Supreme Court & High Courts Weekly Round-Up

This weekly round-up analytically summarises the key stories related to the Supreme Court & High Courts reported at Taxscan.in during the previous week, from September 8, 2025 to September 13, 2025.

Supreme Court

Section 130 of GST Act Cannot Be Invoked for Mere Stock Variations Found in Search: Supreme Court

ADDITIONAL COMMISSIONER GRADE-2 & ANR. vs M/S. DAYAL PRODUCT CITATION : 2025 TAXSCAN (SC) 267

The Supreme Court upheld the Allahabad High Court’s ruling in M/s Dayal Product v. Additional Commissioner Grade-2 & Anr., addressing the legal issue of whether Section130 of the GST Act can be invoked for stock discrepancies detected during a survey. The Court confirmed that mere discrepancies observed through eye estimation without physical verification cannot trigger confiscation proceedings under Section 130, and that any shortfall in tax should be addressed under Sections 73 or 74 of the GST Act.

The bench of Justices Sanjya Kumar and Satish Chandra Sharma dismissed the Special Leave Petition filed by the Additional Commissioner, declining to interfere with the High Court’s judgment. The Court clarified that the dismissal does not prevent the department from pursuing other remedies under the law, reaffirming that confiscation under Section 130 requires more than stock variation detected during a survey.

NCLT Has Jurisdiction to Examine Gift Deed Fraud in Oppression & Mismanagement Cases: Supreme Court

MRS. SHAILJA KRISHNA vs SATORI GLOBAL LIMITED & ORS. CITATION : 2025 TAXSCAN (SC) 268

The Supreme Court of India held that the National Company Law Tribunal (NCLT) has jurisdiction to examine allegations of fraud relating to a gift deed when such allegations form the core of a dispute involving oppression and mismanagement under the Companies Act, 1956, specifically under Sections 397 and 398. The Court emphasized that NCLT’s powers extend to matters incidental to complaints of oppression and mismanagement, including fraudulent or coercive transfer of shares that violate the company’s Articles of Association.

The bench of Justices Dipankar Datta and K. Vinod Chandran restored the NCLT’s 2018 order in favor of Mrs. Shailja Krishna, holding the gift deed and share transfers invalid, and declaring the board meetings of December 2010 conducted illegally. The Court set aside the NCLAT’s 2023 judgment and directed reinstatement of the appellant as director and shareholder, granting all consequential reliefs while parties were ordered to bear their own costs.

Appeals on Breach of Exemption Notification Conditions Lie with HC u/s 130 of Customs Act: Supreme Court

COMMISSIONER OF CENTRAL EXCISE vs M/S LANYARD FOODS LTD CITATION : 2025 TAXSCAN (SC) 269

The Supreme Court of India held that appeals concerning breach of conditions under an exemption notification fall within the jurisdiction of the High Courts under Section 130 of the Customs Act, 1962, and cannot be filed directly before the Supreme Court under Section 130E. The Court emphasized that when disputes are limited to alleged violations of exemption conditions—without involving classification, valuation, or determination of duty rates—Section 130, not Section 130E, governs the maintainability of appeals.

The bench of Justices Manoj Misra and Sandeep Mehta set aside the Karnataka High Court’s earlier order dismissing the Department’s appeals as not maintainable, invoking Article 142 of the Constitution to restore the appeals for adjudication on merits. The Supreme Court clarified that all parties’ contentions remain open before the High Court, and permitted reconstitution of records if previously disposed of or destroyed.

Clandestine Removal Issues not Maintainable u/s 35-L: Supreme Court invokes Extraordinary Jurisdiction, Sets aside HC’s 10 year Old Order

COMMISSIONER OF CENTRAL EXCISE vs M/S. SARAVANA ALLOYS STEEL PVT. LTD CITATION : 2025 TAXSCAN (SC) 270

The Supreme Court of India clarified that appeals concerning clandestine removal of manufactured goods are not maintainable under Section 35-L of the Central Excise Act, 1944. The Court held that disputes relating to clandestine removal or manufacture do not fall within Section 35-L’s ambit, and dismissal of such appeals by the High Court should not leave the appellant without remedy.

The bench of Justices Manoj Misra and Sandeep Mehta invoked their extraordinary powers under Article 142 of the Constitution to set aside the Karnataka High Court’s 2014 order, restoring the matter to its original numbers before the High Court for adjudication on merits. The Supreme Court clarified that all contentions of both parties remain open for consideration, ensuring that the Department and the company can present their cases fully.

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Relief to Confident Projects: Supreme Court dismisses Dept’s appeal against CESTAT Ruling quashing Service tax on Construction of Complex Services for Lack of Merits

COMMISSIONER OF CENTRAL EXCISE BENGALURU SERVICE vs M/S CONFIDENTPROJECTS PVT. LTD CITATION : 2025 TAXSCAN (SC) 271

The Supreme Court of India dismissed the appeal filed by the Department of Central Excise and Service Tax, upholding the CESTAT ruling that Confident Projects Pvt. Ltd. is eligible for the Works Contract (Composition Scheme for payment of Service Tax) Rules, 2007. The Court noted a gross delay of 255 days in filing the appeal and observed that the Department’s challenge to the CESTAT order lacked merit, while keeping the larger question of law open for future consideration.

