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 14, 2025 to September 20, 2025.

Supreme Court

Speculative participants driven by profit Motives cannot be Permitted to Misuse IBC Provisions: SC Directs Center to Create Revival Fund for Stressed Real Estate Projects

MANSI BRAR FERNANDES vs SHUBHASHARMA AND ANR. CITATION : 2025 TAXSCAN (SC) 278

The Supreme Court of India examined the misuse of Section 7 of the Insolvency and Bankruptcy Code, 2016 by speculative investors in real estate projects. The appellants, including Mansi Brar Fernandes, had filed insolvency proceedings against Gayatri Infra Planner Pvt. Ltd. before the NCLT, claiming rights as homebuyers under buy-back agreements. While the NCLT admitted the applications, the NCLAT reversed them, holding the appellants to be speculative investors rather than genuine financial creditors, prompting the present appeals before the Supreme Court.

The Bench of Justice J.B. Pardiwala and Justice R. Mahadevan upheld the NCLAT’s findings, affirming that speculative investors cannot invoke Section 7 IBC. The Court emphasized that the IBC is a revival mechanism for distressed companies, not a profit-making tool, and directed the IBBI to frame project-specific insolvency guidelines. It also advised the Union Government to expand revival funds like SWAMIH to protect genuine homebuyers, reiterating that the right to housing forms part of Article 21 of the Constitution

Supreme Court Upholds 2012 Income Tax Attachment on Mumbai Shop, Rules Possession Alone Cannot Confer Right Without Clear Title

DIGITECH ELECTRONICS SYSTEMSPVT. LTD vs UNION OF INDIA CITATION : 2025 TAXSCAN (SC) 279

The Supreme Court of India recently upheld a Bombay High Court ruling that dismissed a challenge to an Income Tax attachment under the Income Tax Act, 1961, dating back to 2012. The case arose from a special leave petition filed by Digitech Electronics Systems Pvt. Ltd., which had purchased the disputed shop in 2021 and claimed the right to object under Rule 11 of Schedule II and Rule 68B. The High Court, however, held that mere possession without clear title could not defeat a pre-existing attachment.

The Bench of Justice Pankaj Mithal and Justice Prasanna B. Varale affirmed the High Court’s view, noting that Digitech was neither in possession nor a party when the 2012 attachment was made, and its title remained under dispute in pending civil suits. The Court held that such objections could not be entertained and dismissed the special leave petition, leaving questions of ownership and title to be adjudicated in the ongoing civil proceedings.

Hotel Opt to Pay Sales Tax under Regular Provisions, Dept Cannot Assess under Compounded Basis: Supreme Court Upholds Kerala HC Ruling

DEPUTY COMMISSIONER OF STATE TAX& ANR. vs HOTEL SAYOOJ CITATION : 2025 TAXSCAN (SC) 280

The Supreme Court of India upheld a Kerala High Court ruling in favour of Hotel Sayooj, holding that the tax department could not assess it under the compounded provisions of Section 7 of the Kerala General Sales Tax Act when the hotel had in fact paid tax under the regular provisions of Section 5. The dispute arose from a special leave petition filed by the Deputy Commissioner of State Tax, challenging the High Court’s judgment dated 13 November 2024 in Writ Appeal No. 2199 of 2023.

The Bench of Justice Pankaj Mithal and Justice Prasanna B. Varale agreed with the High Court’s reasoning that there was no valid acceptance of the hotel’s application for compounding, and its consistent tax payments were under Section 5. The Court dismissed the petition, affirming that the assessment could not be shifted retrospectively to Section 7, thereby conclusively ruling in favour of Hotel Sayooj.

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Supreme Court Affirms Auction Proceeds Cannot Be Taxed as Storage/Warehousing Services, Rejects Revenue Review

COMMISSIONER OF CGST DELHI vsM/S CONTAINER CORPORATION OF INDIA LTD CITATION : 2025 TAXSCAN (SC) 281

The Supreme Court of India held that auction proceeds from abandoned or unclaimed cargo cannot be taxed as storage or warehousing services under the service tax regime. The case arose from a Revenue demand of over ₹5.12 crore against Container Corporation of India Ltd. for the period 2010–2015, contending that amounts retained under Section 150(2)(d) of the Customs Act, 1962 constituted taxable warehousing charges. Both the Adjudicating Authority and the CESTAT rejected the demand, ruling that such proceeds were sale consideration, not payments for services.

The Bench of Justice J.B. Pardiwala and Justice R. Mahadevan dismissed the Revenue’s review petition, noting an unexplained delay of 127 days and finding no merit in the challenge. The Court affirmed that there was no basis to interfere with the earlier dismissal of the appeal, thereby conclusively upholding the view that auction proceeds are not liable to service tax.

Supreme Court Orders CBI Probe Into Advocate’s Degree After University Declares It Forged

NARESH DILAWARI vs CHARANJITSINGH OBEROI CITATION : 2025 TAXSCAN (SC) 282

The Supreme Court of India, in a civil appeal between Naresh Dilawari and Charanjit Singh Oberoi, dealt with allegations of a forged educational qualification under the Advocates Act framework. The Bar Council of Punjab and Haryana placed on record a verification from Magadh University declaring that the B.Com (Honours) degree and mark-sheet of 1991 relied upon by Dilawari were fake.

The Bench of Justice Manoj Misra and Justice Ujjal Bhuyan observed that the authenticity of the petitioner’s degree was doubtful and warranted an independent probe. The Court directed the Central Bureau of Investigation (CBI) to inquire into the genuineness of the certificate and file its report by 30 November 2025. The matter has been listed for further hearing on 9 December 2025, pending the outcome of the CBI’s investigation.

Revenue Can Tax Only if Case Falls Within Four Corners of Statute, Not on Legislative Intent or Substance: Supreme Court

M/S. SHIV STEELS vs THE STATE OFASSAM CITATION : 2025 TAXSCAN (SC) 283

The Supreme Court of India ruled that tax cannot be imposed on the basis of legislative intent, analogy, or substance unless strictly covered by statute. The case arose from appeals by M/s Shiv Steels challenging reassessments under the Assam General Sales Tax Act, 1993 for assessment years 2003–04 to 2005–06. While the Gauhati High Court upheld the Revenue’s reliance on Section 21 to revive time-barred assessments beyond the three-year limitation in Section 19, the assessee contended that such reassessments were impermissible.

The Bench of Justice J.B. Pardiwala and Justice Sandeep Mehta set aside the High Court’s ruling, holding that Section 21 applies only where no assessment is made within the limitation period, not to revive those already declared time-barred. Reiterating the principle of strict interpretation of fiscal statutes, the Court quashed the reassessments and allowed the appeal, clarifying that no tax liability can be imposed outside the four corners of the statute.

High Court

Gold Smuggling Penalty on 19-Year-Old Taekwondo Player :Delhi HC Sets Aside ₹2 Lakh Fine Citing Age and Coach’s Influence

VIVEK KUMAR SINGH vsCOMMISSIONER OF CUSTOMS A G CITATION : 2025 TAXSCAN (HC) 1803

The Delhi High Court set aside a ₹2 lakh penalty imposed on Vivek Kumar Singh, a 19-year-old national-level taekwondo player, under the Customs Act, 1962, for allegedly carrying smuggled gold. The penalty arose from an order of the Commissioner of Customs (Delhi Airport) dated 31 March 2025, which had confiscated gold chains and rings brought from Bangkok by the petitioner and his teammates under the direction of their coach, Mr. Satwinder Singh, declaring them ineligible for exemption under Notification No. 50/2017-Cus and the Baggage Rules, 2016.

The Bench of Justice Prathiba M. Singh and Justice Shail Jain held that the petitioner was a young athlete acting under the influence of his coach, who had already admitted his role in the smuggling. Accepting the coach’s apology and considering the petitioner’s age, the Court set aside the penalty, clarifying that it would not stigmatise him or affect his sporting career.

GST Portal SCN Glitch: Delhi HC Sets Aside ₹3.16 Crore Demand, Allows PSU to File Reply and Attend Personal Hearing

NATIONAL ALUMINIUM COMPANYLIMITED vs COMMISSIONER OF DELHI GOODS AND SERVICE TAX CITATION : 2025 TAXSCAN (HC) 1804

The Delhi High Court recently dealt with the issue of whether a Show Cause Notice (SCN) uploaded only in the ‘Additional Notices Tab’ of the GSTN portal could be treated as valid service under the Central Goods and Services Tax Act, 2017. The case arose from a demand of ₹3.16 crore raised against National Aluminium Company Limited (NALCO) for FY 2018-19, where the assessee contended that the SCN dated 5th December 2023 went unnoticed due to the GST portal update on 16th January 2024, thereby depriving it of the opportunity to respond under Section 73 of the CGST Act.

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain observed that the peculiar circumstances, including the timing of the portal update and issuance of the reminder, justified interference. The Court set aside the impugned order, granted the assessee time till 31st October 2025 to file its reply, and directed the Adjudicating Authority to provide a fresh personal hearing notice through email and mobile before passing a reasoned order. It was clarified that the ruling would not serve as a precedent in other cases and that GST portal access must be provided to the petitioner within a week.

₹7 Crore Share Sale Treated as Unexplained Cash Credit u/s 68: Karnataka HC Upholds ITAT Decision, Finds Transactions Genuine

THE PR. COMMISSIONER OF INCOMETAX vs M/S THE HAMLET CITATION : 2025 TAXSCAN (HC) 1805

The Karnataka High Court dealt with the issue of whether the sale consideration of ₹7 crore from the transfer of shares could be treated as unexplained cash credit under Section 68 of the Income Tax Act, 1961. The matter arose from the case of The Hamlet, which had reported a short-term capital loss on the sale of shares in M/s. Kemwell Biopharma Pvt. Ltd. to three purchaser companies. The Assessing Officer (AO) treated the transaction as a sham and added the consideration as unexplained cash credit, a view later upheld by the CIT(A). However, the Income Tax Appellate Tribunal (ITAT) deleted the addition, holding the transactions genuine on the basis of bank statements and financial documents already on record.

The Division Bench of Justice S.G. Pandit and Justice K.V. Aravind upheld the ITAT’s ruling, noting that the purchaser companies had sufficient funds, responded to notices under Section 133(6), and their identity, genuineness, and creditworthiness stood established. The Court emphasised that the Tribunal’s findings were factual, based on evidence, and involved no substantial question of law. Accordingly, the Revenue’s appeal was dismissed, and the ITAT’s order dated 16 November 2023 was affirmed.

Income Tax Dept can Conduct Surprise Searches on Family’s Lockers over Suspicion of Undisclosed Assets: Delhi HC

RAJ KRISHAN GUPTA AND ORS vsPRINCIPAL DIRECTOR OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 1806

The Delhi High Court examined whether a search and seizure operation on family lockers was lawful under Section 132 of the Income Tax Act, 1961. The petitioners, Raj Krishan Gupta and his family, challenged the 11 May 2024 operation at their lockers in South Delhi Vaults, Greater Kailash-II, New Delhi, contending that the valuables were either disclosed, ancestral, or belonged to their daughters.

