grievance stood redressed, Chief Justice Harish Tandon and Justice Murahari Sri Raman disposed of the petition as infructuous and closed pending applications.

Sikkim HC Quashes GST Order Denying Budgetary Support of Rs. 59L to Zydus Wellness

Zydus Wellness-Sikkim vs The Assistant Commissioner CITATION : 2025 TAXSCAN (HC) 1725

The Sikkim High Court quashed a GST order that denied Zydus Wellness budgetary support of ₹59.44 lakh, terming the Assistant Commissioner’s rejection legally untenable. Zydus had challenged the 27 June 2022 order under Article 226 after its claim under the 2017 Budgetary Support Scheme was rejected on the ground that eligible support was “negative.”

Justice Meenakshi Madan Rai noted that the issue was already settled in Glenmark Pharmaceuticals v. Union of India (2024), which relied on Coromandel International Ltd. v. Union of India (2023), clarifying that support must be calculated on monthly tax payments through the cash ledger. Accordingly, she set aside the order and directed that Zydus’ claim be reconsidered in line with these rulings.

S.263 of Income Tax Act Can Be Invoked Only in Cases of ‘Lack of Inquiry,’ Not Merely for Inadequate Inquiry: Madras HC Upholds AO’s Order

M/s.Arul Industries vs The Asst. Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 1728

The Madras High Court dealt with the scope of revisional powers under Section 263 of the Income Tax Act, 1961, holding that the provision can be invoked only in cases of complete absence of inquiry and not merely for inadequate inquiry by the Assessing Officer. The case arose from assessment proceedings concerning capital gains treatment and depreciation claims of Arul Industries for AY 2007-08.

A Division Bench comprising Chief Justice Manindra Mohan Shrivastava and Justice Sunder Mohan ruled that since the Assessing Officer had examined the records, considered the property purchase, and discussed the matter with the assessee’s representative, the case was one of inadequate inquiry at best. Consequently, the Court held that the Commissioner had no jurisdiction to invoke Section 263, allowed the assessee’s appeal, and answered the question of law in its favour.

Six Months Custody or Trial Delay not Sufficient Ground for Bail in Economic Offences under PMLA: Jharkhand HC

Pramod Kumar Singh vs Union of India CITATION : 2025 TAXSCAN (HC) 1729

The Jharkhand High Court dealt with the issue of whether six months of custody or trial delay is sufficient ground for bail in economic offences under the Prevention of Money Laundering Act, 2002, while considering Pramod Kumar Singh’s application under Sections 483 and 484 of the BNSS, 2023, linked to misappropriation of NRHM funds.

Justice Sujit Narayan Prasad held that money laundering is a grave economic offence, and bail requires compliance with Section 45 of the PMLA. Since Singh failed to discharge the statutory burden under Section 24 or satisfy the twin conditions, the court dismissed his bail plea, clarifying that observations were confined to bail and not the trial merits.

Delhi HC Refuses Bail to 64 Years Old Senior Citizen in PMLA Case, Holds Health Grounds Alone Cannot Justify Release

ARVIND DHAM vs DIRECTORATE OF ENFORCEMENT CITATION : 2025 TAXSCAN (HC) 1730

The Delhi High Court examined whether health grounds alone could justify bail in serious money laundering cases under the Prevention of Money Laundering Act, 2002. The petition, filed by Arvind Dham, former promoter of the Amtek Group of Companies, arose from ECIRs linked to the diversion of over ₹26,000 crores of public funds through Amtek Auto Ltd. and its group companies. The application was moved under Section 483 of the BNSS, 2023, read with Section 45 of the PMLA.

Justice Ravinder Dudeja, sitting as a single-judge bench, dismissed the bail plea, holding that age and health concerns could not outweigh the gravity of the charges. The court emphasized that under Section 45 of the PMLA, bail cannot be granted unless the accused demonstrates reasonable grounds of innocence, which Dham failed to establish. Observing that medical facilities could be provided in custody and that no exceptional circumstances existed, the Court concluded that the magnitude of the fraud and its impact on public banks warranted denial of bail, clarifying that the findings were limited to the bail stage.