The bench endorsed the tribunal’s finding that the construction contracts in question were composite works contracts and not liable to be taxed under “Construction of Complex Services.” Relying on precedents like Larsen & Toubro Ltd. vs. State of Karnataka, the Court confirmed that service tax demands for the period October 2007 to June 2012 were unsustainable, dismissing the Department’s appeal and upholding the CESTAT order without any consequential relief.

Challenge regarding S. 24 of PBPT Act: Supreme Court list Matter After Two Weeks

ALISHAN COMPLEX PRIVATE LIMITED vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (SC) 272

The Supreme Court of India has listed a petition challenging provisional attachment orders under Section 24 of the Prohibition of Benami Property Transactions (PBPT) Act, 1988. The petitioners, Alishan Complex Pvt. Ltd. and its Director, argued that the attachment was issued before they could respond to the show cause notice, raising natural justice concerns. They also claimed the property was held in a fiduciary capacity under Section 2(9), and thus not a benami property.

A bench of Justice B.V.Nagarathna and Justice R. Mahadevan listed the matter after two weeks. The Court has not yet ruled on the merits but will examine whether the provisional attachment under Sections 24(3) and (4) complied with statutory requirements and principles of natural justice.

Income Tax Refund of Educational Institution: SC Modifies P&H HC Order by Reducing Appeal Disposal Time from 1 year to 2 months

DALHOUSIE PUBLIC SCHOOL EDUCATIONAL SOCIETY vs UNION OF INDIA CITATION : 2025 TAXSCAN (SC) 273

The Supreme Court of India has addressed an income tax appeal involving a large refund claim by Dalhousie Public School Educational Society. The legal issue concerned the rejection of the society’s refund by the Assistant Commissioner of Income Tax (Exemptions), Chandigarh, and the statutory remedy available under Section 246-A of the Income Tax Act, 1961, relating to appeals against orders passed by income tax authorities.

A bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan modified the earlier Punjab & Haryana High Court order and directed that the appeal be disposed of within two months instead of the originally mandated one year. The Court emphasized that the appellate authority must pass an appropriate order in accordance with law, noting that further delay could cause undue hardship to the educational institution.

Classification of Imported Personnel Carrier Mining Service Vehicle and Dump Truck for Customs Duty: SC to Hear Matter

COMMISSIONER OF CUSTOMS vs M/S MAHESHWARI MINING PVT. LTD CITATION : 2025 TAXSCAN (SC) 274

The Supreme Court of India has admitted an appeal filed by the Commissioner of Customs (Port) against the order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata, which had quashed a duty demand on Maheshwari Mining Pvt. Ltd relating to the classification of imported underground mining vehicles. The dispute concerns the proper Customs Tariff Headings (CTH) under which specialized underground mining equipment, including personnel carriers and dump trucks, should be classified, with implications under the Customs Act, 1962 for duty liability.

A bench comprising Justice J.B. Pardiwala and Justice K.V. Viswanathan condoned the delay in filing, allowed the exemption application, and admitted the department’s appeal. The apex court will now determine the correct tariff classification of these purpose-built underground mining vehicles, which were previously treated by CESTAT as off-road mining machinery under Chapter 84, quashing the department’s demand of ₹3.60 crore in differential duty. The next hearing date is yet to be scheduled.

Supreme Court Defers Verdict on Vodafone’s ₹191 Crore Income Tax Deduction Claim u/s 80IA

ASSISTANT COMMISSIONER OF INCOME TAX vs VODAFONE ESSAR GUJARAT LIMITED CITATION : 2025 TAXSCAN (SC) 275

The Supreme Court of India deferred the disposal of a dispute between the Income Tax Department and Vodafone Essar Gujarat Ltd. over a claim of ₹191.59 crore under Section 80IA of the Income Tax Act, 1961. The issue involves whether deductions can be claimed despite shareholding changes under Section 79, with the Gujarat High Court holding that Section 80IA(5) cannot ignore lapsed losses.

The matter was listed before Justice Dipankar Datta and Justice Augustine George Masih, who granted the Revenue two weeks to file a rejoinder and re-listed the petition after three weeks. The Supreme Court is examining the correctness of ITAT and lower authorities’ disallowance of Vodafone’s claim in light of the High Court’s judgment.

Supreme Court refused to condone 431 Days Delay in filing Customs Appeal

COMMISSIONER OF CUSTOMS (PORT) vs M/S. TWINKLE TRADECOM PRIVATE LIMITED CITATION : 2025 TAXSCAN (SC) 276

The Supreme Court of India dismissed the appeal filed by the Department against M/s Twinkle Tradecom (P) Ltd., arising from the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), East Zonal Bench, Kolkata, regarding the classification of imported goods as “Electric Tricycle Spare Parts” under CTH 8708.99.00. The Department alleged that the consignments were e-rickshaws in CKD condition and sought confiscation under Sections 111(m), 112(a)(ii), and 125 of the Customs Act, 1962.

A two-judge bench of Justice Pankaj Mithal and Justice Prasanna B. Varale upheld the CESTAT order, noting that the imported goods were correctly classified as spare parts and not complete vehicles. The Tribunal’s ruling set aside the re-assessed duty, confiscation, redemption fine, and penalties imposed by the lower authorities, dismissing the Department’s appeal on grounds of delay and lack of merit.