The Division Bench of Justice V. Kameswar Rao and Justice Saurabh Banerjee held that the conditions under Section 132 were duly satisfied, that the sufficiency of reasons was beyond judicial review, and that proper authorisations were obtained for each locker. The Court relied on material indicating misuse of benami lockers and the petitioners’ financial profile not matching their possession of multiple high-rent lockers, thereby justifying suspicion of undisclosed wealth. Observing that bona fide reasons to believe were recorded and that bullion fell outside the jewellery limits of CBDT Instruction No. 1916, the Court upheld the searches as lawful and dismissed the writ petition.

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Customs Duty Drawback Fraud: Delhi HC Allows Appeal on 'Beneficial Owner' Applicability with Pre-deposit Adjustment

NEERAJ BHANUPRATAPSINGH vsADDITIONAL COMMISSIONER OF CUSTOMS (EXPORT) CITATION : 2025 TAXSCAN (HC) 1807

The Delhi High Court dealt with a writ petition concerning penalties and demands in a customs duty drawback fraud case under the Customs Act, 1962. The petitioner, Neeraj Bhanupratap Singh, challenged the Order-in-Original dated 11 July 2025, where the Adjudicating Authority had imposed penalties of over ₹1.34 crore for allegedly controlling 56 entities with forged Import Export Codes (IECs) to export overvalued goods and fraudulently claim duty drawback and IGST refunds.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain held that since the Show Cause Notice dated 8 March 2024 was issued after the 2017 amendment, the term “beneficial owner” was rightly applicable. Allowing the petition partly, the Court permitted the appellant to approach the Commissioner (Appeals) by 15 October 2025, directing that the appeal be heard on merits and not dismissed as time-barred. It further clarified that the ₹2 crore already deposited during the investigation would be adjusted toward the mandatory pre-deposit. The writ petition was accordingly disposed of, keeping all rights and remedies open.

Vehicle Intercepted for Non-Possession of E-Invoice: Madras HC Holds Timely Manual Appeal Valid, Directs Appellate Authority to Decide with Additional Evidence

Tvl.FABRO GAARDEN vs The StateTax Officer CITATION : 2025 TAXSCAN (HC) 1808

The Madras High Court examined a dispute under the Goods and Services Tax (GST) regime concerning the rejection of an appeal as time-barred in a case relating to the interception of a vehicle for non-possession of an e-invoice. The petitioner, Fabro Gaarden, had its vehicle intercepted on 4 December 2023 and paid a penalty of ₹5,15,412 under protest. When an adverse order was later passed on 13 October 2024, the petitioner filed a manual appeal on 4 January 2025 within the prescribed limitation period, since the web copy of the order was not available. Later, after obtaining the web copy, an e-appeal was also filed on 21 July 2025, which was rejected as time-barred by the Appellate Authority.

The Bench of Justice G.R. Swaminathan held that once the assessee had filed a manual appeal in time, the rejection of the e-filed appeal on limitation grounds was unsustainable. The Court relied on the Allahabad High Court ruling in Kumar Cargo Solution v. State of U.P. (2024) and clarified that the taxpayer could not be penalised for procedural lapses beyond their control. Accordingly, the rejection order was set aside, and the matter remitted back to the Appellate Authority with directions to number the appeal and decide it on merits. The Court also permitted the petitioner to produce the e-invoice, which had been available at the time but not carried by the driver, and directed the appellate authority to dispose of the matter within three months.

Delhi HC Orders Customs to Refund ₹19.22 Lakh with 6% Interest as Gold already Disposed Before OIO

MR. IMRAN vsCOMMISSIONEROFCUSTOMS CITATION : 2025 TAXSCAN (HC) 1809

The High Court of Delhi dealt with a dispute under the Customs Act, 1962, concerning the premature disposal of a seized 338-gram gold piece before the passing of the Order-in-Original (OIO). The petitioner, Imran, had arrived from Kuwait at IGI Airport in March 2024 when Customs detained the gold. Despite his representative’s request not to dispose of the item and willingness to re-export, Customs disposed of the gold in June 2024 before passing the OIO on 30 December 2024. The OIO had ordered confiscation under Section 111, imposed a penalty under Sections 112 and 114AA, and allowed redemption on payment of ₹2 lakh, without disclosing that the gold had already been sold.

The Division Bench of Justice Prathiba M Singh and Justice Shail Jain directed Customs to refund the petitioner the balance of the sale proceeds, amounting to ₹19,22,917, after deducting redemption fine and penalty. The Court also ordered payment of 6% interest from 28 June 2024, totaling ₹1,67,045, within one month. While leaving it open to the Department to proceed on the allegation of forgery, the Court directed the Customs Commissioner to establish accessible counters outside the secured airport area for passengers in similar situations. The writ petition was disposed of accordingly.

ITC cannot Be Denied Merely Because Supplier’s Suppliers Defaulted: Allahabad HC

M/S Safecon Lifescience PrivateLimited vs Additional Commissioner Grade 2 And Another CITATION : 2025 TAXSCAN (HC) 1810

In a recent judgment, the Allahabad High Court dealt with the issue of denial of Input Tax Credit (ITC) under Section 74 of the Uttar Pradesh Goods and Services Tax (UPGST) Act, 2017. The case arose from a challenge by Safecon Lifescience Pvt. Ltd., a trader and manufacturer of medicines, against the orders of the Deputy Commissioner (12 January 2022) and the Additional Commissioner (20 December 2022), whereby ITC was disallowed solely because the petitioner’s supplier’s suppliers had defaulted in depositing tax.

The Bench of Justice Piyush Agrawal held that ITC could not be denied on genuine transactions duly supported by invoices, e-way bills, transport records, banking transactions, and GST returns. The Court emphasized that Section 74 applies only in cases involving fraud, wilful misstatement, or suppression of facts, none of which were present here. Consequently, both impugned orders were quashed and the writ petition was allowed.

Delhi HC Permits GST Dept. to Examine Advocate’s Seized CPU Under Strict Conditions, Protects Attorney-Client Privilege

PUNEET BATRA vs UNION OF INDIA& ORS CITATION : 2025 TAXSCAN (HC) 1811

The Delhi High Court examined the legality of the GST Department’s seizure of electronic devices from a lawyer’s office, raising the issue of whether such searches could compromise attorney–client privilege and third-party client confidentiality. The writ petition was filed by Puneet Batra, an advocate, after GST officials conducted a search at his office and seized a CPU containing sensitive client data. The case involved interpretation of the GST law’s search and seizure powers vis-à-vis the protections afforded to lawyers and their clients under general law.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain permitted the GST Department to inspect the seized CPU but only under strict safeguards. The Court directed that the examination be carried out in the presence of the petitioner, nominated lawyers or a forensic expert, senior IT officials of the High Court, and a forensic expert of the Department. A clone of the hard drive was to be created, a copy provided to the petitioner, and only relevant files pertaining to the investigation shared with the Department. The CPU was to remain sealed thereafter, and no coercive action could be taken against the petitioner during the inspection.

Commercial Land Treated as Agricultural in NH-28 Acquisition: Patna HC Permits Petitioner to Claim Income Tax Refund on Compensation

Indrapadi Devi Wife of Ajay Sawvs The Union Of India and Ors CITATION : 2025 TAXSCAN (HC) 1812

The Patna High Court dealt with the legal issue of land acquisition compensation under the National Highways Act and the alleged wrongful deduction of income tax from such compensation. The writ petition, filed under Article 226 of the Constitution by Indrapadi Devi, concerned land situated at Mauza Baidarabad, Arwal district, acquired for widening of NH-28. The petitioner sought reclassification of the acquired land as commercial instead of agricultural, recalculation of compensation at four times the market value with solatium and 18% compound interest, and refund of income tax deducted from the award.

The Bench of Justice Rajiv Roy recorded the State’s submission, through counsel Dhurjati Pd, that the petitioner could raise her grievance before the Divisional Commissioner, Magadh Division, Gaya. The petitioner’s counsel, Ambuj Nayan Chaubey and Bhairaw Nand Sharma, agreed to approach the authority. Disposing of the writ, the Court directed that if a statutory petition is filed within four weeks, the Commissioner must adjudicate the matter expeditiously. The Court did not decide the merits of land classification or tax refund but left those issues open for administrative determination.

Double Taxation Not Permissible: Andhra Pradesh HC Quashes Parallel GST Assessments Against ID Fresh Food

ID FRESH FOOD(INDIA) PRIVATELIMITED vs ASSISTANT COMMISSIONER CITATION : 2025 TAXSCAN (HC) 1813

The Andhra Pradesh High Court quashed two GST assessment orders issued by the State authorities against ID Fresh Food (India) Pvt. Ltd., holding that parallel assessments for the same taxable period were impermissible. The company was already facing proceedings initiated by the DGGI, Chennai Zonal Unit, concerning alleged misclassification of parottas and tax liability for the period July 2017 to December 2021, which culminated in an order upheld in appeal and presently pending before the Madras High Court. Despite this, the Assistant Commissioner (ST), Andhra Pradesh, passed separate assessment orders for FY 2019–20 and FY 2020–21 on 27.08.2024 and 25.02.2025.

The Division Bench of Justice R. Raghunandan Rao and Justice Challa Gunaranjan accepted the petitioner’s contention that the state-level proceedings amounted to double taxation for the same period already adjudicated by central authorities. Observing that such duplication was unsustainable in law, the Court set aside both impugned assessment orders but clarified that the State respondents were free to pursue their claims before the Madras High Court, where the matter is pending.

Rajasthan HC Directs Income Tax Dept to Refund Rs. 24.06 Lakh with 12% Interest for Withholding Money without Demand Order

Prince Khunteta vs AdditionalCommissioner, Enforcement Win CITATION : 2025 TAXSCAN (HC) 1814

The Rajasthan High Court held that the Income Tax Department cannot retain amounts collected during a search in the absence of a valid demand order. The case arose from a petition filed by Prince Khunteta, proprietor of Mateshwari Mobiles, Jaipur, after the Department collected Rs. 24,06,375 during a search operation without issuing any formal demand. The petitioner sought a refund with interest, arguing that retention of the amount was illegal and coercive.

The Division Bench of Chief Justice K.R. Shriram and Justice Maneesh Sharma observed that the Department had failed to produce any demand order despite repeated opportunities. The Court ruled that money collected without lawful authority could not be retained, directed the refund of Rs. 24,06,375 with 12% interest per annum by 30 September 2025, and imposed Rs. 25,000 as costs, allowing personal recovery from the responsible officer. The writ petition was accordingly disposed of.

Inability to Amend Pending Export Invoices due to GST-ICEGATE Portal Mismatch: Gujarat HC Directs Customs to Re-verify

RAMESWAR UDYOG PVT. LTD. vsUNION OF INDIA CITATION : 2025 TAXSCAN (HC) 1815

The Gujarat High Court directed the customs authorities to re-verify export records and process a pending IGST refund after finding that a technical mismatch between the GST portal and the ICEGATE system had prevented an exporter from amending certain export invoices. The matter arose from a Special Civil Application filed by Rameswar Udyog Pvt. Ltd., which sought an IGST refund of ₹38,84,875 along with interest for exports made in July 2017.