AO Not Bound by Municipal Rateable Value, Can Fix Fair Rent Independently u/s 23(1)(a) Income Tax Act: Bombay HC

Tivoli Investment & Trading Co. Pvt. Ltd vs The AssistantCommissioner of Income-tax and another CITATION : 2025 TAXSCAN (HC) 1731

The Bombay High Court examined whether the Assessing Officer is bound to accept the municipal rateable value while determining the annual letting value under Section 23(1)(a) of the Income Tax Act, 1961. The case arose from Tivoli Investment and Trading Company Pvt. Ltd., which had let out an office premises at Sakhar Bhavan, Nariman Point, to Citi Bank at a nominal license fee of ₹9,825 per month, alongside an interest-free security deposit of ₹1.54 crores. For AY 1990-91, the assessee declared only ₹1,17,900 as rental income based on the license fee.

The Division Bench of Justice K.R. Shriram and Justice Neela Gokhale dismissed the assessee’s appeal, holding that municipal rateable value is not binding where it does not reflect fair rent. While clarifying that notional interest on security deposits cannot be directly taxed, the Court noted that the low license fee and high security deposit concealed the true rental yield. It upheld the Assessing Officer’s determination of ₹22,00,000 as fair annual letting value based on comparable rentals, rejecting both the nominal license fee and the municipal valuation as unrepresentative.

Time Extension by Supreme Court During COVID Meant for Litigants, Not Authorities: Andhra Pradesh HC quashes GST Revisional Order

GUPTHAS CONSTRUCTIONS COMPANY vs THE JOINT COMMISSIONER CITATION : 2025 TAXSCAN (HC) 1733

The Andhra Pradesh High Court dealt with whether the GST Department could pass a revisional order beyond the three-year limit under Section 108(2) of the AP GST Act, holding that the Supreme Court’s COVID-19 extension orders applied to litigants, not revenue authorities.

A Division Bench of Justices R. Raghunandan Rao and T.C.D. Sekhar set aside the revisional order dated 15.02.2025 as time-barred, ruling that statutory powers cannot be enlarged by pandemic extensions, and allowed the writ petition without costs.

Cooperative Society’s writ on Status of Cooperative Bank for S.80P Deduction Dismissed: Madras HC Says No Decision Possible without its Presence

Muhavoor Primary Agricultural Cooperative Socieity Ltd vs The AssessmentUnit,Income Tax Department CITATION : 2025 TAXSCAN (HC) 1734

The Madras High Court dealt with a writ appeal filed by Q.837, Muhavoor Primary Agricultural Cooperative Society Ltd., challenging the disallowance of deduction under Section 80P of the Income Tax Act, 1961, on interest earned from investments in the Virudhunagar District Central Cooperative Bank. The legal issue centered on whether the said bank should be treated as a “Cooperative Bank” or a “Cooperative Society” for the purpose of Section 80P(2)(a)(i).

A Division Bench of Justices G.R. Swaminathan and K. Rajasekar dismissed the appeal, holding that no pronouncement could be made on the status of the Virudhunagar District Central Cooperative Bank without it being impleaded as a party.

GST Penalty u/s 122 imposed for Fake Invoice Issuance: Madras HC directs to file Reply on 25% deposit, Quashes Penalty Order

P. G. Metal vs Assistant Commissioner CITATION : 2025 TAXSCAN (HC) 1735

The Madurai Bench of the Madras High Court dealt with a writ petition by P.G. Metal, challenging an assessment order dated 26.02.2025 and a penalty order dated 06.03.2025 under Section 122(1)(vii) of the GST Act. The dispute arose from allegations that the petitioner issued bogus invoices to fraudulently avail and pass on Input Tax Credit (ITC), leading to a penalty of ₹2,00,736/-.

Justice C. Saravanan quashed the penalty, observing that there was no written record of the petitioner’s alleged admission and that principles of natural justice required an opportunity to file a reply to the show cause notice. The Court directed the petitioner to deposit 25% of the disputed tax within thirty days, allowed a reply to be filed treating the penalty order as an addendum, and remanded the matter for a fresh decision on merits within three months.