Relief to Plight of individual homebuyers, who invest life savings to secure Home: Supreme Court allows appeal under IBC, Directs to hand over possession

AMIT NEHRA vs PAWAN KUMAR GARG CITATION : 2025 TAXSCAN (SC) 277

The Supreme Court of India dealt with the legal issue of homebuyers’ claims under the Insolvency and Bankruptcy Code, 2016 (IBC), Section 62, concerning possession of apartments in a real estate project during a Corporate Insolvency Resolution Process (CIRP). The dispute arose from M/s Puma Realtors Private Limited’s failure to deliver possession to bona fide homebuyers, Amit Nehra & Anr, despite their claim being verified, admitted, and included in the list of financial creditors.

A two-judge bench of Justices Sanjay Kumar and Satish Chandra Sharma set aside the orders of the NCLT and NCLAT, observing that once a claim is verified and admitted by the Resolution Professional, it acquires full legal recognition. The Court directed the respondents to execute the conveyance deed and hand over possession of the allotted apartment to the appellants within two months, highlighting the hardship caused to individual homebuyers who had paid nearly the entire sale consideration years in advance.

High Court

Setback to SICPA: Sikkim HC’s Division Bench Overturns Single Bench Ruling on Refund of Unutilised ITC for Closed Business

Union of India vs SICPA IndiaPrivate Limited CITATION : 2025 TAXSCAN (HC) 1773

The Sikkim High Court addressed whether refund of unutilised Input Tax Credit (ITC) can be claimed on closure of business under the CGST Act, 2017. SICPA India Pvt. Ltd. sought refund of ₹4.37 crore under Section 49(6) read with Section 54(3) after discontinuing its operations, but the issue turned on whether such refund is permissible beyond the two scenarios expressly provided in Section 54(3).

The Division Bench of Chief Justice Biswanath Somadder and Justice Bhaskar Raj Pradhan set aside the Single Judge’s order, holding that refund is a statutory right limited strictly to the two conditions under Section 54(3). Relying on Union of India v. VKC Footsteps, the Court held that granting refund on closure would be judicial rewriting, and since SICPA failed to show proof of credit reversal under Section 29(5), the Union’s appeal was allowed.

Delhi HC Grants Conditional Release of Artwork “The Scarecrow” on ₹2 Lakh Deposit and ₹30,000 Redemption Fee

UDAY JAIN & ANR. vsADDITIONAL COMMISSIONER CUSTOMS AIR CARGO AND IMPORT & ANR CITATION : 2025 TAXSCAN (HC) 1774

The Delhi High Court examined the confiscation and valuation of “The Scarecrow” by late Shri B.C. Sanyal under the Customs Act, 1962. Uday Jain & Anr. challenged the Commissioner’s order reclassifying the artwork, revising its value to ₹30 lakhs, ordering confiscation under Section 111(m), and imposing heavy duty demands and penalties.

The Bench of Justice Prathiba M. Singh and Justice Shail Jain ordered conditional release of the artwork to avoid damage, directing the petitioner to deposit ₹2 lakhs towards duty and ₹30,000 as redemption fee under Section 125. The release was made subject to further proceedings, with the Customs Department allowed to file its counter affidavit before the next hearing.

Madras HC Allows Passport Renewal of Person Accused of Customs Act Offences noting Employment in UAE

M.Sathish Babu vs Union of IndiaCITATION : 2025 TAXSCAN (HC) 1775

The Madras High Court dealt with the issue of passport renewal for M. Sathish Babu, accused under Sections 132 and 135 of the Customs Act, 1962 read with Section 120B IPC. His renewal application was kept pending due to ongoing criminal proceedings before the Additional Chief Metropolitan Magistrate, EO-II, Chennai, where a non-bailable warrant had been issued against him.

The Bench of Justice N. Anand Venkatesh allowed renewal of the passport subject to strict conditions. The petitioner was directed to file an affidavit undertaking to return to India, surrender before the magistrate on 5 November 2025, and cooperate in early disposal of the case. The Court further ordered communication of its directions to the Consulate General in the UAE and mandated that the petitioner must seek permission from the jurisdictional court for any future travel outside India.

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Delhi HC Refuses to Interfere with Customs Order on Provisional Release of Tempered Glass Labeled ‘Made in China’

SONARAM BAGADARAM MALI vs THECOMMISSIONER OF CUSTOM & ORS. CITATION : 2025 TAXSCAN (HC) 1776

The Delhi High Court heard Sonaram Bagadaram Mali’s challenge to the Customs Department’s seizure of tempered glass labeled “Made in China” from Karol Bagh. He claimed the goods were locally purchased, but Customs treated them as illegally imported, valued them at ₹56 lakhs, and ordered provisional release against bonds and a bank guarantee under the Customs Act, 1962.

The Bench of Justice Prathiba M. Singh and Justice Shail Jain declined to interfere, citing lack of invoices and misleading foreign labels, but allowed the petitioner to join the investigation and seek remedies under Section 128 of the Customs Act. It clarified that its observations would not affect the case’s final merits.