The Bench comprising Justice J.B. Pardiwala and Justice Ilesh J. Vora accepted the remedial protocol outlined in CBIC Circular No. 12/2018-Customs and directed the Deputy Commissioner of Customs to act accordingly, ensuring the refund is sanctioned within 12 weeks of the order. The Court clarified that if any difficulties arise, the authorities must seek information from the petitioner, and in case of persistent issues, the petitioner may revive the writ petition.

56-Day Delay in GST Appeal Due to Partner’s Family Illness: Calcutta HC Sets Aside Rejection, Remands Matter to Appellate Authority

Star Light House & Anr. vsThe Commissioner West Bengal Goods and Services Tax & Ors CITATION : 2025 TAXSCAN (HC) 1816

The High Court of Calcutta set aside the rejection of a GST appeal and remanded the matter to the appellate authority after condoning a 56-day delay, which arose due to a partner’s serious family illness. The matter involved Star Light House & Anr., who had filed the appeal under Section 107 of the WBGST/CGST Act, 2017 against an order passed under Section 73 for the tax period 2019-20. The petitioners explained that the delay occurred because the partner responsible for tax matters was occupied with the treatment of his terminally ill mother.

The Bench of Justice Raja Basu Chowdhury held that the appellate authority had rejected the appeal mechanically without considering the genuine explanation. The Court condoned the delay, quashed the attachment order under Form GST DRC-13 linked to the demand in Form GST DRC-07, and remanded the matter for disposal on merits within twelve weeks, noting that the pre-deposit of Rs. 1,26,832 had already been made.

Signature of AO is Mandatory in GST Assessment Order: Andhra Pradesh HC Invalidates Order, Permits Fresh Proceedings

SLV CONSTRUCTIONS vs ASSISTANTCOMMISSIONER OF STATE TAX CITATION : 2025 TAXSCAN (HC) 1817

The Andhra Pradesh High Court held that a GST assessment order without the signature of the Assessing Officer is invalid and cannot be considered as duly served under law. The matter involved SLV Constructions, which challenged the assessment order dated 21 December 2023 and the summary order in Form GST DRC-07 dated 23 December 2023 issued under the CGST Act, 2017 for the financial year 2021-22.

The Division Bench comprising Justice R. Raghunandan Rao and Justice Challa Gunaranjan quashed both the assessment and summary orders, noting precedents such as A.V. Bhanoji Row v. Assistant Commissioner and T.V.L. Deepa Traders v. Deputy Commissioner, which emphasize that signature is mandatory. The Court granted the Assistant Commissioner liberty to conduct a fresh assessment after proper notice and signature, and excluded the period from the impugned orders’ issuance to the present judgment for limitation purposes. The writ petition was disposed of with no order as to costs.

Mere 17 Hours Expiry of E-Way Bill Cannot Justify 200% GST Penalty without Malafide Intent: Calcutta HC Orders Refund

Hindusthan Biri Leave vsAssistant Commissioner of State Tax CITATION : 2025 TAXSCAN (HC) 1818

The Calcutta High Court held that a mere 17-hour expiry of an e-way bill cannot justify the imposition of a 200% GST penalty in the absence of evidence showing malafide intent to evade tax. The matter involved Hindusthan Biri Leaves & Anr., who challenged the order passed under Section 129 of the West Bengal GST Act, 2017, read with the CGST and IGST Acts, relating to the transportation of 329 bags of kendu leaves from Chhattisgarh to West Bengal. The e-way bill had expired on 27 July 2022, while the vehicle was intercepted on 29 July 2022, leading to the penalty imposed by the department.

The Division Bench comprising Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee observed that there was no allegation of tax evasion or other discrepancy, and the delay was caused by traffic, not malafide intent. Citing precedents such as Progressive Metals Pvt. Ltd. v. Deputy Commissioner and Assistant Commissioner (ST) v. Satyam Shivam Papers (P.) Ltd., the court held that the penalty was mechanical and unsustainable. The orders of the original and appellate authorities were quashed, and the authorities were directed to refund the penalty recovered within eight weeks, with the writ petition and appeal allowed and no order as to costs.

Retrospective Cancellation of GST Registration Invalid when Based on Vague SCN: Calcutta HC Orders Restoration

Nikita Agarwal vs AssistantCommissioner of Revenue Commercial Taxes and State Tax CITATION : 2025 TAXSCAN (HC) 1819

The Calcutta High Court held that retrospective cancellation of a GST registration cannot be sustained when based on a vague and defective show cause notice, and directed the restoration of the registration. The matter involved Nikita Agarwal, who challenged the cancellation of her GST registration with retrospective effect from 9 May 2019. The Assistant Commissioner had issued a show cause notice alleging fraud, wilful misstatement, or suppression of facts, but the notice did not clearly specify the allegation, and the appellant’s request for adjournment was not considered.

The Division Bench comprising Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee (Das) observed that the show cause notice denied the appellant a fair opportunity to defend herself. Relying on precedents such as Oryx Fisheries Pvt. Ltd. v. Union of India and Ramesh Chander v. Assistant Commissioner of GST, the court held that retrospective cancellation requires objective justification, which was absent in this case. Consequently, both the cancellation and appellate orders were set aside, the GST registration was restored retrospectively, and the authorities were directed to consider the appellant’s application for an additional place of business in accordance with law.

Relief for Rayban: Rajasthan HC quashes CENVAT refund rejection, directs payment of ₹16.89 lakh with 12% interest

M/s Rayban Sun Optics India Pvt.Ltd vs The Commissioner Of Central Excise CITATION : 2025 TAXSCAN (HC) 1820

The Rajasthan High Court quashed the rejection of Rayban Sun Optics India Pvt. Ltd.’s CENVAT refund claim of ₹16.89 lakh and directed the department to pay the amount with 12% interest per annum. The matter arose from a show cause notice issued in May 2004 regarding non-reversal of CENVAT credit on inputs written off for A.Y. 2000-01. Despite the CESTAT ruling in June 2021 holding the refund claim to be within time, the department again rejected the claim in January 2023 on limitation grounds.

The Bench comprising Justice K.R. Shriram and Justice Maneesh Sharma observed that the repeated rejection amounted to harassment and violated the finality of the CESTAT order. The Court held that the refund claim was valid and directed the department to release ₹16,89,669/- along with 12% interest per annum, calculated from 19th February 2018, within six weeks. The writ petition was allowed, and the order dated 4th January 2023 was quashed.

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Seizure of Cash and Items in GST Investigation: Gauhati HC Directs Authorities to Return Rs. 9 Lakh, Laptop, and Documents

MRS SULOCHANA DEVI LOHIA vs THEUNION OF INDIA CITATION : 2025 TAXSCAN (HC) 1821

The High Court of Gauhati directed the GST authorities to return cash and items seized from Sulochana Devi Lohia during a GST investigation in July 2023. The petitioner sought the return of Rs. 9,00,000, a laptop, and various documents and files. Upon inquiry, the Standing Counsel for GST confirmed that the investigation had concluded and the seized materials were no longer required.

The Bench of Justice N. Unni Krishnan Nair observed the undertaking given by the GST authorities and directed that the petitioner approach the Additional Officer of GST Intelligence, Guwahati Zonal Unit, on 25 September 2025 to collect the seized items. The Court disposed of the writ petition, emphasizing that the respondents must honor their commitment to return the cash and other materials.

Retrospective Cancellation of GST Registration Invalid When Based on Vague SCN: Calcutta HC Orders Restoration

M/s. Sunrise Coke EnterprisesPvt. vs Chief Commissioner of Commercial Taxes CITATION : 2025 TAXSCAN (HC) 1822

The Orissa High Court held that a two-day delay in filing a GST appeal by Sunrise Coke Enterprises Pvt. Ltd. should not have led to outright rejection without considering the petitioner’s explanation. The appeal, filed for the 2020–21 period against a demand of Rs. 56,364 under Section 73 of the Odisha GST Act, 2017, was submitted on 24 February 2025, two days past the three-month limitation.

The Division Bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman observed that the petitioner’s claim was genuine and not disputed by the department. The Court set aside the rejection order dated 29 April 2025 and directed the petitioner to appear before the Appellate Authority by 10 October 2025, file a response, and be afforded an opportunity of hearing. The writ petition was disposed of with these directions.

Contractual Dispute Cloaked as Cheating: Orissa HC Grants Anticipatory Bail to Liquidator Citing Pending IBC Proceedings

Ashwini Mehra vs State of Odisha CITATION : 2025 TAXSCAN (HC) 1823

The Orissa High Court held that a contractual dispute arising from a pipeline project awarded by GAIL cannot be treated as cheating and granted anticipatory bail to Ashwini Mehra, the liquidator of Punj Lloyd Ltd., and other company officials. The allegations involved non-payment of Rs. 3.28 crore to a subcontractor and wrongful availing of GST credit of Rs. 35.95 lakh, which formed the basis of FIR No. 644 of 2024 at Kamakhya Nagar P.S. The Court noted that insolvency proceedings against Punj Lloyd Ltd. were already pending before the NCLT and that the dispute was essentially civil and contractual in nature.

The Bench of Justice V. Narasingh observed that the investigating agency had ignored the statutory protections under the Insolvency and Bankruptcy Code, 2016. Referring to Supreme Court precedents, the Court held that anticipatory bail can be granted when civil disputes are framed as criminal cases. The petitioners were directed to be released on anticipatory bail, subject to conditions, with the clarification that this order was limited to the bail application and did not comment on the merits of the allegations, which would be examined independently during investigation.

DGGI Lacked Jurisdiction to Invoke S. 74 against NCS Pearson Amidst Pending Writ on Taxability of GMAT Type-III Tests under ODAIR Services: Karnataka HC Quashes SCN

M/S NCS PEARSON INC vs UNION OFINDIA CITATION : 2025 TAXSCAN (HC) 1824

The Karnataka High Court quashed a show-cause notice (SCN) issued under Section 74 of the GST Act, 2017 against NCS Pearson Inc., holding that there was no wilful suppression or intention to evade tax. The SCN, issued by the DGGI, alleged non-payment of GST on GMAT Type-III tests for 2017–2021, despite the classification issue being sub judice before the High Court in W.P. No. 3555/2021. The Court noted that the petitioner had transparently disclosed all relevant transactions before the AAR and AAAR, and that the Revenue’s claim of misreporting or underpayment did not establish deliberate intent to evade tax.

The Bench of Justice S.R. Krishna Kumar emphasized that Section 74 requires proof of fraud, wilful misstatement, or suppression, and cannot be invoked mechanically. The SCN was deemed illegal and arbitrary, as it attempted to bypass ongoing judicial scrutiny while the petitioner enjoyed interim protection. The Court also underscored that tax cannot be collected without clear legal authority, and investigative agencies must respect ongoing proceedings. Accordingly, the SCN was quashed in its entirety.

IDP Education India’s Service to IDP Australia is ‘Export,’ Not ‘Intermediary’: Rajasthan HC Orders Refund of IGST

Idp Education India Pvt. Ltd vsThe Union Of India CITATION : 2025 TAXSCAN (HC) 1825

The Rajasthan High Court held that IDP Education India Pvt. Ltd. qualifies as providing “export of services” to IDP Education Ltd., Australia, rather than acting as an intermediary, and allowed the IGST refund. The petitioner provides counseling, course guidance, and enrollment services to students aspiring to study abroad, but the final admission decisions rest solely with IDP Australia. The Revenue had denied the refund claiming IDP India acted as an intermediary, which would fix the place of supply in India and disqualify it from zero-rated benefits.