Non Refund of excess Consent charges paid to BDA: Orissa HC directs to allow Refund based on report of Approved Valuer of Income Tax Dept

Ratnakar Baral vs BBSR Development Authority CITATION : 2025 TAXSCAN (HC) 1737

The Calcutta High Court heard a writ by Ratnakar Baral challenging BDA’s refusal to refund excess consent charges on transfer of a plot. He argued the charges were wrongly computed by including the structure’s value, contrary to BDA’s 2015 order, and relied on Section 72 of the Contract Act and Mafatlal Industries to claim that excess money cannot be retained by the State.

Justice Dixit Krishna Shripad quashed BDA’s order and directed valuation of the plot by an Approved Valuer of the Income Tax Department, with costs on the petitioner. BDA was ordered to refund any excess within two weeks, failing which 1% monthly interest would apply, recoverable from erring officials.

Co-op Society Seeks Unblocking/Defreezing of Fixed Deposits to Pay Income Tax Dues: Uttarakhand HC Leaves Decision to Registrar

GARHWAL SAINIK SAHKARI SAMITI LTD vs SECRETARY DEPARTMENT OF COOPERATIVE STATE OF UTTARAKHAND & OTHERS CITATION : 2025 TAXSCAN (HC) 1738

The Uttarakhand High Court dealt with a writ petition filed by Garhwal Sainik Sahkari Samiti Ltd., a cooperative society for army veterans, seeking unfreezing of its fixed deposits with the District Cooperative Bank to pay Income Tax dues. The petitioner challenged a June 26, 2020 letter restricting funds and sought directions under the Co-operative Societies framework to ensure proper monitoring and prevent misuse.

Justice Manoj Kumar Tiwari held that approval of fund release rested exclusively with the Registrar of Cooperative Societies and the Court could not compel the authority’s discretion. The writ was dismissed with liberty to the petitioner to file a representation before the Registrar within three weeks, to be decided within six months.

IREO MD Lalit Goyal Already Went to US and Returned: Punjab & Haryana HC Dismisses ED’s PMLA Travel-Ban Petition as Infructuous

DIRECTORATE OF ENFORCEMENT vs LALIT GOYAL CITATION : 2025 TAXSCAN (HC) 1739

The Punjab and Haryana High Court dealt with a petition by the Enforcement Directorate (ED) under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, challenging the Special Judge (PMLA), Panchkula’s order permitting Lalit Goyal, Managing Director of IREO and accused under the Prevention of Money Laundering Act, 2002, to travel to the USA for medical treatment.

Justice Manjari Nehru Kaul dismissed the plea as infructuous, noting that Goyal had already travelled abroad and returned. The Court clarified that the earlier safeguards imposed on his travel remain intact, and once the permitted journey is concluded, the ED’s attempt to restrain such travel cannot be sustained.

Issuance of Form ‘C’ for Inter-State Sales: Delhi HC allows Rectification of DVAT Returns but Keeps Relief Suspended Pending SC Appeal

K R ANAND vs COMMISSIONER OF STATE GOODS AND SERVICE TAX CITATION : 2025 TAXSCAN (HC) 1740

The Delhi High Court dealt with the issue of rectification of returns under the Delhi Value Added Tax Act, 2004. The petitioner, Vijay Screw House, filed a writ under Articles 226 and 227 of the Constitution seeking permission to revise DVAT returns for the first quarter of 2013-14 to enable the issuance of statutory Form ‘C’ for inter-State sales, in light of the pending appeal in Ingram Micro India Pvt. Ltd. before the Supreme Court.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain allowed the petitioner to rectify the DVAT returns for 2013-14 and directed that Form ‘C’ be issued accordingly. However, consistent with earlier rulings in similar cases, the Court clarified that the relief would remain suspended until the Supreme Court pronounces judgment in the pending Ingram Micro appeals.