Draft Assessment Order Mandatory u/s 144C of Income Tax Act for ALP Variation : Karnataka HC Upholds ITAT Decision Declaring Order Void

THE PR. COMMISSIONER OF INCOMETAX vs M/S. ALPHA ELSEC DEFENCE AND AEROSPACE SYSTEMS PVT. LTD CITATION : 2025 TAXSCAN (HC) 1777

The High Court of Karnataka considered whether a draft assessment order under Section 144C(1) of the Income-tax Act, 1961 is mandatory when the Transfer Pricing Officer (TPO) re-determines the Arm’s Length Price (ALP). The dispute arose in Alpha Elsec Defence & Aerospace Systems Pvt. Ltd. (AY 2010–11) after the TPO adjusted ALP and the Assessing Officer passed an order dated 22.11.2016 giving effect to that variation.

The Bench of Justice S.G. Pandit and Justice K.V. Aravind upheld the ITAT and held the AO’s order dated 22.11.2016 void ab initio for failure to issue the mandatory draft assessment order where there was a variation in ALP. The Court rejected Revenue’s plea that no draft was necessary, and dismissed the appeal.

Rejection of Time-Barred 80G Registration Application: Karnataka HC Upholds ITAT’s Remand Order Considering CBDT’s Extended Deadline

THE COMMISSIONER OF INCOME TAXvs CSP FOUNDATION CITATION : 2025 TAXSCAN (HC) 1778

The Karnataka High Court examined whether the assessee could seek Section 80G registration despite an earlier rejection as time-barred under the Income-tax Act, 1961. CSP Foundation, a charitable trust registered under Section 12A, had filed Form 10AB on 22.11.2023, which the Commissioner of Income Tax (Exemptions) rejected as delayed. The ITAT Bengaluru remanded the matter after noting the CBDT press release and Circular No. 7/2024 dated 25.04.2024, which extended the deadline to 30.06.2024.

The Bench of Justice S.G. Pandit and Justice K.V. Aravind upheld the ITAT’s order, holding that the CBDT’s circular permitted filing afresh despite earlier rejection. It ruled that the Tribunal was correct in remanding the matter for reconsideration and dismissed the Revenue’s appeal.

Miss One Instalment, Pay Full GST Dues: Uttarakhand HC Allows Taxpayer to Seek Instalment Relief u/s 80

M/S Suraj Enterprises vsAssistant Commissioner CITATION : 2025 TAXSCAN (HC) 1779

The Uttarakhand High Court held that taxpayers may seek instalment relief under Section 80 of the GST Act, 2017, and barred coercive action until the authority’s decision. Suraj Enterprises, a garment firm, challenged a penalty order and demand notice of ₹17.21 lakh, citing financial hardship and seeking payment in instalments.

The Bench of Chief Justice G. Narendar and Justice Subhash Upadhyay directed that if the petitioner applies under Section 80 within ten days, the Commissioner must decide within two weeks, during which no recovery action shall be taken; otherwise, the department may proceed as per law.

Foreign Cigarette Seizure by DRI: Gauhati High Court Grants Anticipatory Bail to Vehicle Owner

SAYAD ALI LASKAR vs THE UNION OFINDIA CITATION : 2025 TAXSCAN (HC) 1780

The Gauhati High Court granted anticipatory bail to Sayad Ali Laskar, owner of a truck seized by the DRI for allegedly carrying foreign cigarettes. He argued that offences under the Customs Act do not exceed seven years’ punishment, making custodial interrogation unnecessary.

Justice Mridul Kumar Kalita noted the limited punishment and directed that bail be granted on a ₹30,000 bond, subject to cooperation with the investigation, non-interference with witnesses, and appearance before the DRI within ten days.

GST Dept Prima Facie Cannot Reconfirm Dropped SCN Demands After Remand: Delhi HC Directs CESTAT to Examine Validity

M/S AHLCONS INDIA PRIVATELIMITED vs PRINCIPAL COMMISSIONER CITATION : 2025 TAXSCAN (HC) 1781

The Delhi High Court held that the GST Department cannot revive demands dropped in earlier adjudication unless specifically challenged or remanded. Ahlcons India Pvt. Ltd. challenged a 2025 order that reconfirmed such demands despite CESTAT remanding the case only on limited issues like mobilisation advance and service classification.

The Bench of Justices Prathiba M. Singh and Shail Jain ruled that reopening settled demands exceeded the scope of remand and noted the six-year delay in adjudication. It allowed the petitioner to pursue remedies before CESTAT without further pre-deposit on dropped demands, permitting adjustment of prior deposits, and directed CESTAT to decide the case on merits.

Madras HC Dismisses Plea of Meat Exporter attempting to Ship Prohibited Meat to UAE, Allegations of Sampling without Presence Rejected

M/s Minha And Riza Agro vs JointCommissioner Of Customs IV CITATION : 2025 TAXSCAN (HC) 1782

The Madras High Court dismissed a writ petition by a meat exporter challenging Customs proceedings after consignments declared as buffalo meat for export to the UAE were found, on testing, to be prohibited ox/bull meat. The petitioner argued sampling was invalid under Section 144 of the Customs Act and sought immediate release of perishable goods.