The Bench of Chief Justice K.R. Shriram and Justice Maneesh Sharma relied on earlier rulings, noting that intermediary services require three parties, whereas IDP India’s contract involved only two: the petitioner and IDP Australia. The Court also referenced the CBIC September 2021 circular and prior refunds sanctioned elsewhere to reject the Revenue’s contradictory stance. It set aside the orders denying refund and directed the authorities to process IDP India’s IGST refund with applicable interest within four weeks.

SCN Issued u/s 74 of GST Act Despite Return Filed: Patna HC sets aside Orders

M/S Parvinder Singh vs The Stateof Bihar CITATION : 2025 TAXSCAN (HC) 1826

The Patna High Court recently addressed a matter concerning the validity of proceedings initiated under Section 74 of the Goods and Services Tax (GST) Act, 2017, involving a contractor, Parvinder Singh, who had been issued a show-cause notice (SCN) despite having filed his GST returns and paid taxes. The petitioner challenged the assessment order dated 15.01.2021, the appellate order dated 25.03.2025, and the consequent demand raised via DRC-07, asserting that the SCN was issued without proper verification of returns and payments already made, and that the notice had been improperly served only via the “Additional Notices” tab on the GST portal, without email or SMS notification.

The Bench comprising Mr. Justice Rajeev Ranjan Prasad and Mr. Justice Sourendra Pandey held that the proceedings under Section 74 were not justified, noting that the petitioner had filed the relevant returns on 07.12.2020, prior to the issuance of the SCN, and the State’s own counter-affidavit admitted that the proceedings were triggered solely due to non-communication in the prescribed form. Accordingly, the Court set aside the assessment order dated 15.01.2021, the appellate order dated 25.03.2025, and the consequential demand, granting relief to the petitioner against coercive recovery measures.

GST Appellate Authority cannot Remand case back to Adjudicating Authority: Allahabad HC sets aside order against Law Firm

M/S Anand And Anand vs PrincipalCommissioner Central Goods And Services CITATION : 2025 TAXSCAN (HC) 1827

The Allahabad High Court recently addressed the legal issue concerning the powers of the GST Appellate Authority under Section 107(11) of the Central Goods and Services Tax Act, 2017. The Court clarified that the Appellate Authority is empowered only to confirm, modify, or annul the order under appeal and cannot remit cases back to the Adjudicating Authority. This arose from a writ petition filed by M/s Anand and Anand, challenging an order of the Joint Commissioner (Appeals), CGST, Noida, which had remitted multiple appeals for fresh consideration on the ground of insufficient evidence regarding the place of supply of services.

The Bench of Justice Saurabh Shyam Shamshery, held that the part of the impugned order dated 27.09.2023, which remanded the appeals, was ultra vires the statute and set it aside. The Court directed that the appeals be adjudicated afresh by the Appellate Authority itself, in accordance with law, without remanding to the adjudicating authority. It further noted that, since the GST Appellate Tribunal is not yet functional, writ petitions in such matters are being entertained directly, ensuring compliance with the legislative intent and protecting the statutory rights of taxpayers.

₹50 Crore Investment Scam: Punjab & Haryana HC Rejects Anticipatory Bail Plea of HR Manager Accused of Luring Funds of Employees and Public

Sharmeen Abdul Majid Ansari vsState of Punjab CITATION : 2025 TAXSCAN (HC) 1828

The Punjab and Haryana High Court at Chandigarh has refused anticipatory bail to Sharmeen Abdul Majid Ansari, the HR Manager of Market Seller, in connection with a ₹50 crore investment fraud allegedly orchestrated by the company and its affiliates. The FIR, registered in April 2023 at Ranjit Avenue Police Station, Amritsar, alleged that Ansari and co-accused lured investors with promises of high returns through bulk purchasing and online sales, before the company abruptly shut down operations and its promoters absconded.

The Bench of Justice Batra observed that the allegations were serious, involved substantial public loss, and anticipatory bail is an extraordinary remedy to be granted only in exceptional circumstances. Given that proceedings were already underway to declare her a proclaimed offender and no exceptional grounds were made out, the Court dismissed the plea, emphasizing that the decision concerned only anticipatory bail and would not prejudice the merits of the ongoing trial.

GST Appeal Once allowed Cannot Be Recalled u/s. 161 Merely Due to Pending SLP before Supreme Court: Allahabad HC

Opasil Pigments And Chemicals(P) Ltd vs State Of U.P. CITATION : 2025 TAXSCAN (HC) 1829

The Allahabad High Court recently dealt with the legal issue of whether an appellate order under the GST Act, 2017 can be recalled under Section 161 merely due to the filing of a Special Leave Petition (SLP) before the Supreme Court. The petitioners, Opasil Pigments And Chemicals (P) Ltd. and M/s Shyam Enterprises, challenged rectification orders that sought to recall earlier appellate orders which had quashed penalties imposed under Section 129(3) of the GST Act.

The Bench of Justice Piyush Agrawal held that the pendency of a Supreme Court SLP does not, by itself, authorize the recall of an appellate order, especially when no interim stay has been granted. The Court clarified that rectification under Section 161 is limited to patent, clerical, or arithmetic errors and does not permit re-appreciation of facts or substitution of findings. The High Court set aside the rectification/recall orders dated 4.8.2020, restored the original appellate orders allowing the appeals, and allowed both writ petitions, emphasizing that using Section 161 to undo a merits-based order amounts to an impermissible review.

Defunct Business Unable to Provide Alternate Storage for Goods Post Lease Expiry: Calcutta HC Directs GST Authorities to Repossess Goods

Archana Bazaz vs The SeniorJoint Commissioner of Revenue, State Tax & ors CITATION : 2025 TAXSCAN (HC) 1830

The Calcutta High Court recently addressed the legal issue concerning the handling and disposal of goods belonging to a defunct company stored in a leased godown, in light of ongoing GST search and seizure operations. The case involved respondent No. 6, whose leave and licence agreement with the godown owner, Archana Bazaz, had expired on 31 March 2025. The petitioner sought directions for removal of the goods, citing that the lease had ended and she could no longer allow use of the premises or demand fees.

The Bench of Justice Raja Basu Chowdhury observed that respondent No. 6 had no objection to the GST authorities taking possession of the goods and noted that any continued non-cooperation would allow the authorities to clear the godown under the law at the risk and cost of respondent No. 6. The Court directed that if rented storage space was required for the goods, the cost would also be borne by the company. Additionally, notices regarding the case could be validly served on the advocate-on-record for respondent No. 6 for six months. The Bench disposed of the writ petition, allowing the GST authorities to manage and dispose of the goods while restoring the godown to the owner, without imposing costs.

Telangana HC Grants Pre-Arrest Bail to Driver Accused in Fraudulent GST E-Way Bill Generation Case

Mohammed Khan vs The State ofTelangana CITATION : 2025 TAXSCAN (HC) 1831

The Telangana High Court recently dealt with a pre-arrest bail application in a case involving alleged fraudulent generation of e-way bills during goods transportation. The legal issue concerned the application of anticipatory bail under Sections 318(4), 336, 338, and 61(2) of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNS Act) for a driver of a vehicle used in the alleged fraudulent transactions. The petitioner vehicle, lying immobilised at Falaknuma, Hyderabad, was used by the accused to generate fictitious e-way bills, leading to the FIR. The matter raised questions of culpability and preventive custody, given that other accused in the case had already secured anticipatory bail after payment of fines.

The Bench of Justice K. Sujana, who granted anticipatory bail to the petitioner-driver while emphasizing conditional compliance. The petitioner was directed to surrender before the Station House Officer within two weeks, execute a personal bond of ₹25,000 with two sureties of like amount, cooperate with the investigating officer, and appear every Monday until the filing of the charge sheet. The Court’s order balanced the preventive aspect of custodial investigation with the petitioner’s right to liberty, noting the limited role of the driver in the alleged fraudulent e-way bill generation.

Flipkart Wins Big: Karnataka HC Orders ₹16.11 Cr ITC Pre-Deposit Made Before 2020 to Be Refunded in Cash with Interest

M/S. FLIPKART INDIA PRIVATELIMITED COMPANY vs THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES CITATION : 2025 TAXSCAN (HC) 1832

The Karnataka High Court recently addressed the entitlement of Flipkart India Private Limited to a refund of pre-deposit amounts made under the Karnataka Value Added Tax (KVAT) Act and KGST Act, including payments made through Input Tax Credit (ITC). The legal issue concerned whether the ITC component of a pre-deposit made before 2020 could be refunded in cash under Sections 142(7)(b) and 142(8)(b) of the Karnataka Goods and Services Tax Act, following appellate orders in Flipkart’s favour.

The Bench of Justice S.R. Krishna Kumar, who held that Flipkart was entitled to a cash refund of Rs. 16.11 crore, representing the ITC portion of the pre-deposit, along with interest on the total pre-deposit of Rs. 23.01 crore from the date of deposit until the date of refund. The Court observed that the department had accepted the ITC-based pre-deposit without objection at the time of appeal and that the relevant provisions of the KGST Act mandated cash refund once the liability was set aside, irrespective of whether the payment was made through cash or ITC. The Court directed the respondents to refund the amount and interest in cash within six weeks, and allowed the writ petition.

Gauhati HC Quashes Indian Oil’s CST Demand: ‘C’ Form for Concessional Tax Rate Wrongly Denied on Basis of Quashed Circular

VIJAY NIRMAN CO. PVT. LTD. vsTHE STATE OF ASSAM AND 3 ORS. CITATION : 2025 TAXSCAN (HC) 1833

The Gauhati High Court recently dealt with a dispute involving Central Sales Tax (CST) benefits under the Central Sales Tax Act, 1956, concerning the issuance of ‘C’ Forms for concessional tax rates. The legal issue arose when Indian Oil Corporation Limited (IOCL) raised a differential tax demand against M/s Vijay Nirman Co. Pvt. Ltd., following the denial of concessional CST benefits on six notified commodities under Circular No. 7/2017 dated September 5, 2017, issued by the Assam tax authority. T

The Bench of Justice Kardak Ete, who observed that the impugned 2017 circular had already been invalidated in Star Cement Meghalaya v. State of Assam & Ors. (2018), and a replacement circular, No. 12/2018-GST dated August 9, 2018, was now in force, restricting concessional ‘C’ Forms to specified uses such as telecommunications, mining, and electricity generation or distribution. The Court held that no further adjudication was necessary regarding the differential demand and accordingly set aside the tax demand raised by IOCL, while permitting the respondents to take action under the new circular if required.