Delhi HC directs Processing of ₹14.10 Lakh GST ITC Refund under Inverted Tax Structure within Three Weeks with Interest

PREM POLYMERS vs SALES TAX OFFICER CLASS II/AVATO CITATION : 2025 TAXSCAN (HC) 1741

The Delhi High Court dealt with a petition filed under Section 54 of the Central Goods and Services Tax (CGST) Act, 2017, concerning the non-processing of a refund claim of ₹14.10 lakh filed by Prem Polymers. The refund was sought for accumulated Input Tax Credit (ITC) due to the inverted tax structure for the period April 2024 through Form GST RFD-01, the prescribed mechanism under the CGST Rules, 2017.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain directed the GST Department to process the refund claim and release ₹14.10 lakh to the petitioner along with applicable interest. The Court further ordered that the refund order be issued within three weeks, thereby disposing of the petition.

GST Refund Cannot Be Withheld u/s 54(11) Without Pending Appeal: Delhi HC Directs Payment with Interest

OMEGA QMS vs COMMISSIONER,CGST, DELHI WEST &ANR CITATION : 2025 TAXSCAN (HC) 1742

The High Court of Delhi dealt with the issue of whether the Department could withhold a GST refund under Section 54(11) of the Central Goods and Services Tax (CGST) Act, 2017, without any pending appeal or proceeding. The petitioner, Omega QMS, had been granted a refund of ₹83,46,169 by the Appellate Authority, but the Department withheld it on the basis of a review order, despite no appeal having been filed.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain held that the Department’s mere intention to appeal could not justify withholding the refund under Section 54(11). Relying on G.S. Industries and Shalender Kumar, the Court directed the release of the refund with applicable interest under Section 56 by 30th September 2025, while clarifying that any future appeal would govern the refund’s final outcome.

Excess Stock calls for Proceedings u/s 73/74 of GST Act: Allahabad HC quashes Order u/s 130

M/S J.T.Steel Traders vs - State Of U.P CITATION : 2025 TAXSCAN (HC) 1743

The Allahabad High Court examined whether the discovery of excess stock during a survey could justify proceedings under Section 130 of the Goods and Services Tax (GST) Act, 2017. The authorities had initiated confiscation and penalty proceedings against M/s J.T. Steel Traders under Section 130 based on “eye measurement” of stock during a survey, despite the fact that Sections 73 and 74 specifically provide for determination of tax not paid, short paid, or wrongfully availed input tax credit in such circumstances.

Justice Piyush Agrawal quashed the penalty orders passed by the Deputy Commissioner (9 January 2020) and the Additional Commissioner (31 May 2022), holding that proceedings under Section 130 were unsustainable in the absence of intent to evade tax. Relying on rulings such as Vijay Trading Company, Shree Om Steels, Metenere Ltd., and Maa Mahamaya Alloys Pvt. Ltd., the Court directed that cases of excess or unaccounted stock must instead be adjudicated under Sections 73 or 74 of the GST Act, reaffirming that Section 130 cannot be stretched to cover mere stock discrepancies.

IGST Refund Pleas Dismissed: Madras HC holds Debit from ECRL is Mandatory Requirement while Filing Refund Application

M/s.Pallava Textiles Private Limited vs The State Tax Officer (ST) CITATION : 2025 TAXSCAN (HC) 1744

The Madras High Court dealt with the issue of refund eligibility under Section 54 of the Central Goods and Services Tax (CGST) Act, 2017, particularly whether refund applications filed without debiting the Electronic Credit Ledger (ECRL) could be sustained. A batch of writ petitions was filed by textile exporters challenging rejection of their Integrated Goods and Services Tax (IGST) refund claims for 2021–2023, which were denied on grounds of non-debit of refund amounts from the ECRL and being barred by limitation.

Justice Krishnan Ramasamy dismissed the writ petitions, holding that debit from the Electronic Credit Ledger is a mandatory statutory requirement and its absence renders refund claims unsustainable. The Court further observed that issues of eligibility and document verification are factual in nature and fall within the appellate authority’s jurisdiction. Accordingly, while rejecting the petitions, the Court granted liberty to the petitioners to file statutory appeals within four weeks, directing that such appeals, if otherwise in order, be entertained.