Justice N. Anand Venkatesh upheld confiscation and penalty, holding no error warranting writ interference. The Court noted that statutory appeal before the Commissioner of Customs was the proper remedy, while allowing the exporter to apply separately for release of seized goods for consideration on merits.

Electricity Supplied to Township Not in ‘Course or Furtherance of Business’ u/s 16(1), No ITC Allowed: Chhattisgarh HC

Bharat Aluminium Company Limitedvs State of Chhattisgarh CITATION : 2025 TAXSCAN (HC) 1783

The Chhattisgarh High Court held that electricity supplied by BALCO to its employee township was not “in the course or furtherance of business” under Section 16(1) of the CGST Act, 2017, thereby disallowing ITC on coal used for that portion. BALCO’s claim for refund of ₹40.14 lakh was rejected on the ground that township supply was a welfare activity, not business-related.

Justice Sanjay K. Agrawal ruled that ITC is a concession subject to strict conditions and township electricity supply could not qualify as business use. The Court also held that Explanation 1(d) to Rule 43 of the CGST Rules was prospective from 5 July 2022, not retrospective, and dismissed BALCO’s writ petitions upholding the ITC reversal.

S. 173(5) Cr.P.C. Not Applicable to Central Excise Prosecution Based on Private Complaint: Madras HC

M/s.Sree Aravind Steels Limitedvs The Assistant Commissioner CITATION : 2025 TAXSCAN (HC) 1784

The Madurai Bench of the Madras High Court ruled that Section 173(5) Cr.P.C., which applies to police report cases, cannot be invoked in excise prosecutions launched through private complaints. The case involved Sree Aravind Steels Ltd., where prosecution was based on a 2005 adjudication order later quashed by CESTAT, with a fresh 2023 order sought to be introduced without new sanction.

Justices G.R. Swaminathan and P.B. Balaji held that the 2006 sanction, tied to the quashed 2005 order, could not support prosecution on the basis of the 2023 adjudication. The Court set aside the CJM’s order allowing the 2023 order to be marked, holding that fresh sanction was necessary, while permitting the department to restart prosecution after obtaining it.

GST Dept Must issue Separate Notices for Each Financial Year: Madras HC Strikes Down Bunched Notices for 2018-2024

M/S.KAL Media Services Pvt Ltdvs The Joint Commissioner Of Central Taxes CITATION : 2025 TAXSCAN (HC) 1785

The Madras High Court held that the GST Department cannot issue consolidated show cause notices covering multiple financial years, as each year must be treated as a separate “tax period” under the GST Act. The ruling came in a petition by M/s. KAL Media Services Pvt Ltd challenging notices that clubbed six years (2018–2024) into one proceeding.

Justice Krishnan Ramasamy ruled that such “bunched” notices are without jurisdiction and liable to be quashed. The Court struck down the impugned notices but allowed the Department to initiate fresh proceedings for each financial year separately, subject to limitation.

Delhi HC restricts reinstating Suspension of CBL due to violation of CBLR citing Principle of Proportionality

COMMISSIONER OF CUSTOMS vs M/SJAISWAL IMPORT CARGO SERVICES LTD CITATION : 2025 TAXSCAN (HC) 1786

The Delhi High Court applied the principle of proportionality to restrict the suspension of M/s Jaiswal Import Cargo Services Ltd.’s Customs Broker License, noting that the broker had already suffered business loss for 13 months. The license had been revoked for alleged violations of the Customs Brokers Licensing Regulations, 2018 (CBLR), after cosmetic imports were diverted to the local market instead of bonded storage. While the Department alleged complicity, the CESTAT had earlier set aside the revocation, holding that the broker had duly verified the importer’s KYC documents and was not responsible for the diversion.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain held that, though brokers carry significant responsibility under CBLR 2018, the 13-month suspension already served was sufficient punishment. Accepting the respondent’s offer to contribute ₹4 lakh for a good cause, the Court ruled that the suspension period, coupled with this payment, would conclude the proceedings, and declined to reinstate the revocation.

Section 12B of Central Excise Act and Rule 7 in applicable when Provisional assessment is made: Karnataka HC upholds CESTAT ruling in favour of J K Tyre Industries

THE COMMISSIONER OF CENTRALEXCISE vs M/S. J K TYRE INDUSTRIES LTD CITATION : 2025 TAXSCAN (HC) 1787

The Karnataka High Court dealt with appeals filed by the Revenue under Section 35G of the Central Excise Act, 1944, challenging the final order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), South Zonal Bench, Bengaluru. The legal issue revolved around whether Section 12B of the Central Excise Act, 1944, and Rule 7 of the Central Excise Rules, 2002, are applicable in cases of provisional assessment where goods are cleared to depots and adjustments for short-paid or excess duty are claimed by the assessee.

The Division Bench comprising Justice S.G. Pandit and Justice K.V. Aravind upheld the CESTAT ruling in favour of J K Tyre Industries Ltd., holding that Section 12B and Rule 7 are not applicable in provisional assessments. The Court noted that the substantial questions of law had already been settled in CEA No.39/2018, and found no reason to take a different view. Consequently, all appeals filed by the Revenue were dismissed.