Delhi HC upholds Higher Property Tax on Luxury Hotels holding Star Ratings Valid Basis for Classification

M/S EROS RESORTS & HOTEL LTDvs MUNICIPAL CORPORATION OF DELHI CITATION : 2025 TAXSCAN (HC) 1834

The Delhi High Court recently addressed the validity of higher property tax levied on luxury hotels under the Delhi Municipal Corporation Act, 1957, specifically concerning the Municipal Valuation Committee’s (MVC) recommendations under Sections 116A–116C. The legal issue involved challenges to the classification of hotels based on star ratings and the consequent imposition of increased property tax from 10% to 20%, along with a higher “user factor” (UF-10) for 3-star and above hotels.

The Bench of Justice Purushaindra Kumar Kaurav upheld the MCD’s classification and taxation framework, observing that star ratings provide an objective basis for differentiating luxury hotels from ordinary establishments. The Court held that the imposition of a higher tax on 3-star and above hotels was neither arbitrary nor violative of Article 14 of the Constitution, noting that hotels voluntarily opting for star accreditation cannot repudiate the fiscal consequences. The High Court confirmed that the MVC recommendations were adopted in accordance with statutory procedures, and accordingly dismissed the petitions, validating the uniform levy and retrospective application of higher property tax on premium hotels.

Service of GST Notice or Orders without Signature Amounts to No Service at All: Karnataka HC says assessee’s delay in Approaching Court Irrelevant

M/s. Tirumala Electronics(closed) vs The Assistant Commissioner ST FAC and Others CITATION : 2025 TAXSCAN (HC) 1835

The Andhra Pradesh High Court recently addressed the validity of GST assessment and penalty orders under the Goods and Services Tax Act, 2017, specifically concerning unsigned orders lacking a Document Identification Number (DIN) and officer’s signature. The legal issue revolved around whether such defective orders could be considered valid service and whether the petitioner’s delay in approaching the Court would affect their challenge.

A Division Bench comprising Justice R. Raghunandan Rao and Justice T.C.D. Sekhar held that GST orders without the signature of the assessing officer are invalid and amount to no service in law, citing precedents including A.V. Bhanoji Row v. Assistant Commissioner (ST) and related rulings. The Court observed that provisions under Sections 160 and 169 of the CGST Act, 2017, cannot cure this defect, and Rule 26(3) of the CGST Rules, 2017, clearly mandates that unsigned notices or orders do not constitute valid service. Accordingly, the Court quashed the impugned assessment and penalty orders for FYs 2018-19, 2019-20, and 2020-21, while allowing the GST department to issue fresh proceedings with proper signature and due notice, and excluded the period of original orders from limitation calculations.

Bogus Royalty Expenses Exceed ₹50 Lakh: Bombay HC upholds Income Tax Reassessment Beyond 3 Years

Molbio Diagnostics Limited vsAssistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 1836

The Bombay High Court considered whether sufficient cause existed to condone a delay in filing an appeal under Section 35-G(2)(a) of the Central Excise Act, 1944. The issue arose when Sanvijay Rolling and Engineering Ltd. filed an appeal before the High Court while a rectification application under Section 35-C(2) was pending before the appellate tribunal, claiming that the appeal should be counted from the date of the rectification order. The Court examined whether such simultaneous proceedings could justify exclusion of time under Section 14 of the Limitation Act.

The Division Bench of Justice Anil L. Pansare and Justice Siddheshwar S. Thombre observed that the applicant could not pursue two contradictory positions simultaneously—seeking rectification on the one hand and asserting a substantial question of law for appeal on the other. The Court held that the appeal filed during pendency of rectification was premature, as limitation would start only from the rectification order. The applications were rejected, and the applicant was directed to pay costs of ₹5,000/- per application, emphasizing that judicial time had been unnecessarily consumed.

Suspension order passed by Full time member of IBBI who is Party to investigation is void ab initio: Gujarat HC Stays Disciplinary Committee's Order

CHANDRA PRAKASH JAIN vsINSOLVENCY AND BANKRUPTCY BOARD OF INDIA (IBBI) CITATION : 2025 TAXSCAN (HC) 1837

The Gujarat High Court last week stayed an order issued by Insolvency and Bankruptcy Board of India (IBBI) which had suspended the registration of an insolvency resolution professional for six months pursuant to disciplinary proceedings under Section 219 of the Insolvency and Bankruptcy Code, 2016. The petitioner, Chandra Prakash Jain, challenged the order dated 20.08.2025 passed by the Disciplinary Committee, contending that the proceedings initiated pursuant to the show-cause notice issued on 27.02.2025 were erroneous and the order was void ab initio.

The Bench of Justice Mauna M. Bhatt observed that the disciplinary proceedings were therefore invalid, as the same officer had acted both as investigator and adjudicator. The Court noted that no appeal is prescribed under the Code, 2016, making a writ petition under Article 226 of the Constitution of India the appropriate remedy, relying on precedents including Special Civil Applications Nos. 13767/2022, 24566/2022, and 7789/2024. Considering the submissions, the High Court issued notice returnable on 03.11.2025 and stayed the suspension order until the next date of hearing, thereby granting temporary relief to the petitioner.

Courts Cannot Review if AO has Enough Material to Reopen Assessment: Delhi HC

R S ALLOYS vs INCOME TAX OFFICERWARD 63(1) DELHI & ANR CITATION : 2025 TAXSCAN (HC) 1838

The Delhi High Court examined the reassessment proceedings initiated against R.S. Alloys under Sections 147 and 148 of the Income Tax Act, 1961 for the assessment year 2019-20. The issue was whether the Assessing Officer (AO) had adequate material to initiate reassessment based on alleged transactions with a shell company, and whether judicial review could test the sufficiency of such material.

The Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar held that the question of genuineness of transactions was factual and to be examined during reassessment proceedings, not in writ jurisdiction. The Court observed that the AO had received sufficient information to form a belief that income had escaped assessment and that the petitioner had been given an opportunity to respond. Consequently, the writ petition was dismissed, affirming that judicial review cannot challenge the sufficiency of material relied upon by the AO.

Challenge on Application filed u/s 35-C(2) of the Excise Act: Bombay HC blames for Wasting Judicial time for no valid reason

Sanvijay Rolling and EngineeringLtd vs Commissioner of CGST CITATION : 2025 TAXSCAN (HC) 1839

The Bombay High Court at Goa recently addressed the issue of condoning delay in filing an appeal under Section 35-G(2)(a) of the Central Excise Act, 1944, emphasizing that the applicant cannot evade limitation rules by filing an appeal while a rectification application under Section 35-C(2) is pending. The case involved Sanvijay Rolling and Engineering Ltd., which filed an appeal 184 days after the expiry of the statutory 180-day period, arguing that the appeal should be counted from the date of the rectification order.

A Division Bench comprising Justice Anil L. Pansare and Justice Siddheshwar S. Thombre observed that the applicant had caused unnecessary consumption of judicial time by filing multiple applications with contradictory arguments and irrelevant citations. The Court emphasized that the period of limitation under Section 35-G should be calculated from the date of the final rectification order, and not from the original tribunal order. Consequently, the applications seeking condonation of delay were rejected, and the applicant was directed to pay costs of Rs. 5,000 for each application, reinforcing the principle that judicial time should not be wasted without valid cause.

Fake ITC Claim of Over ₹40 Crore under CGST Act: Chhattisgarh HC Grants Bail noting Prolonged Custody and Pending Trial

Aman Kumar Agrawal vs State OfChhattisgarh CITATION : 2025 TAXSCAN (HC) 1840

The High Court of Chhattisgarh recently granted bail in a case involving alleged fraudulent availing of Input Tax Credit (ITC) exceeding ₹40 crore under the Central Goods and Services Tax (CGST) Act, 2017, specifically under Sections 69 and 132(1)(b) and (c). The legal issue revolved around whether the applicant, Aman Kumar Agrawal, could be denied bail despite allegations of claiming ITC through non-existent businesses, given that the investigation was complete, no actual tax loss had been quantified, and the offences were compoundable in nature.

The Bench of Justice Ramesh Sinha heard the matter and, after reviewing the case diary, held that the applicant was entitled to bail. The Court noted that the trial was likely to take time, the applicant had been in custody since 10.06.2025, and there was no risk of absconding. Accordingly, the Court allowed the bail application on furnishing a personal bond of ₹1,00,000 with one solvent surety, effective until the conclusion of Crime No. Arr. 01/2025.

Single Judge Cannot Dismiss CST & VAT Writs for Alternative Remedy Once Division Bench Remits Decision on Merits: Chhattisgarh HC

M/s Sunil Kumar Agrawal vs StateOf Chhattisgarh CITATION : 2025 TAXSCAN (HC) 1841

The Chhattisgarh High Court addressed the legal issue of whether a Single Judge Bench can dismiss writ petitions under the Chhattisgarh Value Added Tax Act, 2005 and the Central Sales Tax Act, 1956 on the ground of availability of an alternative remedy, once a Division Bench has already directed adjudication on merits. The case arose from the deletion of the words “High Speed Diesel for Mining Machinery” from the registration certificate of M/s Sunil Kumar Agrawal, which led to writ petitions challenging the deletion and questioning the maintainability of the Single Judge’s dismissal of the petitions citing alternative remedy.

The Division Bench comprising Justice Sanjay K. Agrawal and Justice Radhakishan Agrawal held that since the earlier Division Bench had remitted the matter solely for adjudication on merits without entertaining the plea of alternative remedy, the Single Judge could not again dismiss the petitions on that ground. The Court set aside the common order dated 3 April 2025 and remitted the matters back to the Single Judge for determination on merits, based only on the substantive questions of law raised.

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Authorities Cannot Retain Petitioner’s Funds After 10% Pre-Deposit u/s 107 of APGST Act: AP HC Directs Refund Subject to Undertakings

WINGTECH MOBILE COMMUNICATIONS(INDIA) PVT. LTD. vs DEPUTY COMMISSIONER ST CITATION : 2025 TAXSCAN (HC) 1842

The High Court of Andhra Pradesh dealt with the legal issue of refund of amounts recovered under the Andhra Pradesh Goods and Services Tax (APGST) Act, 2017, specifically considering the effect of the statutory pre-deposit under Section 107. The petitioner, Wingtech Mobile Communications (India) Pvt. Ltd., challenged the attachment of its bank accounts and recovery of ₹170 crores following an assessment order raising a demand of ₹244.63 crores, contending that the statutory 10% pre-deposit was already deemed paid and authorities could not retain excess funds.

The Division Bench comprising Justice R. Raghunandan Rao and Justice T.C.D. Sekhar directed refund of the recovered ₹170 crores subject to the petitioner’s undertaking to maintain the refunded amounts and sale proceeds in its account, ensuring a minimum balance of ₹221 crores, inclusive of ₹24.4 crores treated as the statutory pre-deposit. The Court held that once the deemed stay under Section 107 came into effect, no further restraints could be imposed, and disposed of the writ petition while closing pending applications.

Income Tax Appeal on Demand Notice issued Pending before ITAT: Calcutta HC Directs to dispose expeditiously

M/s A.D. Electrosteel Co. Pvt.Ltd. & Anr vs The Union of India & Ors. CITATION : 2025 TAXSCAN (HC) 1843

The Calcutta High Court dealt with the legal issue concerning the expeditious disposal of a pending application before the Income Tax Appellate Tribunal (ITAT) relating to a demand notice issued under Section 156 of the Income Tax Act, 1961. The petitioners, A.D. Electrosteel Co. Pvt. Ltd. & Anr., challenged a demand raised pursuant to an assessment order dated 25th March 2015 for Assessment Year 2012-13, following multiple dismissals of their appeals and restoration applications for non-prosecution before the CIT(A) and the ITAT.