No Perversity or Bias in Disciplinary Findings Against Commercial Taxes Officer: Madras HC Dismisses Petition

V.Mahendhiran vs The Government Of Tamil Nadu Principal Secretary ToGovernment CITATION : 2025 TAXSCAN (HC) 1760

The Madras High Court dealt with the issue of disciplinary proceedings against a Commercial Taxes officer under service rules, specifically examining whether delay in enquiry, alleged perversity in findings, and proportionality of punishment could warrant judicial interference. The petitioner, V. Mahendhiran, challenged the penalty of stoppage of increment for two years without cumulative effect, imposed for dereliction of duty and insubordination.

Justice C. Kumarappan held that the charges failure to scrutinize 365 returns, refusal to receive a departmental memo, and poor performance in a refresher test stood duly proved. The Court observed that while there was delay in the disciplinary process, no prejudice was shown, and judicial review cannot reappreciate evidence. Concluding that the punishment was neither perverse nor disproportionate, the Court dismissed the writ petition and upheld the penalty.

Fault Lies with Auditor, Not Assessee or GST Dept: Madras HC Quashes Ex Parte Order Passed for Non-Reply

M/s.Siva Cotton vs The State Tax Officer (FAC) CITATION : 2025 TAXSCAN (HC) 1746

The Madras High Court examined the validity of an assessment order under the Goods and Services Tax (GST) Act, passed against M/s Siva Cotton for non-filing of a reply.

Justice Krishnan Ramasamy held that while the tax authority had granted opportunities for compliance, the default stemmed from the auditor’s negligence. The Court observed that the assessee should not suffer for the auditor’s fault, and accordingly set aside the assessment order. The matter was remanded to the State Tax Officer for fresh consideration, subject to the petitioner depositing an additional 15% of the disputed tax within two weeks, over and above the 10% already paid.

₹11 crore GST Evasion case: Jharkhand HC grants Bail considering Prolonged Period of Custody

Kumar Luv Agarwal vs Union of India represented by Shri Saket CITATION : 2025 TAXSCAN (HC) 1747

The High Court of Jharkhand dealt with the question of bail in a Goods and Services Tax (GST) evasion case under Sections 132(1)(b), 132(1)(c), and 132(5) of the Central Goods and Services Tax Act, 2017. The petitioner, Kumar Luv Agarwal, was accused in Complaint Case No. 2933 of 2025 before the Special Judge, Economic Offences, Jamshedpur, for allegedly evading ₹11 crore in GST from the financial year 2021 onwards.

Justice Ambuj Nath, considering the petitioner’s custody of over two months and the maximum punishment of five years prescribed under the Act, granted bail. The Court directed his release on furnishing bail bonds of ₹20,000 with two sureties of the same amount, to the satisfaction of Shri Abhishek Prasad, Special Judge, Economic Offences, Jamshedpur.

Delayed GST ITC Claim: Karnataka HC Holds Reply to SCN Not Necessary when Records available with Dept

M/S. SRI. NANJUNDESHWARA TRADERS vs COMMISSIONER OF COMMERCIAL TAXES CITATION : 2025 TAXSCAN (HC) 1748

The Karnataka High Court held that non-filing of a reply to a show-cause notice cannot by itself justify an adverse GST order if all necessary records are already with the department, as these enable the authority to verify claims independently.

In M/s Sri Nanjundeshwara Traders’ case, the Court quashed an adjudication order disallowing ITC claimed belatedly, ruling that reconciliation of ITC can be based on departmental records without necessarily requiring a taxpayer’s reply, and remanded the matter for fresh consideration.

Income Tax Notice u/s 12AB(4)(a) Unsustainable During Pending Challenge to FCRA Certificate Cancellation: Delhi HC quashes Notice against CHRI

COMMONWEALTH HUMAN RIGHTS INITIATIVE vs COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 1749

The Delhi High Court dealt with the issue of whether the Income Tax Department could invoke Section 12AB(4)(a) of the Income Tax Act, 1961 to cancel the registration of the Commonwealth Human Rights Initiative (CHRI) solely on the ground that its FCRA certificate had been cancelled by the Ministry of Home Affairs.

A Bench of Justice V. Kameswar Rao and Justice Vinod Kumar accepted this contention, holding that the notice issued under Section 12AB was premature while the FCRA cancellation remains sub judice. The Court quashed the impugned notice, while clarifying that the authorities would be at liberty to initiate fresh proceedings depending on the final outcome of the challenge to the FCRA cancellation.