Karnataka HC upholds ITAT ruling Classifying Toyota Tsusho India Pvt ltd as Not a Wholesale Trader

PR. COMMISSIONER OF INCOME TAX-2vs TOYOTA TSUSHO INDIA PRIVATE LIMITED CITATION : 2025 TAXSCAN (HC) 1788

The Karnataka High Court, under Section 260-A of the Income Tax Act, 1961, addressed whether Toyota Tsusho India Pvt Ltd could be classified as a “wholesale trader” under CBDT Notification dated 29.10.2015, affecting the tolerance range for transfer pricing adjustments under Section 92C(2). The Court examined if the assessee met both conditions for wholesale trading—80% purchase cost of total trading costs and average monthly inventory ≤10% of sales.

The Division Bench of Chief Justice Vibhu Bakhru and Justice C.M. Joshi upheld the ITAT ruling, finding the assessee did not meet the wholesale trading criteria. The Court concluded the matter was fact-specific with no substantial question of law and dismissed the appeal.

COVID, Health Ailment, Fire Causes Delay in Filing GSTR-3B: Madras HC allows Dealer’s GST ITC citing Prior Ruling

News Logistix vs SuperintendentOf Gst And Central Excise CITATION : 2025 TAXSCAN (HC) 1789

The Madras High Court addressed the legality of reversing Input Tax Credit (ITC) under Section 16 of the CGST Act, 2017, for delayed filing of GSTR-3B returns. The petitioner, News Logistix, challenged the Superintendent of GST and Central Excise’s order denying ITC on the ground of delayed filing, invoking hardships such as COVID-19 and other genuine difficulties.

The Bench of Justice Krishnan Ramasamy relied on earlier precedents and legislative amendments, including Section 16(5) inserted by Finance Act (No.2) of 2024, allowing retrospective ITC claims. The Court quashed the impugned order to the extent it barred ITC based on limitation, directed de-freezing of bank accounts, and permitted refund or utilisation of collected amounts, while leaving room for departmental action in cases of wrongful claims.

Madras HC Restores Hyundai-Mobis’ Appeal before CESTAT: Condones 145-Day Delay due to Employee’s Chickenpox Leave

M/s. Mobis India Limited vs ThePrincipal Commissioner of Customs CITATION : 2025 TAXSCAN (HC) 1790

The Madras High Court considered a delay in filing an appeal under Section 129A of the Customs Act, 1962 by Mobis India Limited, a subsidiary of Hyundai. The company had filed its appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) 145 days after the prescribed deadline, due to the misplacement of the order and the prolonged medical leave of the responsible employee.

The Bench of Justice Dr. Anita Sumanth and Justice N. Senthilkumar held that the delay was neither deliberate nor mala fide and arose from circumstances beyond the company’s control. The Court set aside the Tribunal’s order refusing condonation of delay and restored the appeal before CESTAT, fixing 3 September 2025 as the first hearing date, without requiring fresh notice to the petitioner.

GST Payers Entitled to avail ITC for FYs 2017-18 to 2020-21 on GSTR-3B Filed on or before 30.11.2021: Madras HC

Power Builders vs SuperintendentOf Gst And Central Excise CITATION : 2025 TAXSCAN (HC) 1791

The Madras High Court addressed the entitlement of registered taxpayers to claim Input Tax Credit (ITC) under Section 16(4) of the CGST Act, 2017, for financial years 2017-18 to 2020-21. The issue arose where the petitioner, Power Builders, had their ITC claim denied on the ground of delayed filing of GSTR-3B returns, and the assessment order also imposed tax, interest, and penalty.

Justice Krishnan Ramasamy held that the denial of ITC on limitation grounds was unsustainable in view of retrospective insertion of Section 16(5) by the Finance Act (No.2) of 2024, supported by CBIC notifications and circulars. The Court quashed the assessment order insofar as it related to limitation, barred the Department from recovery on this basis, directed defreezing of bank accounts if frozen, and permitted refund or re-credit of amounts to the petitioner’s cash/credit ledgers. The Department retains the right to act only in cases of wrong or fake ITC claims.

GST Liability on Construction of Mauritius Supreme Court: Madras HC Dismisses Writ as Premature, Directs to File Reply

M/s.Renaatus Projects PrivateLimited vs The Joint Director CITATION : 2025 TAXSCAN (HC) 1792

The Madras High Court addressed the issue of whether a writ petition could be entertained to quash a show cause notice (SCN) issued under the IGST Act, 2017, for a project executed entirely in Mauritius. The petitioner, Renaatus Projects, contended that the SCN demanding GST on the construction of the new Supreme Court building at Port Louis was beyond the territorial and legal jurisdiction of Indian authorities.

Justice Krishnan Ramasamy held that the petition was premature, emphasizing that the proper course is for the assessee to file a detailed reply with supporting documents before the authorities. The Court dismissed the writ petition but granted liberty to the petitioner to submit its reply within 30 days and directed the Department to consider it on merits and decide in accordance with law.

GST Appeal Filed with 150-Day Delay: Madras HC Condones Delay Subject to Additional 5% Deposit with 10%

Simon Sagayaraju vs AssistantCommissioner CITATION : 2025 TAXSCAN (HC) 1793

The Madras High Court addressed the condonation of delay in filing an appeal under the GST Act, specifically concerning an assessment order under Section 73 of the CGST/TNGST Act for FY 2018-19. The petitioner, Simon Sagayaraju of Tvl. Euphoria Green Technologies, sought relief for a 150-day delay in filing the appeal due to severe medical reasons.