The Bench of Justice Raja Basu Chowdhury directed that the recalling application filed by the petitioners before the ITAT be taken up and disposed of expeditiously without unnecessary adjournments, noting that the next date of hearing was fixed for 19th September 2025. The Court emphasized the need for prompt adjudication given the pending nature of the application and the raised demand, thereby ensuring that the petitioners’ rights were not unduly prejudiced.

State Cannot Retrospectively Withdraw Purchase Tax Subsidy, Sugar Mills Entitled to Full Five Years: Madras HC

The Government of Tamil Nadu vsTvl.Ponni Sugars (Erode) Limited CITATION : 2025 TAXSCAN (HC) 1844

The Madras High Court addressed the legal issue of retrospective withdrawal of a purchase tax subsidy under the State Government Orders. The case involved Ponni Sugars (Erode) Limited, which had been promised a five-year subsidy equivalent to the purchase tax on sugarcane under the 1984 Government Order. The State attempted to curtail this benefit retrospectively via a 1988 letter, prompting the company to challenge the withdrawal before the Tamil Nadu Taxation Special Tribunal, which upheld the company’s entitlement.

The Division Bench comprising Justice Anita Sumanth and Justice C. Kumarappan held that the retrospective withdrawal lacked legal sanction and violated the principles of legitimate expectation and promissory estoppel. Observing that Ponni Sugars had relied on the Government Orders for its operational and financial planning, the Court ruled that the company was entitled to the full five-year subsidy. Consequently, the writ petition filed by the State was dismissed, with no order as to costs.

GST Act Intended for Ease of Business, Not Harassment: Allahabad HC Slams Revenue for Misusing Section 74

M/S Safecon Lifescience PrivateLimited vs Additional Commissioner Grade 2 CITATION : 2025 TAXSCAN (HC) 1845

The Allahabad High Court dealt with the validity of orders issued under Section 74 of the GST Act, concerning alleged wrongful Input Tax Credit (ITC) claims. The case involved M/s Safecon Lifescience Pvt. Ltd., a pharmaceutical trader and manufacturer, which had purchased goods from a registered supplier, M/s Unimax Pharma Chem, with all transactions supported by tax invoices, e-way bills, and payments through banking channels. The petitioner challenged the Deputy Commissioner’s proceedings under Section 74, which were upheld by the first appellate authority, on the grounds that both supplier and purchaser had correctly filed GSTR-3B returns and there was no evidence of fraud or wilful misstatement.

The Bench comprising Justice Piyush Agrawal quashed the impugned orders, holding that Section 74 proceedings can only be invoked in cases of fraud, wilful misstatement, or suppression with intent to evade tax. The Court emphasized that the authorities had ignored proof of actual movement of goods, proper tax payment, and GST filings, and had relied mechanically on intelligence inputs without verification, violating natural justice. Recalling precedents and a CBIC Circular dated 13.12.2023, the Court noted that mere clerical errors or mismatches do not justify action under Section 74, and allowed the writ petition, striking down both the Deputy Commissioner’s and Appellate Authority’s orders.

AO not competent to pass Draft Assessment Order u/s 144C(1) of Income Tax Act when TPO Makes no Variation: Bombay HC

Classic Legends Pvt Ltd vsAssessment Unit & Ors CITATION : 2025 TAXSCAN (HC) 1846

The Bombay High Court addressed the validity of a Draft Assessment Order under Section 144C(1) of the Income Tax Act, 1961, in the context of transfer pricing assessments. The petitioner, Classic Legends Pvt. Ltd., challenged the Draft Assessment Order dated 8th March 2025 and the Final Assessment Order dated 7th April 2025 under Section 143(3) read with Sections 144C and 144B, along with the subsequent Demand Notice under Section 156 and Show Cause Notices under Sections 270A and 271AAC.

The Bench comprising Justices B.P. Colabawalla and Amit S. Jamsandekar held that the petitioner was indeed not an “eligible assessee” under Section 144C(15)(b) since no variation was made by the TPO. Consequently, the Assessing Officer had no competence to issue a Draft Assessment Order or proceed under Section 144C. The Court quashed the Draft Assessment Order, the Final Assessment Order, the Demand Notice, and the Show Cause Notices, setting aside all impugned proceedings in their entirety.

Payment to Consultant Doctors not salary in absence of Fixed Pay, TDS Deductible u/s 194J: Bombay HC

The Commissioner of Income Tax vs Dr. Balabhai Nanavati Hospital CITATION : 2025 TAXSCAN (HC) 1847

The Bombay High Court addressed the tax treatment of payments made to consultant doctors by Dr. Balabhai Nanavati Hospital, a trust running a hospital, under the Income Tax Act, 1961. The legal issue revolved around whether these payments constituted “salary” under Section 192 or fees for professional services under Section 194J, and the corresponding TDS obligations.

The Bench comprising Justices B.P. Colabawalla and Firdosh P. Pooniwalla upheld the findings of the ITAT and CIT(A), noting that the consultant doctors did not receive fixed remuneration, could practice elsewhere, and no real supervisory control was exercised by the hospital. The doctors themselves filed their tax returns under “Income from Business or Profession,” reinforcing that no employer-employee relationship existed. The Court held that payments to these doctors were not “salary,” and TDS was correctly deductible under Section 194J, dismissing the Revenue’s challenge.

Single SCN under GST cannot be passed in relation to more than one tax period if Assessment is taken up before Due date for filing: Andhra Pradesh HC

S J Constructions vs TheAssistant Commissioner and Others CITATION : 2025 TAXSCAN (HC) 1848

The Andhra Pradesh High Court addressed the issue of whether a single show cause notice (SCN) or composite assessment order under the Central Goods and Service Tax (GST) Act, 2017 can relate to more than one tax period. The petitioners challenged the impugned orders on grounds including lack of signature, DIN number, and, crucially, impermissible bunching of multiple assessment periods into one SCN or order, arguing that this violated Sections 73 and 74 of the GST Act, which provide for issuance of notice and assessment for specified tax periods

The Division Bench of Justice R. Raghunandan Rao and Justice T.C.D. Sekhar held that a single SCN or composite assessment order cannot be issued for more than one tax period—whether a month if assessed before the annual return due date, or more than one year if the annual return due date has passed. The Court quashed the impugned orders and directed that fresh proceedings be initiated separately for each tax period, ensuring compliance with the statutory scheme and safeguarding the rights of registered persons.

Delhi HC Upholds Notice issued u/s 148A(b) of Income Tax Act in absence of Submission of Details of Commission on percentage of Insurance premium receipts

ZOOMINSURANCEBROKERSPVT.LTD vsASSISTANT COMMISSIONEROFINCOMETAX CITATION : 2025 TAXSCAN (HC) 1849

The Delhi High Court addressed the validity of notices issued under Section 148A(b) of the Income Tax Act, 1961, concerning alleged undeclared commission income by Zoom Insurance Brokers Pvt. Ltd. The petitioner challenged notices dated 24.03.2025 and 28.05.2025 under Section 148A(1), an order dated 23.06.2025 under Section 148A(3), and a notice under Section 148, arguing that the amount of Rs. 82,25,822/- received as commission from IFFCO Tokio General Insurance Company Ltd had already been declared in its income tax return and accounts, and that no details of commission percentages had been specifically requested during the proceedings under Section 148A(1).

The Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar observed that the notices were issued to verify whether the commission amount represented a spurious transaction resulting in escaped income, and such an inquiry is a factual matter for the Assessing Officer and not for judicial interference. The Court distinguished the present case from Jindal Saw on factual grounds, noting that the impugned notice was issued in the context of unexplained or undeclared income and was therefore valid. Consequently, the petition to quash the notices was dismissed, along with the application for stay.

Dept. Treated Exempt Road and Irrigation Work Services as Taxable Manpower Supply: Gauhati HC dismisses Writ to Determine Facts

MD. BAHARUL ISLAM vs THE UNIONOF INDIA CITATION : 2025 TAXSCAN (HC) 1850

The Gauhati High Court recently dismissed a writ petition challenging a demand order that treated certain contractual services as taxable manpower supply, even though parts of the work were claimed to be exempt from construction activity. The petitioner, Md. Baharul Islam, a subcontractor engaged by M/s Simplex Infrastructures Ltd. for work on National Highway-31 and related irrigation projects, contended that his activities, including bed preparation and concreting, fell squarely under exemptions provided in Notification No. 25/2012-ST, Clauses 13(a), 12(d), and 29(h).

The Division Bench, led by Justice Sanjay Kumar Medhi, observed that determining whether the contractual work was an exempt construction activity or taxable manpower supply required detailed fact-finding, which lay beyond the scope of writ jurisdiction. Noting the limited powers under certiorari and the existence of an efficacious statutory appellate remedy, the Court concluded that the High Court could not substitute its own factual assessment for that of the adjudicating authority. Consequently, the writ petition was dismissed, with liberty granted to the petitioner to pursue his statutory appeal.

Human Error Led to ₹1 Crore GST ITC availment instead of ₹1 Lakh: Orissa HC Remits Matter for Rectification

Gautam Pattnaik vs PrincipalCommissioner of CT & GST CITATION : 2025 TAXSCAN (HC) 1851

The Orissa High Court recently dealt with a case concerning a clerical error in filing Goods and Services Tax (GST) returns, which led to an inflated Input Tax Credit (ITC) claim. The issue arose under Section 73 of the GST Act, where the petitioner, Gautam Pattnaik, was issued a demand of over ₹3.27 crore due to discrepancies between GSTR-2B and GSTR-3B. The petitioner had inadvertently recorded the ITC as ₹1,07,91,648 instead of the correct figure of ₹1,07,916.48, and sought rectification under Section 161 of the GST Act, which was initially rejected by the authorities on the ground of limitation.

The Division Bench comprising Chief Justice Harish Tandon and Justice Murahari Sri Raman, who observed that the inflated claim arose from a genuine clerical error and noted that human errors of this nature should be permitted to be corrected. The Court set aside the order rejecting the rectification application and directed the Assistant Commissioner of State Tax, CT & GST Circle, Cuttack-I, to allow the petitioner to correct the ITC figures, modify the Section 73 order accordingly, and complete the process within four weeks.

Retrospective GST Cancellation Cannot Be Passed Unless Specifically Mentioned in SCN With Reasons: Delhi HC

EWORLD BUSINESS SOLUTIONSPRIVATE LIMITED vs SUPERINTENDENT CITATION : 2025 TAXSCAN (HC) 1852

The Delhi High Court recently addressed the legality of retrospective cancellation of GST registration under the Central Goods and Services Tax Act, 2017. The issue arose when EWorld Business Solutions Private Limited challenged the cancellation of its GST registration by an order dated 18 March 2025, which sought to cancel the registration retrospectively from 1 July 2017. The petitioner had filed a show cause notice (SCN) on 31 December 2024 for non-filing of returns but subsequently cleared all pending returns and dues. The legal question revolved around whether retrospective cancellation can be imposed when it was not specifically mentioned in the SCN.