Unaccounted Sales Addition Based on 89% Estimated Yield Found Unsustainable without Evidence: Chhattisgarh HC dismisses Revenue’s Appeal

The Deputy Commissioner of Income Tax vs M/s Abhishek Steel IndustriesLtd CITATION : 2025 TAXSCAN (HC) 1750

The Chhattisgarh High Court examined whether additions under Section 153A r.w.s. 143(3) of the Income Tax Act, 1961 could be sustained when based on an 89% estimated yield without tangible evidence. The case followed a search on Abhishek Steel Industries Ltd., where the AO added ₹11.68 crore alleging suppressed yield, despite no disclosed or proven benchmark.

A Division Bench of Justices Sanjay K. Agrawal and Sachin Singh Rajput upheld the CIT(A) and ITAT’s deletion of the addition, ruling that the AO’s action was conjectural. Citing Dhakeswari Cotton Mills Ltd. v. CIT, the Court dismissed the Revenue’s appeal, holding the assessee’s declared yield—above industry average and backed by excise records—required no interference.

Written Approval with Recorded Reasons by Competent Authority Mandatory for Arrest under CGST Act: Delhi HC

MR. AZAD MALIK vs DGGI, MEERUT ZONAL UNIT CITATION : 2025 TAXSCAN (HC) 1751

The Delhi High Court heard Azad Malik’s anticipatory bail plea under Section 70 of the CGST Act, arising from summons issued during an investigation against M/s Eco Fly E-Waste Recycling Pvt. Ltd., where he was Director. He claimed the summons were harassment, creating apprehension of arrest, and relied on Vinay Kant Ameta and Radhika Agarwal to argue that custodial interrogation was unnecessary.

Justice Dr. Swarana Kanta Sharma held that mere fear of arrest was insufficient under Gurbaksh Singh Sibbia, and since arrest required prior written approval from the competent authority, the application was premature and dismissed.

Income Tax Dept Appeals ITAT Ruling on Clifford Chance’s India Tax Liability in Delhi HC

Clifford Chance PTE Ltd vs ACIT CITATION : 2025 TAXSCAN (HC) 1752

The Income Tax Department has approached the Delhi High Court against ITAT’s ruling in Commissioner of Income Tax vs. Clifford Chance PTE Ltd. (ITA 353/2025 & 354/2025), challenging whether the Singapore arm of the firm had a permanent establishment in India and whether its Indian revenues were taxable under the India-Singapore DTAA.

The two-member ITAT bench of BRR Kumar and Astha Chandra held that Clifford Chance lacked a permanent establishment, as employee presence was below the 90-day DTAA threshold, and struck down tax and interest claims under Section 234B. The matter is now pending before Delhi High Court division bench of Justices V Kameswar Rao and Vinod Kumar.

12% vs 18% GST on Works Contract Executed before 2022: Madras HC Directs Contractor to Submit Evidence before Dept for Re-confirming Demand

V.Janarthanan vs The State Tax Officer CITATION : 2025 TAXSCAN (HC) 1745

The Madurai Bench of the Madras High Court addressed the issue of the applicable GST rate on a works contract executed before the 2022 rate revision. The dispute involved Section 74 of the CGST Act, 2017, where the department raised a demand asserting tax at 18% instead of 12% under Notification No. 03/2022-Central Tax (Rate) dated 13.07.2022, while the petitioner contended that the work was completed in 2020 and only invoiced later to regularize records.

Justice C. Saravanan observed that the key question was whether the work was completed before the notification increasing the GST rate. The Court quashed the impugned order insofar as it related to the higher rate and directed the department to reassess after giving the petitioner an opportunity to submit documentary proof of completion prior to July 2022. The Court allowed the petitioner to challenge any penalty under Section 74 after the fresh assessment.