Justice Krishnan Ramasamy held that the delay was genuine and bona fide, condoning it on the condition that the petitioner deposit an additional 5% of the disputed tax (over and above the statutory 10% pre-deposit). The Court set aside the rejection order and directed the appellate authority to admit and dispose of the appeal on merits, after granting the petitioner an opportunity of hearing.

Reversal of ITC u/s 19(2)(v) TNVAT Act: Madras HC upholds Single bench’s Order Quashing Assessment, Limits Revival of Assessment Post- SC Decision

The Commercial Tax Officer vsMudhra Fine Blanc Private Limited CITATION : 2025 TAXSCAN (HC) 1794

The Madras High Court addressed the reversal of Input Tax Credit (ITC) under Section 19(2)(v) of the Tamil Nadu Value Added Tax Act, 2006. The State challenged the quashing of an assessment order against Mudhra Fine Blanc Private Limited, concerning disallowance of ITC by the assessing authority. The legal issue pertained to whether the assessment could be sustained or must follow the binding precedent set in The State of Tamil Nadu v. M/s. Everest Industries Limited (2022).

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The Division Bench of Justices M. Subramiam and C. Saravanan dismissed the State’s appeal, upholding the single bench’s order to quash the assessment. The Court held that revival of the assessment is contingent on the Supreme Court’s decision on Everest Industries, and any revival by the assessing authority must be completed within four weeks of the Supreme Court’s judgment, failing which the opportunity would lapse.

Air Curtains Not Electrical Fans: Madras HC upholds 12% Sales Tax Levy, dismisses Petition of Almonard Limited

M/s.Almonard Limited vsCommercial Tax Officer CITATION : 2025 TAXSCAN (HC) 1795

The Madras High Court addressed writ petitions challenging the higher sales tax levy on air curtains under the Tamil Nadu General Sales Tax Act, 1959. The legal issue concerned whether air curtains should be classified as “electrical fans” taxable at 8% under Entry 17 of Part C, or as “electrical instruments, apparatus and appliances of all kinds” taxable at 12% under Entry 22 of Part DD of the First Schedule.

The Division Bench of Justices M. Subramaniam and C. Saravanan upheld the Tamil Nadu Sales Tax Appellate Tribunal’s decision, dismissing the petitions. The Court observed that air curtains are specialized equipment designed for environmental separation, energy conservation, and handling conditioned air, distinguishing them from ordinary fans. Consequently, the 12% sales tax levy was confirmed on the petitioner’s turnover of ₹8,44,370/-, and both writ petitions were dismissed without costs.

Failure to Disclose Acquisition of Family Property: Madras HC Sets Aside CAT Order Granting Notional Promotion to Customs Officer

Union of India vs V.Kannathasan CITATION : 2025 TAXSCAN (HC) 1796

The Madras High Court addressed the legality of an order by the Central Administrative Tribunal (CAT), Chennai Bench, which had quashed disciplinary proceedings and granted notional promotions to a senior Customs officer. The issue concerned whether the Tribunal had the jurisdiction to interfere with ongoing departmental disciplinary proceedings under Rule 18 of the Central Civil Services (Conduct) Rules, 1964, and Rule 15(1) of the CCS (CCA) Rules, 1965, before their natural conclusion.

The Division Bench of Justices M.S. Ramesh and V. Lakshminarayanan set aside the CAT’s order, holding that the Tribunal had overstepped its jurisdiction. The Court directed the disciplinary authorities to complete the proceedings within three months, taking into account the CBI acquittal and relevant Central Vigilance Commission guidelines. It further clarified that if the officer is ultimately exonerated, he shall be granted notional promotions and retirement benefits without the need to re-approach the Tribunal.

Delhi HC Upholds Exception u/s 40A of Income Tax Act in favour of Mitsubishi Corporation

PRINCIPAL COMMISSIONER OF INCOMETAX - 4 DELHI vs MITSUBISHI CORPORATION (INDIA) PVT LTD CITATION : 2025 TAXSCAN (HC) 1797

The Delhi High Court addressed an appeal under Section 260A of the Income Tax Act, 1961, challenging the ITAT’s order on disallowance of certain expenditures under Section 40(a)(i) of the Act for Assessment Year 2016-17. The issue concerned whether payments made by Mitsubishi Corporation (India) Pvt Ltd to its group companies without tax deduction at source (TDS) could be disallowed, particularly when such payments were made to resident vendors and subject to double taxation avoidance agreements (DTAAs).

The Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar upheld the ITAT’s ruling in favour of the assessee, Mitsubishi Corporation (India) Pvt Ltd. Observing that the substantial questions of law did not arise, the Court dismissed the Revenue’s appeal, noting that the payments made for purchases to resident vendors were not liable for disallowance under Section 40(a)(i) prior to the 2015 amendment and that the issue was covered by the earlier majority view in Commissioner of Income Tax II vs. Mitsubishi Corporation (India) Pvt. Ltd., ITA 180/2014.