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain, who held that the cancellation order was unsustainable as it went beyond the reasons stated in the SCN and relied on new grounds not raised earlier. The court observed that retrospective cancellation has serious consequences, including impacting the input tax credit of buyers, and cannot be applied mechanically. Consequently, the High Court set aside the cancellation order dated 18 March 2025, treating the GST registration as cancelled only from 31 December 2024, and quashed the alert notice issued on 27 May 2025, while granting the department liberty to initiate fresh proceedings for any other violation.

Factual Disputes Involving GST ITC Availment: Delhi HC Refuses to Entertain Writ, Grants Liberty to Appeal

RISHI ENTERPRISES vs ADDITIONALCOMMISSIONER CENTRAL TAX DELHI NORTH CITATION : 2025 TAXSCAN (HC) 1853

The Delhi High Court recently dealt with a challenge under Section 74 of the Central Goods and Services Tax Act, 2017 concerning alleged wrongful availment of Input Tax Credit (ITC). The petitioner, Rishi Enterprises, had filed a writ petition challenging an order dated 11 February 2025 on grounds including limitation, validity of a consolidated show cause notice covering multiple financial years, and lack of opportunity for personal hearing. The core legal issue was whether such factual disputes regarding alleged fraudulent ITC claims could be examined in writ jurisdiction.

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain, who held that the disputed facts were central to the case and could not be adjudicated in writ jurisdiction. The court observed that hearings had been scheduled on multiple occasions which the petitioner did not attend, that consolidated notices are permissible in cases involving fraudulent ITC, and that email communication satisfied service requirements under Section 169. Consequently, the writ petition was dismissed, with liberty granted to the petitioner to file an appeal under Section 107 before the appellate authority by 30 September 2025, which would be decided on merits notwithstanding limitation. Pending applications were disposed of accordingly.

16-Day Delay in Employees Provident Fund Deposit u/s 36(1)(va) Due to COVID-19 Lockdown: Karnataka HC allows Deduction

PROLIFIC HR CONSULTANTS (INDIA)LTD vs ADDITIONAL DIRECTOR OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 1854

The High Court of Karnataka recently addressed the issue of deduction under Section 36(1)(va) of the Income Tax Act, 1961, relating to late payment of Employees’ Provident Fund (EPF). The appellant, Prolific HR Consultants (India) Ltd, had deposited its EPF contribution for AY 2021-22 sixteen days late due to the COVID-19 lockdown. The legal issue was whether such a delay, caused by extraordinary circumstances beyond the assessee’s control, could be considered for deduction under Section 36(1)(va).

The Division Bench comprising Justice S.G. Pandit and Justice K.V. Aravind, who observed that the delay in depositing EPF was due to the COVID-19 lockdown and that the assessee had otherwise been regular in its contributions. Considering these facts, the court directed the Assessing Officer to allow the deduction under Section 36(1)(va) for the delayed deposit, clarifying that the decision was limited to the specific facts of the case. Consequently, the appeal was allowed in part, the ITAT’s order dated 18.07.2023 was set aside, and no costs were imposed.

Payments for Software Licenses, Hardware, and Support Services not Royalty under India-UK DTAA: Karnataka HC dismisses Revenue’s appeal

PR. COMMISSIONER OF INCOME TAXvs M/S SYNA MEDIA LIMITED ONE LONDON ROAD STAINES UPON THAMES LONDON MIDDLESEX CITATION : 2025 TAXSCAN (HC) 1855

The High Court of Karnataka addressed the issue of whether payments received by a UK-based company for software licenses, hardware supply, and support services constitute “royalty” under the India-UK Double Taxation Avoidance Agreement (DTAA). The legal issue focused on the interpretation of “royalty” in the context of software licenses and IPR under international tax treaties.

The Bench consisting of Chief Justice Vibhu Bakhru and Justice C.M. Joshi, who relied on the ITAT’s finding and the Supreme Court precedent in Engineering Analysis Centre of Excellence Pvt. Ltd., noting that no transfer of copyright or IPR occurred that would allow the customers in India to use the software commercially. The High Court found no substantial question of law, upheld the ITAT’s order, and dismissed the Revenue’s appeal against AY 2021-22. Similar appeals for AY 2012-13 and AY 2014-15 were also dismissed, and pending applications were disposed of.

2% CST on Interstate Electronic Sales With No Surcharge Valid: Allahabad HC Quashes Reassessment Based on Invalid Circular

M/S Central Electronics Ltd vsCommissioner Commercial Tax U.P. Lucknow CITATION : 2025 TAXSCAN (HC) 1856

The Allahabad High Court dealt with the issue of taxation of interstate sales of electronic goods under the Central Sales Tax Act, 1956, and the validity of reassessment proceedings initiated on the basis of a quashed circular. The legal question revolved around whether reassessment could be sustained when it was founded solely on Circular dated 18 March 2002, which had been previously quashed by the High Court in Canon India Pvt. Ltd. v. State of U.P., and whether the tax rate of 2% under Notification No. 2473 dated 10 October 1995 applied without any surcharge.

The Bench Justice Piyush Agrawal, who observed that the reassessment proceedings had no valid foundation after the quashing of the circular. The Court held that the assessee, Central Electronics Ltd, was entitled to charge 2% CST on interstate sales of electronic goods without any surcharge. Consequently, the reassessment orders and related Tribunal decisions were quashed, affirming the assessee’s position and dismissing the revenue’s claims.

CBIC Notification on GST Amnesty Scheme cannot Prescribe Retrospective Cut-Off Date: Bombay HC

Esquire Electronics vs State ofMaharashtra CITATION : 2025 TAXSCAN (HC) 1857

The Bombay High Court examined the validity of Notification No. 53 of 2023 dated 2 November 2023 issued by the Central Board of Indirect Taxes and Customs (CBIC) under the Goods and Services Tax (GST) regime, which provided an amnesty scheme for filing belated appeals. The legal issue revolved around whether the notification could operate retrospectively to exclude orders passed before its issuance, particularly regarding appeals filed beyond the normal limitation period.

The Division Bench comprising Justice M.S. Sonak and Justice Advait M. Sethna, which held that a retrospective cut-off date (31 March 2023) lacked rational basis and could not exclude appeals filed after that date but before the notification. The Court set aside the impugned orders of 12 July 2024 dismissing the appeals for being time-barred, and directed the appellate authority to hear the appeals afresh on merits, subject to compliance with the conditions of Notification No. 53 of 2023, including the pre-deposit requirements.

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Revenue’s Failure to Produce Server Records Strengthens Anti-Dating Claim: Allahabad HC Quashes Trade Tax Assessment as Time-Barred

M/S Avant Grade Carpets P Ltd.vs The Commissioner Of Trade Tax U.P. Lucknow CITATION : 2025 TAXSCAN (HC) 1858

The Allahabad High Court dealt with the issue of service of an assessment order under Section 21(5) of the U.P. Trade Tax Act, specifically examining whether an assessment order could be considered valid when there was an allegation of anti-dating and the Revenue failed to produce the original records of the process server. The legal question centered on whether the assessee could claim the benefit of time-barred service in the absence of proper evidence from the department.

The Division Bench comprising Justice Piyush Agrawal, which held that the Revenue’s failure to produce the original process server records strengthened the assessee’s claim of anti-dating. The Court observed that the authorities have a duty to maintain such records, and without them, the assessee cannot be prejudiced. Consequently, the assessment order was held to be time-barred, and the impugned orders of the Trade Tax Tribunal and appellate authorities were quashed, allowing the revisions in favor of Avant Grade Carpets Pvt. Ltd.

Goods Sent for Weighment Must Accompany Delivery Challan: Allahabad HC rules Later Submission Defeats Purpose of S. 129 and R. 138

M/S Vrs Foods Ltd vs AdditionalCommissioner Grade-2 CITATION : 2025 TAXSCAN (HC) 1859

The Allahabad High Court dealt with the legal issue of whether goods transported for weighment without accompanying documents could escape liability under Section 129 of the UPGST Act, 2017 read with Rule 138 of the GST Rules. The case arose when M/s VRS Foods Ltd. sent a truck carrying battery scrap for weighment without a delivery challan or other supporting documents, leading to its interception and detention by the authorities.

The Bench of Justice Piyush Agrawal, held that goods sent for weighment must be accompanied by a delivery challan and prescribed papers, and that subsequent production of documents after seizure could not validate the transportation. The Court rejected the petitioner’s arguments and emphasized that accepting such a stance would frustrate the purpose of Section 129, as violators could conveniently produce documents later. Concluding that the petitioner had contravened mandatory requirements, the Bench upheld the seizure and detention proceedings and dismissed the writ petition.

GST ITC Fraud with Forged E-way Bills, Lorry Receipts & Delivery Challans: Telangana HC Grants Pre-Arrest Bail as Proprietor Paid Penalty

Sri. Syed Shah Raheemuddin Qadrivs The State of Telangana CITATION : 2025 TAXSCAN (HC) 1860

The Telangana High Court recently addressed the issue of fraudulent availment of Input Tax Credit (ITC) under the Goods and Services Tax (GST) regime through forged e-way bills, lorry receipts, and delivery challans. The petitioners sought relief under Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) for anticipatory bail after being booked under Sections 318(4) and 336 of the BNSS, contending that the matter was essentially compoundable under Section 138 of the GST Act.

The Bench of Justice K. Sujana, who observed that the only allegation against the petitioners was wrongful ITC claim without actual movement of goods, and since the penalty had already been paid, custodial interrogation was not warranted. Granting relief, the Court directed each petitioner to execute a personal bond of ₹50,000 with two sureties, comply with conditions under Section 482(2) BNSS, cooperate with the investigating officer, and appear before him every Monday until the charge-sheet is filed. The petitions were accordingly allowed, ensuring balance between the interests of investigation and the rights of the accused.

No Simultaneous GST Audit by State & Central Tax Agencies: Madras HC Interim Stays Notice to ArcelorMittal Nippon Steel

ArcelorMittal Nippon Steel IndiaPrivate Limited vs The Assistant Commissioner CITATION : 2025 TAXSCAN (HC) 1861

The Madras High Court recently dealt with the issue of parallel audit proceedings under the Goods and Services Tax (GST) law, specifically examining the bar under Section 6(2)(b) of the Central Goods and Services Tax Act, 2017 (CGST Act). The petition was filed by ArcelorMittal Nippon Steel India Pvt. Ltd., which challenged a Form GST ADT-01 notice issued by the Central GST authority for FY 2018–2019 to 2022–2023, on the ground that the company was already under audit by the State tax department.

The Bench of Justice Mohammed Shaffiq, who observed that the central audit notice prima facie violated Section 6(2)(b) of the CGST Act since the State GST authorities had already initiated and acted upon audit proceedings, even imposing penalties through Form GST DRC-07. Finding merit in the petitioner’s contention, the Court granted an interim stay of the impugned GST ADT-01 notice dated 07.04.2025, restraining the Central GST authority from proceeding further until the next date of hearing.