State GST Officers Authorised to Function as Proper Officers under IGST and CGST: Allahabad HC

Shree Maa Trading Company vs State Of U.P. CITATION : 2025 TAXSCAN (HC) 1753

The Allahabad High Court addressed the authority of officers appointed under the State GST Act to act as proper officers for Integrated GST and Central GST. The case involved writ petitions by Shree Maa Trading Company challenging seizure and penalty orders under Section 129 of the GST Act for goods intercepted in interstate transit. The petitioner argued that the goods were accompanied by proper documents and that State GST authorities lacked jurisdiction without a notification under Section 4 of the IGST Act.

Justice Piyush Agrawal observed that the petitioner failed to produce any supporting documents at the time of detention and that the driver’s explanation was unsubstantiated. The Court held that under Section 4 of the IGST Act, State GST officers are automatically deemed proper officers for IGST and CGST, and the seizure and penalty proceedings under Section 129 were valid. As the transactions were found to be fictitious and ownership of genuine goods was not proven, the writ petitions were dismissed.

Relief to Gujarat Technological University: ITAT Condones Delay in Filing Form 10B, citing Income Tax Portal DifficultiesGujarat Technological University vs The DCIT CITATION : 2025 TAXSCAN (HC) 1754

The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench, addressed the Gujarat Technological University’s claim for exemption under Section 11 of the Income Tax Act, 1961, despite delay in filing Form No. 10 and Form No. 10B. The CPC and CIT(A) had denied the exemption solely on account of this delay, although the assessee had otherwise fulfilled all substantive conditions, was duly registered under Section 12AA, and had filed the forms belatedly with a bona fide explanation citing portal difficulties and professional negligence.

A two-member ITAT bench comprising Suchitra Kamble and Makarand V. Mahadeokar held that the delay was bona fide and should be condoned in the interest of substantial justice. The Tribunal set aside the orders of the CPC and CIT(A) and directed the Assessing Officer to condone the delay and grant the exemption under Section 11, subject to verification of other statutory conditions, which were already satisfied.

Turnover and size have Impact on comparability: Karnataka HC Upholds exclusion of Infosys & TCS Citing size & turnover

THE PR. COMMISSIONER OF INCOME TAX vs ROBERT BOSCH ENGINEERING CITATION : 2025 TAXSCAN (HC) 1755

The Karnataka High Court examined a transfer pricing dispute under Section 92CA of the Income Tax Act, 1961, in Robert Bosch Engineering and Business Solutions Pvt. Ltd. The issue was whether large companies like Infosys BPO and TCS E-Services, with higher turnover and risks, could serve as comparables for a smaller captive service provider in determining Arm’s Length Price (ALP) under TNMM.

The Division Bench of Chief Justice Vibhu Bakhru and Justice C.M. Joshi upheld the ITAT’s exclusion of companies whose software/IT services contributed less than 75% of total revenue, ruling that segment-level financials cannot bypass this filter. The Revenue’s appeal was dismissed, affirming the proper application of comparability standards.

Chhattisgarh HC upholds Jurisdiction of Stamp Collector for Market Value of Immovable Property Transferred under Income Tax Act

Nuvoco Vistas Corporation Limited vs The State Of Chhattisgarh CITATION : 2025 TAXSCAN (HC) 1756

The Chhattisgarh High Court addressed the jurisdiction of the Collector of Stamps under the Income Tax Act, 1961, in determining the market value of immovable property transferred through a deed of conveyance. The issue arose when Nuvoco Vistas Corporation Limited challenged the Collector’s authority after participating in proceedings related to stamp duty assessment under Section 230A of the Act.

The Division Bench of Chief Justice Ramesh Sinha and Justice Bibhu Datta Guru upheld the Single Judge’s order, observing that the petitioner had accepted the Collector’s jurisdiction by cooperating in the enquiry. The Court held that the petitioner could pursue appeals before the Collector, but the writ challenging jurisdiction was impermissible, and dismissed the appeal.

Allegation of using Personal Bank account of Employees for Income Tax Benefit: Gujarat HC dismisses petition to quash FIR

JALDIP JITENDRAKUMAR DAVE vs STATE OF GUJARAT CITATION : 2025 TAXSCAN (HC) 1757

The Gujarat High Court dealt with a petition under Articles 226 and 227 of the Constitution read with Section 528 of the BNSS, 2023, seeking quashing of an FIR (C.R. No.11191042250198/2025) registered at Satellite Police Station, Ahmedabad. The FIR alleged offences under Sections 316(2), 316(4), 318(4), 336(2), 338, 339 and 61(2) of the Bharatiya Nyaya Sanhita, 2023, involving misappropriation of ₹1.64 crore by siphoning company funds, forging signatures, and using employees’ bank accounts for income tax benefits.