Income Tax Deduction claim of Employees Contribution to PF or ESI is allowable only if deposited on or before statutory due date under ESI/PF Act: Delhi HC

WOODLAND (AERO CLUB) PRIVATELIMITED vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 1798

The Delhi High Court dealt with the allowability of employee contributions to PF, ESI, and Labour Welfare Fund under Section 36(1)(va) of the Income Tax Act, 1961. The issue was whether contributions deposited after the statutory due date but before filing the return for AY 2019-20 could be claimed as a deduction.

A Division Bench of Justices V. Kameswar Rao and Vinod Kumar held that such delayed contributions are not deductible, reaffirming the Checkmate Services (P) Ltd. ruling. The Court upheld the ITAT’s disallowance and dismissed the assessee’s appeal, noting Section 143(1) adjustments apply only to claims apparent from the return.

Relief for Pidilite: Madhya Pradesh HC Classifies Steel Grip Insulating Tape as ‘Insulator’, Taxable at 5%

M/S PIDILITE INDUSTRIES LTD vsTHE COMMISSIONER OF COMMERCIAL TAX CITATION : 2025 TAXSCAN (HC) 1799

The Madhya Pradesh High Court addressed the classification of Steel Grip Insulating Tape manufactured by Pidilite Industries Ltd. under the MP VAT Act. The legal issue concerned whether the product should be taxed under Entry 50, Part II, Schedule II as an “insulator” (4–5% tax) or under the residuary entry of Part IV, Schedule II (12.5–13%), with the petitioner challenging retrospective application of the higher tax.

A Division Bench of Justices Vivek Rusia and Binod Kumar Dwivedi held that the tape’s primary function is insulation, with adhesive properties being secondary. The Court set aside the Commissioner’s order, ruling that the specific entry for insulators prevails over the residuary entry, and allowed the writ petition, applying the lower tax rate of 5% in favor of the assessee.

SCNs, Appeals and Non-Finalised Orders under Repealed GST Rules 89(4B) & 96(10) Cannot Survive after its Omission: Bombay HC

Hikal Limited vs Union of India CITATION : 2025 TAXSCAN (HC) 1800

The Bombay High Court addressed the legal issue of the effect of omission of Rules 89(4B) and 96(10) of the CGST Rules on pending proceedings. The Court examined whether pending show cause notices, adjudication orders, or appeals based solely on these rules could survive after their repeal without a savings clause, in light of Section 6 of the General Clauses Act and provisions under the CGST Act.

The bench of Justices Jitendra Jain and M.S. Sonak held that, in the absence of any express savings clause, the omission of the rules rendered all pending proceedings lapsed, except for “transactions past and closed.” Relying on precedents such as Rayala Corporation and Kolhapur Cane Sugar Works, the Court clarified that Section 6 of the General Clauses Act does not apply to rules made under delegated legislation. The petitions were allowed to the extent of quashing pending proceedings, and refund applications rejected solely under the omitted rules were directed to be reconsidered on merits.

GSTR-9 cannot be Filed after 3 Years from Due Date to File Returns: Madras HC Dismisses Challenge against Late Fee

M/s.New Shivsakthi Traders vsThe Assistant Commissioner (ST) CITATION : 2025 TAXSCAN (HC) 1801

The Madurai Bench of the Madras High Court dealt with a writ petition challenging the imposition of late fees under Section 47(2) of the Tamil Nadu GST Act, 2017 for non-filing of the annual return in Form GSTR-9 for FY 2021-22. The petitioner, M/s New Shivsakthi Traders, contended that the notice was issued without following Form GSTR-3A under Section 46 and Rule 68, and that the Circular No.129/19-GST vitiated the legitimacy of the fee.

Justice C. Saravanan held that Section 44(2) bars filing of annual returns beyond three years, making the petitioner liable for the late fee regardless of the procedural objections. The Court observed that Section 47(2) prescribes ₹100 per day (capped at 0.25% of turnover) and dismissed the petition, confirming the penalty and related proceedings.

2002.26 gm Gold Bar Smuggling Case: Manipur HC dismisses Revenue's appeal as Value falls Below Threshold Limit of Rs. 1 Cr

The Commissioner of Customs vsShri R.K. Swami Singh CITATION : 2025 TAXSCAN (HC) 1802

The High Court of Manipur dealt with the legal issue of whether an appeal filed by the Revenue against the confiscation of 2002.26 grams of gold could be maintained, considering the monetary threshold prescribed under the Ministry of Finance Instruction dated 02.11.2023. The case concerned alleged smuggling under Sections 110, 111(b)(d), and 112(b)(ii) of the Customs Act, 1962, with total value of the seized gold and imposed penalty amounting to less than ₹1 crore.

The bench of Chief Justice K. Somashekar and Justice A. Guneshwar Sharma held that since the total value of the gold bars (₹49,74,605) plus penalty (₹10,00,000) fell below the ₹1 crore threshold for filing an appeal before the High Court, the Revenue’s appeal was not maintainable. The Court dismissed the appeal on this ground, reaffirming the applicability of the financial limits prescribed for appeals in customs matters and noting that smuggled goods are not covered under exceptions allowing appeals irrespective of monetary thresholds.

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