GST Personal Hearing should Not be fixed before Expiry of SCN Reply Period: Allahabad HC Quashes Notice

M/S Bala Ji Medical Ajency vsState Of U.P CITATION : 2025 TAXSCAN (HC) 1862

The Allahabad High Court addressed a procedural issue under the Goods and Services Tax (GST) Act, concerning the issuance of a Show Cause Notice (SCN) under GST REG-17 and subsequent cancellation of registration for non-filing of returns. The petitioner, Bala Ji Medical Agency, a proprietorship registered under GST in August 2022, received an SCN dated 12 March 2024 granting 30 days to file a reply. However, the notice also fixed a personal hearing on 9 April 2024, three days before the expiry of the 30-day period, and failed to specify the venue for appearance. Subsequently, the Assistant Commissioner cancelled the petitioner’s GST registration through an order dated 2 May 2024.

The Division Bench comprising Justices Sangeeta Chandra and Brij Raj Singh held that the SCN was procedurally defective, as the statutory period of 30 days for filing a reply could not be curtailed by scheduling an earlier hearing, and the notice lacked clarity and fairness. The Court quashed both the SCN dated 12 March 2024 and the cancellation order dated 2 May 2024, while noting that the authorities were free to issue a fresh show cause notice in compliance with statutory requirements. The judgment emphasizes that procedural fairness is mandatory in GST proceedings, even when there is a default in filing returns.

No Evidence of Wrongful Opt-Out from Composition Scheme: Allahabad HC rules GST Proceedings Not Illegal when SCN went Unanswered

M/s Poddar Electronics vs Commissioner CITATION : 2025 TAXSCAN (HC) 1863

The Allahabad High Court recently addressed the issue of wrongful opt-out from the GST composition scheme and whether proceedings initiated in such cases could be termed illegal. The writ petition was filed by Poddar Electronics Security, a trader in CCTV cameras and electronic items, which had migrated from VAT to GST and was initially under the composition scheme.

The Bench of Justice Piyush Agrawal, who observed that the petitioner had raised the plea of wrongful opt-out belatedly and failed to produce any evidence supporting its claim. The Court emphasized that once the intimation dated 16 April 2018 was issued, it was incumbent on the petitioner to challenge it through proper proceedings, rather than ignoring statutory notices. The bench further noted that the petitioner had even collected IGST from its customers, which contradicted its claim of being a composition taxpayer. Holding that the order could not be considered illegal or arbitrary in the absence of any material evidence and given the petitioner’s inaction, the High Court dismissed the writ petition and upheld the proceedings under the GST Act.

Goods Sent for Job Work must Accompanied with Delivery Challan and E-way Bill: Allahabad HC

M/s Usha Wire Netting vs Stateof UP CITATION : 2025 TAXSCAN (HC) 1864

The Allahabad High Court recently dealt with the issue of documentation requirements under the Goods and Services Tax (GST) regime for goods sent for job work. The case arose when Usha Wire Netting, a proprietorship firm engaged in the manufacture of wire netting and allied products, challenged an order passed under Section 129(3) of the CGST/UPGST Act.

The Bench of Justice Piyush Agrawal, who relied on the precedent in Nippon Tubes to conclude that in the absence of a delivery challan and e-way bill, the goods could not be treated as properly documented. The Court stressed that compliance with Rules 45 and 55 is mandatory for job work consignments, and subsequent production of documents cannot cure the lapse. It further held that failure to carry such documents justified detention and proceedings under Section 129 of the GST Act. Dismissing the writ petition, the High Court upheld the impugned orders, ruling that the action taken by the authorities was legal and not arbitrary.

Excess GST Paid at 18% Instead of 12%: Allahabad HC allows Fresh Representation for Refund Claim

M/S Kala Construction vs StateOf U.P CITATION : 2025 TAXSCAN (HC) 1865

The Allahabad High Court dealt with a petition under Article 226 of the Constitution of India concerning refund of excess Goods and Services Tax (GST) paid by the assessee. The petitioners, M/s Kala Construction and Another, contended that they had mistakenly paid GST at the rate of 18% instead of the applicable 12% on their works contract, resulting in an excess outflow of ₹8,96,409/-.

The Division Bench comprising Justice Saral Srivastava and Justice Amitabh Kumar Rai refrained from deciding on the merits of whether GST was wrongly charged at 18%. Instead, the Court directed the petitioners to file a fresh representation along with a certified copy of the order before the Principal Secretary, Urban Development Department, within one month. The Bench further ordered that upon such representation, the competent authority must consider and decide the refund claim within two months, after granting due notice and an opportunity of hearing to the petitioners.

Challenge to Parallel GST Proceedings: Allahabad HC Directs State GST to address Jurisdiction Issue Before Continuing S. 74 Proceedings

Hari Om Udyog vs State Of U PThrough Its Principal Secretary And 3 Others CITATION : 2025 TAXSCAN (HC) 1866

The Allahabad High Court dealt with a writ petition concerning the validity of parallel proceedings under Section 74 of the CGST/UPGST Act, 2017, in relation to demand and recovery of GST. The petitioner, Hari Om Udyog, challenged the notices issued under Sections 74 and 122 of the UPGST Act for the period April 2018-March 2019, contending that the Central GST authorities had already initiated proceedings for the same period, thereby attracting the bar under Section 6(2)(b) of the GST Act, which prohibits dual proceedings by different tax authorities on the same subject matter.

The Division Bench comprising Justice Shekhar B. Saraf and Justice Praveen Kumar Giri directed the petitioner to raise this preliminary jurisdictional objection before the State GST authorities. The Court made it clear that the authorities must first decide the question of jurisdiction after granting the petitioner a personal hearing before proceeding further under Section 74. With this clarification, the writ petition was disposed of, ensuring that the issue of jurisdiction is addressed as a threshold matter in accordance with law.

GST pre-deposit made through Electronic Credit Ledger is a Valid Deposit: Allahabad HC Directs Appellate Authority to Accept

M/S O.C.Infraventures AndConstruction Pvt. Ltd vs Joint Commissioner (Appeals) Customs Cgst CITATION : 2025 TAXSCAN (HC) 1867

The Allahabad High Court, Lucknow Bench, dealt with the legal issue of whether a pre-deposit made through the Electronic Credit Ledger (ECRL) constitutes valid compliance for filing an appeal under Section 107 of the Central Goods and Services Tax Act, 2017. The petitioner, M/s O.C. Infraventures and Construction Pvt. Ltd., had challenged the dismissal of its GST appeal by the Joint Commissioner (Appeals), who held that the deposit of ₹15,889/- made via the ECRL was not a valid pre-deposit under Section 107(6), and further treated the appeal as non-maintainable.

The Bench of Justice Pankaj Bhatia held that the appellate authority had erred in not granting the petitioner an opportunity to rectify the alleged deficiency, and that in light of the Gujarat High Court’s decision in Yasho Industries Ltd. v. Union of India (2023) affirmed by the Supreme Court, deposits made through the ECRL are valid for the purposes of pre-deposit under Section 107. The Court therefore quashed the appellate authority’s order and remanded the matter, directing that the petitioner’s deposit be accepted as valid compliance, with liberty to require any shortfall to be made good in line with Section 107(6).

Bombay HC remands Order of ITAT to Decide on Nature of Service of AMC Charges on Medical Equipment X-ray machines and its TDS deduction

The Commissioner of Income Taxvs Dr. Balabhai Nanavati Hospital CITATION : 2025 TAXSCAN (HC) 1868

The Bombay High Court dealt with the issue of the nature of payments under Annual Maintenance Contracts (AMCs) for medical equipment and the correct provision for TDS deduction under Sections 194C and 194J of the Income Tax Act, 1961. The Revenue had challenged the ITAT’s order that held the assessee, Dr. Balabhai Nanavati Hospital (a Trust), was correct in deducting TDS under Section 194C for payments made under AMCs for X-ray machines, CT scanners, dialysis machines, and other medical equipment. The issue concerned assessment years 2007-08 to 2010-11 and revolved around whether such payments constituted “technical services” (requiring TDS under Section 194J) or payments to contractors for routine maintenance (covered under Section 194C).

The Division Bench comprising Justices B.P. Colabawalla and Firdosh P. Pooniwalla held that the ITAT had failed to independently examine the terms of each AMC to determine the nature of services provided. The Court observed that the ITAT, as the last fact-finding authority, ought to have analyzed whether the AMCs involved professional/technical services or routine maintenance work. Consequently, the Bombay High Court quashed the ITAT’s order and remanded the matter back to the Tribunal, directing it to re-examine the AMCs for the relevant years and give a clear finding on whether TDS was correctly deducted under Section 194C or should have been under Section 194J.

JAO has No Jurisdiction to initiate Proceedings u/s 148A and 148 after CBDT Notification mandates Faceless Reassessments: Delhi HC

ALL INDIA KATARIA EDUCATIONSOCIETY vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 1869

The Delhi High Court addressed the issue of whether a Jurisdictional Assessing Officer (JAO) has the authority to initiate reassessment proceedings under Sections 148 and 148A of the Income Tax Act, 1961, after the issuance of the CBDT Notification dated 29.03.2022 mandating that such proceedings be conducted in a faceless manner. The petitioners, All India Kataria Education Society, sought to quash the notice dated 16.07.2025 and related reassessment proceedings, contending that the JAO lacked jurisdiction and that the proceedings were patently illegal and contrary to law.

The Division Bench comprising Justice V. Kameswar Rao and Justice Vinod Kumar relied on the Delhi High Court’s earlier decision in T.K.S. Builders Pvt. Ltd. v. Income Tax Officer, Ward 25(3), New Delhi, observing that reassessment proceedings must be conducted by the Faceless Assessing Officer (FAO) as per the CBDT Notification. The Court noted that similar petitions, including PC Jeweller Limited v. ACIT, had been dismissed following the same precedent. Consequently, the Bench dismissed the pending applications as infructuous, confirming that the JAO could not initiate reassessment and any action must follow the faceless procedure mandated under the Notification.

Delhi HC Directs to Transfer Winding-Up Petitions to NCLT

SH. ALOK KUMAR MISHRA & ORS.vs M/S VIGNESHWARA DEVELOPWELL PVT. LTD. & ORS. CITATION : 2025 TAXSCAN (HC) 1870

The Delhi High Court dealt with the transfer of company winding-up petitions filed under Sections 433(e), 434, and 439 of the Companies Act, 1956, in relation to the respondent company, Vigneshwara Developwell Pvt. Ltd. The petitioners, including Sh. Alok Kumar Mishra & Ors, had sought winding up of the company on the grounds of its inability to pay debts.

The Bench of Justice Tara Vitasta Ganju directed that the pending winding-up petitions be transferred to the NCLT, Delhi Bench, to enable effective adjudication of all similarly situated parties. Referring to its earlier judgment dated 12 September 2025 in CO. Appl. 428/2025 in CO. PET. 885/2015 (Col. P.K. Uberoi (Retd.) & Anr. v. Vigneshwara Developwell Pvt. Ltd. & Ors.), the Court observed that the transfer was appropriate for uniform and efficient handling of related proceedings. The petitions were accordingly transferred, and the petitioners were permitted to take necessary steps for further proceedings before the NCLT.

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