Justice Hasmukh D. Suthar dismissed the petition at the admission stage, holding that prima facie offences were made out and the allegations could not be quashed at the initial stage of investigation. The Court emphasized that the role of the judiciary is not to interfere with police powers of investigation and relied on Emperor v. Khwaja Nazir Ahmed to reiterate that statutory rights of investigation must be respected.

Common Area Maintenance Charges Paid to Mall is not Construed as ‘Rent’ for the Purposes of TDS: Delhi HC

COMMISSIONER OF INCOME TAX-TDS-01 vs DIAMOND TREE CITATION : 2025 TAXSCAN (HC) 1758

The Delhi High Court examined whether Common Area Maintenance (CAM) charges paid by tenants to mall owners qualify as “rent” for TDS deduction under Section 194I of the Income Tax Act, 1961.

The Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar upheld the ITAT’s view, relying on Kapoor Watch Company Pvt. Ltd., Connaught Plaza Restaurants Pvt. Ltd. and the High Court’s precedent in CIT (TDS)-1 v. Liberty Retail Revolutions Ltd. (2023). The Court held that CAM charges, being payments for maintenance and upkeep of common facilities, fall under Section 194C as contractual payments and not under Section 194I as rent, thereby relieving the assessee from higher TDS liability.

Imposition of Penalty Without Hearing Violates Principles of Natural Justice: Allahabad HC

M/S Sriram Traders vs State Of U.P CITATION : 2025 TAXSCAN (HC) 1759

The Allahabad High Court at Lucknow dealt with the issue of levy of penalty under Section 125 of the Goods and Services Tax (GST) Act. Sriram Traders, through proprietor Ajay Kumar Gupta, filed a writ petition challenging the penalty order of ₹50,000 dated 20 January 2023.

The single-judge bench of Justice Pankaj Bhatia allowed the writ petition. The Court held that the impugned order, passed without affording the petitioner a hearing, violated the principles of natural justice and could not be sustained. Consequently, the order was quashed, and the matter was remanded to the concerned authority for a fresh decision after providing due opportunity of hearing.

Penalty u/s 125 of GST Cannot Be Levied When Late Fee u/s 47 Already Imposed: Madras HC

Tvl. Sri Ganesh Murugan Modern Rice Mill vs The State Tax Officer CITATION : 2025 TAXSCAN (HC) 1761

The Madras High Court examined whether penalty under Section 125 of the GST Act can be imposed when a late fee under Section 47 is already levied. Tvl. Sri Ganesh Murugan Modern Rice Mill challenged an ex parte assessment order, arguing that only portal notices were issued without physical service and that dual levy of late fee and penalty was impermissible, relying on Tvl. Jainsons Castors & Industrial Products v. Assistant Commissioner (ST), Chennai.

Justice Krishnan Ramasamy set aside the order and remanded the matter for fresh consideration. The Court held that notices were improperly served, directed the petitioner to deposit the late fee within three weeks, required a 14-day hearing notice before fresh orders, and ordered defreezing of the bank account upon payment proof.

2% TDS demand issued against CHA, No Proof Filed for Exemption: Madras grants Final Opportunity

Shri Prasad Shipping Private Limited vs The Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 1762

The Madras High Court granted a final opportunity to a Customs House Agent (CHA) to prove that it was not liable to deduct TDS on reimbursements of ₹4.06 crore incurred on behalf of importers. The Income Tax Department had treated these expenses, including customs duty and freight charges, as the assessee’s income for AY 2016-17 and demanded TDS under Sections 201/201A.

Justice Krishnan Ramasamy set aside the orders and remanded the matter to the Assessing Officer. The Court directed the assessee to submit all supporting records within two weeks and instructed the AO to grant a personal hearing with seven days’ notice before passing a fresh order on merits.

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